Obama administration officials today announced a proposed $1.25 billion settlement to resolve racial discrimination claims by potentially tens of thousands of black farmers who were denied equal access to U.S. Agriculture Department loan programs.
The settlement addresses claims from black farmers who were excluded from participation in an earlier settlement with the government over USDA loan discrimination. Late-filed or incomplete paperwork meant thousands of farmers were left out.
The settlement announced today by Associate Attorney General Thomas Perrelli of the Justice Department and Secretary Thomas Vilsack of the Agriculture Department sets up a nonjudicial claims process through which individual farmers may demonstrate entitlement to damages awards and debt relief.
Perrelli called the settlement a “great landmark” that highlights his department’s commitment to civil rights. The discrimination was part of a “troubling” and "sordid" chapter at USDA, Vilsack said, and the Agriculture Department is looking to move forward to reduce complaints and modernize.
The settlement is contingent on congressional authorization, for which there is a March 31 deadline. A range of attorney fees—between about 4% and 7%, or $49 million to $89 million—is part of the settlement agreement, according to Perrelli. He called it a "relatively complicated" set of attorney fee provisions that address prior and future work. Judge Paul Friedman of the U.S. District Court for the District of Columbia, who has presided over the case, will have the final say on fees.
“Bringing this litigation to a close has been a priority for this Administration. With the settlement announced today, USDA and the African American farmers who brought this litigation can move on to focus on their future,” Attorney General Eric Holder Jr. said in a statement. “The plaintiffs can move forward and have their claims heard—with the federal government standing not as an adversary, but as a partner.”
Crowell & Moring partner Andrew Marks, a lawyer for the plaintiffs, said he looks forward to working with the administration to ensure the necessary funding is provided. “We are very pleased that we have been able to reach a settlement that will at long last provide meaningful relief to tens of thousands of black farmers who were the victims of decades of race discrimination by the government,” Marks said.
The litigation stems from Pigford v. Glickman, a class action the government settled in 1999 when it agreed to pay $50,000, plus debt and tax relief, to each black farmer who had been a victim of discrimination. Nearly 16,000 farmers won judgments, pushing the government’s tab close to $1 billion.
But thousands of farmers were denied participation in the settlement due to late or incomplete paperwork. Congress in 2008 included $100 million in a farm bill to pay the tens of thousands of farmers who were excluded from the original settlement. The plaintiffs lawyers said that the amount was insufficient. (Last May, The National Law Journal wrote about the litigation here.)
The latest settlement, which includes the $100 million Congress initially set aside, requires Congress to appropriate another $1.15 billion that President Barack Obama requested last year.
The claims process has two tracks, one simplified and the other more rigorous. Claimants who establish credit-related claims will be entitled to receive up to $50,000 and debt relief on one track. On the other, claimants may be provided actual damages of up to $250,000. Perrelli and Vilsack did not speculate on the potential number of claims, which is estimated in the tens of thousands.
“My Administration is dedicated to ensuring that federal agencies treat all our citizens fairly, and the settlement in the Pigford case reflects that commitment," Obama said in a statement. “I look forward to a swift resolution to this issue, so that the families affected can move on with their lives.”