IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO

Transcription

1 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 1 of 29 IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO RAMAH NAVAJO CHAPTER, et al. v. SALLY JEWELL, et al. No. CIV JAP/KBM Exhibit 1 In Support of CLASS COUNSEL APPLICATION FOR AWARD OF ATTORNEYS FEES AND COSTS AFFIDAVIT OF CLASS COUNSEL MICHAEL P. GROSS IN SUPPORT OF APPLICATION FOR ATTORNEY S FEES AND COSTS AND FINAL SETTLEMENT AGREEMENT

2 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 2 of 29 RAMAH NAVAJO CHAPTER, OGLALA SIOUX TRIBE, and PUEBLO OF ZUNI, for themselves and on behalf of a class of persons similarly situated, Plaintiffs, IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW MEXICO vs. No. CIV JAP/KBM SALLY JEWELL, Secretary of the Interior, in her official capacity; UNITED STATES DEPARTMENT OF INTERIOR; KEVIN WASHBURN, Assistant Secretary of Interior for Indian Affairs, in his official capacity; and UNITED STATES OF AMERICA Defendants. AFFIDAVIT OF CLASS COUNSEL MICHAEL P. GROSS IN SUPPORT OF APPLICATION FOR ATTORNEY S FEES AND COSTS AND FINAL SETTLEMENT AGREEMENT State of New Mexico ) County of Santa Fe ) ss. I, Michael P. Gross, being first duly sworn, do depose and state as follows: 1. I am Class Counsel in the above-captioned litigation. Serving as Co-Class Counsel are C. Bryant Rogers and (since 2001) Lloyd B. Miller. 2. This affidavit incorporates and supplements affidavits I filed as attachments to our motions for fees and costs in connection with three previous settlements (Dkt. Nos. 201, 206, and ). rating. 3. My curriculum vitae is attached as Exhibit A. I have an AV Martindale-Hubbell 1

3 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 3 of 29 INTRODUCTION 4. The agreement now before this Court is more than just an agreement to pay a large sum of money. If approved it will also reaffirm, and thus help institutionalize, the fundamental trust relationship between the United States and American Indian Tribes while creating an enforceable tribal contract right. That contractual right is to operate federally-funded governmental services and programs under ISDA 1 in place of bureaucratic Federal agencies. The Ramah Navajo Chapter s road to self-determination is a winding pathway into both the promise and the problems of reaching the goal. So is the Oglala Sioux Tribe s. Each is my individual client and a Class Representative. BACKGROUND 5. In late July 1968, one month after graduating from law school, I arrived in Window Rock, AZ, on the Navajo Reservation for my new job at a poverty-war legal services program now called DNA Legal Services, Inc. I anticipated moving on to a standard law practice after two or so years. That never happened. Instead, I am still working for my first client, the Ramah Navajo Chapter, and in a sense still on my first assignment a fight for the community s survival. 6. My first assignment was to work on a lawsuit to reopen a public high school serving Ramah Navajos as well as non-indians. The school was located in the tiny Anglo village of Ramah, NM, 100 miles from our office. Six weeks before I arrived in Window Rock, the State of New Mexico had closed the school. It was the only local school that Ramah Navajo students could attend. I was told the New Mexico State Department of Education had ordered the 1 The Indian Self-Determination and Education Assistance Act of 1975, P.L , as amended, 25 U.S.C. 450 et seq. (ISDA). 2

4 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 4 of 29 school closed because of declining enrollment. Yet the population of the local Navajo community was increasing. Why the school s enrollment declined while the Navajo population was increasing is a story of mid- twentieth-century bureaucratic indifference. 7. The Ramah Navajo Chapter is an isolated satellite community, distant from the main Navajo Reservation. 2 No practical plan had been made for the Ramah Navajo students to attend another public school. The school year was about to start and the Navajos wanted the school reopened. Our program director had promised the community that a suit would be filed before then. 8. In the 1950s the Bureau of Indian Affairs had built a dormitory near the public high school in Ramah village. It housed elementary- and high-school-aged Ramah Navajo children. Parents fetched them in pick-up trucks on Friday and brought them back to the dorm on Monday morning. But then in the 1960s the Navajo population began to rise. Enrollment in the dormitory rose accordingly. Soon space became scarce. In response, the BIA unilaterally decided to give preference in the dormitory to elementary-school children. As a result, the older Navajo children were displaced. Soon there was no room in the dormitory for Navajo highschool students. The high-schoolers had no way to get to the offered alternative, a school at Zuni 26 miles west of Ramah village. Standard-size school buses could not traverse the narrow, rock-strewn trails on the 300-square-mile Ramah Navajo Reservation, where most of the students lived. As a consequence, the high school s enrollment declined below minimum State standards. So the State closed the school. Simply put, none of the responsible agencies the 2 In Navajo the community is T lochin toh Little Onion Water so named because small wild onions grew around nearby water sources. Sam Martinez, a community elder, told me that in the 1870s Mormon settlers armed with land patents from Santa Fe claimed title to the best watered lands in the valley. The Navajos were driven south and west into more barren country. When I arrived in 1968, the Ramah Navajos numbered about Today there are between 3500 and 4000 Ramah Navajos. 3

