IN THE UNITED STATES DISTRICT COURT FOR Tile DISTRICT OF COLUMBIA -- -,., "-" '_''' _' Z-_ ' ELOUISE PEPION COBELL et al__, ) ...... ) No. 1:96CV01285 Plaintiffs, ) (Judge Lambcrth) V. ) ) GALE A. NORTON, Secretary of ) the Interior, et al__, ) ) Defendants. ) ) INTERIOR DEFENDANTS' MOTION FOR AUTHORITY TO COMMUNICATE WITH CLASS MEMBERS REGARDING THE HISTORICAL STATEMENTS OF ACCOUNT The Secretary of the Interior and the Assistant Secretary - Indian Affairs ("hlterior Defendants," or "interior") respectfully submit the following Motion for Authority To Communicate with Class Members Regarding Historical Statements of Account ("Interior's Class Communication Motion"). Interior has completed approximately 14,235 historical statements of' account for Individual Indian Money ("IIM") account holders. Interior has mailed 1,208 of these statements to the parent(s) or guardian of the account holders for whom they were prepared. A transmittal letter accompanying the statements contained language advising the recipients that, if they wished to challenge the statements administratively, they must follow certain identified procedures. On December 23, 2002, the Court found that the language in the transmittal letter improperly purported to extinguish the rights of class member account holders who received these statements. _ Mem. Op. at 9-10. Consequently, the Court entered a Rule 23(d) Order The language in the transmittal letter was as follows! "If you do not challenge the historical account statement or request an extension within 60 calendar days of the postmark on prohibiting filrther communication with class members without prior authorization from tile Court. As discussed ill Interior's Motion for Reconsideration of the Court's Rule 23(d) Order, and ill Interior's Reply ill support of that motion, nothing ill tile historical staternents of account, or thc accompanying transmittal letters, could, or did, extinguish ally rights of a class member in this litigation. Plaintiffs have opposed Interior's Motion for Reconsideration, but a_ee with Interior that no class member rights were affected in connection with the historical statements of account. See Plaintiffs' Opposition to Interior's Motion for Reconsideration at 6 n.8. Under the Rule 23(d) Order, Interior can communicate with class members if authorized by the Court. Interior seeks authority to resume mailing tile completed historical statements of account to the IIM account holders for whom they were prepared. 2 if, upon reconsideration of the Rule 23(d) Order, tile Court a_ees with Interior (and Plaintiffs) that nothing in the statement, or accompanying transmittal letter, extinguishes any class member rights, then no further explanatory, language need be added to the statements. If, however, the Court desires, Interior is willing to add further language to ensure that no class member recipient mistakenly thinks that any rights in this litigation are affected. The proposed order attached to this Motion contains the precise language that Interior would add to the transmittal letter? the envelope containing this letter, the enclosed Historical Statement of Account will be final and cannot be appealed." See Redacted version of transmittal letter (Attachment A). Pursuant to Local Civil Rule 7.1 (m), counsel for Interior conferred with Plaintiffs' counsel, Mr. Mark Brown, on February 6, 2003. Mr. Brown indicated that Plaintiffs would oppose this motion. The proposed order also contains the language that would be included in a letter to any class member that has already received a historical statement of account, assuming that the Court believes further communication is necessary. 