[Federal Register Volume 63, Number 208 (Wednesday, October 28, 1998)]
[Notices]
[Pages 57700-57703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-28783]
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
Notice of Partial Settlement and Hearing
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Notice.
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SUMMARY: Notice of the Proposed Partial Settlement and Hearing is being
mailed to each class member. The notice is set forth below. It consists
of nine parts and describes the purpose, general nature of claim and
action, definition of the class, the proposed settlement agreement,
proposed deductions, payment and distribution of the Common Fund,
dismissal and release of settled claims, right to object, examination
of papers and additional information.
FOR FURTHER INFORMATION CONTACT: Class Counsel: Michael P. Gross, Lead
Counsel, Law Offices of Michael P. Gross, 347 East Palace Avenue, Post
Office Box 1447, Santa Fe, New Mexico 87504-1447. Telephone number:
(505) 988-8979. Facsimile: (505) 983-7508. E-Mail address:
mpgross@santa-fe.net; or Co-Counsel: C. Bryant Rogers, Roth, VanAmberg,
Rogers, Ortiz, Fairbanks & Yepa, LLP, Post Office Box 1447, Santa Fe,
New Mexico 87504-1447. Telephone number: (505) 988-8979.
SUPPLEMENTARY INFORMATION: The Notice of Proposed Partial Settlement
and Hearing in Ramah Navajo Chapter, for itself and on behalf of a
class of persons who are similarly situated v. Bruce Babbitt, Secretary
of the Interior, Kevin Gover, Assistant Secretary for Indian Affairs,
Robert J. Williams, Acting Inspector General, U.S. Department of the
Interior, and the United States of America (No. CIV90-0957 LH/WWD),
before the United States District Court for the District of New Mexico,
reads as set forth below.
Dated: October 22, 1998.
Bettie Rushing,
Acting Director, Office of Tribal Services.
Ramah Navajo Chapter, for Itself and on Behalf of a Class of
Persons Who Are Similarly Situated v. Bruce Babbitt, Secretary of
the Interior, Kevin Gover, Assistant Secretary for Indian Affairs,
Robert J. Williams, Acting Inspector General, U.S. Department of
the Interior, and the United States of America (No. CIV90-0957 LH/
WWD)
Notice of Proposed Partial Settlement and Hearing as a Contractor,
Grantee or Compactor under the Indian Self-Determination and Education
Assistance Act (Pub. L. 93-638), as amended, you may be entitled to a
payment from a proposed partial settlement in this case. Important
legal rights are involved and you should read this notice carefully and
confer with your own legal counsel.
I. Purpose of This Notice
A proposed partial settlement of damage claims for certain
shortfalls in indirect costs (contract support) on Indian Self-
Determination and Education Assistance Act (ISDEAA) contracts, grants
or compacts for Fiscal Years 1989 through 1993 have been agreed upon by
the Plaintiffs and Defendants in the above-styled class action now
pending in the United States District Court for the District of New
Mexico. The purpose of this Notice is to inform each Class Member about
the proposed partial settlement including the amount of the settlement,
who is a Class Member, how the settlement amount will be distributed,
which claims are being settled and released, how to participate in the
settlement, what the settlement proceeds may be used for, how to object
to the settlement and application for attorney's fees if you wish, and
how to get more information. A hearing on the proposed partial
settlement and application for attorney's fees and expenses is
scheduled for 1:30 p.m. on December 2, 1998, at the U.S. Courthouse and
Office Building, 5th Street and Gold Avenue, NW, Albuquerque, New
Mexico, before the Honorable C. Le Roy Hansen, District Judge. [The
Federal District Court is scheduled to move to new quarters at 4th
Street and Lomas Boulevard in Albuquerque some time in November. To be
certain of the location for this hearing please call the Clerk's Office
at (505) 248-8052.] Please do not contact the court or the court clerk
concerning this Notice or the Lawsuit, except as otherwise provided
herein.
II. General Nature of the Claim and the Action
In October 1990, following enactment of the 1988 amendments to
ISDEAA Pub. L. 100-472, the Ramah Navajo Chapter (RNC) filed this
Action to recover unpaid indirect costs (IDC) from the BIA on its Pub.