5 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 5 of 29 State education department, the county school board, or the Bureau of Indian Affairs (Tribes were not yet in the equation) had consulted the others. Such was the state of Indian affairs in the second half of the twentieth century. 9. The Navajos were told to enroll their high-school children in distant Federal Indian boarding schools or religiously-sponsored family placements in Utah (designed to promote conversions and disconnect Navajo children from their families). Most dropped out. We filed suit. After more than a year, the suit fizzled. At age 27, I was now in charge of a failed lawsuit. But out of the court defeat came a self-help project to start a new Ramah Navajo high school from scratch. Twenty-two years after I became Ramah s lawyer, I filed this lawsuit; 25 years after that comes this culminating settlement. 10. In working up the 1968 lawsuit I researched Indian education. It happened that in August 1968 a draft version of a Senate report on the subject had been published. For two and one half years, New York Senator Robert Kennedy chaired a subcommittee of the Senate Labor and Public Welfare Committee that had been investigating Indian education. 3 was called Indian Education: A National Tragedy A National Challenge. 4 The final report It detailed the atrocity that was then called Indian education. I had never heard the term coercive assimilation. The Senate report and its seven-volume record used the term to describe the systematic, deliberate efforts of the Federal Government in alliance with churches, States, and 3 4 Two months before the draft study was circulated, Senator Kennedy was assassinated. S. Rpt (1969). The Senate Report showed how, by federal policy starting in the late 1800s, young Indian children had been seized by force from their homes and families and placed in distant boarding schools, often controlled by religious orders. There they were subjected to mouth washings with soap or beaten for speaking their own languages, forced to wear little military uniforms or dresses depending on sex, forbidden from practicing their religions, forced to attend Christian churches, denied contact with their families, and taught that their native ways and languages were inferior. Many children died trying to walk home in winter. 4

6 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 6 of 29 U.S. Territories to change by force the cultures, habits, and life-styles of American Indians. It was a deliberate, Federally-endorsed effort to extinguish Indian Tribes, cultures, and languages. 5 The effort concentrated on children. The practice had the same deleterious effects that de jure segregation had on African-Americans and for the same purpose: exploitation. African- Americans were exploited for their labor; American Indians for their lands and resources. 11. The original Ramah lawsuit was dead. I racked my brain for a way to solve the problem. I asked Dillon Platero, the Navajo director of the only Indian-controlled school in the country, the Rough Rock Demonstration School, 6 whether Rough Rock could open a branch 200 miles away in Ramah. Mr. Platero was sympathetic but said distance precluded a satellite at Ramah. 12. Then something of a miracle happened. In December 1969, a newly-created private foundation interested in Indian affairs contacted me through its attorney, a law-school classmate who knew of my involvement with the Ramah Navajos. Could I please come up with some ideas for seed-money projects the benefactress Anne Maytag Shaker could consider? 13. Among my suggestions was a grant to the Ramah Navajo Chapter to explore ways to start its own school from scratch. Ms. Shaker seized on that suggestion. No Indian community had done that since the Cherokee Nation s schools in Oklahoma were forcibly shut 5 The dominant policy of the Federal Government towards the American Indian has been one of coercive assimilation. The policy has resulted in: A. The destruction and disorganization of Indian communities and individuals; B. A desperately severe amd self perpetuating cycle of poverty for most Indians; C. The growth of a large, ineffective, and self-perpetuating bureaucracy which retards the elimination of Indian poverty; and D. A waste of Federal appropriations. S. Rpt , supra, at While pioneering and innovative in many ways, the Rough Rock school had been built and staffed by the Bureau of Indian Affairs. The BIA then asked the Rough Rock Chapter whether it wanted to operate the new school. The community accepted and BIA turned over the completed Rough Rock Demonstration School to the newly elected school board as a completed package in

7 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 7 of 29 down by the U.S. Army in the late 1800s. 14. The Shaker Foundation offered $2,500 to the Ramah Navajo community on condition it would create a non-profit, incorporated school board to start a new school. I prepared articles of incorporation for a Ramah Navajo School Board and invited prominent Navajo leaders including Mr. Platero and the then-deputy director of my legal services program Peterson Zah 7 to attend a special Ramah Navajo Chapter meeting on February 7, At the packed, electrifying Chapter meeting, the community voted unanimously to accept the money and approve the articles. One woman, Bertha Lorenzo, a grandmotherly elder, energetically said, It s time we Ramah Navajos did something for ourselves! The Chapter immediately elected a five-person board. Ms. Lorenzo was one of them. I filed the articles the next Monday and then sought further assistance from the Robert F. Kennedy Memorial Foundation. 15. To help the new organization get started, the Kennedy Memorial immediately offered the services of Donald Olson, a former VISTA volunteer who could speak some Navajo. Within six weeks, the new Ramah Navajo School Board and I traveled to Washington, DC. Mr. Olson laid the groundwork for our trip. The Board, Mr. Olson, and I met with prominent Senators and Representatives and were given a special tour of the White House. The Nixon White House played a prominent role in all these events. One of my law-school friends, Bobbie Kilberg, was a White House Fellow. She arranged several key meetings for us and worked on putting the idea through the bureaucracy of the BIA. Our visit climaxed at the Interior Department where we met with Commissioner of Indian Affairs Louis R. Bruce. A few days later, while still in Washington, the Board received a signed commitment for $368,000 from Commissioner Bruce for the new school s first term. The amount had been computed by BIA 7 Mr. Zah was later elected Chairman of the Navajo Nation and, later still, its President. 6

