Sandars v. Vilsack ( 2011 )

UNlTED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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In re BLACK FARMERS DISCRIMINATION )
LITIGATION )
)
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This document relates to: ) Mise. No. 08-0511 (PLF)
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ALL CASES )
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OPINION
This matter is before the Court on the motion of named plaintiffs James Copeland,
Earl Moorer, and Marshallene McNeil ("the Moving Plaintiffs") for final certification of a
plaintiffs’ class and approval of a settlement agreement that would resolve the pending claims of
approximately 40,000 plaintiffs and compensate thousands of victims of race discrimination
whose complaints have gone unanswered for decades. The defendant, the United States
Department of Agriculture, supports the motion.
After careful consideration of the arguments made by the Moving Plaintiffs and
the defendant, the comments and objections offered by interested parties, the statements made by
interested persons at the Fairness Hearing on September l, 2011, and the long history of this case
and that of its predecessor, Pigford v. Glickman, Civil Action No. 9'}'-1978 (D.D.C.), the Court
will grant the motion, certify a class pursuant to Rule 23(b)(1)(l3) of the Federal Rules of Civil
Procedure, and approve the settlement.‘ Although, like any eornpromise, the settlement
' The papers considered by the Court in connection with this matter include the
following: Amended Class Action Complaint to Detennine Merits and Damages Pursuant to
Section 14012 of the Food, Conservation and Energy Act of 2008, as Amended, Docket No. 163
("Am. Compl."); Certain Plaintiffs’ Motion to Stay the Class Certiiication Proeeedings, Docket
agreement before the Court will not satisfy everyone, it offers class members their best option for
obtaining meaningful redress of longstanding injuries.
No. 66 ("Mot. to Stay"); Motion for Leave to Withdraw the July 6, 2009 Reply in Support of the
Motion to Stay Class Certiflcation Proceedings, Docket No. 108 ("Mot. to Withdraw"); Motion
for Preliminary Approval of Settlement, Certiflcation of a Rule 23(b)(l)(B) Settlement Class, and
for Other Purposes, Docket No. 161 ("Mot. for Prelim. Approval"); Class Counse1’s Motion for
an Award of Attomeys’ Fees and Expenses, Docket No. 180 ("Mot. For Fees"); Plaintiffs’
Motion for Final Approval of Settlement, Docket No. 187 ("Mot. for Final Approval");
Supplemental Memorandum in Support of Consent Motion to Approve Appointrnent of Track A
and Track B Neutral, Docket No. 192 (“Supp. Mem."); Notice of Revision of Proposed Claim
Form, Docket No. 226; Letter from Dewayne L. Goldmon on behalf of the National Black
Agricultural Alliance, Docket No. 211 ("NBAA Letter"); Letter from Eddie Lee Gray, Docket
No. 206 ("Gray Letter"); Letter from Ralph Pai ge on behalf of the Federation of Southem
Cooperatives Land Assistance Fund, Docket No. 204 (“Federation Letter”); Notice of
Appeai'ance on behalf of the Black Farmers and Agriculturalists Association, Docket No. 208
("Burrell Notice"); Notice of Appearance, Docket No. 212 ("Price Notice"); Notice of Objection
to Settlement, Docket No. 183 ("Maltin Obj."); Objection, Docket No. 215 ("Bates Obj."). The
Coult also reviewed the following materials: Motion by Joh.n W. Boyd for Leave to Appear and
Speak at Fairness Hearing of September 1, 2011, Docket No. 203; Letter from William V.
Paramore requesting permission to participate in September l, 2011 faimess hearing, Docket
No. 205; Letter to the Court from Joyce A. Smith requesting permission to participate in
September 1, 2011 faimess hearing, Docket No. 207; Letter to the Coult from Gloria Davis
Gilmore requesting pennission to participate in September l, 2011 faimess hearing, Docket
No. 209; Letter to the Court from Bemice C. Atchison requesting permission to participate in
September 1, 2011 faimess hearing, Docket No. 210; Objection to Proposed Settlement
Agreement by Henry Barris Muharnmad Robbalaa, Docket No. 214; Objection to Proposed
Settlement Agreement by Ada C. Bates, Ava L. Bates, Brad E. Bates, Kerry F. Bates, Theodore
B. Bates, Jr., Karla K. Bates-Adarns, 'I``errie L. Bates~Best, Docket No. 215; Objection to
Proposed Settlement Agreement by Lillie M. Wingard, Docket No. 216; Objection to Proposed
Settlement Agreement by Doris Gray, Docket No. 217; Objection to Proposed Settlement
Agreement by Robert E. Walker, Docket No. 218; Objection to Proposed Settlement Agreement
by Errol Von l-Iart, Docket No. 219; Objection to Proposed Settlement Agreement by Diallarm C.
Stevens, Docket No. 220; Objection to Proposed Settlement Agreement by Booker T. Woodard,
Docket No. 221; Objection to Proposed Settlement Agreement by Justin G. Fouts and Willa G.
Fouts, Docket No. 222; Defendant’s Response to Objection to Settlement Agreement Based on
Propriety of Class Certiflcation Under Rule 23(b)(1), Docket No. 190 ("Def.’s Certiflcation
Resp."); and Reply to Plaintiffs’ Response to Objection 11 to the Settlement Agreement, Docket
No. 213 (“Martin Reply"). The Coult also reviewed the transcript of the September 1, 2011
Faimess Hearing ("Sept. 1 'I``r.").
member on the basis of race in connection with a federal farm
credit transaction or benefit application.
Consent Decree 1] l(h). To be a “Pigford claim" for the purposes of the statute, such a
discrimination complaint must be "documented under section S(b) of the consent decree” _ the
portion of the decree that lists the required elements of a complete claim package 2008 Farm
Bill § l40l2(a)(3).
An individual qualities as a "Pigford claimant" within the meaning of the 2008
Farm Bill only if that person "previously submitted a late-filing request under section S(g) of the
consent decree.” 2008 Farm Bill § 14012(a)(4). Notably, the statute does not specify the time
during which,, to qualify as a “Pigford claimant," an individual must have submitted a S(g)
late~iiling request, although the phrasing of the statute makes clear that the request must have
been made prior to the effective date of the 2008 Farm Bill. _S_e§ id. (late-flling request must have
been "prev'iously submitted").
For those individuals who meet its eligibility requirements, the 2008 Farm Bill
provides for forms of adjudication and relief that are similar, but not identical, to those created by
the Pigt``ord l consent decree. Claimants under the 2008 Farm Bill may elect to pursue "expedited
resolution" of their claims by means of a process that mirrors Track A. § PUB. L. l 10-234,
§ l40l2(i). lf claimants choose to participate in that expedited process, they are entitled to
“liquidated damages of $50,000," loan forgiveness, and tax relief so long as they can prove their
claims by substantial evidence, "as defined in section l(l) of the consent decree." I£l. Under the
2008 Farm Bill, however, "the court" is to “decide the case based on a review of documents"
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submitted by the claimant and the USDA; the statute makes no mention of any third-party neutral
that would be analogous to the consent decree’s Adjudicator. I;l. § 1401 2(f)(l)(B).
In addition, the 2008 Farm Bill, like the consent decree, allows claimants to
pursue a more complete adjudication of their claims and provides for the payment of "actual
damages" to claimants who prevail in such an adjudication by proving their claims by a
preponderance of the evidence. PUB. L. 110-234, § ]40l2(g). But again, the court is authorized
to preside over those adjudications, and no mention is made of an Arbitrator. § g § l40l2(b),
(g). Furthennore, the 2008 Farm Bill does not streamline those adjudications in the way that the
consent decree did for Track B proceedings While the consent decree limited Track B hearings
to one day and permitted only limited discovery, the 2008 Farm Bill contains no such express
restrictions
In contrast to the consent decree, which did not set a cap on the amount of
damages recoverable by the Egi@ class, the Farm Bill originally provided that “[t]he total
amount of payments and debt relief pursuant to actions commenced under [this section] shall not
exceed $100,000,000." 2008 Farm Bill § 14012(0)(2). When 75% of that $100 million had been
"depleted,” the Secretary of the USDA was to notify the H0use and Senate Judiciary
Committees. Ld_. § 14012@)(2). The Secretary was also directed to report on the "stat'us of
available funds" under the statute every six months. E. § 14012(])(1).
The Farm Bill does not purport to create an open-ended right for individuals to
bring late Ligfo_rd claims. The right to file a complaint under the statute "tenninate[d]" two years
after the law’s enactment, on June ]8, 2010. PUB. L. 110-234, § l40l2(k). All complaints based
on Section 14012 of the Farm Bill were to be filed in this Court. § M. § l40l2[b).
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C. The Current Lawsuit and the Cla:``ms Resolutz``on Act of 201 0
Approximately 40,000 individuals have filed complaints in this Court pursuant to
Section 14012 of the 2008 Farm Bill. Mot. for Prelim. Approval at 48. They did not file
individual complaints. Instead, plaintiffs brought suit in groups, with large numbers of
individuals aggregating their claims and summarizing them all in a single complaint. §e_g, e_.g;,
Agee v, Schafer, Civil Action No. 08-0882, Complaint at l-24 (D.D.C. May 23, 2008) (listing
plaintiffs). Twenty-three such complaints alleging claims under the 2008 Farm Bill (hereinaf``ter
"Pigford II" actions or cases), most of them aggregating large numbers of plaintiffs in the marmer
described, were filed in this Court between May of 2008 and June of 2010 by plaintiffs
represented by a wide array of counsel. Recognizing the substantial case management difficulties
posed by the Pigford II actions, the Court stayed each individual lawsuit and consolidated all 23
actions into one miscellaneous case in order to permit the various parties, their counsel, and the
Court to determine the best way to proceed in this matter. §_e§, e_.g¢, In re Black Farmers
Discrimination Litig., Misc. No. 08-0511, Order (D.D.C. Aug. 8, 2008) (consolidating the first
eight cases brought pursuant to Section 14012).
Beginning in the spring of 2009, counsel for the plaintiffs named in several
Pigford II complaints initiated settlement negotiations with counsel for the USDA and the United
States Department of Justice. §_e§ Mot. for Prelim. Approval, Ex. 13 (Declaration of Andrew H.
Marks) (“Marks Decl.")1[ 2. In February 2010, after extensive negotiations, the defendant and
certain plaintiffs executed the first version of a settlement agreement that has since been signed
by counsel for every plaintiff named in a pending Pigford ll complaint except for those in five
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cases, Civil Action Nos. 09-1019, 10-0465, 10-0737, 10-0801, and 10-0839. § Mot. for
Prelim. Approval, Ex. 2 (Settlement Agreement) (“SA") 1[ II.HH. Secretary of Agriculture
Thomas Vilsack and Attomey General Eric Holder armounced the settlement on February 13,
2010. § Press Release, USDA, USDA and Department of Justice Armounce Historic
Settlement in Lawsuit by Black Farmers Clairning Discrimination by USDA (Feb. 18, 2010),
available at http:/fwvvw.usda.govfwpsfportal;'usda/usdahome‘?content;idonly=
true&contentid=ZOI0f02f00?2.xml. As the Attorney General explained, the settlement provided
that a total of $l .25 billion would be made available for the resolution of claims brought pursuant
to Section 14012 of the 2008 Farm Bill _ but at the time the settlement was executed, the only
ftmds appropriated by Congress for that purpose were the $100 million set aside by the Farrn Bill
itself. §§ E. The settlement’s continuing validity was contingent upon the appropriation by
Congress of an additional $l .15 billion, E.
Begirming in Ma,rch of 2010, members of Congress introduced legislation
intended to fund the settlement agreement reached by the USDA and the Moving Plaint_iffs. §
S. Amend. 340'? to H.R. 4213, l l lth Cong. (2010) (failed proposed amendment that would have
appropriated $l . 15 billion "to the Department of Agricultt.lre . . . to carry out the terms of a
Settlement Agreement . . . executed in In re Black Farmers Discrimjnation Litigation"), reprinted
in 156 Cong. Rec. Sl 189 (daily ed. Mar. 4, 2010). Several such attempts to fund the settlement
agreement were defeated in the Senate during the spring, summer, and fall of 2010. §
TADLOCI< CowAN AND JoDY FEDER, CoNG. REsBARcH SERv., RS 2043 0, THE PIGFORD CAsEs:
USDA SETTLEWNT 01= DISCRBAJNATIoN Son‘s BY BLACI< FARN[ERS 12 (201 1).
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On November 30, 2010, Congress passed the Claims Resolution Act of 2010,
which was signed into law by President Barack Obama on December 8, 2010. § PUB. L.
l 1 l-29l, 124 STAT. 3064. The Act "appropriated to the Secretary of Agriculture
$l ,l 50,000,000, to remain available until expended, to carry out the terms of the Settlement
Agreernent [in In re Black Farmers Discrimination Litigation ] if the Settlement Agreement is
approved by a court order that is or becomes final and nonappealable[.]" Claims Resolution Act
§ 20l(b). "Settlement Agreement” is specifically defined by the statute to refer to "the settlement
agreement dated February 18, 2010 (including any modifications agreed to by the parties and
approved by the court under that agreement) between certain plaintiffs . . . and the [USDA] . . . in
In re Black Farmers Discrimination Litigation, Misc. No. 08-mc-05 l l ," M. § 201(a)(l).
In addition to f``urrding the settlement agreement reached by the defendant and the
Moving Plaintift``s, the Claims Resolut.ion Act amended Section 140]2 of the 2008 Farm Bill.
Tltose amendments included the removal of two provisions of Section 14012 that would have
required the USDA to (l) supply each Pigford ll plaintiff with reports on USDA loans and other
benefits awarded in the plaintiff’s county of residence, and (2) make progress reports to Congress
regarding the depletion of the $100 million made available by Section 14012 for the payment of
awards in Pigf``ord II. § Claims Resolution Act § 201 (F)(Z), (5) (striking subsections l40l2(e)
and (j) of the 2008 Farm Bill). lt also makes clear that the claims under the settlement agreement
should be resolved by a Neutral Adj udicator rather than by the Court itself``. § Claims
rae-solution Act § 201(1>), (g)(i).
On March 30, 201 l , the Moving Plaintif``fs requested preliminary certification of a
plaintif``fs’ class and approval of the settlement agreement first executed on February 18, 2010.
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§ Mot. for Prelim. Approval. On April 25, 2011, the Court sent counsel for the Moving
Plaintif``f``s a letter in which it communicated several questions and concerns raised by the
proposed settlement agreement. g Docket No. 168. Those questions and concems were
addressed by the Moving Plaintiff``s in a written response dated May l I, 201 l. §e_e Docket No.