2 The amending language would essentially inform class members of tile existence of this litigation and their status as class members, infornn them of class counsel, and include addresses, phone numbers and a citation to plaintiffs' counsels' web address, and would ensure recipients that they will not lose any rights in this case if they do not administratively appeal the historical statement of account. The supplemental language would only be included for those account holders who are actually class members. CONCLUSION For these reasons, Interior's Class Communication Motion should be granted. Dated: Februa_ 6, 2003 Respectfully submitted, ROBERT D. McCALLL_I, JR. Assistant Attorney General STUART E. SCHIFFER Deputy Assistant Attorney General J. CHRISTOPHER KOHN Director C"} Deputy Dircctor D.C. Bar No. 261495 JOHN T. STEMPLEWICZ Senior Trial Attorney CYNTHLA L. ALEXANDER PHILLIP M. SELIGMAN Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station Washington, D.C. 20044-0875 (202) 514-7194 3 -. United States Department of the Interior I _' OFF}CE OF HISTORICAL TRUST ACCOUNTING 1801 Pennsylvania Avenue. NW, Suite 400 ¢ Washington, DC 20240 Phor_e (2(I2) 327-.530(] Fax (202) 327-5.375 Octotx_r 9, 2002 Parent(s) or Guardian of John Iq. Doe Re: Individual Indian Money Accomt/t 607JXXXXX P. O. Box x,-xx_ 'gdhiterivcr, AZ :c'cxxx Parrot(s) or G,uard/an: This lener and the fi'n-ee _clcsu.r_ are be/.ng s_m to you bec2,_c¢ you arc the parem(s) or guard/an ofthe above- yarned accoum hold_-, who has at least one Individual Indian Money ('I_f) account managed by the Un/ted Srmes 12_-¢ar_,em of the Interior (DOI'). This letter and the thr_ enclosures apply only to the JIM account which con'&ins a share of serfi_'nem monies reef_ired by the account holder's trite_, the Wt-Ste Mm.ax,nih A r_ache Tribe of A.rizorm. DOI's Office of b_odcal Trust Accounting (OblTA) recently performed an accounting of th/s account fi-om thc dine it was opened through _l:<:r 31, 2(X)0. Yom will find a I--Sstorical Statemeat 0fAccount enclosed with th/s lener. Plea_q: read r.he following inforrnadon in this leuer and _e three enclosures carefully. They provide you with the folio,Mag impcrtant in.formation about the account. · Accounting Results: Importara inform,xioa aleut the accOUnt, including lirakat/ons on the accounting t and w_ether errcrs or losses were detected ,, Accounting Approach: Mow the his'lo/Sc20, a_fing was performed . xX'2tat You Should Do Nc-x-t: Imp:mm-it de.ndlin_ for respoad/ng to and chnllc-nging the h_oricai accounting · Your Appeal Rights: How you can appeal ro the Interior Board of Indian AppeaLs (IBIA) , Questions: W]ao will answer questicns and where you may obtain additional information Accountino Result. The account was established for the account holder in 199'7 to rt._.ive a share eta payment thax was made to serfie a claim filed as _te Mountain Apache Tribe of Arizona v. Un/ted Stat_, Court cffFederai Claims Dcr.ket No. 22-H. As an enrolled member of the 9,Trite Mountain Apache Tribe as of April 29, 1997, the account was credited with a l:myme,at ors orx November 3, 1997. As of December 31, 2000, the account l:ralance tam]_t $I, The balance shown on thc _stodcal Statement of Accca.mt as of' December .31, 2000, agrees with the balance ma/nta/n_ by IX)I's Office of Tru._ Funds Management (OTFM) as of the same date. Thc accompanying }r_astoric_ Statement of Account details the receipts, interest, and