UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA ________________________________ ) MARILYN KEEPSEAGLE, et al., ) ) Plaintiffs, ) ) v. ) Civil Action No. 99-3119 (EGS) ) TOM VILSACK, Secretary, U.S. ) Department of Agriculture, ) ) Defendant. ) ________________________________)

MEMORANDUM OPINION

This case places the Court in the unenviable position of

enforcing a five-year-old bargain that nobody likes. The bargain

at issue is not any old contract; rather, it is a settlement

agreement that resolved a major civil-rights class action, was

approved by the Court in accordance with the Federal Rules of

Civil Procedure, and was made final by that approval and the

lack of appeal therefrom. The story that led this case to its

current posture is as unique as it is disappointing. In brief,

the $680,000,000 in damages that were awarded under the

settlement agreement was intended to compensate Native American

farmers who alleged that the United States Department of

Agriculture discriminated against them personally. The agreement

created a claims process for distributing this money, but the

claims process failed and $380,000,000 remains undistributed. The scope of this failure is monumental; the reasons for it

remain unclear.

The agreement was finalized before the claims process began,

so no one anticipated such a large amount of excess funds. But

the parties did anticipate that some money might be leftover, so

they included in their settlement agreement a cy pres provision,

which directs that all leftover funds be distributed in equal

shares to a group of charities that serve Native American

farmers and ranchers that were to be chosen by Class Counsel.

Now, faced with the prospect of over half of the plaintiffs’

damages being distributed in equal shares to charities nominated

by Class Counsel, many class members regret that part of their

agreement and want to change it. Principal among those class

members is Marilyn Keepseagle, who has asked the Court to modify

the agreement to create a renewed claims process to distribute

more of the money to individual class members. Others, including

Class Counsel, ask to modify only the charitable-distribution

procedures to accommodate the large amount of money to be

distributed by: (1) allowing it to be distributed in unequal

shares scaled to an organization’s capacity; (2) spreading the

distribution over twenty years; and (3) placing distribution

decisions in the hands of a trust run by Native American

leaders.

2 Unless there is a legal basis for this Court to modify the

agreement, the Court must enforce the agreement reached in 2011.

Doing so would frustrate all parties’ goals. Contrary to the

Keepseagles’s wishes, the funds would remain entirely for

charitable distribution. Contrary to the goals of Class Counsel

and the government, that charitable distribution would be

pursuant to the arguably inefficient procedures that were

designed to handle a much smaller amount of money. This result

could be viewed as both unjust and inefficient. Over half of the

class’s damages would be distributed to third parties, despite

the relative ease with which class members could be identified,

the claims process reopened, and previously successful claimants

permitted to prove that they suffered damages in excess of the

compensation they have obtained.

The Court’s role is not to craft a new compromise based upon

the Court’s own views about the appropriate amount of

compensation due to class members who alleged decades-long, and,

in many cases, life-altering discrimination at the hands of

their federal government. Nor is it to create a preferred

process for distributing the funds to charity. Before the Court

is a simple question: Are any of the narrow circumstances in

which a court’s final judgment may be modified present in this

case?

3 The avenues proposed by the parties for unilateral

modification—Class Counsel’s attempt to realign the charitable-

distribution procedures pursuant to Federal Rule of Civil

Procedure 60(b)(5), and the Keepseagles’s attempt to reopen the

claims process pursuant to the legal doctrine governing

unclaimed funds as well as Rules 60(b)(5) and 60(b)(6)—are

simply inapplicable, as the Court discusses in detail in Parts

II.A and II.B of this Opinion. Absent a way to modify the

agreement unilaterally, the parties must come to a consensus

themselves, which their settlement agreement defines as “the

written agreement of the Parties.” As the Court finds in Part

II.C, this language requires more than the agreement of Class

Counsel and the government, over the objection of at least one

class representative and many class members, which is what is

presented by Class Counsel’s proposed modification. It also

requires more than an alignment between Class Counsel, the class

representatives, and members of the class, who would all prefer

that the money be distributed directly to class members. Because

there is no consensus within the meaning of the agreement, and

because the parties’ proposals for unilateral modification are

legally insufficient, the Court DENIES both pending motions for

modification of the settlement agreement. The Court expects that

there will be review of the legal conclusions reached in this

Opinion by appellate courts. Upon resolution of appellate

4 proceedings, if this Court’s legal conclusions are undisturbed,

the Court will grant the Parties a period of time to negotiate

an agreement that they may jointly present to the Court.

* * *

Before beginning its legal analysis, the Court makes some

observations regarding the government’s arguments. The

government has chosen to oppose any modification of the

settlement agreement that would alter the cy pres nature of the

funds in any way, based upon concerns that class members might

receive a “windfall” in excess of the damages they suffered and

that reopening the claims process would undermine the

government’s interest in the finality of court judgments.

The Executive Branch’s narrow position today stands in stark

contrast to the messages of respect and reconciliation it

expressed upon the settlement of this case. Upon announcement of

the settlement in 2010, the President issued the following

statement:

Today, the Department of Agriculture and the Department of Justice announced a settlement agreement with the plaintiffs in the Keepseagle class action lawsuit. This suit was originally filed in 1999 by Native American farmers alleging discrimination in access to and participation in USDA’s farm loan programs. With today’s agreement, we take an important step forward in remedying USDA’s unfortunate civil rights history.

I applaud Secretary Vilsack and Attorney General Holder for their hard work to reach this settlement–a settlement that helps strengthen the nation to nation

5 relationship and underscores the federal government’s commitment to treat all citizens fairly.

Statement by the President on Settlement Agreement in the Native

American Farmers Lawsuit Against USDA, White House Office of the

Press Secretary (Oct. 19, 2010), https://www.whitehouse.gov/the-

press-office/2010/10/19/statement-president-settlement-

agreement-native-american-farmers-lawsuit. A statement issued by

Secretary Vilsack and then-Attorney General Holder expressed

similar sentiments:

“Today’s settlement can never undo wrongs that Native Americans may have experienced in past decades, but combined with the actions we at USDA are taking to address such wrongs, the settlement will provide some measure of relief to those alleging discrimination,” Vilsack said. “The Obama Administration is committed to closing the chapter on an unfortunate civil rights history at USDA and working to ensure our customers and employees are treated justly and equally.”

“The settlement announced today will allow USDA and the Native American farmers involved in the lawsuit to move forward and focus on the future,” said Attorney General Holder.

* * *

Under Secretary Vilsack’s leadership, USDA is working to address past civil rights complaints and today’s announcement is a major step in that effort. The Secretary and his leadership team are committed to addressing allegations of discrimination, and shortly after he took office he sent a memo to all USDA employees calling for “a new era of civil rights” for the Department.

Agriculture Secretary Vilsack and Attorney General Holder

Announce Settlement Agreement with Native American Farmers Who

Claim to Have Faced Discrimination by USDA in Past Decades, USDA

6 Office of Communications (Oct. 19, 2010), http://www.usda.gov/

wps/portal/usda/usdamediafb?contentid=2010/10/0539.xml&printable

=true&contentidonly=true.

The Court is sympathetic to the government’s legal argument

that the settlement is a final judgment and that respect for

final judgments is a cornerstone of our legal system. Indeed,

that argument ultimately binds the Court. That is the Court’s

role: To resolve legal disputes, not make policy decisions, even

when the law dictates a result the Court may disfavor. The

Executive Branch, however, has a broader role: To defend itself

in litigation, for sure, but also to seek justice on a broader

stage. It is for that reason, the Court presumes, that the

government sometimes settles cases that implicate deep-seated

interests of justice, even where the government’s legal defense

may be relatively strong.

This case was not an abstract legal dispute. It was a major

class-action seeking to remedy what many felt was the latest

chapter in the federal government’s sordid history of

mistreating Native Americans. The statements of the President,

Secretary Vilsack, and then-Attorney General Holder make clear

that the government in 2010 understood this dimension of the

case. The government’s position lately evinces a failure to

grapple with that dimension. The government would do well to

remove its legalistic blinders.

7 The result is that $380,000,000 of taxpayer funds is set to be

distributed inefficiently to third-party groups that had no

legal claim against the government. Although a $380,000,000

donation by the federal government to charities serving Native

American farmers and ranchers might well be in the public

interest, the Court doubts that the judgment fund from which

this money came was intended to serve such a purpose. The public

would do well to ask why $380,000,000 is being spent in such a

manner.

Because these considerations move beyond the realm of the law

and into the realm of politics and policy, this Court can only

make observations, bound as it is to the final judgment in this

case and the narrow legal doctrines for modifying a final

judgment. This Court has confronted an analogous situation

before and its words are equally applicable here: “Were this

Court empowered to judge by its sense of justice, the heart-

breaking accounts of” life-altering discrimination suffered by

members of the class at the hands of their federal government

“would be more than sufficient justification for granting all

the relief that they request.” Roeder v. Islamic Republic of

Iran,

(D.D.C. 2002). As in Roeder,

however, the authority to grant such relief lies with another

branch of government and “[t]he political considerations that

8 must be balanced prior to such a decision are beyond both the

expertise and the mandate of this Court.”

I. Background

A. The Case is Hard Fought from 1999 to 2010.

On November 24, 1999, the plaintiffs filed this lawsuit

against the Secretary of Agriculture on behalf of a class of

Native American farmers and ranchers who applied to the United

States Department of Agriculture’s farm loan and benefits

programs between January 1, 1981 and November 24, 1999. The

plaintiffs alleged that the Department of Agriculture

discriminated against them in a variety of ways in connection

with these applications and its treatment of complaints of

discrimination arising therefrom. The plaintiffs alleged that

these actions violated the Equal Credit Opportunity Act, 15

U.S.C. § 1691e; the Administrative Procedure Act,

(2)(A), and Title VI of the Civil Rights Act of 1964, 42

U.S.C. § 2000d, et seq.

On December 12, 2001, this Court granted in part the

plaintiffs’ motion for class certification. See Keepseagle v.

Veneman, No. 99-3119,

(D.D.C. Dec. 12, 2001).

Upon finding that the requirements of Federal Rule of Civil

Procedure 23 had been met, the Court:

[C]ertifie[d] the following class for plaintiffs’ claims for declaratory and injunctive relief pursuant to Fed. R. Civ. P. 23(b)(2): All Native–American

9 farmers and ranchers, who (1) farmed or ranched between January 1, 1981 and November 24, 1999; (2) applied to the USDA for participation in a farm program during that time period; and (3) filed a discrimination complaint with the USDA individually or through a representative during the time period.

. The Court did not address certification of

plaintiffs’ claims for monetary relief:

Without a developed factual record and without clear representation of subclasses, it is impossible for the Court to make a finding that claims for individual compensatory relief will destroy the class cohesion. Similarly, the Court can not ascertain whether, should it permit class certification on plaintiffs’ claims for all forms of requested relief, the claims for monetary damages would overshadow those for declaratory and injunctive relief.

. Accordingly, the Court stated that it would consider

certification of the plaintiffs’ monetary claims “in the event

that, after the completion of discovery and the identification

of appropriate sub-class representatives, plaintiffs are able to

demonstrate to the Court the existence of a class properly

certifiable as a hybrid class or pursuant to Rule 23(b)(3).”

The D.C. Circuit declined the government’s petition for

interlocutory review of the Court’s class-certification order.

See In re Veneman,

(D.C. Cir. 2002).

