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6 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 1 of 6 IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO RAMAH NAVAJO CHAPTER, OGLALA SIOUX TRIBE, and PUEBLO OF ZUNI, for themselves, and behalf of others similarly situated, Plaintiffs No. 1:90-CV LH/KBM v. SALLY JEWELL, Secretary of the Interior, et al., Defendants. JOINT STATUS REPORT ON PROGRESS OF SETTLEMENT DISCUSSIONS Pursuant to this Court s October 22, 2012 Order, see Order Granting Joint Motion to Stay, ECF No. 1247, the parties file this status report on the progress of their settlement discussions and state as follows: 1. In this case, the plaintiff class seeks contract damages for defendants alleged failure to pay adequate Contract Support Costs ( CSC ) associated with contracts, compacts, and annual funding agreements that the parties entered into under the Indian Self Determination and Education Assistance Act of 1975 ( ISDA ), Pub. L. No ( 638 ), 88 Stat (as amended 25 U.S.C. 450 et seq.), between 1994 and The parties have been conducting settlement discussions with the goal of reaching a fair and adequate settlement since the Supreme Court issued its opinion in Salazar v. Ramah Navajo Chapter, 132 S. Ct (2012). To that end, the parties have met in person almost every month, engaged in dozens of phone calls, and exchanged innumerable s. 1

7 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 2 of 6 2. Over the course of these meetings, the parties have worked hard to develop and implement a plan to settle the case in a fair and efficient manner. Rather than evaluate every one of the thousands of contracts, compacts, and annual funding agreements at issue in this case, the parties have engaged expert statisticians to design and implement a method for taking a statistically valid sample of this universe. All parties have made diligent efforts to locate and obtain the relevant documents identified in the sample, including the contracts, compacts, annual funding agreements, audits, indirect cost rate proposals and agreements, trial balances and other relevant information. The parties have engaged expert auditors and accountants to evaluate the financial information contained in these documents in an attempt to determine an appropriate settlement amount for each of the sampled years of the sampled tribal contractors, known as tribe years. The parties statisticians will then extrapolate the results of the accountants analyses back to the universe of contracts, compacts, and annual funding agreements at issue in this case to help determine an agreed-upon settlement amount for the entire class. 3. The parties recently completed their respective analyses of 38 tribe-years selected for a Pilot Sample. The parties disagree on the need to continue to conduct statistical sampling beyond the Pilot Sample. The defendants believe that additional statistical sampling is necessary because the 35 tribe years in the Pilot Sample is not large enough to be reliable. Defendants expert statisticians believe that the margin of error from the extrapolated results of the Pilot Sample is too large. Defendants expert statisticians additionally believe that, because the distribution of the sample is highly skewed by the presence of outliers, the sample size is too small to know yet whether such outliers are underrepresented or overrepresented in the sample. Although the plaintiff class believes that additional sampling is unnecessary, the class is continuing to cooperate in the sampling process. Based on the parties expert statisticians 2 Error! Unknown document property name.

8 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 3 of 6 review of the Pilot Sample, the parties agreed to discard three of the sampled tribe-years as outliers, and to draw an additional 104 sample tribe years, with a goal of completing analyses on 66 of those sampled tribe years. Defendants believe that completing analyses of the additional 66 sampled tribe years will produce results that can be used to extrapolate a fair settlement amount. Plaintiffs believe that contemporaneous government records and statistics documenting annual contract support cost shortfalls provide a sufficient and reliable basis for a negotiated settlement. Defendants believe that the shortfall reports are merely a budgeting tool and do not represent an assessment of the amount due under any contract with any tribe or tribal organization, and note that they were not provided to Congress for many of the years at issue in this case. 4. It has been the parties experience that the process of evaluating all documents and information associated with each sampled tribe year has become more efficient, has narrowed the range of issues over which they disagree, and has allowed the parties to move through the sample faster and faster. Even so, obtaining the necessary documents from government and tribal contractor archives and applying the accounting methodologies to each of the sampled tribe years has been an arduous, time-consuming, and expensive exercise. 5. It is the parties goal to continue to accelerate their review of the remaining tribe years necessary to determine by extrapolation an agreed-upon settlement amount for the entire class. Nonetheless, numerous members of the plaintiff class have expressed to class counsel their frustration with the slow pace of the negotiations to settle this 24-year-old case. 6. On September 2, 2014, based in part on the results of the Pilot Sample, the plaintiff class transmitted a written settlement offer to the defendants to resolve the case. The plaintiff class believes that the case should be settled without the need for additional sampling. 3 Error! Unknown document property name.