I'?l-l. The Court granted preliminary class certification and preliminary approval of the
settlement on May 13, 201 l, set a deadline for the filing of written objections to the settlement,
and scheduled a Fairness Hearing for September I, 201l.
Afi‘.er preliminary approval of the settlement agreement, the Moving Plaintiffs
initiated a comprehensive program intended to provide notice of the proposed settlement to
putative class members. §e_e Mot. for Final Approval, Ex. A (Declaration of Katherine Kinsella).
Kinsella Media, LLC, the firm engaged by the Moving Plaintiffs to effect notice, arranged for the
mailing of packets describing the settlement agreement in detail directly to all individuals who,
according to the records of`` the Pigf``ord I Facilitator, made any written request to participate in the
Pigford 1 claims resolution process between 0ctober of 1999 and June 18, 2008. §e§ § 1[ 7.
Notice was also broadly disseminated through radio, television, print, and online advertising A
GU-second advertisement announcing the proposed settlement aired on two national radio stations
with large Al"rican-American audiences and 52 local radio stations located in areas with high
concentrations of African-American farmers. § Q. 1[ 13. Written announcements appeared
once in American Profile, a newspaper supplement available in many rural counties; once in §
magazine; once in 46 daily newspapers that circulate in areas where high concentrations of
putative class members reside; twice in numerous newspapers targeting Al"rican-Americans; once
or twice in almost 200 community newspapers; and at least once in 20 trade publications geared
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toward farmers and ranchers. Sg E. 1]1[ l'?, 23-24. Online announcements appeared on a variety
of websites with large numbers of African-American visitors, § § ll 22, and directed Internet
users to a website, www.blackfarrnercase.com, providing detailed information about this case
and the proposed settlement. g Q. 1| 21 . Press releases announcing details of the settlement
were circulated and widely reported on by various media outlets. § i§. 1|1[ 27-29.
After that notice program was implemented, as of August 5, 201 1, interested
persons had made more than 62,000 requests for the claim packages that must be completed by
any individual wishing to participate in the claims resolution process that would be created by the
proposed settlement agreement. Mot. for Final Approval, Ex. A1] 32. Nearly ]50,{}00 calls had
been placed to a toll-free telephone number established to provide information about the
settlement agreement I;i. Almost 70,000 visitors have viewed the website announcing the
settlement. I;i. In spite of the overwhelming degree of interest indicated by these numbers,
however, the Court received only a handful of vvritten objections from parties who may be
members of the putative plaintiffs’ class. The Court also received several written comments or
objections from organizations or individuals that either do not appear to be or to represent
potential class members, or have made no attempt to establish that they are class members. S_ee;
In re Black Farmers Discrimination Litig., Misc. No. 08-0511, Memorandum Opinion and Order
Regarding Fairness Hearing (D.D.C. Aug. 26, 201]) (listing objections).
The Court held an all-day Fairness Hearing on September l, 2011. Because so
few objections by putative class members had been received, and because the Court is aware that
this litigation is a subject of intense interest among many At``rican-American farmers and farming
organizations, the Court allowed any individual who had experience with or an established
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interest in Pigford l or communities of African-American farmers to offer comments at the
hearing. Although few of those who spoke demonstrated that they are putative plaintiffs’ class
members and so have standing to object to the settlement agreement, the Court appreciates and
has considered their comments.
II. CLASS CERTIFICATION
The Moving Plaintiffs seek final certification of a settlement class consisting of:
All individuals: (l) who submitted Late-Filing Requests under
Section 5(g) of the Pigford v. Glickrnan Consent Decree on or after
October 13, ]999, and on or before June 18, 2008; but (2) who
have not obtained a determination on the merits of their
discrimination complaints, as defined by Section l(h] of the
Consent Decree.
SA 11 III.A. A "Late-Filing Request" is defined as "a written request to the Court, the P_ig@-
Facilitator, the Eg@ Monitor, the Adjudicator, or the Arbitrator seeking to
participate in the claims resolution processes in the Consent Decree." E. 1[ II.T. The
dates specified in the class definition _ October 13, ]999, and June 18, 2008 _ correspond,
respectively, to (l) the day after the deadline for the filing of a timely claim under the
consent decree, and (2) the effective date of the 2008 Farm Bill. The remainder of the class
definition tracks the language of Section 14012. _S_e_e 2008 Farm Bill § 1401 Z(a)-(b).
As the parties seeking class certification, the Moving Plaintiffs bear the burden of
demonstrating that the proposed class meets the requirements of Rule 23 of the Federal Rules of
Civil Procedure. Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 614 (1997). The parties must
show that all four prerequisites of Rule 23(a) have been met and that the proposed class falls
within at least one of the three categories delineated by Rule 23(b). SE FED. R. CIV. P. 23(b);
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Richards v. Delta Air Lines lnc., 453 F.3d 525, 529 (D.C. Cir. 2006). lf the Moving Plaintiffs
are able to satisfy those requirements, then the Court may decide, in its discretion, whether a
class should be celtified. _S_e_e_ Garcia v. Johalms, 444 F.3d 625, 631 (D.C. Cir. 2006) (citing
McCarthy v. Kleindienst, 741 F.Zd 1406, 1410 (D.C. Cir. 1984)).
The Moving Plaintiffs’ request for class certification is supported by the
defendant. § Def.’s Certification Resp. The only real opposition to the request comes from a
group of ten potential class members represented by attomey Precious Martin ("tlle Martin
Objectors"). 553 Martin Obj. at l-2. According to those plaintiffs, the assets available for the
payrnent of awards in this case do not truly qualify as a "limited fund," and therefore certification
of a class pursuant to Rule Z'_’»(b)(I)(B) of`` the Federal Rules of Civil Procedure is improper. d
at 14-17. Furthermore, the Martin Obj ectors assert that the class proposed by the Moving
Plaintiffs does not meet the commonality requirement of Rule 23(a)(2). §_e_e Martin Reply at 2-3.
Because the matters in dispute all relate to Rule 23(b)(l)(B) and Rule 23(a)(2), the Court first
addresses those provisions together before moving on to consider the requirements of Rule
23(@1)(1), (3), 311<1(4).
A. Requirements for a Limited Fund Class Acc‘ion
Under Rule 23(b)(l)(B) of`` the Federal Rules of Civil Procedure, a plaintiffs’ class
meeting the requirements of Rule 23(a) may be certified if
prosecuting separate actions by or against individual class
members would create a risk of . . . adjudications with respect to
individual class members that, as a practical matter, would be
dispositive of the interests of the other members not parties to the
individual adjudications or would substantially impair or impede
their ability to protect their interests
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FED. R. CIV. P. 23(b)(1)(l3). The Moving Plaintiffs request certification under Rule 23(b)(1)(B)
on the ground that this case involves the aggregation of "‘claims . . . made by numerous persons
against a hand insufficient to satisfy all claims."’ Ortiz v. Fibreboard Corp., 527 U.S. 815, 834
(1999) (citation omitted). In such a case every award made to one claimant reduces the amount
of fi.mds available to other claimants until, in the absence of equitable management of the fund,
some claimants are able to obtain full satisfaction of their claims, while others are left with no
recovery at ai]. Thus are "adj udications with respect to individual class members . . . dispositive
of the interests of the other members" in such a case. FED. R. CIV. P. 23 (b)(l)(B); g generally
Ortiz v. Fibreboard Co;'p., 527 U.S. at 334-37.
To qualify for class certification on such a limited fund rationale, the Moving
Plaintiffs must show that the fund and the proposed class in question meet three criteria §
Ortiz v. Fibreboard Co;)., 527 U.S. at 83 8. First, "the totals of the aggregated liquidated claims
and the fund available for satisfying them, set definitely at their maximums, demonstrate the
inadequacy of the fund to pay all the claims." _l_d. Next, “the whole of the inadequate fund" must
be dedicated "to the overwhelming claims." I_d. at 83 9. Finaily, all claimants to the fund who are
"identified by a common theory of recovery [must be] treated equitably among themselves." E.
All three requirements are met in this case.
l. inadequacy of the Fund
The 2008 Farm Bill initially limited the amount of money available for the
payment of damages to Pigford 11 plaintiffs to $100 million. PUB. L. 1 10-234, § 14012(0)(2).
The Claims Resolution Act of 2010 increased that pool of assets by $i .l 5 billion, to a total of
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I. BACKGROUND
A. Pfgford v. Gfr``ckinan ("Pfgford 1”)
l. Claims of Pigford l PlaintiHs and Their Resolution by Consent Decree
ln 1997, a group of African-American farmers brought suit in this Court against
Dan Glickrnan, at that time the Secretary of the United States Department of Agriculture
("USDA"). Their final amended complaint alleged that, from january 1983 through January
]997, the USDA discriminated on the basis of race in allocating benefits under various federal
agricultural prograrns, denying African-Arnerican farmers loans and other benefits that were
freely granted to similarly situated white farmers. § Pigford v. Glickman, Civil Action No.
97-1978, Seventh Amended Complaint at 4 (D.D.C. Oct. 26, 1998] ("Pigford l Compl."). The
Ligf@ plaintiffs further alleged that, when they attempted to protest that discrimination by filing
complaints with the USDA, the Department failed to investigate those complaints, flouting its
responsibilities under federal civil rights laws, including the Civil Rights Act of 1964 and the
Equal Credit Opportunity Act ("ECOA"). Pigford l Compl. at 4. According to the complaint,
that history of discrimination in the administration of USDA farm programs, combined with the
agency’s long-standing refusal to investigate and remedy specific instances of discrimination,
deprived countless farmers of desperately needed credit and payments under various aid
programs, with the result that many farmers suHered severe financial losses and even, in many
cases, lost title to their farms. ,S_c§, §¢g;, § at ?-34 (sunnrnarizing the damages claimed by the
named plaintiffs); m_e generally Pigford v. Glickman, 185 F.R.D. 82, 86-89 (D.D.C. 1999).
$l .25 billion, on the condition that the proposed settlement agreement be approved. § PUB. L.
11 l-29l , § 20l(b). Taken out of context, that fund might seem vast. When considered in light
of the Pigford l proceedings, however, it appears woefully insufficient to fund the judgments or
to satisfy the meritorious claims likely to result from this litigation. Of the roughly 22,?``00
individuals who pursued claims under the Consent Decree, 99% elected to proceed along Track
A and receive liquidated damages if they prevailed on their claims. 2010 Monitor Report at l0.
Roughly 69% of those Track A claimants, or 15,645, succeeded in proving their entitlement to
relief. E. Even though each of those successful Track A claimants was entitled only to $5 0,000
plus debt and tax relief (amounting to $12,500), the aggregate amount of damages paid to those
claimants amounted to more than $l billion. E. at 19.
More than 40,000 plaintiffs have already filed complaints in this case. Tens of
thousands more may be entitled to participate in the litigation. § LB at l'?. The $l .25
billion appropriated by Congress in the 2008 Farm Bill and the Claims Resolution Act would
cover Track A cash damages and tax relief _ a payment amounting to $62,500, g Pub. L. No.
110-234, § l4012(e), as amended by Pub. L. 111-291, § 201(1] ("Am. 2008 Farm Bill”) - for
only 20,000 successful claimants. That simple calculation does not take into account the facts
that some claimants will also win debt relief, that others will pursue the more generous monetary
relief afforded upon success in Track B, and that the costs of administering the claims resolution
process will inevitably run into the tens of millions of dollars, further reducing the funds
available for awards. Even if Pigford II class members prevail on their claims at far lower rates
than their Pigford I predecessors _ and there is no reason to believe that they would _ it is
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apparent that the available $l .25 billion fund is inadequate to pay for the awards of all successful
claimants.
No party to this litigation _ and none of those who filed objections or spoke at
the Fairness Hearing - disputes that the hinds made available by Congress in the 2008 Farm Bill
and the Claims Resolution Act are insufficient to compensate the Pigford Il plaintiffs Instead,
the l\/lartin Obj ectors contend that the fund established by the 2003 Farm Bill and the Claims
Resolution Act is not "set definitely at [its] maximum." § Martin 0bj. at 14-17; Martin Reply
at 6-7. All of the arguments marshaled by the Martin Obj ectors in support of this assertion,
however, are unpersuasive
The Martin Obj ectors claim first that no limited fund can exist in this case
because the defendant has engineered the limitation on the fund, in contravention of the Supreme
C0urt’s ruling in 1 that a fiind does not qualify as "limited" for the purposes of a Rule
23[b)(l)(B) analysis if it is capped only "by the agreement of the parties." Ortiz v. Fibreboard
LL, 527 U.S. at 848. "[his argument lacks merit for two reasons. First, the defendant in this
case is the USDA. As the text of the 2008 Farm Bill and the Claitns Resolution Act makes clear,
the USDA did not impose the limitation on the fund at issue here _ Congress did. Second, even
if one were to ignore the fact that the USDA is a separate juridical entity from Congress, and so
to imagine that the defendant here is simply equivalent to the United States govemment, the
Martin Obj ectors ignore the fact that the government is that unique defendant which has the legal
authority to define the extent of its own liability, unlike the private defendants in l. § E.
at 850 (limited hand would comprise defendant corporation’s entire equity and insurance assets).
There is nothing improper or illegal about Congress’ limitation of the plaintiffs’ possible
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recovery in this case to $l .25 billion, if the proposed settlement is approved, or to $100 million,
if it is not.
Next, the Martin Obj ectors contend that there is no limited fund in this case
because the Claims Resolution Act is unconstitutional, or because it "does not apply
retroactively." Martin Reply at 6-8. While creative, these arguments are bizarre and frivolous.
According to the Martin Objectors, the Claims Resolution Act violates the separation of powers
between branches of govemment because it represents an attempt by Congress "to coerce the
class and the Court into accepting th[e] proposed settlement." E. at 6. Congress has not
overstepped its bounds with respect to this case. Although Congress may lack authority to direct
a court to reach a particular result in a given case without amending substantive law, §
Robertson v. Seattle Audubon Soc_’y, 503 U.S. 429, 436, 441 (l 992), Congress certainly has not
done so here. Indeed, the Claims Resolution Act makes clear that Congress has funded the
proposed settlement agreement only if this Court approves the settlement in a final order. But
nothing in the statute presumes to instruct the Court how or whether to decide if the settlement
should be approved.
