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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Miscellaneous 08-511 IN RE: BLACK FARMERS DISCRIMINATION LITIGATION

Action

September 1, 2011 9:45 a.m.

TRANSCRIPT OF FAIRNESS HEARING BEFORE THE HONORABLE PAUL L. FRIEDMAN UNITED STATES DISTRICT JUDGE APPEARANCES: For all plaintiffs: ANDREW H. MARI{S LAUREL PYKE MALSON CROWELL & MORING LLP 1001 Pennsylvania Avenue, N.W. Washington, DC 20004 (202) 624-2920 HENRY SANDERS CHESTNUT, SANDERS, SANDERS PETTAWAY 1 Union Street Selma, AL 36701 (334) 875-9.264 GREGORIO FRANCIS MORGAN & MORGAN, P.A. 20 North Orange Avenue Suite 1600 Orlando, FL 32801 For the Defendant U.S. Department of Agriculture: MICHAEL SITCOV TAMRA TYREE MOORE TAMARA LYNN ULRICH U.S. DEPARTMENT OF JUSTICE 20 Massachusetts Avenue, NW Suite 6146 Washington, DC 20001 (202) 514-1944

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RAMONA E. ROMERO BRANDI A. PETERS OFFICE OF THE GENERAL COUNSEL U.S. DEPARTMENT OF AGRICULTURE 1400 Independence Avenue, SW Suit 107 W, Whitten Building Washington, D.C. 20250 (202)720-3351 Court Reporter: REBECCA STONESTREET, RPR, CRR Official Court Reporter Room 6511, U.S. Courthouse Washington, D.C. 2001 (202) 354-3249 transcript produced

Proceedings reported by machine shorthand, by computer-aided transcription.

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PRO
COURTROOM CLERK:

C E E DIN
Miscellaneous

GS
case 08-511, Sitting at

In Re: Black Farmers Discrimination plaintiffs'

Litigation.

counsel table are Andrew Marks, Laurel Malson, Greg Francis; at defense counsel table,

Henry Sanders,

Mr. Sitcov, Tamra Moore, Tamara Ulrich. MR. SITCOV: is the general Your Honor, also at defense counsel table

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counsel at USDA, Ms. Ramona Romero, and in the general counsel's

Brandi Peters, who is an attorney office at the USDA. THE COURT: Good morning.

I know there are other sitting -- I see other

lawyers and other interested people people in the courtroom,

but there are other lawyers who sitting immediately behind

represent

some of the class members

counsel table.

Ms. Sanders, good morning. Good morning, Your Honor. else. under Rule 23 of the

MS. SANDERS: THE COURT:

Mr. Frantz, everybody

Welre here for a fairness hearing Federal Rules of Civil Procedure. bit of background - and 11m

And just by way of a little

sure counsel will have more to say -

some of us in this room have lived with this issue and the related case since 1999, I think. wasj the lawsuit was filed in 1997. room have probably litigation That's when the settlement Some of the people in this

lived with the issue that led to the as well, for a lot

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back then, and this litigation

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longer than I have, and some of you and your clients probably have or had parents and grandparents who lived with this prob1e and this issue for a long time. But as Mr. Sitcov knows, and Mrs. Sanders and Mr. Frantz and others know, 12 years ago I approved a settlement in Pigford
vs. Glickman

in 1999.

It was a historic settlement.

It was, I think, the largest civil rights settlement in the history of the country at that time, and it put in place a nonjudicial claims process that was intended to resolve individual claims of discrimination during a period of time fro January 1, 1982, until December 31, 1996. By the end of 2010, 22,721 people had filed claims; 15,747 of those claimants were successful, and they received a total of $1.05 billion in estimated tax payments and debt relief. These were individuals primarily in Alabama,

Mississippi, Georgia, Arkansas, North Carolina, South Carolina. But I think, contrary to the hopes of lots of people, not everyone who had a claim was able to file a claim. Some

people probably didn't get notice; some people never pursued their claims because they didn't think that there would be anything that came of this lawsuit; some people had been disappointed so many times by their state and federal government in the past that they didn't think that Pigford going to accomplish anything.
vs. Glickman

was

And so they didn't file claims.

Something like 65,000 people requested that they be permitted to

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file claims late in the Pig.ford case, and most of those people were denied under the terms of the consent decree in the Pigfor case, and therefore they were unable to participate in their claims process and never had their individual claims resolved. Through the efforts of a lot of people, Congress was persuaded that something ouqht;to be done about;that. And as

many of you know - perhaps all of you know - in June of 2008, Congress passed, and then the President signed, the Food Conservation and Energy Act of 2008 as part of the Farm Bill. And that statute created a new cause of action, aridpermitted people to file claims in this court if they met the definition of the original Pigford class, and Congress appropriated

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$100 million, which obvi ousLy was not going to be enough. So through the efforts of a lot of people, Congress and the main thing that Congress did, of course, was, as I said, to create a new cause of action, And they again waived the

statute of limitations and said that people could file a lawsuit if they brought it within two years
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and subsequently -- and

they, within the statute, tried to parallel kind of the two-track system of the original Pigford case.

There were some differences between the original lawsuit and the new statute. First had to do with the fact that

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the money available was limited by this statute to $100 million. And that was the primary difference. Again, a lot of people

went to work, went back to Congress, and Congress passed the

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Claims Resolution Act of 2010 to provide an additional $1.15 billion, and the President signed that into law on December 8th, 2010. So Congress has appropriated $1.25 billion to fund this case, and the claims in this case, and the government of the United States, the Justice Department representing the Secretary of Agriculture, and plaintiffs' class counsel have proposed a settlement. And the settlement agreement, which man of you have seen, is very voluminous. It essentially -- and

I'll let counsel speak to this.. What it does, it creates a similar two-track system similar to the one that existed in the original Pigford case. And I preliminarily approved this on May 13th, 2011, and preliminarily designated it as a class action. And under

the preliminary approval, the plaintiffs' class counsel, with the help of an expert, sent notices - radio, television, newspaper - to where they thought they would reach the largest number of potential class members. And within that notice ther~

were certain deadlines set, and reiterated in my order of May 13th, 2011, that objections to the settlement had to be filed by a date certain, and sCheduling this fairness hearing. The purpose of this hearing under the Federal Rules of Civil Procedure is for me to decide whether the sett1ement reached between the plaintif.fs class counsel, on behalf of r their clients and the members of the class, that they reached

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with the government of the United States{ I need to determine whether that settlement is fair, adequate, and reasonable. I

look at the original complaints that were filed{ what were the claims plaintiffs were seeking, and I look at the settlement that was reached and what is proposed, and the question is whether it's fair, adequate, and reasonable. we're here. I issued an order on August 26th, 2011, and at the end of last week or earlier this week a couple of additional orders in terms of what the scope of this hearing is. And I listed in And that's why

that order, I think, all of the entities and individuals from whom we heard with respect to objections, and I said that what I propose that we do in terms of presenting the objections is to proceed in the following way; First hear from plaintiffs' class counsel; hopefully, for those of you who haven't read every word in this document, to explain in some specificity what the settlement is all about and what they propose and what they've agreed to with the government, and why they think it's fair, adequate{ and reasonable. And then I have to hear from governm~nt counsel.

