BLACK FARMERS ARE NOT THE ONLY VICTIMS OF THE USDA

August 26, 2002

Re:  Garcia v. Veneman, C.A. No. 1:00CV2445

United States District Court for the District of Columbia

Imagine, if you will, that your continued existence in your chosen profession depended upon the willingness of three to five of your competitors to approve annually your application for a loan. And imagine further that your competitors were given very broad discretion to interpret highly subjective eligibility criteria such as "character," "creditworthiness" and "experience" in determining your eligibility for these essential loans. We suspect that you would find such a Kafkaesque process unimaginable. Yet that is precisely the process that confronts minority farmers who seek to obtain farm credit and participation in the noncredit benefits programs operated by the Farm Service Agency ("FSA") of the United States Department of Agriculture.

Under a system that dates from the 1930s, farmers for whom the USDA is the creditor of last resort must have their eligibility to receive farm credit and participate in noncredit benefit programs determined by county committees. Historically, these committees have invariably consisted of white male farmers from the local counties. To serve on the committee, the farmer had to be eligible to participate in the programs. Thus, the committee members determining eligibility were not only competitors as farmers, but competitors as potential borrowers. It is easy to see how much a system could lend itself to rampant discrimination against disfavored minorities.

We represent a putative class of Hispanic farmers and ranchers who are suing the USDA, in a lawsuit styled Garcia v. Veneman, C.A. No. 1:00 CV 2445 (D.D.C.), before Judge James Robertson in the District of Columbia. The lawsuit alleges that USDA has discriminated against Hispanic farmers and ranchers in its administration of farm credit and noncredit programs. This case, which was filed by some of the same small law firms that handled the black farmers’ case, is one of several filed by them on behalf of Hispanic, native American and women farmers in wake of the settlement of the historic black farmers case, Pigford v. Glickman.

You have probably seen a number of recent articles about the black farmers case and the controversy surrounding that case. Indeed, there seems to be a concerted effort to use that controversy to obscure the substantial victory achieved in the Pigford case and to deflect attention from the massive discrimination within USDA that continues to hobble minority farmers to this very day. Much of the dissatisfaction with the settlement in the Pigford case stems from the fact that the procedure established to process claims has proven to be misunderstood and the fact that some of the adjudicators considering settlement claims have improperly applied the burden of proof resulting in appeals of those decisions.

The settlement provided for two tracks — Track A and Track B. Farmers who had limited documentation to support their claims could elect Track A. Those farmers had to demonstrate that they farmed or attempted to farm during the relevant time period, applied for a loan from USDA and that USDA denied the loan and that, in denying the loan, USDA treated these farmers less favorably than similarly situated white farmers. Farmers who satisfied those requirements received $50,000, plus $12,500 in tax payments, debt relief and priority consideration for future loans and program participation. Farmers who believed that they had sustained greater damages and had the documentation to prove it could opt for Track B, which provided a one-day mini trial and no cap on damages. The vast majority of black farmers elected to file Track A claims.

Even with some of the adjudicators misapplying the burden of proof, black farmers won sixty percent of the approximately 21,500 Track A claims, which translated into approximately 13,000 black farmers and a total, to date, of more than $800,000,000 in payments and debt relief to black farmers. (According to the most recent Agricultural Census, there were only approximately 18,000 black farmers in the United States in 1997 and, given historic trends, the number is even lower today.) Significantly, the USDA, the Department of Justice and some journalists suggest that the fact that only 13,000 farmers proved discrimination somehow means that discrimination was not and is not a serious problem at USDA.

Another source of concern with respect to the Pigford settlement is that while providing for liquidated damages, debt relief and certain priorities for farmers who proved discrimination, the settlement did not set in place mechanisms (1) to insure that discrimination would be ended once and for all, and (2) to bring transparency to USDA’s lending practices to permit effective auditing of those practices. Consequently, black farmers, who successfully pursued settlement claims, found themselves once again confronting the same individuals and system that discriminated against them in the past and continue to discriminate against them to this very day.

It is against this backdrop that the Hispanic farmers’ case arises. Unlike most cases, this case involves facts that are not seriously disputed. Indeed, the USDA has a long, well-documented history of discrimination that we have chronicled, including findings of discrimination by the United States Commission on Civil Rights and Congress, and an admission by then-Secretary Glickman, the defendant in the black farmers case and the original defendant in the Hispanic farmers case. Amazingly, notwithstanding this well-documented history of discrimination and an historic settlement in the black farmers case, USDA continues to discriminate against Hispanic and other minority farmers. Rosalind Gray, former Director of the USDA Office of Civil Rights, has perhaps best summarized the situation:

[a]fter all the investigations and findings of discrimination, after all the findings that FSA was not in compliance with civil rights regulations, after the millions paid by FSA in settlement of administrative complaints and after the many more millions in debt that FSA has forgiven, there still has not been any change in the way programs are administered. There were many recommendations for change. Yet the systemic exclusion of minority farmers remains the standard operating procedure for FSA.

This story would have been shocking thirty years ago as the nation sought to move beyond the legacy of de jure and de facto segregation and discrimination. Today, it is all the more shocking and appalling that Hispanic farmers and ranchers, along with other minority farmers, are still facing raw and virulent discrimination perpetrated by the USDA, a governmental agency, and financed by taxpayers’ dollars. Moreover, what is even more amazing is that the story of this well-documented discrimination against Hispanic farmers and ranchers is going untold during an election year in which both major parties seek to lay claim to the increasingly important Hispanic vote.

A major goal of the Garcia case is to achieve meaningful and lasting remedial relief in order to root out the discriminatory policies and practices once and for all. A key component of that effort will be achieving sufficient transparency so that, in the future, USDA’s loan and benefit programs can be easily monitored and any remaining problems quickly identified and remedied. The success of this effort will benefit not just Hispanic farmers, but black farmers and, indeed, all farmers who seek fair and equal access to USDA credit and noncredit benefit programs. The case also seeks money damages for those who were victims of past discrimination.

The difficulties encountered in managing the Pigford settlement prompted the firms initially handling the Pigford and Garcia cases to invite Howrey Simon Arnold & White, a national litigation firm with more than 500 lawyers and a reputation for excellence in litigating complex cases, to assume a lead role in the Garcia case. The Howrey firm has the resources, expertise and commitment to prosecute the Garcia case aggressively and effectively. Indeed, since assuming control of the case, the Howrey firm has persuaded the court, over the strenuous objection of the USDA, to set a firm trial date of March 17, 2003, thereby putting the case on a fast track.

If you would like to learn more about this case and to read the declarations of scores of Hispanic farmers recounting their first-hand experiences with USDA discrimination, please visit our website at www.garciaclassaction.com and click on "Case Summary." While visiting our website, also click on "Docket and Filing." There, you will find two documents of particular interest: (1) Plaintiffs’ Supplemental Memorandum In Support Of Their Motion For Class Certification, dated April 8, 2002 and (2) Plaintiffs’ Second Supplemental Memorandum In Support Of Their Motion For Class Certification, dated July 17, 2002. With respect to the April 8, 2002 Memorandum, we invite you to review in particular Exhibits 1, 2, 4, 7, 9 and 10. With respect to the July 17, 2002 Memorandum, we invite you to review Exhibits 8, 40 and 42. Should you have any questions concerning this matter, please call either Steve Hill at (202) 383-6967 or Ken Anderson at (202) 383-7303.

Stephen S. Hill and Kenneth C. Anderson