8 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 8 of 29 staff who multiplied the per pupil cost of educating an Indian high school student for a year at a BIA boarding school by the expected enrollment of the new school. The Board wanted to open its new school in time for the next school year, barely seven months away. 16. Returning from Washington, I quit my legal services job to become temporary coordinator for the new Board. My wife and I moved to Ramah village in May. The understanding was that I would leave whenever the Board wished, presumably in the fall. 17. The plan was to put the new school in the abandoned public high school in Ramah village until funds for a new school on the Ramah Reservation could be obtained. My first task was to negotiate a lease for the high school building with its owner, the Ramah Village Water and Sewage Association, the only public entity in the unincorporated village. As far as we could tell, this was the first formal agreement ever entered between the Ramah Navajos and the Anglo residents of Ramah village. 18. From March until September 1970, we hired teachers; developed a curriculum (based on a community survey); found caches of used books; created a cafeteria out of an abandoned WPA stone building on the property; and renovated the high school structure with a separate $60,000 grant from the Navajo Office of Economic Opportunity. We bought a fleet of spanking new mini-school buses to negotiate the twisting, rock-strewn, unpaved reservation roads where the students lived. Navajo men were hired to do the work. My office was a makeshift desk inside a World War II-era aluminum trailer. 19. In June 1970 Navajo students started to return from distant boarding schools and placement homes to help renovate their own school. We housed them in Army surplus tents on the ball field at the old school. College students came from around the country to serve as counselors. Jack Perkins of NBC News did a feature on the new school project for the Huntley- Brinkley News Show. 7

9 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 9 of Throughout, the Board made all decisions. Mr. Olson helped instruct them on how to run meetings and control outsiders like me. Thus was created the first modern Indian school started from scratch by an American Indian Tribe. 21. In July 1970, President Nixon s Message to Congress on Indian Affairs 8 made national news. President Nixon cited the Ramah Navajo school project as a notable example of Indian self-determination. 9 He denounced the existing-policy of Indian termination. Termination meant that Tribes deemed ready for full citizenship were instantly cut off from Federal protection and services promised by the treaties in exchange for the vast land areas the Tribes had ceded to the United States. Turning moderately prosperous Tribes into povertystricken enclaves overnight, the termination policy was a disaster. 22. The President called for a new policy of Indian self-determination. Under his proposal, the United States special trust relationship and its treaty and other commitments to Indian Tribes would be retained while qualified Indian Tribes would have the opportunity to operate and control Federal programs serving their communities. Central was the idea of reducing the Federal bureaucracy by placing control of Indian programs and services in the hands of Tribes. Essential was the pledge that programs under contract would be funded to maintain the same quality and quantity of services as when operated by the Federal agencies. 23. When the Ramah Navajo School was dedicated on September 11, 1968, President Nixon sent a congratulatory telegram. The school opened three days later. A month later, I was gently asked to resign. Enthusiasm, energy, excitement, elation dominated. Ramah Navajos 8 Richard M. Nixon, Special Message to Congress on Indian Affairs (July 8, 1970), in Public Papers of the Presidents, Richard Nixon 1970, at 564 (1971). 9 Indian education and self-determination are inextricably connected. That is why Public Law is entitled the Indian Self-Determination and Education Assistance Act. Title I covers contracting Federal programs; Title II deals with Indian education. 8

10 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 10 of 29 were seizing control of their lives. 24. The publicity and, especially, the Message to Congress attracted attention from many Indian communities. After resigning from the Ramah Navajo School Board that fall, I became a consulting attorney on Indian education for the newly-created Native American Rights Fund (NARF). My job was to respond to requests for assistance from Indian communities all over the country seeking to replicate Ramah s achievement. 25. One of the first was Oglala Sioux Tribe, where several Tribal leaders took a lead in promoting Indian self-determination. They had heard about Ramah and wanted to hear more. NARF sent me to Pine Ridge, South Dakota to meet with them. Birgil Kills Straight, Gerald Clifford, and Oglala Sioux President Gerald One Feather and I sat in a small conference room in the run-down, BIA-operated Loneman Day School near Pine Ridge, the tribal capital. They wanted to take over the school. I told them other Indian communities had contacted me through NARF with similar objectives. That sparked the idea of getting us all together. I suggested taking it a step further by forming a grassroots Coalition of Indian Controlled School Boards (CICSB). Its premise was that the members would collectively help that member furthest along in planning its own locally-controlled Indian school and then help the next one. Mr. Kills Straight became the first President of the Board and Gerald Clifford became Executive Director. I served as its counsel for the next ten years. 26. The CICSB became the leading promoter of Indian self-determination in the 1970s. Its first success was forcing the BIA to make a Ramah-type grant of $50,000 to the Wind River Indian Education Association in Wyoming. Accompanying the Association to Washington, the CICSB and I had met with a reporter named William Greider. His November 7, 1971, Washington Post Sunday magazine article exposed the BIA s delays in fulfilling the President s policy promoting Indian school control. The Wind River contract issued forthwith. 9