And then there are four groups that have filed written objections that I've indicated in this order will be allowed to speak for up to 15 minuteSt and then all other objectors for up to five minutes. And those groups and individuals, one is Mr. Martin,

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Precious Martin, who represents a number of individuals, and he has filed a number of documents with respect to this. Then

there's the Black Farmers and Agriculturalists Association, Mr. Burrell; then the Federation of Southern Cooperatives Land Assistance Fund, Mr. Paige; and then the National Black Agricultural Alliance, Mr. Goldmon. If they want to speak, eac And then I'll hear fro

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of them can speak for up to 15 minutes.

other people who have indicated their desire to be heard today. So that's the process and the procedure that we'll follow. We'll take as long as we need to, and after I have

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heard from everybody I will issue an opinion at some point soon deciding on whether or not to approve the proposed settlement agreement that was filed in February 2010, and revised as of August 17th, 2010, along with certain clarifications that have been made subsequently. So
I

guess that's all I have to say.

And I'll start

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with plaintiffs' class counsel. MR. MARKS:

Mr. Marks, are you up?

Your Honor, for the record, Andrew Marks,

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one of the counsel you've designated, at least on an interim basis, as lead class counse1 along with Mr. Andrews and Mr. Francis. One point of clarification. In your order setting

forth the procedure - and we I re flexible, however the Court wants to proceed - we thought that you wanted to hear first the reasons why class counsel advocates the approval, then hear fro

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the government, settlement

and then hear a longer explanation If you would rather

of the

implementation.

THE COURT: MR. MARKS: THE COURT: MR. MARKS:

However you want to do it. Whatever the Court prefers.

However you want to do it. Okay. So let's do it this way:

Mr. Sanders and Mr. Francis are going to take the lead in advocating reasonable, to the Court why this proposed and adequate; settlement is fair,

I'll make a few comments

about the

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adequacy of notice, because, of course, under Rule 23, the Court needs to make findings about the adequacy of noticei and then a

I'll try and walk through, which as the Court references, complex and detailed process settlement agreement,

and walk through the

that would follow if the Court were to approve it. So if that's okay with the Court -THE COURT: MR. MARKS.: THE COURT: MR. SANDERS: That's fine. -- I'll turn it over to Mr. Sanders. Good morning, Mr. Sanders. Your Honor. How are you? Your Honor, I the named And

Good morning,

would first like to take a moment and introduce plaintiffs.

Two are here, and one is unable to be here. and he's from

the first one is Mr. James Copeland, Harris County, Georgia. open heart surgery, not travel alone.

And he came in spite of recently having

and his wife is with him because he could And with the Court's permission, I would like

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to ask Mr. Copeland to stand. THE COURT: Good morning, Mr. Copeland. Thank you. Welcome.

MR. SANDERS: is Mr. Earl Moorer.

The second one, Your Honor,

Hels from White Hall, Alabama, about

20 miles east of Selmar and heTs here because he filed on behalf of his fatherr who is deceased. And he had a very -- the

grandfather had a very small farm, and kept going to Lowndes County trying to get relief, and never received relief. I forgot to just point out briefly about Mr. Copeland. When he went in to get relief, Your Honor, he was told not to look the USDA official in the eye. And then his application got

losti he came back and filled out another one; it got lost a second time. By then he began to realize that it was getting

lost on purposer and he complained. The third one is Marshallen McNeil, Your Honor. She is

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not here, but she is from Camden, about 40 miles from Selma. And she's had multiple surgeries for breast cancer, and now her doctors believe she has pancreatic cancerr and all of that is b way of -- I donlt think I had Mr. Moorer to stand up. Mr. Moorer? THE COURT: Good morning. Judge Friedmanr I would like to start by

MR. SANDERS:

saying that I wish that JR Chestnutr Junior was standing here -THE COURT: So do we all. -- instead of me. He would be joyful an

MR. SANDERS:

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he would be proud that this has come this far.

This is just a

few days past August 28th, which some 40 years ago Dr. Martin Luther King stood on the Mall and lifted a quarter of a million people in person, and tens of millions that went across the country by the news media, and he really talked about his dream for America. And we're here today, Judge, because a lot of black farmers had an additional dream. They had the same dream, but

they had an additional dream, and that dream was to be able to provide for their families and themselves. That dream was to be

able to be independent and have self-respect, and in so many instances the USDA predecessors ended up in one way or another turning that dream into a nightmare. And this court went a long

ways in the Pigford case bringing that nightmare to an end for a whole lot of farmers. far-reaching decision. It was not only historic, but it was a And we're here to say how much we

appreciate that decision. And as the Court has pointed out, a lot of folks got i but a lot of folks didn't get in. And I think the Court is

correct that some didn't get notice, but many of them did not think anything would come of it. And that was a very reasonable

position to take, because there had been so many scams in the community, and so many rip-offs, that some just didn't want to take another chance on another scam and another rip-off, so the didn't apply. But I'm glad that the Congress of the United

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States

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after many years of being petitioned, saw fit to give And the Court

those who tried to get in another opportunity.

has already laid that out in some detail, but the efforts of this court were heroic in trying to include them. And one of the things that Dr. Martin Luther King said, not on that day but on other occasions, he said that the arc of the moral universe is long, but it bends toward justice. And

for these black farmers, Judge Friedman, it has been extremely long because it started a long time before, and in one way or another, nearly all of these farmers either didn't get the chance to farm or were driven from their farm. And that's not

just an economic decision, that's has a decision on their identity, on their self-respect, artthe way they see themselves and see their families and see all of the folks that are connected to them. And that is why it I s so important that we

all help to bend that arc just a little bit more towards justice. And we oelieve that if this settlement is approved,

given final approval, then it will advartcejustice in that sense. The judge pointed out -- Judge, you pointed out that the standard is fair, reasonable, and adequate that that standard has been met.
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and we believe

But I want to talk a little

bit about a little higher standard that we tried to include, an it was whether this was just, whether this was efficient, and whether this was effective, and whether it was done with

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integrity. We believe, Judge, that it was fair because it balance a lot of interests. The black farmers had an interest in being

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compensated for the discrimination that they sufferedi the U.S. Justice Department and USDA had various interests. The

Justice Department certainly wanted to see that everyone could be included that could be included; we wanted to see that, too. This settlement does that. They wanted it because it would

bring things to an end; we wanted it because as many farmers as possible ought to be treated just. The way this settlement is constructed is effidient, because in the first Pigford case I think the last appeal was

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just rendered this year, some 12 years later; under this settlement, this entire matter would be resolved by -- hopefull by this time next year. So that's efficient. And that was

22,000 people; this is going to be anywhere from 85,000 to whatever. a lot more. We don't know quite how many, but we know it will be And under this settlement it will resolve in a muc

shorter period of time. Under this settlement, it's effective because -efficient because it would do it using the least amount of resources possible in terms of time, in terms of money, and in terms of other resources. There's also always an lssue I should say,

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Judge Friedman, that we don't claim that this is a perfect

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settlement.

