Court permits changes to allocation model for Volkswagen Indian Trust Fund

By Chandra Lye | Nov 20, 2018

SAN FRANCISCO – A U.S. district court has allowed changes to a trust fund set up by Volkswagen for emission mitigation projects among federally recognized Native American tribes.

The U.S. District Court Northern District of California approved Nov. 16 the modification recommendations put forward that changes the Indian Tribe Trust Agreement. The federal government asked the court to approve the modifications.

According to the court order, Volkswagen set up and financed the trust but disbursements were stayed in March of this year as officials reviewed the fund’s allocation formula.  

“Currently, if a funding cycle is oversubscribed—that is, if tribes ask for more money than is available—funds are allocated among participating tribes on a pro rata basis, based on population," District Judge Charles Breyer wrote in the court order. "As proposed, the allocation formula would be modified so that 50 percent of the funds would be allocated equally among participating tribes and 50 percent would be allocated based on population. The result would be that smaller tribes would receive a greater share of the funds than they would under the current allocation formula.”

One tribe, the Cherokee Nation, had been arguing to keep the current allocation formula as it benefited it the most. However, the court disagreed and permitted the changes.  

“It is also evident that the parties to the trust did not intend for only the most populous tribes to benefit from it,” Breyer wrote. “...If the parties had intended for trust funds to be allocated only to the largest Indian tribes, they could have stated so explicitly. Rather than doing so, they designed the trust so that any Indian tribe, regardless of size, can become a beneficiary.” 

The trust was one of two set up by Volkswagen in an effort to “offset the negative effects of Volkswagen’s ‘clean diesel’ vehicles,” according to the court order. The company put more than $2 billion into the funds, which can be accessed by any of the 568 federally recognized Indian tribes.

Want to get notified whenever we write about U.S. District Court for the Northern District of California ?

Sign-up Next time we write about U.S. District Court for the Northern District of California, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. District Court for the Northern District of California

More News

The Record Network