Nor is the Claims Resolution Act impermissibly retroactive. The Martin
Objectors contend that the Act “is a conditional attempt to limit the funds of this case
retroactively, contingent upon the class and this Court’s acceptance of the settlement." Martin
Reply at 213. That contention is silly. There is nothing retroactive about the limitation on funds
in this case; the 2008 Farm Bill limited the available funds first, and it did so to a much lower
nurnber, $100 million, than the Claims Resolution Act. Furtherrnore, contrary to the conclusory
assertions of the Martin Objectors, the Claims Resolution Act did not "‘attach[] new legal
23
consequences to events completed before its enactment."’ I£l. at 8 (quoting Landggaf v. USI Film
l, 511 U.S. 244, 270 (1994)). The Act is a valid statute, one that makes available for the
payment of claims in this case limited hinds that may be combined with the even more limited
funds appropriated by the 2008 Farm Bill. Since there is no reason to believe that any further
hinds are or will be available for the payment of Pigford II claims, and since the available funds
are inadequate to pay all claims fully, the first Ortiz requirement is satisfied.
2. Dedication of the Fund to Class Claims
To qualify as a limited fund justifying the certification of a plaintiffs’ class, "the
whole of the inadequate fund" available for the payment of judg1nents must be dedicated "to the
overwhelming claims." Ortiz v. Fibreboard Co;g., 5 2')' U.S. at 839. That criterion is easily met
in this case. The 2008 Farm Bill and the Claims Resolution Act appropriate the total of $l .25
billion specifically for use in the resolution and payment of Pigford II claims. § Claims
Resolution Act § 20l(b); Arn. 2008 Farm Bill § 20l(f].
3. Equitable Distribution of the Fund
In order for a class to be certified on a limited fund theory, "the class [must]
comprise everyone who might state a claim on a single or repeated set of facts, invoking a
common theory of recovery, to be satisfied from the limited fund as the source of payrnent.”
Ortiz v. Fibreboard Col_'p., 527 U.S. at 839. Every plaintiff in this case proceeds on the theory of
recovery spelled out in the 2008 Farm Bill, and every prevailing plaintiff will be paid out of the
limited fund created by Congress. Furthermore, the proposed class would include every person
who could potentially be eligible for relief under Section 14012, encompassing every individual
24
who unsuccessfully petitioned for leave to file a late claim under Paragraph S(g) of the
consent decree. With all potential plaintiffs gathered into one class, the Court will be able to
ensure that, even given an available fund insufficient to pay the full amount of all judgments,
similarly situated plaintiffs will ultimately receive the same awards, thus satisfying the
requirement that all claimants to the fund who are “identified by a common theory of recovery
[will be] treated equitably among themselves." Ortiz v. Fibreboard Co;g., 527 U.S. at 83 9. As
explained below, see _i_n_f_ra at 48-49, the proposed settlement agreement provides for an equitable
division of the common fund among members of the plaintiffs’ class.
4. Commonality
As the foregoing analysis indicates, the proposed plaintiffs’ class meets the
requirements identified in Ortiz as prerequisites for the formation of a Rule 23(b)( 1 )(B) class.
For similar reasons, the proposed class also meets the requirement of Rule 23 (a) of the Federal
Rules of Civil Procedure that there be "questions of law or fact common to the class." FED. R.
CIV. P. 23 (a)(Z). "‘What matters to class certification,"’ however, "‘is not the raising of common
"questions” _ even in droves ~ but, rather the capacity of a classwide proceeding to generate
common answers apt to drive the resolution of`` the litigation."’ Wal~l\/[art Stores lnc. v. Dukes,
131 S. Ct. 2541, 2551 (2011) (quoting Richard A. Nagareda, Class Certt``ficat‘t'on in the A ge of
Aggregat‘e Prooj; 84 N.Y.U. L. REV. 9'?, 132 (2009)) (emphasis in original). ln other words, the
determination of a disputed question or questions that are common to the various class members
will "resolve an issue that is central to the validity of each one of`` the claims in one stroke." M.
25
"Implicit in a finding that an action satisfies the requirements of Rule 23(b)(l) is
the decision that there are questions of law or fact shared by the persons affected." 1 WILLIAM B.
RUBENSTEIN, ALBA CoNTE & HERBERT B. NEWBERG, NEWBERG ON CLAss Ac"rloi\ls § 3:10 (4th
ed. 2002). The logic of that principle is evident upon a brief examination of the factual questions
that must be answered before the common fund may be divided equitably among similarly
situated plaintiff``s: How many plaintiffs will prevail? What amount of damages will each
prevailing class member be entitled to recover? And how, in the likely event that total
recoverable damages exceed available funds, will each award be reduoed? These questions are
"central to the validity" of every single claim that could be brought in this matter because they
will determine the extent to which any prevailing claimant is entitled to relief``.
The Martin Obj ectors dismiss these common questions as "related solely to the
issue of how potential class members, and consequently, class counsel, might get paid." Martin
Reply at 3. But they fail to explain why that distinction matters. The sole function of the 2008
Farm Bill is to allow those farmers who were the subject of discrimination by the USDA and
who meet other eligibility requirements to "get paid" _ z``.e. , be compensated for their injuries.
Determining the amount of compensation that a given plaintiff may receive is central to the
claims made in this lawsuit, and that determination cannot be made without answering the
"common questions" identified above. The Martin Obj ectors have identified no way in which
those questions could be answered in the absence of a Rule 23(b)(l)(l3) class. Certification of a
class to pennit the proper determination of common questions is thus not only appropriate, but
necessary in this case.
26
B. Orher Requz``rements of Rufe 23(:1)
In addition to the commonality requirement, Rule 23(a) conditions class
certification upon a showing that the proposed class "is so numerous that joinder of all members
is impracticable," FED. R. CIV. P. 23(a](l); that "the claims . . . of the representative parties are
typical of the claims . . . of the class," id. 23(a)(3); and that the named plaintiffs "Will fairly and
adequately protect the interests of the class." l_d. 23(a)(4). No party or objector has claimed that
the proposed class fails to meet any of those three requirements, and the Court finds that each is
satisfied here.
l. Numerosity
"Courts in this District have generally found that the numerosity requirement is
satisfied and that joinder is impracticable where a proposed class has at least forty members."
Vista Healthplan, lnc. v. Warner Holdings Co, llI, Ltd., 246 F.R.D. 349, 357 (D.D.C. 2007)
(listing cases); §§ § Cohen v. Chilcott, 522 F. Supp. 2d 105, 114 (D.D.C. 2{)0'?')(sa1ne).
Roughly 40,000 plaintiffs have filed claims at this point in the Pigford II litigation, and thousands
more may follow. Those thousands of plaintiffs and potential class members are scattered
throughout the country. D=:_ 2010 Monitor Report, App. 5 (showing the successful
claimants came from more than forty states). Joining such a vast number of dispersed parties is
not praeticable. § Pigf``ord v. Glickman, 182 F.R,D. 341, 347-48 (D.D.C. 1998). The
numerosity requirement is satisfied
27
2. Typicality
The remaining requirements of Rule 23(a) identify "the desired qualifications of
the representative parties" to a class action, FED. R. CIV. P. 23, advisory committee’s note (1966
amendment), that the "claims or defenses" of the representative parties be "typical" of the claims
of the class, and that the representative parties "fairly and adequately protect the interests of the
class." FED. R. CIV. P. 23(a)(3)-(4). The typicality requirement "is ‘intended to assess whether
the action can be efficiently maintained as a class action and whether the named plaintiffs have
incentives that align with those of the absent class members so as to assure that the absentees’
interests will be fairly represented.’” igford v. Glickman, 182 F.R.D. at 349 (quoting Baby Neal
for and by Kanter v. Casey, 43 F.3d 48, 57 (3d Cir. 1994)). In other words, "[t]he typicality
prerequisite assures that the class representative[s] share[] the issues common to other class
members." l RUBENSTEIN, CoNTE & NEWBERG, NEWBERG oN CLAss Ac'noNs § 3:13.
The three named plaintiffs proposed by the Moving Plaintiffs all share the
classwide need for and interest in an equitable distribution of the limited fund available for
damage awards. Taken together, the allegations advanced by these plaintiffs are appropriately
representative of the fact pattems underlying the claims of other putative class members.
Proposed named plaintiffs J ames Copeland and Marshallene McNeil both allege that they were
denied USDA program benefits between January 1, 1981 , and December 31, 1996, as a result of
racial discrimination. § Am. Compl. 11 22 (alleging that "[b]etween 1990 and 1992, Mr.
Copeland attempted to apply to USDA for an operating loan, but was told repeatedly that the
USDA office had lost his applications"); § 11 26 (claiming that “[i]n 1982, Ms. McNeil went to
the [Farmers Home Administration] office in Camden, Alabama to request an operating loan, but
28
. . . her loan application was denied" based on racial discrimination). The third named plaintiff
proposed by the Moving Plaintiffs, Earl Moorer, proceeds not on his own behalf, but, like
numerous other plaintiffs, as the heir of a family member _ in his case, his father, John Moorer
_ who applied for and was denied USDA loan benefits repeatedly between 1981 and 1984 even
as local white farmers received the benefits he was denied. § id '[| 24.
Mr. Copeland, Ms. McNeil, and John Moorer each complained to the USDA
about racial discrimination at least once between Januaxy l, 1981 , and July l, 1997, but their
complaints went unanswered. §§ Am. Compl. 1111 22, 24, 26. Mr. Copeland and Earl Moorer,
on behalf of the Estate of John Moorer, were both "late filers" in ; between October 13,
1999, and September 15, 2000, they petitioned under Paragraph S(g) of the consent decree for the
right to submit late claims, but their petitions were denied, and their claims went unadjudicated
§ M. 1]1| 23, 35. Ms. McNeil, on the other hand, is a "late-late filer." She submitted a S(g)
petition prior to the effective date of the 2008 F arm Bill, but after the deadline established by this
Court for the timely submission of such petitions. g Q. 11 27.
Each of these proposed representative plaintiffs alleges the same core facts as all
other potential class members: injury resulting from racial discrimination by the USDA, followed
by complaints about that discrimination that went unaddressed, and ultimately an unsuccessful
and untimely attempt to join the claim resolution process established in . S``1nce each of
these plaintiffs has the same interest in ensuring equitable division of the available limited fund
as do other putative class members, the Court finds the typicality requirement satisfied.
29
3. Adequacy of Representation
"'Ihe final element of Rule 23 (a) necessitates an inquiry into the adequacy of
representation, including the quality of class counsel, any disparity of interest between class
representatives and members of the class, communication between class counsel and the class
and the overall context of the litigation.” Pigford v. Glickman, 182 F.R.D. at 350 (citing m
John Does v. District of Columbia, 117 F.3d 571, 575 (D.C. Cir. ]997)). The Court has already
found the interests of the representative plaintiffs to be in alignment with those of other putative
class members. lt also finds that the representation afforded by class counsel is more than
adequate.
Counsel for the proposed plaintiff``s’ class are 42 attorneys associated with 20
different law finns. § Mot. for Final Approval, Ex. 2 ([Proposed] Fina] Approval Order and
Judgment) 1] 10. These attorneys serve a wide variety of geographical areas in which likely
claimants reside, including Alabama, Arkansas, Florida, Mississippi, North Carolina,
Pennsylvania, South Carolina, and Virginia. S;oe i_d. Among them are several attorneys --
including Henry Sanders, Fayarose Sanders, David Frantz, and Phillip L. Fraas _ who were
deeply involved in the litigation of class claims in Pigford I and are faxniliar with the sorts of
factual, legal, and administrative issues that may arise in this case. Several members of class
counsel have extensive experience in complex litigation in general and in class action litigation
in particu]ar. L, e. ., Mot. for Prelim. Approval, Ex. 13 at 3 (professional accomplishments of
co-lead counsel Andrew H. Marks). In short, the members of this group of counsel collectively
offer class members highly relevant legal skill and experience
30
The plaintiffs thus alleged that the USDA had committed and then exacerbated a
vast array of civil rights violations over a period spanning nearly twenty years. Their claims,
though broad in scope, were no exaggeration. The USDA itself, in a report commissioned by
Secretary Glickman at the behest of then-President Clinton, noted that the "USDA’s painful
history of individual and class action lawsuits, court orders, media exposés, numerous
Congressional hearings, and reports depicts the Department as a stubborn bureaucracy that
refuses to provide equal opportunity for all as the law requires.” USDA CIVIL RIGHTS ACTION
TEAM, ClvlL RIGHTS AT THE UNrrEr) STATES DEPARTMENT oF AGMCULTLJRE 6 (1997).
Congress acknowledged the scope of the civil rights problems plaguing the USDA
by giving new life to thousands of claims of past discrimination by the agency. Claims alleging
violations of ECOA typically have a short life; they must be brought within two years of the
occurrence of the statutory violations in question. §e§ 15 U.S.C. § l69le(f``). ln 1998 Congress
eliminated that restriction on ECOA claims against the USDA, creating a new statute of
limitations for complaints alleging ECOA violations in the administration of various farm-related
benefit programs § PUB. L. NO. 105-277, § 74], 112 STAT. 2681, 2681-3-1 (1998). Such
complaints could be brought at any time within two years of Congress’ enactment of the new
statute of limitations, so long as (1) the allegations underlying those complaints had previously
been presented to the USDA before July 1, 199?, and (2) the ECOA violations alleged had
occurred between January l, 1981, and December 31, l996. Q. § ')'4l(e). Congress’ action thus
had the effect of opening the courthouse doors to large numbers of old claims, including many
subsequently brought in Pigford I.
The overall context of this litigation confirms the Court’s belief that class counsel
will provide adequate representation. Although this'case, involving many separate legal
complaints and scores of attomeys, could have devolved into an endless series of squabbles
between rival attomeys, class counsel, representing the vast majority of plaintiffs who have filed
complaints under the 2008 F arm Bill, have managed to band together and to negotiate with the
defendant a single comprehensive settlement. Perceiving that late iilers and late-late filers might
have adverse interests, § 1 at 6 1 -62, several class counsel sought to ensure that the two
groups were represented by separate and independent attomeys. §§ Mot. to Withdraw at 3-4.
Despite the large number of attorneys designated as class counsel, the responses of counsel to the
0rders of this Court have been prompt, efficient, and well-coordinated. Based on the procedural
history of this matter, the Court concludes that proposed class counsel will provide more than
adequate representation to class members.
C. The Court ’s C'onclust’on on C'errificatc``on
The Court is satisfied that the requirements of Rule 23 of the Federal Rules of
Civil Procedure are fulfilled by the proposed plaintiffs’ class. Furthennore, the Court cannot
imagine how the claims of the thousands of putative class members could be resolved efficiently
and fairly in the absence of class treatment. Accordingly, the Court will certify a plaintilfs’ class
pursuant to Rule 23 (b)(l)(B) of the Federal Rules.