I don't know of any perfect

settlement.

But we

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really think it meets those kinds of standards. the issue of adequacy

We think that

is always a big issue, because you can But Judge, this and as you and now the

make a case that there ought to be more money.

is all the money that the Congress has appropriated, pointed out, they started out with just 100 million, it's one and a quarter billion dollars. amount is one issue of adequacy, procedures also.

And therefore,

but all of the different

And I won1t go into those in detail because

others will be going into that, This was a compromise Department representing between the U.S. Justice representing USDA, and
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the government,

representing

-- it took two years of negotiation, point.

of compromise

to reach this particular that's included decision in this.

That is an element of fairness where a

The element of neutrals,

would be made by somebody other than the lawyers, by by somebody who has the I think that that's

somebody other than the administrator, background

to make these kinds of decisions,

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an element of fairness.

But all of this is done within the

context of a short period of time. And I may say, Your Honor, that there are a lot of -in addition, there will be many other people who apply who will
100 ,000
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have to be dealt with - maybe another

we don I t know who are not

but many other people who would have to be processed

on the list but you have to deal with them in any kind of way.

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And to do all of this by this time next year is a Herculean task, but the way this settlement is structured, it can be done. I want to touch on just two other little things and I'll be through. I'll stop. I won't be through, but I'll stop.

The lBO-day period of time, I just want to touch on that. Because in the first case, we couldn't do that within that period of time, and I simply -- I believe that it can be done i that period of time. I think it's well organized; the basic

universe is identified, when I know the universe wasn't identified before; there are a lot more lawyers, a lot more class counsel involved; there are a lot more resources available to being able to get that done, and we expect that every lawyer -- I mean, every claimant, every black farmer claimant, would have the opportunity to have a face-to-face meeting with class counsel in this process. And the other one is the appeal. With people dying

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almost every day, it was imperative that this be brought to a conclusion as quick as possible, and the Court has been moving this as quick as possible. But in the initial appeal -- I mean,

in the initial case you had to have a white farmer, and most of the appeals involved the issue of either the absence or the inadequacy of a white farmer. We don't have that here.

In this particular settlement, another important distinction is it was contested; this is not contested. The And

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procedure provides for a neutral, but it's not contested.

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we don I t want another five years, not to speak of another 12 years in appeals, and in our opinion, it will be able to do that. And yet we feel with the training with the class counsel,

with their participation and everyone getting an opportunity to do that without charge, we feel that the training of the neutrals involved with it will also make that possible. And I want to end my remarks by simply saying that one of the wonderful things about Dr. Martin Luther King was that he recognized that the arc of the moral universe was long and it bent toward justice, but he also believed in helping bend that arc just a little bit. And we think that the Court has done a case,

tremendous job in bending that arc in the first Pigford

and we think that the Court has an opportunity to bend it a little more so that it will end up meeting justice, at least for these thousands of -- tens of thousands of people who were involved. And we thank the Court for giving us the opportunity

to say these few words. THE COURT: Appreciate it. Thank you very much, Mr. Sanders.

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Mr. Francis? Good morning, Your Honor. May it please

MR. FRANCIS: the Court.

Judge, I would like to start off by acknowledging

not only the presence of the named plaintiff in this case, but many other black farmers who have traveled many miles to be here today to see and to witness justice. I think it is important to note that the individual

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known as the American today. Research

Black Farmer has virtually that between

disappeared

demonstrates

1920 and 1997, just there's been

after the period of the complained a 98 percent decrease country.

discrimination,

in the number of black farmers in this to an overall decline among white

Now! this compares

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farmers of approximately

66 percent.

There is, of course, more than one reason for this precipitous decline of black farmers generally, for black

farmers have vanished But unfortunately,

in greater numbers than white farmers. in the South, in the rural that one of the leading

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a n many place

communi ties, it is widely believed

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causes of why this is true is because of racial discriminatory practices by the USDA. A report by the civil rights action team in 1997 somewhat tells the story. There are some, based on this report

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and the investigation, plantation.

who called at the time the USDA the last the USDA was one of the and perhaps the last to It's

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An old line department,

last federal agencies

to integrate,

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include women and minorities considered

in leadership

positions.

a stubborn bureaucracy

and slow to change.

However, there's before,

Your Honor, we stand before you, and I think As she has been acknowledged the presence of general and the

light on the horizon.

I would also like to acknowledge

counsel for the United States Department other members of the USDA. I believe

of Agriculture,

that demonstrates

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commitment of Secretary Vilsack and the Obama administration to putting an end to and curing this sordid past. And so, Your Honor, welre before you tOday to present second black farmers settlement, this one designed to allow those who were denied the opportunity to have their claims hear on the merits in the initial case because they failed to file the claim in a timely fashion. Itls important to note that

while this present claim is a direct descendant of the Pigford action, it I S very different in many respects, and it I S important to note. Significantly, the underpinnings of the case are very different. The Pigford action involves civil rights claims

under the Equal Credit Opportunity Act and Equal Access to Justice Act i the present case is a result of, as you noted before, an entirely new cause of action created by Congress an 2008 through Section 14012 of the Farm Bill. This new cause of

action revived the otherwise foreclosed claims of those who were untimely in filing their claims in the initial Pigford action. Also, unlike the Pigford case, where meritorious claims were paid without limit from the judgment fund, in the present case there!s a finite amount of money available to pay meritorious claims and the costs of administration and implementation of the settlement. When creating this new cause of action, Congress provided a special fund initially of $100 million. As a result

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of the settlement of this case, Congress increased the funding to a total of 1.25 billion in the Claims Resolution Act of 2010. As Congress made clear in that act, however, this additional funding was contingent upon approval of this settlement by you, Your Honor. And also, unlike the initial Farm Bill that was

passed in 2008, the Claims Resolution Act was explicitly clear that no additional funds would be appropriated to pay Section 14012 claims. Judge, youlll recall that soon after the Farm Bill passed in 2008, claimants began filing lawsuits. It's my

estimation that claims were filed on behalf of approximately 29,000 individuals shortly after the initial Farm Bill was passed. Ultimately, after these suits were filed and after

two years of hard fought negotiations with the government, the parties, along with the government, entered into the settlement agreeMent before you today. My co-lead counsel Andy Marks will go into more detail about the provisions of the settlement and the claims process. But for my remarks today, just let me say that the settlement agreement overall, and the claims resolution process created by that settlement, has significant benefits for the class members. And I would like to point out some of note. First and foremost, by establishing a Rule 23(b) (1) limited fund class, the settlement ensures that all meritorious claims will receive a fair share of the funds Congress had

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appropriated. the courthouse

Without

settlement,

it would have been a race to

to see who could get their claims heard and for the initial $100 million appropriated.

obtain their portion

The settlement

also assures that class members will be fashion, but with procedural are made

paid in the most expeditious protections correctly.

in place to ensure that decisions

Again, Mr. Marks will talk about the process, but i to the claSs, the settlement to receive their award, makes it possible

terms of benefits for class members potentially

if meritorious,

at the end of 2012 or early 2013 i whereas without class members WQuld face uncertain litigation. is to lower the In the initial recovery

the settlement,

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after many years of protracted Another benefit evidentiary
Pigford

of the settlement

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standard

for Track A claimants.

action they were required

to meet -- Track A claimants of the evidence standard.

were required

to meet a preponderance

Here, in this case -THE COURT: substantial evidence The Track A claimants were -- it's a in

standard in Track A and preponderance
Pigford.

