United States Court of Appeals, District of Columbia Circuit
January 13, 2017
from the United States District Court for the District of
Columbia (No. 1:99-cv-03119)
William A. Sherman argued the cause for appellant. With him
on the briefs were Reed D. Rubinstein and James W. Morrison.
Craig Tingle filed the briefs for appellant.
M. Sellers argued the cause for appellees Porter Holder;
CLARYCA Mandan, on behalf of themselves and the plaintiff
class. With him on the brief were Christine E. Webber, Paul
M. Smith, Jessica R. Amunson, and Amir H. Ali.
Benjamin C. Mizer, Principal Deputy Assistant Attorney
General, U.S. Department of Justice, and Charles W.
Scarborough and Carleen M. Zubrzycki, Attorneys, were on the
brief for federal appellee.
Marshall L. Matz and John G. Dillard were on the brief for
plaintiff-appellee Marilyn Keepseagle. Phillip L. Fraas,
David J. Frantz, Stewart D. Fried, and Sarah M. Vogel entered
Before: Brown and Wilkins, Circuit Judges, and Edwards,
Senior Circuit Judge.
EDWARDS SENIOR CIRCUIT JUDGE.
1999, a class of Native American farmers and ranchers filed
suit against the United States Department of Agriculture
("the Department"), contending that the Department
discriminated against Native American applicants in their
claims under farm credit and benefits programs. After more
than a decade of contentious litigation, the District Court
approved a Settlement Agreement ("the Agreement")
in 2011 that created a $680 million compensation fund for the
benefit of class members who participated in a non-judicial,
administrative claims process.
conclusion of the claims process, $380 million still remained
in the compensation fund. Under the terms of the Agreement,
any leftover funds were to be distributed to
cy-près beneficiaries - i.e.,
non-profit organizations that provided services to Native
American farmers. Because the parties had not anticipated
such a large remainder, they entered into negotiations to
modify the Agreement. The parties' initial attempt at
modification was unsuccessful. However, a second effort
resulted in an addendum to the Agreement that is the subject
of the dispute in this case. Under the terms of the addendum,
the cy-près process would be reformed to
distribute funds more efficiently and supplemental payments
would be awarded to class members who had successfully
recovered from the compensation fund.
District Court approved the addendum to the Agreement,
concluding that it was "fair, reasonable, and
adequate" under Federal Rule of Civil Procedure 23(e)(2)
("Rule 23"). The District Court found that the
addendum reflected a compromise between two competing goals:
paying out more funds to claimants who successfully recovered
through the claims process, and maintaining the
cy-près distributions for the benefit of the
class as a whole.
class members - class representative Keith Mandan
("Appellant Mandan") and class member Donivon Craig
Tingle ("Appellant Tingle") - appealed to this
court, raising four principal arguments. First,
Appellant Mandan claims that under the Agreement's
modification clause, the proposed addendum cannot be approved
without his assent. Second, Appellant Mandan
disputes that the addendum is "fair, reasonable, and
adequate." Third, Appellant Mandan asserts that
the cy-près provision of the Agreement is
unconstitutional, in violation of the Appropriations Clause,
and unlawful under the Judgment Fund Act. Fourth,
Appellant Tingle alleges that class counsel and class
representatives breached their fiduciary duties to class
members. Both Appellants, who successfully obtained payments
through the claims process, contend that all of the $380
million still remaining in the compensation fund should be
distributed pro rata to the successful claimants.
affirm the judgment of the District Court. We reject the
claim that the modification clause requires Appellant
Mandan's assent before the Agreement can be amended. We
further hold that the District Court did not abuse its
discretion in finding that the addendum was fair, reasonable,
and adequate. We decline to reach the merits of Appellant
Mandan's legal challenges to the cy-près
provision because these claims were explicitly
waived before the District Court. The claims were also
forfeited because Appellant Mandan never raised any legal
challenges to the cy-près provision before
the District Court despite clear opportunities to do so. And
there are no good reasons at this late date in the litigation
for this court to entertain Appellant Mandan's legal
challenges to the cy-près provisions in the
first instance. Finally, we find no merit in Appellant
Tingle's breach of fiduciary duty claims.