For nearly ten years, the parties engaged in extensive and

contentious discovery and motions practice. A recounting of the

full history of this phase is unnecessary at this time, but this

nearly decade-long battle resulted in a narrowing of the

10 plaintiffs’ claims. The Court granted in part a motion for

judgment on the pleadings, dismissing the plaintiffs’ Title VI

claim, which the plaintiffs had ultimately conceded was barred

by the law in this jurisdiction at that time. See Opinion &

Order, ECF No. 275. Plaintiffs filed a series of Amended

Complaints, and ultimately rested in their Eighth Amended

Complaint on their Equal Credit Opportunity Act claim. Eighth

Am. Compl., ECF No. 460 ¶¶ 131–36. Discovery on this claim was

completed by November 2009. With certification of the

plaintiffs’ monetary claims still a hotly contested issue, the

parties jointly sought to stay briefing on December 3, 2009,

representing that “given the current status of the litigation,

settlement discussions are appropriate at this time.” Joint Mot.

to Stay, ECF No. 548 at 2. The case was in settlement

discussions for most of 2010.

B. The Parties Reach a Settlement Agreement.

On October 19, 2010, the parties informed the Court that they

had reached a settlement. See Notice, ECF No. 570. Three days

later, the plaintiffs moved for preliminary approval of that

settlement. See Mot. for Prelim. Approval, ECF No. 571. In

connection with this motion, the plaintiffs noted that their

expert witness had come to a conclusion that the damages

suffered by the class were approximately $776,000,000, making

11 the $680,000,000 settlement award nearly 90% of the plaintiffs’

estimated total damages. See Pls.’ Suppl. Br., ECF No. 572 at 4.

On November 1, 2010, the Court granted preliminary approval of

the settlement. See Order, ECF No. 577. In so doing, the Court

affirmed its prior certification of the class’s injunctive

claims and also certified the class’s claims for monetary relief

under Federal Rule of Civil Procedure 23(b)(3). See id. at 2.

The Court also approved the parties’ plan for disseminating

notice of the Agreement, required that objections to the

Agreement and requests to opt out be postmarked by no later than

February 28, 2011, and scheduled a fairness hearing for April

28, 2011. See id. at 3.

The relevant provisions of the settlement agreement were

described in a prior Opinion of this Court:

The Agreement created a Compensation Fund (“the Fund”) of $680,000,000 “for the benefit of the Class.” [Agreement, ECF No. 621-2] ¶ VII.F (p. 7).1 The Fund was to be used in part to cover the attorney-fee award and individual awards to those who served as class representatives. See id. Primarily, however, the Fund

1 In 2012, the Agreement was modified to alter provisions related to the distribution of certain awards. See Mot. to Amend, ECF No. 621 at 1; Amended Settlement Agreement, ECF No. 621–2. This modification was done without opposition from any party. See Minute Order of August 1, 2012. For clarity, the Court refers throughout this Opinion to the version of the Agreement as modified in 2012, as it has in prior Opinions. The amended agreement contains typographical errors that resulted in duplicative paragraph numbering. As the Court has in prior Opinions, the Court refers in its citations to the listed paragraph number as well as the page number on which the cited material appears. 2 An appeal of one of these decisions is currently pending before 12 would “pay Final Track A Liquidated Awards, Final Track A Liquidated Tax Awards, Final Track B Awards, and Debt Relief Tax Awards, to, or on behalf of, Class Members pursuant to the Non-Judicial Claims Process.” Id.

The Agreement described how leftover funds, if any, would be disbursed: “In the event there is a balance remaining . . . the Claims Administrator shall direct any leftover funds to the Cy Pres Fund.” Agreement ¶ IX.F.9 (p. 37). “Class Counsel may then designate Cy Pres Beneficiaries to receive equal shares of the Cy Pres Fund.” Id. These designations “shall be for the benefit of Native American farmers and ranchers.” Id. The Agreement made eligibility as a recipient contingent upon being “recommend[ed] by Class Counsel and approv[ed] by the Court.” Id. Potential recipients were also only “non-profit organization[s], other than a law firm, legal services entity, or educational institution, that has provided agricultural, business assistance, or advocacy services to Native American farmers between 1981 and [November 1, 2010].” Id. ¶ II.I (pp. 6–7).

The Class received notice of all relevant provisions of the Agreement. The Claim Form provided to potential claimants contained a section that required the claimant to acknowledge that “[y]ou . . . forever and finally release USDA from any and all claims and causes of action that have been or could have been asserted against the Secretary by the proposed Class and the Class Members in the Case arising out of the conduct alleged therein.” Ex. C to Agreement, ECF No. 576–1 at 63. The Agreement, moreover, provided that the Class “agrees to the dismissal of the Case with prejudice.” Id. ¶ VI.A (p. 15). The Claim Form also notified Track A claimants that they would be “eligible for . . . [a] cash award up to $50,000.” Ex. C to Agreement, ECF No. 576–1 at 63. The Notice that was sent to the Class similarly described the $50,000 maximum under Track A and the fact that participation would result in a resolution of the individual’s legal claim, and stated that “[i]f any money remains in the Settlement Fund after all payments to class members and expenses have been paid, then it will be donated to one or more organizations that have provided agricultural, business assistance, or advocacy

13 services to Native Americans.” See Ex. I to Agreement, ECF No. 576–1 at 87, 88, 92.

Keepseagle v. Vilsack (“Keepseagle I”), No. 99-3119,

(D.D.C. Nov. 7, 2014) (alterations in original).

The Court has also summarized the proceedings that followed:

On March 18, 2011, Class Counsel filed copies of thirty-five letters raising objections to the Agreement. See Notice, ECF No. 585. Class Counsel filed their motion seeking final approval of the Agreement, which also responded to those objections, on April 1, 2011. See Mot. for Final Approval, ECF No. 589. Only two written objections related to cy pres. See

at 62–63. One objector requested that his organizations be granted cy pres funds. See Kent Objection, ECF No. 585–2 at 7–8. Class Counsel noted that this request was premature. See Mot. for Final Approval, ECF No. 589 at 62. Another objector indicated his preference that excess funds be used for outreach purposes and not be limited to groups that already existed in 1981. See Givens Objection, ECF No. 585–4 at 19–20. Class Counsel noted that this desire was entirely consistent with the existing cy pres provisions. See Mot. for Final Approval, ECF No. 589 at 62–63.

The Court held a fairness hearing on April 28, 2011. See Minute Entry of April 28, 2011. The issue of cy pres was not raised by any objector. See generally Transcript of April 28, 2011 Fairness Hearing, ECF No. 609. After hearing from all who attended the fairness hearing, the Court found that the Agreement was fair and reasonable and approved it pursuant to Federal Rule of Civil Procedure 23(e). See Order, ECF No. 606. No appeal was filed from the Court’s approval of the Agreement.

Id. at *3.

14 C. The Settlement Fund is Distributed, Leaving $380,000,000 Leftover.

By design under the Agreement, the Court was largely

uninvolved in the distribution process that followed final

approval of the Agreement, with one exception. Over the course

of the distribution, a handful of potential claimants petitioned

this Court for relief from allegedly erroneous determinations

made during the Non-Judicial Claims Process. See Smith Mot. to

Intervene, ECF No. 622; LaBatte Mot. to Intervene, ECF No. No.

635; Jones Mot. to Intervene, ECF No. 693. The Court rejected

these requests for similar reasons. See Order Denying Smith

Mot., ECF No. 633; Order Denying LaBatte Mot., ECF No. 692;

Order Denying Jones Mot., ECF No. 720.

Because this case had settled, the Court’s jurisdiction was

limited. See Order Denying LaBatte Mot., ECF No. 692 at 7–8. The

putative intervenors had to rely on the Court’s ancillary

jurisdiction, but “[a]ncillary jurisdiction . . . is a

relatively limited source of jurisdiction[,] aris[ing]: ‘(1) to

permit disposition by a single court of claims that are, in

varying respects and degrees, factually interdependent . . . and

(2) to enable a court to function successfully, that is, to

manage its proceedings, vindicate its authority, and effectuate

its decrees.’” Id. at 8 (quoting Kokkonen v. Guardian Life Ins.

Co.,

, 379–80 (1994)). Neither criterion was

15 satisfied, however. The first was inapplicable because the facts

alleged by each putative intervenor—erroneous determinations

during the Non-Judicial Claims Process—were distinct from the

underlying claims of discrimination. See, e.g.,

The second

was inapplicable because “‘[d]istrict courts enjoy no free-

ranging ‘ancillary’ jurisdiction to enforce consent decrees, but

are instead constrained by the terms of the decree and related

order.’”

at 8–9 (quoting Pigford v. Veneman,

,

924 (D.C. Cir. 2002)). “The Agreement sharply limits the

circumstances under which the Court may exercise jurisdiction,”

and although the Court retained jurisdiction “‘to supervise the

distribution of the Fund and to ensure that Debt Relief Awards

issued by the Track A and Track B Neutrals are applied by

USDA,’” “that provision is limited by a more specific provision

of the Agreement precluding the Court from reviewing any ‘Claim

Determinations, and any other determinations made under th[e]

Non-Judicial Claims Process.’” Id. at 9 (quoting Agreement, ECF

No. 621-1 ¶¶ V.A.7 (p. 40), IX.A.9 (p. 19)). These provisions,

the Court held, are reconciled by “foreclos[ing] judicial review

of certain decisions as to who is entitled to receive an award,

while permitting judicial supervision over distribution of the

Fund . . . after those decisions have been made.” Id. (quoting

Order Denying Smith Mot., ECF No. 633 at 8).2

2 An appeal of one of these decisions is currently pending before

16 The Court previously described what occurred at the end of the

distribution process:

On August 30, 2013 Class Counsel filed a status report, notifying the Court that nearly all distributions from the Fund had been made and approximately $380,000,000 remained leftover. See Status Report, ECF No. 646 at 3.3 Class Counsel asserted that this “render[ed] some of the conditions for cy pres distribution impractical.” Id. at 5. Class Counsel also outlined a potential modification of the Agreement, which would have involved the endowment of a new foundation “which could fund non-profit organizations serving the needs of Native American

the D.C. Circuit. See Keepseagle v. Vilsack, No. 14-5223 (D.C. Cir. filed Sept. 11, 2014). 3 It remains unclear why such a large amount was left over. Class Counsel proposes four causes: (1) “many of the farmers and ranchers who were otherwise eligible to participate in the settlement were deceased by the time the claims process began in mid-2011,” and although their heirs could file claims on behalf of their estate, “the heirs simply lacked sufficient information in order to complete the claim form”; (2) “[s]ome Native American farmer[s] and ranchers who believed they had been denied loans for discriminatory reasons regarded it futile to lodge complaints with the USDA,” so they were unable to prove their claim in the Non-Judicial Claims Process (which required some proof of having filed such a claim); (3) “the USDA’s historic failure to conduct sufficient outreach to much of the Native American farming and ranching community,” which, Class Counsel asserts, meant “that otherwise eligible Native Americans never applied or attempted to apply for loans” (such individuals were “included in the expert analysis of people eligible for loans,” but could not make a claim under the Agreement because they had never applied for a loan); (4) “there were some potential claimants who were so distrustful of the federal government for historic reasons, that they did not have confidence in the validity of the settlement process, and thus did not submit claims.” Class Counsel’s Status Report, ECF No. 646 at 5 n.3. The government has proposed an additional explanation: “[T]he simplest [explanation] is that there are simply fewer people with claims than Plaintiffs originally argued.” Gov’t Opp. to Keepseagle Mot. to Modify, ECF No. 786 at 8 n.5.

