Results matching “cobell”

(This post is co-authored with Adam Schulman of the Center for Class Action Fairness.)

Sullivan v. DB Investments, the Third Circuit en banc decision affirming a class action settlement certification, was troubling, for reasons noted by Andrew Trask last year. Class members who had no cause of action were grouped with class members who did have a cause of action in a single settlement class, and got identical relief. The Third Circuit found no intra-class conflict, despite the obvious wealth transfer. As Judge Scirica's concurrence reads:

[O]bjectors contend some class members do not have a valid cause of action, but these class members with non-repealer state law claims have lost nothing through inclusion in the class. Objectors speculate inclusion of non-repealer state law claims necessarily diminishes the settlement accrued to class members whom they contend have undisputedly valid claims. But they provided no support for their assertion.

Objectors contend they seek to protect absent class members, but fail to explain how absent class members--all of whom claim injury--are harmed by the defendants' willingness to settle all potential claims.

Judge Jordan had the obvious rejoinder:

The problem here is not that some absent class members who deserve compensation are left out by the settlement. The problem is that some class members who deserve nothing are included in the settlement and hence are diluting the recovery of those who are entitled to make claims. That harm is real, and the cause of it, the overbreadth of the class, is akin to the problem in Amchem.

Now, over a year after the decision, checks have been mailed, and, surprise, surprise, class members' claims have been diluted to near nothing: a Consumerist poster, Laura Northrup, notes that a class member with a $3000 claim (which would be trebled under the antitrust laws), received a mere $48. (This is hardly surprising, given that there were 67 million class members splitting about $200 million. If anything, $48 is surprisingly large. Of course, Ms. Northrup's friend might be in the $0 cross-subsidizing subclass, rather than the subclass whose recovery was diluted.) Meanwhile, the attorneys who won this nuisance settlement of pennies on the dollar were compensated more than in full: $73 million.

The DC Circuit rejected a similar challenge in Cobell v. Salazar; cert petitions were rejected in Cobell and voluntarily dismissed in Sullivan, so the Supreme Court has not yet addressed appellate courts' disregard of its precedents and the circuit split, but the issue is likely to arise again in some pending megasettlements.

Pigford makes it into the New York Times - PointOfLaw Forum

Years after the late Andrew Breitbart called attention to the multi-billion dollar giveaway of taxpayer money to Friends of Obama under the guise of settling discrimination litigation, the New York Times notices that a political decision to settle meritless litigation that the government was winning in court as if the government had defaulted on all claims has led to an abuse of the Settlement Fund, and a lot of fraudulent claims, with no intent by the government to investigate the theft from taxpayers. (Where are the False Claim Act qui tam suits?) As the late Richard Nagareda and I noted years ago, when you have a mass-tort settlement with no checks for fraud, you will get the Field-of-Dreams problem: "If you build it, they will come," and the claims process will be overrun by fraud. But, as Paul Horwitz notes, the legal academy utterly ignored this aspect of the Pigford litigation.

One settlement of $700 million only presented $300 million of claims (itself a likely exaggerated figure), leaving a $400 million slush fund for the attorneys (Cohen Millstein) for "cy pres," again with apparently no oversight. Will anyone be checking to determine if the money is actually going to its intended purposes instead of to something affiliated with the attorneys?

More: Walter Olson; Daniel Foster; earlier on POL.

The story focuses on Department of Agriculture settlements, and thus omits the equally problematic Cobell v. Salazar settlement. There, the government had essentially won the litigation, getting the D.C. Circuit to throw out a judgment of $455 million. Yet, once Obama took office, the case settled for $3.4 billion—including $1800 a pop for hundreds of thousands of class members with absolutely no damages because they correctly had only pennies in their trust accounts. As you recall, I filed an objection on behalf of a class member who complained that class members with actual damages were being shortchanged by the settlement because of the arbitrary payments to the uninjured class members. Yet, though the D.C. Circuit had earlier held that such a distribution "would be inaccurate and unfair to an unknown number of individual trust beneficiaries," it affirmed approval of a settlement with the exact same "inaccurate and unfair" distribution. That taxpayers ended up on the hook for $3 billion more than the D.C. Circuit had already held was unreasonable has gone entirely unreported upon.