1999, over two hundred Native American farmers and ranchers
filed a class-action suit against the United States
Department of Agriculture, contending that the Department
discriminated against Native American applicants in their
claims for credit and benefits under various government
programs. Plaintiffs alleged violations of the Equal Credit
Opportunity Act, the Administrative Procedure Act, and Title
VI of the Civil Rights Act of 1964. In 2001, the District
Court found that the plaintiffs had satisfied the
requirements of Rule 23(b)(2), and certified a class of
[a]ll Native-American farmers and ranchers, who (1) farmed or
ranched between January 1, 1981 and November 24, 1999; (2)
applied to the [the Department] for participation in a farm
program during that time period; and (3) filed a
discrimination complaint with the [the Department]
individually or through a representative during the time
Keepseagle v. Veneman, No. 99-cv-3119, 2001 WL
34676944, at *6 (D.D.C. Dec. 12, 2001). The District Court
declined to decide whether certification under Rule 23(b)(3),
for monetary relief, was appropriate at the time.
Id. at *14. However, the court noted that it
"maintain[ed] the power to revisit the definition of the
class at any point." Id.
The Initial Settlement
more than a decade of extensive discovery practice, the
parties reached agreement in 2010 and drew up a settlement
agreement for the District Court's approval. See
Motion for Preliminary Approval of Settlement, Keepseagle
v. Vilsack, No. 99-cv-3119 (D.D.C. Oct. 22, 2010), ECF
No. 571. The proposed Settlement Agreement provided both
programmatic and monetary relief. See Settlement
Agreement §§ IX, XII, Judicial Appendix
("JA") 405-23, 424-29. The programmatic relief
included establishing the Council for Native American Farming
and Ranching, requiring the Department to collect and
evaluate data pertaining to its Farm Loan Program, and
enhancing services and education for Native American farmers
and ranchers. Id. § XII, JA 424-29. To provide
monetary relief, the Agreement sought certification of a Rule
23(b)(3) opt-out class. Id. § IV(A), JA 400.
The Agreement established a $680 million compensation fund
financed by the Department of the Treasury. Id.
§ VII(F), JA 403. Under an administrative claims process
set forth in the Settlement Agreement, claimants would
receive either $50, 000, if they had "substantial
evidence" of certain circumstances required in the
Agreement, or up to $250, 000, if they met a higher
evidentiary standard. See id. § II(SS), (VV),
JA 398 (setting out the dollar amounts of awards); § IX,
JA 405-23 (outlining the non-judicial claims process).
Claimants were given 180 days from the effective date of the
agreement to submit their claims. Id. § II(B),
JA 392. Some funds were also allocated to the named class
representatives as "service awards." Id.
§ XV(C), JA 433-34.
event that the $680 million compensation fund was not
exhausted during the claims process, the Agreement contained
a cy-près provision. Id. §
IX(F)(7), JA 422-23. That provision created a "Cy Pres
Fund, " defined as "a fund administered by Class
Counsel designated to hold any leftover funds" from the
claims process. Id. § II(J), JA 393. The Cy
Pres Fund was to be distributed in equal shares to
cy-près beneficiaries designated by class
counsel. Id. § IX(F)(7), JA 422-23. The
Agreement limited cy-près beneficiaries to
"any non-profit organization, other than a law firm,
legal services entity, or educational institution" that
served Native American farmers. Id. § II(I), JA
Agreement also contained a provision permitting modification
of the settlement, but "only with the written agreement
of the Parties and with the approval of the District Court,
upon such notice to the Class, if any, as the District Court
may require." Id. § XXII, JA 438. The
Agreement defined "Parties" as "the Plaintiffs
and the Secretary, " and "Plaintiffs" as
"the individual plaintiffs named in Keepseagle v.
