Marilyn Keepseagle v. Sonny Perdue

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 13, 2017 Decided May 16, 2017

No. 16-5189

MARILYN KEEPSEAGLE, ET AL.,

APPELLEES

v.

SONNY PERDUE,

APPELLEE

DONIVON CRAIG TINGLE, SILENT CLASS MEMBER,

APPELLANT

Consolidated with 16-5190

Appeals 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.

D. Craig Tingle filed the briefs for appellant.

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Joseph 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

appearances.

Before: BROWN and WILKINS, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

Concurring opinion filed by Circuit Judge WILKINS.

Dissenting opinion filed by Circuit Judge BROWN.

EDWARDS, Senior Circuit Judge: In 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.

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At the 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.

The 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.

Two 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

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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.

We 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.

I. BACKGROUND

In 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

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[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 period.

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.

A. The Initial Settlement

After 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

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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.

In the 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 393.

The 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 396.

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The 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.

Class 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

order.

The 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

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“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 solutions.

B. The First Modification Attempt

In 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.

The 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,

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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.

C. The Second Modification Attempt

Class 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.

The 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.

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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.

Counsel 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

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challenged the initial settlement agreement, the merits of which

were resolved in 2011. Id. at 21–22, JA 1223–24.

Even 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.

The 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.

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II. ANALYSIS

A. Standard of Review

We 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).

B. The District Court’s Interpretation of the Modification

Provision

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.

“We 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

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disputed language meant.” Id. (quoting Tillery v. D.C. Contract

Appeals Bd., 912 A.2d 1169, 1176 (D.C. 2006)).

We 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

result”).

The 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,

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we reject the argument that “the agreement of the Parties” was

meant to require unanimity.

Furthermore, 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. 23(e)(2).

These 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

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resolving a representational proceeding – permits amendment

of the Agreement without unanimous assent.

Finally, 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.

We are 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.

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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 omitted).

C. The District Court’s Fairness Determination

The 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)).

The 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).

Following 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

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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.

The 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.

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As we 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.

Appellant 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.

First, 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.

19

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.

Second, 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.

20

The 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.

The 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.

Finally, 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

21

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.

D. The Waived and Forfeited Claims Relating to the

Appropriations Clause and the Judgment Fund Act

The 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 challenge

the legality of the cy-près provision in the Agreement.

The initial Agreement contained a cy-près clause providing

that “the Claims Administrator shall direct any leftovers funds

to the Cy Pres Fund.” Settlement Agreement § IX(F)(7), JA

422–23. Neither Appellant Mandan nor any other interested

party objected to this provision. Quite the contrary, Appellant

Mandan accepted the settlement and received a payout from the

administrative claims process. See Comments of Class

Representative Keith Mandan at 1 (Jan. 20, 2016), JA 1197

(“Keith Mandan, is both a Class Representative and a

Prevailing Claimant . . . .”).

Appellant Mandan (and other parties) had a second

opportunity to challenge the legality of the cy-près provision in

the Agreement during the first proceedings to modify the

Agreement. At this point in the litigation, the claims process

had concluded, leaving $380 million remaining to be directed

to the cy-près fund. The issue regarding the distribution of

funds pursuant to the cy-près provision was front-and-center at

22

this stage of the proceedings before the District Court. Yet,

neither Appellant Mandan nor any other interested party raised

any objection to the legality of the cy-près provision in the

Agreement.

Appellant Mandan’s third opportunity to challenge the

legality of the cy-près provision came when the District Court

considered the second proposal to modify the Agreement.

Appellant Mandan contested the cy-près distribution, but he

did not contest the legality of the cy-près provision. See

Comments of Class Representative Keith Mandan at 3 (Jan. 20,

2016), JA 1199. Appellant Mandan’s counsel clearly knew

during the second modification proceeding that he could raise

any constitutional or legal challenges to the cy-près provision.

He knew because he explicitly declined to pursue any such

challenges.

In February 2016, a few days before the District Court’s

fairness hearing concerning the second proposed modification,

counsel for Appellant Mandan filed a new, separate lawsuit, on

behalf of a different class member, challenging the legality of

the cy-près provision. See Complaint, Smallwood v. Lynch, No.

16-cv-161 (D.D.C. Feb. 1, 2016), ECF No. 1. In that complaint,

counsel for Appellant Mandan marked the case as related to the

Keepseagle case, but the District Court determined that it did

“not appear to be related within the meaning of our local rules.”

Tr. of Mot. Hr’g Proceedings at 22, JA 1224. However, at the

February 2016 fairness hearing, Judge Sullivan, who was

presiding over the Keepseagle proceeding, offered counsel for

Appellant Mandan the opportunity to present his challenges to

the legality of the cy-près provision. The District Court told

counsel that the case “was reassigned to one of my colleagues,

Judge Walton. He and I have not discussed this, and maybe I

should have heard from counsel first as to whether the Court

should keep the case and resolve it itself or not. I’m interested

23

in your views about that.” Id. But Appellant Mandan’s counsel

refused Judge Sullivan’s invitation to raise the issue and

explicitly declined to present his argument to the District Court,

stating that “we are completely satisfied with where the case

sits at this particular point.” Id. at 70, JA 1272. Judge Sullivan

then told counsel that the case is “before Judge Walton, and so

you can make your arguments to him.” Id. at 71, JA 1273.

Counsel for Appellant Mandan thereafter argued before

Judge Walton in the separate case challenging the legality of

the cy-près provision. Judge Walton dismissed the complaint

for lack of standing on January 30, 2017. See Smallwood v.

Yates, No. 16-cv-161, 2017 WL 398334 (D.D.C. Jan. 30,

2017). The matter was never raised again in conjunction with

the Keepseagle case until Appellant Mandan filed his appeal

with this court. Judge Sullivan never had occasion to address

the issue because Appellant Mandan’s counsel explicitly

declined to pursue the matter in this case. This procedural

history, which Appellant Mandan did not mention in his briefs

to this court, reveals that he knowingly declined to raise his

claims with the District Court in the matter now under review

in this court.

Appellant Mandan now advances, for the first time in this

case, constitutional and statutory challenges to the Settlement

Agreement’s cy-près provision. He argues that the provision

violates the Appropriations Clause, U.S. CONST. art. I, § 9, cl.

7, because it proposes to expend Treasury funds without a

specific appropriation by Congress. Br. for Mandan at 21–32.

And he contends that the provision violates the Judgment Fund

Act, 31 U.S.C. § 1304(a)(3), because cy-près beneficiaries are

“uninjured non-parties” who would not be able to recover

judgments against the United States. Br. for Mandan at 26. In

Appellant Mandan’s view, these claims are inexorably tied

together and they are presented together in his brief. See, e.g.,

24

id. at 19. As noted above, these claims were never raised with

the District Court. We therefore decline to review the claims

because they were waived or forfeited.

In Greenlaw v. United States, 554 U.S. 237, 243–44 (2008),

the Supreme Court explained why appellate courts should be

loath to address issues that were not raised with the district

court in the first instance:

In our adversary system, in both civil and criminal

cases, in the first instance and on appeal, we follow the

principle of party presentation. That is, we rely on the

parties to frame the issues for decision and assign to

courts the role of neutral arbiter of matters the parties

present. To the extent courts have approved departures

from the party presentation principle in criminal cases,

the justification has usually been to protect a pro se

litigant’s rights. See Castro v. United States, 540 U.S.

375, 381–383 (2003). But as a general rule, “[o]ur

adversary system is designed around the premise that

the parties know what is best for them, and are

responsible for advancing the facts and arguments

entitling them to relief.” Id., at 386. (SCALIA, J.,

concurring in part and concurring in judgment). As

cogently explained:

“[Courts] do not, or should not, sally forth each

day looking for wrongs to right. We wait for cases

to come to us, and when they do we normally

decide only questions presented by the parties.

Counsel almost always know a great deal more

about their cases than we do . . . .” United States

v. Samuels, 808 F.2d 1298, 1301 (C.A.8 1987) (R.

Arnold, J., concurring in denial of reh’g en banc).

25

554 U.S. at 243–44.

“Although jurists often use the words interchangeably,”

Kontrick v. Ryan, 540 U.S. 443, 458 n.13 (2004), waiver is the

“intentional relinquishment or abandonment of a known right,”

United States v. Olano, 507 U.S. 725, 733 (1993) (citation and

internal quotation marks omitted), and “forfeiture is the failure

to make the timely assertion of a right.” Id. In this case,

Appellant Mandan waived his claims and he forfeited any right

that he might have had to raise the matters on appeal.

Application of the waiver doctrine, alone, is sufficient to

dispose of these issues.

Appellant Mandan explicitly waived his claims when his

counsel told the District Court Judge that he did not wish to

pursue any challenges to the cy-près provision. He did this after

Judge Sullivan invited him to raise whatever concerns he had.

“[A]fter expressing [a] clear and accurate understanding of the

. . . issue, [Counsel] deliberately steered the District Court away

from the question . . . . In short, [Counsel] . . . chose, in no

uncertain terms, to refrain from interposing [any] ‘challenge’

[to the cy-près provision].” Wood v. Milyard, 132 S. Ct. 1826,

1835 (2012). In these circumstances, Appellant Mandan’s

claims regarding the legality of the cy-près provision were

waived and they cannot be raised on appeal.

On the record before us, there is no doubt that Appellant

Mandan waived his claims regarding the legality of the cy-près

provision. Even if we take a different tack and consider

whether Appellant Mandan forfeited (rather than waived) his

claims, the result is the same. The case law is clear that he is

foreclosed from belatedly challenging the legality of the cy-

près provision for the first time on appeal because he never

raised his claims with the District Court in the first instance.

26

“It is well settled that issues and legal theories not asserted

at the District Court level ordinarily will not be heard on

appeal.” District of Columbia v. Air Florida, Inc., 750 F.2d

1077, 1084 (D.C. Cir. 1984). We have explained the reasons

for this general principle: “Enormous confusion and

interminable delay would result if counsel were permitted to

appeal upon points not presented to the court below. Almost

every case would in effect be tried twice under any such

practice. While the rule may work hardship in individual cases,

it is necessary that its integrity be preserved.” Id. at 1084–85

(quoting Johnston v. Reily, 160 F.2d 249, 250 (D.C. Cir.

1947)).

Thus, under well-established law, a party forfeits a claim

by failing to raise it below when the party “knew, or should

have known” that the claim could be raised. Laffey v. Nw.

Airlines, Inc., 740 F.2d 1071, 1091 (D.C. Cir. 1984). In this

case, Appellant Mandan knew, or should have known, that his

constitutional and statutory claims could have been raised in

2011, when the District Court approved the Settlement

Agreement containing the cy-près provision. Appellant

Mandan does not dispute this.

By 2015, after the claims process concluded and the

remaining funds were slated for cy-près distribution, there can

be no doubt that Appellant Mandan was once again on notice

of the opportunity to put forward his constitutional and

statutory theories. As detailed above, during the February 2016

fairness hearing, Judge Sullivan offered counsel for Appellant

Mandan the opportunity to present his legal challenges to the

cy-près provision. Counsel expressly declined and thereafter

never pursued the claims with the District Court in this case.

In light of this record, it would be extraordinary for an

appellate court to address these claims for the first time on

27

appeal. As the Supreme Court said in Greenlaw, in “our

adversary system . . . we follow the principle of party

presentation. . . . [Appellate courts] should not, sally forth each

day looking for wrongs to right. We wait for cases to come to

us, and when they do we normally decide only questions

presented by the parties.” 554 U.S. at 243–44 (citation and

internal quotation marks omitted).

It does not matter that Appellant Mandan’s belated claims

involve constitutional issues. The doctrines of waiver and

forfeiture apply to constitutional objections. See Curtis Pub.

Co. v. Butts, 388 U.S. 130, 143 (1967) (“[I]t is . . . clear that

even constitutional objections may be waived by a failure to

raise them at a proper time . . . .” (citing Michel v. Louisiana,

350 U.S. 91, 99 (1955)); see also Eli Lilly & Co. v. Home Ins.

Co., 794 F.2d 710, 717 (D.C. Cir. 1986) (finding that

“appellants waived their constitutional claims by failing to

raise them on their initial appeal to this court”); Yakus v. United

States, 321 U.S. 414, 444 (1944); (“No procedural principle is

more familiar to this Court than that a constitutional right may

be forfeited in criminal as well as civil cases by the failure to

make timely assertion of the right before a tribunal having

jurisdiction to determine it.”).