17 farmers and ranchers.” Id. at 8. The Department of Agriculture opposed this proposal. See Response to Status Report, ECF No. 649.

The filing of the August 30, 2013 status report prompted the [Choctaw Nation of Oklahoma and its affiliated Jones Academy Foundation] and [a group of class members calling themselves the] Great Plains Claimants to move to intervene. See Mot. to Intervene, ECF No. 647; Mot. to Intervene, ECF No. 654. These motions, however, sought to intervene in proceedings that did not yet exist. No one had proposed any modification to the Court and the hypothetical proposal outlined by Class Counsel was opposed by the defendant. Accordingly, the Court allowed the parties additional time to come to an agreement on whether and how to modify the Agreement.

On September 24, 2014, Class Counsel filed an unopposed motion to modify the Agreement. See Mot. to Modify, ECF No. 709. The modification proposes that 10% of the Cy Pres Fund be distributed immediately to non-profit organizations “proposed by Class Counsel and approved by the Court” that must also meet the following criteria:

(1) they must have “provided business assistance, agricultural education, technical support, or advocacy services to Native American farmers or ranchers between 1981 and November 1, 2010 to support and promote their continued engagement in agriculture”; and

(2) they must be “either a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code . . . educational organization described in Section 170(b)(1)(A)(ii) of the Code; or an instrumentality of a state or federally recognized tribe, including a non-profit organization chartered under the tribal law of a state or federally recognized tribe, that furnishes assistance designed to further Native American farming or ranching activities.”

Proposed Addendum to Agreement, ECF No. 709–2 ¶ II.A.

18 The modification utilizes the remainder of the Cy Pres Fund to create a trust “for the purpose of distributing the cy pres funds” which “shall seek recognition as a non-profit organization under § 501(c)(3).” Id. ¶ II.B. The trust would be required “to distribute the funds over a period not to exceed 20 years” and would be charged with disbursing the funds to “not-for-profit organizations that have served or will serve Native American farmers and ranchers.” Mot. to Modify, ECF No. 709–1 at 1. The Trust would be authorized to make grants subject to the following restrictions:

(i) “grants must be to a tax-exempt organization described in Section 501(c)(3) of the Code; educational organization described in Section 170(b)(1)(A)(ii) of the Code; or an instrumentality of a state or federally recognized tribe, including a non-profit organization chartered under the tribal law of a state or federally recognized tribe, that furnishes assistance designed to further Native American farming or ranching activities”; and

(ii) “the organization must use the funds to provide business assistance, agricultural education, technical support, and advocacy services to Native American farmers and ranchers, including those seeking to become farmers or ranchers, to support and promote their continued engagement in agriculture.”

Proposed Addendum to Agreement, ECF No. 709–2 ¶ II.B.

Shortly before the motion to modify the Agreement was filed, the Great Plains Claimants filed a renewed motion to intervene. See Second Great Plains Mot. to Intervene, ECF No. 705. On September 18, 2014, the Court denied without prejudice the earlier motions to intervene of the Great Plains Claimants and the Choctaw Movants and set a schedule for the briefing of renewed motions to intervene. See Minute Order of September 18, 2014. The Choctaw Movants filed a renewed motion to intervene on October 1, 2014. See Second Choctaw Mot. to Intervene, ECF No. 714.

Keepseagle I,

, at *3–4.

19 D. The Court Denies Requests to Intervene.

On November 7, 2014, the Court issued an Opinion denying both

requests to intervene for lack of standing, which the Court

found was a prerequisite for intervention as of right and for

permissive intervention. See

The Choctaw Movants lacked Article III standing “because any

injury [they may face] will arise only if a multitude of

speculative events occur.” Id. at *6. Their purported economic

injury was conjectural: “The Choctaw Movants have no existing

involvement with the Cy Pres Fund. They have not received a cy

pres distribution, been approved to receive one, or had their

eligibility assessed. Accordingly, modification of the cy pres

provision would not affect them in the direct ways described in

the cases they cite.” Id. It was unclear whether they would even

satisfy the requirements for obtaining a cy pres distribution

under the existing agreement as the Choctaw Nation was a tribal

government and “the Agreement does not include tribal

governments as potential recipients of cy pres distributions.”

Id. at *7. In any event, the Choctaw Movants had not yet been

recommended by Class Counsel to receive a distribution, which

was “problematic for standing, as the Supreme Court is

‘reluctant to endorse standing theories that require guesswork

as to how independent decisionmakers will exercise their

judgment.’” Id. at *8 (quoting Clapper v. Amnesty Int’l, 133 S.

20 Ct. 1138, 1150 (2013)). The Court also noted the “highly

speculative” nature of predicting what amount the Choctaw

Movants might receive if they were approved under the Agreement.

See id. “These twin uncertainties—whether the Choctaw Movants

would receive an award at all and, if so, how large an award

they would receive—render[ed] it highly speculative to assert

that the proposed modification would harm them.” Id. At the same

time, it was hypothetical at best to say that the procedures as

modified would harm, rather than help, the Choctaw Movants’s

ability to receive a cy pres distribution and to say whether

they would be likely to receive a larger or smaller amount if

they were approved. See id. Finally, the Court rejected the

argument that the Choctaw Movants would suffer a lost

opportunity to compete, as they “lose no opportunity to compete

under the modification” and their ability to compete under the

original Agreement appeared to be “illusory.” Id.

The Choctaw Movants also independently lacked prudential

standing because they sought to “assert a legal right to compete

under the existing procedures for cy pres distribution that were

created by a settlement (which has nothing to do with them), to

be distributed for the benefit of a class (of which they are not

a part), to remedy claims of discrimination (which they did not

suffer).” Id. at *9. “In doing so, they assert rights under the

Agreement that do not belong to them.” Id. Because the Choctaw

21 Movants could not show that they were in any way intended

beneficiaries they could not seek to enforce rights purportedly

created by that Agreement. See id. at *9–10. The Court rejected

their argument that the Agreement created a trust of which the

Choctaw Movants were intended beneficiaries: Both the purpose of

cy pres and the text of the Agreement itself “confirm[ed] that

[the cy pres provision’s] purpose was geared toward the Class.”

Id. at *10.

The Court also found that the Great Plains Claimants lacked

Article III standing. Those individuals were all class members

who had successfully pursued claims under the Agreement. See id.

at *12. Although none had objected to the cy pres provision when

the Agreement was approved and none had filed an appeal from

that approval, they sought to intervene to undo the cy pres

provision, on the ground that they had a legally protected

interest in the leftover funds. Id. The Court noted, however,

that the class members had “intentionally satisfied their legal

claims” by entering into the Agreement and thereby gave up any

legal claim they may have had. See id. This Court also surveyed

the law governing unclaimed settlement funds, which counseled

strongly in favor of finding that “‘neither the class members

nor the settling defendants have any legal right to unclaimed or

excess funds.’” Id. (quoting Diamond Chem. Co. v. Akzo Nobel

22 Chems. B.V.,

(D.D.C. 2007)).

Accordingly, the Court held:

The Great Plains Claimants have received the full value of their claims pursuant to the Agreement and thereby fully satisfied those legal claims. The fact that their claims, if ultimately successful at trial, could have resulted in higher damages awards changes nothing. As the Court emphasized during the April 28, 2011 fairness hearing: “There are risks in litigation as we all know. This case could have gone to trial, presumably, and the Plaintiffs not recovered anything. Class certification was not a foregone conclusion, and you’re aware, I’m sure, of other cases in this court, not before this judge, wherein class certification issues were not as successful as the class members would have liked. . . . So there were no guarantees that this case went forward at all.”

at *13 (quoting Transcript of April 28, 2011 Fairness

Hearing, ECF No. 609 at 24:9–18). In sum, the Court found that

the Great Plains Claimants “cannot now claim a property right in

funds that were intended to pay the claims of other class

members who did not claim their award.”

The Choctaw Movants timely appealed the Court’s intervention

decision. See Notice of Appeal, ECF No. 746. Their appeal

remains pending before the D.C. Circuit, Keepseagle v. Vilsack,

No. 15-5011 (D.C. Cir. filed Jan. 20, 2015), and they have

indicated that they will not move to stay proceedings before

this Court unless and until the Court grants any motion for

modification of the Agreement. See Choctaw Mot. to Extend

Deadline for Mot. to Stay, ECF No. 750 at 2. The Great Plains

Claimants did not appeal the Court’s decision.

23 E. Ms. Keepseagle Obtains Separate Counsel.

Shortly before the Court issued its Opinion denying the

motions to intervene, the Court scheduled a status hearing for

December 2, 2014 and informed the parties that once the

intervention issue was resolved, the Court would address the

following issues:

(1) whether the Court must direct notice to the Class and hold a fairness hearing pursuant to Federal Rule of Civil Procedure 23(e); (2) whether, if Rule 23 does not permit the Court to require such notice and a hearing, the Court may nonetheless exercise discretion to direct notice to the class and to permit class members to give their thoughts on the proposed modification during a status hearing or motion hearing; and (3) what content and form any notice— whether required by Rule 23(e) or permitted by the Court’s discretion—should take.

Minute Order of October 20, 2014.

In advance of the December 2, 2014 status hearing, the Court’s

staff was contacted by individuals on behalf of class

representative Marilyn Keepseagle, who indicated that Ms.

Keepseagle would attend the December 2, 2014 hearing, and

requested an opportunity to be heard by the Court. A recent

Opinion of this Court summarized what transpired next:

The Court began the status hearing by permitting Ms. Keepseagle to speak. Ms. Keepseagle discussed her opposition to Class Counsel’s proposed modification and her support for a proposal under which the cy pres funds would instead be distributed to members of the class. See Transcript of Dec. 2, 2014 Hearing, ECF No. 756 at 5:12–8:5, 9:19–10:3. The Court responded:

24 I’m not suggesting at all by any stretch of the imagination that the theory has legal support. I don’t know. But I very clearly heard [Ms. Keepseagle] tell me in her words very eloquently, as she is, that she wants relief from this judgment which sounds like a Rule 60(b) motion. So, the thought then is, what should the Court do at this juncture to enable her to develop her theory? I’m not going to lose sight of the fact that she’s without individual counsel, from what I can determine based on our brief discussion in open court.

at 12:25–13:18. Accordingly, the Court held further proceedings in abeyance, and granted Ms. Keepseagle time to secure legal representation. See

at 22:4–9.

Keepseagle v. Vilsack (“Keepseagle II”), No. 99-3119,

(D.D.C. Apr. 23, 2015).

Ms. Keepseagle’s new attorneys entered their appearances on

February 9, 2015 and indicated their desire to file two

preliminary motions before proceeding to address the settlement-

modification issue. See

Over the objection of Class Counsel

and the government, the Court set an expedited schedule for

separate adjudication of those motions. See

One motion

sought “a Court Order removing Porter Holder and Claryca Mandan

as class representatives” on the grounds that they were

inadequate because they supported Class Counsel’s proposed

modification, while the other motion sought “an Order compelling

Class Counsel to produce certain materials” related to public

gatherings at which Class Counsel discussed their proposed

modification with members of the class.