Vilsack, . . . the members of the Class, and the Class
Representatives." Id. § II(DD), (EE), JA
District Court received thirty-five letters objecting to the
proposed Agreement. See Notice of Filing Objections
and Opt Out Requests, Keepseagle v. Vilsack, No.
99-cv-3119 (D.D.C. Mar. 18, 2011), ECF No. 585. Neither
Appellant Mandan nor Appellant Tingle submitted objections.
Three letters related to the Cy Pres Fund: one objector
offered up organizations he had started as potential
cy-près beneficiaries, id. at
Exhibit 2; another recommended that cy-près
awards be used for outreach to farmers, id. at
Exhibit 33; a third cautioned that it was "simply
wrong" to distribute remaining funds to
cy-près beneficiaries "as determined by
class counsel, " id. at Exhibit 32.
counsel responded to the objections in a motion seeking final
approval of the settlement, and the District Court held a
fairness hearing on April 28, 2011. The District Court found
that the terms of the settlement were fair and reasonable and
adequate pursuant to Rule 23(e), and approved the Agreement.
See Order, Keepseagle v. Vilsack, No.
99-cv-3119 (D.D.C. Apr. 28, 2011), JA 589-91. The District
Court entered final judgment dismissing the case, but
retained continuing jurisdiction for five years for the
limited purposes of overseeing compliance with the
programmatic relief and the administrative claims process.
See Final Order and Judgment, Keepseagle v.
Vilsack, No. 99-cv-3119 (D.D.C. Apr. 29, 2011), JA
592-93. No party appealed from the District Court's final
administrative claims process proved to be less than
satisfactory. Far fewer people made claims than anticipated.
At the conclusion of the claims process, only $300 million of
the $680 million settlement fund had been paid out. Although
the Agreement originally directed the remaining $380 million
to be distributed to cy-près beneficiaries,
class counsel informed the District Court that such a large
cy-près disbursement was "not
contemplate[d]" by the original Agreement and would be
"impractical." Status Report at 4-5, Keepseagle
v. Vilsack, No. 99-cv-3119 (D.D.C. Aug. 30, 2013), ECF
No. 646. The parties agreed to confer over possible
The First Modification Attempt
September 2014, class counsel filed an unopposed motion to
modify the Settlement Agreement, citing Rule 60(b)(5) and the
modification clause of the Agreement. See
Plaintiffs' Unopposed Motion to Modify the Settlement
Agreement Cy Pres Provisions, Keepseagle v. Vilsack,
No. 99-cv-3119 (D.D.C. Sept. 24, 2014), ECF No. 709. Counsel
proposed to act promptly to distribute $38 million of the
leftover funds to non-profit organizations, and to use the
remaining $342 million to create a trust that would
distribute the latter sum, over 20 years, to non-profit
organizations serving Native Americans. While class counsel
and the Department agreed to the proposed modification, one
of the class representatives - Marilyn Keepseagle - did not,
and filed her own motion to modify the settlement.
See Marilyn and George Keepseagle's Motion to
Modify the Settlement Agreement, Keepseagle v.
Vilsack, No. 99-cv-3119 (D.D.C. May 19, 2015), ECF No.
779. Keepseagle proposed a pro rata distribution of
the leftover funds to the successful claimants - a
supplemental payment of around $100, 000 each. The District
Court held a hearing at which many class members testified in
support of Keepseagle's proposal. Neither Appellant
Tingle nor Appellant Mandan testified.
District Court denied both class counsel and Keepseagle's
motions to modify. See Keepseagle v. Vilsack, 118
F.Supp.3d 98 (D.D.C. 2015), JA 1098-1167 ("First
Modification Decision"). The court found that neither
class counsel nor Keepseagle had met the requirements of Rule
60, in part because, in the court's view, the
larger-than-expected remaining funds did not constitute
"truly changed circumstances" warranting relief.
Id. at 55-62, JA 1152-59. The court also found that
class counsel's motion did not have the "agreement
of the Parties, " as required by the modification
clause, because Keepseagle, a class representative, opposed
the motion. Id. at 67-68, JA 1164-65. The District
Court implored all parties to continue negotiating.