Even more remarkable is the fact that the plaintiffs used the D.C. Circuit briefing to admit that they had lied before Congress about their case. James Otis Kennerly, served as the poster child for the class because he had allegedly been cheated out of millions of dollars by poor trust accounting relating to an oil well on his land; lead plaintiff Elouise Cobell testified before Congress about that story as late as 2007. In arguing for rejection of the settlement, we noted that Kennerly was going to get the same $1800 as class members entitled to nothing. In response, plaintiffs argued that Kennerly's case couldn't be used to prove the settlement unfair because Kennerly wasn't actually entitled to anything either, because evidence the government presented years before Cobell's testimony to Congress showed that Kennerly never had a legitimate claim to the oil well. (Mother Jones hasn't run a correction to its story, and a documentary about Cobell is apparently planning to retell the bogus version of the Kennerly account; if you google Kennerly, you will find no indication from anyone other than me that plaintiffs have made this admission.) Again, no consequences: Cobell was awarded $2 million, and her heirs are asking for another $11 million as an "incentive" for her success in this case.

Around the web, September 4 - PointOfLaw Forum

  • Overlawyered round-up of CCAF victories, plus two more on July 31.

  • Delaware Supreme Court upholds $300 million fee award we criticized; a $35,000/hour payday is nice if you can get it. [ABA Journal link roundup]

  • Complaint to Illinois Department of Human Rights that corporate executive's speech creates "hostile environment" in chain's restaurants. [Volokh]
  • A side-effect of the Obama administration's politicization of the Department of Justice is skepticism when they start investigations of corporations associated with owners critical of the administration. [Naked DC] Separately, Walter Olson looks at Sheldon Adelson's libel litigation record. [OL; Frankel]
  • Kimberly Craven appeals the error-ridden DC Circuit Cobell decision to the Supreme Court. I am no longer Ms. Craven's attorney, and can't comment, so please don't contact me looking for insight or explanations of why she appealed or requesting that she drop her appeal. [ICTMN; Native Sun News; cert petition @ Turtle Talk]
  • China provides the perfect example of ideal Keynesianism in action—and not working. [Cowen]
  • A new North Korean economic policy provides 0% marginal tax rates on farmers' surplus production, but people are skeptical of the reforms because of the lack of rule of law and the government's previous confiscations of reform-generated wealth. But you can ever so briefly complain that your marginal tax rate is higher than that of top North Korean farmers. [Daily NK]
  • Inspiring story of paralyzed Skadden M&A partner and Chicago Law grad. Also, never ski. [WSJ]

Cobell v. Salazar (D.C. Cir. 2012) - PointOfLaw Forum

I'm disappointed by Tuesday's decision in Cobell v. Salazar, the first time I ever lost a federal appeal I've argued. (Of course, as always, the Center for Class Action Fairness is not affiliated with the Manhattan Institute.) [Briefing; Coverage: DC Circuit Review; BLT; ICTMN; AP; Reuters; Cronkite; McClatchy; Oklahoman; wildly inaccurate KFBB.]

Cobell v. Salazar oral argument in DC Circuit - PointOfLaw Forum

Yesterday I argued the Cobell v. Salazar case in the DC Circuit. The Seventh and Ninth Circuits make their oral arguments available over the web, so I was surprised and disappointed to find that the DC Circuit does not. You'll have to settle for coverage from Indian Country Today and BLT. The case is under submission.

In the Cobell v. Salazar Indian trust class action settlement, class counsel made unrealistic promises to the class about when money from that settlement would be distributed. With over four separate appeals, including one from my client, Kimberly Craven, and post-fairness-hearing motions about whether the lead representative plaintiff, Elouise Cobell, was personally entitled to another $10.5 million from the settlement fund, the money has not yet been distributed, and class members are asking questions, including why there are appeals. Class counsel could simply make the briefing publicly available, or even summarize their arguments against the appeal. Instead, they announced falsely January 20 that the appealing objectors "each believes that you are not entitled to the relief (nor the payment of your trust funds) that has been provided in the settlement agreement," and then provided the addresses and phone numbers of the appellants and invited the hundreds of thousands of class members to contact the objectors. (The allegation is especially ironic, given that it is the class counsel who has defended the settlement approval and their $99 million fee (and $2.5 million in incentive payments to the class representatives) by arguing that class members are not entitled to anything, so anything they get makes the settlement fair, notwithstanding objectors' claims of intra-class conflicts and complaints that the settlement violates Wal-Mart v. Dukes in multiple ways.)