11 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 11 of 29 A few years later, that success led to formation of a public school district within the Wind River Reservation controlled by a school board of elected Arapahos and Shoshones. 27. With help from a number of small foundations, CICSB and I, as its counsel, helped found other Ramah-type schools: On the Pine Ridge Reservation in South Dakota, the Loneman Day School and Little Wound School came under control of locally-elected tribal school boards; at Keshena, in Wisconsin, the Menominee (Alternative) Indian School led to formation of a new public school district coextensive with the newly restored Menominee Indian Tribe s reservation; and on the Alamo Reservation near Magdalena, New Mexico, the Alamo Navajo School followed Ramah s model in creating a BIA-funded contract school under ISDA. All are still in operation. PASSAGE OF ISDA AND ORIGINS OF THIS LAWSUIT 28. In 1973, CICSB asked me to review and critique a new bill, No. S1017, introduced by Senator Henry Scoop Jackson of Washington. The bill contained two titles. Title I was based on President Nixon s call for Indian self-determination; Title II aimed at reforming Indian education in public schools based on the Senate report on Indian education. Initially, Title I only authorized the Secretaries to contract with an Indian Tribe to operate programs previously operated by the BIA and the IHS. I suggested the word directed be added. The Committee accepted that suggestion. 10 See 25 U.S.C. 450f(a)(1). That one-word change turned the Act from a discretionary program into a mandate. Years later, it provided the 10 Michael P. Gross, opinion letter to Gerald Clifford, Director, CICSB, March 27, 1973, reproduced in Hearings on S.1017 and Related Bills to Promote Maximum Indian Participation in the Government and Education of the Indian People, before the Subcomm. on Indian Affairs of the S. Comm. on Interior & Insular Affairs, 93d Cong., 1st Sess., at 230, 233 (1973). See also Gary B. Senese, Self-Determination and the Social Education of American Indians (Praeger 1991) pp , 135 fn. 16, 17 & 18 (word directed substituted for authorized into key operative section of bill that became Public Law , following suggestion of Michael P. Gross in 1973 testimony on a predecessor bill). The Act substitutes directed for authorized. 10

12 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 12 of 29 basis for this lawsuit. 29. With assistance from C. Bryant Rogers (Co-Class Counsel in the instant case), I briefed and argued the first case under ISDA to reach the Supreme Court, Ramah Navajo School Board, Inc. v. Bureau of Revenue of New Mexico, 458 U.S. 852 (1982). The case arose when New Mexico sought to tax the construction of the new Ramah school complex that Congress had funded. The Ramah Navajo School Board asked me to challenge the tax. I filed suit but lost in the trial and appellate state courts. The Supreme Court reversed the State courts, holding that ISDA preempted the New Mexico tax because the tax impeded Congress s purpose to provide enough funding to build the entire school complex. 30. Meanwhile, tribal efforts to carry out the promise of ISDA moved back to the Federal agencies. The first problem was lack of judicial remedies to require compliance with ISDA. 11 Substantive issues were even more vexing. Soon after passage of ISDA in 1975, Tribes began complaining that the funds provided by the BIA (and the IHS) were not sufficient to operate contracted programs and services at parity with the level at which the agencies operated them. Although the BIA deserves credit for developing the concept of contract support costs (CSC), it never asked for enough money to pay them. CSC was paid from left-over monies, if any. Payment was arbitrary, inconsistent, and inadequate. From 1975 through 1987, Indian Tribes and their legal counsel, including the undersigned, participated in seemingly endless investigations, conversations, negotiations, and confrontations over the issue until CSC were 11 In the early 1980s, I had sought damages from the Interior Department under the Contract Disputes Act in an ISDA case involving a tribal school in Montana where the BIA was supposed to maintain school facilities but did not. The lawsuit had been dismissed in critical part on the ground that the Contract Disputes Act did not extend to sociological type agreements under that early version of ISDA. When Congress considered the 1988 ISDA amendments, the case Busby School of the Northern Cheyenne Tribe v. United States, 8 Cl. Ct. 596 (1985) was cited as a reason to explicitly bring ISDA contracts under the CDA. S. Rpt , at 33. See Publ. L (a), codified at 25 U.S.C. 450m-1(d). 11

13 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 13 of 29 made mandatory by the 1988 amendments to ISDA. 31. It is a reflection of the intensity of the dispute that this lawsuit is now about to enter its 26 th year. Agency resistance to parity fueled the dispute. Implicit in the ISDA scheme is the need for the two Federal Indian agencies to reduce in-house infrastructure as their programs are contracted out to Tribes. As early as 1978, the Office of Management and Budget advised the agencies to reduce their overhead as contracting increased. 12 Despite that memo reflecting a central ISDA premise, someone on the eve of passage persuaded Congress to insert a loosely-worded proviso into the 1988 amendments. See 25 U.S.C. 450j-1(b). 13 The Tribes argued the proviso did not authorize reductions in CSC. For the FY 1994 appropriation, the appropriators presumably with BIA approval and perhaps at its instance then engineered the first capped CSC appropriation, again without warning to or input from Tribes. 32. The Secretaries assumed the caps together with the proviso would allow them to continue business as usual fully funding their own in-house programs while imposing the burdens of capped CSC entirely on tribal contractors in direct defiance of the parity principle. Until the Supreme Court decided the issue in favor of the Class, most judges decided it for the Government. The result was that despite the 1978 OMB admonition and the Nixon Message, federally-run Indian programs remained protected while tribally-run programs had to sacrifice 12 We believe that the Department [of the Interior], through the proper management of its existing resources, can and should provide to the tribal contractors the full amount of contract support funds which are rightly due them. Furthermore, we expect the Bureau s own overhead costs to decrease as the overall level of Self-Determination Act contracting increases. OMB Director James T. McIntyre, Jr. to Cecil B. Andrus, Secretary of the Interior, April 13, 1978, reproduced in Ramah Navajo Chapter v. Lujan, 10 th Cir. No , Record on Appeal, at We could find no legislative history for the proviso. It appeared shortly before the bill reached the floor for a vote and no hearings were held on it. The proviso protected programs operated by the agencies at the expense of contracted programs, defeating the parity principle, and also made the Secretaries provision of funds under ISDA subject to the availability of appropriations. 12

