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Hearing set to decide what to do with $380 million in Native American USDA settlement

FARGO - A federal judge in Washington, D.C., has set a June 29 hearing to consider what to do with $380 million in unclaimed funds generated in a discrimination case against the U.S. Department of Agriculture by Native Americans.

U.S. District Judge Emmet G. Sullivan has asked members of the class action suit and heirs to submit comments by June 15.

The Native Americans in October 2010 settled a class action lawsuit called Keepseagle v. Vilsack, named for Marilyn Keepseagle of the Standing Rock Reservation in North Dakota. Other plaintiffs were Claryca Mandan, Mandaree, N.D., of the Fort Berthold Reservation in North Dakota, and Porter Holder of Soper, Okla.

Secretary of Agriculture Tom Vilsack is the named defendant. The Keepseagle suit claimed that the USDA discriminated against Native Americans or farm loans and loan servicing from 1981 through 1999.

USDA agreed to a settlement in April 2011. A claims process was completed Dec. 27, 2011, and checks were mailed in 2012. Track A claimants were able to request up to $50,000 in damages, plus Farm Service Agency loan debt forgiveness. Track B claimants get up to $250,000, but with more documentation.

Of $680 million paid to settle the case, $380 million was not claimed. The settlement required that any unclaimed funds be paid to a "nonprofit organization, other than a law firm, legal services entity, or educational institution, that have provided agricultural, business assistance, or advocacy services to Native American farmers between 1981 and Nov. 1, 2010."

"Given the unexpectedly large amount of unclaimed funds," the class lawyers asked USDA to modify the agreement, according to a court summary of the case.

Joseph Sellers, lead counsel in for the class, says his clients have suggested the funds be put in a trust to disburse funds over 20 years to nonprofit organizations, with educational entities and tribal-sponsored organizations, as well new nonprofits, that help Native American farmers and ranchers. Decisions on making grants would be made by a 13-member Native American board. USDA has agreed in principle to this option.

Among the 13 people nominated to head the trust are Jim Laducer, Turtle Mountain Chippewa in Bismarck, N.D.; Claryca Mandan of Mandaree, N.D.; and Ross Racine, executive director of the Intertribal Agricultural Council in Billings, Mont.

Big dissent

But there are competing options, including one notable one from Keepseagle -- still a named plaintiff in the case.

Keepseagle in December 2014 proposed the unspent funds be distributed "solely as additional damages to Track A claimants who succeeded in their claims." At the time, Judge Sullivan asked whether this might be considered a windfall, Sellers notes.

USDA opposes this option, Sellers says. In March 2015, Keepseagle unsuccessfully attempted to have Mandan and Holder removed as co-lead plaintiffs, allegedly because they objected to her proposal.

Still another option would be to pay the unclaimed funds to successful claimants, or those denied because of a "technical defect but that warrant reconsideration." USDA has objected to that, and has warned if that is allowed, they might attempt to get the unspent funds returned to the U.S. treasury, Sellers says.

The website www.indianfarmclass.com has copies of all filings and added information. Comments should be sent to the Chambers of the Honorable Emmet G. Sullivan, U.S. District Court for the District of Columbia, 333 Constitution Ave. NW, Washington, D.C., 20001. The hearing is 9 a.m. in Courtroom 24A on the fourth floor of the U.S. Courthouse, 333 Constitution Ave. NW, Washington, D.C., 20001.

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