9 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 4 of 6 Plaintiffs have not yet elaborated or explained the basis for their offer, and defendants have not yet responded to it. 7. There are several legal issues on which the parties disagree. The parties have discussed the possibility that this Court, through the Chief Magistrate Judge, could assist the parties in mediating those legal issues, although no agreement has been reached on this course of action. In light of the progress the parties have made, defendants believe that mediation is premature and possibly even unnecessary, will distract the parties from their efforts to finish collecting documents necessary to complete analyses of the remaining tribe years in the sample, and thus will delay resolution of this case. Class counsel will further address the possibility of mediation at the September 15, 2014, status conference. 8. The parties respectfully request the Court schedule another status conference in 60 days to meet and confer with the parties to discuss how the parties intend to proceed after they complete the sampling process. 4 Error! Unknown document property name.

10 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 5 of 6 Respectfully Submitted, s/ Michael P. Gross MICHAEL P. GROSS M.P.GROSS LAW FIRM, P.C. 460 St. Michaels Drive, Suite 401 Santa Fe, NM mike@mpgrosslaw.com Counsel for Plaintiffs Ramah Navajo Chapter and Oglala Sioux Tribe and Lead Class Counsel s/ James D. Todd, Jr. JAMES D. TODD, JR. U.S. DEPARTMENT OF JUSTICE Civil Division, Federal Programs Branch 20 Massachusetts Avenue, N.W. Washington, D.C james.todd@usdoj.gov Counsel for Defendants s/ C. Bryant Rogers C. BRYANT ROGERS VANAMBERG, ROGERS, YEPA, ABEITA & GOMEZ, LLP PO Box 1447 Santa Fe, NM cbrogers@nmlawgroup.com Counsel for Plaintiffs Ramah Navajo Chapter and Oglala Sioux Tribe and Co-Class Counsel s/ Lloyd B. Miller LLOYD B. MILLER SONOSKY, CHAMBERS, SACHSE, MILLER & MUNSON 900 West Fifth Ave, #700 Anchorage, AK lloyd@sonosky.net Counsel for Pueblo of Zuni and Co-Class Counsel Dated: September 12, Error! Unknown document property name.

11 Case 1:90-cv LH-KBM Document 1279 Filed 09/12/14 Page 6 of 6 CERTIFICATE OF SERVICE I hereby certify that the foregoing document was filed via the Court s ECF system, through which a copy of this filing will be sent to the following counsel of record: Mark Anderson Jacobson, Buffalo, Schoessler & Magnuson, Ltd 1360 Energy Park Dr., #210 St Paul, MN Philip Baker-Shenk Dorsey & Whitney, LLP 1050 Connecticut Ave NW, Suite 1250 Washington, DC Thomas W. Christie Navajo Nation Department of Justice PO Box 2010 Window Rock, AZ Thomas M Disselhorst PO Box 2463 Bismarck, ND Craig J. Dorsay 1 SW Columbia, Suite 440 Portland, OR craig@dorsayindianlaw.com Lisa M. Enfield Frye Law Firm PC Academy NE, #310 Albuquerque, NM lenfield@comcast.net Kurt B Gilbert Rodey Law Firm P.O. Box Paseo de Peralta Santa Fe, NM kgilbert@rodey.com Michael P. Gross M.P. Gross Law Firm, P.C. 460 St. Michaels Drive, Suite 401 Santa Fe, NM mike@mpgrosslaw.com Frank R Jozwiak Morisset, Schlosser, Ayer & Jozwiak 801 Second Ave 1115 Norton Bldg. Seattle, WA f.jozwiak@msaj.com David C Mielke Sonosky, Chambers, Sachse, Mielke & Brownell, LLP 500 Marquette Av NW, Suite 660 Albuquerque, NM dmielke@abqsonosky.com Lloyd Benton Miller Sonosky, Chambers, Sachse, Miller & Munson 900 West Fifth Ave #700 Anchorage, AK lloyd@sonosky.net Fredericks Peebles & Morgan LLP 3610 North 163rd Plaza Omaha, NE smullin@ndnlaw.com William R. Perry Sonosky, Chambers, Sachse, Endreson & Mielke 500 Marquette, NW #1310 Albuquerque, NM Edward B. Reinhardt, Jr. PO Box 4160 Albuquerque, NM C. Bryant Rogers VanAmberg, Rogers, Yepa, Abeita & Gomez, LLP PO Box 1447 Santa Fe, NM cbrogers@nmlawgroup.com s/ James D. Todd, Jr. JAMES D. TODD, Jr. 6 Error! Unknown document property name.