14 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 14 of 29 program levels. 33. In 1989, a year after Public Law was enacted, the Ramah Navajo Chapter s outside accountant John Donham and in-house finance officer Earla Begay came to my office to complain that the Interior Department was not following the law. The CSC paid were inadequate. Program levels could not be maintained. The two experts laid the blame on manipulation of indirect cost rates used to determine how much CSC were to be paid. They educated me on the complexities of the rate-making system and how its application prevented RNSB and other Tribes from receiving enough contract support to maintain parity with BIA program levels as required by law. Based on their analysis, I prepared a contract dispute for the Chapter to send to its contracting officer at the BIA. 34. In October 1990, following denial of the Chapter s contract dispute by the contracting officer, we filed this suit. The Tenth Circuit upheld our rate-making claim, Ramah Navajo Chapter v. Lujan, 112 F.3d 1455 (1997). That decision led to our first partial settlement agreement (PSA I). Ramah Navajo Chapter v. Babbitt, 50 F. Supp. 2d 1091 (D.N.M. 1999), Dkt Thereafter, two new Class Representatives joined the case the Oglala Sioux Tribe, my client, and the Pueblo of Zuni, Co-Class Counsel Miller s client in order to bring two additional claims for underpayment of CSC. The new claims led to a second partial settlement agreement (PSA II), which was approved in Ramah Navajo Chapter v. Norton, 250 F. Supp. 2d 1303, Dkt. 730, 731. A third partial settlement agreement (PSA III), reforming the rate-making system, was approved in Dkt By then my firm had taken on the IHS on behalf of the Tunica-Biloxi Tribe of Louisiana and the Ramah Navajo School Board. Tunica-Biloxi Tribe of Louisiana v. United States, U.S.D.C. D.C. No. 1:02-cv The claims were based on the same rate-making and shortfall claims presented here. In the course of that case, I discovered yet another rate-making 13

15 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 15 of 29 maneuver that reduced indirect cost rates dramatically for all Indian contractors using fixed-withcarry-forward rates, as most did. I dubbed this procedure double dipping. It produced artificially-exaggerated indirect cost over-recoveries (which cause rate reductions) by double counting any given year s over-recovery a second time in the succeeding rate cycle. While the maneuver could be justified if both over- and under-recoveries (which increase rates) were treated even-handedly, most under-recoveries which increase future rates were dumped into a new shortfall column in its rate template. 14 Interior s rate-making agency, claiming legal support from the caps on CSC, then ignored this ultra vires shortfall in the rate calculation. The maneuver eliminated most under-recoveries. 36. Indirect cost rates plummeted. The result was to reduce CSC payments below statutory requirements with devastating impact on contractors. 15 Discovering and understanding these obscure rate-making maneuvers helped inform the dimensions of our claims in this case. THE DISPUTE S EFFECT ON TRIBES 37. Because of this long legal war and the agencies failure to protect program parity, the mood and circumstances at Ramah and elsewhere in Indian country have changed visibly. In my observation the legal disputes surrounding ISDA have dampened initial enthusiasm among many Tribes. 16 In many places the excitement of the 1970s has given way to trench warfare as 14 Of course, as the Salazar v. Ramah decision confirms, these insufficiently funded capped appropriations did not reduce the legal obligation of the United States to pay the full amount of CSC under the statutory scheme in effect then as now. 15 The bizarre double-dipping maneuver and the shortfall column were rectified by the new rate-making options in PSA III. None of the hours worked on the IHS case are used here as basis for our fee application. 16 ISDA has become one of the most litigious areas of dispute between Indian Tribes and the Federal Government. The current USCA by rough count cites 90 or more cases (some overlapping) concerning disputes over implementation of the Act. An uncountable further number of disputes were settled without lawsuit or reported court decision. These disputes were 14