31
III. PROVISIONS OF PROPOSED SETTLEl\/lENT AGREEMENT
A. Overview offhe Claim Resolu!z``on Process
The proposed settlement agreement maintains the two-track claim resolution
process created in and repl icated in Section 14012 of the 2008 Farm Bill, but modifies
some aspects of that process in light of the strictly limited funds available for the resolution and
payment of c]aims. As in P_igtgd__l, the agreement provides for the creation of two altemative
forms of claim reso]ution, designated Track A and Track B. § SA 1[ V. Under Track A,
claimants must prove their claims by substantial evidence, the same evidentiary standard that was
mandated for Track A claims in the consent decree, and the standard that is prescribed
by Section 14012 of the 2008 Farm Bill. I;i. Those who prevail in Track A on a claim of
discrimination in a credit program are entitled to a maximum of $50,000 in cash, forgiveness of
certain categories of debt to the USDA, and tax relief equal to one-quarter of the combined value
of awarded cash and debt relief. I;i. 1[1| II.LL-NN.:’
Those claimants who proceed along Track B must, as in , prove their
claims by a preponderance of the evidence. SA 1] V. If they prevail, those Track B claimants are
entitled to a maximum of their proven actual damages or $250,000, whichever is less. M. Claim
determinations in both Track A and Track B will be made by a neutral third party, the "Track A
Neutral" or the “Track B Neutral," and the determinations of both neutrals are final and not
subject to appeal. I;i. 1[V.A.8.
3 Track A claimants who prevail on a claim of discrimination in a non-credit
program are eligible for debt relief, tax relief, and maximum cash payments of $3,000. SA 11 Va.
32No award will be paid to any claimant until after determinations have been
rendered on all claims »- a process expected to last for approximately a year. Once all claims
have been resolved, the cash value of awards payable to successful claimants will be compared to
the value of available funds, consisting of the appropriated $1.25 billion, less administrative and
implementation costs and attomeys’ fees. § SA 1[1] V.E.4-5. If payable awards exceed
available funds, awards will be reduced ratably according to a predetermined procedure. First, if
the total of Track B awards exceeds $100 million, those awards will be proportionately reduced
until their total falls below the $100 million cap. E. 1| V.E.S.a. If the total value of Track A and
Track B awards still exceeds available funds, then the awards of late-late tilers will be reduced,
again on a pro rata basis, by up to 30% of their value. lc_l. 1[ V.E.S.b. lf the total value of awards
still, even after those reductions, exceeds available funds, then all awards will be proportionately
reduced until their aggregate value is equal to or less than the amount of available funds. ]Ll.
‘|| V.E.S.c. Awards will then be paid out to successful claimants. M. 1|‘[| V.E.S.
B. Mefhod of Determinfng Clcrz``rns
The agreement’s provisions become operational only if this Court’s final order
approving the settlement is either upheld on appeal or ceases to be subject to appeal. SA ‘]] II.L.
Once either of those two conditions is met, members of the plaintiffs’ class will have 180 days _
roughly six months _ to submit their claims for resolut;ion. E. 1| II.D. To do so, each claimant
must submit to Epiq Systems, Inc. (the “Claims Administrator") a “Claim Package" that
includes, among other documentation, the following: (l) a swom declaration by the claimant in
which he or she states, among other things, whether he or she submitted a late-filing request
33
under Paragraph S(g) of the Pig;ford I consent decree during the relevant time period, and whether
he or she has received a determination on the merits of a claim in Pigford I, § Q., Ex. C at 3;
and (2) a sworn declaration by the claimant’s counsel that "the claim is supported by existing law
and the factual contentions have evidentiary support.” _l_d. 1| V.A. The claimant must also
indicate at that time whether the claim is to be evaluated under Track A or Track B of the claim
resolution structure. g E., Ex. C at 4. For those who choose Track A, that choice is fmal. §
id. Class counsel have committed to providing direct assistance to would-be claimants as they
prepare their claim packages and decide whether to proceed along Track A or Track B. § Mot.
for Prelim. Approval at 21 ."
Once the claimant has submitted a timely and complete Claim Package to the
Claims Administrator, the Claims Administrator will determine whether the claimant has
established by a preponderance of the evidence that he or she is a member of the plaintiffs’ class.
SA 11 V.B.4. The Claims Adrm``nistrator’s determination regarding class membership is final and
not subject to review, E. ‘|i V.B.S. lf the Claims Administrator determines that a claimant has
established class membership, and that claimant has elected to proceed along Track A, the Claim
Package will be forwarded to the Track A Neutral for review and determination of the claim. E.
‘|i V.B.6. The Claims Administrator will retain Track B Claim Packages until the close of the
180-day claim submission period. At that point, the Claims Adrninistrator will notify all
claimants who have elected to proceed along Track B of the number of other claimants who have
4 Exhibit C to the Settlement Agreement was the Claim Form claimants were to
submit. Following the Fairness Hearing, the Claim Form was revised and the revised form was
submitted to the Court on October 7, 2011. g Notice of Revision of Proposed Claim Forrn,
Docket No. 226. At the request of lead class counsel, with the consent of the defendant, the
Court will approve the revised Claim Form in the accompanying Order and Judgment.
34
chosen to do the same. I;i. il V.B.'?. At that point, claimants who have selected Track B may opt
instead for Track A if they choose to do so and notify the Claims Administrator. E. If they do
not so notify the Claims Administrator within a specified period of time, their selection of Track
B becomes final and irrevocable E.
To prevail on a Track A claim, a plaintiffs’ class member must show by
substantial evidence that the class member (l) "is an African-American who farmed, or
attempted to farm, between January ], 1981, and December 31, 1996"; (2) “owried or leased, or
attempted to own or lease, farm lands"; (3) "applied, or constructively applied, for a specific farm
credit transaction(s) or non-credit benefit(s) at a USDA office between January ], 1981, and
December 31, 1996"; (4) was denied the requested loan or benefits, or was provided a loan or
benefits late, on terms less favorable than those requested, or subject to "restrictive condition[s]";
(5) sustained economic damages as a result of USDA’S handling of the application for a loan or
benefits; and (6) "complained of discrimination to an official of the United States Govemment on
or before July l, 1997, regarding USDA’s treatment of him or her in response to the application."
SA 11 V.C. 1 . Notably, class members proceeding on Track A under the settlement will not be
required, as they would have been under the Pigford 1 consent decrec, to identify a specific
"similarly situated white farmer" who received better treatment from the USDA during the
relevant time period. The USDA will not participate in the claim determination process, except
to provide information about debt owed by the claimant that may be eligible for forgiveness if the
claimant prevails. M. 1[ V.C.3. All documentation before the Track A Neutral, then, will come
from materials "submitted by the Class Member." M.
35
A class member proceeding under Track B must establish, “by a preponderance of
the evidence and through independent documentary evidence admissible under the Federal Rules
of Evidence,” the same elements that a Track A claimant must, with the additional requirement
that a Track B claimant must also show that the "treatment of the [claimant’s] loan application(s)
by [the] USDA was less favorable than that accorded a specifically identifled, similarly situated
white farmer." SA 1| V.D. l, As with Track A, the USDA will not participate in the Track B
claim determination process, nor are Track B claimants entitled to any discovery from the
USDA. E. 1[1| V.A.9, ll. Unlike the Track B process created by the Pigford I consent decree,
the Track B resolution of claims under the settlement agreement involves only documentary
evidence and does not require or allow a "mini-trial." gc Mot. for Prelim. Approval at }7.
C. Ombudsman
At the request of the Court, the Moving Plaintiffs and the defendant have provided
in the settlement agreement for the appointment by the Court of a neutral third party, known as
the "Ombudsman," to serve as the arm of the Court during the implementation of the claim
resolution process. _S_ej SA 11 VI. lt will be the responsibility of the Ombudsman to (l) serve as a
neutral party to whom complaints or concems about the claim resolution process may be
presented; (2) work with the parties’ counsel and, if necessary, the Court to address any serious
concems or problems that arise during the implementation of the settlement agreement; and
(3) report in writing to the Court, the defendant, and class counsel regarding "the good faith
implementation" of the settlement agreement. § M. Unlike the Monitor appointed under the
consent decree in Pigford I, the Ombudsman will not have any power to reexamine the merits of
36
any claim, nor will he or she have the authority to require the defendant to take any particular
actions. Q. 1| VI.C.
D. implementation Costs, Attomeys ’ Fees, and Legal Representation for Cfcrss Members
Of the $l .25 billion made available by the 2008 Farm Bill and the Claims
Resolution Act, a maximum of $38.5 million may be allocated for "implementation costs" _
"Court-approved administrative costs associated with implementing” the claims resolution
process created by the settlement agreement SA 1|1] II.I, R. The costs of the Ombudsman, which
should be far less than those associated with other aspects of the settlement agreement, are not
included in the $38.5 million reserved for implementation costs, and must be drawn from the
$100 million appropriated by the 2008 Farm Bill. E. 11 II.R, U.
The amount of attomeys’ fees payable to class counsel is to be determined as a
percentage of $l .25 billion minus $22.5 million ($I,ZZ’;',SO0,000) _ a calculation presumably
intended to remove expected implementation costs from the iimd, the size of which determines
class counsel’s fees. After the completion of the claims resolution process, the Court will
approve a lump-sum fee for class counsel that will not exceed 7.4% of $i ,227,500,000
($90,835,000) or be less than 4.1% of $ l ,22';',500,000 ($50,327,500). SA 11 II.O. That fee will
be divided among class counsel pursuant to the terms of the settlement agreement and a separate
contract executed between and among class counsel. § id 1[ X.E; Mot. for Fees, Ex. A,
As required by the settlement agreement, class counsel will represent any Track A
claimant during the claims resolution process without seeking or receiving any additional fee
from the claimant. SA '|[ VIII.A.Z. Or if they choose, Track A claimants may retain non-class
37
counsel to represent them; such counsel may seek a fee of up to 2% of any award ultimately
made to a Track A claimant that he or she represents. ILI. \l X.A. Track B claimants, regardless
of whether they are represented by class counsel or another attomey, may be required to pay up to
8% of any award they receive in exchange for legal representation. I_d. No class counsel
designated by the accompanying Order and Judgment may seek to enforce the terms of any
existing contingency fee agreements with class members.
E. Provz``sions Requz``red by the Claims Resolution Act
The Court notes that the funds appropriated by the Claims Resolution Act become
available to finance the settlement only upon a finding by the Court that "the Settlement
Agreement [has been] modified to incorporate the additional terms contained in subsection (g)"
of the statute. Claims Resolution Act § 201(b). The Court finds that this requirement of the
statute has been satisfied In particular, the settlement agreement has been modified to provide
that (l) the Track A and B neutrals will be approved by the Court, the USDA, and the United
States Attomey General, g SA 1111 II..IJ, RR; (2) all Track A and B neutrals must take an oath
administered by this Court that "he or she will determine each claim faithti.llly, fairly, and to the
best of his or her ability," see id_.; (3) counsel representing any claimant in the claims resolution
process must produce a sworn statement to the effect that “to the best of the attorney’s
knowledge, information, and belief formed after an inquiry reasonable under the circumstances,
the claim is supported by existing law and the factual contentions have evidentiary support," M.
1[ V.A. l.c.; (4) any Track A or Track B neutral may request more documentation or evidence
from a claimant “if, in the [neutral’s] judgment, additional documentation and evidence would be
38
necessary or helpful in deciding the merits of a particular claim, or if the [neutral] suspects fraud
regarding a particular claim," E. 111 V.C.4, D.4; and (5) the Claims Administrator will prepare
and provide to the USDA, the USDA’s Inspector General, the Attomey General, and lead class
counsel a report accounting for the use of all funds disbursed pursuant to the settlement
agreement § d 1| V.F.
IV. FAIRNESS OF PROPOSED SETTLEMENT AGREEMENT
Under Rule 23 of the Federal Rules of Civil Procedure, no class action may be
dismissed, settled, or compromised without the approval of the Court. FED. R. CIV. P. 23(e).
Before giving its approval, the Court must direct the provision of adequate notice to all members
of the class, Q., conduct a "fairness hearing," and fmd, after notice and a hearing, that the
"settlement is fair, adequate and reasonable and is not the product of collusion between the
parties." Thomas v. Albright, 139 F.3d 227, 231 (D.C. Cir. 1998). In performing this task, the
Court must protect the interests of those unnamed class members whose rights may be affected
by the settlement of the action.
ln this circuit there is "no obligatory test" that the Court must use to determine
whether a settlement is fair, adequate, and reasonable. Osher v. SCA Real§g I, Inc., 945 F. Supp.
298, 303-04 (D.D.C.l996); se_e g Radosti v. Envision EMI LLC, 717 F. Supp. 2d 37, 54
(D.D.C. 2010). Instead, the Court must consider the facts and circumstances of the case,
ascertain what factors are most relevant in the circumstances, and exercise its discretion in
deciding whether approval of the proposed settlement is fair. By far the most important factor is
a comparison of the terms of the compromise or settlement with the likely recovery that plaintiffs
39
would realize if the case went to trial. S;oe Pigford v. Glickman, 185 F.R.D. at 98 (collecting
cases). ]n addition, courts frequently find the following factors relevant in assessing the fairness
of a proposed settlement: (l) "whether the settlement is the result of ann’s-length negotiations";
(2) "the status of the litigation at the time of the settlement"; (3) "the reaction of the class”; and
(4) "the opinion of experienced counsel." Radosti v. Envision EMI LLC, 717 F. Supp. 2d at 55.
Having careiil]ly considered all of the objections that have been filed with the Court or expressed
at the Fairness Hearing, the Court concludes that the settlement is fair, adequate, and reasonable.§
5 The following individuals and/or organizations submitted written or oral
comments or objections: the Martin Obj ectors (Larry Morgan, M.C. Moore, Willie Parker, Sr.,
Vernon Ross, Sr., Blanche Ross, Lewis Walker, 'l``homas Walker, Inez Washington, Steven
Bailey, and O.C. Antholl¥); Thomas Burrell, President of the Black Farmers and Agriculturalists
Association; Ralph Paige, Executive Director of the Federation of Southern Cooperatives Land
Assistance Fund; Dr. Dewayne L. Goldmon, Chairman of the National Black Agricultural
Alliance; Tracy Lloyd McCurty, representing the Rural Coalition; John Zippett, representing the
Federation of Southern Cooperatives; John W. Boyd, Jr., President of the National Black Farmers
Association; Bernice Atchison, President of the Black Farmers of Chilton County, Alabama;
Justin and Willa Fouts; Booker T. Woodard; Diaharm C. Stevens; Errol Von Hart; Eddie Lee
Gray; Muhommad Rabbalaa and Henry Burris; Karla K. Adams and Terrie L., Theodore B., Brad
E., Kerry F., and Ava L. Bates; Lillie M. Wingard; Robert E. Walker; M. Murline Price; Joyce A.