L 93-638 contracts. The claim arose when, despite these amendments, the
BIA failed to adjust its method for computing RNC's indirect cost rate
based on OMB Circular A-87. That method required inclusion of funding
from other federal agencies in the direct cost base, which in turn
produced a lower IDC rate with consequent reduction in IDC recovery
contrary to the provisions of Pub. L. 100-472.
After certifying a class action, the District Court dismissed
Plaintiffs' claims by granting the Government's motion for summary
judgment. Plaintiffs appealed. On May 8, 1997, the United States Court
of Appeals for the Tenth Circuit reversed and remanded the case for
determination of damages and injunctive relief. Ramah Navajo Chapter v.
Lujan, 112 F. 3d 1455 (10th Cir. 1997).
Since September 1997, the parties have been engaged in settlement
negotiations. They have formally met over seven times in Washington,
D.C., New Mexico and elsewhere, each occasion averaging two or more
days, and have conferred informally throughout. For the break-through
session in Tempe, Arizona, the parties jointly retained a private
mediator. The session lasted four days. Observers to the negotiations
included representatives from the National Congress of American Indians
(NCAI), the United South and East Tribes, Inc. (USET), and the Oglala
Sioux Tribe. In addition, from October 1997 through September 1998,
Class Counsel attended several conferences sponsored by NCAI, USET, the
self-governance tribes, the IHS work group on contract support, the
Billings Area Tribal Chairmen's organization, and the Bureau of Indian
Affairs Budget Review Meeting in Palm Springs, California. Counsel also
met with individual tribes in an effort to keep the class informed of
the progress of negotiations and to seek input on the proposed
agreement. Major law firms in the Indian law field have also been kept
informed and were consulted about the negotiations and final form of
agreement. Additionally, Class Counsel have been involved in
discussions with Congressional Committees about the settlement and are
participating in meetings sponsored by NCAI on indirect costs/contract
support, aiming toward
[[Page 57701]]
reforms of the entire indirect cost system.
III. Definition of the Class
The class consists of all Indian tribes and entities which have
contracted, received grants, or compacted under ISDEAA with the Bureau
of Indian Affairs at any time since the beginning of Fiscal Year 1989
(October 1, 1988) and which had an indirect cost rate agreement with
the Office of Inspector General of the Department of the Interior or a
lump sum agreement for contract support with the BIA. Only Class
Members in existence prior to the end of Federal Fiscal Year 1993 are
eligible for a distribution from this settlement, although newer Class
Members may be eligible for shares in a future settlement or judgment,
if any.
Four tribes filed timely notices of their desire to opt-out of the
action and, therefore, were not a part of the Class when the Tenth
Circuit issued its decision. These are the Navajo Nation, the
Confederated Tribes of Siletz, the Eastern Shoshone Tribe, and the
White Mountain Apache Tribe. The first three of these tribes have filed
motions to be readmitted to the class. Their motions are still pending.
None of the opt-out tribes will participate in or be bound by the
proposed settlement. The proposed settlement agreement provides that
should Defendants and Plaintiffs agree to reentry of the opt-outs into
the class they will do so only on condition that there be (1) no
dilution of the common fund provided by the settlement for existing
Class Members, (2) proportionate sharing of costs, fees and expenses by
the readmitted opt-outs, and (3) no preferential treatment for any of
the opt-outs.
Only new Class Members (those who became Class Members after April
12, 1994) may opt-out of the Class at this time. To do so they must
actually file a notice to opt-out with the court within thirty (30)
days of the mailing of this notice, or the date of newspaper
publication of this notice, whichever is later, and serve a copy on
Defendants' and Plaintiffs' legal counsel whose names and addresses
appear at the end of this Notice. In such event, the opt-out entity
shall not be bound by or receive any benefits from any judgment or
order for relief which may be determined during the balance of this
case. All Class Members, except new Class Members who timely file a
notice to opt-out, shall be bound by this proposed Partial Settlement
Agreement, if approved, including the Release, and by any rulings,
orders or judgments in the case which may be entered in future.
IV. The Proposed Settlement Agreement
This is a partial settlement of Plaintiffs' Cause of Action
covering only the years FY 1989 through FY 1993. All claims of any
nature which arose or arise after FY 1993 are not part of this
settlement and are not to be released.