25 On April 23, 2015, the Court denied both motions. See

The

Court found that Porter Holder and Claryca Mandan remained

adequate class representatives because their position—while

unpopular with many class members—was a principled outgrowth of

their representation of the entire class and consideration of

various litigation risks. See

at *5–8. In any event, the

Court found that it would lack the authority to remove class

representatives at this stage of litigation because Federal

Rules of Civil Procedure 23(a)(4) and 23(c)(1)(C) do not “permit

the Court to modify the class certification order in light of

allegedly inadequate representation by a class representative .

. . where post-judgment actions will not affect class members’

legal rights.” Id. at *3. This was such a situation, as “the

class members in this case have no legal right to the Cy Pres

Fund,” and thus “the proposed modification would not implicate a

class member’s legal right.” Id. at *5. As for the motion to

compel, the Court found that the Keepseagles failed to supply an

appropriate legal basis for such discovery at this stage of

proceedings. See id. at *8–11.

F. The June 29, 2015 Hearing and the Pending Modification Proposals.

Having resolved all pending requests for intervention, Ms.

Keepseagle’s representation status, and the preliminary motions

filed by her counsel, the Court set a schedule for the

26 simultaneous briefing of the Keepseagles’s motion to modify and

Class Counsel’s motion to modify. See Order, ECF No. 771 at 1–2.

The Court also scheduled a hearing on these motions for June 29,

2015. See id. at 2.

In anticipation of this hearing, the Court resolved the last

preliminary issue: the applicability of Federal Rule of Civil

Procedure 23(e). Agreeing with the government and Class Counsel,

the Court found Rule 23(e) inapplicable to Class Counsel’s

proposed modification. See Keepseagle v. Vilsack (“Keepseagle

III”), No. 99-3119,

, at *4–8 (D.D.C. May 4,

2015). The Court first held that Rule 23(e) “applies only when a

modification materially hinders a class member’s legal right.”

Id. at *4. This is so because the entire purpose of Rule 23—and

in particular Rule 23(e)—is to provide procedural protections at

various stages of class-action litigation to ensure that the

rights of absent class members are appropriately protected. See

id. Unless a proposed modification would hinder such a class

member’s legal right in some way—whether by expanding the scope

of the res judicata effect of the judgment or otherwise limiting

the remedy available to a class member—there would be no need

for such protections. See id. at *5–6. The Court found—for

reasons similar to its findings that the Great Plains Claimants

lacked a legal interest in the Cy Pres Fund and that the

Keepseagles could not remove class representatives at this stage

27 of proceedings—that Class Counsel’s proposed modification would

not have such an effect. See id. at *6–7. Notwithstanding this

finding, the Court held that it had the authority, under both

Rule 23 and the Agreement itself, to order Class Counsel to

provide notice to the class of its motion to modify and of the

June 29, 2015 hearing, and also to permit class members to speak

during the hearing to provide their perspectives on the issue.

See id. at *7–9. The Court’s Order provided that class members

could submit written comments to the Court’s chambers—which have

been posted on the docket—and could also speak during the June

29, 2015 hearing. See Order, ECF No. 775.

The June 29, 2015 hearing lasted the entire day in the Court’s

Ceremonial Courtroom. After hearing extensive argument from

counsel, the Court was able to hear oral statements from all

individuals who wished to give them. See generally Transcript of

June 29, 2015 Hearing, ECF No. 806. Many individuals spoke in

favor of a proposal akin to Ms. Keepseagle’s, under which the

excess funds would be distributed to class members directly.

Many also shared the heart-wrenching stories of discrimination

they allegedly suffered at the hands of the federal government,

and the lasting effects of that discrimination.

The motions for modification of the settlement agreement are

now ripe for resolution. As described above, Class Counsel seeks

a modification of the procedures for the cy pres distribution,

28 and the government does not oppose that motion. See Class

Counsel Mot., ECF No. 709. The Keepseagles request a

modification that would either provide pro rata distribution to

class members who were successful under the initial Claims

Process or, in the alternative, provide for a second claims

period for those who were not successful under the original

process and then distribute the remainder pro rata to all who

were successful in either round of the distribution process. See

Keepseagle Mot., ECF No. 779. The Court has received amicus

curiae briefs from three groups—(1) the Association of American

Indian Farmers, (2) the Great Plains Claimants, and (3) the

Indian Land Tenure Foundation and Intertribal Agriculture

Council. See Assoc. of Am. Indian Farmers Br., ECF No. 740;

Great Plains Claimants Br., ECF No. 784; Indian Land Tenure Br.,

ECF No. 787. Finally, the Court has received extensive

correspondence from class members and others expressing their

views on the proposals.4

4 See First Set of Letters, ECF No. 780; Second Set of Letters, ECF No. 789; Third Set of Letters, ECF No. 790; Fourth Set of Letters, ECF No. 791; Fifth Set of Letters, ECF No. 794; Sixth Set of Letters, ECF No. 795; Seventh Set of Letters, ECF No. 796; Eighth Set of Letters, ECF No. 797; Ninth Set of Letters, ECF No. 798; Tenth Set of Letters, ECF No. 799; Eleventh Set of Letters, ECF No. 800; Twelfth Set of Letters, ECF No. 801; Thirteenth Set of Letters, ECF No. 802; Fourteenth Set of Letters, ECF No. 803; Fifteenth Set of Letters, ECF No. 804; Sixteenth Set of Letters, ECF No. 805; Seventeenth Set of Letters, ECF No. 807.

29 II. Analysis

The Court begins with the undisputed proposition that the

Agreement is a final judgment. As this Court has noted on two

recent occasions, “[a]n agreement between the parties dismissing

all claims is the equivalent of a decision on the merits and

thus claims settled by agreement are barred by res judicata.”

Chandler v. Bernanke,

(D.D.C. 2008);

see Keepseagle II,

; Keepseagle I,

. The Supreme Court has made this issue clear

with regard to consent decrees similar to the Agreement in this

case. “A consent decree no doubt embodies an agreement of the

parties and thus in some respects is contractual in nature. But

it is an agreement that the parties desire and expect will be

reflected in, and be enforceable as, a judicial decree that is

subject to the rules generally applicable to other judgments and

decrees.” Rufo v. Inmates of Suffolk Cnty. Jail,

(1992); see also Pigford, 292 F.3d at 923 (treating a

settlement of a very similar case involving the claims of

African-American farmers under Rufo’s standard for consent

decrees).

Because the Agreement is a final judgment, the Court’s

authority is circumscribed. “[D]istrict courts enjoy no free-

ranging ‘ancillary’ jurisdiction to enforce consent decrees, but

are instead constrained by the terms of the decree and related

30 order.” Pigford, 292 F.3d at 924 (quoting Kokkonen,

). “As our court of appeals has rhetorically asked: ‘Who

would sign a consent decree if district courts had free-ranging

interpretive or enforcement authority untethered from the

decree’s negotiated terms?’” In re Black Farmers Discrim.

Litig.,

(D.D.C. 2013) (quoting Pigford,

292 F.3d at 925). Indeed, the importance of respecting the

finality of a judgment is deeply embedded in our legal system.

See, e.g., Massaro v. United States,

(2003)

(noting “the law’s important interest in the finality of

judgments”). Any party seeking to overrule, modify, or rescind

the Agreement therefore bears the burden of demonstrating a

legal basis for doing so. Three avenues have been raised by one

or more of the parties: (1) the law governing the disposition of

unclaimed settlement funds; (2) Federal Rule of Civil Procedure

60(b); and (3) the modification provision of the Agreement

itself. The Keepseagles rely upon the first and second avenues,

while Class Counsel relies upon the second and third.

A. The Law Governing the Disposition of Unclaimed Settlement Funds Does Not Override the Mandatory Language of the Agreement.

The Keepseagles focus a large portion of their arguments—both

in favor of their proposal and in opposition to Class Counsel’s

proposal—on the legal doctrine governing the distribution of

excess funds. Their argument is that this doctrine has become

31 increasingly inhospitable to the use of cy pres except as a last

resort. They assert that the current circumstances of this case

do not render other distribution methods unworkable, so the

Court should not utilize a cy pres remedy. Class Counsel and the

defendant note that the Keepseagles are eliding an important

fact that renders this case unique: The question is not which

distribution method the Court should choose in a vacuum; rather,

the Court is presented with specific and mandatory language in a

final settlement that was never challenged or appealed.

1. Questions Have Arisen Regarding the Legal Rules Applicable to Cy Pres Remedies.

Courts in this Circuit have approved generally of the use of

cy pres in distributing leftover settlement proceeds. See

Democratic Cent. Comm. of D.C. v. Washington Metro. Area Transit

Comm’n,

(D.C. Cir. 1996); In re Living

Social Marketing & Sales Practice Litig.,

(D.D.C.

2013); Diamond Chem. Co.,

; Diamond Chem.

Co., Inc. v. Akzo Nobel Chems. B.V., Nos. 1-2118, 2-1018,

(D.D.C. July 10, 2007). The Keepseagles are not wrong

to suggest that cy pres has fallen out of favor in recent years,

however. In a statement concurring in the denial of certiorari,

Chief Justice Roberts summarized the many legal issues lurking

to be decided:

Granting review of this case might not have afforded the Court an opportunity to address more fundamental

32 concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. . . . In a suitable case, this Court may need to clarify the limits on the use of such remedies.

Marek v. Lane,

(2013) (Roberts, C.J.). The

American Law Institute has also set forth principles to govern

the use of cy pres, which limit the circumstances in which a

court may choose cy pres over other distribution methods:

• (a) If individual class members can be identified through reasonable effort, and the distributions are sufficiently large to make individual distributions economically viable, settlement proceeds should be distributed directly to individual class members.

• (b) If the settlement involves individual distributions to class members and funds remain after distributions (because some class members could not be identified or chose not to participate), the settlement should presumptively provide for further distributions to participating class members unless the amounts involved are too small to make individual distributions economically viable or other specific reasons exist that would make such further distributions impossible or unfair.

• (c) If the court finds that individual distributions are not viable based upon the criteria set forth in subsections (a) and (b), the settlement may utilize a cy pres approach. The court, when feasible, should require the parties to identify a recipient whose interests reasonably approximate those being pursued by the class. If, and only if, no recipient whose interests reasonably approximate those being pursued

33 by the class can be identified after thorough investigation and analysis, a court may approve a recipient that does not reasonably approximate the interests being pursued by the class.

Principles of the Law of Aggregate Litigation § 3.07 (2010). The

Keepseagles urge the Court to follow these Principles and

thereby decline to utilize a cy pres remedy in this case because

individual distributions to class members would not be

especially difficult. Their argument is reasonable: This is not

a case where further distribution of unclaimed funds to the

class would be terribly inefficient. The large amount of money

remaining to be distributed, combined with the large number of

identifiable potential claimants would make further

distributions relatively straightforward. Those who were

unsuccessful during the previous claims process could be put

through a renewed process, while those who previously received

compensation could prove that they suffered damages in excess of

the award they already received. Were this case in a traditional

posture, the issue would be relatively clear.

2. This Case Involves the Unique Circumstance in which a Cy Pres Remedy Has Already Been Approved and Neither Objected to Nor Appealed from.