We would not only pervert the adversary process by

addressing Appellant Mandan’s newly raised claims, we would

also be required to engage in unduly weighty and cumbersome

decision-making without a decent record from the District

Court. See Air Florida, Inc., 750 F.2d at 1085 (pointing out the

“serious problems” that would be encountered if the court

entertained complex issues on appeal “without prior

consideration by the trial court”).

Appellant Mandan’s theories are novel and they rest on his

view of legislative history that is beyond the record of this case.

28

See Br. for Mandan at 26–29 (citing, e.g., Proposal to Expedite

the Payment of Judgments against the United States: Hearing

Before the Subcomm. of the Comm. on Appropriations, 84th

Cong. 883 (1956)). While some of Appellees’ briefs touch on

the merits of some of Appellant Mandan’s claims, see, e.g., Br.

for Appellee Vilsack at 19–24, we lack the robust record

necessary to properly evaluate the substance of these

arguments. Indeed, as far as we can discern, Appellant

Mandan’s arguments have never been addressed by any federal

appellate court, and they have been explored only tangentially

in a single law review article. See Paul F. Figley, The Judgment

Fund: America’s Deepest Pocket and its Susceptibility to

Executive Branch Misuse, 18 U. PA. J. CONST. L. 145, 194–97

(2015).

Even giving Appellant Mandan the benefit of the doubt,

we certainly cannot say that “the proper resolution [of his

claims] is beyond any doubt.” Singleton v. Wulff, 428 U.S. 106,

121 (1976). If anything, his arguments regarding the Judgment

Fund Act appear to be misguided. See Availability of Judgment

Fund in Cases Not Involving a Money Judgment Claim, 13 Op.

O.L.C. 98, 103 (1989) (focusing on the “underlying cause”

leading to settlement, and not on the identity of the parties

receiving settlement funds (citation omitted)).

Indeed, it is noteworthy that Appellant Mandan’s

arguments regarding the Judgment Fund Act stem principally

from his policy concerns over the use of cy-près provisions,

and not from any clear statutory mandate. See, e.g., Br. for

Mandan at 28–29 (“Cy pres is a troublesome concept

generally.”). “This being so, injustice [is] more likely to be

caused than avoided” if this court were to address the issues in

the first instance before they have been properly raised and

tried in the District Court. Singleton, 428 U.S. at 121.

29

Given the novelty and complexity of Appellant Mandan’s

claims, the materials that he asks us to review, and the policy

arguments that he raises, it would be entirely inappropriate for

this court to address the merits of his claims without the benefit

of a full record, including a decision from the District Court in

the first instance. As then-Judge Scalia explained,

[t]he premise of our adversarial system is that appellate

courts do not sit as self-directed boards of legal inquiry

and research, but essentially as arbiters of legal

questions presented and argued by the parties before

them. . . . Failure to enforce this requirement will

ultimately deprive us in substantial measure of that

assistance of counsel which the system assumes—a

deficiency that we can perhaps supply by other means,

but not without altering the character of our institution.

Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983); see

also Hormel v. Helvering, 312 U.S. 552, 556 (1941) (“[It] is

essential . . . that parties may have the opportunity to offer all

the evidence they believe relevant to the issues which the trial

tribunal is alone competent to decide . . . .”). Departing from

our established “principle of party presentation” would deprive

the parties of a full opportunity to present their arguments and

would place this court in the unsuitable position of deciding

novel legal issues in the first instance. This is not our role.

We understand that, in “exceptional circumstances,” an

appellate court may exercise discretion to address an issue that

is subject to forfeiture. Roosevelt v. E.I. Du Pont de Nemours

& Co., 958 F.2d 416, 419 n.5 (D.C. Cir. 1992). The Supreme

Court said as much in Singleton, 428 U.S. at 121. But the Court

made it clear that this is the exception, not the rule, and it

should be limited to situations “as where the proper resolution

is beyond any doubt,” or where “injustice might otherwise

30

result.” Id. (citation omitted). The record in this case does not

come close to establishing exceptional circumstances that

would militate in favor of this court considering, in the first

instance, Appellant’s legal challenges to the cy-près provision.

The truth here is that the “exceptional circumstances”

exception to forfeiture is of little moment in this case because,

before the District Court, Appellant Mandan explicitly waived

the claims that he now seeks to raise with this court. And

contrary to what the dissent implies, there is no authority to

support a suggestion that Appellant Mandan's Appropriations

Clause claims raise an Article III concern or call into question

the jurisdiction of this court. The simple point here is that

Appellant Mandan’s Appropriations Clause claims were

waived before the District Court and that is the end of the

matter.

E. Appellant Tingle’s Arguments

Appellant Tingle’s arguments overlap significantly with

Appellant Mandan’s, and are unpersuasive for the reasons

discussed above. However, Appellant Tingle raises two unique

arguments: first, that “[c]lass counsel had a conflict of interest

and breached its fiduciary duty,” Br. for Tingle at 30; and,

second, that “[t]he class representatives breached their

fiduciary duties,” id. at 35. We reject both claims because

Appellant Tingle offers no evidence in support of his

allegations. He asserts that “divergent interests emerged within

the class” such that class counsel “was simultaneously

representing clients with conflicting interests.” Id. at 31. He

does not explain what those divergent interests were and how

they resulted in breaches of fiduciary duties. Class

representatives often must weigh competing claims in

weighing the best interests of the class as a whole. This,

without more, does not give evidence of a breach of fiduciary

31

duties. Likewise, Appellant Tingle alleges that trusteeships

overseeing the proposed trust were promised to certain class

representatives “to incentivize a change in position.” Id. at 36.

Nothing in the record supports this accusation. Lastly,

Appellant Tingle takes aim at the “incentive fees” (or service

awards) provided by the Agreement for the class

representatives’ work in negotiating the Agreement and its

modification. Id. at 37. However, “incentive awards have often

been used to compensate a class representative,” Cobell v.

Jewell, 802 F.3d 12, 25 (D.C. Cir. 2015), and nothing in the

record of this case suggests that the service awards served any

nefarious purposes.

III. CONCLUSION

For the reasons set forth above, we affirm the judgment of

the District Court.

WILKINS, Circuit Judge, concurring: I join the majority

opinion in its entirety. I write separately to emphasize a few

brief points.

The dissent spins a tale of corruption and conspiracy, in

which the plaintiffs and the Government were complicit in

bilking the nation’s taxpayers to pay a political ransom. While

this narrative may have been advanced in news accounts and

scholarly articles, most of those statements and opinions have

not been validated by the solemnity of the oath and “testing in

the crucible of cross-examination,” Crawford v. Washington,

541 U.S. 36, 61 (2004); nor are they found in the record, and it

is the record upon which our decision must be based. Fed. R.

App. P. 10(a).

What the record shows is that the District Court expressly

found that the settlement “was attained following an extensive

investigation of the facts and the law . . . [and] resulted from

vigorous arms’-length negotiations, which were undertaken in

good faith.” Order, Keepseagle v. Vilsack, No. 99-cv-3119

(D.D.C. Apr. 28, 2011), JA 589-91. Unless we find clear error

in the District Court’s conclusion – and even the dissent does

not claim to do so – that finding stands.

It is true that more than half of the settlement fund was not

distributed through the claims process and is now poised to be

distributed via the cy-près provision. But this was an

unanticipated state of affairs, not an intended result. See

Keepseagle v. Vilsack, 118 F. Supp. 3d 98, 102 (D.D.C. 2015)

(“[N]o one anticipated such a large amount of excess funds.”).

As represented to the District Court, “the parties contemplated

that no more than several million dollars in settlement funds

would be unclaimed,” based on an expectation that “over ten

thousand class members would likely file . . . claims, and that

most of those claims would be successful.” J.A. 718 & n.2.

Instead of 10,000 claims, only 5,191 were received. J.A. 596.

2

The reason for this discrepancy is “unclear,” Keepseagle,

118 F. Supp. 3d at 102, but the difference in the number of

actual, versus estimated, claimants correlates closely with the

amount of surplus settlement funds. The parties have offered

several possible explanations, including that the deaths of

eligible claimants (the claims process began 30 years after the

first year covered by the settlement) left heirs with insufficient

information to complete claim forms or that, perhaps, there

were “simply fewer people with claims than Plaintiffs

originally argued.” Id. at 108 n.3. In addition to falling short

of the expected number of claims, a large number of submitted

claims were unsuccessful. Most strikingly, out of 146 Track B

claimants, only fourteen were successful. Compare J.A. 596,

with J.A. 716.

Regardless of the cause of this “monumental” failure in the

claims process, Keepseagle, 118 F. Supp. 3d at 102, there is no

occasion for considering the newly-resurrected claim that the

cy-près provision – a feature of the Settlement Agreement since

it was first unveiled seven years ago – violates the

Appropriations Clause. The dissent apparently concedes that

Appellant Mandan waived this claim before the District Court

when he was asked whether he wished to pursue it. Yet, the

dissent relies exclusively on cases involving forfeiture – not

waiver – to argue that “exceptional circumstances” permit an

appellate court to nevertheless consider the claim. The

Supreme Court, though, has been clear: “Waiver is different

from forfeiture.” United States v. Olano, 507 U.S. 725, 733

(1993). While “[m]ere forfeiture . . . does not extinguish an

error,” waiver may. Id. (internal quotation marks omitted).

Of course, some errors cannot be waived – subject matter

jurisdiction chief among them. In an attempt to shoehorn this

case into that category, the dissent hints that a federal court may

be without jurisdiction to approve a settlement agreement that

3

requires the Executive to make an unappropriated expenditure.

No authority is cited for that proposition and the legal signposts

in this area instead point in the opposite direction. See Local

No. 93 v. City of Cleveland, 478 U.S. 501, 523 (1986) (“[T]he

mere existence of an unexercised power to modify the

obligations contained in a consent decree does not alter the fact

that those obligations were created by agreement of the parties

rather than imposed by the court.”); cf. Authority of the United

States to Enter Settlements Limiting the Future Exercise of

Executive Branch Discretion, 23 Op. O.L.C. 126, 128 (1999)

(“We do not believe . . . that Article III bars federal courts from

entering consent decrees that limit executive branch discretion

whenever such decrees purport to provide broader relief than a

court could have awarded pursuant to an ordinary injunction.”).

Even if the “extraordinary circumstances” standard cited

in the dissent were applicable, its terms are not met. The

dissent claims that the “proper resolution is not in doubt”

because we are presented with a “fully briefed, purely legal

question.” See Dis. Op. at 16-17. But, of course, the proper

resolution of even fully briefed, purely legal questions can be

doubtful. Circuit splits happen.

Moreover, the question presented here is not purely legal.

Congress has appropriated funds for the Executive to settle

“claims . . . for defense of imminent litigation or suits against

the United States . . . [which] shall be settled and paid in a

manner similar to judgments in like causes.” 28 U.S.C. § 2414.

Concededly, the nonprofit organizations that will receive cy-

près distributions out of leftover settlement funds may not

possess any claims against the United States. But there is no

denying that the Settlement Agreement did in fact settle claims

against the United States; namely, the claims of the members

of the class. The question of whether this settlement was

supported by a congressional appropriation turns on whether

4

providing for cy-près distribution of unclaimed settlement

funds is “similar to judgments in like causes.” Id. That

requires answering at least two questions that are not “purely

legal”: What are “like causes” to this one? And how are

judgments in such causes settled and paid? The record offers

no answers to these questions, nor should it, because Appellant

Mandan told the District Court that this issue was off the table.

Not only has there been no fact-finding on these questions,

there has been no adversarial presentation; these questions are

not “fully briefed.” Nor can we say, without a proper factual

record, that the proper resolution of the merits question is, in

fact, “beyond any doubt,” Singleton v. Wulff, 428 U.S. 106, 121

(1976).

These conclusions are not the product of “schadenfreude”

or disrespect for the importance of separation of powers.

Rather, they are mandated by a commitment to the proper role

of the appellate court and the system of adversarial

presentation. When properly presented in a case or

controversy, courts vindicate the constitutional scheme of

separation of powers. Otherwise, allegations of trespass onto

Congress’ constitutional curtilage must be addressed by

Congress – not the courts – and Congress has ample weaponry

with which to defend its turf.

