PrintAfter inching through the courts for nearly two decades, a series of mediation sessions that began in the summer of 2009 led to Tuesday's proposal to settle a dispute over a trust fund holding oil royalties for $33 million.
The agreement would provide $1 million to the trust on July 15, 2010; $5 million in 2011; $13.5 million in 2012, and $13.5 million in 2013. It still must be approved by tribal members, U.S. District Judge Tena Campbell, Gov. Gary Herbert and the Utah Legislature.
An undetermined amount for court costs and plaintiff attorneys' fees would be taken out of the settlement. Attorney Brian Barnard, who has represented the Navajo trust beneficiaries since the suit was filed in 1992, gives a rough estimate of $4 million to $5 million.
That amount covers Barnard and attorney John Pace, who also has worked on the case for 18 years, as well as Utah lawyer Parker Nielson and lawyers with Nordhaus Law Firm in New Mexico who assisted in the matter.
Barnard said a trial could have ended with a different amount, but the litigation would have taken much longer and piled up more expense.
"Settlement of the case means an end to litigation but more importantly it means money more quickly into the trust to aid the beneficiaries," he said.
Utah Attorney General Mark Shurtleff said encouragement from Herbert and the work of assistant attorneys general David Sonnenreich and Philip Lott led to the agreement. Shurtleff's office last year set up a settlement committee that included state attorneys and Utah lawmakers.
Key to brokering Tuesday's deal was an agreement on the rate at which interest would be calculated, said Shurtleff.
The dispute centered on the Utah Navajo Trust Fund, which was created by Congress in 1933 to hold 37½ percent of the royalties from drilling in the Aneth oil fields for the benefit of tribal members living in San Juan County. The rest of the royalty money goes to Navajo Nation headquarters in Window Rock, Ariz.
After substantial money began flowing into the account in 1955, some beneficiaries in Utah alleged mismanagement by state trustees. Four lawsuits were filed eventually -- the first in 1961 -- demanding an accounting from state officials. The first three suits ended with either no accounting or a limited review of some transactions.
The current lawsuit sought an accounting of trust expenditures from the mid-1950s to 1992, when a new board took over management. The trust money pays for projects such as new housing and health care for San Juan County Navajos.
The state denied the mismanagement allegations and admits no wrongdoing in the settlement.
Lawyers for the Navajo plaintiffs at one point calculated the trust fund was owed $150 million, including interest. But the state was able to document some expenses and show that "a good deal of the money was properly spent," Barnard said.
"There were beneficiaries that went to college, beneficiaries that had their homes insulated, beneficiaries that had their bathrooms built," he said.
Barnard and Pace plan to travel to the reservation on Sunday to present the agreement to tribal members.
pmanson@sltrib.com Dispute over royalties
Lawsuit » Five Utah Navajos filed a federal lawsuit in March 1992 accusing the state of breaching its fiduciary duty to oversee a trust fund set up to administer oil royalties. The suit, brought on behalf of an estimated 8,000 Navajos living in San Juan County, alleged millions of dollars had been lost through mismanagement.
Settlement request » Lawyers for Utah Navajos asked a state panel in 1993 for a quick, out-of-court settlement.
Dismissal » In 1995, U.S. District Judge David Sam ordered the suit thrown out, saying nothing in the laws creating the fund gave individual Utah Navajos the right to sue over its handling. A year later, the 10th U.S. Circuit Court of Appeals reinstated the suit.
Class action » Sam granted class-action status to the suit in 1998.
Price tag » For the first time, in 2000, the Utah Navajos put a figure on how much they contend they are owed: $150 million including interest. That number later dropped after the state did some initial accounting.
Lawsuit leaders » The number of class representatives leading the legal fight grew to eight in 2002. Three of the original five plaintiffs had died by then, and six Utah tribal members agreed to step in.
Boost for plaintiffs » In 2006, U.S. District Judge Tena Campbell rejected the state's contention that a request to provide information about how it handled the trust fund came too late.
No limit » The 10th Circuit in 2008 agreed with Campbell that the time period for an accounting from Utah state officials should not be shortened.
Mediation » Settlement discussions begin in the summer of 2009.
Resolution » A proposal to settle the lawsuit for $33 million was announced Tuesday. The plaintiffs
The eight plaintiffs named in a class-action suit over the handling of oil royalties for Utah Navajos are:
Helen Cly » Oljato chapter.
Jim Benally » Red Mesa chapter.
Wallace Saltclah » Teec Nos Pos chapter.
Leo Manheimer » Navajo Mountain chapter.
Corey Johnson » representing off-reservation Navajos.
Harrison Johnson » Aneth chapter.
Kenneth Maryboy » Mexican Water chapter.
Nancy Tsosie » Dennehotso chapter.