Track B in the original

I think the standard was the in both

same, but one of the things that had to be proved Track A and Track B in Pigford situated white farmer. required

was that there was a similarly

And as I understand

itt

that's not

in this case for Track A. MR. FRANCIS: Yes, Your Honor, that has been eliminate

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for Track A in this case.

The settlement allows class members

to benefit from automatic foreclosure relief that they would otherwise have to request in an administrative proceeding before the USDA. One of the things that I think was noted by you, Your Honor, with regard to notice, this settlement provides a comprehensive notice process to ensure everyone with potentiall meritorious claims is made aware of the settlement in this case. Granted, we have somewhat of a different cause of action because we have an identifiable list of claimantsi therefore, as the extensive declarations filed by Kinsella indicate, notice has been provided in a number of different ways to the potential class members. Targeted print, television, and radio ads have

run, and outreach efforts to organizations in the relevant communities have been initiated. Additionally, should the Court

see to approve the settlement, direct notice will be provided to the 5(g) claimants as well. Finally, Your Honor, Rule 23(b) (1) limited fund class provided by the settlement provides -- creates a mechanism for the Court to provide and identify trained representatives for all class members. Class counsel has went through extensive

training with regard to the rules and regulations of the USDA, the available programs, loan programs, and what was required to qualify for those programs. Along these lines, the settlement also provides several

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methods for payment of attorneys' fees and costs and implementation.. The settlement caps certain implementation costs, and provides for court oversight so that the costs of implementation and administration do not unjustifiably dilute the funds available. With regard to attorney compensation, I think itrs important to note that initially when this case was filed, the claimants who hired attorneys had filed and signed contingency fee contracts with many of the counsel involved, some at 20 percent or higher of their recovery. Now, with the

settlement, with respect to class counsel, the agreement sets a range of attorneys' fees of 4.1 to 7.4 percent of the available funds, less certain expenses. For attorneys the class members

may retain on their own, the settlement caps their compensation as well. As the Court made clear in the rulings prior to this hearing today, we're not going to argue to this Court, and the Court is not going to consider today, what specific award withi the range may be appropriate, or how attorneys' fees should be allocated amongst the various lawyers involved in the case i however, you are going to consider today whether the proposed fee range is fair and reasonable to class members. Your Honori on behalf of the class, we respectfully submit to you that the proposed attorney fee range is fair and reasonable for a number of reasons. At the outset, the

25

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settlement agreement negotiated at armIs length with the government contemplates a fee award within this range, and the law in this circuit requires this court to use a percentage of the common fund analysis to evaluate attorneys' fees. Under

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this method, and based upon research submitted to the Court prior to the hearing today, even the high range of this fee is reasonable and compares favorably to similar class action settlements of this magnitude. The range is also appropriate given that class counsel have obtained substantial benefits for the class, and have demonstrated skill and e.f.ficiencyn negotiating and i implementing the settlement. Finally, with regard to fees, Your Honor, we believe that the range is appropriate and reasonable in light of the work that has been performed thus far to get us to this point, and the work that is anticipated to bring this case to a conclusion through the claims process. This settlement,

Your Honor, is a product of vigorous armIs length negotiations with experienced counsel, and negotiated with the government, removing the possibility of fraud or collusion. One last important point to note, Your Honor. This

settlement provides a reasonable compromise of the potential tensions between what are known as late versus late late claimants in this case. claimants. There are sufficient funds to pay all But if

Regardless of status, they will be paid.

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there are not sufficient funds, then late late filers will be paid 70 percent what late filers are paid, in recognition of the potential difficulties late filers would face if required to litigate their claims. Your Honor, you're aware your task today, as you indicated in your opening remarks, is to determine whether the proposed settlement is fair, reasonable, and adequate for class members. You need not decide that settlement is perfect or eve Stated another way, the Court must examine

the best possible.

whether the interests of the class are better served by the settlement than by further litigation. In evaluating that, the

Court should determine whether the settlement is adequate and reasonable, and not whether a better settlement is conceivable. As demonstrated by our filings, Your Honor, and the evidence an information we've provided to you, the settlement is an outstanding result, in our opinion, for the clc;l.sS members, and more than meets the legal requirements for final approval. Judge, the pursuit of justice has never been easy. There are those who would stand in the way. continues to the end, but we're close. The struggle

We'll see it through.

On behalf of myself and other class counsel, we submit to you that we remain steadfastly committed to shepherding home this essential act of justice. We would ask that you approve this

settlement so that we may get to work in providing the settlement's benefits to these black farmers. Thank you.

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1

THE COURT: MR. MARKS: It I S daunting

Thank you very much, Mr. Francis. Good morning, Your Honor. Andrew Marks.

2

3 4 5 6 7 8 9 10
11

to follow the eloquence

of Mr. Sanders and first the issue of the to the

Mr. Francis, but I do want to address

adequacy of notice, because I know that r s of importance Court, and obviously a requirement under Rule 23 (e).

And then,

as the Court pointed out, this is a long and complex settlement agreement. It1s 44 pages, single spaced, No one thought, when

we sat down to negotiate like.

this, that that1s what it would look there are so many to do it the and to

But thatrs what it ended up, because

complexities

and because we were so determined

12
13

right way and to really anticipate make sure we addressed a process possible, integrity.

all the variations,

this and created

a result that was fair, as

14 15
16 17

that was fair, a process

that was as efficient

and, as has been underscored, And underscore

a process that has of the integrity,

the importance

because as it I S a limited fund, dollars people who do not have meritorious from those who do have meritorious class has an interest Secondly, in integrity,

that may get paid to take away

18
19

claims potentially claims.

So number one, the

20 21 22 23 24 25

we all recognize

that werre dealing with to ensuring that in the that

public funds, and we I re all committed best possible way, consistent

with the efficient process, funds and ensuring

we are safeguarding

those public

that those claims.

funds are being paid to individuals

who have meritorious

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And that required a lot of complexity in the drafting.

We had

tremendously skilled and experienced counsel on the other sidei to say that the negotiations were vigorous and armis length is a dramatic understatement, but one that we all approached with commitment, with goodwill, and believe that after two years of negotiation and 20 some odd drafts, what lim going to describe as the process is a process that the Court should find to be fair, efficient, adequate, and reasonable. with respect to notice, I would note, Your Honor, that no objection has been made to the scope and breadth of notice. And indeed, given the amount of resources spent - almost $2 million approved by the Court for notice - and the multifaceted approach of notice, we hired Kinsella media, recognized widely as one of the premier, if not the premier, class action notice companies. We worked with

Ms. Kinsella, the president, with Ms. Macauley and Ms. Ghiselli, who are both here today, to design a process. We spent an

enormous amount of time, they spent an enormous amount of time. Ms. Kinsellals declaration that was in support of the Courtls -that we submitted at the preliminary approval I think demonstrated that, and I think that her declaration submitted i support of the motion for final approval confirms it. And just to indicate kind of how effective the reach has been so far will not stop. and the notice program, I should underscore, We are determined -- in the hope that the Court

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does approve will continue

this, once approval

is granted,

the notice process until the

in many ways and number of outreaches

180-day claim period is done.