o/her activity for the account holder's mt from the opening depot thrcaagh December 31, 2000. Please note that the account balance shown is for December 31, 2000. For kuSxmafion abca_ thc account activity and balances after December 31, 2000, please refea to the Statement o£Accoum soat to you quarterly by OTFM. In acldldox, the H:istcrical Statement of Accoum does nor reflect any funds or transactions for the other accounts wh/ch the ao:ount holder may have with OTFM. DOI has identified several histcrical accounting issues that may affect the mount of' interest I:_id to the account. Please read the enclosed Statement of Accounting LirnitcuSort_ to learn more about these im_t issues and how they might affect the account. Accountinz ApproAch. In perti:x'ming the accountiz_g, OHTA reviewed documents verifying the award, the approved tribal resolution distributing thc award to tribal memb:m, and the plan governing the use and distribution -'- of r.h_e award. 0HTA a/so verified the rncnth/y interest based on the interest rate disrribudo_ f2ctc_ determined by OTFM. An indcl_:ndmt acccamdng firm reviewed the himorical accounting work to ensure'correcmess. Attachment A Defs' Motion for Authority to Communicate with Class Members What You Should Do Ne.x_. OHTA _m_ler_ the enclosed _r_j.gt_ Sratemmt of!u:counr for the t/me from _e OlX.ming or,he account r.b.rough IXx:_ 31, 2030. You should compare rSe _ Statement of Account to ,/our files and records to detenmine if your reccrds agree with the t_tstorical Statement of Accotmt and the balance it sho,_s on December 3 l, 2000. If you a_ee with the t-fistoricaI Staternerrt of Account and the balance shown, please retain this letter ar_, to OH'FA and IBIA) or until alter the deadlines for doing so have or.hcrwi_ expireck 9uesrio_. Endc_d is a Ncw..hure arus_ general questions about the historical aecram_ project. If you have any quesrioes aborn this letter or the enclosed t-r_srorical Statement of Account, please call OIq-rA toll-fi'ee at 1-885- 329-5562. Also, additional background inforrnaticat, including a report oI-rrA provided to the United States Congress aboat its histcrdcai accouming project, is svuilahle o_ the I.nternet at http://www.doLgov/ohea. Very Iruly yours, Bert T. Edwards, Executive Director Enclosures (3) -/--ti_orical Staternmt ofAccount, Brcr.hure, and Statement of Accounting Limitraims Statement of Acrmmting Limitations In prep_g the enclcsed _torical S_amment of Acco.mt, the Department crf_c I.m_cr (IX)I) idcmrilScx:l sc'ver_ system-w/de accounting issues that ir, voNe the amount ofLm_esr credJ_ to mxxt 5md accounts. These issues have nor yet been fully resoNed b2' EX3t stp. ce IDOl must complete _d.ition_ rcseardn on the L_sues. By statute and policy, 5.rods in the Individual Indian Trust Fund have, typically, been invested in _nxrittes issued by the U.S. Treasury and U.S. Government s_nsored entities. Man.zities range from overnight investments with the U.S. Deparrmem of the T;easury m over ten years M_ a large concerrcraticn in the 5-10 _m.r sector. INDI's Office of Trust Funds Managemm! (OTTM) determines O.e monthly interest ¢qctor to credit imerest _o each 1.2,4 accoum _sed on the t_al im_st ezrrfing.s for the month and the total average dollar balances oflLM accoums for the mon_~ The interest farxor used to d_crmine the amount of interest credited _o the account dzanges with the total amoxmt of invested funds and the preva/Ung rams ofi.mere_ For the information, m-tac_he4 is a compar-aJive s',mmmry of bnterest rates on invesmaenI pools similar to