July 20, 2004

Obstruction of Justice: African American Farmers Sue USDA for Racial Discrimination

Pigford v. Veneman — African American Farmers Turn to the Courts for Justice

When the USDA failed to implement its own recommendations for addressing the persistent racism in the administration of its programs, African American farmers turned to the courts in hopes of finally addressing this monumental injustice. Among these lawsuits was Pigford, et al. v. Veneman, 97 Civ. 1978, 98 Civ. 1693 (PLF), a case brought by three farmers on behalf of all African American farmers who had been victims of racial discrimination at the hands of the USDA. Pigford would prove to be a landmark case, and, unfortunately, a study on how a federal agency can evade accountability despite admitting to wrongdoing and agreeing to compensate its victims.

"The way it usually works is that you would file for FSA assistance in February. You're supposed to get your money in March or April in order to have enough resources to plant on time to reach harvest before the fall rains and frost come. White farmers were getting their money on time, every time. But not the black farmers."

—Leon Pulley, Butler County, MO farmer

On August 28, 1997, farmer Timothy Pigford filed a class action lawsuit in the United States District Court for the District of Columbia against the Secretary of Agriculture, Dan Glickman, alleging that USDA discriminated against African American farmers by denying or delaying applications for benefit programs and by mishandling the discrimination complaints filed with the Department. [Document: Complaint] The case was assigned to Judge Paul Friedman, who, on October 9, 1998, certified the Pigford class, allowing the case to move forward as a class action.

Concerns about the expiration of the statute of limitations loomed over the case, threatening to bar the farmers' claims from ever being heard in court. After African American farmers and their supporters presented testimony before Congress, a bill was passed suspending the statute of limitations, which President Clinton signed into law on October 21, 1998.

With this matter resolved, the African American farmers and the USDA continued in their settlement discussions. From the beginning of the case, the parties had discussed settlement under the direction of a mediator. They faced several struggles in the settlement process. A key point of controversy between the farmers and the USDA involved the structure of the potential settlement. The parties engaged in contentious debate, both before the mediator and before Judge Friedman, over whether to structure an agreement which settled all of the farmers' claims at once or whether to construct a process which would resolve the claims on a case-by-case basis. The attorneys for the farmers were concerned that a case-by-case process would drag on for years and further delay justice for the farmers. After much debate, nearly two years after the complaint was filed, the parties entered into a settlement, filing their version of the agreement, the Consent Decree, with the Court on March 19, 1999. [Document: Consent Decree]

The Consent Decree set forth a revised class definition and a two-track system for resolving claims on a case-by-case basis. All individuals who fit within the following definition were considered members of the class:

All African American farmers who:

(1) farmed, or attempted to farm, between January 1, 1981 and December 31, 1996;

(2) applied to USDA during that time period for participation in a federal farm credit or benefit program and who believed that they were discriminated against on the basis of race in USDA's response to that application; and

(3) filed a discrimination complaint on or before July 1, 1997, regarding USDA's treatment of such farm credit or benefit application. [Excerpt: Class Definition | Full Document: Consent Decree]

The system designed by the parties for resolving claims took the form of a two-track dispute resolution mechanism, with two separate processes through which African American farmers in the class could pursue claims. Under the more streamlined process, Track A, a farmer could prevail with minimal documentation, but recovery is limited to $50,000. The alternative process, Track B, would be more like a civil trial, requiring more extensive documentary evidence, but providing farmers with the opportunity to obtain cash payments based on actual damages without a cap on the award.

Successful farmers in both tracks would also be eligible for non-cash relief, including tax assistance, debt forgiveness, foreclosure termination, technical assistance and one-time priority loan consideration. Both tracks presented all-or-nothing options — if you won you got relief, if you lost, you got nothing. The Consent Decree did not provide any appeal right, therefore, if a farmer lost the claim, the farmer had no right to have that decision overturned by a neutral party. Instead, a losing party could request that the court-appointed Monitor direct the original decision-maker to re-examine the decision. Those who did not want to accept the terms of the settlement were legally entitled to opt out of the settlement and pursue lawsuits of their own.