16 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 16 of 29 tribal administrators shuttle endlessly back and forth to the Area or Regional offices of the funding agencies and even to Washington, DC, to demand what ISDA says should be paid. 38. The annual budgets of the two Ramah entities together are more than $25 million per year. Yet funding problems still plague both. Ramah opened an ISDA-funded health clinic in the late 1970s. It has fallen into disrepair. The award-winning school buildings and clinic featured in a national architecture magazine in the late 1970s have developed plumbing and sanitation problems. Sidewalks are cracked, and there is general deterioration. Mold problems closed the elementary school building for two years. Monies from the BIA and IHS to fix and maintain the facilities have seldom materialized and never in adequate amounts. Earlier this year, these problems were featured in an exposé on a local TV station. 39. In 2007 the School Board sued the IHS for failing to pay the proper amounts for operation of the health clinic. In a 2012 hearing, the School Board s Executive Director testified that the unemployment rate in the Ramah Navajo community was 70 percent. (In 1968 the rate was 60 percent.) He said that no Ramah Navajo owned a local business. Virtually all employment in the Ramah Navajo community comes from the two Ramah entities that operate the self-determination contracts. In other words, there is no local economy. At the hearing, undisputed evidence showed deteriorating social conditions at Ramah, including an alarming increase in suicides. (The suit against the IHS was finally settled during cross-appeals in early 2015.) 40. In the summer of 2014 when the BIA did not pay already contracted program and contract support amounts to the School Board and the Chapter, both became desperate. The Department had owed much of the money for more than a year. The excuse given was that a spawned by the resistance of the agencies especially at field offices to faithful and enthusiastic implementation of the Act. 15

17 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 17 of 29 new automated financial system was not working properly and that the contracting officer was overworked. It took action by the Assistant Secretary for Indian Affairs to get those monies paid. 41. In the 1970s, as noted above, the Ramah Navajo community received funding from Congress to build a new school and health clinic. The new complex is in the heart of the Ramah Navajo Reservation, some 20 miles from the village of Ramah where the old high school was located in Pine Hill, NM. When the complex was built, the BIA also paved the road to the new school. Roads, however, go in two directions. Two decades later, the paved road made it possible for the Anglos in Ramah village to persuade its public school district to run school buses into the heart of the Ramah Navajo Reservation. 42. At first few Ramah Navajo school children got on those buses. Yet the Ramah Navajo community saw the danger. A lawsuit over the busing ended inconclusively. Busing into Ramah public schools continued. In the early 2000s the Gallup school district (whose territory includes the village of Ramah but excludes most of the Ramah Reservation) built a new school complex including a high school in the village. Attracted by the new facilities and aware of the increasing deterioration of the school campus at Pine Hill, increasing numbers of Ramah Navajos started attending the Ramah village public schools, transported back and forth on the new paved road by the Gallup school buses. In other words, the troubles the Ramah Navajos have experienced in funding their own self-determination school are driving many parents to send their children to the new facilities in the Anglo village where in 1968 the state of New Mexico had closed the high school. Most Ramah Navajos do not live within the public school district operating the refurbished schools in Ramah village, including the reopened high school. As a result they have no political control over those schools. Morale within the Navajo community has declined. Several years ago, the Ramah Navajo schools had an enrollment of 16

18 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 18 of 29 over 500; now the enrollment is well below 300. The community has lost its zip. 43. At Pine Ridge conditions are just as bad. 17 Many other Tribes are experiencing similar conditions. While some have achieved a measure of economic security, there is a crisis in Indian health care and education, and the situation is worsening, not getting better. Dozens of articles and government studies document this crisis. A selection is cited in Exhibit B to this declaration. In short, the promise of self-determination has been fulfilled haphazardly at best. 44. I attribute a significant portion of the deterioration at Ramah and continuing unacceptable economic and social conditions at Pine Ridge and elsewhere to the Federal bureaucracies. While Ramah and Pine Ridge do not reflect all of Indian country, they do reflect a large portion. See unsolicited from A. Gay Kingman, Executive Director of the Great Plains Tribal Chairman s Association and director of the Coalition of Large Tribes, to Michael Gross, July 31, 2015 (attached as Exhibit C, without attachments). As Ms. Kingman s suggests, many of these problems can be traced to the lack of CSC. She notes that Tribes are still forced to take direct program monies to pay overhead. The turf war between the agencies and Tribes over control of Indian monies and jobs continues. 18 While top leadership in the Department of the Interior is sympathetic, the bureaucracy s self-preservation engine grinds away protecting itself by denying or delaying funds to self-determination contractors. The 17 See, e.g., In the Spirit of Crazy Horse, National Geographic cover story, August 2012, at 51: Liver disease Pine Ridge Reservation 21.3 (United States 9.7); suicides per 100,000 Pine Ridge Reservation 37.2 (United States 10.9). Pine Ridge is home base for Class Representative Oglala Sioux Tribe. 18 Of Counsel Paul E. Frye has noted that this resistance has historical antecedents. See Felix S. Cohen, The Legal Conscience: Selected Papers of Felix S. Cohen (1970) at 307, where Cohen described the resistance of BIA bureaucrats to even informing tribal leaders of attributes of tribal self-government preserved in the Indian Reorganization Act of As Cohen wrote, while every official was in favor of self-government generally, by the same token he was opposed to self-government in the particular field over which he had any jurisdiction. Id. at