the []2,4 'l'rusr Fund_ 12OI has idea'fi_fled potential discrt'pandes that may a.ffec_ invested funds accruing Lqrermt, A2r,hou_ IZ_DI believes ti-mt these discrepancies are norn_ thcy may t-,nye a small impact orr _e mount of interest credited _o the account. I2)OI has requested _ apUropriaticn from Congress to address certain 't.:xmea If_is apFropriation is received, 12)0I will make appropriate adjusmaents. While thc account holder's IL-M account may be credited with n&titional interest in the future, the I_,._s-rarical Statement afAccotm! is a crucinl Lmporurnt step in completing the overall kistcrical accounting project for all Individual Indian Mrmey accounts. As a result of the work performed on the accompanying _astoricaJ Sralernent of Accatmt, I2)OI ,has czmSrmed several things. · The initial deposit into the IL-M account was corr_t. · No improper disbursements va:re made from the ,'u'comt _wughg December 31, 2000. · The interest cal,.tinted by OTFM, b _a.sed on the monthly interest d/srribution _c"._, w-as Frolx'rly applied to the accotmt. As our work on the historical accounting project progrm,s_, 12,OI will c_.mY2rm the amount of additional interest the account may be enr/fiexl to, and explain to you how any such interest was determJned_ It is not necessary for you to regixter a challenge to _e accompanying I-5.storical Statement of Account (with respect to interest only) since I2)OI is aware oftNs issue which may impact a large number ofilM accoams. IfDOI determines that additional interest should be credited to the account in the future, th.is w/ll be done whether or not you challenge the accuracy of the inclosed }_s:a_c_ Statement of Accaunt .C. OM:PAJA_ LNTEREST FACTOt:Lq II2,,f 10-Ymr OTFM Treasury TSP "O" N_:rnth Factor i Ra_es2 Fund" November 1997 7.38 5.86 6.00 _ber 1997 6.47 5.74 6.24 January 1998 7.31 5.63 6.12 February 1998 6.21 5.63 5.28 March 1998 6.64 5.63 6.00 .April 1998 6.99 5.67 5.88 b4ay 1998 6.48 5,57 6.12 June 1998 6.95 5.4.6 5.76 July 1998 6.57 5.50 5.88 August 1998 6.43 5.20 5.88 Septem .be_r 1998 7.77 4.67 5.28 October 1998 6.60 4.63 4.92 'November 1998 7.3 8 4.83 5.04 Decem_r 1998 6.87 4.75 5,16 January 1999 6.68 4.72 5.04 Fd:ruar7 1999 5.71 5.00 4..56 March 1999 6,90 5.23 5.64 April 1999 6.16 5.26 5.52 .May 1999 6.14 5.56 5.64 June 1999 6.39 5.98 5.88 July 1999 6.23 5.g6 6.24 August 1999 6,6.9 5.81 6.36 Set:neml:x:r 1999 6.53 5.88 6.12 October 1999 6.85 6.16 6.36 November 1999 6.26 6.10 6, I2 December 1999 6.57 6.4I 6.18 Janu.._y 2000 6.50 6.68 6.72 Febrmry 2000 6.25 6.38 6.3 6 March 2000 6.61 6.13 6.60 April 2000 6.96 6.15 6.24 May 2000 6.39 6.42 6.48 June 2000 6.62 6.08 6.36 July 2000 6.31 6.04 6.36 August 2000 6.31 5.75 6.24 September 20O0 6.85 5.82 5.88 October 2000 6.14 5.66 6. I2 Noveml:er 2000 6.27 5.65 5.76 I)eceml_ 2000 6.5 5,1 5.76 ' OTFM; Al_querque., NM : McCary Sxe',x_ Associates Inc. (Rates at which new is,sues of 1 O-year Lh.i_ed S_mes Government ('USO) lx:nads were issued) Th.r_ Savir_ Plan wehsite _ww, tsp gov/ralc.q/histo_/html. The IbP "O" Fund is similar to an IRS sectiou 401(k) Plan. The TSP "Ca" Fund inv_r.s solely in USG delx securities and debt securities guaranteed by the USG. There are a number of mutual 5.rods where objective is to invest principally in USG securities or securities guaranteed by the USG. Unlike the IIM Trust Fund investments, a portion of the investments of the following mutual fired is inveaed in derivatives s_ch as repurchase agreements, Generally derivatives represent higher risk factor, and claus a bSgher return, than USG securities. Mor_kly rates of return for the following mutual fiznds are not readily available, however, annual rates of return are set forth below, 1998 1999 2000 T. Rowe Price- U, S. Treasury - Intermediate Fund (3 - I0 year terms) 9.58% 4.28% 1,97% 1997 - 200I Average Rates of Return- Intermediate Term (3 - 10 year terms) -USG Bonds Vanguard (VTITX) - 82% Galaxy II (IUTIX)- 7.8% A.merican Century (CPTNX) - 7.6% Fidelity Spartan (SPGVX) - 7.6% Source: .www.aaii, com/promo/2002.0513/mfimds2.shtm[ COMPARATIVE iN'I:EREST :FACTORs .... 