Fortunately for the cause of justice, the appellants are not so easily silenced by such unprecedented intimidation tactics. I'm quoted in two of the stories. [Indian Country Today; AP/WaPo; Lincoln Journal-Star]

Capriccioso on Cobell appeal - PointOfLaw Forum

Indian Country Today looks at the latest filings in the Cobell v. Salazar appeal.

It's worth noting that, notwithstanding fulminations from the plaintiffs' attorneys, the appeal hasn't yet delayed the settlement at all: even if there had been no appeal, the settlement moneys still would not be distributed, because Elouise Cobell's collateral request for reconsideration of an extra $10.5 million to be paid to her (another document absent from the indiantrust.com website) is still pending at the district-court level.

DC Circuit briefing in Cobell v. Salazar complete - PointOfLaw Forum

Hans Bader on challenging class-action abuses - PointOfLaw Forum

Hans Bader, senior attorney and counsel for special projects at the Competitive Enterprise Institute, in a piece featured on CEI's blog OpenMarket.org, discussed recent challenges to class-action abuses focusing his commentary specifically on cy pres distributions.

In his discussion of Nachsin v. AOL, Inc., where the Ninth Circuit struck down cy pres to local Los Angeles charities unrelated to the class or the claims of the lawsuit, Hans cited the appeals court,

As the appeals court noted, judges have often wrongly used class-action settlements to enrich groups that have nothing to do with consumers' rights, like the ACLU: "courts have awarded cy pres distributions to myriad charities which, though no doubt pursuing virtuous goals, have little or nothing to do with the purposes of the underlying lawsuit or the class of plaintiffs involved," such as "awarding $2 million from an antitrust class action settlement to fifteen applicants, including the San Jose Museum of Art, the American Jewish Congress, a public television station, and the Roger Baldwin Foundation of the American Civil Liberties Union of Illinois.

Ted Frank of PointofLaw and the Center for Class Action Fairness who represented the objecting consumer in the AOL settlement is also "challenging a settlement in a class-action lawsuit over mishandling of Native American trust accounts that massively enriched some favored claimants while ripping off others. CEI filed an amicus brief in support of that challenge in a case called Cobell v. Salazar."

CEI amicus in Cobell v. Salazar Indian trust appeal - PointOfLaw Forum

The Competitive Enterprise Institute has filed an amicus brief opposing the $3.4 billion settlement in the Cobell v. Salazar Indian trust case. The lead brief author, Andrew Trask, has written on Wal-Mart v. Dukes, a critical precedent in this case, for the Cato Supreme Court Review, and is the co-author of The Class Action Playbook. [BLT]

Opening brief filed in Cobell v. Salazar - PointOfLaw Forum

The Center for Class Action Fairness LLC filed its opening brief today in the DC Circuit in Cobell v. Salazar, No. 11-5205. The case, relating to the $3.4 billion government settlement of Indian trust mismanagement claims, raises important issues regarding class members' rights in class action settlements; whether it is permissible to abrogate some class members' individual rights while giving other class members a windfall; whether one can impose a mandatory class upon a wholly monetary settlement by characterizing the monetary relief as "equitable"; the appropriateness of certifying a unitary class involving dozens of different types of claims; the extent to which Congress can abrogate the protections of Rule 23; and whether it is an impermissible conflict of interest for a class representative to request an incentive award of $13 million. It's an important case for delineating the scope of Wal-Mart v. Dukes.

Which raises an interesting issue. The plaintiffs' attorneys, Kilpatrick Townsend, hoping to defend a fee award between $99 and $111 million (some of which will be shared with other attorneys), are now placed in the position of arguing for a narrow construction of Wal-Mart v. Dukes—so narrow as that they will need the D.C. Circuit to essentially find that that precedent has no effect, because plaintiffs cannot possibly win an affirmance consistent with Wal-Mart. Kilpatrick's clients include Adidas, BellSouth, British Petroleum, Chrysler, Delta Air, Dupont, General Electric, Google, Office Depot, Pepsi, and Sony—all of whom would be adversely affected if Kilpatrick Townsend wins this case in the DC Circuit. I've previously complained that Fortune 500 companies are more concerned about political correctness in their law firms than whether those firms are taking litigation positions harmful to their own long-term interests, and this case provides another remarkable example of a BigLaw firm putting its own financial interests ahead of its clients. General counsels should pay much more attention to whom they're giving their business to: they should do more to insist that their outside defense firms are really defense firms that believe in their clients' rights, rather than mercenaries that happen to represent defendants in a particular case.

