United States of America v. Volkswagen AG et al

Filing 68

Order by Judge Charles R. Breyer denying 61 Cherokee Nation's Motion to Lift Stay. (crblc4, COURT STAFF) (Filed on 7/11/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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IN RE: VOLKSWAGEN “CLEAN DIESEL”
MARKETING, SALES PRACTICES, AND
PRODUCTS LIABILITY LITIGATION
_____________________________________/

ORDER DENYING CHEROKEE
NATION’S MOTION TO LIFT STAY

This Order Relates To:

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United States District Court
Northern District of California

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MDL No. 2672 CRB (JSC)

United States v. Volkswagen AG, No. 3:16-cv00295-CRB, Dkt. No. 61
______________________________________/

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As part of the settlement between the United States, California, and Volkswagen in this

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multidistrict litigation, Volkswagen agreed to fund a trust that would be used by federally-

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recognized Indian tribes to finance projects that would reduce pollution. The Court approved the

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terms of the tribal trust agreement in September 2017. (See 16-cv-00295, Dkt. No. 49.)

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In March 2018, the United States, Volkswagen, and the trustee notified the Court of a

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potential problem with the trust: tribes had requested more funds than were available to be

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distributed in the first funding cycle, and this oversubscription had triggered a population-based

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allocation formula in the trust agreement that, under the circumstances, would award the majority

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of the funds to several large tribes and would result in de minimis awards for all other tribal

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beneficiaries. The United States, Volkswagen, and the trustee expressed concern that this result

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would be inconsistent with the goals of the tribal trust agreement. In response, the Court ordered

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the United States and interested tribal beneficiaries to meet and confer, in consultation with the

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trustee, to discuss whether any adjustments to the allocation formula were necessary. The Court

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also stayed all disbursements of trust funds until further notice. (See MDL Dkt. No. 4867.)

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On June 15, 2018, Cherokee Nation, a tribal beneficiary, filed a motion to lift the stay on

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disbursements. (16-cv-00295, Dkt. No. 61.) Cherokee Nation makes several arguments in its

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motion, but the Court construes the motion as ultimately challenging the United States’ efforts to

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modify the trust agreement’s allocation formula. The Court DENIES the motion for the following

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reasons.

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First, Cherokee Nation’s arguments will be best addressed at a later date. A week after

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Cherokee Nation filed its motion, the United States filed a notice of proposed material

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modifications to the tribal trust agreement, which include proposed modifications to the trust’s

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disbursement allocation formula. (16-cv-00295, Dkt. No. 62.) The United States explained in its

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notice that it would be providing tribal beneficiaries 30 days to comment on the proposed
modifications. That comment period is currently under way. The arguments Cherokee Nation

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United States District Court
Northern District of California

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makes in its motion to lift the stay are best framed as comments on the proposed modifications.

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Given that the 30-day comment period has yet to end, judicial efficiency counsels in favor of the

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Court addressing Cherokee Nation’s comments after the comment period has ended and after the

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United States has responded.

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Second, the stay remains appropriate because the stay preserves the status quo as potential

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modifications to the trust agreement are considered. Cherokee Nation has not convinced the Court

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that it has been materially harmed by the stay to date, or that it will be prejudiced if the Court

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continues to stay disbursements until after the comment period has ended, the United States has

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responded, and the Court is able to evaluate the merits of the proposed modifications.

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Because judicial efficiency counsels against addressing Cherokee Nation’s comments now,

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and because the stay of disbursements remains appropriate and has not materially harmed

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Cherokee Nation, the Court DENIES Cherokee Nation’s motion to lift the stay. As noted, the

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Court will consider Cherokee Nation’s comments when deciding whether to approve the

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modifications to the tribal trust agreement that the United States has proposed.

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IT IS SO ORDERED.
Dated: July 11, 2018

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CHARLES R. BREYER
United States District Judge

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