BROWN, Circuit Judge, dissenting: $380,000,000 is, to use

the late Senator Dirksen’s wry phrase, “real money.” That is

what has been left on the table for private disbursement in this

case. Perhaps one day, I will possess my colleagues’

schadenfreude toward the Executive Branch raiding hundreds-

of-millions of taxpayer dollars out of the Treasury, putting

them into a slush fund disguised as a settlement, and then

doling the money out to whatever constituency the Executive

wants bankrolled. But, that day is not today.

The Constitution’s Appropriations Clause ensures the

People’s elected representatives “hold the purse.” See THE

FEDERALIST NO. 58, p. 357 (Clinton Rossiter ed., 1961) (J.

Madison). “No money shall be drawn from the Treasury, but

in Consequence of Appropriations made by Law.” U.S.

CONST. art. I, § 9, cl. 7. The Executive Branch may wish to

favor certain interests on the taxpayer’s dime. It may wish to

use the Judicial Branch’s enforcement of settlement

agreements to avoid asking Congress for an appropriation. But

the Constitution’s design gives the People’s elected

representatives a means to thwart these “overgrown

prerogatives.” See THE FEDERALIST NO. 58, p. 357 (Clinton

Rossiter ed., 1961) (J. Madison). By limiting the “judicial

Power” to resolving “Cases” and “Controversies,” U.S. CONST.

art. III §§ 1–2, the Constitution ensures the Judicial Branch has

“no influence over . . . the purse.” See THE FEDERALIST NO.

78, p. 464 (Clinton Rossiter ed., 1961) (A. Hamilton).

Expenditures toward the fulfilment of public policy are integral

to policymaking itself, and policymaking is left to the

legislature. See id. at 464, 467. In short, congressional control

over the People’s purse is a structural limit on both the

Executive and Judicial Branches. See Clinton v. City of New

York, 524 U.S. 417, 451 (1998) (Kennedy, J., concurring)

(“Money is the instrument of policy and policy affects the lives

of citizens. The individual loses liberty in a real sense if that

instrument is not subject to traditional constitutional

constraints.”).

2

But this case exposes a peril to the public fisc with which

the drafters never reckoned: cy pres. Originating from the law

of trusts and estates, cy pres refers to a court’s power to reform

the terms of a trust or gift that is otherwise impossible to

effectuate. Rather than revert the unclaimed money or gift

back to the defendant, a court may distribute the unclaimed

sum for a purpose “as near as possible” to the objectives

underlying the trust or gift. See generally Martin H. Redish,

Peter Julian & Samantha Zyontz, Cy Pres Relief and the

Pathologies of the Modern Class Action: A Normative and

Empirical Analysis, 62 FLA. L. REV. 617, 624 (2010)

[hereinafter Redish]. Cy pres seeped its way into class actions

after a 1972 article proposed that courts distribute unclaimed

settlement dollars to whatever non-parties fulfill the litigation’s

“purpose.” See id. at 631–32. Cy pres took the judiciary “to

the utmost verge of the law” even before it was applied to class

actions. See Jackson v. Phillips, 96 Mass. 539, 574 (1867)

(quoting the English jurist Lord Kenyon). Now in “class action

litigation,” its mere presence raises “fundamental concerns”

about the nature of judicial power. See, e.g., Marek v. Lane,

134 S. Ct. 8, 8–9 (2013) (statement of Roberts, C.J., respecting

denial of certiorari).

Here, Congress only appropriated money for the Executive

Branch to pay settled claims against the United States via the

Judgment Fund Act. See 31 U.S.C. § 1304(a) (Judgment Fund

Act); see also 28 U.S.C. § 2414 (authorizing the Justice

Department to pay settled litigation claims using funds

appropriated via the Judgment Fund Act). Those claims have

already been paid—every Native-American farmer who filed a

viable claim of discrimination by the United States has been

compensated. And yet, more than half of the Judgment Fund

appropriation for this case—more than $380,000,000—

remains. The Executive Branch and class counsel have devised

3

a cy pres distribution scheme to send these taxpayer dollars to

“nonprofits” and “charities” with no claims against the United

States. But, the Executive Branch and class counsel tell us not

to worry. According to their distribution scheme, these

unidentified non-parties fulfill the “purpose” of having

“provided agricultural, business assistance, or advocacy

services to Native American farmers,” JA 393 (Original

Settlement Agreement, II.I.), and are thus entitled to receive the

remaining taxpayer money. Congress, however, never

appropriated money for this expense.

Unfortunately, no party before the Court really cares what

Congress authorized. Cy Pres gives the Executive Branch a

win-win: By agreeing to a settlement amount that vastly

overstated the claimants’ monetary damages, the Executive can

use a large dollar amount to reap the political benefits of photo-

op compassion towards a discriminated minority group. At the

same time, the Executive’s agreement to an overstated

damages sum ensures enough money is left in the fund to pay

favored third parties after the claimants are compensated. See,

e.g., Paul F. Figley, The Judgment Fund: America’s Deepest

Pocket and Its Susceptibility to Executive Branch Misuse, 18

U. PA. J. CONST. L. 145, 200 (2015) (explaining that the

Keepseagle settlement was part of an Obama administration

strategy “to neutralize the argument that the government favors

black farmers over . . . Native American[s] . . . and to court key

constituencies”) [hereinafter Figley, The Judgment Fund].

Class counsel gets a piece of the action too: By agreeing to cy

pres distributions, the size of the settlement fund is inflated.

The larger the settlement’s size, the larger class counsel’s fee

award—regardless of how much of the settlement actually pays

injured parties (better known as class counsel’s clients). Even

Appellant’s protest of the cy pres scheme is not entirely

altruistic. He wants the remaining money distributed to

already-compensated class members, not returned to the U.S.

4

Treasury. In short, everyone apparently presumed a bloodied-

shirt party could be thrown at the taxpayer’s expense. Why risk

Congress being a killjoy? See generally Sharon LaFraniere,

U.S. Opens Spigot After Farmers Claim Discrimination, N.Y.

TIMES, (Apr. 25, 2013),

http://www.nytimes.com/2013/04/26/us/farm-loan-bias-

claims-often-unsupported-cost-us-millions.html [hereinafter

LaFraniere, Spigot].

Nevertheless, the Constitution’s limitations on judicial

power remain, even if “the parties” before a court “cannot be

expected to protect” them. See Commodity Futures Trading

Comm’n v. Schor, 478 U.S. 833, 851 (1986). Judicial restraint

becomes judicial abdication when the parties keep making

mistakes and we keep them from being corrected. Cf. 33 G.K.

CHESTERTON, The Blunders of Our Parties, in THE COLLECTED

WORKS OF G.K. CHESTERTON 312, 312–16 (1990). Like the

Constitution’s other structural features, “[n]either Congress nor

the Executive can agree to waive” the Appropriations Clause.

See Freytag v. Comm’r, 501 U.S. 868, 880 (1991). When the

Constitution’s “structural principle[s]” limiting judicial power

are “implicated in a given case, . . . notions of consent and

waiver cannot be dispositive.” Schor, 478 U.S. at 850–51.

If the Government wishes to achieve certain purposes by

expending taxpayer money to people with no monetary claims

against the United States, a legislative appropriation is

required. No such appropriation exists here. Neither

authorizing nor policing a cy pres distribution scheme in a class

action settlement with the United States is consistent with

constitutional limitations. Because the money was

appropriated to pay claims, and those claims have been

compensated, the more than $380,000,000 that remains here

should be returned to the American People. But, cy pres

permits the judiciary to take more than half the taxpayer money

5

Congress authorized to pay claims in this case and appropriate

the money for something else. This is not justice. It is not even

law. I respectfully dissent.

I.

The Constitutionality of Cy Pres Distributions Is Before Us

The majority averts its gaze from the Constitution by

invoking the waiver doctrine. But waiver is not proper simply

because “[q]uestions may occur which we would gladly

avoid.” Cf. Cohens v. Virginia, 19 U.S. (6 Wheat.) 264, 404

(1821) (per Marshall, C.J.). Waiver is a proper conclusion

when we follow the doctrine’s guideposts. If those guideposts

tell us “we cannot avoid” a difficult question, then we must

“exercise our best judgment, and conscientiously . . . perform

our duty.” See id. Here, the waiver doctrine provides no

security blanket keeping us from cy pres’s constitutional

problems.

There are two primary reasons why waiver is inapposite

here: (1) this case presents “exceptional circumstances;” and

(2) this case raises structural, jurisdictional limitations on

judicial power that cannot be waived.

Some background information is essential to grasping this

case’s exceptional circumstances and the structural

constitutional limitations it raises:

The Keepseagle case is one of several class actions

attempting to capitalize on successful litigation under the Equal

Credit Opportunity Act (“ECOA”), where African-American

farmers were treated unfairly in loan programs, crop payments,

and disaster payments run by the U.S. Department of

Agriculture. Congress facilitated these cases by amending

6

ECOA’s statute of limitations. See Stephen Carpenter, The

USDA Discrimination Cases: Pigford, In re Black Farmers,

Keepseagle, Garcia, and Love, 17 DRAKE J. AGRIC. L. 1, 15–

16 (2012) (discussing the statute of limitations problem in

Pigford I). The class litigation involving African-American

farmers was incredibly successful—leading to, most notably,

Congress appropriating a settlement payout of $2,000,000,000

for resolving the Pigford II litigation. See, e.g., Figley, The

Judgment Fund, 18 U. PA. J. CONST. L. at 189–92 (detailing the

African-American farmers’ class litigation).

The success of the African-American class litigation owed

more to politics than law. See, e.g., id. at 193 (“President Bill

Clinton and President Barack Obama favored the farmers’

claims, and their political appointees actively supported the

settlements over the objections of some career officials.”);

LaFraniere, Spigot (quoting Congressman Steve King, who

explained Congress’s appropriation by saying, “[n]ever

underestimate the fear of being called a racist”). But, no matter

how political the Executive’s litigation strategy may have been,

“the [settlement] payments were made in a manner that

respected the Judgment Fund.” Figley, The Judgment Fund, 18

U. PA. J. CONST. L. at 193. Congress “allowed” the African-

American class litigation when it expanded ECOA’s statute of

limitations, and it “appropriated money . . . with full knowledge

of the terms of the agreement” settling Pigford II. See id; see

also Todd David Peterson, Protecting The Appropriations

Power: Why Congress Should Care About Settlements at the

Department Of Justice, 2009 B.Y. U. L. REV. 327, 362 (2009)

(“Rather than leaping over or subverting the limitations

imposed by Congress’s control over the circumstances in

which money judgments may be obtained against the United

States, the Department of Justice went to Congress for the

appropriate authority before it settled the case.”).

7

Keepseagle, however, has all of these political motivations

but none of the respect for Congress’s control over the purse.

The Executive Branch neither sought a specific appropriation

for this case, nor did Congress ever authorize the Executive to

send taxpayer money appropriated for settled lawsuits to non-

injured third-parties with no claims against the United States.

See Figley, The Judgment Fund, 18 U. PA. J. CONST. L. at 194–

97. Why, you may ask, would the Executive Branch avoid

asking Congress for a specific appropriation for Keepseagle?

Congress, in writing a multi-billion dollar appropriation for

Pigford II, demonstrated its willingness to pay large sums to

resolve discrimination claims against the United States. But,

the difference with Keepeseagle is the purpose of the

settlement. This settlement—as the more than $380,000,000

remaining for cy pres distribution now confirms—went far

beyond compensating injured Native-American farmers; it

sought to ensure favored “nonprofits” and “charities” were

flushed with cash. 1

1

Even outside its cy pres provisions, the Keepseagle settlement is

generally less focused on compensating class members—and more

focused on enacting agriculture policy and compensating class

counsel—than the Pigford consent decree. See Carpenter, The

USDA Discrimination Cases, 17 DRAKE J. AGRIC. L. at 25–26 &

n.261 (explaining that, unlike Pigford, the Keepseagle settlement

provides for “programmatic relief” that will: create a Federal

Advisory Committee called the Council for Native American

Farming and Ranching; create sub-offices within the Agriculture

Department on Indian Reservations; provide for a review of loan

making within the Agriculture Department in consultation with class

counsel; require the Agriculture Department to collect data regarding

Native American farming loans to identify disparities; and create an

Ombudsman that will address concerns of “socially disadvantaged”

farmers and raise them with the Council. Class counsel also received

a bigger benefit in Keepseagle—the settlement allows class

counsel’s fee award to come from a percentage of the common

8

As the majority acknowledges, when the Keepseagle class

was first certified in 2001, it was certified only for injunctive

relief—the district court deferred the question whether the class

deserved monetary relief. See Keepseagle v. Veneman, 1:99-

cv-03119, 2001 WL 34676944, at *14 (D.D.C. Dec. 12, 2001).

