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Lawyers weigh appeal after $3.4B tribal lands settlement

WASHINGTON – Attorneys plan to decide “sooner rather than later” whether to appeal a federal court’s decision to uphold a $3.4 billion settlement of claims by Native Americans who said the government mismanaged properties it held in trust.

A federal appeals court Tuesday rejected claims by one group of Indians in the class-action suit that they were short-changed by terms of the so-called Cobell settlement. Kimberly Craven had argued that it was impossible under the terms of the deal to tell whether some Indians are being over-compensated while others are being underpaid.

Craven’s attorney, Ted Frank, said he is reviewing the ruling and that a decision on an appeal will need to be made sooner rather than later. Ultimately, the decision to is up to Craven, he said.

“We need to look at our chances of winning and we have to evaluate where the ruling sits in with the law,” Frank said.

But attorneys for the Cobell class say that continued appeals just delay payout to Native Americans from the settlement, the largest in U.S. history.

Attorney Dennis Gingold said settlement checks could be mailed to members of the class-action lawsuit by the first week of June, barring another appeal.

“The courts have ruled this settlement is fair,” Gingold said. “But they (opponents of the settlement) could delay this even longer. They have the right to do that, they could petition this all they way to the Supreme Court, but that would be utterly without merit.”

The settlement could benefit tens of thousands of Native Americans from seven Arizona tribes and nearly half a million Native Americans nationwide, by some estimates. Those Indians claim that their land trust royalties were mismanaged by the Interior Department for more than a century.

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Elouise Cobell, who died of cancer in October, sued the government in 1996 to discover how much money had been lost or mismanaged by the Department of the Interior.

The suit accused the government of cheating Native Americans out of billions of dollars of royalties because of poor handling of Indian trust accounts and lands. The accounts were intended for American Indians in exchange for timber, grazing, oil, gas leases and other things on tribal lands.

After more than a decade of legal wrangling, the two sides agreed to a settlement when it became clear that the cost of figuring out what was owed would exceed the cost of any payout to affected Native Americans.

The settlement pays out $1.5 billion to two classes of recipients, and most Native Americans belong to both classes, according to Gingold. Those in the Historical Accounting Class, who sold the rights to their lands, would receive a payment of $800; those in the Trust Administration Class, who kept their lands, would get $1,000.

The settlement sets aside another $1.9 billion for a Trust Land Consolidation Fund to acquire “fractional” interests in trust lands that have been divided into increasingly smaller parcels over the years as they were handed down from one generation to the next.

Craven had argued that without a historical accounting of who was owed what, it was impossible to know if the settlement was fair to all parties.

But a three-judge panel of the U.S. Circuit Court for the D.C. Circuit said the government would be unable to perform an accurate audit of royalties owed. The panel concluded that the settlement is fair and the best option for avoiding years of additional litigation.

The money will not make up for all that Native Americans are owed, but it would address some ongoing needs, both at a tribal level and for individuals, said John Lewis, executive director of the Inter Tribal Council of Arizona Inc.

“There would be some benefits, but compared to what they lost or have calculated as what was owed to them it doesn’t really reach that point, but at least it is recognized,” said Lewis.

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Settling accounts

The $3.4 billion settlement of the Cobell class-action suit, which claimed that the government mismanaged funds it was supposed to hold in trust for Native Americans, is the largest in U.S. history. Among the terms of the settlement:

  • The agreement pays out $1.5 billion directly to hundreds of thousands of Native Americans who claim the government mismanaged properties that were supposed to be held in trust.
  • Recipients are divided between two classes: Those in the Trust Administration Class will get $1,000 each and those in the Historical Accounting Class will get $800 each.
  • Lead plaintiff Elouise Cobell was additionally awarded $2 million and the three other main plaintiffs were awarded between $150,000 and $200,000.
  • The settlement includes another $1.9 billion that the government will use to purchase “fractionated” land allotments from Native Americans.
  • The class-action suit includes as many as a half-million Native Americans, including tens of thousands in Arizona.