In urging the Court to resort immediately to the ALI

Principles—which address whether to use a cy pres remedy in the

first place—the Keepseagles gloss over a key fact that places

this case in a unique posture: “[T]his is not a case where

34 parties seek to . . . address whether cy pres is appropriate in

the first instance,” Keepseagle I,

, nor

is it one in which the Court is presented with a settlement

agreement that contains a cy pres provision and must assess

whether it is “fair, reasonable, and adequate” before approving

it. Fed. R. Civ. P. 23(e)(2); cf. Keepseagle III,

(“The question . . . is not whether choosing to

utilize a cy pres remedy in the first instance would alter the

class’s legal rights if the Settlement Agreement were silent on

the disposition of excess funds (that ship sailed in 2011).”).

If the Court were presented with such a blank slate and asked to

decide how to distribute $380,000,000 in leftover funds, the

Keepseagles would likely be correct that of the four general

options available to a court considering how to distribute

unclaimed funds—(1) allowing the funds to revert to the

defendant; (2) pro rata distribution to class members who filed

claims; (3) escheat to the state or federal government; or (4)

cy pres distribution—the Court would choose a pro rata

distribution. See Newberg on Class Actions § 12:28 (5th ed.

2015) (as a general matter, “a court’s goal in distributing

class action damages is to get as much of the money to the class

members in as simple a manner as possible”).

35 As Professor Rubenstein notes in Newberg on Class Actions, the

existence of mandatory language in a final settlement agreement

cannot be ignored:

[T]he parties’ settlement agreement will typically include a provision expressing the settling parties’ preference with regard to unclaimed funds. The Court will review that provision at final approval to ensure it is ‘fair, reasonable, and adequate’ from the perspective of the class; if it is, the court will enforce the provision and follow its distributional instructions, even if the court (or objectors) might have chosen a different path.

Id. The Keepseagles ignore the fact that a final judgment speaks

directly to the issue in this case and mandates the use of a cy

pres remedy. The Court, however, must recognize the powerful

force of a final judgment agreed upon by all parties, approved

by the Court, and neither objected to nor appealed from, “even

if the court (or objectors) might have chosen a different path”

knowing what is known now. Id.

3. Most Case Law Regarding the Use of Cy Pres Does Not Address the Circumstance in Which Cy Pres Has Already Been Finally Approved.

The authorities on which the Keepseagles rely for the

proposition that a cy pres distribution is inappropriate in this

case largely addressed situations in which no final settlement

agreement spoke to the issue. See, e.g., In re Baby Prods.

Antitrust Litig.,

(3d Cir. 2013)

(reviewing objector’s direct appeal of the district court’s

approval of a settlement that directed excess funds to “one or

36 more charitable organizations proposed by the parties and

selected by the Court,” finding “that a district court does not

abuse its discretion by approving a class action settlement

agreement that includes a cy pres component directing the

distribution of excess settlement funds to a third party to be

used for a purpose related to the class injury,” but vacating

the approval of the settlement because the district court “did

not have the factual basis necessary to determine whether the

settlement was fair to the entire class”—namely, the district

court’s approval came before it was informed of the unexpectedly

high amount of unclaimed funds because “counsel did not provide

this information to the Court”); Nachshin v. AOL, LLC,

, 1037–38 (9th Cir. 2011) (reviewing objector’s direct

appeal of a district court’s approval of a settlement in which

no damages would go to the class and would instead be

distributed entirely as cy pres); Masters v. Wilhelmina Model

Agency, Inc.,

, 435–36 (2d Cir. 2007)

(reviewing objector’s direct appeal of a district court’s

approval of a settlement that provided that if there were excess

funds “the Court shall, in its discretion, determine the

disposition . . . after hearing the views of the parties hereto

as to such disposition” and reversing insofar as the district

court viewed its hands as tied in rejecting a request for an

37 award of treble damages to the class, in lieu of cy pres).5 Two

decisions warrant a more detailed review, as they frame the

fact-specific inquiry that is required when assessing whether cy

pres is mandated or permitted by a settlement.

In the case In re Lupron Marketing & Sales Practices

Litigation,

(1st Cir. 2012), a class of “medical

patient consumers . . . alleging fraud in overcharging for the

medication Lupron” reached a settlement agreement which the

district court approved.

at 23–24. A fairness hearing was

held, at which time a group of dissident class members—one of

whom had been allowed to intervene to “participat[e] in the

process established by the court for the evaluation of the

proposed settlement”—objected “that the amount of the settlement

allocated to the class of consumer purchasers of Lupron was

inadequate.”

. After the district court approved the

settlement over objection, the dissidents “said they would

pursue appeals of the settlement agreement unless they received

more,” so the parties negotiated an “implementation agreement”

5 In re Katrina Canal Breaches Litig.,

, 196–98 (5th Cir. 2010) is wholly distinct. That decision declined to consider “whether a cy pres distribution of the settlement fund, without any monetary distribution would be fair, reasonable, and adequate” as such a decision “would be premature” and later found that a proposed notice of class-action settlement was inadequate because it failed to inform class members of the possibility that excess funds would be distributed cy pres. The notice in this case did not suffer from such deficiencies. See Keepseagle I,

.

38 which increased the payments available to the consumer class in

exchange for the withdrawal of the objectors’ appeals and

objections. See id. at 26. The district court approved the

settlement and the implementation agreement. See id. After a

four-year-long claims period, over $11,000,000 remained in

unclaimed funds. See id. The district court heard proposals on

the disposition of those funds and ultimately “decided to make a

cy pres award of all of the unclaimed settlement funds” to a

hospital. See id. at 27. Three of the dissidents noted an appeal

of this decision. See id. at 28. The First Circuit affirmed the

decision to use cy pres because class members had received the

full amount of their damages and the class’s relief “was

established for the benefit of all consumer purchasers of

Lupron, not just the 11,000 who filed claims.” Id. at 34.

Although the First Circuit found that application of the ALI

Principles was appropriate at that stage, it was presented with

a settlement agreement, unlike the one before this Court, that

directed that unclaimed funds “shall be distributed in the

discretion of the Settlement Court as it deems appropriate,”

noting that “[i]f all or part of any unclaimed funds is

distributed to one or more charitable organizations,” the

defendant reserved the right to claim a tax deduction. Id. at

26. Thus, unlike the Keepseagle settlement, the district court

in Lupron had to make a threshold determination whether to

39 utilize cy pres or another distribution mechanism. Were the

Court presented with such a circumstance, this case would be

very different.

The issue is therefore very fact-specific when it arises in a

case resolved by a settlement agreement, as the Fifth Circuit

explained in Klier v. Elf Atochem N. Am., Inc.,

(5th Cir. 2011). In Klier, the Fifth Circuit was presented with

a class-action settlement resolving “claims of persons

assertedly injured by the toxic emissions of an industrial plant

near Bryan, Texas.”

. The settlement created three

subclasses and allocated monetary relief among them. See

One

subclass—of individuals who did not yet have medical conditions

resulting from the emissions—obtained medical monitoring as

relief. See

. Another class included individuals

“suffering serious injuries,” who received direct payments. See

. Upon completion of the medical-monitoring, the

funds allocated to that subclass were not exhausted, but the

fund for the subclass of individuals who suffered injury was

exhausted. See

. The district court then granted the

defendant’s request to distribute the funds as cy pres, and a

class member opposed the proposal, arguing “that an additional

distribution to members of [the injury subclass] was

economically feasible and would be equitable since the members

of [that subclass] had been found to suffer [serious injuries]

40 that are compensable under the settlement.”

The Fifth

Circuit reversed the district court’s decision to utilize a cy

pres remedy, focusing on the fact that the settlement agreement

itself contained no such remedy and in fact contained three

interrelated provisions that counseled in favor of

redistribution to members of the other subclass. See

at 476–

77 (one provision required “that any money left over in any

subclass fund ‘shall be distributed pro rata to all Claimants in

that subclass,” another provision permitted the court to “make

changes to the terms of this protocol as necessary for the

benefit of the Settlement Class Members,” and a third provision

allowed the settlement administrator to petition the court “for

reallocation of available funds among the [subclasses] on a

showing of good cause if . . . he determines that considerations

of equity and fairness require reallocation”) (alterations in

original). The Fifth Circuit emphasized a district court’s role

in administering a class-action settlement:

Because a district court’s authority to administer a class-action settlement derives from Rule 23, the court cannot modify the bargained-for terms of the settlement agreement. That is, while the settlement agreement must gain the approval of the district judge, once approved its terms must be followed by the court and the parties alike. The district judge must abide the provisions of the settlement agreement, reading it to effectuate the goals of the litigation. This is not a free exercise of cy pres, but a determination of how the settlement agreement’s many provisions define the class’s property interests and allocate those interests once created. The terms of

41 the settlement agreement are always to be given controlling effect.

at 475–76; see also

(“This is not a case where

the settlement agreement itself provides that residual funds

shall be distributed via cy pres.”).

4. The Eighth Circuit’s Decision in In Re Bank America Corporation Securities Litigation Is Unpersuasive.

Only one decision cited by the Keepseagles addressed the

situation in which a settlement agreement mandated the use of cy

pres. That decision found it appropriate to overrule an

agreement that had been approved by a district court and

affirmed as fair by the Eighth Circuit, all without objection to

the cy pres provision.

In re BankAmerica Corp. Securities Litigation (“BankAmerica

II”),

(8th Cir. 2015) involved a settlement of a

securities-fraud class action, resulting in a $333,200,000 fund

for a subclass of shareholders of NationsBank. See

.

A class representative objected that the class should receive

more money because of the strength of its claims. See

That

objection was overruled, and the objector appealed. See

. “At that time[, the objector] did not raise any objection

to . . . the provision that settlement funds remaining after one

or two distributions ‘may be contributed as a donation to one or

more non-sectarian, not-for-profit 501(c)(3) organizations as

determined by the Court in its sole discretion.’”

(emphasis

42 in original). The Eighth Circuit affirmed the district court’s

approval of the settlement agreement, which included that term.

See In re BankAmerica Secs. Litig. (“BankAmerica I”),

(8th Cir. 2003). A round of distributions occurred in

2004 and another took place in 2009, after which approximately

$2,400,000 remained. See BankAmerica II,

. In

2012, class counsel moved, over objection of the same objector

who brought the appeal in BankAmerica I, to distribute the

remainder as cy pres, and the district court agreed and ordered

the funds distributed to Legal Services of Eastern Missouri. See

The objector appealed from that determination and the Eighth

Circuit reversed. In so doing, the Eighth Circuit discussed

extensively the ALI Principles and the Court’s belief that cy

pres was inappropriate in the case. See

at 1063–66.

The Eighth Circuit addressed only briefly the fact that the

language of the final settlement agreement, to which the very

same objector had failed to object originally and failed to

mention in his prior appeal, “stat[ed] that the balance in the

settlement fund ‘shall be contributed’ to non-profit

organizations ‘determined by the court in its sole discretion.”

. The Eighth Circuit’s reasoning for ignoring the

settlement agreement was as follows:

In the first place, the agreement and order stating that a cy pres distribution would be made in the district court’s ‘sole discretion’ was contrary to our

43 controlling decisions in Airline Tickets I and Airline Tickets II; that provision was void ab initio. See In re Lupron,

(“Distribution of funds at the discretion of the court is not a traditional Article III function.”). More importantly, we agree with the Ninth Circuit that “[a] proposed cy pres distribution must meet [our standards governing cy pres awards] regardless of whether the award was fashioned by the settling parties or the trial court.” Nachshin,

. In arguing to the contrary [Class Counsel] misstates the holding of Klier, which overturned the district court’s cy pres award because ‘a cy pres distribution to a third party of unclaimed settlement funds is permissible only when it is not feasible to make further distributions to class members.”