Yet the Judgment Fund does not apply to injunctive relief.

Without class certification for monetary relief, a large

settlement payout was impossible; the Keepseagle plaintiffs

would have to individually litigate any claims for monetary

damages. But the claims of the class claimants were quite

facile, and individually-litigated cases are seldom as lucrative

as class actions. See LaFraniere, Spigot (“Depositions had

revealed many of the individual farmers’ complaints to be

shaky. And federal judges had already scornfully rejected the

methodology of the plaintiffs’ expert, a former Agriculture

Department official named Patrick O’Brien, in the [female

farmers’] case.”); see also Garcia v. Veneman, 224 F.R.D. 8,

16 (D.D.C. 2004) (“The history of the Pigford (black farmers)

class action litigation amply demonstrates that . . . it is the

questions affecting only individual members that

predominate.”); Barry Sullivan & Amy Kobelski Trueblood,

Rule 23(f): A Note on Law and Discretion in the Courts of

Appeals, 246 F.R.D. 277, 279 (2008) (“Where a class is not

certified, the plaintiffs (and their lawyer) may not have the

will—or the resources—to continue with a litigation that [may]

yield only a small recovery and little basis for an award of

substantial attorneys’ fees.”).

settlement fund, rather than a flat fee credited against the class

award). These arrangements gave class counsel an incentive to

inflate the class claimants’ damages, while incentivizing the

Executive Branch to drop its strong legal arguments and settle in

favor of enacting agriculture policy.

9

For most of this lawsuit’s history, the Executive Branch

was not helping class counsel out of this little conundrum.

From the lawsuit’s filing in 1999 to December 2009, the

Executive Branch “hotly contested” the mere existence of

monetary damages. See Keepseagle v. Vilsack, 118 F. Supp.

3d 98, 105–06 (D.D.C. 2015). Even after “nearly ten years” of

“extensive and contentious discovery and motions practice,”

the Executive Branch insisted on the non-existence of money

damages. See id. Discovery gave the Executive good reason

to remain insistent—“this nearly decade-long battle resulted in

a narrowing of the plaintiffs’ claims.” See id. In fact, in

October 2009, the Executive Branch went so far as to tell the

district court that the narrowing of Plaintiffs’ “theory of the

case and supporting law” was so “considerabl[e]” that it

“call[ed] into question the previous class definition.” See

Gov’t Mem. in Opposition to Plaintiffs’ Mot. for Order

Regarding the Establishment of Class Membership at 4,

Keepseagle v. Vilsack, No. 1:99-cv-03119 (D.D.C. Oct. 23,

2009), ECF 541. Yet, a mere six weeks later, even as the

deadline for the Executive Branch’s submission of a rebuttal

expert report on damages approached, the Justice Department

agreed to stay the case—concluding that “settlement

discussions are appropriate at this time.” See Joint Mot. to Stay

at 2, Keepseagle v. Vilsack, 1:99-cv-03119 (D.D.C. Dec. 3,

2009), ECF 548.

In late 2009, the Executive Branch went from disputing the

existence of money damages to embracing a settlement

agreement that pays the Plaintiffs “nearly 90%” of their

“estimated total damages,” $776,000,000, $680,000,000 of

which came from the Judgment Fund. See Keepseagle, 118 F.

Supp. 3d at 106. Given the $380,000,000 remaining from the

Judgment Fund appropriation after class claimants were

compensated, we now know Plaintiffs’ money damage

10

estimates were wildly off-base. 2 Class counsel, though,

received a $60,800,000 payday—roughly four times class

counsel’s actual expenses. 3 None of this should have surprised

2

The dearth of class claimants that actually qualified to receive

money damages confirms the inflation. As the Executive Branch

acknowledges here, “[t]he claims process . . . allowed claimants to

obtain substantial recoveries by submitting minimal evidence.”

Gov’t Br. 27 (emphasis added). All that was required to “obtain

$50,000 plus $12,500 in tax relief [under Track A]” was “a written

statement without any further supporting documentation (save proof

of Tribal membership, if applicable).” Id. at 27–28. Under Track B,

a claimant could “obtain a cash payment of up to $250,000 by

meeting a ‘preponderance of the evidence’ standard in an entirely

non-adversarial process (meaning that any showing of discrimination

went unrebutted even if the government could have rebutted the

claim had it proceeded to litigation).” Id. at 28. Moreover, the

Agriculture Department forgave any outstanding federal farm loan

debt for any claimant that prevailed under either Track A or Track B,

even if “the value of that debt relief far exceeded claimants’ cash

recoveries.” Id. Short of giving the settlement money away without

any process at all, it is difficult to see how the Executive Branch

could have made it any easier for class members to collect.

Nevertheless, only 3,601 individuals prevailed in this process—a

sliver of the more than 19,000 claimants predicted by the class

complaint. See Fifth Amended Class Action Complaint at 163

¶ 143, Keepseagle v. Vilsack, No. 1:99-CV-03119, 2001 WL

35985330 (D.D.C. June 27, 2001).

3

Even the Executive Branch could not, initially, swallow the size of

class counsel’s fee award. In contesting this award, the Executive

Branch acknowledged it was willing to pay attorney fees that roughly

doubled its estimate of class counsel’s actual expenses to settle the

case, but it was not comfortable paying what class counsel ultimately

received. See, e.g., Gov’t Resp. to Pls.’ Mot. for Att’y Fees and

Expenses and to Pls.’ Mot. for Approval of Class Representative

Incentive Awards at 2, 7, Keepseagle v. Vilsack, No. 1:99-cv-03119

(D.D.C. Mar. 18, 2011), ECF No. 586; see id. at 9 (“It is possible

11

the Executive Branch. When it came before this Court to

contest the deferral of class certification on monetary damages,

the Justice Department said the following: “‘This case is, at

bottom, about compensatory relief for past wrongs,’ creating a

threat of ‘hydraulic’ pressure to settle” for a large sum. See In

re Veneman, 309 F.3d 789, 794 (D.C. Cir. 2002) (quoting the

Justice Department). Moreover, the Government’s damages

expert, Economics and Statistics Professor Gordon C. Rausser

of the University of California, Berkeley, “produced a 340-

page report stating that [Plaintiffs’ expert’s damages]

conclusions were based ‘in a counter-factual world’ and that

Native Americans had generally fared as well as white male

farmers.” LaFraniere, Spigot. “‘If they had gone to trial, the

government would have prevailed,’ he said. ‘It was just a

joke,’ he added. ‘I was so disgusted. It was simply buying the

support of the Native-Americans.’” Id. By settling, however,

the Executive Branch never filed its rebuttal expert report.

Both the original settlement agreement and the addendum

appealed here require court approval of the cy pres recipients

class counsel will propose. See JA 393 (Original Settlement

Agreement, II.I); JA 1170 (Proposed Settlement Agreement

Addendum, II.A–B). Court approval is also required for the

“awards” class counsel proposes that these cy pres recipients

receive. See JA 423 (Original Settlement Agreement, IX.7);

JA 1172 (Proposed Settlement Agreement Addendum, IV.A).

No adjudicative standard is set forth for approving either the cy

pres recipients or their distributions, other than that these

recipients fulfill the “purpose” of having “provided

agricultural, business assistance, or advocacy services to

that Plaintiffs’ billing records provide adequate support for the

claimed expenditures, but it is difficult to imagine, for example, how

money spent on ‘conferences’ or ‘media services’ is a reasonable and

necessary litigation expense at that time, and none of the travel

expenses are justified or described beyond ‘travel.’”).

12

Native American farmers,” e.g., JA 393 (Original Settlement

Agreement, II.I). The proposed addendum adds an equally-

fraught twist: The “primary cy pres beneficiary” will be a

newly-created “Native American Agriculture Fund.” JA 1170

(Proposed Settlement Agreement Addendum, II.B). Class

counsel will select the Trust Fund’s Board of Trustees and its

Executive Director, and a court will be tasked with approving

those selections. See id.

Nothing prohibits class counsel from serving on the Trust

Fund’s Board (or as its Executive Director), nor is the

Executive Branch in any way prevented from “suggesting”

names for class counsel’s nomination (nor, presumably, is a

court so limited). Moreover, this Trust Fund will be tasked

with using its taxpayer-funded cy pres money to, among other

things, “educate the public on agricultural issues, the needs of

Native American farmers and ranchers, and other matters

related to the Trust’s Mission, including by advocating for a

particular position or viewpoint” (the Trust Fund does purport

to be a non-political nonprofit, however). JA 1180.

The settlement agreement here strongly suggests its

exorbitant sum is not the result of, as the Executive Branch

preposterously contends, “the level of sophistication and

effectiveness of the lawyers representing the class’s interests[,]

. . . as well as the legal backdrop against which the parties

negotiated.” Gov’t Br. 23. Rather, political calculations

explain the settlement. Cf. Keepseagle, 118 F. Supp. 3d at 104

(suggesting the Government settled this case because it

“implicate[s] deep-seated interests of justice” even if “the

government’s legal defense may be relatively strong”). An

internal memorandum within the Department of Agriculture

from March 2010 says Keepseagle was part of an Obama

administration effort “to neutralize the argument that the

government favors black farmers over Hispanic, Native

13

American or women farmers.” LaFraniere, Spigot; see also id.

(“Sweeping settlements with the three groups, [Tony] West

[Assistant Attorney General of the Justice Department’s Civil

Division], argued, would eliminate legal risks and smooth

relations between the Agriculture Department and important

constituencies.”); Press Release, Agriculture Secretary Vilsack

and Attorney General Holder Announce Settlement Agreement

with Native American Farmers Who Claim to Have Faced

Discrimination by USDA in Past Decades, Release No.

0539.10 (Oct. 19, 2010)

https://www.usda.gov/wps/portal/usda/usdamediafb?contentid

=2010/10/0539.xml&printable=true&contentidonly=true

(“[S]hortly after [Secretary Vilsack] took office he sent a

memo to all USDA employees calling for ‘a new era of civil

rights’ for the Department. In February 2010, Secretary

Vilsack announced the Pigford II settlement with black

farmers; the Keepseagle settlement continues as part of that

new era. Meanwhile, Secretary Vilsack continues to pursue the

resolution of all claims of past discrimination against USDA.”).

Reporting also indicates “the payouts pitted [the Secretary of

Agriculture] and other political appointees against career

lawyers and agency officials, who argued that the legal risks

did not justify the costs” to the taxpayer. LaFraniere, Spigot.

My colleague suggests we should ignore this case’s

context because it is not “found in the record.” Concurrence at

1. Of course, the district court not only acknowledged this

context—it expressed sympathy with the Executive Branch’s

preference for political largess over legal defense. 4 See

4

Moreover, the insistence that we must be willfully blind to context

unless it is “test[ed] in the crucible of cross-examination” is

especially puzzling. Concurrence at 1. The context of this case is

not examined to make a factual determination—it helps explain why

“exceptional circumstances” exist to address Mandan’s

14

Keepseagle, 118 F. Supp. 3d at 104 (“The statements of the

President, Secretary Vilsack, and then-Attorney General

Holder make clear that the government in 2010 understood this

dimension of the case. . . . The government[’s] [lawyers]

would do well to remove [their] legalistic blinders.”); but see

Authority of the United States to Enter Settlements Limiting the

Future Exercise of Executive Branch Discretion, 23 Op. O.LC.

126, 137 (1999) (“The Attorney General generally possesses

the congressionally conferred power to settle on terms that

would serve the best interests of the United States, but the

considerations and terms that inform and structure a settlement

must be traceable, nonetheless, to a discernible source of

statutory authority.” (emphasis added)) [hereinafter

Settlements Limiting the Future Exercise of Executive Branch

Discretion]. Despite the district court’s obvious sympathy, it

still questioned whether the Judgment Fund Act permitted a cy

pres distribution:

The result is that $380,000,000

of taxpayer funds is set to be

distributed inefficiently to third-

party groups that had no legal

claim against the government.