Id. at 69, JA 1166.
The Second Modification Attempt
counsel, the Department, and Keepseagle reached a compromise
in December 2015, and submitted a motion to amend the
Agreement pursuant to the modification clause. See
Plaintiffs' Unopposed Motion to Modify the Settlement
Agreement Cy Pres Provisions, Keepseagle v. Vilsack,
No. 99-cv-3119 (D.D.C. Dec. 14, 2015), ECF No. 824. The
proposed compromise provided for an additional $18, 500
payment to each of the 3, 605 successful claimants and a
corresponding payment to the Internal Revenue Service on each
claimant's behalf. See Memorandum Opinion at 8,
Keepseagle v. Vilsack, No. 99-cv-3119 (D.D.C. Apr.
20, 2016), JA 1454 ("Second Modification
Decision"). Then, $38 million would be promptly
distributed to non-profit organizations proposed by class
counsel and approved by the District Court. After the named
representatives received additional "service
awards" for their work in negotiations, the remaining
funds (estimated to be $265 million) would be placed in a
trust, to be paid out over twenty years, as contemplated by
class counsel's previous motion.
District Court directed class counsel to provide notice of
the proposed modification to the class, reviewed written
comments from class members, and held a hearing on February
4, 2016, at which many class members testified. Appellant
Tingle wrote in opposition, claiming that the trustees of the
proposed trust would enrich themselves instead of benefiting
class members. See Letter from D. Craig Tingle (Jan.
4, 2016), JA 1201-02. Appellant Mandan also filed a letter
with the District Court, arguing that the remaining funds
should all go to successful claimants, who are "easily
identifiable, " and not to "third parties who have
not suffered any injury and who have no claims against the
United States." See Comments of Class
Representative Keith Mandan (Jan. 20, 2016), JA 1197-99.
Appellant Mandan also filed a separate submission arguing
that the District Court could not approve the proposed
modification without his assent, because the modification
clause requires the "agreement of the Parties."
Points and Authorities of Law at 1, Keepseagle v.
Vilsack, No. 99-cv-3119 (D.D.C. Feb. 11, 2016), ECF No.
851. Appellant Mandan's objection cited the District
Court's decision rejecting the first proposed
modification and claimed that his objection presented
"the same issue" as Keepseagle's objection.
Id. at 3.
for Appellant Mandan, and Appellant Mandan himself, testified
in support of fully distributing the remaining funds to
successful claimants. See Tr. of Mot. Hr'g
Proceedings at 68-74, 175, JA 1270-76, 1377. At the February
4, 2016 hearing, District Court Judge Sullivan, who had been
presiding over the case, asked Appellant Mandan's counsel
about a separate lawsuit that he had filed on behalf of a
different class member, William Smallwood. Id. at
21, JA 1223. Judge Sullivan noted that three days earlier, on
February 1, 2016, Appellant Mandan's counsel had filed a
complaint in the District Court challenging the legality of
the proposed cy-près distribution.
Id. Judge Sullivan stated that the complaint was
initially marked as "related" to the
Keepseagle proceeding, but had been reassigned to
Judge Walton because the complaint challenged the initial
settlement agreement, the merits of which were resolved in
2011. Id. at 21-22, JA 1223-24.
though the matter had not been raised in the
Keepseagle proceeding, Judge Sullivan responsibly
invited counsel to offer his views on whether Smallwood's
challenges to the legality of the cy-près
provision should be heard by the District Court in the
Keepseagle proceeding as a related case.
Id. at 22, JA 1224. Counsel declined this
invitation, stating that he was "completely satisfied
with where the case sits at this particular point."
Id. at 70, JA 1272. Thereafter, counsel never
raised, briefed, or otherwise pressed any legal challenges to
the cy-près provision in the
Keepseagle proceeding, and the District Court did
not further address it. In the separate case, Judge Walton
granted the Department's motion to dismiss for lack of
standing on January 30, 2017. Smallwood v. Yates,
No. 16-cv-161, 2017 WL 398334 (D.D.C. Jan. 30, 2017). An
appeal was filed in that case on April 12, 2017.