Our work will not end in that

regard, so I want the Court to know that you have class counsel's commitment on that. As of early

5
6

But to date, the numbers are impressive. A.ugust, Epiq, who is the claims administrator approved and who was receiving

7 8 9 10 11 12 13
14

that the Court has Epiq has for

the calls and inquiries,

already received claim packages,

-- had received more than 62,000 requests

more than 143,000 calls to its toll free number, web site.

and more than 68,000 unique hits to its settlement And I I ve seen numbers yesterday obviously have continued

that showed that tho.se numbers

to grow. the notice that's given: Direct

So it underscores postcards literally

1.5 16 17 18 19 20 21 22 23 24 25

sent to everyone whose address we could find; something like 90,000 postcards changed, went out. When they

were returned with addresses The media, of hundreds

they were sent out again. declaratio

there's a list attached of media outlets,

to Ms. Kinsella's

broadcast

and print, and many

other forms of outreach. So we would ask the Court to make the finding under Rule 23 that notice has been adequate. than adequate We think it
I

S

been more

to satisfy Rule 23, and we therefore

would ask the in

Court to make the finding that notice has been provided accordance wi th your pre 1iminary approval

order, it I S been give

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in an adequate

and sufficient

manner, and it constitutes

the

best notice practicable the requirements

under the circumstances,

and satisfies

of due process., I must say, I think I've commented in a

THE COURT: conference

5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
I

call I had with you and Mr. sitcov at one point that of this, the notices themselves, the short

given the complexity

forms and the long forms, were actually understandable understand English that non-lawyers

in plain, easily I think could readily

what was required

of them in term of the filings and else. And I was to use

obj ections and scheduling impressed with the ability

and everything to understand

and the ability

plain English, which is something company undoubtedly prides

that I know Ms. Kinsella's But there are a lot of

itself on.

things that we see in the class action world that doesn't meet that standard. MR. MARKS: either. THE COURT: MR. MARKS: of that, and Kinsella think. So I would like to turn now to a review of how the settlement will be implemented indulgence, if the Court approves it. And No, So we all worked very hard in recognition did a great job on that i Your Honor
I

Not necessarily

the strong suit of lawyers,

we

with the Court's because

it will take me a little time

it's complex.

I'll try and keep it as simple and

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straightforward as possible, but I don't want to skip some of the important steps, because I know for folks who are here, the want to be able to understand exactly what is being presented. THE COURT~ MR. MARKS: In plain English. In plain English. You've raised the bar.

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

So let me say that as the Court has recognized, and like in Pigford, this settlement agreement proposes a two-track process, a Track A and a Track B. Track A is a streamlined It is an

process, it's one that can be handled efficiently.

uncontested proceeding that will be resolved -- I'll talk a little bit later about the role of the neutrals. resolved under a substantial evidence standard. is contained in the Farm Bill, Section 14012. It will be That actually

So it's a

standard that's less rigorous, which is not to say it doesn't have rigor, but it's less rigorous than the preponderance of the evidence standard that would typically apply in a federal court case. And claimants submitting claims under that Track A are entitled to if there's sufficient money, entitled to $50,000,

debt relief if they still have debt they owe under the programs that were related to the discrimination they suffered, and also a tax payment that would be paid directly to the IRS on their behalf. Because, of course, receipt of a payment, of an award

like this, is a taxable event, and so in recognition of that, the statute and the Claims Resolution Act and the settlement

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agreement

provide

for a tax award to be paid, so that hopefully a $50,000 award will actually individual

2 3 4 5 6 7 8 9
10
11

the claimants

who are receiving

net that amount of money. tax circumstances credit.

But, of course; everyone1s

are di.f.ferent,but that 1s the goal of that tax

Track B -- and I would just say at the outset, were relatively

there

few Track B claims in the first Pigford ease,

and we do not expect there to be very many at all here, for a variety of reasons. who believe I donlt need to go into that, but for those that they might be eligible for Track B/

claimants

Track B offers them the prospect THE COURT: MR. MARKS:

of a recovery up to $250,000.

12 13 14 15
16 17 18

Why was that number selected? Let me say why a number was selected, and

then say that the number was a matter of intense negotiation. A number was selected because it was a limited fundi

and we did not believe it would be fair to have an enormous amount of the overall funds go to a handful of people without knowing what the magnitude
I

and

of claims would be, we all

19 20
21

agreed that out of fairness to the overall class, there ought to be some number. that -- and 11m because The limitation on Track B was so we would get can speak to it as well, There were two ways to tr
I

sure the government

22 23 24 25

they felt strongly about it.

and make sure there is a viable Track B process doesn't distort the overall distribution The first limitations

but it also

of funds. total of

would be $100 million

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the 1.25, or roughly 1.25 paid to claims. somewhere between,I

So the math is So we

guess, eight and nine percent.

wanted a limit to make sure that most of the money was available for Track A because most of the claimants Track A. Secondly, within Track B we wanted to make sure there could be spread for everyone there. by far will be

was enough money so that that $100 million equitably, and yet still leave enough money

So as I say, it was making sausage, but the sausage ended up with the $250,000. seen both from Pigford And we believe, based on what welve that we I ve talked

I and from the clients

to in this case, that $250,000 be sufficient for the Track B1s.

in almost every case is going to

But to come back to the point, Track B is a rigorous process. First of all, Track 8, unlike Track A, a claimant has that there was a similarly situated white farmer of their
L; it

to demonstrate

who was treated better discrimination.

than they were as a measure

And that was a hard process
II - in this case,

in Pigford

will be harder in Pigford because of the passage difficult standard. Secondly, economic damages.

I should say - just a

of time.

So that is potentially

a claimant

in Track B has to show actual a

Whereas under Track A itrs essentially

liquidated

damage sum, 50,000; here, the measure has to be you and you have to show

have to show your actual economic damages,

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it not by substantial evidence, by a preponderance of the evidence. That likely will require an expert in many cases to It's going to be a

demonstrate how you calculated your damages. process.