Although a $380,000,000

donation by the federal

government to charities serving

Native American farmers and

ranchers might well be in the

public interest, the [c]ourt

doubts that the judgment fund

from which this money came

constitutional arguments. It makes no sense to insist on a trial when,

by design, “exceptional circumstances” are only invoked on appeal

to consider an argument not raised below.

15

was intended to serve such a

purpose. The public would do

well to ask why $380,000,000 is

being spent in such a manner.

Keepseagle, 118 F. Supp. 3d at 104. But the district court

reasoned the parties’ consent to the final judgment put the cy

pres issue “beyond the realm of the law and into the realm of

politics and policy.” Id; see also id. at 121 (“[T]he [c]ourt is

not persuaded that it has any authority to declare void portions

of an agreement that was negotiated by the parties, approved

by the [c]ourt pursuant to [Rule] 23, and finalized on appeal

(either by affirmance of the Court of Appeals or by the lack of

any timely appeal).”). In considering the cy pres amendment

at issue here, both the district court and the majority continue

to treat the parties’ consent as a means to circumvent

constitutional limitations on judicial power.

A.

Exceptional Circumstances Are Present

“[A] federal court is more than ‘a recorder of contracts’

from whom parties can purchase [relief].” Local Number 93,

Int’l Ass’n of Firefighters v. Cleveland, 478 U.S. 501, 525

(1986). Congress did not create the Judgment Fund for the

Executive to dispense political favors, but to pay lost or settled

litigation claims against the United States. See 31 U.S.C.

§ 1304(a) (appropriating money “to pay final judgments,

awards, [and] compromise settlements,” and limiting that

appropriation to when: payment is not authorized by another

source; the Treasury Department has certified the payment; and

“the judgment, award, or settlement is payable” under a statute

Congress designated for such payment). “The Framers fully

recognized that nothing would so jeopardize the legitimacy of

16

a system of government that relies upon the ebbs and flows of

politics to ‘clean out the rascals’ than the possibility that those

same rascals might perpetuate their policies simply by locking

them into binding contracts.” U.S. Tr. Co. v. New Jersey, 431

U.S. 1, 45 (1977) (Brennan, J., dissenting). Even the Executive

Branch has acknowledged that, despite its “sweeping” power

to settle lawsuits, “the Attorney General must, as a general

matter, exercise her broad settlement discretion in a manner

that conforms to the specific statutory limits that Congress has

imposed upon its exercise.” Settlements Limiting the Future

Exercise of Executive Branch Discretion, 23 Op. O.LC. at 136.

When exceptional circumstances are present, “the courts

of appeals” possess “the discretion” to decide “what questions

may be taken up and resolved for the first time on appeal.”

Singleton v. Wulff, 428 U.S. 106, 121 (1976). Exceptional

circumstances are present when “the proper resolution is

beyond any doubt, or where injustice might otherwise result.”

Id. (internal citation omitted). Here, such circumstances exist,

justifying us in addressing Appellant’s challenge to the

settlement agreement’s cy pres provisions.

i.

The Proper Resolution Is Not In Doubt

The Appellant, Keith Mandan (“Mandan”), argues that cy

pres distribution violates the Appropriations Clause and the

Judgment Fund Act. This is his lead argument within his

opening brief. Both the Executive Branch and the Plaintiff-

Appellees briefed this issue too. Moreover, the Executive

Branch is right when it claims Mandan’s argument challenges

cy pres distributions in class action settlements with the United

States generally—not just the cy pres distribution scheme

proposed within the addendum to this settlement agreement.

17

See Gov’t Br. 18; cf. Appellant Opening Br. 22–29.

Poignantly, the Executive Branch set forth the proper remedy

within its own brief. See Gov’t Br. 24 (“If the remaining $3[8]0

million in taxpayer money indeed remains part of the public

fisc and need not be distributed according to the terms of the

2011 settlement agreement, then the most appropriate

disposition of this unexpectedly large sum would be for it to

revert to the Treasury.” (emphasis added)). This is, therefore,

not a case where “the opposing party los[t] its opportunity to

contest the merits,” or where “an improvident or ill-advised

opinion on the legal issues” is at risk. See Se. Mich. Gas Co. v.

FERC, 133 F.3d 34, 42 n.3 (D.C. Cir. 1998). The result and

issue are squarely raised before us.

“Deciding fully briefed, purely legal questions is a

quotidian undertaking for an appellate court.” See Ass’n of Am.

R.R. v. U.S. Dep’t. of Transp., 821 F.3d 19, 26 (D.C. Cir. 2016).

The concurrence claims the proper resolution of a fully briefed

legal issue can still be in doubt, so “exceptional circumstances”

cannot be invoked on that ground. See Concurrence at 3. This

view does not follow from our precedent. See Hodge v. Talkin,

799 F.3d 1145, 1171 (D.C. Cir. 2015) (“The district court . . .

did not reach Hodge’s vagueness challenge. . . . Here, we find

it appropriate to consider Hodge’s vagueness claim. Not only

does he ask us to address the challenge, but it raises pure

questions of law. And the government joins issue with

Hodge’s arguments on the merits rather than suggesting that

we forbear on the matter.”). To be sure, the Executive Branch

argues waiver. But as noted above, the Executive Branch also

set forth a detailed response on the merits and identified the

proper remedy. This is thus unlike the circumstance in which

we declined addressing constitutional issues surrounding cy

pres. Cf. Democratic Cent. Comm. v. Wash. Metro. Area

Transit Comm’n, 84 F.3d 451, 455 n.2 (D.C. Cir. 1996)

(declining to address the “controversial” use of cy pres

18

distributions in class actions against the United States because,

unlike here, “[t]his case . . . is not a class action; the

constitutional challenges mentioned above are not at issue

here.”). We cannot be transgressing our discretion by resolving

this issue.

ii.

Invoking Waiver Results In Injustice

By failing to consider Mandan’s cy pres challenge, we

permit a fundamental injustice: cy pres allows the Executive

Branch to circumvent checks on its own power with the

Judicial Branch’s imprimatur. The acceptability of

circumventing the congressional appropriations process under

the guise of Article III is “extraordinarily important and

deserves a ‘definitive answer.’” See Al Bahlul v. United States,

840 F.3d 757, 760 n. 1 (D.C. Cir. 2016) (en banc) (Kavanaugh,

J., concurring) (quoting Al Bahlul v. United States, 767 F.3d 1,

62 (D.C. Cir. 2014) (en banc) (Brown, J., concurring in

judgment and dissenting in part)). This issue raises the proper

relationship of our Federal Government’s three branches when

dealing with the People’s money. Moreover, “other cases in

the pipeline require a clear answer to [this] question.” See id.

As Chief Justice Roberts recently noted, “[c]y pres remedies

. . . are a growing feature of class action settlements.” Marek,

134 S. Ct. at 9 (statement of Roberts, C.J., respecting denial of

certiorari). Other legal commentators have also noted this

trend. See Redish at 661 (“[T]he prevalence of class action cy

pres awards has increased steadily by decade since the 1980s

and has accelerated noticeably after 2000.”). Additionally, cy

pres distribution in this case is not merely dispensing a

“residual” amount—it will dispose of more than half of this

settlement fund. Even by cy pres standards (such as they are),

this is exceptional. See, e.g., In re Baby Prods. Antitrust Litig.,

19

708 F.3d 163, 174 (3d Cir. 2013) (“Barring sufficient

justification, cy pres awards should generally represent a small

percentage of [the] total settlement funds.”).

In sum, if these circumstances are not exceptional, I do not

know what defines “exceptional circumstances.”

B.

Structural Constitutional Objections Are Present

The source of the “exceptional circumstances” here is its

own basis for not invoking waiver: a “neither frivolous nor

disingenuous” “constitutional challenge” to “the validity of the

. . . proceeding that is the basis for th[e] litigation.” See

Freytag, 501 U.S. at 879. Specifically, the structural issue

before us is the district court’s power to approve and police a

cy pres distribution scheme without congressional

appropriation.

The fact that Mandan consented to the 2011 agreement is

immaterial. “[C]onsent” cannot “excuse an actual violation of

Article III,” see, e.g., Wellness Int’l Network, Ltd. v. Sharif, 135

S. Ct. 1932, 1945 n.10 (2015), and that is what Mandan’s

Appropriations Clause claim presents. 5 We must be willing to

5

Mandan does not detail the Appropriations Clause’s implications

for judicial power to the same extent he does for cy pres distributions

under the Judgment Fund Act. Still, Mandan does fully brief the

implications of cy pres distributions for the separation of legislative,

judicial, and executive powers. See, e.g., Appellant Opening Br. 22–

29. We are thus well within our purview to detail the particular

implications for judicial power. See Kamen v. Kemper Fin. Servs.,

500 U.S. 90, 99 (1991) (“When an issue or claim is properly before

the court, the court is not limited to the particular legal theories

20

assess claims that the Judicial Branch acted with power

entrusted to another branch of the Federal Government. See

Freytag, 501 U.S. at 879 (“[T]he disruption to sound appellate

process entailed by entertaining objections not raised below

does not always overcome what Justice Harlan called ‘the

strong interest of the federal judiciary in maintaining the

constitutional plan of separation of powers.’” (internal citation

omitted)). 6

Our Founders “lived among the ruins of a system of

intermingled legislative and judicial powers.” Plaut v.

Spendthrift Farm, Inc., 514 U.S. 211, 219 (1995). Judges were

under the King’s thumb, while legislatures were often

advanced by the parties, but rather retains the independent power to

identify and apply the proper construction of governing law.”);

Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983) (clarifying a

panel is “not precluded from supplementing the contentions of

counsel through [its] own deliberation[s] and research” (emphasis

added)).

6

The concurrence dismisses the cases saying structural,

jurisdictional limitations on Article III are always before us, because

those cases “involv[e] forfeiture—not waiver.” Concurrence at 2.

The concurrence says “[t]he Supreme Court . . . has been clear” on

the difference between the two concepts. See id. I beg to differ. See

Freytag, 501 U.S. at 894 n.2 (Scalia, J., concurring in part and

concurring in the judgment, joined by O’Connor, Kennedy, &

Souter, JJ.) (“[O]ur cases have so often used them interchangeably

that it may be too late to introduce precision. . . . I shall try not to

retain the distinction between waiver and forfeiture throughout this

opinion, since many of the sources I shall be using disregard it.”).

What is clear, however, is the Supreme Court’s admonition in Schor:

constitutional limits on Article III are not to dangle at the mercy of

artfully parsed relinquishment concepts. See 478 U.S. at 850–51

(“notions of consent and waiver cannot be dispositive” if Article III

limitations are at issue (emphasis added)).

21

obstructed in their ability to make policy. See generally THE

DECLARATION OF INDEPENDENCE (U.S. 1776). In response, the

Founders created a judiciary “truly distinct from both the

legislature and the executive.” THE FEDERALIST NO. 78, p. 465

(Clinton Rossiter ed., 1961) (A. Hamilton). The “judicial

[p]ower” was limited to “render[ing] dispositive judgments” in

“cases” or “controversies” within the scope of federal

jurisdiction. See Plaut, 514 U.S. at 218–19. The judiciary thus

received “no influence over . . . the purse.” THE FEDERALIST

NO. 78, p. 464 (Clinton Rossiter ed., 1961) (A. Hamilton). As

the Constitution gave the appropriations power to the American

People’s elected representatives, our founding document

“assure[s] that public funds will be spent according to the letter

of the difficult judgments reached by Congress as to the

common good and not according to the individual favor of

Government agents or the individual pleas of litigants.” OPM

v. Richmond, 496 U.S. 414, 427–28 (1990); cf. Freytag, 501

U.S. at 880 (“The structural interests . . . are not those of any

one branch of Government but of the entire Republic.”).

Cy pres distribution schemes in class actions against the

United States confound judicial power; reverting us to the time

when the King could circumvent the People’s representatives

through the judiciary. Ninth Circuit Judge Andrew Kleinfeld

described the problem of cy pres in class actions rather

ominously given Keepseagle’s facts:

A defendant may prefer a cy pres

award to a damages award, for

the public relations benefit. And

the larger the cy pres award, the

easier it is to justify a larger

attorneys’ fees award. The

incentive for collusion may be

even greater where . . . there is

22

nothing to stop [the lawyers for

both sides] from managing the

[cy pres recipient(s)] to serve

their interests . . . .

