A conservative think tank that advocates for free enterprise and limited government is challenging the $3.4 billion settlement in a Native American class action in Washington, saying the judge in the high-profile case should not have certified a class.
The non-profit public interest group Competitive Enterprise Institute, represented by McGuireWoods, submitted a brief supporting opponents of the landmark settlement who are challenging the merits of the deal. The case is pending in the U.S. Court of Appeals for the D.C. Circuit.
“The proper administration of class actions is vital to the functioning of the free market and the rule of law,” the institute’s brief (PDF), lodged Tuesday, said. “Large settlements—including large class-action settlements—are rarely isolated events; instead they signal to future litigants (or future class-action lawyers) that the rules underlying litigation have changed, and that they should continue to push the boundaries of the legal system.”
The suit, filed by the late Elouise Cobell in 1996 in U.S. District Court for the District of Columbia, demanded an historical accounting of money the government held in trust for thousands of Native Americans. The settlement, which required congressional authorization, will pay potentially hundreds of thousands of class members.
The Competitive Enterprise Institute said the presiding Washington trial judge, Thomas Hogan, who approved the deal between the plaintiffs and the government, should have conducted a more “rigorous” inquiry before certifying a class for purposes of the settlement.
At issue, in the eyes of the free enterprise group, is the scope of the rule of civil procedure that governs class actions.
The U.S. Supreme Court recently offered guidance on the rule in the high court’s decision in the Wal-Mart sex discrimination case. In that matter, the Court rejected a potential class of current and former female Wal-Mart employees.
CEI’s attorneys, Anand Ramana and Andrew Trask of McGuireWoods’ office in Washington, said “relaxing the demanding standards of Rule 23 in order to accomplish settlements is a constant temptation for courts.”
The congressional authorization of the settlement, the lawyers said, improperly set aside the requirements of the class action rule, which include an analysis of shared traits among potential class members. Congress, CEI’s attorneys said, had the power to set up a claims process, to compensate individual Indians, as an alternative to a class action.
CEI’s lawyers said the certified class “was anything but homogeneous.” The case covered a range of allegations, including charges the government failed to maintain adequate records of individual Indian trust accounts and charges the government lost or mismanaged trust funds.
“[T]he superhuman efforts to resolve this litigation involves superhuman efforts to sidestep the requirements of Rule 23,” the CEI brief said.
A lead attorney for the plaintiffs, Dennis Gingold, a Washington solo practitioner, called the CEI brief a “non-event,” saying it repeats arguments critics unsuccessfully made in the trial court. The Center for Class Action Fairness, representing a class member, is also challenging the merits of the settlement.
Gingold also said the CEI brief was filed late. There is no certainty the court will take it into the record. The advocacy group said "simple computer issues" prevented a punctual electronic filing.
The D.C. Circuit has not set an argument date, but the case could be heard early next year.
Updated 4:11 p.m.