Bailing out 'the smartest guys in the room'

Ms. Cobell’s Aug. 4, 2010, post, headlined "A Cravenly op-ed," continues an unbroken line of materially misleading representations to the public and to members of the plaintiff class to whom she owes a fiduciary duty. More importantly, she continues materially misleading members of the United States Senate whom she is asking to change the law and the rules so her proposed “settlement” can proceed. This may reflect the desperation she and her lawyers are feeling to salvage any hope of recovery in her 14-year-old lawsuit. To date, her recovery in court is nil.

Ms. Cobell offers a redacted quotation to contradict my observation that her attorneys will not be required to account for all their time and expenses in claiming up to $100 million in fees. Ms. Cobell writes that her attorneys will have to document “their ‘contemporaneous…and complete daily time, expense, and cost records.’”

The actual language of paragraph 4.c. of the Agreement on Attorney’s Fees, Expenses, and Costs that Ms. Cobell from which Ms. Cobell quotes selectively is as follows: “Plaintiffs shall file statements regarding Class Counsel’s billing rates, as well as contemporaneous, where available, and complete daily time, expense, and cost records supporting this motion.” (emphasis added)

Ms. Cobell’s convenient use of ellipsis, … (dots indicating omitted words) to change the meaning of the quoted material is a prevarication at best. Many members of her plaintiff class, to whom she owes a fiduciary duty, would have an even less decorous term to describe this tactic.

Ms. Cobell also notes that many of the claims that would be extinguished by her proposed settlement “are embedded in the original complaint filed over 14 years ago.” The careful use of the term “original complaint” to describe a complaint the plaintiffs have never amended is apparently intended to mask the fact that the “original complaint” was eviscerated by order of the court nearly twelve years ago. The court ordered struck from the complaint virtually all claims for monetary relief in this case after the plaintiffs insisted in open court they were not seeking any “infusion of cash.” See 30 F. Supp. 2d 24, 39-40, 48 (D.D.C. 1998).

Ten years later, the plaintiffs were granted the trial they had claimed to want throughout the litigation in order to claim scores of billions of dollars in “restitution.” Following that trial, in ruling that the plaintiffs had proved nothing, the judge held: “The plaintiffs’ model stands or falls with their legal theory, and it falls.” Cobell v. Kempthorne, 569 F. Supp. 2d 223 (D.D.C.2008).

As of this date, after 14 years of acrimonious litigation, the Cobell plaintiffs are entitled to no monetary recovery whatsoever from the courts. Unless the Senate acts to change the law governing federal court jurisdiction, and to change the Federal Rules of Civil Procedure governing class actions, and explicitly authorizes the federal district court to entertain a new complaint in this case solely for the purpose of entering judgment on this “settlement,” the plaintiffs are empty-handed.

Proponents are urging the Senate to convert a losing lawsuit into perhaps the largest recovery ever against the federal government. Some people are saying it would be irresponsible to pass up a free lunch if the Congress approves it. Some of us think there is no such thing. Even though he has staunchly championed approval of this settlement, I urge the senators to recall another bit of real wisdom Senator Dorgan often attributes to his father: “Never buy anything from someone who shows up out of breath.”

Ms. Cobell and her attorneys are perhaps the most breathless persons in the country today. But they have more than $100 million at stake personally. The Senate is being asked to spread around more than $3 billion as a justification for bailing out “the smartest guys in the room” (with apologies to Bethany McLean and Peter Elkind).