Pigford's Two Track Settlement Process, Tracks A and B

Track A - "Automatic" $50,000 Award

Track A was designed to provide limited relief quickly for farmers with minimal or no documentary proof. The process was to take a total of 110 days, or just over 3 months, from start to finish. The Court described this track as a "dispute resolution mechanism that provides those class members with little or no documentary evidence with a virtually automatic cash payment of $50,000" (Pigford 1999, at 95).

Farmers who are alleging racial discrimination in loan or subsidy programs are eligible for this track. In order to succeed, farmers had to present substantial evidence showing that he/she was subjected to racial discrimination by the USDA and suffered economic damages as a result. Substantial evidence was defined by the Court as, "a reasonable basis for [finding] that discrimination happened." Successful farmers would receive a $50,000 cash payment for loan-based claims or $3,000 for subsidy-based claims as well as debt relief. Loan programs, or credit benefits programs, include loans offered by the Farmers Home Administration (FmHA), now part of the Farm Services Agency (FSA). Subsidy programs, or non-credit benefits programs, include commodity programs, disaster programs, and conservation programs, formerly administered by the Agricultural Stabilization and Conservation Service (ASCS), also now administered by the FSA.

Under Track A, the process should proceed as follows:

  • farmer submits a claim package to Facilitator, choosing Track A. Claim packages must include all documentation and evidence supporting class membership and proving claim.
  • Within 20 days of receiving the package, Facilitator determines whether farmer is a class member and assigns a track, then forwards notice to the Adjudicator, USDA and class counsel.
  • Within 60 days of receiving notice USDA may submit information relevant to liability or damages to Adjudicator and class counsel.
  • Within 30 days of receiving material from farmer and USDA, Adjudicator decides whether claim is supported by substantial evidence, stating the reasons for the decision. Adjudicator must evaluate whether the farmer has presented substantial evidence to show the following:

    (1) farmer owned or leased, or attempted to own or lease farm land,
    (2) farmer applied for a loan or subsidy transaction at a USDA office between January 1, 1981 and December 31, 1996,
    (3) the application was denied, provided late, approved for a lesser amount than requested, encumbered by restrictive conditions, or USDA failed to provide appropriate service,
    (4) treatment received was less favorable than that accorded to a specifically identified, similarly situated white farmer, and
    (5) USDA's treatment caused farmer economic damages.
  • Successful loan program claimant receives $50,000 payment and debt relief from USDA. Successful subsidy program claimant receives $3,000 payment and debt relief from USDA. (Losing party may request that the Monitor direct the Adjudicator to re-examine claim where clear, manifest error has occurred that has resulted or is likely to result in a fundamental miscarriage of justice.)
  • Maximum time from submission of claim to decision: 110 days.

Track B — Evidence-Based Proceeding to Recover Actual Damages

Track B was designed to offer an abbreviated trial procedure and an accurate damages award for farmers with superior documentation of their claim. This process, though expanded, was designed to take a maximum of 240 days, or 8 months, from claim submission to decision. Only farmers with claims arising from loan, or credit program, transactions were eligible for this track. Track B farmers had to prove their claims and actual damages by the standard civil litigation burden of proof, "preponderance of the evidence," showing that it is more likely than not that their claim was valid (Pigford 1999, at 95). Successful farmers would be entitled to receive monetary damages as proven, and non-cash relief.

Under Track B, the process should proceed as follows:

  • Farmer submits a claim package to Facilitator, choosing Track B.
  • Within 20 days of receiving the package, Facilitator determines whether farmer is a class member and assigns a track, then forwards notice to Arbitrator, USDA and class counsel.
  • Within 10 days of receiving claim package, Arbitrator notifies farmer and USDA of date of evidentiary hearing. Hearing date to be set within 150 days of sending notice, but may not be set for less than 120 days after notice is sent.
  • 90 days prior to hearing date, parties serve on each other witness lists, statements of intended testimony of witnesses, and copies of exhibits to be presented at arbitration hearing.
  • 45 days prior to hearing date, parties complete depositions of opposing party's witnesses.
  • 30 days prior to hearing, parties file with Arbitrator and serve on each other written versions of direct testimony of witnesses.
  • 21 days prior to hearing date, parties notify each other of witnesses whom they intend to cross-examine at trial. Also by this date, parties file memoranda of law and fact with Arbitrator.
  • Hearing (eight hours)—four hours of cross-examination of opponent's witnesses and presenting legal arguments for each party.
  • Within 60 days of hearing, Arbitrator issues written decision as to whether farmer has demonstrated by a preponderance of the evidence that farmer was a victim of racial discrimination and suffered damages as a result.
  • Successful farmer receives actual damages from USDA. (Losing party may request that the Monitor direct Adjudicator to reexamine claim where clear, manifest error has occurred that has resulted or is likely to result in a fundamental miscarriage of justice.)
  • Maximum time from submission to decision: 240 days.

