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, D.C. – April 28, 2011) U.S. District Judge Emmet G. Sullivan
today granted final approval of the historic settlement between Native American
farmers and ranchers and the United States Department of Agriculture (USDA), in
a case known as Keepseagle v. Vilsack. Resolving a nationwide class action
lawsuit, the Keepseagle settlement agreement requires 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 lead plaintiffs’ attorney Joseph M. Sellers, of Cohen Milstein Sellers &
Named plaintiffs Claryca Mandan, of Mandaree, N.D., and Porter Holder, of
Soper, Okla., who attended the fairness hearing on Thursday, 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.”
Added Holder: “This settlement will help thousands of Native Americans who are
still farming and ranching. The USDA has some terrific programs, but Native
Americans must have equal access to them. That’s what the law requires. We
look forward to forging a new era of partnership with the USDA so that our
communities can fully benefit from USDA’s farm loan program.”
The Keepseagle 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 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, 2011 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 2011, 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 2011.
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 on the
IndianFarmClass.com website or by calling 1-888-233-5506.
Under the settlement agreement, 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 whom will be Native Americans or represent
Native American interests and four of whom will be top USDA officials. The
Council 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. The Council will report its recommendations directly to senior UDSA
In addition to establishing the Council, the USDA will take the following additional
steps to improve its services: 1) create 10 to 15 USDA regional sub-offices that
will provide education and technical assistance to Native American farmers and
ranchers and their advocates; 2) 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; 3) create a customer guide on
applying for credit from the USDA; 4) create the Office of the Ombudsperson to
address concerns of all socially disadvantaged farmers and ranchers; and, 5)
regularly collect and report data on how well Native Americans fare under USDA’s
farm loan programs.