By terms of the proposed Partial Settlement Agreement, the
Defendants agree to entry of a judgment against them in the amount of
Seventy-Six Million Two Hundred Thousand Dollars and No Cents
($76,200,000.00), plus pre-judgment interest on this amount from July
1, 1998, until the date the judgment approving the settlement is
entered at the interest rate set by the Contract Disputes Act
(``CDA''), all of which is the ``judgment amount''. Thereafter, post-
judgment interest will accrue on the combined total of the judgment
amount plus accrued CDA interest at the post-judgment interest rate set
by statute. Because of its initiative in bringing this case, its risk
of nonrecovery of litigation expenses it incurred, and for advancing
the public interest, the named Plaintiff Ramah Navajo Chapter will
receive a lump sum payment from the class common fund of $400,000.00
plus interest as its full share from the judgment amount. This sum
represents the named Plaintiff's actual shortfall in indirect costs for
the settlement years plus expenses in connection with the case. The
remaining amount of $75,800,000.00, plus accrued interest, is the Gross
Common Fund. The remainder of the judgment amount after deduction of
the RNC lump sum payment shall be reduced by the fees, costs and
expenses approved by the court. After these deductions the remaining
balance will be the Net Common Fund available for distribution to all
other Class Members.
Proceeds from the settlement received by Class Members may be used
for any lawful purpose or expenditure (direct or indirect) which would
be permitted under any self-determination contract under Section 102 of
ISDEAA, as amended. Ramah Navajo Chapter is permitted, consistent with
its organic documents, to expend any or all of the sums it receives
from the settlement as authorized by ISDEAA.
By operation of law this settlement will be paid from the Judgment
Fund pursuant to 31 U.S.C. Sec. 1304 and 41 U.S.C. Sec. 612. No issue
or claim concerning any possible payback of the Judgment Fund under 41
U.S.C. 612(c) is part of the Settled Claims which are to be released.
The Partial Settlement Agreement includes a detailed description of
this matter including Plaintiffs' position that no payback could be
legally or equitably required from tribal programs, and Defendants'
statement that the issue is not ripe and their expression of shared
concern. The agreement obligates the Government to take actions to
support reasonable efforts to minimize or eliminate this possible
problem. Defendants also bind themselves not to make a payback if not
required to do so and to give advance notice to Class Counsel and
publish in the Federal Register any decision to pay back the Judgment
Fund.
V. Proposed Deductions
Under the terms of the proposed Partial Settlement Agreement the
Judgment Amount will first be reduced by the Ramah Navajo Chapter's
separate settlement of $400,000.00 plus accrued interest. That amount
shall be paid without deduction to the RNC in recognition of its
initiative in filing this suit, pursuing and sustaining the suit,
incurring the risk of non-reimbursement of its expenses in the suit,
and vindicating the public policy of The Indian Self-Determination Act.
The resulting Gross Common Fund will be further reduced as follows:
1. $250,000 will be contracted by the Class to NCAI for the purpose
of conducting a study of the entire issue of indirect costs and
contract support as it relates to ISDEAA. The terms and conditions of
this award will be negotiated in good faith by Class Counsel and NCAI,
with Class Counsel having the right to audit the expenditures of NCAI
for this study.
2. A Reserve of $1,000,000 will also be deducted to pay the actual
and estimated costs to distribute the Net Common Fund. Class Counsel
will retain an independent CPA firm to manage the distribution and
allocation. After such distribution, the court will determine whether
there is enough money in the Reserve to warrant a second distribution
to the class. If there is, the same method used in the initial
distribution will be employed. If the court concludes that there is not
enough money to make a second distribution economically feasible it
will determine, on application, whether and how any money remaining in
the Reserve should be disbursed and to whom (an intertribal
organization or charity). The Reserve will be augmented on a monthly
basis by interest earned on the Net Common Fund before it is
distributed, less the fees and costs of managing the funds by a bank,
broker, or similar custodian. Class Counsel will be allowed to apply to
the Court periodically for drawdowns from the Reserve to pay for on-
going expenses of administering the Gross and Net
[[Page 57702]]
Common Funds including the Independent CPA who will manage the
distribution and allocation, the Class' expert accountant and
statistician and other expenses associated with managing the
Distribution/Allocation methodology set forth in Appendix D to the
agreement. However, no additional attorney's fees will be paid for the
services of Class Counsel in connection with the Distribution/
Allocation methodology.
