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CRC Plus settlement… check's not in the mail

Hurry up and wait. After filling out and returning a multitude of paperwork by the required deadlines, rice farmers included in the CRC Plus class action lawsuit are still anxiously awaiting their shares of the settlement money.

That wait isn’t likely to end soon. More than two years after the suit was filed, and 16 months after a settlement was agreed to in the case, attorneys for the plaintiff say checks will be mailed to farmers later, rather than sooner.

Earlier reports from both the plaintiffs’ attorneys and the CRC Plus litigation claims administration center had farmers receiving their share of the settlement money by Sept. 15, 2001.

Cindy Green, an attorney with the New Orleans firm representing the plaintiff said, "We’re not really sure when farmers included in the class action will receive their share of the settlement money. We really don’t have any kind of time frame now."

What has happened, according to Green, is that the court official handling the settlement distribution has disqualified some farmers from the class action lawsuit.

In most of the cases, farmers were taken out of the class action because the information on their claim forms was either incomplete or incorrect. The vast majority of those disqualified failed to accurately complete the requested production information, Green said.

"In early October we sent letters out to all of those farmers who the special master for the court disallowed," Green said. "We are currently fielding questions from the affected producers, and we’re going back through any discrepancies in an attempt to get all eligible producers qualified for the settlement."

Officials at the CRC Plus Claims Administration Claims Center in Excelsior, Minn., said they are currently in the process of compiling the class list. "All of the letters have gone out notifying those class members who are not eligible for the settlement. The checks to all eligible class members should be distributed sometime within the month," an official handling the case said.

According to the claims center, those rice producers who have not received a disqualification letter and have returned all necessary paperwork by the set deadline remain eligible for their shares of the settlement money.

For most of those rice producers, the last communication they received was an Aug. 3 letter from the U.S. District Court in Little Rock, Ark., asking for their tax identification numbers. The identification numbers were to be returned to the court office by Aug. 31 in order to be eligible for settlement funds.

The settlement is the result of a lawsuit filed by Arkansas farmer Jimmy Wallace on the behalf of rice farmers against American Agrisurance (Am Ag), and three other related insurance companies. The lawsuit alleges breach of contract, fraud and violation of the Arkansas Deceptive Trade Practices Act by the crop insurance company.

Wallace was one of the rice producers who applied for the supplemental 3 cents-per-pound crop revenue insurance coverage offered by Am Ag in 1999. Shortly after Wallace and hundreds of other of Delta rice growers signed up for the insurance product, Am Ag abruptly announced March 1, 1999, that it was canceling its previous offer to farmers.

Coming to the realization that the CRC Plus policies the company had sold were threatening the company’s bottom line, Am Ag CEO Rick Gibson told customers that the company was cutting CRC Plus coverage for rice from 3 cents to 1.5 cents per pound.

The class action lawsuit settlement includes any and all farmers in the nation who applied for CRC Plus coverage on rice for 3 cents. Anyone that applied for 3 cents per pound crop revenue coverage and didn’t receive it is included.

To be eligible to receive a share in the settlement, farmers who applied for the insurance coverage had to submit a class member claim form by June 14, 2000, and a tax identification number by Aug. 31, 2001.

There is some speculation that the pool of farmers sharing in the $3.7 million proposed legal settlement announced in June 2000 will be smaller than was earlier projected.

An estimated 6,000 rice producers applied for the supplemental 3 cents-per-pound crop revenue insurance coverage offered by AmAg. However, an unnamed source said that of the more than 6,000 letters that went out to growers eligible to be included in the class action, only about 2,600 responses were returned.

Included in the proposed settlement of $3.7 million plus interest is the payment of one-third of the total in attorneys’ fees and an "incentive award" to those who have served as class representatives in the litigation.


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