District Court approved the proposed compromise modification
on April 20, 2016. See Second Modification Decision,
JA 1447-75. The District Court declined to construe the
original Agreement's modification clause "to require
unanimous consent of the class representatives."
Id. at 19, JA 1465. The District Court also
determined that the proposed modification was "fair,
reasonable, and adequate, " as required by Rule
23(e)(2). Id. at 19-27, JA 1465-73. Appellants
Tingle and Mandan now appeal the District Court's grant
of class counsel's motion to modify the settlement.
Standard of Review
review the District Court's interpretation of the terms
of the Settlement Agreement de novo. See Nix v.
Billington, 448 F.3d 411, 414 (D.C. Cir. 2006). And we
review the District Court's approval of the modification
to the Settlement Agreement for abuse of discretion. See
Pigford v. Johanns, 416 F.3d 12, 16 (D.C. Cir. 2005).
The District Court's Interpretation of the
District Court correctly interpreted the modification
provision in the Agreement because a "reasonable person
in the position of the parties" would not have thought
that the provision requires unanimous approval by class
representatives. See Richardson v. Edwards, 127 F.3d
97, 101 (D.C. Cir. 1997). The modification provision states
that the Agreement "may be modified only with the
written agreement of the Parties." Settlement Agreement
§ XXII, JA 438. We find that "written agreement of
the Parties" cannot reasonably be construed, as
Appellant Mandan urges, to require the unanimous
assent of class representatives.
interpret a settlement agreement under contract law."
Gonzalez v. Dep't of Labor, 609 F.3d 451, 457
(D.C. Cir. 2010) (citing T Street Dev., LLC v. Dereje
& Dereje, 586 F.3d 6, 11 (D.C. Cir. 2009)). We must
first "determine whether the disputed language is
unambiguous." Armenian Assembly of Am., Inc. v.
Cafesjian, 758 F.3d 265, 278 (D.C. Cir. 2014). If we
find that the relevant clause is subject to more than one
reasonable interpretation, we consider "what a
reasonable person in the position of the parties would have
thought the disputed language meant." Id.
(quoting Tillery v. D.C. Contract Appeals Bd., 912
A.2d 1169, 1176 (D.C. 2006)).
acknowledge that "the written agreement of the
Parties" is ambiguous because "agreement" is
reasonably susceptible to more than one construction.
Nevertheless, in the context of this class action settlement,
we do not believe that agreement means unanimous
agreement, because such an interpretive gloss would yield
absurd results. See United States v. Winstar Corp.,
518 U.S. 839, 907 (1996) (avoiding interpretation of contract
that "would be absurd"); Am. First Inv. Corp.
v. Goland, 925 F.2d 1518, 1521 (D.C. Cir. 1991)
(avoiding interpretation that would "produce an absurd
Agreement defines "Parties" as "the Plaintiffs
and the Secretary, " and defines "the
Plaintiffs" as "the individual plaintiffs named in
Keepseagle v. Vilsack, . . . the members of the
Class, and the Class Representatives." Settlement
Agreement § II(DD), (EE), JA 396. The terms of the
Agreement allow modification upon the written agreement of
the individual plaintiffs named in Keepseagle v.
Vilsack, the members of the Class, the Class
Representatives, and the Secretary. Id. § XXII,
JA 438. If "agreement" were construed to require
unanimous assent, the Settlement Agreement could be modified
only if every single class member - upwards of thousands of
people - assented. There is no good reason to believe that
the parties intended to impose such a stringent barrier to
modification. The modification provision would become
meaningless, which would make little sense. See Beal
Mortg., Inc. v. FDIC, 132 F.3d 85, 88 (D.C. Cir. 1998)
(describing "the cardinal interpretive principle that we
read a contract to give meaning to all of its
provisions" (citations and internal quotation marks
omitted)). In order to avoid such an absurd construction and
to give effect to the parties' intentions, we reject the
argument that "the agreement of the Parties" was
meant to require unanimity.
a central interpretive goal "in construing a contract is
to give effect to the mutual intentions of the parties."
