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Monday, June 28, 2010

The Pigford Case: USDA Settlement of a Discrimination Suit by Black Farmers

Tadlock Cowan
Analyst in Natural Resources and Rural Development

Jody Feder
Legislative Attorney

On April 14, 1999, Federal District Court Judge Paul L. Friedman approved a settlement agreement and consent decree resolving a class action discrimination suit (commonly known as the Pigford case) between the U.S. Department of Agriculture (USDA) and black farmers. The suit claimed that the agency had discriminated against black farmers on the basis of race and failed to investigate or properly respond to complaints from 1983 to 1997. The deadline for submitting a claim as a class member was September 12, 2000. Many voiced concern over the structure of the settlement agreement, the large number of applicants who filed late, and reported deficiencies in representation by class counsel. A provision in the 2008 farm bill (P.L. 110-246) permitted any claimant in the Pigford decision who had not previously obtained a determination on the merits of a Pigford claim to petition in civil court to obtain such a determination. A maximum of $100 million dollars was also authorized for new claims settlements.

On February 18, 2010, Attorney General Holder and Secretary of Agriculture Vilsack announced a $1.25 billion settlement of these so-called Pigford II claims. The process for adjudicating the individual claims has not been finalized. The Administration included $1.15 billion in its FY2010 supplemental budget request for settlement costs. An amendment (S.Amdt. 3407) to H.R. 4213, the Tax Extenders Act of 2009, to authorize the funding failed on March 10, 2010. On May 28, 2010, the House passed its version of H.R. 4213 and included the $1.15 billion for the settlement.

A provision in the settlement permitted the plaintiffs to void the settlement if Congress did not appropriate the $1.15 billion by March 31, 2010. Appropriators did not meet that deadline, although USDA Secretary Tom Vilsack sent letters in March to congressional leaders asking them to appropriate money for the settlement, saying that resolving cases of discrimination is a department priority. Because the settlement is clearly a priority of both the USDA and the White House, plaintiffs are unlikely to exercise their right to void the settlement in the near term. Unlike the original Pigford decision, the Pigford II settlement does not include a suggested settlement amount, although it does provide for higher payments to claimants who go through a more rigorous review and documentation process. A moratorium on foreclosures of most claimants' farms will be in place until after claimants have gone through the claims process. Payments to successful claimants may begin in the middle of 2011.

This report highlights some of the events that led up to the Pigford class action suit and outlines the structure of the original settlement agreement. It also discusses the number of claims reviewed, denied, and awarded, and some of the issues raised by various parties.

Date of Report: June 15, 2010
Number of Pages: 10
Order Number: RS20430
Price: $29.95

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