Smith; Doris Gray; J ames Coleman; Wi]liarn Paramore; Gloria Davis Gilmore; Carl Ulyssess
Eggleston; Jonathan Grant; Melvin Bishop; ()bie Beal; and Pauline and Johrmy Hughes.
Although the Court instructed potential objectors in its Pre]iminary Approval
Order that they must include in their objections a “statement explaining the basis for the
objector’s belief that he or she is a Class Mernber," most objectors failed to do so. In re: Black
Farmers Discrimination Litig., Misc. No. 08-0511, Order Granting Preliminary Approval of
Settlement Agreement 1] ZS(a) (D.D.C. May 13, 201 l). Based on the record before the Court, it
appears that only the following individuals may have standing to make objections: Bernice
Atchison, Larry Morgan, Blanche Ross, 'I``homas Walker, Inez Washington, Errol Von Hart,
Eddie Lee Gray, Doris Gray, Williain V. Paramore, Lille M. Wingard, M. Murline Price, Karla
K. Bates, Terrie L. Bates, Brad E. Bates, and Kerry F. Bates. § Pigford v. Glickman, 185
F.R.D. at 103 n.l? (citing Mayfield v. Barr, 985 F.2d 1090 (D.C. Cir. 1993)) (in general, only
putative class members have standing to object to proposed settlement agreement). Nevertheless,
the Court has carefully considered all comments or objections submitted, and discusses them
where appropriate.
40
In light of Congress’ 1998 amendments to the statute of limitations applicable to
ECOA claims, this Court ultimately certified a plaintiffs’ class in Pigford under Rule 23(b)(3) of
the Federal Rules of Civil Procedure that was composed of
[a]ll African American farmers who (]) farmed, or attempted to
farm, between January l, 1981 and December 31, 1996; (2) applied
to the (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 l, 1997, regarding USDA’s treatment of such farm
credit or benefit application.
Pigford v. Glickinan, 185 F.R.D. at 92. Rather than proceeding to trial on the claims of the
plaintiffs’ class members, class counsel and the USDA negotiated a settlement, which was
approved by the Court and memorialized in a consent decree filed on April l4, I999. That
consent decree did not provide for the automatic payment of damages to any plaintiff Instead, it
established a non-judicial mechanism by which each class member would have an opportunity to
demonstrate that he or she had been the victim of past discrimination by the USDA and therefore
was entitled to compensatory damages Potential class members were not required to participate
in that altemative claims resolution process, however; those African-American farmers who
wished to pursue their ECOA claims against the USDA in court were permitted to opt out of the
Pigford plaintiffs’ class by submitting an opt-out request within 120 days of the entry of the
consent decree. Pigford v. Glickman, Civil Action No. 97-19'?8, Consent Decree 11 S(b)-(f)
(D.D.C. Apr. 14, 1999)("ConsentDecree"); g Lo_ Pigford v. Glickman, 185 F.R.D. at 95-96.
For those who did not opt out of the plaintiffs’ class, the Pigford consent decree
created a distinctive process for resolving class members’ claims against the USDA. First, any
A. The Process ofSefflemenf and Context of the Liffga€z``on
1. 'l``iming and Negotiation of Settlement
The Court has received very few substantive objections concerning the manner
and context in which the settlement was negotiated _ an unsurprising state of affairs given the
nature of this litigation and of most of the counsel involved with it. As the text of Section 14012
of the 2008 Farm Bill makes clear, that statute is intended to provide certain African-American
farmers who were unable to pursue relief under the Pigford I consent decree a second chance of
sorts, an opportunity to gain relief similar to that afforded by the consent decree by engaging in a
dispute resolution process similar to the one created by the decree. § Am. 2008 F arm Bill
§ 140l2(d)-(f]. As a result, when counsel in this case initiated settlement negotiations, they
already had a template for their efforts, one that had been field-tested for roughly ten years: the``
Pigford I consent decree. Unlike in many class actions, here both plaintiffs’ counsel, among
whom are a number of attomeys who participated in Pigford I, and defendant’s counsel, at least
one of whom participated in Pigford I, were in a position from the outset of this case to gauge the
defendant’s liability, the sort of proof that would be required to establish plaintiffs’ claims, the
types of legal and factual questions that might arise during the adjudication process, and the
range of problems that would arise in the management of the litigation. Class counsel and
defendant’s counsel thus were ideally situated to assess the strength of their litigating positions
and to negotiate accordingly.
At the sarne time, despite the wealth of knowledge made available to counsel in
this matter by the litigation in Pigford I, there was no rush to settlement in this case. Class
counsel, led by Andrew H. Marks of Crowell & Moring, and defendant’s counsel, led by Michael
41
Sitcov of the Department of Justice, negotiated the terms of the agreement currently before the
Court for almost two years, exchanging more than 20 drafts of the settlement during the prooess.
Mot. for Prelim. Approval, Ex. 13 1[1[ 2, 5; Sept. l Tr. at 26 (statement of Mr. Marks). From all
accounts, the negotiations were "vigorous" and at "arm’s length." I£l. There is no hint in the
record, and no suggestion by any objector, that the attomeys who negotiated the terms of the
proposed agreement were anything other than professional and zealous in the defense of their
respective clients’ interests during the negotiation process.
The Martin 0bjectors have suggested, in a conclusory manner, that plaintiffs’
counsel failed to engage in sufficient discovery before accepting the settlement agreement that
has been proposed. According to the Martin Objectors, "[t]here is no evidence, absent discovery,
to determine the strength of the Plaintiffs’ cases, or, therefore, what a proper settlement amount
might be." Martin Obj. at 5. While insufficient discovery is a charge frequently raised by those
objecting to a proposed class settlement, the claim that class counsel were not sufficiently
familiar with the factual underpinnings of this case is simply not credible. 'I``his case rests upon
the same factual predicates as Pigford I, in which "‘a literal mountain of discovery [was]
provided and reviewed."’ Pigford v. Glickman, 185 F.R.D. at 99 (citation omitted). USDA’S
liability for widespread discrimination against African-American farmers in the relevant time
period is not in dispute g L;B at 4. In addition, the 12 years of proceedings that have taken
place under the Pigford I consent decree have provided counsel in this case with a huge amount
of data _ including the detailed annual Monitor’s Reports _ from which to extrapolate the
likely success rate of Pigford ll plaintiffs. Against this backdrop, the assertion that "[t]here is no
42
evidence" from which class counsel might estimate the strength of the plaintiffs’ case is
profoundly unpersuasive
As the foregoing analysis indicates, the proposed settlement agreement was the
result of arm’s-length negotiations by experienced counsel who had extensive knowledge about
the factual basis of the case. As a result, the settlement is entitled to "[a] presumption of fairness,
adequacy, and reasonableness." Radosti v. Envision EMI LLC., 717 F. Supp. 2d at 56.
2. Adequacy of Notice
“When a class is certified and a settlement is proposed, the parties are required to
provide class members with the ‘best notice practicable under the circumstances.’” Pigford v.
Glickntan, 185 F.R.D. at 101 (quoting FED. R. CIV. P. 23(0)(2)). In this case, class members have
received more than adequate notice and have had sufficient opportunity to be heard on the
faimess of the proposed settlement
Notice of the proposed settlement was provided promptly, allowing potential class
members ample time to lodge objections, and was disseminated in a manner calculated to reach
as many of those putative class members as was practicable. The best possible source of the
names and addresses of potential class members, the Pigford 1 Facilitator’s list of S(g)
petitioners, was put to good use; postcard notice of the proposed settlement was mailed directly
to almost 90,000 possible class members on June 3, 201 l, some ten weeks before the deadline
for filing a written objection. g Mot. for Final Approval, Ex. B 11 6. Class counsel also
retained a linn specializing in the provision of class action notice, which developed and
43
implemented a comprehensive scheme for reaching a vast array of potential class members by
use of radio, television, print, and Intemet campaigns. § LB at 16-17.
Although the content of the notice provided by class counsel varied somewhat
depending on the format in which it was presented, every form of notice was carefully designed
to give any potential class member easy access to detailed information regarding "‘the terms of
the proposed settlement and . . . the options that are open to [class members] in connection with
[the] proceedings"’ in this Court. Ma_vgalt v. Parker & Parsle_v Petroleum Co., 67 F.3d 10'?``2,
1078 (2d Cir. 1995) (citation omitted). And, unlike in some class action cases, despite the
complexity of the case, the notices were written in easy-to-understand plain English.
Short-form notices gave possible class members an overview of the subject matter
of this litigation, the major forms of relief that might be available to them under the proposed
settlement, and their right to submit objections. L, gg;, Mot. for Prelim. Approval, Ex. 5,
Attach. 3, App. 4 (postcard notice). Those short-fonn notices also directed potential class
members to both a toll-free telephone number and a website through which an individual could
obtain long-form notice. g § Long-forrn notices provided detailed but accessible sunnnaries
of the nature of this litigation, the requirements for class membership, the terms of the proposed
settlement, the date, location, and purpose of the Faimess Hearing, and the manner in which
objections could be submitted. § E., App. 5 (long~form notice). Putative class members were
also instructed on how to file a claim in the event that the settlement is approved. § id at 8.
The notice provided a toll-free number that could be used to contact class counsel. g i_d. at 9.
In short, class counsel’s notice program was exceptionally well-designed by Kinsella Media,
44
LLC to reach as many potential class members as was practicable and to provide in a
comprehensible way exactly the information that such class members might want and need.
3. Responses of Class Members
Potential class members were given a lengthy period in which to file objections to
the settlement, and the Court has given careful consideration to all objections, even those that
were filed late, that did not meet the substantive or procedural requirements outlined in the
Court’s Preliminary Approval Order, or that were submitted by individuals who did not attempt
or otherwise failed to establish that they are members of the proposed settlement class. As the
Court has already discussed, g s_u}@ at l?, the proposed plaintiffs’ class in this matter could
encompass tens of thousands of individuals. ln light of that fact, it is significant that only
approximately 15 likely class members have made objections to the settlement. § Pigford v.
Glickman, 185 F.R.D. at 102 (noting as a factor weighing in favor of settlement approval that
"there are relatively few objections to the settlement in comparison with the size of the class").
By contrast, there is powerful evidence that the vast majority of possible class members are
enthusiastic about the settlement and welcome the opportunity to pursue relief under its
provisions. Aocording to the Claims Administrator, 62 ,Tl 5 individuals have already requested a
Claims Package so that they may participate in the claim resolution process once the settlement is
approved and implemented. Mot. for Final Approval, Ex. B 11 13. Given the overwhelming
indications of support for and interest in the settlement and the comparatively minuscule number
of objections to it, the Court easily concludes that the mere fact that some potential class
45
members dislike aspects of the settlement is not sufficient to demonstrate that the settlement is
not fair and adequate. § Pigford v. Glickman, 185 F.R.D. at 102.
B. Substantive Faz``rness of the Settlement
As our court of appeals has said, in considering a proposed class action
settlement, the Court first must compare the benefits afforded to class members under the
settlement with the likely recovery that plaintiffs would have realized if they pursued the
resolution of their claims through litigation in court. § Thomas v. Albright, 139 F.3d at 231.
The Court must look at the settlement as a whole and should not reject a settlement merely
because individual class members claim that they would have received more by litigating rather
than settling. The Court should scrutinize the terms of the settlement carefully, but the discretion
of the Court to reject a settlement is restrained by the "principle of preference" that encourages
settlements. § Durrett v. Hous. Auth. of Ci'_ty of Providence, 896 F.2d 600, 604 (l st Cir. ]990);
Radosti v. Envison EMI LLC, 717 F. Supp. 2d at 51; In re Vitamins Antitrust Litig., 305
F. Supp. 2d 100, 103 (D.D.C. 2004); Pigford v. Glickman, 185 F.R.D. at 103. Fu:rthermore, "the
Court [shou]d not] make the proponents of the agreement justify each tenn of settlement against
a hypothetical measure of what concessions might have been gained." Stewart v. Rubin, 948 F.
Supp. ]0'}'7, 1087 (D.D.C. 1996). The relevant question is whether the structure of the settlement
and the substantive relief, including the amount of money provided, are fair and reasonable when
compared with the recovery that plaintiffs likely would have realized if their claims were decided
through the judicial process. In this case, the benefits offered to plaintiffs by the settlement
agreement are so substantial, and the likely outcome of this case to individual plaintiffs if it were
46
to proceed to a final resolution in court is so dismal, that the Court is firmly convinced that the
settlement is fair, adequate, and reasonable.
l. Likely Results of Settlement Contrasted with In-Court Adjudication
In the absence of the proposed settlement, the plaintiffs’ prospects for recovery are
sobering. The $l . 15 billion appropriated by Congress in the Claims Resolution Act is
specifically earmarked for the funding of the proposed settlement agreement and its availability is
contingent on the approval of a settlement. Indeed, the statute precisely identities the agreement
funded as the one executed by class counsel and the defendant on February 18, 2010, as
subsequently revised, if at all, by agreement of the parties. § Claims Resolution Act
§ 20l(a)(l). Without that additional $l . 15 billion _ z``.e., in the absence of an approved
settlement agreement _ the only iimds available for prevailing plaintiffs in this matter are the
$100 million appropriated by Section 14012 of the 2008 Farm Bill. § Am. 2008 Farm Bill
§ 14012(¢)(2). Although the Farm Bill originally suggested that more ftmds might be available
for the payment of claims in this case as the initial $100 million fund was depleted, se_e 2008
Farm Bill § l40l2(i)(2), j(Z), the Claims Resolution Act amended the Farm Bill to remove that
possibility and explicitly provided: "If the Settlement Agreement is not approved as provided in
this subsection, the $100,000,000 of hinds . . . made available by section l40l2(i) of the [2008
Farm Bill] shall be the sole funding available for Pigford claims." Claims Resolution Act
§ 201 (b) (emphasis added). At $5 0,000 per claim, § g]:@ at 32, that $100 million would cover
Track A cash damages _ excluding damages paid in the form of loan forgiveness and tax relief
_ for only 2,000 of the tens of thousands of plaintiffs in this case.