NRM Corp. v. Hercules, Inc., 758 F.2d 676, 681 (D.C.
Cir. 1985). To effectuate the parties' intent, we must
consider the "context." Id. at 681 n.10.
Here, it is noteworthy that the Agreement resolved a class
action. "Class actions are a form of representative
litigation. One or more class representatives litigate on
behalf of many absent class members, and those class members
are bound by the outcome of the representative's
litigation." William B. Rubenstein, Newberg on Class
Actions § 1:1 (5th ed. 2016). Various class action
procedures protect class members from being taken advantage
of by class representatives, including the requirement that
class representatives "fairly and adequately protect the
interests of the class, " Fed.R.Civ.P. 23(a)(4), and the
requirement that a court ensure that any settlement is
"fair, reasonable, and adequate, " Fed.R.Civ.P.
structural protections for class members diminish the need
for unanimous decisionmaking in a class action. Requiring
unanimity among class members, apart from being virtually
impossible to achieve in a case of this sort, also invites
gamesmanship by giving any class member the power to
"hold out" and threaten to veto to seek a payoff.
See Elizabeth Chamblee Burch, Group Consensus,
Individual Consent, 79 Geo. Wash.L.Rev. 506, 508 (2011)
("The holdout problem arises when defendants condition
settlement on nearly unanimous consent . . . . [A hold out]
threatens to derail the entire deal unless those claimants
receive a disproportionately high payoff."). With these
considerations in mind, we conclude that the modification
provision, read in context - an Agreement resolving a
representational proceeding - permits amendment of the
Agreement without unanimous assent.
we can discern no good reason why the parties would require
unanimity to modify the Settlement Agreement, when
unanimity was not required to approve the settlement
in the first instance. As we noted in Thomas v.
Albright, 139 F.3d 227, 232 (D.C. Cir. 1998), "a
settlement can be fair even though a significant portion of
the class and some of the named plaintiffs object to
it." Indeed, in this case, the District Court approved
the original settlement over the objections of thirty five
class members. We doubt that the parties intended for
modification to be more difficult than approval. Thus, the
District Court correctly found that
[j]ust as it could not reasonably have been the intent of the
parties to construe the modification provision to require the
consent of all class members to any modification, it also
could not reasonably have been the intent of the parties to
construe the modification provision to require the unanimous
consent of the class representatives.
Second Modification Decision at 19, JA 1465.
not persuaded by Appellant Mandan's one argument to the
contrary. He claims that the District Court was bound by its
decision rejecting the first modification proposal because it
was the "law of the case." Br. for Mandan at 48.
This claim is simply mistaken. The District Court's
initial decision was not binding because it was not embodied
in any final judgment. "When there are multiple appeals
taken in the course of a single piece of litigation,
law-of-the-case doctrine holds that decisions rendered on the
first appeal should not be revisited on later trips to the
appellate court." LaShawn A. v. Barry,
87 F.3d 1389, 1393 (D.C. Cir. 1996) (citation and internal
quotation marks omitted). However, the law-of-the-case
doctrine "does not apply to interlocutory orders . . .
for they can always be reconsidered and modified by a
district court prior to entry of a final judgment."
First Union Nat'l Bank v. Pictet Overseas Tr.
Corp., 477 F.3d 616, 620 (8th Cir. 2007) (citation
The District Court's Fairness Determination
District Court reasonably determined that the modified
agreement was fair, reasonable, and adequate. Appellants have
not met their "burden on appeal of making a 'clear
showing' that an abuse of discretion has occurred"
in the District Court's approval of the modified
settlement. Pigford v. Glickman, 206 F.3d 1212, 1217
(D.C. Cir. 2000) (quoting Moore v. Nat'l Ass'n of
Sec. Dealers, 762 F.2d 1093, 1107 (D.C. Cir. 1985)).
