Congressional approval of one of the largest class action settlements in U.S. history is getting hung up on the issue of legal fees for plaintiffs lawyers.
The $3.4 billion Indian trusts settlement agreed to in December could be scuttled if Congress doesn’t approve the terms of the agreement by May 28, according to The Associated Press.
The tentative settlement would close the books on a class action filed in 1996 on behalf of 300,000 American Indians. The plaintiffs in the suit claimed that as trustee for 145 million acres of land under the Dawes Act of 1887, the U.S. Department of the Interior mismanaged trust accounts and allowed the federal government to give the best land to white settlers. The settlement calls for plaintiffs to be paid $1.4 billion — about $1,500 per class member- — and for a $2 billion fund to be set up to buy American Indian land.
The potential snag now, as reported by sibling publication The Blog of Legal Times, is a move by Sen. John Barrasso of Wyoming to cap attorney fees in the case at $50 million. That has one of the plaintiffs lawyers who spent years litigating the matter crying foul.
Dennis Gingold — a solo practitioner in Washington, D.C., who serves as lead counsel to the plaintiffs — told the AP that he will terminate the settlement and resume litigation unless Congress approves the agreement without altering any of its terms. Gingold told The BLT that Barrasso’s sentiments fly in the face of a previous fee cap of $100 million agreed to in December, which would give Gingold and his co-counsel at Kilpatrick Stockton fees totaling between $50 million and $100 million.
Were Gingold and Kilpatrick Stockton to split $100 million, they would be taking a total cut of roughly 7 percent of the $1.4 billion settlement figure; the lawyers’ share shrinks to about 3 percent if the $2 billion trust called for under the proposed settlement is figured in. Either way, the fees would be well below what has been paid out to plaintiffs lawyers in other major class actions such as the one against Enron, as noted by lead plaintiff Elouise Cobell, a former treasurer of Montana’s Blackfeet Nation, in a story by Legal Newsline.
Calls to Gingold and Kilpatrick Stockton litigation partner Keith Harper were not returned by the time of this post. The American Lawyer named both lawyers Litigators of the Week last year for their efforts in reaching an agreement. Kilpatrick disclosed in December 2008 that it had already plowed more than $22 million in legal fees and expenses into the case.