Court's Fairness Review and Consent Decree Approval

The Court reviewed the settlement for fairness, considering objections and responses of the African American farmers and USDA, and approved the Consent Decree in an opinion dated April 14, 1999. Numerous class members, civil rights organizations and farmer organizations filed objections to the Consent Decree and testified at the fairness hearing. [Document: NBFA objections] Overall, the Court received objections from 15 organizations and 27 individuals, including two named plaintiffs, Timothy Pigford and Cecil Brewington. Farmers voiced concerns about many aspects of the Consent Decree, including the amount of recovery provided to the farmers in the settlement, the structure of the dispute resolution mechanism, and the lack of forward-looking relief. After considering the objections and comparing the settlement outcome with the likelihood of prevailing at trial, the Court determined that the settlement would provide a fair, efficient tool for redressing the farmers' grievances.

"You got to choose one or the other track, your choices are simple, you either take the $50,000 or you gamble that you might get more and wait it out. It wasn't an easy decision, I didn't want to just take the $50,000. I wanted to go for the $5 million they had denied me, but it seemed like it would never be resolved if I did that."

—Leroy McCray, Sumter County, SC farmer

Much of the Court's analysis hinged on the fair and efficient administration of the settlement process. In discussing the fairness of the amount of recovery provided in the settlement, the Court reasoned that farmers largely lacked documentary evidence to prove their claims and that "the settlement negotiated by the parties provides for a relatively prompt recovery" compared to trial, where, "it is unlikely that any class member would have received any recovery for his injury for many years" [Document: Fairness Opinion] (Pigford 1999, at 104-105).

In addressing objections to the requirement that Track A farmers show proof that they fared worse than "a specifically identified, similarly situated" white farmer, the Court found that the requirement was not overly burdensome because the plaintiffs' lawyers had obtained information on a number of white and African American farmers from USDA (Pigford 1999, at 106). Thus, the Court opined, "class counsel should be able to provide most farmers with the evidence they need" (Pigford 1999, at 106).

When the Court considered objections to Track B's lack of a discovery procedure requiring parties to exchange documents, the Court maintained that this was a fair concession since "the Track B mechanism ... resolves the claim much more quickly than an ordinary civil case would be resolved, in large part because of the shortened discovery period" (Pigford 1999, at 106). In resolving that the lack of an appeal procedure was fair, the Court focused on the expectation that most farmers would succeed in the settlement, stating, "[s]ince it is anticipated that most class members will prevail under the structure of the settlement, the Court concludes that the forfeit of the appeal rights was a reasonable compromise" (Pigford 1999, at 108).

The Court was "surprised and disappoint[ed]" by USDA's refusal to include the following sentence in the Consent Decree: "In the future the USDA shall exert best efforts to ensure compliance with all applicable statutes and regulations prohibiting discrimination" (Pigford 1999, at 111-112). Though the Court acknowledged that the farmers "legitimately fear that they will continue to face...discrimination in the future," the Court reasoned that the settlement was fair because "USDA is obligated to pay billions of dollars to African American farmers who have suffered discrimination...those billions of dollars will serve as a reminder to the Department of Agriculture that its actions were unacceptable and should serve to deter it from engaging in the same conduct in the future" (Pigford 1999, at 111). Finally, the Court determined that future discrimination would be curtailed because USDA would be under intensified scrutiny of the Courts, Congress, and the African American farmers as a group, all of which are equipped, according to the Court, to address future discriminatory practices discovered within USDA.

In approving the Consent Decree, the Court had described the settlement as an agreement that would "achieve much of what was sought without the need for lengthy litigation or uncertain results" (Pigford 1999, at 95).