For nearly a century, the Department of Interior sold oil and gas leases on lands belonging to the Blackfeet Indians for a song to oil and gas wild catters, and later to Big Oil. The Department of Interior was suppose to hold those royalties in trust for the Indians but who the hell cares about the Indians, so over the years federal employees managing the trust -who probably spent most of their time posting on TER- woefully mismanaged it and caused the trust to lose billions of dollar.

In 1994, however, a bunch of lawyers filed a class action against the United States for mismanaging the trust fund and, lo and behold, 16 years later the Obama admin agreed to settle for $3.4 billion and to pay the lawyers $99 million for their work. In addition, the gov agreed to cut checks for each Indian of $1000. So lawyers $99 million, Indians $1000 – any problem so far?

But, after thinking about it, the lawyers decided $99 million was not enough. So they asked the court to grant them atty fees of $223 million plus another 1 million for their expenses. Of course, this money would have to come out of the settlement reducing that $1000 payment to each Indian, but what the hell do Indians need money for? Any problem so far?

So now those wet blankets in Congress are trying to pass a law capping fees at $50 million. Strangely, the Obama admin guys who negotiated the settlement have refused to testify.
But isn’t this outrageous? Don’t those sheperds of the lord, the lawyers, deserve the $223 million? Stay tuned.


*Caption from Washington Post with apologies to Henry VI.

Of course those lawyers deserve every penny of that money, I mean what are a bunch of dirty stinking Indians going oto do with all that money?

I mean someone had to pay for law school, right?

I don't know about other states, but in Oklahoma the natives were fucked so badly that anyone of Native American origin has to get permission from their tribe (whichever one applies) before an oil and gas lease signed by them becomes valid.

Yes folks, Marikod has admitted that lawyers have fucked people and GaGambler has admitted that Oil Companies have done the same. I wonder if the sun will still rise in the east tomorrow?

how many Blackfeet Indians are there? At a $1000 bucks a pop, you're talking 300,000 plus Blackfeet Indians, even after subtracting the excessive fees. Do a little googling and you get about 10,000 Blackfeet.

Mismanaged the trust? What did they do, invest it all in Krispi Kreme?

Something is not right.

case was used to enrich the lawyers from a fund rightfully belonging in full to the Indians, while at the same time paying no meaningful benefit to the individual Indians. Sure the class is large but who is the real winner here?

      Class actions are a major legal scam which most laymen do not appreciate it. In consumer product class actions, frequently the consumers only get "coupons" while the lawyers get millions. It's almost as bad as a LBO.

    As to what they did to mismanage the trust, that Obama settled rather than litigate pretty much tells you it was extremely blatant.
When the litigation started, the US denied it owed anything and three Secretarys of the Interior were held in contempt for failing to comply with court orders.

Is it by the hour? Is it an established fixed fee? Is it value based, i.e. based on the award? All three?

It appears getting the info on how the fees are structured are nearly impossible, which by definition means they are bogus.

We are both numbers kind of guys. So what is a standard middle of the road hourly rate? How about we use $500? I realize the hourly rate is different based on the complexity of the case, type of lawyer, etc. Nevertheless, $223M divided by $500 is 446,000 man hours. The lead attorney said they toiled for 15 years. Do lawyers only work on one case at a time? I use a term in my work called FTE (Full Time Equivalent). We tend to generally use 2000 hours a year. At 446,000 man hours, that comes to 14.8 lawyers working full time for 15 years.

Unfortunately we are just getting a snapshot of the case. Though I would like to know how they are trying justify $223M, as well as how they mismanaged the Trust.

Obama settled rather than litigate. Obama is a lawyer by education, and settling appears to be pretty standard in the legal world.

Sidebar, congrats so far on FTO, even though it pulled back a bit from $32+. Oil @ $113! Part of me wants to short oil, but I guess when 99.9% of the experts, analysts, traders, speculators, whatever you want to call them say oil is going to $125, you don't go against the tide. But damn, it's so tempting.

up $13 from my $18 basis so I decided to take profits. I also sold XLE at $80 so I am out of the oil and gas business at the moment.

     Believe it or not, I now own nuclear power plants LOL. At the height of the Japanese disaster Excelon (EXC) slipped so I swooped in on the assumption nothing will change and they do pay a 5% plus DD.

      Now the real question is will BOA report profits next week, or are they still losing money? The debacle about having their dividend increase request rejected by the FEd is not a good sign. It would be really nice to see BOA having a P/E ratio again.

      The fee in the Indian litigation was a contingency fee probably 40% as between the lawyers and their clients. But at the settlement, they agreed to 99 million fee - now they want twice that while Congress is trying to cut the fee in half.

    I don't actually have information on this but no way that this was the only case they handled.

      My final idea tonight - instead of shorting oil, consider shorting Netflix. More on this later.

I never hear the term "poor lawyer."

At least for the short term, you basically timed it right. I was going to short oil via a leveraged ETF late Friday, but I was just too nervous. So what happens? African Union is trying to broker a peace in Libya, Goldman Sachs comes out last night with a note saying to sell commodities for the short term, and gasoline demand in the U.S. is trending down. Nevertheless, I wimped out.

I can't wait to hear your thesis on Netflix. First, I do own a little Akamai, which provides content delivery technology. Netflix is a client. On Monday, Level 3 buys Global Crossing, which may hit Netflix's margins. I basically understand Netflix's business model, but a company with $2B in revenue, and a market cap of $12B. Long side, NO. But I'm willing to listen on the short side.

Priceline is another high flyer with a ridiculous valuation. You'd think higher oil, i.e. reduced travel, may eventually hit Priceline.

Back to work.