USDA to pay $760 million in Keepseagle settlement
- Parent Category: News
- Published: Thursday, 28 April 2011 05:45
- Written by Staff Reports
- Hits: 10380
Historic Settlement Between Native Americans and USDA Granted Final Approval by U.S. District Court
USDA to pay $760 million in damages and debt relief to settle credit discrimination claims
and improve lending to Native American farmers and ranchers
WASHINGTON – U.S. District Judge Emmet G. Sullivan on April 28 granted final approval of the historic settlement between Native American farmers and ranchers and the United States Department of Agriculture in a case known as Keepseagle v. Vilsack.
Resolving a nationwide class action lawsuit, the Keepseagle settlement agreement requires the USDA to pay $680 million in damages to thousands of Native Americans, to forgive up to $80 million in outstanding farm loan debt and to improve the farm loan services USDA provides to Native Americans.
“Final approval of the Keepseagle settlement marks the end of an unfortunate chapter in our nation’s history where USDA’s credit discrimination against Native Americans was the norm. Under this settlement, Native American farmers and ranchers will finally receive the compensation and justice they deserve, and we will undertake a process to ensure that the USDA treats Native Americans equally and fairly,” said the lead plaintiffs’ attorney Joseph M. Sellers.
Named plaintiffs Claryca Mandan, of Mandaree, N.D.; and Porter Holder, of Soper, Okla., who attended the fairness hearing, were elated by the court’s official ruling.
“We’ve waited three decades for the USDA to be held accountable to the Native American people. So today is a great day, indeed,” said Mandan. “The changes to USDA’s Farm Loan Program will mean that our children and grandchildren will inherit a system that is far more responsive and fair to Native Americans than the system that hampered our generation of farmers and ranchers.”
The class-action lawsuit was filed more than 11 years ago, on the eve of Thanksgiving 1999. The plaintiffs alleged that since 1981, Native American farmers and ranchers nationwide were denied the same opportunities as white farmers to obtain low-interest rate loans and loan servicing from USDA, causing them hundreds of millions of dollars in economic losses.
The settlement agreement approved by the court represents an extraordinary result for the plaintiffs. The settlement’s $760 million in monetary relief represents about 98 percent of what the plaintiffs could possibly have won at trial, according to an expert report prepared by a former USDA economist for the plaintiffs. All funds for the settlement will be paid from the federal Judgment Fund, which is controlled by the U.S. Department of Justice, and will not have to be approved by Congress.
Now that the settlement agreement has received final approval, Native American farmers and ranchers will have until Dec. 24 to file claims for damages and debt relief. Keepseagle class members will have an option to file individual claims under either Track A or Track B.
Track A permits eligible class members to recover up to $50,000 by providing information under oath that they are Native Americans, that they farmed or ranched (or attempted to farm or ranch) between 1981 and 1999, that they sought a loan or loan servicing from USDA during that period, and that they complained when they were denied a loan or otherwise treated unfavorably.
Track B permits eligible class members to seek an award of damages up to $250,000, with the amount based upon evidence of their actual economic loss. Track B claims must submit evidence that would be admissible in court to satisfy each of the same elements as Track A, and in addition, must identify a similarly situated white farmer who received more favorable treatment.
Starting in July, class counsel will conduct a series of meetings to assist Native American farmers and ranchers with filing claims under Track A. These meetings will occur throughout Indian Country from July through December. Class members are encouraged to retain individual counsel for Track B claims, as far more is involved in preparing a successful Track B claim than a Track A claim. A list of attorneys willing to consider Track B claims will be provided to interested class members. Claims approved by a neutral adjudicator are expected to be paid in the summer of 2012.
Notification of meetings and information on how to file a claim can be found online at IndianFarmClass.com or by calling 1-888-233-5506.
Under the settlement, the USDA also will forgive up to $80 million in debt currently held by class members whose claims are approved under Track A or Track B. When the U.S. District Court granted preliminary approval of the settlement in November 2010, that order put into effect a moratorium on foreclosures, debt accelerations and debt offsets not already referred to the U.S. Treasury Department.
The moratorium currently applies to all Native American farmers and ranchers and for those who file Track A or Track B claims the moratorium will last until the claims process has concluded. After the debt relief is provided, if there are any class members with remaining debt, who are delinquent on any outstanding USDA farm loan debt, the USDA will engage in a round of loan servicing of that debt.
The third provision of the settlement agreement calls for the USDA to improve the delivery and responsiveness of its farm loan program to Native American farmers and ranchers. One of the most important provisions is the creation of the Native American Farmer and Rancher Council, a new federal advisory committee. The council will have 15 members, 11 of who will be Native Americans or represent Native American interests and four of who will be top USDA officials.
It will meet at least twice a year for the next five years to discuss how to make USDA’s programs more accessible for Native Americans farmers and ranchers. It will report its recommendations directly to senior UDSA officials.
In addition to establishing the council, the USDA will take the following additional steps to improve its services: create 10 to 15 USDA regional sub-offices that will provide education and technical assistance to Native American farmers and ranchers and their advocates, undertake a systematic review of its farm loan policies to determine how its regulations and policies can be reformed to better assist Native American farmers and ranchers, create a customer guide on applying for credit from the USDA, create the Office of the Ombudsperson to address concerns of all socially disadvantaged farmers and ranchers and regularly collect and report data on how well Native Americans fare under USDA’s farm loan programs.