Solicitor General's office at Main Justice in Washington. Credit: Mike Scarcella / NLJ

The U.S. Supreme Court on Monday declined to review two separate challenges to a $380 million fund that is designated for third parties in a larger class action settlement between the federal government and Native American farmers and ranchers.

The U.S. Justice Department had urged the justices to deny review even though it previously had called the third-party agreement “regrettable” in the lower appellate court. So-called “cy pres” payments are funds that are given to persons or entities that are not direct parties to the dispute.

The Justice Department in June announced a new policy that generally prohibits government attorneys from entering into settlement agreements that require “cy pres” payments.

The $380 million fund is to be distributed to nonprofit groups that work with Native American farmers. The funds were part of a bigger $680 million settlement that the U.S. government reached in 2011 with the plaintiffs in the case in Washington's federal trial court. The farmers and ranchers had sued the U.S. Department of Agriculture for alleged discrimination in its loan programs from 1981 through 1999.

Joseph Sellers of Cohen Milstein Sellers & Toll, counsel to the class in the underlying case, also had asked the Supreme Court to deny review.

The high court's action came without comment in Tingle v. Perdue and Mandan v. Perdue. Donivon Tingle and Keith Mandan challenged the constitutionality and fairness of the cy pres provision. Chief Justice John Roberts Jr. did not participate in the vote. No reason was given.

In the Justice Department's brief opposing review, U.S. Solicitor General Noel Francisco told the justices that Sessions' new policy “will prevent the recurrence of circumstances like those that led to the modified cy pres provision here, in turn eliminating any need for this court's guidance regarding the principles that would govern the legality and administration of cy pres provisions in settlements involving the federal government.”

Tony Mauro contributed reporting from Washington.

 

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