record reveals that the District Court conducted an
impressive and thorough review of the proposed addendum. The
District Court "directed class counsel to provide the
class with notice of the proposed Addendum, allowed class
members to submit written comments to the Court, and
scheduled a hearing . . . to hear argument from counsel and
oral statements from class members." Second Modification
Decision at 11, JA 1457. During an eight-hour hearing in the
ceremonial courtroom, which was used to accommodate the large
number of class members present, the District Court heard
testimony from over thirty class members. See JA
1203-1437 (transcript of hearing).
the hearing, the District Court concluded that the proposed
addendum was a fair compromise. The addendum reformed the
cy-près distribution provisions, which all
parties agreed were unworkable. The initial Settlement
Agreement required an equal distribution of funds to a
restricted class of non-profit organizations approved by
class counsel; the addendum eliminated the equal distribution
requirement and expanded the class of non-profits eligible
for the funds. See Plaintiffs' Unopposed Motion
to Modify the Settlement Agreement Cy Pres Provisions at 6-8,
Keepseagle v. Vilsack, No. 99-cv-3119 (D.D.C. Dec.
14, 2015), ECF No. 824. Most notably, the addendum placed the
bulk of the cy-près funds in a trust overseen
by trustees with "substantial knowledge of agricultural
issues, the needs of Native American farmers and ranchers, or
other substantive knowledge relevant to accomplishing the
Trust's Mission." Trust Agreement § 13(f)(1),
Keepseagle v. Vilsack, No. 99-cv-3119 (D.D.C. Dec.
14, 2015), ECF No. 824-3. And, rather than distributing all
of the funds at once, the addendum established a process for
the trust to be paid out over 20 years. Id. §
10. As the District Court explained, these reforms, which
offered greater flexibility and expertise in the management
and distribution of funds, were necessary because of the
"unexpectedly large amount of remaining funds."
Second Modification Decision at 25-26, JA 1471-72.
addendum also reflected a compromise regarding additional
payments to class members who recovered in the first claims
process. The two contending groups - one favoring
distribution of all remaining funds to successful claimants,
and one favoring no additional distribution - conceded to a
middle ground: a limited distribution to successful
claimants. The compromise provided for an additional $18, 500
payment to successful claimants as well as a direct payment
to the Internal Revenue Service to cover tax liability. As
the District Court recognized, "[w]hile the amount of
the payment is not as high as the class representatives and
many class members would prefer, it is an additional payment
that was not contemplated in the existing Agreement."
Id. at 25, JA 1471.
have previously noted, "[a] claim that individual
dissenters are entitled to more money is not, by itself,
sufficient to reject the overall fairness of the settlement;
. . . a settlement necessitates compromise."
Thomas, 139 F.3d at 232. We have no good reason to
second-guess the District Court's conclusion that, in
providing both supplemental payments and reforming the
cy-près process, the negotiated compromise
fairly balances the parties' competing positions.
Mandan raises several procedural challenges to the District
Court's fairness determination. He argues that the
District Court erred by failing to recognize that it had the
"equitable power" to distribute all of the funds
marked for cy-près beneficiaries to the
prevailing claimants. Br. for Mandan at 32-35. In a related
argument, Appellant Mandan claims that the District Court
should not have approved the modified settlement
"without first determining whether the prevailing
claimants were readily identifiable and whether further
distributions to them were economically viable."
Id. at 35 (capitalization altered). Appellant
Mandan's final procedural challenge is that the District
Court did not provide a "reasoned explanation" for
its approval of the modified settlement. Id. at 42.
We find no merit in these claims.
the District Court was correct in finding that it was not
authorized "to fashion a different resolution such as
ordering that the remaining funds be paid to prevailing
claimants, " Second Modification Decision at 24, JA
1470, because the District Court's jurisdiction was
limited to accepting or rejecting the proposed settlement
agreement that was before it. "[D]istrict courts enjoy
no free-ranging 'ancillary' jurisdiction to enforce
consent decrees, but are instead constrained by the terms of
the decree and related order." Pigford v.
Veneman, 292 F.3d 918, 924 (D.C. Cir. 2002). In a
previous decision in this case, we said: "The District
Court's jurisdiction is drawn exceedingly narrowly . . .