12 Case 1:90-cv LH-KBM Document 1280 Filed 09/15/14 Page 1 of 2 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO Before the Honorable Karen Ballard Molzen United States Chief Magistrate Judge Clerk s Minutes RAMAH NAVAJO CHAPTER v. JEWELL, 90cv0957 CLH/KBM Date of Hearing: Monday, September 15, 2014 at 1:30 p.m. Attorneys for Class: Tribal Representatives: Attorney for United States: Michael Gross C. Bryant Rogers Lloyd Benton Miller *Don Simon Leah Carpeneti David Mielke *Dan MacMeekin Paul Frye Martha Garcia (Ramah) Arlen Quetawki (Zuni) Bryan Brewer (Oglala) James Todd *Appearing telephonically **************************************************************************************************** Proceedings: 1:38 p.m. Court is in session. 1:39 p.m. Attorneys enter their appearances. Michael Gross, Bryant Rogers, Lloyd Miller, Leah Carpeneti, and David Mielke, appearing in person, and Donald Simon and Dan MacMeekin, appearing telephonically, for Plaintiffs. James Todd for the United States. Tribal Representatives: Martha Garcia with Ramah Navajo Chapter, Bryan Brewer with Oglala Sioux, Arlen Quetawki with Zuni Pueblo.

13 Case 1:90-cv LH-KBM Document 1280 Filed 09/15/14 Page 2 of 2 1:39 p.m. Mr. Gross addresses the Court on behalf of the class as to the status of the sampling. 1:45 p.m. Mr. Bryant addresses the Court. 1:46 p.m. Mr. Miller addresses the Court. 1:52 p.m. Mr. Gross addresses the Court. 2:00 p.m. Mr. Todd addresses the Court. 2:12 p.m. The Court and attorneys begin off-the-record settlement discussions. 4:02 p.m. The Court goes back on record. 4:02 p.m. The Court orders that the pilot sampling will continue for two months. The Court will set a settlement conference in November. Class representatives should attend the conference but other tribal members will not be able to participate given the confidential nature of the conference. 4:03 p.m. The Court directs that Kevin Washburn, Assistant Secretary of Indian Affairs, attend the settlement conference as well as the person within the Justice Department who can obtain the necessary approval for settlement. 4:06 p.m. Court invites questions. 4:06 p.m. Martha Garcia addresses the Court on behalf of Ramah Navajo Chapter. 4:14 p.m. Arlen Quetawki addresses the Court on behalf of the Zuni Pueblo. 4:20 p.m. Brian Brewer addresses the Court on behalf of the Ogalala Tribe. 4:25 p.m. Mr. Todd addresses the tribal representatives, assuring them that he will relay their messages to Government officials. 4:30 p.m. Court is in recess. Time in Court: 1:30 p.m. to 4:30 p.m. Court Reporter: Liberty Clerk: aem