47
If the plaintiffs were to pursue relief solely through litigation in this Court and not
through the claim determination process created by the settlement agreement, the formidable
obstacles to a reasonable recovery for prevailing plaintiffs would derive not only from the grossly
insufficient funds available for the payment of claims, but also from staggering, perhaps
insurmountable, case management problems. The 23 complaints filed in this Court under
Section 14012 of the 2008 Farm Bill name 40,000 individual plaintiffs. Section 14012 provides
that the claim of every plaintiff should be determined by this Court. § Am. 2008 Farm Bill
§ 14012(b), (e)(l)(B). Adj udication of individual claims on such a massive scale would take
decades. § Pigford v. Glickrnan, 185 F.R.D. at 94. Indeed, any judicial adjudication of the
claims authorized by Section 14012 would be so "umnanageable," ig., that it is almost
impossible not to conclude that Congress expected and intended this matter to be resolved by a
class action settlement
Furthermore, in the absence of settlement, it is unclear that the severely limited
hand available for the payment of awards could be distributed equitably among prevailing
plaintiffs. Under the proposed settlement, the equitable division of available funds is ensured
because individual adjudications will occur swiftly, in approximately a year, and payments from
the fund will be made to prevailing claimants only once the amount of all awards is determined
ln contrast, in the absence of the settlement and the certification of a Rule 23(b)(l)(l3) limited
fund class, it might not be possible for the Court to delay the payment of awards pending the
adjudication of all claims - meaning that available funds would be exhausted by payments to
prevailing claimants long before all claims were decided. Even if payments could be delayed
adjudication of all claims would be so time-consuming that payments to claimants might not be
48
made for many years. Such a result is undesirable in a ease where the injuries to be redressed are
already decades old and many of those likely entitled to relief are elderly or already deceased. lt
is also contrary to the intent of Congress, which expressed its wish in the 2008 Farm Bill that the
claims of plaintiffs in this case “be resolved in an expeditious and just manner." Am. 2008 Fa.rm
Bill § 1401 l.
Some of the individuals who have objected to the proposed settlement appear to
be proceeding under the misapprehension that African-American farmers who were unable to
present their claims in may obtain resolution of those claims by filing a complaint under
a statute other than Section 14012 of the 2008 Farm Bill. For example, Mr. Thomas Burrell,
president of the Black Farmers and Agriculturalists Association, asserted at the fairness hearing
and in a written submission, § Burrell Notice 1]1| 27-28, that "the 66,000 or so[] claimants who
were denied entry into " may still file complaints in court under Section 741 of Public
Law No. 105-2'?7, the 1998 statute that revived certain stale ECOA claims by permitting them to
be filed at any time within two years of the statute’s enactment. § PUB. L. NO. 105-277, § 741;
LB at 4. Mr. Burrell is simply wrong. The consent decree by its terms extinguished
the ECOA claims against the USDA of all members of the plaintiffs’ class who did not
opt out of the consent decree by August 30, l999. § Consent Decree 1] 18; Pigford v.
Veneman, 208 F.R.D. 21, 23 (D.D.C. 2002). Thus, no P_igfii claimant who did not opt out of
the class by August 30, l999, could pursue his or her E_igfgr_d claim in court, whether under
Section '?41 or otherwise.
Those individuals who fit the definition of the plaintiffs’ class in Pigford and who
filed a timely opt-out notice were permitted to pursue their claims under ECOA and Section '?41
49
in court rather than under the consent decree; but to do so, they had to file in court a complaint
setting out their claims prior to the end of the statute of lirnitations period established by Section
741 - that is, on or before October 21, 2000. Thus, none of the "66,000 or so[] claimants," by
Mr. Burrell’s calculation, "who were denied entry into Pigford I" can, at this late date, pursue
their Pigford claims under Section 741 andfor ECOA. 'I``heir only avenue of relief is Section
14012 of the 2008 Farm Bill.
As the Court has made clear, those with claims under Section 14012 are faced
with two drastically different possibilities for resolution of those claims: a decades-long process
of in-court adjudication that may end by providing little or no recovery for most claimants, or the
alternative, out-of-court claims process created by the proposed settlement agreement, which
would provide claimants with a much larger potential recovery and permit the payment of awards
in one to two years. 'I``he merits of these options are not similar; the settlement agreement affords
the far better result. Furtherrnore, in light of various statutory and financial constraints, the
settlement agreement strikes a fair, reasonable, and adequate balance between the competing
concerns of all affected parties.
2. Breadth of Plaintiffs’ Class
Various objectors have complained that the plaintiffs’ class contemplated by the
settlement agreement is either too narrow or too broad. A number of objectors, most prominently
those represented by attomey Precious Martin, argue that the class is too broad because it does
not permit any individual falling within its definition to opt out of the class and, by extension, out
50
individual seeking an award under the consent decree was required to submit to a neutral
"Facilitator," the Poorman-Douglas Corporation (now Epiq Systerns, lnc.), evidence that he or
she was in fact a member of the class. § Consent Decree 11 Z(b). Next, if the Facilitator
determined that a given claimant was a member of the class, the claimant was permitted, at his or
her election, to proceed along one of two "tracks” for determining the merits of the claim. I_d.
‘ll S(i). "Track A" allowed a claimant to prevail by presenting "substantial evidence" of
discrimination to a neutral, third-party "Adjudicator." l_d. ‘|] 9. The requirement of "substantial
evidence" -- defined as "such relevant evidence as . . . a reasonable person might accept as
adequate to support a conclusion after taking into account other evidence . . . that fairly detracts
from that conclusion," § 11 l(l) _ represents a less stringent evidentiary §tandard than the more
common preponderance of the evidence standard. Still, prevailing on a Track A claim in
was not easy, largely because the claimant was required to demonstrate that he or she had made a
request for USDA program benefits that yielded a less favorable result than a request or requests
made by “speciflcally identified, similarly situated white farmers." ILJ. 1[ 9(a)(i)(C); se_e Pigford v.
Glickman, 127 F. Supp. 2d 35, 39 (D.D.C. 2001) (discussing the difficulty of satisfying this
requirement). Nevertheless, because claimants proceeding along this track were not required to
prove their claims by a preponderance of the evidence, their potential recovery was limited: with
respect to monetary compensation, a successful Track A claimant was entitled only to liquidated
damages in the amount of $50,000, plus forgiveness of certain types of debt owed to the USDA
and a payment to offset federal taxes owed on other portions of the award. § Pigford v.
Glickman, 185 F.R.D. at 97.
of the settlement agreement. §§ Martin Obj. at 12-13. Indeed, the Martin Objectors assert that
any class settlement that does not permit opt-cuts is unconstitutional. S_Qe i;l. The Court is aware
of no authority establishing such a rule. On the contrary, "courts should not permit opt-cuts
when doing so would undermine the policies behind (b)(l) . . . certiiication[.]" Eubanks v.
Billington, 110 F.3d 87, 94-95 (D.C. Cir. ]997); E L Keepseagle v. Johanns, 236 F.R.D. l,
3-4 (r).o.c. 2006) (Same).
ln this case, permitting opt-outs would destroy'tlre fairness of the proposed
settlement and defeat the purpose of certification of a Rule 23 (b)(l)(B) class. The settlement
agreement addresses the problem of insufficient available funding by providing for delayed
payment of awards and, if necessary, the pro rata reduction of awards to ensure that similarly
situated claimants receive the same recovery. § s_upr_a at 33. lf class members were permitted
to opt out of the claim resolution process created by the settlement agreement, they could pursue
their claims in court and avoid both delayed payment of awards and any equitable reductions in
the amount of their recovery, destroying the safeguards intended to provide for the fair
distribution of limited funds. Furthermore, if presented with the opportunity to escape from the
restrictions imposed by the settlement agreement, plaintiffs would likely opt out in large
numbers, rendering the agreement a dead letter. Opt-outs are thus contrary to the interests of the
plaintiffs’ class as a whole and cannot be permitted.
Other objectors have suggested that the proposed plaintiffs’ class is too exclusive.
'I``hey argue that this litigation should afford relief to "the large number of active farmers who
were outright denied or denied proper debt relief in the first settlement," NBAA Letter
at 5, or individuals who filed late or incomplete claim packages or petitions for Monitor review
51
in Pigford I. § Federation Letter at 2. The definition of the plaintiffs’ class contained writhin
the settlement agreement, however, tracks the language of the 2008 Farm Bill, _se_e _s_gB at ]8,
and encompasses every individual authorized by the statute to pursue relief under its provisions.
Pigford l claimants whose claims under the consent decree were presented to and denied by the
Adjudicator or the Arbitrator are not eligible for any relief under the statute. g Am. 2008 Farm
Bill § 140l2(b). The settlement agreement carmot provide relief to those with no legal l
entitlement to it.
3. Adjudication Process
Perhaps the most difficult problem confronted by the negotiators of the settlement
agreement was the need to balance, on one side, the interests of all parties and the United States
itself in the accurate determination of claims, and on the other, the practical reality that most
class members, because of the passage of time and the failure of the USDA to investigate civil
rights complaints during the relevant time period, carmot meet the stringent evidentiary standards
required in traditional litigation to prove their claims. It was widely felt by all parties in Pigford I
that drastic remedial action was required in light of the USDA’s history of discrimination, and
that "class members’ lack of documentation [of their claims] [was] at least in part attributable to
the passage of time which ha[d] been exacerbated by the USDA’s failure to timely process
complaints of discrimination." Pigford v. Crlickman, 185 F.R.D. at 94. Therefore, Track A, with
its lowered burden of proof, was designed to provide ‘virtually automatic" relief to those who
had “little or no documentary evidence." E. at 95. Yet, because of the similarly situated white
farmer requirement, that turned out not to be the ease; only 69% of Track A claimants prevailed,
52
even after Monitor review of the Adjudicator’s claim decisions. § 2010 Monitor Report at ]0.
In light of that fact, some commenters have suggested that the T rack A adjudication process
should be less rigorous than the settlement agreement proposes. _S_e§, gg,, NBAA Letter at 5
("[O]nce a Black farmer proves that he is an eligible party, the evidence of discrimination should
include information that could easily be provided by the complainant or USDA.").
Set against any impulse to ease the requirements of the Track A adjudication
process is the need to ensure that relief goes to those who truly are entitled to redress - those
who were victims of USDA discrimination during the relevant time period. This interest is
particularly strong in a limited ftmd case, where any erroneous award reduces the total pool of
money available for plaintiffs with meritorious complaints. At the same time, the existence of a
limited fund of available assets that must be used both to pay awards and to cover
implementation costs increases the pressure to keep those implementation costs _ including the
costs of adjudication - low.°
Finally, the congressionally established limitation on the liability of the
government in this case removes the defendant’s financial incentive to contest claims, for the
amount that may be paid to claimants, regardless of how many claimants are successful, is tixed,
while the government incurs more and more costs every time the Department of Justice or the
Department of Agriculture becomes involved in the adjudication process. And in fact, the
settlement agreement provides that neither agency will oppose claims made in the adjudication
6 Furthermore, it would be difficult to imagine a less rigorous standard than the
"substantial evidence" burden as defined in the settlement agreement, SA 1| V.C, in combination
with the elimination of the requirement in Track A to show that a similarly situated white farmer
was treated more favorably by USDA. Com_r_)are SA 1[ V.C, § Consent Decree 1| 9(a)(i)(C).
53
process; nor may any claimant obtain discovery from the USDA, with the exception of
information about the claimant’s own debts. § SA ‘|| V.A.9. Those provisions of the
agreement will dramatically reduce the defendant’s costs and accelerate the rate at which claim
determinations may be made; they will also, on balance and in combination with the elimination
of the requirement that 'I``rack A claimants identify a "similarly situated white farmer,” Se_e Lt;@
at 35, likely lead to an increase in the number of Track A claimants who are able to prevail on
their claims. At the same time, however, the non-participation of the USDA in the adjudication
process removes one means of ensuring accurate claim determinations. In the absence of
information supplied by the USDA, plaintiffs’ claims will succeed or fail based solely on the
strength of the claimants’ submissions _ their level of detail and coherence, their consistency,
and their credibility.
lt is clear from the filings of class counsel and from the settlement agreement
itself that both the Moving Plaintiffs and the defendant are sensitive to the competing concerns at
play in the claim determination process and have structured that process accordingly. Whi le the
defendant has little if any financial incentive to be concerned about the structure of the
adjudication process, it does, as a government agency, have a fiduciary duty to ensure that public
funds are disbursed responsibly and with a reasonable likelihood of reaching their intended
recipients.? In the Court’s view, it has fulfilled that duty. Working within the constraints
f That fiduciary duty includes the responsibility to investigate any fraudulent claims
by claimants, as well as seams on and misrepresentations made to claimants. As was made clear
at the Fairness Hearing, there is evidence that such seams and misrepresentations have taken
place in the past and continue to be of concern to claimants and their attorneys today. S_ee Sept. l
Tr. at 160-64 (statement of Ms. Rose Sanders). In addition, class counsel and the neutrals shall
promptly bring to the attention of the inspector General of the Department of Agriculture, to the
United States Department of Justice, and to the 0mbudsman appointed by the Court pursuant to
54
imposed by Congress’ limitation of available funding, class counsel and defendant’s counsel
have proposed a system of adjudication that would subject each claim to careful and rigorous
review while keeping costs in check.
Track A claims, subject to a lower standard of proof, will each be assessed at least
twice, by two separate reviewers. First, one of the attomeys at BrownGreer, “a litigation support
and claims management firm devoted to mass claims resolution, litigation management, and
claims administration," will review each claim and issue a recommended decision on its merits.
Supp. Mem. at 2~3. Then an attomey working for the Track A Neutral, JAMS, with
BrowrlGreer’s recommendation in hand, will review the claim de novo and render a decision. M.
at 4. lf that decision is a denial of the claim, the claim determination will be reviewed again by
another JAMS adjudicator, one with experience in the adjudication of Lig@ l claims. M. at '}'.
This iterative review process will reduce errors in claim determinations and subject each claim to
thorough examinations
Because Track A claim determinations will be based largely on the quality of the
claimant’s submissions, it is essential that the Track A Neutral have established protocoIs for
assessing the credibility of factual assertions and for drawing the line between persuasive and
unpersuasive claims. The Court is convinced that class counsel are aware of this necessity and
the settlement agreement information that they receive relating to potential scarns on claimants
and;’or misrepresentations being made to claimants relating to the claims process or the relief
available to claimants under the settlement agreement.
8 BrownGreer thus assists JAMS by, as class counsel puts it, "serv[ing] as an
additional quality control check on the process, providing a second set of eyes for each claim,
and [providing] an additional review for detecting potential fraud in the process." Supp. Mem.
at 4.
55
have taken appropriate steps to ensure that the necessary protocols are in place. First, the Court
notes that the team from JAMS that will review Track A claims consists of very experienced
attorneysf'arbitrators and will be led by Lester Levy and Nancy Warren, both of whom have
extensive knowledge of the types of claims at issue in this case because they adjudicated Track A
claims in . § Supp. Mem. at 2, 9. Indeed, 10 of the 16 adjudicators from JAMS were
involved in the determination of claims in Pigford I. I_d. at 2.