.

The Court is not persuaded by this reasoning.

First, the Court is not persuaded that it has any authority to

declare void portions of an agreement that was negotiated by the

parties, approved by the Court pursuant to Federal Rule of Civil

Procedure 23, and finalized on appeal (either by affirmance of

the Court of Appeals or by the lack of any timely appeal). The

Eighth Circuit’s finding that the cy pres provision with which

it was presented was nonetheless “void ab initio” is difficult

to square with this reality, and the Eighth Circuit cited no

authority for the proposition that courts may line-item-veto

final settlements in this manner.6 To the extent that the Eighth

6 Even if this reasoning were persuasive, the D.C. Circuit does not appear to have any precedent that would have rendered the cy pres provisions of the Keepseagle settlement void ab initio. Furthermore, the Keepseagle settlement does not devote the cy pres distribution to the Court’s discretion; rather, it mandates that the funds be transmitted to a cy pres fund by the claims administrator, makes Class Counsel responsible for soliciting

44 Circuit relied upon In re Lupron for such authority, this Court

is unconvinced. The general statement in Lupron cited by the

Eighth Circuit—that “[d]istribution of funds at the discretion

of the court is not a traditional Article III function”—does not

establish the authority for a court to find a provision of a

settlement agreement void after that very court had approved the

agreement. Lupron, moreover, affirmed the application of cy pres

consistent with the ALI Principles when dealing with a

settlement that gave the district court discretion in discerning

how excess funds should be distributed. 677 F.3d at 30–36.

Second, the Eighth Circuit’s reliance on a decision of the

Ninth Circuit for the proposition that cy pres distributions

must comply with legal standards governing whether cy pres is

appropriate “regardless of whether the award was fashioned by

the settling parties or the trial court,” Nachshin,

, is unhelpful because that decision was a direct review of

a district court’s approval of a settlement agreement, so it was

the Ninth Circuit’s job to confirm whether the entire

settlement, including the cy pres provision, was fair,

reasonable, and adequate in the face of objections. At that

stage, a court obviously must apply the doctrine governing the

appropriate disposition of unclaimed funds. Nachshin does not

applications and making recommendations, and places the Court in a minor administrative role of approving those recommendations.

45 address a court’s role after final approval and affirmance on

appeal (or when no appeal is filed).

Third, the final sentence of the Eighth Circuit’s reasoning on

this point criticizes class counsel in that case for

“misstat[ing] the holding of Klier, which overturned the

district court’s cy pres award because ‘a cy pres distribution

to a third party of unclaimed settlement funds is permissible

only when it is not feasible to make further distributions to

class members.”

. Klier, however, is a paean to

the sanctity of class-action settlement agreements. Indeed, the

Fifth Circuit in that case found that the applicable settlement

agreement not only failed to provide affirmatively for a cy pres

distribution, but actually contained provisions indicating that

pro rata distribution to another subclass was appropriate. See

at 476–77. The Fifth Circuit specifically distinguished the

circumstance presented in BankAmerica II and in this case: “This

is not a case where the settlement agreement itself provides

that residual funds shall be distributed via cy pres.”

. And the Fifth Circuit could not have been clearer on the

importance of following the settlement agreement’s terms:

Because a district court’s authority to administer a class-action settlement derives from Rule 23, the court cannot modify the bargained-for terms of the settlement agreement. That is, while the settlement agreement must gain the approval of the district judge, once approved its terms must be followed by the court and the parties alike. The district judge must

46 abide the provisions of the settlement agreement, reading it to effectuate the goals of the litigation. . . . The terms of the settlement agreement are always to be given controlling effect.

at 475–76.

In this Court’s view, the Eighth Circuit’s reasoning for

overruling a final settlement is unpersuasive. Courts are

appropriately bound by the language of final settlement

agreements and may deviate from them only when authorized by

law. In the context of class actions, settlement agreements

reflect the considered judgment of the class, its counsel, the

defendant, and the Court, after following extensive procedural

protections. The truly terrible facts of the case before this

Court arguably cry out for a resolution that does not result in

$380,000,000 being distributed as cy pres where class members

are readily identifiable and may either prove their previously

unsuccessful claims or prove that they suffered damages in

excess of what they already received. Notwithstanding this

reality, the Court must resist the temptation to allow these bad

facts to make bad law. Following the Eighth Circuit’s holding

would make bad law by undermining the finality of a judgment

without a clear legal basis for doing so.

* * *

For these reasons, the Court is bound to the final judgment

proposed by the parties and approved by the Court after full

47 compliance with Rule 23 procedures—an approval to which no class

member objected in relevant part or appealed from at all.

Whether the cy pres doctrine as it exists in 2015 may bar a

finding that a cy pres provision like the one approved by this

Court in 2011 is fair, reasonable, and adequate is not an issue

before the Court.7

7 This case should serve as a cautionary tale to litigants in complex class actions. It should be the rare case where a major settlement agreement is completely finalized, only to find that a massive amount of unclaimed funds are leftover due to starkly lower-than-expected turnout by members of the class. Parties must do a much better job of predicting turnout and facilitating class-member participation in settlements. Such settlements are presented to district courts in a non-adversarial posture unless there are vocal objectors, making district courts especially ill-equipped to assess the reasonableness of a settlement’s predictions for class-member participation.

That does not leave district courts at the mercy of the accuracy of the parties’ predictions, however. To reduce the chances of the circumstances of this case repeating themselves, the Court suggests one of two paths. One option is “to withhold final approval of a settlement until the actual distribution of funds can be estimated with reasonable accuracy.” In re Baby Prods.,

; see also In re Living Social,

(giving final approval to a settlement that included a cy pres remedy only after the claims process had completed, at which point the court knew that $1,900,000 would be distributed to class members while $2,500,000 would be distributed as cy pres). This could allow the parties to modify certain portions of the preliminary settlement to reflect especially high or low turnout. Another option is for parties to include in the settlement terms that would be triggered in the event of a larger-than-expected excess to ensure that, similar to the result in Klier, class members who did participate are able to benefit, so long as that benefit would not exceed their actual damages. See In re Baby Prods.,

(“[A] court may urge the parties to implement a settlement structure that attempts to maintain an appropriate balance between payments to the class and cy pres awards.”). These approaches would have

48 B. Federal Rule of Civil Procedure 60(b) Does Not Provide a Method for Modifying the Agreement.

The parties each seek modification of the Agreement pursuant

to Federal Rule of Civil Procedure 60(b). Class Counsel relies

upon Rule 60(b)(5), while the Keepseagles invoke Rules 60(b)(5)

and 60(b)(6). Under Rule 60(b)(5), both parties argue that the

far-larger-than-expected amount of excess funds is a changed

circumstance that renders prospective application of the

Agreement inequitable. Under Rule 60(b)(6), the Keepseagles

argue that the issue is so important that it meets the

extraordinary-circumstances test necessary for application of

that Rule. Neither party has a convincing argument.

“‘[T]he decision to grant or deny a Rule 60(b) motion is

committed to the discretion of the District Court.’” Green v.

AFL-CIO,

(D.D.C. 2012) (quoting Kareem v.

FDIC,

(D.D.C. 2011)) (alteration in

original). “‘The movant has the burden to establish that [he is]

entitled to relief under Rule 60(b).’” Cohen v. Bd. of Trustees

of Univ. of D.C., No. 14-754,

, at *2 (D.D.C.

Dec. 9, 2014) (quoting F.S. v. District of Columbia, No. 10–

1203,

(D.D.C. Oct. 2, 2014)) (alteration

in original). Ultimately, “under Rule 60(b) the trial judge must

prevented the result in this case. Unfortunately, because this issue arose after final judgment, the ability of the parties and the Court to rectify the problem is much more limited.

49 strike a ‘delicate balance between the sanctity of final

judgments and the incessant command of a court’s conscience that

justice be done in light of all the facts.’” Twelve John Does v.

District of Columbia,

(D.C. Cir. 1988)

(alteration omitted; emphasis in original).

1. Federal Rule of Civil Procedure 60(b)(5) Does Not Apply Because the Cy Pres Provision Is Not Prospective and Circumstances Have Not Changed in a Manner Warranting Relief.

Federal Rule of Civil Procedure 60(b)(5) provides: “On motion

and just terms, the court may relieve a party or its legal

representative from a final judgment, order, or proceeding

[when] the judgment has been satisfied, released or discharged;

it is based on an earlier judgment that has been reversed or

vacated; or applying it prospectively is no longer equitable.”

The parties rely only on the final clause—when prospective

application of the judgment is inequitable due to changed

circumstances. Two elements are inherent in this clause: (1)

that the judgment has prospective application; and (2) that

circumstances have changed to make that application inequitable.

Neither element is satisfied here.

a. The Cy Pres Provision Does Not Have Prospective Effect.

“Rule 60(b)(5) allows a court to amend any judgment that has

prospective effect.” Kapar v. Islamic Republic of Iran, No. 2-

cv-78,

, at *3 (D.D.C. May 22, 2015) (quotation

50 marks omitted). “Although the principal significance of this

portion of the rule is with regard to injunctions, it is not

confined to that form of relief, nor even to relief that

historically would have been granted in courts of equity.” 11

Charles Alan Wright & Arthur R. Miller, Federal Practice and

Procedure § 2863 (3d ed. 2015)). A judgment may also be

prospective only in part, in which case Rule 60(b)(5) could

permit modification only of the portion of the judgment that has

prospective effect. Cf. Pennsylvania v. Wheeling & Belmont

Bridge Co.,

(1855) (in a decision that forms

the foundation for the changed-circumstances doctrine, the

Supreme Court found that a prior judgment ordering the removal

of a particular bridge could be reconsidered insofar as the

prior judgment “direct[ed] the abatement of the obstruction,”

but portions of the judgment regarding payment of costs were not

subject to reconsideration).

The D.C. Circuit has described the prospective-effect

requirement as follows:

Virtually every court order causes at least some reverberations into the future, and has, in that literal sense, some prospective effect; even a money judgment has continuing consequences, most obviously until it is satisfied, and thereafter as well inasmuch as everyone is constrained by his or her net worth. That a court’s action has continuing consequences, however, does not necessarily mean that it has ‘prospective application’ for the purposes of Rule 60(b)(5).

51 Twelve John Does,

. Reviewing the Supreme

Court’s decision in Wheeling & Belmont, as well as a subsequent

decision, United States v. Swift & Co.,

(1932), the

D.C. Circuit concluded that “the standard we apply in

determining whether an order or judgment has prospective

application within the meaning of Rule 60(b)(5) is whether it is

‘executory’ or involves ‘the supervision of changing conduct or

conditions.’” Twelve John Does,

; see Swift,

(“A continuing decree of injunction directed to

events to come is subject always to adaptation as events may

shape the need,” but will be found to be continuing only if it

“involve[s] the supervision of changing conduct or conditions

and [is] thus provisional and tentative”). Accordingly, the D.C.

Circuit concluded that an order dismissing the Attorney General

as a party to a prison-conditions lawsuit involving District of

Columbia inmates “did not have the requisite prospective

application”: “The order did not compel him to perform, or order

him not to perform, any future act; it did not require the court

to supervise any continuing interaction between him and the

other parties to the case; rather, it definitively discharged

the Attorney General from any further involvement in the case.”