57 .... "' ".'7'""'" ::" : "'i ',-'""'.'."..' "" .... ""' : ' "' ' ' ' ' : ' ' :' '" " { 15. . '- '. ....... · 8 Fz_-6>_,-, '_,_:._,_;,,_h,,_,<-_,._:_,' ):7_;_.i,_,,,~..;_,_:,,x_,,.:;,.... _-_,..:._...,. ' ': ' . , .... a . ,it 'J_"_"-_r ,-_ '_,r=..- ' '5_, *..?,_,_.>,-.·.,% [ -. ',,._... · _;._,,.W'.;.>_,._, · .. ,_z, .... e....'_,:_;.-. ,'2e'''_ ........ *-'"' ......'___'' _"_;_____'--..__':'__O:-F.'_,=-..,;..>_,..,.g,T,:;'.,,7_:. -'' '_'_,._k'_''_.,,._'__''-_ w'_'__¢___..z,_'_=. ...._,_='---._---.,._.__' ' '_..__..:.,'x,._-t ' I'"'- .. r_ .-4,;,_ ,;,,r-'_,;,_,4_,e,_" ' _il.d,_,;_,._ .... *_"_ ", _''_'___'__'_,·_',_._'__ . ;.'Z_:_.'q'- _U,.I ,t---,_,;._,i_--%,._-_, _ _ ' _ -_/....,. _ -_-_,r-----.,.'_._..'_.:__,_,rt._._i.;./_t-'t_,, ' _ i_ i_. _ :.i_ _ _,.:_ 'i}. :_ti'_: ': .: ., . ., : " . . ... . z , '_ .,.:_ :,=_ ... ,_....o_ ..,:z; .-.-¢... , _..'.T_.. _: ":'0' e_ '_, '_ .' ._". ,< .:0 . . e_ /:,. '?:7". ,,: ."f!;' i. "'.':'.:5. ';:":'. ':' '.i' ": '." /'..'-'i? MONTHS-.; "" :'..,;:.' .':,"' (.. i.::.i' ":..f. '.'5:.:. :: '('' ':.:-,,M "OTF:M 'Fair C_,,_--_.O.: .ye.:a.:r: ',;ia's..:U._.' R"aies .' .'..:':' i'. "'i:"_i.... ' .f.:/.i:.:i ..'. "' '. i': .... TsP ,G,, Fundt !(_:¢_..,:-I,__,,_._.,_..._.C_:,._,-._..._5._:-:_._;_,i!_]_¢_q If you wish lo challenge the rca,Its shown ca the lnfommlion ou the rules and guidanc6 for ,'-ivy,.-'Y,._;_.==__' "__.._pJ_i-a__.:.:01tnl,(_?_i_?.:¢/.l ac__unt statement: filing a Notice of Appeal with IBIA can be found in TiLIe 43 p,_t 4 office C(_Ie ofl?eder_?l mr Historical Stalmncnt of Account describes 1. Provide a written explnnation and/lily supporting Reg, lation.r and in file Fe,/eral Regisler notice : transactions associated with either ajudgmaent documents wilhin 60 calendar days of the posm_ark published Scplember 6. 2002. :cunt or a per capita Individual Indian Money on the envelope to: M) account. If your IIM account is a judgment _;z_._-._.¢mj.e_._:_,._,..,_._,,,>.,_,_._.,_;t_._.,_,r:_,_x_ _- ,_.._ m, -_ :nit of a lawsuit and then distributed to each Office of Historical Trust Accounting _,,_.,._...../,_q..,_,_,s_,,_,/,_i_i._,_.__":'_.,.-i_ = ,=.......=s_-,_._._, ,_[_..,__,,_x-_, i_;.s--,_........ -- rolled member of the Tribe. Per capita fimds U.S. Department of Ihe Interior o represent Tribal payments to individuals, but 1801 Pennsylvania Ave., N.W., Suitd 400 _t%y areyou recdving this accouter · money comes fi.om a source other than a Washington, D.C. 20006 .rtatement? Igment award, such as Tribal timber sales. The ails of your account are included in the 2. Ifyou need more than 60 days to review or Thc American Indi,'m Trust Fund Management _to_cal Statement of Account. challenge the ttistorical Statement of Account, you Reform Act of 1994 provides ttmt IIM account = ._ . may request a 30-day extension by contacting Office holders he given an accounting of thc fimds ,_/._LOZ_/._-";.y_._._[i_.._...aieiri:_jji_,:rd_O_.;_:_:_,_%,:i{._:!] of Historical T nt.qt Accounting (OItT A) in writing at held in trust. Your Historical Statement of _