Lane v. Facebook, Inc., 696 F.3d 811, 834 (9th Cir. 2012)

(Kleinfeld, J., dissenting). 7 Some circuits recognize this

potential for conflicting interests and promise “careful

scrutiny” of cy pres provisions. See, e.g., In re Baby Prods.

Antitrust Litig., 708 F.3d at 175; Mirfasihi v. Fleet Mortg.

Corp., 356 F.3d 781, 785–86 (7th Cir. 2004). Other circuits

attempt to implement cy pres distributions only where “it is not

possible to put those funds to their very best use: benefitting

7

This reality of aligned interest bespeaks a broader problem of

collusion within class actions—often at the expense of individual

class members. See MAYER BROWN, DO CLASS ACTIONS BENEFIT

CLASS MEMBERS? AN EMPIRICAL ANALYSIS OF CLASS ACTIONS 9

(2013),

https://www.mayerbrown.com/files/uploads/Documents/PDFs/2013

/December/DoClassActionsBenefitClassMembers.pdf (“Cy pres

awards and injunctive relief serve primarily to inflate attorney’s fee

awards—and benefit third parties with little or no ties to the putative

class.”); see also Amchem Prods. v. Windsor, 521 U.S. 591, 614,

617–18 (1997) (describing the class action device as

“adventuresome” and fraught with questions of proper judicial

administration). The class action device is supposed to be nothing

more than a mere “species” of joinder. See Shady Grove Orthopedic

Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 408 (2010). When

class actions attempt to circumvent the underlying substantive law,

the device has gone beyond its strictures. See Wal-Mart Stores, Inc.

v. Dukes, 564 U.S. 338, 367 (2011) (“[T]he Rules Enabling Act

forbids interpreting Rule 23 to abridge, enlarge, or modify any

substantive right . . . .”). By breaking the bonds of a case or

controversy, cy pres in a class action against the United States comes

at the expense of the underlying substantive law meant to restrict

Government action: Our Constitution.

23

the class members directly.” Klier v. Elf Atochem N. Am. Inc.,

658 F.3d 468, 475 (5th Cir. 2011); Masters v. Wilhelmina

Model Agency, Inc., 473 F.3d 423, 436 (2d Cir. 2007); In re

Pharm. Indus. Average Wholesale Price Litig., 588 F.3d 24, 35

(1st Cir. 2009). But the fact remains: “It is inherently dubious

to apply a doctrine associated with the voluntary distribution of

a gift to the entirely unrelated context of a class action

settlement, which a defendant no doubt agrees to as the lesser

of various harms confronting it in litigation.” Klier, 658 F.3d

at 480 (Jones, C.J., concurring) (emphasis added). The reality

Judge Jones identified is at play here. The Executive Branch

saw an opportunity to exploit a large settlement award without

having to ask Congress for money, class counsel saw the

promise of a large fee award, and, suddenly, doubtful claims

for monetary damages became a class action worth more than

half-a-billion taxpayer dollars.

Both the district court and Mandan consider the American

Law Institute’s Principles of the Law of Aggregate Litigation

to set forth “reasonable” criteria to police cy pres’s use in class

actions. See Keepseagle, 118 F. Supp. 3d at 116–17; Plaintiff-

Appellant Opening Br. 39–40 (citing Principles of the Law of

Aggregate Litigation § 3.07 (2010) (“ALI Principles”)). Yet

these principles suggest what the Appropriations Clause and

Article III require: Cy pres should never be used in class action

settlements with the United States.

The ALI Principles presume, first and foremost, a

settlement fund’s outstanding monies will fully compensate

class members for their damages. See ALI Principles § 3.07(b).

But that presumption is inapplicable when, as here, the class

members have been fully compensated.

The ALI Principles prefer that outstanding monies are

distributed to those “whose interests reasonably approximate

24

those being pursued by the class.” Id. § 3.07(c). This is

achieved by reversion to the Treasury, where Congress can—

through the appropriations process—approximate the interests

of the class. Because Congress can reasonably approximate the

class’s interests, reversion to the Treasury is different in kind

from reversion to a private defendant. See ALI Principles

§ 3.07(b) cmt. b (explaining reversion to the defendant “would

undermine the deterrence function of class actions and the

underlying substantive-law basis of the recovery by rewarding

the alleged wrongdoer simply because distribution to the class

would not be viable”). Congress has a long track record of

reasonably approximating the interests of various classes

through the creation of victim compensation funds. 8

Moreover, allowing Congress the opportunity to reasonably

approximate class interests furthers “the underlying

substantive-law basis of the recovery” by honoring Congress’s

limits on the Judgment Fund Act. Reversion to the Treasury

ensures public accountability, avoids conferring standing on

non-injured third parties to contest cy pres distributions, and it

comports with Congress deciding whether the Government

should waive sovereign immunity and be liable for certain

claims in the first instance. 9

8

The circumstances in which Congress has compensated victims are

legion and varied. See, e.g., 12 U.S.C. § 5219a (Home Affordable

Modification Program, created by the Emergency Economic

Stabilization Act of 2008 in response to the subprime mortgage

crisis); 15 U.S.C. § 7246(a) (creating the “Fair Fund” established by

the Sarbanes-Oxley Act of 2002 to distribute disgorgement penalties

to defrauded investors); 49 U.S.C. § 40101 (creating the September

11th Victim Compensation Fund).

9

Reversion to the Treasury is also distinct from escheating to the

state, another alternative to cy pres distributions. Certain

requirements must be met for monies deposited with the judiciary to

escheat to the United States. See 28 U.S.C. § 2041. The issue here,

25

Cy pres distributions, given their range of potential

beneficiaries, their attenuated relationships to actual class

members, and their focus on fulfilling a general “purpose”

rather than remediating monetary damage, resemble legislative

appropriation. See, e.g., Redish at 624; Goutam U. Jois, The

Cy Pres Problem and the Role of Damages in Tort Law, 16 VA.

J. SOC. POL’Y & L. 258, 260 (2008); cf. also THE FEDERALIST

NO. 75, at 449 (Clinton Rossiter ed., 1961) (A. Hamilton)

(distinguishing legislative and executive power by inquiring

into “the particular nature of the power” at issue, and

identifying “[t]he essence of legislative authority” in the

prescription of general rules for society). Yet Congress made

no such appropriation here, and no part of the appropriations

process is within the judicial power. See Buckley v. Valeo, 424

U.S. 1, 123 (1976) (per curiam) (holding Article III courts may

not exercise “executive or administrative duties of a

nonjudicial nature”); In re BankAmerica Corp. Sec. Litig., 775

F.3d 1060, 1066 (8th Cir. 2015) (“Distribution of funds at the

discretion of the court is not a traditional Article III function,”

rendering such a cy pres provision “void ab initio.”); In re

Compact Disc Minimum Advertised Price Antitrust Litig., 236

F.R.D. 48, 53 (D. Me. 2006) (“Federal judges are not . . .

accustomed to deciding whether certain nonprofit entities are

however, is not that the settlement fund’s remainder is unable to

compensate a claimant for some reason. Cf. id. (“This section shall

not prevent the delivery of any such money to the rightful owners

upon security, according to agreement of parties, under the direction

of the court.” (emphasis added)). Rather, the “rightful owners,” the

class claimants, have already received what they rightfully own (their

respective awards for compensatory damages), and Congress

appropriated money for no other expenditure. The only other

“rightful owners” are the American taxpayers, who own the

remainder pending a decision by their elected representatives to

additionally appropriate the remaining money.

26

more ‘deserving’ of limited funds than others; and we do not

have the institutional resources and competencies to monitor

that ‘grantees’ abide by the conditions we or the settlement

agreements set.”). Accordingly, regardless of the cy pres

provision’s form, approving recipients and distributions in

class actions against the United States gives a court the very

influence over the purse prohibited by Article III. Cf. THE

FEDERALIST NO. 78, at 465 (Clinton Rossiter ed., 1961) (A.

Hamilton).

Even in class actions where cy pres distributions are not

made from the public fisc—and the comingling of legislative

and judicial power is not implicated—cy pres is problematic

for judicial power. A court risks violating Article III

justiciability requirements should it adjudicate disputes

between cy pres recipients and would-be recipients, as none

would possess an injury-in-fact. See Lewis v. Cont’l Bank

Corp., 494 U.S. 472, 577 (1990) (holding Article III prohibits

federal courts from “decid[ing] questions that cannot affect the

rights of litigants in the case before them” (emphasis added));

see also Klier, 658 F.3d at 481 (Jones, C.J., concurring)

(explaining how cy pres distributions “transform[] the judicial

process from a bilateral private rights adjudicatory model into

a trilateral process”). In this trilateral process, there is no

neutral, adjudicative standard by which a court can determine

the “next best” recipient of settlement money—or what to do

with the money when no “next best” recipient bears any

relationship to the class. See, e.g., In re Motorsports Merch.

Antitrust Litig., 160 F. Supp. 2d 1392, 1399 (N.D. Ga. 2001)

(distributing, via cy pres, approximately $2 million remaining

in a settlement pool from a consumer price-fixing lawsuit to

nine different organizations, ranging from drug prevention

programs, a breast cancer foundation, and a children’s hospital,

27

even though none of those organizations bore any relationship

to the injured class—Georgia NASCAR fans). 10

Keepseagle reveals that nothing short of the Constitution’s

enumerated limits on power can protect the taxpayer’s money

and the judiciary’s integrity. The Executive Branch has an

independent obligation to assess the constitutionality of its own

conduct. In the first instance, politics should not have been

allowed to permit what the Appropriations Clause would

prohibit. Similarly, in the first instance, the district court

should have never allowed the parties’ consent to override its

independent obligation to not approve agreements that

10

These problems are compounded by the “appearance of

impropriety” created by “the specter of judges and outside entities

dealing in the distribution and solicitation of large sums of money.”

SEC v. Bear, Stearns & Co., 626 F. Supp. 2d 402, 415 (S.D.N.Y.

2009). As numerous press reports and cases indicate, cy pres

distributions are littered with ethical issues. See, e.g., Richard A.

Epstein, Editorial, The Deferred Prosecution Racket, WALL ST. J.

(Nov. 28, 2006, 12:01 AM),

https://www.wsj.com/articles/SB116468395737834160 (criticizing

a Bush administration settlement with Bristol-Myers Squibb that

required the company’s endowment of a—hold on to your hat—chair

of ethics at Seton Hall Law School, the alma mater of the then-U.S.

Attorney for the District of New Jersey); Editorial, Holder Cut Left-

Wing Groups in on $17 Bil BofA Deal, INVESTOR’S BUSINESS DAILY

(Aug. 27, 2014),

http://www.investors.com/politics/editorials/holders-bank-of-

america-settlement-includes-payoffs-to-democrat-groups/

(criticizing a Justice Department settlement with Bank of America as

a “raft of political payoffs to Obama constituency groups”); Adam

Liptak, Doling Out Other People’s Money, N.Y. TIMES (Nov. 26,

2007),

http://www.nytimes.com/2007/11/26/washington/26bar.html.

28

transgress Article III’s limits. 11 See, e.g., Freytag, 501 U.S. at

896 (Scalia, J., concurring in part and concurring in the

judgment) (“[A] litigant’s prior agreement to a judge’s

expressed intention to disregard a structural limitation upon his

power cannot have any legitimating effect—i.e., cannot render

that disregard lawful. Even if both litigants not only agree to,

but themselves propose, such a course, the judge must tell them

no.”); see also Se. Fed. Power Customers, Inc. v. Geren, 514

F.3d 1316, 1321 (D.C. Cir. 2008) (“[T]he district court could

hardly approve a settlement agreement that violates a statute . .

. .”). But the violation to our Constitution’s structure here is

not merely ex ante to approving this settlement agreement’s cy

pres provisions. This violation is ongoing and is jurisdictional.

