IN THE UNITED STATES DISTRICT COURT DISTRICT OF NEW … 1 Affidavit of Michael P Gross.pdf · Case 1:90-cv-00957-JAP-KBM Document 1313-1 Filed 09/29/15 Page 1 of 29. 1 IN THE UNITED

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF NEW MEXICO

RAMAH NAVAJO CHAPTER, et al. v. SALLY JEWELL, et al.

No. CIV 90-0957 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

Case 1:90-cv-00957-JAP-KBM Document 1313-1 Filed 09/29/15 Page 1 of 29

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IN THE UNITED STATES DISTRICT COURT

DISTRICT OF NEW MEXICO

RAMAH NAVAJO CHAPTER,

OGLALA SIOUX TRIBE, and

PUEBLO OF ZUNI, for themselves

and on behalf of a class of persons

similarly situated,

Plaintiffs,

vs. No. CIV 90-0957 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

1145-3).

3. My curriculum vitae is attached as Exhibit A. I have an AV Martindale-Hubbell

rating.


2

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 ISDA1 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. 93-638, as

amended, 25 U.S.C. §§ 450 et seq. (ISDA).


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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 high-

school 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 1500. Today there are between

3500 and 4000 Ramah Navajos.


4

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 The final report

was called “Indian Education: A National Tragedy—A National Challenge.”4 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 Two months before the draft study was circulated, Senator Kennedy was assassinated.

4 S. Rpt. 91-501 (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.


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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. 91-501, supra, at 21.

6 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 1966.


6

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 Zah7 to attend a special Ramah Navajo Chapter meeting on February 7, 1970. 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.


7

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 make-

shift 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.


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20. 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 Affairs8 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 poverty-

stricken 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 93-638 is entitled the Indian Self-Determination and Education Assistance Act. Title I

covers contracting Federal programs; Title II deals with Indian education.


9

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.


10

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. 124-125, 135 fn. 16, 17 & 18 (word “directed” substituted for “authorized” into key

operative section of bill that became Public Law 93-638, following suggestion of Michael P.

Gross in 1973 testimony on a predecessor bill). The Act substitutes “directed” for “authorized.”


11

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. 100-297, at 33. See Publ.

L. 100-472 § 206(a), codified at 25 U.S.C. § 450m-1(d).


12

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 26th

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, 10th

Cir. No. 94-2253, Record on Appeal, at 194-

195.

13 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.”


13

program levels.

33. In 1989, a year after Public Law 100-473 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.

287. 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 2002. 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 2008. Dkt. 1159.

35. 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-02413. 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


14

maneuver that reduced indirect cost rates dramatically for all Indian contractors using fixed-with-

carry-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


15

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.


16

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


17

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 email 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 email

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 1934. 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

309.


18

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 2016. 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 lump-

sum 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)).


19

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).


20

NEGOTIATION OF THE SETTLEMENT22

47. 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.


21

documents necessary to conclude this settlement;

h. To oversee selection of a Settlement Administrator and Class Monitor; and

i. To consult by phone, email, 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.


22

49. 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 time-

consuming 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.


23

52. 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.23

23

We knew him because his late father, attorney Eric Treisman, had been part of our legal

team in this case.


24

56. 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. § 3716 and 26 U.S.C. § 6331(h), Treasury is required to set


25

off against any payments by the United States to a party any amounts that party owes to the

United States. Treasury has asserted that in this case it must offset even the debtor’s share of

attorneys’ fees and costs from the Class settlement. The Department of Justice has indicated it

will continue to try to persuade Treasury exercise its statutory authority to exempt from such

offsets class action attorneys’ fees and costs. Justice indicates there is hope Treasury will do so.

But Justice has also told us that formal resolution of this issue would take months at best. In the

interest of expediting the settlement, Class Counsel have agreed to take the risk that our fees (and

possibly even cost reimbursements) might be reduced. The extent of the problem is unknown.

The issue illustrates the complexity of the negotiation and why it has taken so long to conclude.

It also shows how much Class Counsel are willing to risk to conclude this important agreement.

TIME AND COSTS

61. I am a sole practitioner. To assist me in these tasks, I have engaged two seasoned

lawyers as “of counsel” to my firm. Daniel H. MacMeekin has been working with me since

2002, not only on this case but on many other matters, almost all of them arising under ISDA.

Paul Frye, a seasoned Indian law expert, has been working with me since November 2014 solely

on this case. In addition to my time records attached as Exhibit D are those of Mr. MacMeekin,

Exhibit E, and of Mr. Frye, Exhibit F. Respective curriculum vitae are also included. Further,

the three firms representing the Class through Mr. Rogers, Mr. Miller and myself, jointly

engaged the Washington, D.C. law firm of Sidley Austin LLP to assist in drafting the Class brief

in the United States Supreme Court. Mr. Carter Phillips of that firm also presented the oral

argument on behalf of the Class. Exhibit G contains timesheets for Sidley Austin, LLP. The

hours shown in each exhibit are as follows: Michael P. Gross 6,131.82, Daniel H. MacMeekin

3,364.21, Paul E. Frye 122.60, and Sidley Austin, LLP 665.00, for a total of 10,283.63.


26

62. My time sheets start in June 2001 when work began on the Class’s motion for

summary judgment addressing this issue. Eleven years later that motion for summary judgment

led to the Supreme Court’s decision in Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181

(2012). Although I recorded time on the “caps” issue before 2001, that time is not included in

Exhibit D. Nor is time spent on the companion Tunica case researching rate-making issues,

even though my work in that case produced insights helping lead to better understanding of the

entire funding scheme of the Interior Department's rate-making agencies and thus helped in the

negotiation of the instant settlement. I have, however, included in Exhibit D unpaid work on

behalf of the Class performed in the summer and fall of 2001 in preparing two amicus briefs, one

in the Ninth Circuit on rehearing in Shoshone-Bannock v. Thompson, 279 F.3d 660 (9th

Cir.

2002), and one in the Tenth Circuit, Cherokee Nation v. United States, No. 07-7106, on appeal

from 190 F.Supp.2d 1248 (E.D. Okla. 2001). I have also included in that exhibit unpaid work on

behalf of the Class in the spring of 2004 in preparing an amicus brief to the Supreme Court in the

latter case. Each of these cases presented ISDA contract support issues of critical importance to

the Class’s position on lump-sum appropriations and the caps. The work performed on these

matters was directed at preserving and advancing the Class’s interests with respect to the caps

issue. I consider it an integral part of the representation of the Class in this matter.

63. Exhibit H to this affidavit is a record of unreimbursed costs through August 31,

2015, incurred for services performed for the benefit of the Plaintiff Class in reaching this

settlement.

64. In 1999, after testifying in support of Class Counsel’s PSA I fee request,

J. Eugene Gallegos, a prominent lawyer in Santa Fe, asked me to join his complex litigation and

oil and gas royalty holders practice. I moved my office to his. After PSA I, I expected my work

in this case to diminish or even end. It did not and in fact expanded exponentially. I therefore