(CCAF is not affiliated with the Manhattan Institute.)

Some follow-up - PointOfLaw Forum

Court rejects appeal bond in Cobell v. Salazar - PointOfLaw Forum

In a brief full of ad hominem attacks on me and my client, class counsel asked for an $8.3 million appeal bond, requesting millions of dollars of expenses that the D.C. Circuit had held were unavailable under Fed. R. App. Proc. 7. We noted the class counsel's omission of binding precedent and other misleading citations in opposing the request and asked for sanctions. Yesterday, the district court denied the motion, and asked class counsel to submit declarations on the question of whether sanctions were appropriate: "the plaintiffs' motion and reply brief go beyond fair advocacy and border on misrepresentation." [McClatchy; earlier]

Around the web, September 9 - PointOfLaw Forum

  • Are Americans more litigious? Where the legal system works and doesn't. [Rasmusen/Ramseyer @ SSRN; Fisher @ Forbes]

  • Questionable nastygram sent by plaintiffs' firm to client who disclosed mass-tort nuisance settlement offer. [Frankel; earlier]
  • More bad laws named after dead people: turns out fear of bath salts was unjustified, but law is still on books. [Balko]
  • Obama's illegal move on immigration. [Rivkin/Casey @ WaPo; earlier on Obama administration disregard for rule of law]
  • 9/13 Federalist Society debate in DC on confronting terrorism: Mukasey v. Barr. [Fed Soc]
  • Press coverage on the Cobell appeal. I am accused of having a "noted legal mind." [Cronkite News; BLD; CCAF]
  • Obama administration planning to freeze foreclosures? I'm skeptical that they'd be that irrational. [Bader]
  • Government failure and market failure: when comparing the performance of markets to government, markets look pretty darn good. [Becker @ WSJ]

Appeal bond in Cobell v. Salazar? - PointOfLaw Forum

AP's Matt Volz reports on the class counsel's attempt to impose an $8.3 million appeal bond on Kimberly Craven's appeal of the settlement approval. The story interviews class counsel, but not me, though it does quote from our brief without clearly indicating that such an appeal bond is expressly forbidden by D.C. Circuit precedent.

Around the web, July 12 - PointOfLaw Forum

  • I'm quoted. "Cobell Concludes with the Rich getting Richer." [Indian Country Today; earlier]
  • One problem with Cobell is the commonality of the sprawling Trust Administration class. Another D.D.C. court recently decertified a class because of similar commonality problems. [Trask; Lightfoot v. DC]
  • California court creates implied right of action to sue insurers. Insurance Journal
  • "A Supreme Court win for political speech." [Will @ WaPo]
  • Roger Parloff's Lago Agrio litigation financing story no longer behind paywall. [Fortune]
  • "Hypotheses are verified by testing, not by submitting them to lay juries for a vote." S.D. Fla. rejects junk-science lawsuit accusing Fixodent of causing myelopathy. [In re Denture Cream Prod. Liab. Lit. via Oliver]
  • CPSC overregulation of cribs costing tens of millions. [Olson; CFIF]
  • Another voice against TSA security theater, [Bloomberg]

The growth of the Center for Class Action Fairness LLC can be shown just by the breadth of its activities on Monday, June 20:

  • There were twelve objectors at the Cobell v. Salazar fairness hearing, and I was the only attorney representing an objector. Unfortunately, the district court overruled our objections, and approved the $3.4 billion settlement. There was some good news: if one takes the plaintiffs' request for $224 million in a fee and expense award seriously, rather than as a tactical maneuver to give the judge room to award high fees while appearing to cut the request, then the judge's decision to award $99 million in fees (and reject another $11 million in expense requests by the class representatives) means that there will be another $136 million available for class members when and if distribution takes place.
  • Dan Greenberg was at the fairness hearing in the Central District of California for Stetson v. West Publishing which drew some extra blogosphere attention because it involved BarBri expenses for many many recent law-school graduates. The court, from the bench, rejected the coupon settlement, which entailed over $1.8 million in attorney-fee requests. It's the second win from the bench in a row for Dan; we're still waiting for the official opinion in the coupon settlement rejection in Sobel v. Hertz (D. Nev.).
  • And Adam Schulman, our local counsel Chris Arfaa, and I helped file Dan's reply brief in the McDonough v. Toys "R" Us (E.D. Pa.) baby products class action settlement, where the attorneys are requesting about $14 million though the class is likely to receive less than $20 million. The fairness hearing will be July 6 in Philadelphia.
The Center for Class Action Fairness LLC is not affiliated with the Manhattan Institute.

The settling parties have posted their briefing in support of final approval of the settlement; my client, Kimberly Craven, is identified in one of the briefs as "Objector #52." (Note especially an important correction regarding the hours of one of the plaintiffs' attorneys discussed in Docket No. 3763 at 58-59, regarding three days allegedly billed at 24 hours or more. One of those days reflected an error on plaintiffs' part; one reflected a mistake on my part; and one is a day where the attorney insists he billed 24 hours. I regret my error.)

Today, the Center for Class Action Fairness LLC filed our opposition (download) to the motion for settlement approval on behalf of Ms. Craven. (Exhibit 1 is Congressional testimony that is on-line.) The case raises interesting questions of statutory interpretation, the constitutional limits of aggregate litigation and class certification, whether material terms can be omitted from class notice, at what point class representative incentive payments create an impermissible conflict of interest, and whether class compensation allocation has to be rationally related to the alleged damages. The government also claims that Congress "can change the statutory rights of litigants, even where this change may retroactively eliminate an initially meritorious claim" against the government; we argue that that proposition has limits.

Earlier on Point of Law.

Center for Class Action Fairness LLC is not affiliated with the Manhattan Institute.

Around the web, April 22 - PointOfLaw Forum

  • Overcriminalization and the Constitution. [Heritage]
  • Early coverage of the (still undocketed) CCAF Cobell objection, including the first conspiracy theory. [Plains Daily; ATL; Popehat; Overlawyered; Turtle Talk; earlier]
  • "How is it that the government can prosecute someone for not providing an agency with what they claim is discoverable material, while not prosecuting DOJ attorneys who fail to provide constitutionally mandated discoverable material to defense attorneys?" Feds re-indict former Glaxo in-house lawyer. [Corporate Counsel/law.com]
  • Does clinic representation make a difference for clients? NB obvious "civil Gideon" implications. [Concurring Opinions via Olson]
  • "More disclosure may be a good idea. But the way to get it is to fix securities litigation." [Ribstein]

  • "Public Interest Objectors in Class Action Settlements" [Karlsgodt]
  • SEC proposes crackdown on Wall Street bonuses. [Dealbook/NYT]
  • In defense of habeas. [Greenfield; earlier]
  • Spitzer's role in causing the financial crisis? [Ribstein; WSJ]

Today the Center for Class Action Fairness filed an objection to the $3.4 billion taxpayer-funded Cobell Indian trust settlement on behalf of Sisseton-Wahpeton Ovate tribe member and class member Kimberly Craven.

Congress recently held hearings in response to the class attorneys' fee request of $223 million, which was over twice the $99.9 million they promised Congress they would limit their request to. [BLT]

The fee request includes one $925/hour attorney who claims to have billed over 28,000 hours in seven years, including a 28.5-hour day. The class representatives have also requested an unprecedented $13 million payment for themselves, raising conflict-of-interest questions that could preclude settlement approval.

Ms. Craven's objection, among other issues, challenges the "upside-down" allocation methodology, where class members who have suffered the most mismanagement of their trust accounts will receive less money than equally situated class members whose trust accounts were administered appropriately.

The settlement and objection present interesting legal issues of whether Congress can constitutionally abrogate class action certification requirements and whether a mandatory class action for injunctive relief can involuntarily waive class members' rights to relief already won in court in exchange for one-size-fits-all cash payments.

The case is Cobell v. Salazar, No. 1:96-cv-1285 (TFH) (D.D.C.).

The Center for Class Action Fairness is not affiliated with the Manhattan Institute.

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