." Keepseagle v. Vilsack, 815 F.3d 28, 36 (D.C.
Cir. 2016). We recognized that the Agreement grants ongoing
jurisdiction to the District Court only for specifically
delineated, and narrow, circumstances, none of which apply
here. Settlement Agreement § XIII, JA 429-30. District
courts do not have freewheeling jurisdiction to modify
settlements. "Who would sign a consent decree if
district courts had free-ranging interpretive or enforcement
authority untethered from the decree's negotiated
terms?" Pigford, 292 F.3d at 925.
the District Court did not err in approving the addendum
without determining whether the prevailing claimants were
identifiable and whether paying out funds to them was
feasible. As discussed above, this argument misconceives the
role and authority of the District Court, which is very
limited. Appellant Mandan's argument also misreads our
case law. There is no precedent in this circuit to support
the assertion that parties cannot negotiate a settlement
providing for cy-près distribution where
prevailing claimants are identifiable and dispersal of funds
is feasible. In support of this claim, Appellant Mandan cites
Democratic Central Committee of the District of Columbia
v. Washington Metropolitan Area Transit Commission, 84
F.3d 451 (D.C. Cir. 1996). However, the decision in that case
did not limit cy-près awards to situations
where prevailing claimants are not easily identifiable.
Rather, the decision merely stated a definition of
cy-près - "permit[ting] such funds to be
distributed to the 'next best' class when the
plaintiffs cannot be compensated individually" - that
"some courts have applied." Id. at 455. It
does not limit cy-près distributions to
certain prescribed circumstances.
cases from other circuits cited by Appellant Mandan are
inapposite. See Br. for Mandan at 38. Appellant
Mandan primarily points to decisions in which district courts
sua sponte made cy-près awards, not
cases (like the one here) in which the parties'
negotiated settlement agreement included a
cy-près provision. Indeed, in a decision from
the Third Circuit, the court explained that "a district
court does not abuse its discretion by approving a class
action settlement agreement that includes a cy pres
component directing the distribution of excess settlement
funds to a third party." In re Baby Prods. Antitrust
Litig., 708 F.3d 163, 172 (3d Cir. 2013). That decision
distinguished cases in which the parties "agreed
to" the cy-près distribution from cases
in which trial courts imposed a cy-près
distribution "over the objections of the parties."
Id. at 172 n.7. This case falls in the former
category because the Settlement Agreement includes a
cy-près provision. See Settlement
Agreement § IX(F)(7), JA 422-23.
other cases cited by Appellant Mandan involving decisions
from our sister circuits are also plainly distinguishable.
See, e.g., In re Lupron Mktg. & Sales
Practices Litig., 677 F.3d 21 (1st Cir. 2012) (agreement
gave district court full discretion to select recipients of
cy-près fund); Nachshin v. AOL, LLC,
663 F.3d 1034 (9th Cir. 2011) (cy-près
beneficiaries were completely unrelated to the objectives of
the class action); In re Katrina Canal Breaches
Litig., 628 F.3d 185 (5th Cir. 2010) (agreement provided
for appointment of special master to dispose of any remaining
funds without any guidelines). All of these cases involved
situations that are very different from this case.
Appellant Mandan's argument that the District Court
failed to give a reasoned explanation for its acceptance of
the addendum is belied by the record. As discussed above,
throughout the extensive settlement process that was
supervised by the District Court, as well as in its opinion
disposing of this case, the court showed admirable patience,
fairness, and good judgment in weighing the competing
proposals for modification. See Second Modification
Decision at 25-27, JA 1471-73 (explaining the court's
reasoning). We not only do not reverse the District Court, we
applaud its good efforts in bringing this case to conclusion.
The Waived and Forfeited Claims Relating to the
Appropriations Clause and the Judgment Fund Act
lawsuit in this case was filed in 1999. The parties reached
settlement in 2010. The District Court approved the
settlement in 2011. No appeal was taken by any party. And at
no time during this twelve-year period did any party