19 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 19 of 29 Federal bureaucracies reaction to the Supreme Court s ruling was typical. 45. In the fall of 2012 only months after the Supreme Court handed down its decision in this case the two Federal agencies charged with carrying out Indian policy together with OMB proposed a plan to defeat parity once and for all. They adopted the most extreme of several options listed by the Court as to how Congress could deal with CSC appropriations. We dubbed it the mini-caps plan. It would have added to the Indian appropriations bill for the next fiscal year a list of every Indian Tribe and tribal organization contracting under the Act. Each individual entity was to be assigned a precise dollar amount for CSC. Each would thus receive its own separate annual appropriation for CSC. The aim was to bypass the Ferris doctrine on which the Supreme Court s ruling rested. 19 Under the mini-caps proposal, every contractor would be paid only what Congress appropriated to it, whether too high or too low. Because each entity would in effect receive a discrete appropriation, Salazar v. Ramah would have become irrelevant. An uproar ensued. Indian Tribes around the country and their lawyers, including the undersigned, protested loudly. Within a few weeks, the plan was withdrawn; the agencies reversed course and proposed full funding of CSC in the annual appropriations for FY 2014, FY 2015, and FY The episode illustrates the vulnerability of the entire self-determination policy. 46. In my view, as important as the promised money in this settlement is the necessity of furthering Congress s goal to maintain program levels under contract in parity with in-house- 19 When a Government contractor is one of several persons to be paid out of a larger appropriation sufficient in itself to pay the contractor,... the Government is responsible to the contractor for the full amount due under the contract, even if the agency exhausts the appropriation in service of other permissible ends.... That is so even if an agency's total lumpsum appropriation is insufficient to pay all of the contracts the agency has made. Salazar v. Ramah Navajo Chapter, 132 S.Ct. at 2189 (citations and internal edits omitted) (quoting Cherokee Nation v Leavitt, 543 U.S. 631, 637 (2005)). 18

20 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 20 of 29 run programs of the two Federal agencies involved. These are contracts with a profound social purpose. ISDA s aim is to reintroduce effective tribal governments. To do that, enough resources must be provided to keep contracted programs at the same levels they would be under the government s control. 20 Because Congress has now appropriated sufficient monies for CSC, parity has been achieved for the past three years. But that is not enough. Approval of this settlement will show Class Members and their constituents as well as the funding agencies that the Class Members really can sue city hall, in this case the agencies. ISDA serves as a partial redress of coercive assimilation. The sanctity of contract undergirding that law allows Tribes to better shape their own destinies. In this way, the Supreme Court decision in this case interpreting the Model Contract in ISDA according to fundamental principles of contract law compares to some small degree with Brown v. Board of Education, 347 U.S. 483 (1954). 21 Basic contract law principles are now the guidepost framing long established and reconfirmed Indian rights to self-government. Within the context of the unique relationship between the United States and Indian Tribes, this Court can now play a central role by actualizing the promise of self-determination and thus helping to guarantee a better future for them. 20 As the OMB Director noted in 1978, parity requires that the agencies reduce their overhead as contracting expands. See, n. 12, supra. 21 Indeed, one state court in the 1970s held in a case in which I represented the Indian side that rectifying coercive assimilation by creating a reservation school district would violate the state constitution s equal protection clause. Geraud v. Schrader, 531 P.2d 872, 882 (Wyo. 1975). That decision is now essentially as dead as Plessy v. Ferguson. Despite the Geraud decision, the community on the Wind River Reservation, Wyoming, managed to organize a public high school district like Menominee s a few years later. Its high school basketball team later became a state-wide sensation, winning the state championship several times. For an argument that coercive assimilation is a violation of equal protection, see Michael P. Gross, Indian Control for Quality Indian Education, 49 North Dakota Law Review 237 (1973). 19

21 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 21 of 29 NEGOTIATION OF THE SETTLEMENT As Class Counsel, I have had overall responsibility for the entire case. There have been two monetary settlements and one equitable settlement to date. In this fourth settlement, as in the others, my role has been: a. To coordinate and consult with all attorneys and parties in preparing and presenting the Plaintiffs positions to both the mediator and the opposing parties; b. To conduct legal research and prepare a series of position papers, briefs, and other documents with Co-Class Counsel; c. To attend and lead all negotiation sessions with the Defendants; d. To work with Co-Class Counsel and with Chief Magistrate Judge Karen B. Molzen over the course of three years and especially in the last phase to help conclude the agreement on all remaining issues; e. To negotiate this deal with the Government along with Co-Class Counsel C. Bryant Rogers and Co-Class Counsel Lloyd B. Miller and their respective firms, and independent counsel retained by my firm in negotiating terms and conditions of the settlement agreement; f. To work with Co-Class Counsel to oversee the activities of the Class s statisticians and accountants; g. To work with Co-Class Counsel to help draft settlement documents including the final settlement agreement, the joint motion for preliminary and final approval of the settlement agreement. the Class notice, distribution procedures, and other 22 My colleagues, Co-Class Counsel C. Bryant Rogers and Lloyd B. Miller, have expounded on the details of our settlement negotiations. I do not repeat those details here. I endorse the descriptions given by Mr. Rogers and Mr. Miller. 20