Second, Track A neutrals from JAMS, as well as claims reviewers from
BrownGreer, will undergo initial and continuing training on such crucial matters as farm loans,
applicable legal standards, and USDA procedures. g Supp. Mem. at 5-6. 'l``he form of
continuing training will be determined by a quality control process whereby random samples of
claim determinations are reviewed by a JAMS team led by Lester Levy. I;i. at 7. If that review
of randomly selected claims demonstrates weaknesses or inconsistencies in the claim
determination process, neutrals will be retrained accordingly. § M. BrownGreer will subject
its claims review process to similar quality controls and will also retrain its attomeys as
necessaly. M. at '?.
Finally, the Track A neutrals have already begun a process intended to generate
specific guidelines for the review and determination of claims presenting various types of factual
allegations. JAMS and BrownG“reer are currently testing the Track A adjudication process by
deciding 300 “‘mock’ claims prepared by Class Counsel after interviewing 300+ putative class
Members and assisting them in completing draft Claim Fonns." § Supp. Mem. at 5-6. This
test run will permit the development of consistent approaches to various factual patterns and will
permit training of neutrals to be tailored to clarify concepts and standards that have proven
56
difficult to apply or understand. § E. at 6. The Court is satisfied that this extensive plan for
the preparation and continuing training of Track A neutrals, combined with the iterative claim
determination process described above, will yield fair results for Track A claimants.
The Track B adjudication process, as in the past, is relatively demanding,
requiring that claimants prove their claims by a preponderance of the evidence and by supplying
"independent documentary evidence." SA 11 V.D. l. The results of Track B claims will be
similarly fair, since those claims will be assessed by Michael Lewis, the Pigford l Arbitrator, who
has immense experience in and knowledge of the factual and legal issues likely to arise in the
claim determination process, §§ Supp. Mem. at 6 n.6.
A number of individuals have objected that the proposed settlement agreement
does not permit claimants to appeal adverse decisions by the Track A or Track B Neutral. §ee_,
§g,, Federation Letter at 2; Burrell 0bj. 1 45. The Court concludes that the absence of such an
appeal option or a court-appointed Monitor (as in Pigford I) does not render the settlement l
agreement unfair, tmreasonable, or inadequate. As the Court has explained, class counsel have
set in place numerous safeguards against erroneous claim determinations, including an additional
layer of review for every adverse determination by a JAMS neutral. §e§ Supp. Mem. at 7. These
safeguards lessen the benefit to be gained by an appeals process, Furthermore, under the
settlement agreement _ unlike the consent decree in Pigford l _ Track A claimants need not
prove they were treated less favorably than a similarly situated white farmer, and no government
counsel will be opposing adequately documented claims. Therefore, there is much less need for
an appeals process or Monitor review. Finally, an appeal option would significantly increase the
cost of the claim determination process _ reducing the funds available for the payment of
57
awards -- as well as slow that process considerably, delaying the distribution of any awards to
successtill claimants. Given the costs and benefits of an appeal process or even a Monitor
oversight and review, the Courl concludes that the decision of the Moving Plaintiffs and the
defendant not to offer such a process under the settlement agreement does not make the
agreement or the process it established unfair or unreasonablc.
One commenter has suggested that unsuccessful Traclc B claimants should be
allowed subsequently to pursue Track A rel ief. _S_e_e NBAA Letter at 5. That suggestion is not
feasible. "If there were a fallback mechanism to provide relief for claimants who failed in their
Track B claims, every class member would choose Track B and the settlement structure would
collapse under its owri weight." Pigford v. Glickman, 185 F.R.D. at 107 (responding to the same
suggestion).
As the foregoing analysis indicates, structuring the claim determination process in
this matter required the careful balancing of many competing factors. The balance ultimately
reached by the Moving Plaintiffs and the defendant is fair, adequate, and reasonable.
4. 180 Days for Submission of Claims
The settlement agreement requires completed Claim Packages to be submitted to
the Claims Administrator within 180 days of the date the agreement becomes effective. _S_e_e
§§ at 33. Any class members who fail to submit a complete Claim Package within that
window of time will be unable to receive any relief under the agreement or the 2008 Farm Bill.
Some objectors assert that 180 days is an insufficient amount of time for the preparation and
submission of claims. @, gg;, Federation Letter at 2. None of these objectors, however,
58
suggests a preferable length of time, or supplies any specific reasons to believe that 180 days will
be insufficient As the Court has already found, the notice program instituted by class counsel is
more than adequate, see supra at 43-45, and class counsel have represented that after the approval
of the settlement they will continue to provide notice; within the lSO~day claim submission
period, postcard reminders will be sent by mail to potential class members on the Facilitator’s
S(g) list who have not yet filed a claim. § Mot. for Prelim. App., Ex. 5, Att. 3 at 9. Then, at a
second, later point during the submission period, the Claims Administrator will contact by phone
those potential class members on the Facilitator’s list who have not filed a claim. I_d. Finally,
once the settlement is approved, class counsel will work with community and trade organizations
to disseminate news of the settlement by word of mouth. ILI. at 3. ln addition to this extensive
continuing notice program, class counsel will be working during the 180-day window to provide
class members with direct assistance in the preparation of Claim Packages. §e_§ Mot. for Prelim.
Approval at 21. In light of this extensive plan for outreach to potential claimants, it is not
unreasonable to require class members to file their claims within a l80~day period.°
5. Forms of Relief
The forms of relief offered to class members through the settlement agreement are
reasonably chosen and structured in light of the financial constraints imposed by Congress. One
cornmenter suggested that debt relief should be emphasized in the settlement agreement. §
NBAA Letter at 4. In fact, the settlement agreement has always provided for significant debt
relief. Track A claimants who prevail on a credit claim are entitled to forgiveness of certain
9 As provided in the accompanying Order and Judgment, the 180-day period will
commence on November ]4, 2011 and end on May Il, 2012.
59
outstanding loans if those loans are related in specified ways to the claim on which the class
member prevailed. _S_ee_ SA 1| II.MM. Acknowledging that claims for debt relief are "highly
technical," class counsel have arranged for all such claims to be determined by a group of
neutrals "who have extensive experience reviewing and analyzing USDA debt records and all
relevant communications from the §ig@ Monitor’s office." Supp. Mem. at 8. JAMS will also
secure the services of a debt relief expert to assist in the detennination of claims for debt relief.
§ Q. at 8-9. Finally, the settlement agreement provides that the USDA will not "accelerat[e] or
foreclos[e] any FSA Farm Loan Program Loan held by a Class Member that originated between
January l, 1981 , and December 3 l , ]996," unless and until the class member in question is
reported not to be entitled to relief under the settlement. SA 1| VII.A.
One individual has objected to the $250,000 cap imposed on Track B awards by
the settlement agreement. g Gray Letter at l. That cap represents a reasonable compromise
reached by balancing conflicting interests and in light of the restricted funding that is available
for awards to class members. First, the cap serves the purpose of preventing a small number of
claimants from receiving a highly disproportionate amount of the limited fund. In Pigford l,
101 Track B claimants _ just 0.6% of the claimants who prevailed under the consent decree _
received 4% of total monetary relief awarded. § 2010 Monitor Report at 10, 12, 20. Given the
strong possibility that Track B claimants might in this case be awarded a recovery significantly
disproportionate to their numbers and thus divert a disproportionate percentage of the limited
available funds away from other class members, it was not unreasonable to impose a cap on
Track B awards.
60
The second form of claim resolution created by the consent decree, known as
"Track B," also involved a streamlined process of dispute resolution. Track B claims were to be
heard by another third-party neutral, the "Arbitrator," who could receive written testimony and
documentation as evidence but would conduct only a one-day mini-trial of each plaintiffs
claims. g Pigford v. Glickrnan, 185 F.R.D. at 9'7.- Claimants choosing 'I``rack B, unlike those
proceeding along Track A, were required to prove their claims by a preponderance of the
evidence, rather than the more lenient substantial evidence standard, but, if successful, they were
awarded the full amount of damages necessary to compensate them for their losses. I;i.
Eigf_o;t_] class members were not given an unlimited amount of time in which to
submit their claims and supporting documentation to the l§"acilitator. Under the terms of the
consent decree, all claims packages had to be postmarked on or before October ]2, 1999.
Consent Decree ‘f[ 5(c). Paragraph S(g) of the consent decree provided that if a claims package
was not postmarked within that period of time, the claimant could pursue relief under the decree
only by receiving permission from the Arbitrator. Consent Decree 11 5(g).2 The claimant could
receive such permission, however, only if he or she demonstrated that "his failure to submit a
timely claim was due to extraordinary circumstances beyond his control.” I_d. Furtherrnore, there
was also a time limit on the period during which late claimants could submit petitions under
Paragraph S(g); by order of the Court, those petitions were to be postmarked no later than
2 The consent decree originally provided that the Court would render decisions on
petitions for permission to submit a late claims package under Paragraph S(g), but the Court
subsequently delegated that authority to the Arbitrator. Sl Pigford v. Glickman, Civil Action
No. 97-1978, Order, at 2 (D.D.C. Dec. 2{), ]999).
7
Second, the Track B cap is reasonable in light of the fact that the defendant will
not oppose any claims made under the settlement agreement § §§ at 53-54. As a result, the
risk of failing to prove a Track B claim is reduced. Given the reduced risk faced by Track B
claimants under the settlement agreement, it is reasonable that the ultimate recovery permitted
should also be reduced.
Finally, the aggregate cap on Track B awards of $100 million is reasonable. The
aggregate cap serves the purpose of preventing the disproportionate reduction of the limited fund
by Track B claimants. Because Track B claimants will be given the opportunity to switch to
Track A once they are notified of the total number of class members pursuing Track B claims,
they will not be unfairly surprised if aggregate Track B awards exceed the $100 million cap and
have to be reduced on a pro rata basis. The limits on Track B awards thus reflect a careful and
reasonable balancing of the interests of all class members.
Some individuals have objected that late-late fi1ers are subject to a greater
reduction of their awards than are late tilers. § Bates 0bj. '|] 6; ge a@ §1_1@ at 33. But late
filers and late-late tilers are differently situated_ The 2008 Farm Bill does not specify whether, to
qualify for relief under the statute, a plaintiff must have submitted a timely 5(g) request. S_ec_:
gm at ll. The statute could be reasonably construed both to grant relief to late-late filers and
to deny it. ln light of that fact, both sets of plaintiffs would run the risk of an unfavorable
determination if the Court were forced to identify the correct interpretation of the statute. instead
of running that risk, the late tilers and late-late tilers among the Moving Plaintiffs, represented by
separate and independent counsel, g LB at 31, reached a fair and reasonable compromise of
their competing interests by agreeing that late-late tilers would be permitted to pursue relief
61
under the settlement agreement, but would be forced to accept a greater reduction in their awards
if the available fund proved too limited to pay all awards in full.
Finally, some have objected to the lack of injunctive relief afforded by the
settlement. _S_e_e, gg;, Burrell Obj. at 25-26. The answer to this complaint is simple: Section
]4012 does not authorize injunctive relief. 'l``he defendant cannot be expected to agree to any
settlement that would involve the granting of a form of relief that could not be awarded if the
case were to proceed in court.
The relief available under the settlement agreement is carefully calibrated in light
of the limited funds available and the sometimes competing interests of different groups of class
rnembers. lt is fajr, reasonable, and adequate.
6. Attorneys’ Fees
The only major objection remaining to be addressed is perhaps the most
frequently voiced: attomeys’ fees are too large. §_e_e, gg:, Price Obj. at 3; Burrell Obj. at 27. As
the Court has already explained, the settlement agreement provides that the Court will choose an
appropriate aggregate award of attomeys’ fees for class counsel that is between 4.1 and 7.4% of
$ l ,22'}',500,000, z``.e. , between $50,32'?',500 and $90,835,000. SA 1[ II.O. Because Congress has
appropriated a fixed sum of money for the payment of all expenses and awards associated with
claims under Section 14012 of the 2008 Farm Bill, and because Section ]4012, unlike ECOA,
contains no fee-shifting provision, attomeys’ fees must be dravm from the $l .25 billion
appropriated by the 2008 F arm Bill and the Claims Resolution Act. Of necessity, this means that
a larger award of attomeys’ fees leads to a smaller available iiJnd for the payment of awards. But
62
to permit only a minimal award of attorneys’ fees, as some objectors have proposed, is not a
realistic or desirable response to that problem.
In the absence of the services of class oounsel, the members of the plaintiffs’ class
would not be in a position to divide up $l .25 billion (less implementation costs); they would be
engaged in a chaotic struggle to win a portion of the $100 million appropriated by the 2008 Farm
Bill before those lilnds ran out. As the Claims Resolution Act’s specific references to the
settlement agreement make clear, the execution of an agreement between class counsel and
defendant’s counsel was a necessary catalyst leading to the appropriation of a great deal of
additional flmding for this litigation. Sg Claims Resolution Act § 20l(a), (b). J ust as
importantly, the settlement agreement negotiated by class counsel makes the funding
appropriated by Congress far more accessible to class members than it otherwise would have
been. As has already been explained, litigation of the claims of the plaintiffs in this or any court
would have resulted in likely disastrous outcomes: the full compensation of some prevailing
plaintiffs at the cost of depriving others of any recovery and/or a years-long delay in the
resolution of claims. Class counsel’s intensive efforts over nearly two years to arrive at a
settlement have thus yielded enormous benefits to the class already.
Without the services of class counsel, then, there would be no recovery for most
class members In such a situation, where class counsel’s efforts have "create[d], preserve[d], or
increase[d] the value of a fund" whose proceeds will be distributed to class members, "[i]t is . . .
well established that . . . [counsel] is entitled to a reasonable attorney’s fee from the fund as a
whole." Swedish I-losp. Corp. v. Shalal , l F.3d 1261, 1265 (D.C. Cir. 1993). If the rule were
63
otherwise, "the beneficiaries of the fund [would] be unjustly enriched by the attomey’s efforts."
Id.
In this circuit, courts typically determine the appropriate amount of fees to be
apportioned to attomeys in a "common fund" case such as this one by approving a specified
percentage of the fund that will be earmarked for attomeys’ f``ees. § Swedish Hosp. Corp. v.
Shala.la, l F.3d at 1266, 1271.