The parties have been squabbling over how to modify the

cy pres provisions to their respective benefit for nearly four

years—indeed, that dispute underlies this appeal. See

Keepseagle v. Vilsack, 307 F.R.D. 233, 238 (D.D.C. 2014)

(dating the “potential modification” of the cy pres provisions

to at least August 2013). The Court’s opinion today ensures

this will continue, as approval of cy pres recipients and

distributions—or any additional changes to the cy pres

scheme—will rest solely on what led to the error in the first

instance: substituting the parties’ consent for constitutional

requirements. This sort of Government-By-Autopilot cannot

be reconciled with our Constitution. Cf. Randy Barnett, The

Origination Clause and the Problem of “Double Deference,”

The Volokh Conspiracy, WASHINGTON POST (Mar. 12, 2014),

11

For these reasons, it is inapposite to conclude that invoking waiver

prevents Mandan from “sandbagging” either the Executive Branch

or the district court. The rule of law is undermined if “sandbagging”

includes a party raising constitutional problems that the Executive

Branch and the district court were obliged to consider in the first

instance.

29

https://www.washingtonpost.com/news/volokh-

conspiracy/wp/2014/03/12/the-origination-clause-and-the-

problem-of-double-deference/?utm_term=.900b86fc81e1

(“[I]f the courts defer constitutional judgments to Congress,

and Congress defers constitutional judgments to the courts,

then no one is considering the Constitution itself. Double

deference is a shell game.”).

“Abdication of responsibility is not part of the

constitutional design.” Clinton, 524 U.S. at 452 (Kennedy, J.,

concurring). But as a result of the majority’s reticence, the

judiciary will now be distributing more than $380,000,000 of

taxpayer money without congressional appropriation and

outside the confines of a case or controversy. “[T]o permit the

appellate court to ignore” this jurisdictional, structural defect

“because of waiver would be to give the waiver legitimating,

as opposed to merely remedial, effect, i.e., the effect of

approving, ex ante, unlawful action by the appellate court

itself.” Freytag, 501 U.S. at 896–97 (Scalia, J., concurring in

part and concurring in the judgment). The Executive Branch

cannot continue to pursue this course, and the Judicial Branch

had no more power to indulge it today than it had the power to

approve the initial cy pres provisions. We had an opportunity

to eliminate this constitutional breach before it results in

material damage to the Constitution’s limitations—the

approval of cy pres recipients and cy pres distributions of

taxpayer money. Waiving away these constitutional problems

is a dereliction of duty.

II.

The Appropriations Clause and the Judgment Fund Act Bar a

Cy Pres Settlement Provision

A.

30

Congress Only Appropriated Money To Pay “Claims”

Against the United States

Turning to the merits of Mandan’s claim, there is no doubt

that the Keepseagle settlement reveals a dramatic dilution of

Congress’s power of the purse—and an abuse of the judiciary’s

limited role—in furtherance of the Executive Branch’s political

priorities.

Under our Constitution’s Appropriations Clause, the

American People’s elected representatives possess “a

controlling influence over the executive power.” See 1 Joseph

Story, COMMENTARIES ON THE CONSTITUTION OF THE UNITED

STATES, § 531, p. 384 (Thomas M. Cooley ed., 4th ed. 2011)

(emphasis added). By holding this power, Justice Story

explained, Congress “holds at its own command all the

resources by which a chief magistrate could make himself

formidable.” Id.

The Supreme Court is as stout-hearted as Justice Story. In

its very first Appropriations Clause decision, the Court

unanimously stated “[i]t is a well-known constitutional

provision, that no money can be taken or drawn from the

Treasury except under an appropriation by Congress.” Reeside

v. Walker, 52 U.S. (11 How.) 272, 291 (1850); see also

Cincinnati Soap Co. v. United States, 301 U.S. 308, 321 (1937)

(explaining the Appropriations Clause “was intended as a

restriction upon the disbursing authority of the Executive

department”). Even in more recent years, the Court has not

wavered. See, e.g., United States v. MacCollom, 426 U.S. 317,

321 (1976) (plurality opinion) (“The established rule is that the

expenditure of public funds is proper only when authorized by

Congress, not that public funds may be expended unless

prohibited by Congress.”).

31

Moreover, the Court has recognized the Clause as a

limitation on the Executive Branch’s disbursement authority in

legal settlements. See Richmond, 496 U.S. at 427–28. The

Executive Branch threatens the Constitution’s structure if it

“were able, by [its] unauthorized oral or written statements to

citizens, to obligate the Treasury for the payment of funds.” Id.

at 428. In that circumstance, “control over public funds that

the Clause reposes in Congress in effect could be transferred to

the Executive.” Id. The question here, therefore, is whether

the Executive’s “statements to citizens,” i.e., what it promised

to private parties via settlement, were “authorized” by

congressional appropriation. Any part of the Executive’s

agreement with the private party not “authorized” by

congressional appropriation cannot be enforced.

Here, as Mandan explains, two congressional statutes

effectuate all that Congress has authorized respecting the

Keepseagle claims: the Judgment Fund Act and the settlements

authority statute. 31 U.S.C. § 1304(a) (Judgment Fund Act);

28 U.S.C. § 2414 (settlements authority statute). These two

appropriations are interrelated—the Judgment Fund Act

authorizes the payment of “compromise settlements” under the

settlements authority statute. See 31 U.S.C. § 1304(a)(3)(A)

(citing 28 U.S.C. § 2414, permitting the “Payments of

judgments and compromise settlements” from district courts

and the Court of International Trade). The Judgment Fund is

not to be used as another source of congressional appropriation

to an agency’s programs. Rather, it is designed to ensure

claimants “receive prompt payment without awaiting a special

appropriation.” United States v. Maryland, 349 F.2d 693, 695

(D.C. Cir. 1965). The settlements authority statute is broad,

but, as explained above, its use must “conform[]” to its

“specific statutory limits.” See Settlements Limiting the Future

Exercise of Executive Branch Discretion, 23 Op. O.LC. at 136.

32

The settlements authority statute gives the Attorney

General power to settle “claims . . . for defense of imminent

litigation or suits against the United States,” and such claims

“shall be settled and paid in a manner similar to judgments in

like causes.” 28 U.S.C. § 2414 (emphasis added). The

Government Accountability Office (“GAO”) has illuminated

some of these terms. It explains “for defense of imminent

litigation or suits against the United States” means “[t]he

agency must be confronted with a genuine disagreement or

impasse . . . . There must be a legitimate dispute over either

liability or amount.” U.S. GOV’T ACCOUNTABILITY OFF.,

GAO-08-978SP, 3 PRINCIPLES OF FEDERAL APPROPRIATIONS

LAW 14-35 (3d ed. 2008) (citing, inter alia, opinions of the

U.S. Attorney General finding that the compromising parties

must have possessed a “bona fide dispute as to either a question

of fact or of law”) (“GAO, PRINCIPLES”). Further, “a

compromise settlement which exceeds the authority of the

official purporting to make it does not bind the government.”

See id. at 14-34 (citing White v. U.S. Dep’t of Interior, 639 F.

Supp. 82 (M.D. Pa. 1986), aff’d mem., 815 F.2d 697 (3d Cir.

1987); United States v. Irwin, 575 F. Supp. 405 (N.D. Tex.

1983)).

Cy pres distribution in class actions against the United

States cannot satisfy these requirements. As part of settling

Keepseagle, agents of the Executive agreed to send taxpayer

money to as-yet unidentified “nonprofits” and “charities” that

possess no claims against the United States. But the Judgment

Fund Act and the settlements authority statute require the

prompt payment of settled claims against the United States.

The “nonprofits” and “charities” that will receive taxpayer

money via cy pres are—more than five years since the

33

settlement agreement’s entry12—unidentified. More

fundamentally, they possess no claims against the United

States.

As any potential cy pres recipient is neither involved in

this litigation nor a party to the settlement agreement, the

agreement settled no “bona fide dispute” between any potential

cy pres recipient and the United States Government. Cy pres

recipients will nevertheless receive access to the settlement

fund, akin to being a “compromising party.”

In reality, the eventual cy pres recipients are being tasked

by the Executive Branch and class counsel to fulfill a certain

“purpose:” advocate for and assist Native American farmers

and ranchers. But, as the U.S. Comptroller General has

concluded, when a congressional appropriation limits an

agency’s action to “remedying [a] violation,” it cannot use that

appropriation “to carry out other statutory goals of the agency,”

lest the agency “improperly augment its appropriations for

those other purposes, in circumvention of the congressional

appropriations process.” See Rep. to H. Rep. Subcomm. On

Oversight and Investigations, B-247155, 1993 WL 798227 at

*2 (Comp. Gen. Mar. 1, 1993); see also Availability of

Judgment Fund in Cases Not Involving a Money Judgment

Claim, 13 Op. O.L.C. 98, 104 (1989) (“[A]ny conclusion that

would permit the Judgment Fund to pay out settlements in

cases in which it would not pay out judgments would provide

12

Delay results in a further perversion of the Judgment Fund Act.

Interest accrued on the remaining amount in the settlement fund will

be subject to cy pres distribution too. As of October 2014, more than

$2.5 million in accrued interest was available for cy pres distribution.

See JA 881–82. The longer it takes to “select” cy pres recipients, the

more interest will accrue, and the more money will pass through cy

pres distribution. Compensating class claims is truly ancillary to

such a scheme.

34

agencies with an incentive to urge settlement of cases in order

to avoid payment from agency funds. We would not lightly

attribute to Congress an intent to create a structure that might

encourage settlements that would not otherwise be in the

interest of the United States.”) [hereinafter Availability of

Judgment Fund].

Congress intentionally separated Judgment Fund

payments from agency appropriation payments. See, e.g.,

VIVIAN S. CHU & BRIAN T. YEH, CONG. RESEARCH SERV.,

R42835, THE JUDGMENT FUND: HISTORY, ADMINISTRATION,

AND COMMON USAGE 6 (2013) (“[T]he Judgment Fund is

limited to litigative awards, meaning awards that were or could

have been made in a court. Litigative awards are distinguished

from administrative awards because the latter are provided for

by statute and are paid from an agency’s appropriation.”

(emphasis added)). “Accordingly, settlements . . . could be

paid from the Judgment Fund if a judgment on that claim

would have been paid from the Fund and no other source was

mandated by law to pay such settlements.” Figley, The

Judgment Fund, 18 U. PA. J. CONST. L. at 162–63 (emphasis

added). 13

A cy pres distribution is not an “award” the Keepseagle

class claimants could have received by prevailing at trial. Had

they proceeded to trial and prevailed on their claims for

monetary damages, they would have received compensation

for their damages. Cf. Augustin v. Jablonsky, 819 F. Supp. 2d

13

In attempting to turn what a “claim” is into a factual dispute, the

concurrence looks for shadows where there are none. See

Concurrence at 4 (“What are ‘like causes’ to this one? And how are

judgments in such cases settled and paid?”). Whether one has stated

a claim can be subject to factual argument, but what a “claim” is—

or, if you prefer, what a “cause” of action is—and what kind of relief

a claim is capable of yielding, rests on the law.

35

153, 177 (E.D.N.Y. 2011) (noting the “general legal tenet that

compensatory damages should do no more than compensate a

victim for [his] injury”). This compensation is, by definition,

a money judgment payable from the Judgment Fund. But, had

the Keepseagle class claimants prevailed at trial, they could

not, by definition, receive “cy pres damages”—payments that

do not compensate them directly but fulfill a “purpose” “as near

as possible” to compensating them. A cy pres distribution is

thus not equivalent to a money judgment at trial. This renders

the Judgment Fund Act appropriation unavailable for cy pres

distributions. See Availability of Judgment Fund, 13 Op.

O.L.C. at 98–99 (concluding “final judgments . . . are payable

from the Judgment Fund if they require the government to

make direct payments of money to individuals, but not if they

merely require the government to take actions that result in the

expenditure of government funds” (emphasis added)); see also

31 U.S.C. § 1301(a) (“Appropriations shall be applied only to

the objects for which the appropriations were made except as

otherwise provided by law.”).

The arguments set forth by the Executive Branch and the

Plaintiff-Appellees in response cite no supporting legal

authority. The Executive Branch all but concedes cy pres

distributions are not, themselves, compensation for claims

against the United States—it just thinks that concern is

“irrelevant.” See Gov’t Br. 21 (“Because all of the payments

contemplated by the agreement are intended to settle the claims

of class members, it is irrelevant whether an entity that might

receive a distribution itself has a claim against the

government.”). The Plaintiff-Appellee’s make a similar

argument. See Plaintiff-Appellee Br. 47 (“There is no

independent, additional requirement that each specific payment

within that judgment must separately qualify under the

Judgment Fund Act.”). My colleague apparently agrees. See

Concurrence at 3–4 (admitting “the nonprofit organizations

36

that will receive cy pres distributions out of leftover settlement

funds may not possess any claims against the United States,”

while excusing this because “the Settlement Agreement did in

fact settle claims against the United States”). These

contentions have no basis in law.