Twelve John Does,

. By contrast, a prototypical

example of a consent decree that is prospective under Rule

60(b)(5) is one that resolved a church’s challenge to the denial

52 of building permits by allowing construction with limitations:

“[I]t imposes ongoing restrictions on Northridge’s ability to

build or undertake various activities, all of which are

supervised by the district court.” Northridge Church v. Charter

Twp. of Plymouth,

(6th Cir. 2011).

The application of these principles to the case at bar is

somewhat novel. “The consensus among Courts of Appeal, including

the D.C. Circuit, is that a claim for money damages is not

‘prospective’ for the purposes of Rule 60(b)(5).” Kapar,

, at *3; see also, e.g. Twelve John Does,

; Stokors S.A. v. Morrison,

(8th Cir.

1998); Marshall v. Bd. of Educ.,

, 425 (3d Cir.

1978); Ryan v. U.S. Lines Co.,

(2d Cir. 1962).

The cy pres provision of the Agreement addresses the final step

in the payment of damages. Thus, in one sense, it is an

execution of the award of money damages, not a prospective

judgment.

The cy pres provision arguably has some characteristics of a

prospective order, however, insofar as the distribution process

requires Class Counsel to solicit and recommend cy pres

recipients and creates an administrative task for the Court to

approve the recommendations. In that regard, Class Counsel

pointed the Court to the D.C. Circuit’s decision in Pigford,

, in which the D.C. Circuit applied Rule 60(b)(5) to a

53 damages-distribution process very similar to the Non-Judicial

Claims Process in this case. The D.C. Circuit did not discuss

the prospective-effect requirement in applying Rule 60(b)(5) in

Pigford, but it was dealing there with a request to reconsider

deadlines that very clearly had prospective effect. If those

deadlines were not modified, they would have barred a number of

class members from participating in the claims process under the

settlement, even though their failure to meet deadlines was due

to their counsel’s apparent malpractice. See id. at 925–27.

Ultimately, the cy pres provision in this case lacks this type

of binding effect on a party’s future behavior that makes a

judgment prospective within the meaning of Rule 60(b)(5). It

does not, in the language of the D.C Circuit, “compel [anyone]

to perform, or order [anyone] not to perform, any future act; it

d[oes] not require the court to supervise any continuing

interaction between [anyone] and the other parties to the case.”

Twelve John Does,

. Although Class Counsel has a

limited responsibility to propose recipients under the

Agreement, that is not the same thing as a party to the case

being subject to limitations on future conduct, and courts have

emphasized the need for such limitations if a judgment is to be

considered prospective. See, e.g., Comfort v. Lynn Sch. Comm.,

(1st Cir. 2009) (“[W]e have limited the

provision’s application to injunctions and consent decrees that

54 involve long-term supervision of changing conduct or

conditions.”) (quotation marks omitted). The cy pres portions of

the Agreement are thus akin to unpaid damages: The mere fact

that they have yet to be paid out, leaving some administrative

responsibilities to be executed, does not render them

prospective. See Kapar,

, at *3; Marshall, 575

F.2d at 425 n.7 (“A ‘prospective’ injunction envisions a

restraint of future conduct, not an order to remedy past wrongs

when the compensation payment is withheld from the beneficiaries

until some subsequent date.”).8 The Court therefore finds that

the cy pres provision of the Agreement is not prospective within

the meaning of Rule 60(b)(5), making that Rule inapplicable.

b. The Parties Have Not Demonstrated Changed Circumstances Within the Meaning of Rule 60(b)(5).

Even if the cy pres provision was prospective, it is not clear

that the larger-than-expected excess is the type of factual

8 It is telling that Class Counsel and the government have argued repeatedly that the modification proposed by Class Counsel would have no binding effect on the legal rights of any class member. That argument, which the Court accepted, served to support findings that class members lacked standing to intervene, Keepseagle I,

, at *11–14; that Rules 23(a)(4) and 23(c)(1)(C) did not apply to police the adequacy of a class representative at this stage of proceedings, Keepseagle II,

, at *3–5; and that Rule 23(e) did not require the provision of renewed notice and the holding of another fairness hearing, Keepseagle III,

, at *4–7. That the proposed modification would have no binding effect on the legal rights of class members in the future is consistent with the Court’s finding that the cy pres provision it sought to modify has no prospective effect.

55 change that warrants relief under Rule 60(b)(5). Rule 60(b)(5)

requires truly changed circumstances, not a difference in degree

of what was expected that renders a judgment less efficient, and

certainly not mere disagreement with the judgment: “We are

asking ourselves whether anything has happened that will justify

us now in changing a decree. The injunction, whether right or

wrong, is not subject to impeachment in its application to the

conditions that existed at its making. We are not at liberty to

reverse under the guise of readjusting.” Swift,

.

The inquiry is twofold: “[A] party seeking modification . . .

bears the burden of establishing that a significant change in

circumstances warrants revision. . . . If the moving party meets

this standard, the court should consider whether the proposed

modification is suitably tailored to the changed circumstance.”

Rufo,

. The initial factor may be met “by showing

either a significant change . . . in factual conditions or in

law.”

.

A change in factual conditions—the only change pressed here—

may support modification when it “make[s] compliance with the

decree substantially more onerous,” when “a decree proves to be

unworkable because of unforeseen obstacles,” or “when

enforcement of the decree without modification would be

detrimental to the public interest.”

For example, where a

state agency was under a consent decree regarding housing

56 facilities, modification of that decree was warranted where it

was not possible to find appropriate housing facilities for

certain patients. See

(citing N.Y. State Ass’n for Retarded

Children v. Carey,

, 969 (2d Cir. 1983)). Another

example cited by the Supreme Court was where modification of a

prison-conditions decree was necessary to avoid the need to

release individuals accused of violent felonies. See id. at 385

(citing Duran v. Elrod,

, 759–61 (7th Cir. 1985)).

Unlike in these decisions, nothing about the need to distribute

significantly more money via a cy pres provision is unworkable

or against the public interest. To be sure, it may be difficult

to distribute under the existing cy pres provision and it may

result in an inefficient distribution in view of the need to

distribute the funds all at once and in equal shares, but the

essence of the provision would still be served: The leftover

funds would go to the types of organizations the parties

initially contemplated when they entered the Agreement.

The D.C. Circuit’s decision in Pigford,

illustrates this distinction. There, the Court addressed the

application of Rule 60(b)(5) to a substantially similar

settlement of the claims of African-American farmers. Class

counsel in that case had failed adequately to represent the many

class members whom it was obliged to assist in proving their

claims under that settlement’s claims process. Id. at 925. The

57 failure to assist the class through that process was “an

‘unforeseen obstacle’ that makes the decree ‘unworkable’”

because it resulted in many class members missing the deadline

for filing claims. Id. at 927. In Pigford, the very purpose of

the settlement—distributing damages to class members—was totally

undermined by the lawyers’ actions. The larger-than-expected

excess in this case does not undermine the purpose of the

settlement in the same way, even if a modification would make

the settlement more efficient. Accordingly, circumstances have

not changed in a manner that would trigger the application of

Rule 60(b)(5).

c. If The Parties Had Demonstrated Changed Circumstances, the Keepseagles’s Proposal Is Not Tailored to that Change.

It is not enough simply to show that the judgment has

prospective effect and that circumstances have changed. “Once a

moving party has met its burden of establishing either a change

in fact or in law warranting modification of a consent decree,

the district court should determine whether the proposed

modification is suitably tailored to the changed circumstance.”

Rufo,

. A change in circumstances is not a free

pass to rewrite a consent decree; rather “the focus should be on

whether the proposed modification is tailored to resolve the

problems created by the change in circumstances.”

The D.C.

Circuit has applied this rule stringently, rejecting an attempt

58 in Pigford to correct Class Counsel’s failure to represent class

members through the claims process by “vesting arbitrators with

generic authority to revise deadlines ‘so long as justice

requires.’” Pigford, 292 F.3d at 927. “Whatever tailoring method

the district court ultimately adopts,” the Circuit held, “must

preserve the essence of the parties’ bargain.” Id.

Under this standard, even if the cy pres provision were

prospective and the parties had demonstrated changed

circumstances under Rule 60(b)(5), the Keepseagles’s proposals

would be inappropriate subjects of a Rule 60(b)(5) motion. The

changed circumstances cited by the parties are the fact that far

more money is leftover than was expected. This would render

application of the judgment inequitable, if at all, by virtue of

the difficulty it causes under the existing cy pres distribution

plan, which requires an immediate distribution in equal shares

to a limited set of entities. Neither of the Keepseagles’s

proposals—an immediate pro rata distribution to successful

claimants or a second claims process followed by a pro rata

distribution—are tailored to those changed circumstances.

Although the Court is very sympathetic to the perspective of

class members that the larger-than-expected excess provides an

opportunity to distribute more compensation to class members,

the goal of Rule 60(b)(5) is to “preserve the essence of the

parties’ bargain,” while accommodating the changed circumstance.

59 Pigford, 292 F.3d at 927. If, as the D.C. Circuit held, it was

not properly tailored in Pigford for a court to respond to class

counsel’s representational failings that caused missed deadlines

by permitting the arbitrators to extend the deadlines as justice

required, id., it is surely not tailored to respond to a larger-

than-expected excess by deleting the entire cy pres provision

that the parties included in the Agreement, did not object to,

and did not appeal from, and replace it with a term directing a

very different disposition of the leftover funds. Whether due to

concern with ensuring that excess funds would be used to provide

some indirect benefit to those who did not participate in the

claims process, or the government’s concern that a distribution

process that could result in Track A claims exceeding $50,000 in

the event of a surplus might lead to pressure to provide

similarly higher compensation to participants in the settlements

involving other farmers, the parties specifically agreed upon a

cy pres remedy for the disposition of excess funds. Whatever the

reasons for the provision initially, the Court would not be

empowered to undo the bargain entirely, even if Rule 60(b)(5)

were otherwise applicable.

2. The Keepseagles Have Not Demonstrated the Extraordinary Circumstances Necessary to Invoke Rule 60(b)(6).

Federal Rule of Civil Procedure 60(b)(6) provides: “On motion

and just terms, the court may relieve a party or its legal

60 representative from a final judgment, order, or proceeding for .

. . any other reason that justifies relief.” To avoid allowing

this exception to swallow the rule, “[r]elief under Rule

60(b)(6) . . . require[s] a showing of ‘extraordinary

circumstances.’” Kapar,

, at *3 (quoting Kramer

v. Gates,

(D.C. Cir. 2007)); see also Twelve

John Does,

(Rule 60(b)(6) “should be only

sparingly used”) (quotation marks omitted). Such extraordinary

circumstances have been found due to “an adversary’s failure to

comply with a settlement agreement that was incorporated into a

court’s order, fraud by the ‘party’s own counsel, by a

codefendant, or by a third-party witness[,]’ or ‘when the losing

party fails to receive notice of the entry of judgment in time

to file an appeal.’” More v. Lew,

(D.D.C.

2014) (quoting 11 Charles Alan Wright & Arthur R. Miller,

Federal Practice and Procedure § 2864 (3d ed. 2015))

(alterations in original); see also, e.g., Austin v. Donahoe,

No. 5-1824,

(D.D.C. Dec. 2, 2014)

(finding extraordinary circumstances where a party “asserts that

[her counsel] not only was negligent in failing to oppose the

[defendant’s] motion, resulting in the dismissal of her case,

but that he consistently misled her into believing that her case

was progressing when, in fact, it had long since been removed

from the Court’s docket”). Finally, “[c]laims under Rule

61 60(b)(6) must not be ‘premised on one of the grounds for relief

enumerated in clauses (b)(1) through (b)(5).’” Green,

(quoting Liljeberg v. Health Servs. Acquisition Corp.,

(1988)).

