A federal judge in Washington today approved a $760 million settlement in a class action that Native American farmers and ranchers brought over discrimination claims tied to government loan processing.
Judge Emmet Sullivan of Washington federal district court called the terms of the settlement, reached after more than a decade of litigation, historic, fair and appropriate.
The $760 million includes $680 million in damages and $80 million in debt relief. The settlement also calls on the U.S. Department of Agriculture to improve farm loan services. The suit alleged the government, between 1981 and 2007, denied Native American farmers and ranchers the same opportunities as others to obtain low-interest rate loans from the government.
The plaintiffs’ team, which included Cohen Milstein Sellers & Toll, Jenner & Block, Patton Boggs and Conlon, Frantz & Phelan, will split $60.8 million in legal fees. Over the objection of the Justice Department, Sullivan today awarded the maximum amount allowed under the agreement. DOJ had pushed for $30.4 million in fees.
Cohen Milstein partner Joseph Sellers, lead class counsel, said in a statement today that final approval of the deal in Keepseagle v. Vilsack, “marks the end of an unfortunate chapter in our nation’s history where USDA’s credit discrimination against Native Americans was the norm.” Sellers said the agreement provides “compensation and justice” to Native Americans.
Tens of thousands of farmers and ranchers are expected to receive compensation. The settlement sets out two tracks—one that provides the ability to recover up to $50,000 and another that allows recovery of up to $250,000 based on evidence of economic loss. The plaintiffs’ lawyers said the settlement amount is nearly the maximum the plaintiffs could have received at trial.
In a crowded courtroom today in Washington, Sullivan said “this case has been hard fought for over 11 years.” The judge said he had no doubt the litigation and settlement negotiations were conducted at “arm’s length.”
Sullivan also noted the plaintiffs’ team faced significant risk of never getting paid for their work in the case.
“There were many battles looming on the horizon if this litigation continued,” the judge said. He noted that in a similar suit, filed by women and Hispanic farmers, judges in Washington denied class certification.
Sullivan called the plaintiffs’ legal fees—8 percent of the settlement—on the “modest end of the range.” Citing a colleague’s decision in 2003 in an antitrust case, Sullivan said a fee award of 15 percent is not uncommon in mega-fund cases.
The judge also said he was satisfied the plaintiffs’ lawyers addressed his concern over designating banks that will receive, and invest, the settlement fund before checks are cut to class to members. In court earlier this week, Sullivan asked the lawyers to assess whether more of the money can be deposited into Native American or minority-owned banks.
The plaintiffs’ lawyers said “through a fresh and expanded process” the team expects to ensure the safety of the funds, generating a modest rate of return, while placing the money in banks owned by Native Americans. In court today, Sullivan ensured class members that the issue over the banks will not derail the settlement.
“Suffice it to say to all, congratulations,” Sullivan said from the bench today. At the end of the two-hour hearing, the judge stepped down and shook the hands of Justice lawyers, plaintiffs’ attorneys and members of the class.