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$1.25 billion settlement for black farmers

Following nearly a decade of litigation, a $1.25 billion agreement has been struck between the USDA and a class consisting of black farmers. Congress is now being asked to provide the needed funds and several prominent farm-state politicians seem keen to do so.

“I am pleased that a settlement has been reached between USDA and African American farmers,” said Arkansas Sen. Blanche Lincoln in a statement. “As chairman of the Senate Agriculture Committee, I am committed to ensuring that every farmer in America receives equal access and treatment in the delivery of USDA’s programs and services. I look forward to working with my colleagues in Congress to help provide the compensation owed to African American farmers who have been victims of discrimination.”

The current deal comes after the original 1990s Pigford v. Glickman settlement that cost taxpayers some $1 billion. In the original settlement, roughly 22,000 claims were filed and 16,000 claimants received funds.

Saying they’d been left out of the earlier suit, the current class claims USDA’s widespread discriminatory loan-lending practices harmed tens of thousands of black farmers.

“Today’s announcement moves us an important step closer to a just resolution of the black farmers cases,” said John Boyd, president of the National Black Farmers Association. “President Obama, (USDA) Secretary Vilsack and the administration have shown leadership in getting us to this moment. Next week, another black farmer will lose his farm. Others are at risk of not living to see justice. These farmers have waited for years, and simply cannot wait any longer for final resolution.”

In contrast to Boyd’s muted approval of the agreement, the tone at the Thursday USDA/Department of Justice press conference announcing the deal was buoyant.

“This is a great day for the USDA and the many thousands of African American farmers it serves,” said Thomas Perrelli, DOJ associate attorney general. “This litigation has gone on for many years and has stood in the way of what should be a productive, cooperative relationship. The settlement we’re announcing is possible because Secretary Vilsack was, and is, committed to changing that relationship.”

The second round of Pigford litigation “has lasted through the terms of several previous (USDA secretaries) but Secretary Vilsack was determined from Day One to be the one who turned the page. He’s been personally involved, making sure the deal was done in a way that was right by the farmers and was responsible for the government.”

The $1.25 billion — $100 million of which is accounted for in the 2008 farm bill — was included in President Obama’s latest budget and will “completely resolve the claims that arose out of the original litigation, addressing the claims of late filers,” continued Perrelli.

“Once we have that appropriation, we’ll seek approval from the court where interested parties will have an opportunity to review the settlement and make any comments for the court to consider. If the court approves it … class members will have six months to submit claims.”

Perrelli noted several other settlement criteria:

• The class consists of anyone who, prior to the passage of the 2008 farm bill, submitted a late claim in the original Pigford litigation and hasn’t had his discrimination complaint heard.

• The process for participating will be similar to the one used in the original case.

Acknowledging major complaints from both sides in earlier cases, Perrelli vowed this time would be “a much, much more streamlined process.”

• As in the earlier cases, farmers who submit claims will choose between two tracks.

“Track A provides for a simplified claims process designed to provide quick relief of up to $50,000 plus debt relief. Track B will be a more rigorous process but will permit successful claimants an opportunity to receive actual damages up to $250,000.”

• The actual amount any claimant will receive depends on how many successful claimants there are.

So, Track A awards of $50,000 could end up being much less if there are too many successful claimants?

“I don’t want to put a particular number on it,” said Perrelli. “But, like I said, it could be up to $50,000. It could be lower if there are significantly more plaintiffs.”

The process “will take time. But we feel we’ve learned, over the last decade, how to make it more streamlined and efficient. And we hope the $1.25 billion will be distributed quickly and appropriately.”

• If funds aren’t appropriated by Congress by the end of March, plaintiffs have the opportunity to walk away from the agreement.

One problem: last year, Congress didn’t approve a similar budget request and amount. Why will it approve the $1.25 billion this time?

In refusing the earlier request, “one of the concerns Congress expressed was the lack of signed settlement agreement in which there was an acknowledgement by the plaintiffs that this would be a sufficient amount to resolve the dispute and would be a structure they’d be satisfied with,” said Vilsack. “We now have a signed settlement agreement. … Our hope and belief is Congress will pass this appropriation expeditiously and allow us to begin the process of getting folks paid.”

To ensure the settlement funding, Vilsack pledged to “focus all my time, attention and resources. ... I think there’s bipartisan support for this. One of the senators I talked to about this recently … is (Republican) Charles Grassley from Iowa.”

Indeed, in a statement, Grassley said he’d “originally hoped that the Pigford v. Glickman settlement would take care of the injustice that had been left untouched for decades. Unfortunately, many people were shut out of the process. When it became apparent that the USDA would not act, we took further steps and introduced legislation to right the wrongs. We finally got something included in the last farm bill and now, with today’s announcement, African American farmers who were wronged by the USDA are one step closer to a full resolution and well-deserved justice.”

Such statements are unlikely to placate farmers who claim it isn’t only blacks who have had trouble with the USDA through the years. And Vilsack did himself no favors during the press conference when asked for the “most egregious example” of USDA’s racial bias.

“Here’s an example: you had two farmers — one white, one black — go into Farm Service Agency in state ‘X,’” said Vilsack. “The white farmer applied for an operating loan, had it processed rapidly, had it approved and had the resources available so he could put a crop in. The black farmer was either denied the operating loan without due diligence to determine if he could repay the loan or he was strung out for such a long time that he didn’t get the operating loan in a timely (manner). That compromised (the black farmers’) capacity to put a crop in the ground and therefore made it more difficult to make payments and keep their farming operation. The result was either people got deeply in debt or, in some cases, they lost the farm.”

If that is the most “egregious” example Vilsack can find, Congress will surely be reluctant to fund such a settlement. In coming weeks, there will be plenty of people pointing Congress to the fact that for years numerous U.S. farmers, of all racial make-ups, received late operating loans. In fact, lawsuits similar to Pigford have been filed by other ethnicities, including whites. A class made up of Native Americans has already been certified.

In addition, Vilsack dodged questions about potential fraud, the possibility that more than $1.25 billion will be needed, and the number of potential claimants. “I’m not going to get into hypothetical circumstances,” he said. “There are numbers all over the place in terms of this. … I don’t know how many claims there will be. I don’t know if it’ll be 75,000 or 10,000. I don’t know if it’ll be 28,000 or 42,000.”

What about class attorney fees? Fees for “a lengthy list” of class attorneys “are part of the settlement negotiation,” said Perrelli. “It is a relatively complicated set of attorney fee provisions because it includes both prior work and a significant amount of future work with (Track A and Track B cases). There are also provisions that attempt to address both payments to class counsel as well as payments to non-class counsel. That’s because we want to ensure the maximum amount of funds actually reach individual farmers.

“The broad outline is … that the party will put before the court the issue of attorney fees. We’ll litigate between a range of potentially 4.1 percent and 7.4 percent of the total funds made available. That puts (attorney fees between) $49 million and $89 million.”

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TAGS: Legislative
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