We think there will be Track B 's, we hope people who

have economic damages they can show will pursue Track B, but we think the number will be relatively small. So the process creates these two tracks, and claimants will have to elect one or the other of the tracks. Track A, it will be irrevocable. If you elect

If you elect Track A, you have

to go down the Track A route, because it will be highly inefficient and disruptive for people to be going back and forth. But in the case of Track B, we negotiated something a little more lenient. We said if you elect Track B, it would be

potentially unfair if you elect Track B and then find out there are 5,000 Track B claims, and in fact you would get less under Track B than you would under Track A. So we negotiated into the

agreement that the Track B will not be adjudicated until we kno the universe of claims. Once we know the universe of Track B

claims, then notice will be go out to all the Track B claimants and their counsel that says: There are this many Track B

claims; would you prefer to go Track A or do you want to stay i Track B? We thought that was a matter of fundamental fairness,

because if someone didn't find out, they went through the hurdles of Track Band maxed out at $35,000, for example. Don't

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think that will be the case, but that safety net is there. So the process, if the Court approves the settlement, upon the final approval date, a lBO-day clock will be running, and that is the time by which all claimants will have to file their claims. So just for those who are sort of doing the

mental calendar, were the Court to approve this September 15th, that would mean that all claims would have to be submitted by March 15th. That means that in that 180-day period, we've

said - Mr. Francis, Mr. Sanders said, and 1111 repeat - class counsel is committed to meet in person, be available to meet in person with every member of the class who wants to meet with a lawyer. And we encourage all class members to do so, because under the settlement agreement, there is no additional charge. Any class member can meet with a lawyer, have the advice of a lawyer, and will have to pay nothing if they use class counsel. So welre hopeful. Because even though the claim form

itself is not complicated, in our experience - and welve had experience working with the claim form already - those clients who work with counsel I think are going to have a better chance of presenting a valid claim. So in that 180-day period, we have plans to schedule scores of meetings throughout the country, but particularly in Alabama and Mississippi and the South, as well as much direct outreach, so that as many possible class members will be able to meet with class counsel.

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The claims must be submitted by the end of the 180-day period. When the claims are submitted, they will go to the That's Epiq Class Action Recovery Systems

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
20

claims administrator.

that the Court has already approved, and hopefully in the final approval would reaffirm. Epiq has done an extraordinary job, I

would say, so far in helping us through the first couple of months under the preliminary approval, and we're confident they have the systems in place to help us manage this efficiently. Epiq -- it would be Epiq's responsibility to review each claim that comes in to make sure it I S complete, and also to make the initial determination. And the initial determination is: Is

the person who submitted a class member or not a class member. And you'll recall that the definition of the class that we have proposed, and that the Court has preliminarily approved, is individuals who submitted a late filing request under Section 5 (g) of the Pigford
VS.

Glickman

consent decree between

October 13th, 1999, and June 18, 2008, and who did not receive a determination on the merits in the first Pigford case. This is

not a second bite at the apple for people who participated in
Pigford,

this is a bite at the apple for those who were unable

21 22 23 24 25

to participate. So there's a threshold determination that the claims administrator will make, and not every person who submits a claim is going to be determined to be a class member. many will not. In fact,

And unfortunately, that I s because the statute

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that creates the cause of action that welre settling limited the recovery in this case to people who were eligible to claim in
Pigford I and who made a late filing request.

4 5 6 7 8
9

So the claims administrator will make that determination. That will not be an appealable determination.

They will make that determination, and once they've made that determination, those completed claims by people who are determined to be class members will be sent to a neutral. THE COURT: will be notified? MR. MARKS: People will be notified, absolutely. Presumably - I'm sure it's in here - people

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

People will be notified at that time if theylre determined not to be a class member. And attached to the preliminary approval

order, or I assume to our final request, are forms that the Court has already looked at, and should look at again, of course, that would be the notification that people would receive. Once it goes to the neutral -- let me talk just a little bit, briefly, about the neutral process. discussed briefly already it
I
I

Itls been
I

but we believe that as in Pigford I

S

important that the decisions be made by people who are

neutral, who don't have any stake in the process, but who are experienced, who have high integrity, who are recognized from a history on the bench or the bar to be men and women of judgment, and who everyone can feel confident are going to work hard to

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review the claims, and are going to review them with integrity and with fairness. We have proposed to the Court that the Court approve ,J.AMS. 'I'ha s an acronyrn J-.A-M-Sis now its formal name. t.t , know the Court is familiar with JAMS. I

For those who are not

familiar, JAMS is recognized throughout the country as one of the leading dispute resolution firms, has an extraordinarily competent and experienced group of individuals, former judges and members of the bar, on its roster, and JAMS also has the benefit of having substantial experience from the Pigford case, which we think will be very helpful and important to ensure that the neutrals who are looking at these claims have the knowledge and background and sophistication to reach the right result. We filed a motion I know the Court has taken under advisement. questions. Mr. Levy from JAMS is here if the Court has any We've proposed that Mr. Levy be the chief Track A
I

neutral, and he's got a list -- we proposed a list of former judges and lawyers that we have proposed at least at the outset would be the decision makers as neutrals for JAMS
I

and that

Mr. Michael Lewis would be the chief Track B neutral, and also be able to use people on that same roster. In that regard, Your Honor, if I may, it's come to our attention that one of the former judges who was intended to be on the Iist submitted to the Court, Judge Richard A. Levie,

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L-E-V-I-E, a former Superior Court judge in the District of Columbia - I know the Court knows Judge Levie - we would ask if the Court does see fit to approve that motion, if the Court would be willing to add Judge Levie to that roster. We think

he's an important addition, and he has experience in Pigford I. So the claims will be sent to the neutrals. will be assigned to a neutral. outfit known as Brown Greer. Brown Greer. Each clai

7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
25

JAMS will be working with an

We've proposed to the Court

Many of us on class counsel side have experience

working with Brown Greer in other class actions and mass claims cases. They bring tremendous sophistication and a great talent

pool, and I think will make an effective team to tee up the claims for the JAMS neutrals to review and make decisions. The neutrals, as I said, will decide the elements of each claim using a substantial evidence standard in the case of Track A and preponderance of the evidence for Track B. the end of the day, the neutrals will make decisions on each of the claims.
I

And at
I

yes or

no

JAMS is committed to devote enormous

resources, because they understand the importance of getting this process done quickly. THE COURT: And this is not going to be -- in either

case, am I correct, the government is not going to be contesting the claims? Track B? MR. MARKS: Yes, Your Honor, that is true. That's true of Track A; is that also true of

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So from an efficiency standpoint, the claims will be able to proceed on the papers submitted. It's not anticipated

there will be live hearings, that there will be that kind of adversarial proceeding, which we believe is very much in the interests of the class, particularly because of the importance of having a process that's efficient and that can be completed, we hope, as Mr. Sanders indicated, by this time next year, or certainly by the end of next year. So it's important that we have the commitment from JAMSi they've given us that commitment - I'm sure they'll give it to the Court - that they've got the resources devoted to process those claims. They will be reviewing claims -- they're It will

not going to wait until the end of the lBO-day period. be done on a rolling basis.