On the Executive Branch’s reading, the Attorney

General’s settlement authority allows him to make a mockery

of Congress’s specific statutory limitations. For example, the

Executive Branch could enter into a $1 billion settlement

agreement fully aware only 1% of appropriated Judgment Fund

dollars will be paid to class claimants, while 10% will go to

class counsel and the remaining 89% will be distributed via cy

pres. The Executive Branch, the reasoning would go, was not

“legally required to have entered into a less generous

agreement” simply because nearly all of the settlement fund

will pay for something other than money damage claims

against the United States. See Gov’t Br. 23. If class counsel’s

“sophistication and effectiveness” can sweeten a settlement by

letting the Executive use the settlement to further the

Executive’s political goals instead of compensating class

claimants, the sky is the limit. See id. We are nearly there in

this case, where the majority of taxpayer dollars will not

compensate class members but will pay cy pres recipients.

This robs the Appropriations Clause of any force by

undermining its presumption: Rather than expend public funds

“only when authorized by Congress” in an express

appropriation, “public funds” may be expended from the

Judgment Fund “unless prohibited by Congress.” But see

MacCollom, 426 U.S. at 321 (plurality opinion). Such a view

“increase[s] the power of the President beyond what the

Framers envisioned, . . . compromis[ing] the political liberty of

our citizens, liberty which the separation of powers seeks to

secure.” Clinton, 524 U.S. at 452 (Kennedy, J., concurring).

37

By binding the United States to these cy pres provisions,

the Executive Branch arrogated the appropriation power from

Congress to itself. See Richmond, 496 U.S. at 427–28. The cy

pres provisions of the parties’ settlement agreement therefore

exceed the Executive Branch’s bargaining authority; they

cannot bind the Government. See GAO, PRINCIPLES, at 14-34;

cf. Int’l Ass’n of Firefighters, 478 U.S. at 526 (“[T]he fact that

the parties have consented to the relief contained in a decree

does not render their action immune from attack on the ground

that it violates . . . the Fourteenth Amendment.”); Settlements

Limiting the Future Exercise of Executive Branch Discretion,

23 Op. O.LC. at 140 (concluding the Attorney General “may

not enter into a decree that would require unconstitutional

government action . . . .”). Most relevant for our purposes,

“Article III federal courts may not enforce unauthorized

executive branch settlements.” See id. at 148. A court cannot

effectuate this settlement’s cy pres provisions (i.e., it cannot

approve cy pres recipients or distributions), nor can a court

approve the addendum to the cy pres scheme at issue here—or

any other addendum permitting cy pres recipients and

distributions.

B.

Remedies Going Forward

The more than $380,000,000 remaining in this

settlement fund should revert to the U.S. Treasury. This

remedy respects Congress’s appropriations power, “corrects

the parties’ mutual mistake” (if we want to call it that) “as to

the amount required to satisfy the class members’ claims,” and

it ensures the judiciary does not “effectuate transfers of funds

from [the Government] beyond what [it] owe[s] to the parties

in judgments or settlements.” See Klier, 658 F.3d at 482

(Jones, J., concurring). The Executive Branch concedes that

38

this is the proper remedy. See Gov’t Br. 24. Mandan responds

by saying “[t]here is no language in the Settlement Agreement

to support a reverter[,] and courts have consistently rejected

requests by defendants for reverter of residual settlement

funds.” Plaintiff-Appellant Reply Br. 12. But none of

Mandan’s cited cases deal with cy pres’s constitutional

infirmities in class actions against the United States

Government.

Our Court does, and should, “decline[] to adopt

[Appellant’s] suggestion to distribute unclaimed funds to those

individuals who make claims; such a procedure would result in

those class members receiving a windfall from the public fisc

and is inconsistent with the general legal tenet that

compensatory damages should do no more than compensate a

victim for [his] injury.” Augustin, 819 F. Supp. 2d at 177. But

by affirming the district court’s approval of the cy pres

addendum, the majority proves itself a faint-hearted friend of

the public fisc. Even if this Court will not look after the

People’s money, that does not mean the Justice Department—

and Congress—lack means to do so. Cf. Ledbetter v. Goodyear

Tire & Rubber Co., 550 U.S. 618, 661 (2007) (Ginsburg, J.,

dissenting), superceded by statute, Lilly Ledbetter Fair Pay Act

of 2009, Pub. L. No. 111-2, 123 Stat. 5 (“Once again, the ball

is in Congress’[s] court. As in 1991, the Legislature may act

to correct this Court’s parsimonious reading of Title VII.”).

Before the cy pres process begins, the Justice Department

should consider a motion under Federal Rule of Civil

Procedure 60(b)(4) to strike the cy pres provisions within the

settlement agreement as void. No party has raised a Rule

60(b)(4) challenge in this case, and it is not subject to the finite

time constraints restricting other Rule 60(b) motions. See FED.

R. CIV. P. 60(c)(1). This course could remove the cy pres

provisions before recipients are approved and distributions

39

begin. This should not affect the settlement agreement’s

applicability between the class members and the United

States—the class members have already been compensated,

and the cy pres provisions may be severed from the rest of the

agreement. See JA 438 (Original Settlement Agreement,

XXVI. Severability). Indeed, the parties’ agreement prohibits

any of its provisions from “impos[ing] on the Secretary [of

Agriculture] any duty, obligation, or requirement” that “would

be inconsistent with federal statutes or federal regulation in

effect at the time of such performance.” See id. (Original

Settlement Agreement, XXIII. Duties Consistent with Law and

Regulations).

The Justice Department can argue, as explained above,

that the Executive Branch lacked the constitutional and

statutory authority to enter into these cy pres provisions. It

cannot be required to continue to ask the judiciary to approve

and police a cy pres distribution scheme that violates the

Appropriations Clause and Article III limitations. As the

Executive Branch said when contesting class counsel’s

proposed attorney fee award in this case, “the government has

an interest in ensuring . . . that funds coming ultimately from

federal coffers are not expended in an unnecessary or

unreasonable manner.” Gov’t Resp. to Pls.’ Mot. for Att’y

Fees and Expenses and to Pls.’ Mot. for Approval of Class

Representative Incentive Awards at 2, Keepseagle v. Vilsack,

No. 1:99-cv-03119 (D.D.C. Mar. 18, 2011), ECF No. 586.

What was true then is true now. As objections rooted in the

Constitution’s structural, jurisdictional limits on judicial power

cannot be waived or consented to, and no cy pres process has

occurred yet, objecting to the provisions before the Judicial

Branch effectuates them is certainly “within a reasonable time”

for purposes of Rule 60(b)(4). See FED. R. CIV. P. 60(c)(1);

Karsner v. Lothian, 532 F.3d 876, 886 (D.C. Cir. 2008)

(explaining that, “before a judgment may be deemed void

40

within the meaning of [Rule 60(b)(4)], it must be determined

that the rendering court was powerless to enter it”).

More broadly, the Justice Department should consider

setting forth specific settlement guidelines disapproving the

use of cy pres in class settlements with the United States. These

guidelines could provide a prelude to congressional action.

As for Congress, it should consider amending the

Judgment Fund Act to explicitly bar cy pres distribution

schemes in class action settlements with the United States. As

Mandan points out, “the Executive Branch may not do

indirectly what it is barred from doing directly.” Plaintiff-

Appellant Opening Br. 29 (citing United States v. Bowman, 341

F.3d 1228, 1240 (11th Cir. 2003)). But this lawsuit reveals the

degree to which implicit limitations on power are contingent

upon the good faith of those exercising power. Cf. Clinton, 524

U.S. at 452–53 (Kennedy, J., concurring) (“The Framers of the

Constitution could not command statesmanship. They could

simply provide structures from which it might emerge. The

fact that these mechanisms, plus the proper functioning of the

separation of powers itself, are not employed, or that they prove

insufficient, cannot validate an otherwise unconstitutional

device.”). Further, to ensure the Executive Branch is not letting

political calculations supplant legal judgments at the taxpayer’s

expense, Congress should also consider authorizing the

Comptroller General to review and report to Congress on any

class action settlement in excess of $100 million.

III.

More than a century ago, Yale Professor William Graham

Sumner famously discussed “The Forgotten Man.” See

William Graham Sumner, The Forgotten Man, in THE

FORGOTTEN MAN AND OTHER ESSAYS 465 (Albert Galloway

41

Keller ed., 1919). The Forgotten Man is the one left behind in

the Government’s rush to “right” every perceived “wrong.”

Sumner eloquently set forth the formula embraced by the social

engineers of every age:

As soon as A observes

something which seems to him

to be wrong, from which X is

suffering, A talks it over with B,

and A and B then propose to get

a law passed to remedy the evil

and help X. Their law always

proposes to determine what C

shall do for X, or, in the better

case, what A, B, and C shall do

for X.

Id. at 466. “C,” of course, is “The Forgotten Man.” He is “the

hidden taxpayer, the average citizen—not someone who

received, rather someone who paid in.” Amity Shlaes, THE

FORGOTTEN MAN: A NEW HISTORY OF THE GREAT DEPRESSION

128 (2007). As Sumner says of “C,” “He works, he votes,

generally he prays—but he always pays—yes, above all, he

pays.” Sumner, The Forgotten Man, in THE FORGOTTEN MAN

AND OTHER ESSAYS 491 (Albert Galloway Keller ed., 1919).

Keepseagle is Sumner’s formulation come to life, and our

decision today only entrenches the American People’s status as

the Forgotten. The Executive Branch saw a wrong to correct—

discrimination against Native-American farmers. It talked it

over with class counsel, eager to receive a big payday. They

then worked together to ensure a vastly-overinflated settlement

amount that would leave a huge sum to “remedy the evil” via

cy pres. Lost in the midst of their self-congratulation is the

42

plight of “C,” the American People that pay for the Executive

Branch’s outsized misadventure and class counsel’s fee feast.

To the extent discrimination occurred against Native-

American farmers by the Department of Agriculture, it was the

Department of Agriculture, not the taxpayers of the United

States, that engaged in discrimination. Those allegedly

discriminated against have been compensated by the public

fisc, and that payment occurred via a process that—while ripe

with politics and folly—was ultimately permitted by law. But,

to the extent the Government would like to additionally

account for this discrimination by funding nonprofits and

charities that work to end discrimination against Native

Americans, this should be the decision of the People and their

elected representatives. It should not be the decision of Justice

Department lawyers, class counsel, and the judiciary.

John Adams’s observation, “[o]ur Constitution was made

only for a moral and religious People” and is “wholly

inadequate to the government of any other,” is often quoted.

See Letter from John Adams to Massachusetts Militia, 11

October 1798, Founders Online, NATIONAL

ARCHIVES,https://founders.archives.gov/documents/Adams/99

-02-02-3102. Few, however, explain what he meant. In the

same passage, Adams admonished an America that “assume[d]

the Language of Justice and moderation while it is practicing

Iniquity and Extravagance.” Id. In such a nation, he warned,

“Avarice, Ambition [and] Revenge or Galantry, would break

the strongest Cords of our Constitution as a Whale goes

through a Net.” Id. Jurist Thomas Cooley arrived at the same

sentiment when he wrote a constitution cannot be completely

understood by its words, but must also make reference to “that

body of rules and maxims in accordance with which the powers

of sovereignty are habitually exercised.” THOMAS M. COOLEY,

A TREATISE ON THE CONSTITUTIONAL LIMITATIONS WHICH

43

REST UPON THE LEGISLATIVE POWER OF THE STATES OF THE

AMERICAN UNION 2 (1868). There are, in short, norms upon

which self-government depends. The Constitution presumes

them, but the character of our people determines whether we

keep them. See THE FEDERALIST NO. 1, at 27 (Clinton Rossiter

ed., 1961) (A. Hamilton) (“[I]t seems to have been reserved to

the people of this country, by their conduct and example, to

decide the important question, whether societies of men are

really capable or not of establishing good government from

reflection and choice, or whether they are forever destined to

depend for their political constitutions on accident and force.”

(emphasis added)). The conduct of those in this case proves

how little the Constitution will matter when good character

ceases to be informed by adherence to one’s oath of office, and

is primarily defined by how generous you are willing to be with

someone else’s money.

I respectfully dissent.