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Legal wrangling to delay payout in massive Indian class-action lawsuit

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A history of the Cobell case:

- June 10, 1996: Elouise Pepion Cobell of Valier, Mont., and four others sue Interior Secretary Bruce Babbitt, Assistant Interior Secretary Ada E. Deer and Treasury Secretary Robert E. Rubin, claiming the Interior and Treasury departments mismanaged Individual Indian Money accounts.

- Dec. 7, 2009: The two sides file a joint motion to settle the case.

- Nov. 30, 2010: The U.S. House follows the Senate in passing the Claims Settlement Act of 2010, approving the Cobell settlement. The legislation also approved settlements in Native American water rights suits and a discrimination case brought by black farmers.

- Dec. 8, 2010: President Barack Obama signs the act.

- June 20, 2011: The settlement is affirmed in a fairness hearing in U.S. District Court in Washington, D.C.

- Aug. 6, 2011: Kimberly Craven files a notice to appeal the settlement. She is one of several parties that have filed notice to appeal.

WASHINGTON – Payments in a $3.4 billion settlement to Native Americans could be delayed by more than a year because of appeals filed, and rebutted, in August.

Officials had said that, barring legal wrangling, payments in the Cobell case – the largest settlement in U.S. government history – could have begun as early as October. With the latest court skirmishes, that distribution could now be pushed back by 12 to 18 months.

The number of beneficiaries in the class could range from 300,000 to more than 500,000 Indians nationally, including as many as 30,000 Arizonans from seven different tribes in the state.

“People would have (had) money before Christmas,” said Dennis M. Gingold, an attorney for the class of hundreds of thousands of Native Americans who sued the federal government. “As long as the appeal’s going on, that’s not going to happen.”

But an attorney for one of the people challenging the settlement said his client is “not trying to delay this” and that legal maneuvering by the class is also responsible for slowing the process.

“We are happy to expedite it,” said Theodore H. Frank, who represents Kimberly Craven. He said his client has regularly beat filing deadlines by several days.

The case, now known as Cobell v. Salazar, was filed in 1996. It claimed the Interior Department for decades mishandled American Indian trust royalties. The trusts were established to let nontribal groups use Native American lands for things such as oil development and timber harvesting.

The federal government agreed to settle the suit in 2009 for $3.4 billion. The deal, approved by Congress and signed by President Barack Obama, designated $1.4 billion to be distributed to Individual Indian Money accounts of trustees and it set aside $1.9 billion for the government to buy land that was “fractionalized,” meaning the property has so many stakeholders that it is worth a paltry amount to each.

After the settlement was confirmed in a fairness hearing on June 20, Craven filed a notice of appeal in U.S. District Court in Washington, D.C. Craven is a member of the class set to receive the settlement.

Her objection states, among other things, that anyone whose IIM account was mishandled would receive less than those whose accounts were not mishandled, even though the first group suffered more financially. The settlement determines awards by the amount of money generated by a person’s account, so severely mismanaged ones will have earned less and will be given less compensation.

Craven said in a Sept. 2 filing that the method “systematically and perversely paid the least to the class members who suffered the greatest alleged injury.”

In response to the appeal, attorneys in the original suit asked the judge to force Craven to first file an $8.3 million bond to cover their legal fees and other from the 15–year case. That bond motion, Frank said, will spark more legal action and further postpone payment.

“The motion for the appeal bond is going to delay this,” said Frank, who also founded the Center for Class Action Fairness.

Gingold said the ongoing effort to determine how many class members there are and how much money they are owed will not be affected by the appeal. But no money will be doled out until the dust settles.

Ultimately, the hundreds of thousands of individuals in the case could each receive anywhere from $500 to $1 million or more.

In Arizona, possible beneficiaries include members of the Tohono O’odham, Navajo, Salt River/Pima-Maricopa, San Carlos Apache, Hopi, Gila River and Colorado River tribes.

Gingold said Craven’s objection does not take into account many factors of an extremely complicated case and that the settlement has received widespread approval.

“We have 500,000 class members, and 99.98 percent affirmatively support the case,” he said.