Courts have looked to several factors in assessing the
reasonableness of a fee request, including: (1) the size of the fund
created and the number of persons benefitted; (2) the presence or
absence of substantial objections by members of the class to the
settlement terms andfor fees requested by counsel; (3) the skill and
efficiency of the attomeys involved; (4) the complexity and
duration of the litigation; (5) the risk of nonpayment; (6) the
amount of time devoted to the case by plaintiffs’ counsel; and ('J")
the awards in similar cases.
In re Baan Co. Securities Litig., 288 F. Supp. 2d 14, 17 (D.D.C. 2003). To set a benchmark
against which the reasonableness of class counsel’s fee request may be measured, the Court will
address first the last of those factors, awards in similar cases.
In "a majority of common fund class action[s]," attomeys’ fee “awards fall
between twenty and thirty percent" of the fund. Swedish I~Iosp. Cog;. v. Shalala, 1 F.3d at 1272;
g a@ In re Dep’t of Veterans Affairs [VA) Data Theft Litig., 653 F. Supp. 2d 58, 61 (D.D.C.
2009) ("The majority of fee awards nationally appear to fall in a range of 20 percent to 30 percent
of the common fund."); 4 RuBENsTErN, C0NTE & NE\A»'BERG, NEv»/BERG oN CLAss ACTIONS
§ 14:6. Larger common funds are typically associated with smaller percentage awards, however,
because even a small percentage of a very large fund yields “a very large fee award." Wal-Mart
Stores Inc. v. Visa U.S.A. Inc., 396 F.3d 96, 122 (2d Cir. 2005). Where the common fund is
64
worth many millions or even billions of dollars _ in so-called “megaiilnd" cases - an
appropriate fee may be considerably less than twenty percent of the iilnd. §§ i_d.; In re AT&T
Mobility Wireless Data Servs. Sales Tax Litig., No. 10-2278, 201 1 WL 2173746, at *3-*4 (N.D.
Ill. June 2, 2011) (surveying studies of awards in megafund cases).
Nevertheless, even in cases where, as here, the common fund is over one billion
dollars, the range of percentages permitted by the settlement agreement in this case _ 4.1 to
?.4% _ is unexceptional. According to one study, in cases involving common funds "from $500
nu``llion to $l billion" in 2006 and 2007, “the mean and median awards were both 12.9%" of the
fund. In re AT&T Mobili‘gy Wireless Data Servs. Sales Tax Litig., 2011 WL 2173746, at *4
(citing Brian T. Fitzpatrick, An Empirical Study ofClass Aclion Settlemenz’s and Thez``r Fee
Awards, ')’ J. EIvfPTRICAL LEGAL STUD. 81 l, 339 (2010)). ln other cases, where the class recovery
exceed $l billion, courts have approved awards in the 5 to 10% range. E, e_.gg, Wal-Mart
Stores Inc. v. Visa U.S.A. Inc., 396 F.3d at 122 (approving district court’s award of 6.5% of $3
billion fund); In re Enron Co§p. Securities, Derivative & "ERISA" Litig., 586 F. Supp. 2d '?32,
'?40, 328 (S.D. Tex. 2008) (approving award equal to 9.52% of $'7.2 billion fund). The Court
also notes that in Keepseagle v. Vilsack, another class action involving allegations of
discrimination by the defendant USDA, Judge Emmet G. Sullivan approved a fee award equal to
8% of a $'?60 million fund. § Keepseagle v. Vilsack, Civil Action No. 99-3] l9, Order on
Plaintiffs’ Motion for Final Approval of Settlement 1] 8 (D.D.C. Apr. 28, 2011). In this context,
an award in the range of 4.1 to ’?.4% of the $l .25 billion fund in this case would be a reasonable
one, neither unusually high nor extremely low.
65
The complexity of this action, the time already devoted by class counsel to this
case, and the skill of the many attorneys working on behalf of the plaintiffs’ class also justify the
approval of a substantial fee award in this case. Although civil rights litigation is not typically
considered as complex as, for example, sprawling commercial class actions, this case involves a
wide range of complicating factors: an enormous, geographically dispersed plaintiffs’ class that
may number more than 60,000; a multitude of individual claims predicated at least in part upon
unique facts and upon events that may have occurred as much as 30 years ago; an authorizing
statute never interpreted by a court; a dizzying array of relevant statutory and regulatory
provisions affecting the validity of claims as to both liability and darnages; a large number of
potential class members who are highly suspicious of both attorneys and the government; and
intense scrutiny by Congress, the executive branch, and the press. The prospect of such litigation
is daunting, and many attorneys would not have undertaken it.
Class counsel, however, have embraced the challenges associated with the
litigation of this matter, and assert that they already have devoted more than "40,000 attomey
hours and 60,000 paralegal hours to this case." Mot. for Fees at 30. The considerable labor
already devoted by counsel to the litigation of this matter, and the skill brought to the cases by
class counsel, are evident in the comprehensive settlement and case management plan that they
have presented to the Court. In attempting to settle this case, class counsel confronted the task
not only of securing a much larger amount of funding for distribution to successful plaintiffs, but
also of developing and implementing an efficient, reliable, and cost-effective claim determination
process. As the Court’s analysis throughout this Opinion should make clear, class counsel, along
with counsel for the United States, have succeeded admirably at that task.
66
The time and effort invested by class counsel will increase exponentially in the
weeks and months to come. After the approval of the settlement agreement, class counsel will be
responsible for overseeing the implementation of the claim determination process and for guiding
tens of thousands of claimants through that process. 'l``o fulfill those responsibilities, counsel will
have to engage in extensive communication with class members, planning and holding "scores of
meetings throughout the country" with potential clairnants. Mot. for Fees at 29. They will offer
legal representation during the claim determination process, for no additional j?ze, to any Track A
claimant who requests it. SA 1| V.A.2. They will coordinate the efforts of the neutrals and
respond to any problems that arise during the resolution of claims. And they will respond to any
inquiries from the Ombudsman or the Court. All of these activities will require great skill and
effort, as well as substantial time.
When they became involved in this litigation, class counsel also assumed a
substantial risk that their efforts would never yield much in the way of fees. There has never
been any guarantee that Congress would appropriate additional funding for the adjudication and
payment of Section 14012 claims. Even after the settlement agreement was executed and
legislation to fund it was introduced in Congress, the path to passage and approval of the funding
required by the settlement was not easy. § s_u}la at 14. lf available funding had remained
capped at $100 million, the more than forty attorneys now acting as class counsel would have
been left to scrarnble for any fees that could be eked out of a fund vastly insufficient to pay all
claims against it, and the payment of any fees that were forthcoming may have been delayed for
years. This litigation was no sure bet for plaintiffs’ lawyers.
67
ln light of the skill and dedication exhibited by class counsel, the enormous
amount of time that they have devoted and will continue to devote to this case, the complexity of
this Iitigation, the risks assumed by counsel, and the very substantial benefits secured by counsel
for the class, the Court concludes that a fee within the range of 4.1 to 7.4% of the common fund
is fair and reasonable. This conclusion is reinforced by the lack of substantial objections to the
fee range set by the settlement agreement. Although numerous individuals have objected to the
prospect of a $90 million award of attorneys’ fees, at the high end of the proposed range, none of
those individuals has proposed a reasonable altemative measure of fees. Nor have they provided
specific reasons that the proposed range is unfair or unreasonable, aside from the fact that the fee
award will inevitably reduce the fund available for payments to the class _ a necessary and
unavoidable result. All of these considerations lead the Court to conclude that the proposed fee
range should be approved.
The Court also approves the very modest contingency fees authorized for
non-class counsel who, at a claimant’s request, will represent class members in Track A, and for
all attorneys who represent claimants in Track B. § SA 1| X.A. Set at 2% and 8% of the
claimant’s recovery, respectively, these fees are modest and reflect the necessary balance
between compensating attorneys for the services they provide and preserving awards for class
members to the extent feasible.
68
V. CONCLUSION
Forty acres and a mule. That was the promise made by the government to those
fenner slaves who wanted to farm land in the South after the Civil War. As detailed in this
Court’s opinion in Pigford I, for most African-Americans the promise of forty acres and a mule
was never kept, and the United States Department of Ag;riculture and the county commissioners
to whom it delegated so much power bear much of the responsibility for the broken promise to
those African-American farmers and their descendants. Pigford v. Glickman, 185 F.R.D. at 85.
In the early 1900’5, there were 925,000 African-American farmers in the United States farming
16 million acres of farmland. By the time the Court approved the Pigford l consent decree, there
were fewer than 18,000 African-American farms in the United States and African-American
farmers owned less than three million acres of land. Iii. As the Court said 12 years ago in
approving the consent decree,"[n]othing can completely undo the discrimination of the past or
restore lost land or lost opportunities" to the many African-American farmers who were part of
the Pigford l class. ld. at 1 12. Historical discrimination cannot be undone, but the Pigford l
consent decree was a significant first step, a step that had been a long time coming. And, as
described earlier in this Opinion, LIB at 9, nearly 16,000 African-American farmers received a
total of more than $l billion through the claims process created by the settlement of that historic
CE|.S€.
'I``oday, because of a Congress that was willing to once again waive the statute of
limitations and to appropriate $l .25 billion to help further redress the historic discrimination
against African-American farmers, the Court is pleased to approve the settlement agreement
proposed by the Moving Plaintiffs, and endorsed by the United States, as fair, reasonable, and
69
adequate. lt will also approve the appointment of the neutrals who will participate in the
implementation of the agreement. This settlement is the product of extraordinary efforts by
private litigants and their counsel, by the Congress, and by the Executive Branch. Thc Court
joins all of those parties in hoping that it will bring class members the relief to which they are
entitled.
An Order and Judgment consistent with this Opinion shall issue this same day.
PAUL L. FR]EDMAN
United States District judge
SO ORDERED.
DATE: /,-_,/J;}_v h
70
January 30, 2000. Pigford v. Glickrnan, Civil Action No. 97-1978, Order, at 2 (D.D.C. Dec. 20,
l 999).
lmplementation of all of these provisions of the consent decree was to be overseen
by the "Monitor," another independent, neutral third party whose responsibilities were delineated
by the decree itself. § Consent Decree ff 12. The Monitor was responsible for (l) making
periodic written reports on the good faith implementation of the consent decree; (2) attempting to
resolve any problems that any class member may have with the consent decree; and (3) being
available to class members and the public through a toll-free number to provide information
about the consent decree and the claims process and to facilitate the lodging of any consent
decree complaints and to expedite their resolution. M. 11 l2(b). While there was no appellate
review of the decisions of the Arbitrator, the Adjudicator, and the Facilitator, the Monitor was
authorized to examine them for "clear and manifest error" in the screening, adjudication, or
arbitration of the claim that has resulted or is likely to result in "a fundamental miscarriage of
justice." £l. 1] 12(b)(iii). On a petition for review of a decision granting or denying a claim
submitted in Track A, the Monitor was permitted within her discretion to consider new evidence
- documentation not previously submitted to the Adjudicator _ if she found that "such
materials address[ed] a potential flaw or mistake in the claims process that in the Monitor’s
opinion would result in a Idndamental miscarriage of justice if left unaddressed." Pigford v.
Glicman, civil Action N@. 97-19?3, order of Reference 11 s(e)(i) (li).r).c. Apr. 4, 2000).
2. Results of the Consent Decree’s Claim Resolution Process
As of December 31, 2010, more than 22,700 completed claim packages had been
submitted by individuals eligible to pursue relief under the terms of the consent decree.
v. Glickman, Civil Action No. 9'}'-]9'?'8, Monitor’s Report Regarding implementation of the
Consent Decree for the Period of January 1, 2010, through December 31, 2010, at '}' (D.D.C. May
2?', 201_1) ("2010 Monitor Report"). Of those eligible claimants, approximately 99% elected to
pursue Track A relief, while 170 claimants proceeded to Track B arbitration. I_d. at 10. Over one
billion dollars has been awarded to the approximately 16,000 successful claimants in the form of
direct payments, loan forgiveness, and tax relief. Lc_l. at 10, 19-20.
Although the number of eligible claimants who submitted timely claims under the
consent decree may seem staggering, that figure is dwarfed by the number of individuals who
have sought to submit late claims. As of September 15, 2000, the court-set deadline by which
late claimants were to request permission to file late claims under Paragraph S_(g) of the consent
decree, more than 61,000 individuals had petitioned the Arbitrator for leave to submit untimely
claim packages 2010 Monitor Report at 5. These "late iilers" were laterjoined by an as-yet
uncertain number of "late-late filers" _ individuals who filed Paragraph S(g) petitions with the
Arbitrator after September 15, 2000. &e_ Mot. to Stay at l-2 (suggesting that the number of
late-late filers may be as high as 25,000).
In light of this Court’s order that such petitions should be postmarked by
September 15, 2000, the Arbitrator did not considerany petitions postmarked after that date. §
2010 Monitor Report at 4-5. Instead, in accordance with the dictates of Paragraph S(g), he
reviewed the 61 ,252 timely petitions to determine whether each petitioner’s failure to file a claim
package within the prescribed timeframe resulted from “extraordinary circumstances beyond [the
petitioner’s] control." _Id. Those petitioners who ascribed their failure to submit timely claims to
such uncontrollable circumstances as ill health or the ravages of Hurricane Floyd were given
permission to complete late-claim packages l_d. at 4. That permission was denied to all those
who explained that they had failed to complete timely claim packages because they had only
recently learned of the §gfo_rd lawsuit or the consent decree. _Id. Ultimately, only 2,585 late
tilers _ 4% of the total number _ were permitted to pursue relief under the consent decree. I_d.
at 5.
B. The 2008 Farm Bz'll
In 2008, after extensive hearings on the case and the consent decree, L,
gg;, "Notz``ce " Provz'sz'on in the Pr``gford v. Glickman Consent Decree.' Hear'ing Before the
Subcomm. on the Constitutz``on ofthe H. Comm. on the Judc'cc'ary, 118th Cong. (2004), Congress
resurrected the claims of those who had unsuccessfully petitioned the Arbitrator for permission to
submit late claim packages Under the Food, Conservation, and Energy Act of 2008 (“2008
F arm Bill"), "[a]ny Pigford claimant who has not previously obtained a determination on the
merits of a Pigford claim may, in a civil action brought in the United States District Court for the
District of Colurnbia, obtain that determination.” PUB. L. ]10-234, § I40l2(b), 122 STAT. 923,
1448 (2008). A “Pigford claim" is “a discrimination complaint” as defined by the P_ig@
consent decree, E. § I40]2(a)(3):
a communication from a class member directly to USDA, or to a
member of Congress, the White House, or a state, local or federal
official who forwarded the class member’s communication to
USDA, asserting that USDA had discriminated against the class
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