22 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 22 of 29 documents necessary to conclude this settlement; h. To oversee selection of a Settlement Administrator and Class Monitor; and i. To consult by phone, , and fax and to attend meetings with the Class Representatives and Indian organizations including the Great Plains Tribal Chairmen s Association, the Coalition of Large Tribes, and the National Congress of American Indians. I have also attended meetings of the Interior Department s Work Group on Contract Support Costs, an appointed body of the Interior Department and tribal representatives organized by the Bureau of Indian Affairs to serve as a forum for discussing questions, concerns, and proposals about CSC prompted by this case. A parallel body exists under the IHS. 48. Prior to the instant negotiations, I represented the Class as follows:: a. By developing the original theory of this case in terms of the rate methodology and adding the shortfalls claim to it; b. By succeeding in getting the Class certified under FRCvP 23; c. By recruiting a team of lawyers experienced in Indian law and Federal practice to assist me; d. By preparing with our team all pleadings and motions through the Tenth Circuit appeal, including oral argument on the motion for summary judgment in the Tenth Circuit Court of Appeals, whose 2-1 decision reversing this Court s grant of summary judgment to the defendants was indispensable for the ultimate victory in the Supreme Court; and e. By participating with our team in the preparation of arguments and pleadings in the Supreme Court. 21

23 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 23 of My involvement in this final settlement has been as follows: In July 2012, one month after the Supreme Court decision in favor of the Class on the caps issue, we began settlement talks with the Department of Justice. We met in Washington, DC. Our legal team presented a spreadsheet that estimated total damages based on the Federal Government s own records. Those records included statutorily-required Department of the Interior budget estimates and reports to Congress on CSC shortfalls, Federal Register notices, Departmental memoranda to tribal contractors, appropriation acts, and other sources the authenticity of which was never challenged. We argued these documents should serve as basis for our negotiations. We pointed out that collecting data from individual Class Members going back to 1994 would be timeconsuming at best and impossible at worst. 50. At our next session, the Government flatly rejected our contentions based on its own global data. It maintained that the macro information even though prepared by the Interior Department and certified to Congress as accurate was largely inaccurate and could not serve as a basis for settlement. Its legal counsel stated that because this was a contract case, damages could and should be computed precisely for each Class Member. The Government offered to search its own archives. At first the Government s lawyers would not settle unless we went through the exercise of computing individual Class Member s precise damages. This would have taken years if possible at all. To save time the parties agreed to do statistical sampling. We reasoned that the time it would take to litigate damages could possibly exceed another five years and the outcome of such continued litigation might not be favorable. 51. The Class located a highly regarded statistician, Michael Larsen, an Associate Professor of Statistics at George Washington University. His curriculum vitae is attached as Exhibit F to this affidavit. The Government s statistician and ours then created the statistical plan. All of this took months. 22

24 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 24 of The details of the plan were complex. It required over 100 sample entities to be chosen randomly. Chances of being selected were dependent on the size of the entities, so for example, larger contractors had a greater chance of being chosen than smaller; as a result some class members were randomly chosen for more than one year. For smaller Class members, chances of selection dropped. The goal was to statistically determine Class-wide damages. 53. The plan required each chosen entity to submit audits, contracts, and similar financial data. All of the chosen sample entities complied with enthusiasm and maximum cooperation. But not all the entities could locate required documents, especially for earlier years. 54. As a result, the Government mined its own archives. These were located primarily in Lenexa, Kansas, near Kansas City, MO, but also in BIA regional offices throughout the United States. Each expedition to these archives required considerable planning. The sides exchanged all data collected. 55. In addition to the statisticians, each side chose a principal accounting firm to assemble the incoming data from the sample entities and analyze the data according to each side s understanding of the parameters set in the sampling plan. In addition, the Class retained two independent accountants, John Donham and Marcel Kerkmans, who had served as expert witnesses in earlier phases of this case. They helped analyze the data and develop interpretations for Class Counsel. They often participated in face-to-face negotiations. In addition, the Class retained Yan Lu, a University of New Mexico Associate Professor of Statistics, who assisted in the early phases of the negotiation. After her contract ended, we retained Zachary Treisman, a Lecturer in Mathematics at Western State Colorado University to help the legal team understand and evaluate the work of the two principal statisticians We knew him because his late father, attorney Eric Treisman, had been part of our legal team in this case. 23

25 Case 1:90-cv JAP-KBM Document Filed 09/29/15 Page 25 of For more than a year and half, the statisticians and the two principal accounting firms communicated extensively with each other. Many issues arose. Documents from one tribal contractor were often not in the form used by others; some sampled contractors could find only a few of the requested documents; interpretation of the documents was often difficult. Even seemingly minor task the names of the Class Members proved vexing at times since some were known by several names. Class Counsel took part in resolving each and every one of these issues. 57. Because of the confidentiality of negotiations under Rule 408 of the Federal Rules of Evidence, I do not here describe further details of the settlement process or the major legal issues debated. Suffice to say there were several. Co-Class Counsel Rogers and Miller give some further detail in their affidavits. 58. In the end, statistical sampling as implemented by each side produced different estimates of damages. After the Class made a settlement offer in September 2014, the parties agreed to bring in a mediator. Over the course of two days in December 2014, Chief Magistrate Judge Karen B. Molzen managed to bring the parties to agreement on the dollar amount of the settlement. The parties then had to draft and agree upon the other settlement issues and draft the agreement, tasks that required seven more months. The Class Representatives played a major role in the mediation, as they had in previous negotiation sessions. 59. The compromise takes into account the risks of continued litigation. These are significant. Among them are the possibility of Class de-certification and prolonged delay including further appeals. 60. In February 2015, lead counsel for the Department of Justice James Todd announced that settlement payments in this case were subject to the Treasury Department s Offset Program. Under 31 U.S.C and 26 U.S.C. 6331(h), Treasury is required to set 24