The Keepseagles appear to rely on the same argument they made

under Rule 60(b)(5)—that the larger-than-expected excess is

extraordinary. This is simply insufficient for relief under Rule

60(b)(6), which cannot be premised on the bases enumerated in

other portions of the Rule. See Green,

. Even

if the larger-than-expected excess were a cognizable reason for

modification under Rule 60(b)(6), all parties to this case chose

the terms of the Agreement, which included the cy pres terms.

That they no longer like those terms because of factual

developments does not constitute an extraordinary circumstance,

and Rule 60(b)(6) “may not be employed simply to rescue a

litigant from strategic choices that later turn out to be

improvident.” Salazar ex rel. Salazar v. District of Columbia,

(D.C. Cir. 2011) (quotation marks omitted).

There has been no suggestion of the kinds of extraordinary

representational failings or complete lack of notice that has

animated prior grants of relief under Rule 60(b)(6).

Accordingly, Rule 60(b)(6) does not provide an avenue for

modification.

62 C. The Settlement Agreement Permits Its Own Modification Only with the Consent of “the Parties,” Not Just Class Counsel and the Defendant.

The final legal avenue that was proposed lies in the Agreement

itself. The Agreement’s modification provision states: “This

Settlement Agreement may be modified only with the written

agreement of the Parties and with the approval of the District

Court, upon such notice to the Class, if any, as the District

Court may require.” Agreement ¶ XIV (p. 49). The government does

not oppose the use of this provision for Class Counsel’s

proposed modification, so Class Counsel asks the Court to rely

on it to grant its motion.

The Court briefly notes that, as all parties appear to agree,

the Court retains jurisdiction to enforce this provision.

“Federal courts are courts of limited jurisdiction” and “[i]t is

to be presumed that a cause lies outside this limited

jurisdiction.” Kokkonen,

. As the Court has

analyzed previously, the Court’s ancillary jurisdiction over the

Agreement is limited. See Order Denying LaBatte Mot., ECF No.

692 at 8 (citing Kokkonen, 511 U.S. at 379–80). “[D]istrict

courts enjoy no free-ranging ‘ancillary’ jurisdiction to enforce

consent decrees, but are instead constrained by the terms of the

decree and related order.” Pigford, 292 F.3d at 924. Although

the Agreement’s retention-of-jurisdiction provision did not

specifically mention the modification provision, Agreement ¶¶

63 V.A–B (pp. 40–42), the modification provision can only be used

with Court involvement and approval, id. ¶ XIV (p. 49), so any

interpretation of the Agreement as withholding jurisdiction to

enforce the modification provision would render that provision a

complete nullity. Unlike the requests for review of

determinations made during the Non-Judicial Claims Process,

moreover, exercising jurisdiction over requests for modification

would not contradict another of the Agreement’s terms. See Order

Denying LaBatte Mot., ECF No. 692 at 9–12. Therefore, although

the Court’s jurisdiction at this stage of proceedings is

limited, that jurisdiction extends to approving a modification

that is properly reached.

Class Counsel’s “unopposed” motion does not meet the

substantive requirements for obtaining modification under the

Agreement, however. Although the modification provision requires

consent of “the Parties,” the three represented groups—the

government, Class Counsel, and the Keepseagles—all seem to have

operated under the assumption that the provision requires

consent of Class Counsel and the government alone. The

Agreement, however, defines “the Parties” as “the Plaintiffs and

the Secretary,” Agreement ¶ II.DD (p. 10), and further defines

“the Plaintiffs” as “the individual plaintiffs named in

Keepseagle v. Vilsack, No. 1:99CV03119 (D.D.C.), the members of

the Class, and the Class Representatives.” Id. ¶ II.EE (p. 10).

64 The plain language of the Agreement, therefore, does not support

a reading that would allow Class Counsel to enter unilaterally

into an “unopposed” agreement to modify. Here, the Court is

presented with stark disagreement, including a class

representative and named plaintiff who has obtained separate

counsel and specifically opposed the proposed modification.

The Court raised this issue during the June 29, 2015 hearing

and gave the parties time to review the Agreement before

responding. The parties’ responses were unconvincing. The

Agreement plainly does not say that a modification may be

approved as “unopposed” when a class representative—who happens

to be the named plaintiff who gives this lawsuit its name—has

expressed written opposition through separate counsel.9 Class

Counsel and the government ultimately rested on the position

that Class Counsel serves as a representative of the entire

class and may therefore enter into an Agreement on behalf of

“the Plaintiffs.” This certainly squares with the general nature

of representative litigation, and the usual case would involve a

modification proposal by Class Counsel to which no class member

raised any objection. In that circumstance, the Court could—as

it did in 2012—approve the modification. But the posture of this

9 Indeed, Class Counsel’s response to certain of the Court’s questions made clear the vital status of, at a minimum, the class representatives, as “parties” to this case. See Transcript of June 29, 2015 Hearing, ECF No. 806 at 41:16–47:17.

65 case demonstrates that Class Counsel’s view does not represent

the view of even all of the class representatives. The parties

in drafting this Agreement chose to require the consent of “the

Parties,” defined to include more than just Class Counsel and

the government. This choice must be given effect, much as Class

Counsel and the government have argued strenuously that the

Court must give effect to the Agreement’s cy pres provision.

As the Court’s discussion with Class Counsel regarding another

provision of the Agreement illustrated, even the

representational nature of class-action litigation counsels in

favor of recognizing that the class representatives must also be

on board with a proposal:

MR. SELLERS: Okay. In the middle of that paragraph it says, “Class counsel and class representatives, as defined earlier, will be appointed to represent the class in its pursuit of monetary relief under Rule 23(b)(3),” which is consistent with the introduction I mentioned, that is, we and the class representatives have been appointed to represent the class, whether the class is individually or separately or collectively in connection with this agreement and the pursuit of monetary relief.

THE COURT: All right. Does that mean that all class representatives must agree?

MR. SELLERS: Do all class representatives, as opposed to the individuals?

THE COURT: Right.

MR. SELLERS: Um...

THE COURT: Ms. Keepseagle was a class representative, correct?

66 MR. SELLERS: Right.

* * *

THE COURT: So does this mean, then -- putting aside parties and plaintiffs, putting aside that plain language -- does this plain language mean that all class representatives must, indeed, approve a request for modification?

MR. SELLERS: I don’t think so, because the –

THE COURT: What number must approve it, then, if not all, and where does it say so?

MR. SELLERS: I don’t think it contemplates a majority or minority. It treats them as a group.

THE COURT: Which begs the question, then: Do all members of that group need to approve?

MR. SELLERS: Right.

THE COURT: And the answer is?

MR. SELLERS: The answer is: I don’t think the agreement provides that they all have to agree.

Transcript of June 29, 2015 Hearing, ECF No. 806 at 66:10–67:19

(discussing Agreement, ECF No. 621-2 ¶ VI.A.7 (p. 43).10

The Court agrees that the modification provision would be

absurd were it to recognize the consent of “the Parties” only

10 It is telling that Class Counsel could not clearly answer the following question about how the Court could interpret the modification provision: “So the Court would have to say something like this: Notwithstanding the plain language of the agreement that identifies plaintiffs as the individual plaintiffs named in Keepseagle v. Vilsack, the members of the class and class representatives, notwithstanding that, comma, the true plaintiffs are -- now how would you finish that sentence?” Transcript of June 29, 2015 Hearing, ECF No. 806 at 54:21–55:1.

67 upon written consent from every single member of the Class. The

Agreement, as Class Counsel argued, is representational in

nature. But the representational nature of the case does not end

with Class Counsel. This Court appointed class representatives

for a reason, and the breadth of the modification provision

counsels in favor of requiring their consent, as do the other

portions of the Agreement cited by Class Counsel during the June

29, 2015 hearing. Were the Court presented with an agreement to

which all class representatives agreed, Class Counsel’s

assertions regarding the representational nature of this

litigation would be convincing. Because the Court is not

currently presented with such an agreement, it cannot grant

relief under the Agreement’s modification provision at this

time.11

III. Conclusion

For the foregoing reasons, the Court DENIES the pending

motions for modification of the Agreement. The Agreement speaks

11 The Keepseagles indicated in one of their pleadings that they may ultimately prefer Class Counsel’s proposal to the existing Agreement, if the choice comes down to the two options alone. See Keepseagle Opp., ECF No. 785 at 15–20. This conditional statement is not, in the Court’s view, sufficient to constitute consent of “the Parties.” During the June 29, 2015 hearing, moreover, one of the Keepseagles’s attorneys expressed openness to renewed negotiations with the government and Class Counsel, and also seemed to hint at potential appellate proceedings. In the event the case returns to this Court with this Opinion’s legal conclusions intact, the Parties will be permitted time to present whatever agreement they deem appropriate.

68 directly to this issue and existing doctrine regarding cy pres

cannot overrule a final agreement that was neither objected to

nor appealed from. Rule 60(b)(5) cannot be used to alter the

Agreement because the cy pres provision does not have

prospective effect and circumstances have not changed such that

the provision is inequitable. Rule 60(b)(6) does not apply

because the Keepseagles have not cited any “extraordinary

circumstance” that could trigger its application. Finally, on

the current record, the Court cannot grant Class Counsel’s

motion under the Agreement itself because the Agreement requires

consent of more than just Class Counsel and the government.

These legal rulings are not the end of the matter, however.

Over the past year, the Court has issued four published Opinions

that addressed a number of legal issues. Some of these

conclusions will likely be reviewed by appellate courts. The

simplest resolution, however, is the same path that took this

case from one of the hardest-fought cases on this Court’s docket

to one of the more monumental civil-rights settlements in recent

memory. The Parties have the ability to reach a compromise that

the Court can approve and which would give this case finality.

In considering this option, the Executive Branch would do well

to consider the remarks of President Obama, given in June 2014

while on the Standing Rock Sioux Reservation (the tribe to which

Marilyn Keepseagle and many other class members belong):

69 I know that throughout history, the United States often didn’t give the nation-to-nation relationship the respect that it deserved. So I promised when I ran to be a President who’d change that -- a President who honors our sacred trust, and who respects your sovereignty, and upholds treaty obligations, and who works with you in a spirit of true partnership, in mutual respect, to give our children the future that they deserve.

* * *

We’ve responded and resolved longstanding disputes. George Keepseagle is here today. (Applause.) A few years ago, my administration reached a historic settlement with George and other American Indian farmers and ranchers.

* * *

There’s no denying that for some Americans the deck has been stacked against them, sometimes for generations. And that’s been the case for many Native Americans. But if we’re working together, we can make things better. We’ve got a long way to go. But if we do our part, I believe that we can turn the corner. We can break old cycles.

Remarks by the President at the Cannon Ball Flag Day

Celebration, The White House (June 13, 2014), https://www.

whitehouse.gov/photos-and-video/video/2014/06/13/president-

obama-speaks-cannon-ball-flag-day-celebration#transcript.

* * *

An appropriate Order accompanies this Memorandum Opinion.

SO ORDERED.

Signed: Emmet G. Sullivan United States District Judge July 24, 2015

70