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Interior and Justice Department Announce Settlement of Cobell Lawsuit


12/08/2009


 The Department of the Interior and the U.S. Department of Justice have announced a historic settlement of a long-running and highly contentious class-action lawsuit regarding the U.S. government's trust management and accounting of over 300,000 individual American Indian trust accounts. The announcement was made in a news conference by Secretary of the Interior Ken Salazar and Attorney General Eric Holder.Secretary Salazar announcing the Cobell settlement

Under the negotiated agreement, litigation will end regarding the Department of the Interior’s performance of an historical accounting for trust accounts maintained by the United States on behalf of more than 300,000 individual Indians. A fund totaling $1.4 billion will be distributed to class members to compensate them for their historical accounting claims, and to resolve potential claims that prior U.S. officials mismanaged the administration of trust assets.

 The settlement also addresses an issue called “fractionation.” Today, it is common to have hundreds—even thousands—of Indian owners for one parcel of land. Such highly fractionated ownership makes it extremely difficult to use the land productively or to provide financial benefit to any individual. Through a $2 billion Trust Land Consolidation Fund, Interior will buy back and consolidate fractionated land interests. The voluntary land consolidation program will provide individual Indians with an opportunity to obtain cash payments for divided land interests and free up the land for the benefit of tribal communities.

By reducing the number of individual trust accounts that the U.S must maintain, the program will greatly reduce on-going administrative expenses and future accounting-related disputes.

In order to provide owners with an additional incentive to sell their fractionated interests, the settlement authorizes the Interior Department to set aside up to 5 percent of the value of the interests into a college and vocational school scholarship fund for American Indian students.

Cobell v. Salazar is one of the largest class actions ever brought against the U.S. government. It began in 1996 and has seen 7 full trials constituting 192 trial days; has resulted in 22 published judicial decisions; has been up to the Court of Appeals ten times; and has been the subject of intense, and sometimes difficult, litigation.