Court Opinion

ID: 2841910
Source: CourtListenerOpinion
Date Created: 2015-09-03 14:01:23.728748+00
Date Added: 2024-06-11T08:50:49.270399
License: Public Domain

UNITED STATES DISTRICT COURT
                             FOR THE DISTRICT OF COLUMBIA

_________________________________________
                                          )
In re BLACK FARMERS DISCRIMINATION        )                  Misc. No. 08-0511 (PLF)
LITIGATION                                )
_________________________________________ )

                           MEMORANDUM OPINION AND ORDER

               Section V.E.13 of the Settlement Agreement in this case, as amended by the Court

on April 7, 2014, see Dkt. No. 405, provides for the distribution of unclaimed settlement funds to

cy pres beneficiaries proposed by Class Counsel and approved by the Court. That provision

states that such cy pres beneficiaries must be either:

               (a) a law school that has a low-income taxpayer clinic or program
               that provides tax advice or assistance to Class Members who have
               received an award under the Settlement Agreement and that has
               been approved by the Court, or

               (b) a tax-exempt non-profit organization, other than a law firm, legal
               services entity, or educational institution, that is providing
               agricultural, business assistance, or advocacy services, including
               assistance under Pigford and the Consolidated Case, to African
               American farmers.

               The Court is aware of the decisions of various courts of appeals suggesting that

unclaimed settlement funds ordinarily should not be distributed on a cy pres basis except when it

is not feasible to make further distributions to class members. See In re BankAmerica Corp. Sec.

Litig., 775 F.3d 1060, 1064 (8th Cir. 2015); Klier v. Elf Atochem North America, Inc., 658 F.3d

468, 475 (5th Cir. 2011). These decisions have relied in part on principles promulgated by the

American Law Institute. See AMERICAN LAW INSTITUTE, PRINCIPLES OF THE LAW OF

AGGREGATE LITIGATION § 3.07 (2010). The ALI principles now are being considered by the

Advisory Committee on Civil Rules as a potential model for additions to Rule 23(e) of the
Federal Rules of Civil Procedure. See Rule 23 Subcommittee Report, in Agenda Book for

Advisory Committee on Civil Rules, Washington, D.C., April 9-10, 2015, at 263-271. 1 The

relevance of these evolving principles of law to cases involving existing settlement agreements

that include cy pres provisions, like this case, recently has been considered by another judge of

this Court. See Keepseagle v. Vilsack, Civil Action No. 99-3119 (EGS), 2015 WL 4510837

(D.D.C. July 24, 2015).

                In view of these authorities, the Court believes that before Class Counsel begins

the process contemplated by Section V.E.13 of the Settlement Agreement of identifying potential

cy pres beneficiaries and proposing an allocation of unclaimed settlement funds, the Court

should determine whether a cy pres distribution should be made in this action or whether,

instead, some or all of the unclaimed settlement funds should be distributed to Class Members.

To assist the Court in its consideration of this and related questions, the Court directs the parties

to file briefs of not more than 30 pages addressing the following issues:

                1.      If the case law presumes that identifiable class members are entitled to the

distribution of any excess funds, when feasible, why shouldn’t the Court attempt to further that

goal, which was of course the whole purpose of this litigation, rather than providing those funds

to disinterested third parties?

                2.      Absent agreement of the parties, does the Court have the authority under

the Settlement Agreement, Rule 60 of the Federal Rules of Civil Procedure, or otherwise, to

        1
               The Agenda Book is available at the following weblink:
http://www.uscourts.gov/rules-policies/archives/agenda-books/advisory-committee-rules-civil-
procedure-april-2015. The draft minutes of the April 9-10 meeting of the Advisory Committee
on Civil Rules also are available online. See Agenda Book for Committee on Rules of Practice
and Procedure, Washington, D.C., May 28-29, 2015, at 231-63 (discussion of cy pres at pages
256-57), available at http://www.uscourts.gov/file/18038/download.

                                                  2
provide for the distribution of unclaimed settlement funds to Class Members rather than to cy

pres beneficiaries?

               3.     Do any acts of Congress pertinent to this case, such as the Food,

Conservation, and Energy Act of 2008 or the Claims Resolution Act of 2010, bear on whether it

would be permissible or appropriate to provide for the distribution of unclaimed settlement funds

to Class Members?

               4.     If the Court has the authority to act sua sponte to provide for the

distribution of unclaimed settlement funds to Class Members, either through modification of the

Settlement Agreement or through other means, what legal standard(s) should the Court apply in

determining whether taking such action would be appropriate?

               5.     In the interests of transparency, should the Court schedule a public hearing

inviting Class Members to offer their views regarding these issues?

               The parties are not limited to these issues, and in their briefs may address other

issues that they believe are germane to the Court’s review of the cy pres provisions of the

Settlement Agreement and its consideration of what course of action to take.

               Accordingly, it is hereby

               ORDERED that the parties shall submit memoranda addressing the issues

outlined above on or before October 9, 2015.

               SO ORDERED.

                                                             /s/____________________
                                                             PAUL L. FRIEDMAN
DATE: September 3, 2015                                      United States District Judge

                                                 3