But we ant~cipate that the claims

review and determination process will go at least to the middle of next year. Once all the claims have been decided, that's where the agreement actually gets a little more complicated. And we wish it didn't have to be, because if there were unlimited money, we wouldn't have to worry about it. But as has already been

underscored, as the Court stated, Congress has seen fit to only give 1.25 billion, and that may not be enough. how many successful claims there are. It depends on

If there are not -- do

the math, but whatever the math is, if there's enough money to pay all the claims in full at the 50,000 plus tax relief for

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Track A, and whatever complexity

the Track B amounts are, then a lot of the agreement falls aside, and the

of the settlement

3

checks will be able to be sent out promptly. However, if there's not enough money to pay all the

4
5

claims in full, then we have to address how do we fairly deal with -- make sure everyone a cardinal principle proposed. is treated the same. Because that's that we've

6 7 8
9

for the limited fund settlement

I know it's been an important

issue for the Court

from the beginning; important

it' s important

to class counsel, and it' s

10 11 12 13
14 15

to all class members. So the claims administrator has given a very detailed how to divide the pot to As Mr. Francis

set of formulae to go about deciding

make sure that everyone gets paid equitably. indicated; agreement there is a distinction between

drawn in the settlement

late filers, those who filed a written request
I before

16 17 18 19 20 21 22 23 24
25

to participate deadline

in Pigford

the September

15th, 2000,

that was in this court's July 2000 consent decree, and

those who filed a written request after that and all the way up to the time of the Farm Bill. disparity whether is because And the reason there' s a as to

there was a heated disagreement

the Farm Bi 11 -THE COURT: Regardless of which side of the line they

fallon,

they had to have made a 5(g) request? MR. MARKS: They had to make a 5(g) request. Exactly. betwee

And the result of that dispute was a settlement

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{ \

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3

the lates and late lates that is embodied agreement, everyone

in the settlement

that says that if there's not enough money to pay less.

in full, the late lates may get paid somewhat

4 5
6

It's a very detailed the calculations

formula, but at the end of the day, when

are done, the checks will then go out promptly And our hope, our goal, and as much as we is to have that done, and

to all class members,

7 8
9

can ever make a moral commitment, everything possible. THE COURT:

in our power to have that done as early in 2012 as

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

At some point in the process,

even before

you get to that, you have to advise the Track B people that given the number of Track B and the $100 million cap, that the most that anybody is going to get, hypothetically, if there are

too many of them, is not 250, but X, and then they have to make a judgment as to whether they want to move to Track A. MR. MARKS: I should have emphasized that. So that

would happen, Your Honor.

At the end of the 180-day period, we So within 30 days of

will know how many Track B's there are.

that - I think it says 30 days - but quickly after that there will be a list of who'S filed Track B. A notice will go out to them to say: And they've

all of them and the counsel who have represented

Here's the number; do you still want to do Track B. got a limited time, obviously, to respond.

So the Track B adjudications

will then take place

--

again, if the end of the claim period were March 15th, 2012,

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hypothetically in May.

it would be in April

-- or I'm sorry, it would be But that will still give

It would be a 30-day process.

enough time to get all the Track B's done, and at that point, as I say, JAMS has committed the resources to do that.

So I think that basically And if there are any questions thing. The Court has indicated

reviews the overall process.

6

-- I would just say one other that it may want to appoint an That is

7 8
9

ombudsperson provided

to be able to oversee the process. agreement,

for in the settlement

and that ombudsperson

10 11 12 13 14 15 16
17

would report directly additional

to the Court.

And I think that's an to know it an

important safeguard

for the class members,

that they've got this additional can address issues and concerns

person who is overseeing

they may have about the process.

So, Your Honor -THE COURT: the ombudsperson in Pigford
I.

It's very, very clear in the proposal

that

does not perform

the role that the monitor did that

There is no monitor review, there is nothing review. Everything that JAMS does with

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looks like appellate Brown Greer is final. MR. MARKS: THE COURT: the ombudsman.

That1s

right. to me, or to

Nobody can go to a monitor,

The ombudsman

is not going to review decisions. on individual claims, it's and report

As I read the settlement

agreement

going to look more at systemic

issues and problems,

to me, and will have access to the neutrals

and to you and to

Rebecca

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the government and that sort of thing. role. MR. MARKS:

But it's a very limited

That's correct, Your Honor.

Thatls what

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the settlement agreement proposes. So unless the Court has questions, 1111 sit down and let the government address it. THE COURT: MR. SITCOV: Okay. Mr. Sitcov?

May it please the Court, 11m Mr. Marks gave a

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Michael Sitcov from the Department of Justice.

pretty detailed explanation of how we got to where we are, what the terms of the settlement agreement are, and I don I t think there 1 s a need forme to repeat those. There are a couple of

issues, however, that I would like to address with the Court. One is the issue of the agreement being fair, adequate, and reasonable. To begin with, there is a fixed amount of money thatls available to all prevailing class members. The agreement

devises a fair and expeditious process for dividing that fund among what would be tens of thousands of successful claimants. I think Mr. Marks explained in more detail than I think I need to how that will work, but we agree that it is fair to do it the way the agreement provides. Also, the agreement avoids substantial problems that were associated with the consent decree, as you alluded to, and that I s because it does not involve USDA in any substantial

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fashion.

For that reason, the extraordinary contesting

costs and time DSD

devoted to Pigford one-third

claims of a class that's only large

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the size of this one, and the need to reassign

numbers of county office staff away from helping farmers to work on the settlement -- on the adjudicatory as well. the process itself ought processes themselves

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has been eliminated

So for both of those reasons,

to operate much more smoothly and expeditiously in the Pigford consent decree.

than the process

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To be a little bit more specific, we don't think there's any doubt that the settlement with Rule 231s received requirement. agreement is consistent that was

The only objection

relating

to the requirements certifies

of Rule 23(a) is that the

set tlement agreement commonality decision,

a class that doesn't satis.fy the The recent
vs. Dukes

requirement

imposed by 23(a) (2).

as I'm sure the Court is aware, in Wal-Mart the Supreme Court's

(sic), reaffirms holdings;

long line of commonality can be an issue of

more specifically,

that commonality

fact or law, and that the commonality resolution, not the allegation

inquiry turns on the

of the claim.

In Wal-Mart, quoting:

the court put it this way, and I'm to class certification is not the

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"What matters

raising of common questions, capacity of a class-wide

even in droves, but rather the to generate common answers

proceeding

apt to drive the resolution

of the litigation.!!

Rebecca Stonestreet

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The claims of the putative class easily satisfy this test. The common question before the Court is how to fairly an

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promptly divide among as many as 65,000 class members the $1,250,000,000 that is available to pay them in the case for settlement. The answer to that question is the ADR processes

that Mr, Marks described, that the settlement agreement provides, to create the drive that resolves the entire universe of those claims. As far as Rule 23(b) (1) is concerned, this is

exactly the situation that is addressed in 23(b) (1)(B), where individual adjudication as a practical matter would be dispositive of the other class members not parties to the individual adjudications. There's presently a $100 million common fund created b a special appropriation, Section 14012 of the 2008 USDA Appropriations Act
I

and it's the only source of funds presently The minimum

available to pay all successful class members. award under Section 14012 would be $62[500.

That means that

absent the settlement[ there's only enough money to pay awards to about 1,500 farmers. That would moot the claims of the The settlement agreement resolved

remaining 63,500 farmers.

this problem because it will create a large enough fund so that every successful class member will receive a substantial award, even if every class member is successful. In sum, Your Honor, because the settlement agreement is fair, reasonable, and adequate, and satisfies Rule 23(a) (2) and

Rebecca Stonestreet

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(b) (1) (B), the Court should approve

it. I have nothing mor

Unless the Court has any questions, to say, THE COURT: anybody Okay. Thank you.

