Lawyer says capping his team's fees at $50 million would derail $3 billion settlement

Chris Rizo May 5, 2010, 3:22pm

John Barrasso (R)

Elouise Cobell

WASHINGTON (Legal Newsline)-One of the trial lawyers who sued the federal government over claims it mismanaged Indian trust funds says the proposed $3.4 billion settlement would be derailed if Congress tries to reduce fees he and other counsel in the case would receive.

The long-running case's lead plaintiffs' attorney, Washington-based solo practitioner Dennis Gingold, said the draft settlement will be null and void and the case will revert to litigation, if Congress attempts to change the terms or fails to approve the accord by May 28.

The original deadline was Dec. 31, but Congress failed to act so the deadline was lengthened to Feb. 28 and extended again to the end of May.

Gingold's statements, reported this week by The Associated Press, came after a suggestion by the Senate Indian Affairs Committee's ranking Republican that a cap be placed on fees collected by lawyers who litigated the case.

U.S. Sen. John Barrasso, R-Wyo., said there should be a $50 million cap on pre-settlement attorney fees and costs awarded in the 14-year-old class action filed over mismanagement of royalty payments collected on land leases for such things as cattle grazing and extraction of minerals, timber and natural gas.

Barrasso late last month reiterated his concerns about the pending settlement's fairness. Among other things, he said any incentive awards in the settlement should be to named plaintiffs to recover actual costs they incurred and have not recovered.

"Since its announcement in December, the proposed settlement has given rise to considerable discussion and debate in Indian Country and elsewhere," Barrasso said in a letter to tribal leaders, adding that in addition to the unresolved question of how to pay for the settlement, there are "concerns that deserve to be carefully considered before Congress acts."

In the letter the senator also asked Native Americans to provide him feedback about the accord - in time for him to weigh their opinions before the legislation authorizing the payments is heard.

Foremost, the settlement between Individual Indian Money Account holders or their heirs and the U.S. Interior Department would provide $1.4 billion to be distributed to the more than 300,000 class members as compensation for their financial losses and to resolve any future claims.

Congressional approval is required so a yet-to-be-named special master in the case may distribute the funds.

Filed in 1996 in the federal court for the District of Columbia, the lawsuit seeks a completer accounting of royalty payments placed in trust for Native Americans. The lawsuit is among the largest class actions ever filed against the U.S. government.

The case, known as Cobell v. Salazar, is overseen by U.S. District Court Senior Judge James Robertson in Washington. The lead plaintiff is Indian rights activist and banker Elouise Pepion Cobell, 64, a former treasurer of the Blackfeet Tribe of Montana.

She and the rest of the class are represented chiefly by Gingold and Keith Harper, head of the Native American Affairs practice group at the national law firm of Kilpatrick Stockton LLP. They have agreed to fees of between $50 million and $99.9 million, which would be paid from the settlement funds.

In a February Internet posting, Cobell defended her lawyers' $99.9 million figure, saying that would mean less than 3 percent of the total settlement would go to attorney fees.

She said 3 percent is a "very low percentage for attorneys in class-action lawsuits."

"Consider that attorneys representing tribes under Indian Claims Commission Act generally received 10 percent as mandated by statute and attorneys involved in suits related to Enron received 9.5 percent," or almost $700 million in attorneys' fees.

Announced late last year, the proposed settlement calls also for a $2 billion land consolidation fund and an Indian college scholarship fund of up to $60 million.

Just days after the settlement announcement, plaintiffs filed a petition for certiorari, asking the U.S. Supreme Court to review a July ruling from the U.S. Court of Appeals for the D.C. Circuit that erased a $455.6 million award for the government's breach of fiduciary trust in managing the tribal trust funds.

Even if Congress approves the settlement, individual class members are able to formally object to its terms and call on the federal courts to reject it.

House Natural Resources panel Chairman Nick Rahall, D-W.Va., and Rep. Doc Hastings of Washington, the panel's ranking Republican, have both raised concerns about the settlement proposal but say it is time to put the lawsuit to rest.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., said she is "committed" to finding funding for the settlement as well as $1.15 billion to settle claims by African American farmers who said the U.S. Department of Agriculture discriminated against them in farm lending and other USDA programs.

In the Senate, Majority Leader Harry Reid, D-Nev., called on his chamber last month to approve the settlements, which he said are a matter of "justice and fairness."

From Legal Newsline: Reach staff reporter Chris Rizo at

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