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Thursday, December 9, 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. As of November 2010, 15,642 (69%) of the 22,721 eligible class members had final adjudications approved.

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) will permit any claimant in the Pigford decision who has 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 in mandatory spending was authorized for these 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. On May 28, 2010, the House passed its version of H.R. 4213 and included the $1.15 billion for the settlement. The Senate version of the bill did not recommend the $1.15 billion. H.R. 4213 passed without the Pigford II funding. The House version of H.R. 4899 (passed March 24, 2010), the supplemental appropriations bill, also included the funding for Pigford II. The Senate version of H.R. 4899 (passed May 27) did not include the funding. The House passed (July 1) an amended version of H.R. 4899 that included the funding. The Senate objected to the House version, and on July 27, the House passed the Senate’s May 27 version of H.R. 4899 that did not include the funding for Pigford II. On September 23, Senator Blanche Lincoln introduced S. 3838 (cosponsored by Senators Kay R. Hagan and Mary Landrieu) to fund the $1.15 billion Pigford II settlement. On November 19, by unanimous consent, the Senate passed the Claims Resolution Act of 2010 (H.R. 4783) to provide the $1.15 billion appropriation. The Senate bill was then passed by the House on November 30 and sent to the President for signing.

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. Because the settlement was clearly a priority of both the USDA and the White House, plaintiffs did not exercise their right to void the settlement. Like the original Pigford decision, the Pigford II settlement provides both a fast-tack settlement process and higher payments to potential claimants who go through a more rigorous review and documentation process. A moratorium on foreclosures of most claimants’ farms will remain 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 and the Pigford II settlement. It also discusses the number of claims reviewed, denied, and awarded, and some of the issues raised by various parties.

Date of Report: December 1, 2010
Number of Pages: 10
Order Number: RS20430
Price: $19.95

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