Well, I think, unless

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else at plaintiff's

table or defense table have anything

to say - Ms. Sanders does - this would be a good time for a break before we hear from everybody else,

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Ms. Sanders, do you want to say something? MS. SANDERS: this is the appropriate May it please the Court. I!m not sure time I

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time, but at the appropriate

would like to speak to the Court about some concerns and clarifications decide. THE COURT: MS. SANDERS: THE COURT: Concerns and clarifications to what? - not objections - at the time that you so

To some of the issues in the settlement. All right. Well, what I propose to do is

to hear from the objectors, after consulting than welcome to.

and if you want to speak thereafter, youlre certainly more

with your colleagues,

MS. SANDERS: Your Honor. THE COURT: break.

I've consulted

with them.

Thank you,

Okay.

I

think the court reporter

needs a

So why don't we take a 15-minute

break, after which 1111

hear from Mr. Martin, then from Mr. Burrell and Mr. Paige, Mr. Goldmon, if they're all here, if they would like to speak,

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for no more than 15 minutes each, and then we will proceed with hearing other people who have indicated a need for speaking. (Recess taken at 11:03 a.m.) THE COURT: I indicated Okay. Under my order of August 26th, 2011,

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there were four individuals

that, based on their 15 minutes, up to

filings, would have 15 minutes, 15 minutes.

if they needed

And the first person is Mr. Martin, Are you here, Mr. Martin? I'm wrong. Are you

Precious Martin. Precious Martin?

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MS. PRICE:

Good morning,

Your Honor.

May it please

the Court, my name is Dana L. Price of Precious Martin & Associates. I'm here in representation Okay. -- if that's okay. Yes. Could you spell your first name for of Mr. Martin --

THE COURT: MS. PRICE: THE COURT: the court reporter? MS. PRICE: THE COURT: bi t r

D-A-N-A,

P-R-I-C-E. a little

And if you lower the microphone

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since you I re not as tall as Mr. Si tcov. MS. PRICE: THE COURT: MS. PRICE: I think I am. Okay. Like I said, may it please the Court, and also

Your Honor

l

with respect to the other plaintiffs counsel and the government

plaintiffs'

- can I just say that & Associates
l

today I'm just here on behalf of Precious Martin

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and basically I want to let the Court know that Mr. Martin stands upon his briefs and the arguments therein. If the Court

has any questions, I would be happy to answer them. THE COURT: Well, I'll tell you, let me just say this:

As I understand at least the primary arguments that Mr. Martin has made, he thinks that people ought to be able to opt out of the class and bring their own lawsuit. primary point. And as I read the legislation -- and I think somebody at plaintiffs' table and Mr. Sitcov have alluded to this. As I And that's certainly his

read the legislation, Congress has appropriated $1.25 billion. And if thi.ssettlement or something close to this settlement is not approved -- I mean, I expect that if I needed to make some minor modifications, I could do that, or if I wanted to go back to counsel, as I have on occasion during the process, and suggested things to them, including writing it more -- in plainer English than the original draft that I saw. But I think

what Congress has said is that if there's not a settlement agreement approved by the Court, then there's no longer $1.25 billion available. The statutes could be read to suggest

that there would still be $100 million available, but not $1.25 billion available. And Mr, Sitcov just spoke to that,

said if you divide 100 million by 62,000, or even 20,000 or eve 40,000, there isn't a whole lot of money there. So if I allowe But that's

opt-outs, the argument is that would be the result.

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what Mr. Martin wants. Secondly, there's an argument, I think, that -- I mean, therers a suggestion in his filings that we can just -- those who opt out can bring lawsuits and get money from the Justice Department or the Agriculture Department from the general fund or the judgment fund or the settlement f und or whatever the funds are called that they normally use in normal lawsuits. But the response to that is, well, that wouldn't One is that Congress has said

actually work, for two reasons:

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theexecuti ve branch cannot use any fund of money other than this $1.25 billion for this case; and secondly, that there wouldnrt be a cause of action at all if it weren't for Congress having waived or eliminated the statute of limitations. So what I guess with this question: itrs a long comment, but it ends

Why would it be in the interests of

Mr. Martin rs clients or any other African-American farmers for me to reject the settlement agreement and/or permit opt-outs? MS. PRICE: THE COURT: Is that it? I'm done. I basically think that based on your
mel

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MS. PRICE:

argument -- the question that you just asked

Your Honor, in

reference to the legislation that was passed, upon our brief filed August 31st - I believe that was yesterday - that issue was addressed in detail. I can scan through it and give you a

general argument of what that is.

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The legislation that was passed can be seen as a bit unconstitutional, the legislation that was passed; therefore, that legislation being passed stating that! we can come to the idea that that legislation is unconstitutional, therefore the distribution of those funds can be allocated in a different way. THE COURT: Well, if it's unconstitutional -- both

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statutes, the first statute, the Farm Bill, and the second statute? MS. PRICE: Our brief iterates that the second would be

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unconstitutional; whereas we're still back and forth on the first. But definitely the second, I believe. THE COURT: So if I were to agree with you that the

second statute is unconstitutional, then there would only be $100 million left. MS. PRICE: Well, I guess you could say there would be

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$100 million left, but that would leave us to of course attack the first one, then. But at the end of the day we're basically

saying that we have questions as to both; but definitely as to the second. THE COURT: So if the first one were unconstitutional,
0

that would mean that the statute of limitations will have run 62,000 African-American farmers, and nobody has a lawsuit.

If I

were to agree with you and say the statute, either the first one or the second one or both, were unconstitutional, and you and others wanted to pursue claims against the

Rebecca Stonestreet

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354-]249

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..net

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Agridulture Department, I assume that Mr. Sitcov and his colleagues would file a motion to dismiss because this lawsuit is barred by the statute of limitations, which would have ended in 1980 -- I donlt know whether it would have ended in 186 or -it depends whether the original ECOA and EAJA statute of limitations kick in, or whether the expanded statute of limitations from Pigford I kicks in. in 1997 or 1998. So, you know, 11m just asking. I understand your But I think that expired

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argument, but 11m not sure how any African-American farmer benefits, if I agree with you. MS. PRICE: Well, in that case, Your Honor, I would sa

ln general view of the situation, rather than approval of this proposed settlement and certification of the class, we ask that the opt-out option be given. anyone benefit from that? And then you say: Well, how will

Well, welre saying it would basicall Okay, well,

allow a person to come back and say to themselves:

I donlt like the options you've given me, so I should have the option to get out. That affirms their due process rights.

We're saying that once this is approved, without that opt-out option, a person basically says: nothing else. Take this or take

And we just don't believe that's constitutional. Okay. Well, I guess what I'm responding

THE COURT:

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and I'll look at the cases youlve cited and everything, but I guess what 11m saying is, if I were to permit opt-outs, Congress

Rebecca

Stonestreet

(202) 354-3249

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