3. For achieving this partial settlement and recovering the Gross
Common Fund for the benefit of the Class, Class Counsel are entitled to
an award of attorney's fees, costs and expenses in an amount to be
determined by the Court. Class Counsel intend to apply for Court
approval of an award of attorney's fees in the amount of 12.5% of the
Gross Common Fund plus gross receipts tax. This amount includes all
fees for all services in connection with the Settled Claims rendered
from the inception of this case in 1989 to the present and all services
to be rendered in connection with the distribution of the Net Common
Fund and any defense of the settlement as against a payback under 41
U.S.C. 612(c). Class Counsel also intend to seek Court approval of an
award of expenses incurred to the date of application in an amount not
to exceed $170,000.00, plus supplemental costs to date of settlement
hearing upon application by Class Counsel and approval of the Court.
Class Counsel also seeks any interest which may accrue on the award of
attorney's fees, tax and costs. Class Counsel has reserved the right to
seek an award of attorney's fees and expenses for services performed in
connection with any matters other than achieving and defending this
Partial Settlement Agreement and overseeing the distribution of the Net
Common Fund.
4. The Net Common Fund shall be distributed to the Class Members
according to Appendix D to the Partial Settlement Agreement, see below.
VI. Payment and Distribution of the Common Fund
When received, the Judgment Amount plus interest will be placed in
a trust account and prudently deposited and invested according to the
Standards in Appropriations Act for Department of the Interior and
Related Agencies for FY 1998, Pub. L. 105-83, Sec. 112, so that the
settlement monies will earn interest before distribution. Class Counsel
and the Independent CPA (to be hired by Class Counsel through a
competitive process) will file reports with the court as to the status
of the account, all as required by the Partial Settlement Agreement.
The Net Common Fund will be distributed according to Appendix D to
the agreement, Distribution/Allocation Methodology. This method will be
based on each Class Member's other-federal-agency funding (other than
IHS) compared with the class' total other-federal-agency-funding (other
than IHS) for each of the five settlement years. Class Members will be
asked to submit data to the Independent CPA. If such data is missing,
the CPA will attempt to secure the information from other sources
including Defendants. Class Counsel are given the right, after Notice
to the Class, to apply to the court for modification or replacement of
this system if it proves unworkable.
Further notices to each Class Member and publication in the Federal
Register by the BIA will be made following final Court approval of the
settlement. Do not send any documents yet. You will be notified what,
when and where to send information after the proposed settlement is
approved by the court.
There may be Class Members who did not receive funding from any
other federal agency or who did not become Class Members until after
the settlement years. In this case, no share will be distributed to
that Class Member, because the distribution methodology tracks the
legal theory which was litigated, i.e., the inclusion of other-federal-
agency-funds in the direct cost base in the settlement years.
VII. Dismissal and Release of Settled Claims
Upon approval by the Court of this Partial Settlement Agreement,
the portion of Plaintiffs' Cause of Action for the settlement years
will be dismissed with prejudice as part of the judgment to be entered
by the Court.
Upon payment of the settlement amount plus accrued interest by the
Defendants and their fulfillment of the other terms and conditions of
the settlement, the Named Plaintiff Ramah Navajo Chapter on its own
behalf and Class Counsel on behalf of the Plaintiff Class shall release
the Defendants from the Settled Claims as defined in the Partial
Settlement Agreement which reserves other claims as defined in the
agreement
In summary form, the release and dismissal will cover all claims
for shortfalls of indirect costs of Class members for the settlement
years, FY 1989 through FY 1993, except for reserved claims which
include:
1. Future equitable or injunctive relief;
2. Any and all claims against the Defendants and all federal
agencies arising for Fiscal Year 1994 and forward, including any issue
arising from the judgment fund provision in 41 U.S.C. 612(c);
3. Any and all claims against IHS for underpayment of indirect
costs or contract support under ISDEAA except those based on the other-
agency-funding methodology for the settlements years;
4. Any and all claims against BIA based on a computational or
mathematical error; failure to pay indirect cost obligations already
acknowledged in writing by BIA; or failure to pay such costs based on
BIA's assertion of insufficiency of appropriations; and
5. Any and all individual claims which could not be maintained as
class actions under FRCP 23.
The judgment and release in the action will apply to and bind all
Class Members except for new Class Members who file a timely request
for exclusion. If you have any question about whether or how a pending
or any prospective claim(s) will be affected by the dismissal and
release of the settled claims, you are advised to contact your
attorney.
After dismissal of the Settled Claims the portions of Plaintiffs'
Cause of Action remaining for resolution in this case are (1)
prospective declaratory, injunctive or other equitable relief, and (2)
monetary relief for the years Fiscal Year 1994 forward. A stipulated
order has been presented to the Court regarding equitable relief. The
order requires periodic reports to the Court describing progress made
in consultation with BIA, IHS, and Congress toward a general reform of
the indirect cost system.
VIII. Right to Object
Any Class Member who objects to any of the terms of the proposed
partial settlement or the proposed attorneys' fees and costs, and who
has not excluded itself from the class, may file a written objection
with Mr. Robert C. March, Court Clerk, U.S. District Court for the
District of New Mexico, P.O. Box 689, Federal Bldg. & U.S. Courthouse,
500 Gold Avenue, SW, Albuquerque, New Mexico 87103. Any such objection
must be received by the clerk of the court on or before thirty (30)
days of the date of mailing of this notice or the date of newspaper
publication, whichever is later. Copies of the objection must be served
within the same time limit on counsel for plaintiffs and counsel for
defendants. The objection must also begin with the following statement:
``The (name of entity) objects to the
[[Page 57703]]
proposed settlement in Ramah Navajo Chapter v. Babbitt, No. CIV 90-0957
LH/WWD.'' All objections must state the objector's full name, address,
and the name and number of this case, and must state in detail the
factual basis and legal grounds for the objection. If you wish, you may
retain your own counsel, at your expense, to represent you in
connection with your objection to the settlement. If you wish to appear
at the hearing to approve the settlement and application for fees and
expenses, you must also file a written statement of intention to appear
with the clerk of court with copies to counsel no later than twenty
days prior to the date scheduled for the hearing. All timely written
objections will be considered by the Court with or without appearance
by the objector at the hearing.
IX. Examination of Papers
You may inspect the proposed Partial Settlement Agreement and the
other papers in the record during regular business hours at the office
of the Clerk of the Court, U.S. District Court for the District of New
Mexico, 5th and Gold, SW, Albuquerque, New Mexico. The settlement
agreement with appendices, application for attorney's fees and costs,
and other papers in connection with this settlement will be posted on a
website for this case: http://www.RNCclassaction.santa-fe.net.
X. Additional Information
Please, except as otherwise expressly provided in this notice, do
not contact the Court concerning this notice or the lawsuit. If you
have any questions, contact either your own attorney or Lead Counsel
for the Plaintiffs. If you wish to obtain copies of the Partial
Settlement Agreement or the application for attorney's fees and costs
you may write or call Class Counsel.
Class Counsel
Michael P. Gross, Lead Counsel, Law Offices of Michael P. Gross; C.
Bryant Rogers, Co-Counsel, 347 East Palace Avenue, Post Office Box
1447, Santa Fe, New Mexico 87504-1447, Telephone: 505 988 8979,
Facsimile: 505 983 7508, E-mail: mpgross@santa-fe.net
Counsel for Defendants
John W. Zavitz, Assistant U.S. Attorney, Post Office Box 609,
Albuquerque, New Mexico 87102-0607, Telephone: 505 224 1505, Facsimile:
505 766 7105
Dated the 5th day of October 1998.
Approved as to form by John W. Zavitz, Assistant U. S. Attorney,
Defendant's Counsel, and Michael P. Gross, Plaintiff's Counsel.
[FR Doc. 98-28783 Filed 10-27-98; 8:45 am]
BILLING CODE 4310-02-W
