Pigford, Timothy v. Glickman, Dan ( 2000 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 28, 2000 Decided March 31, 2000
No. 99-5222
Timothy C. Pigford, et al.,
Appellees
Leonard C. Cooper,
Appellant
v.
Dan Glickman, Secretary,
The United States Department of Agriculture,
Appellee
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Consolidated with
No. 99-5223
Appeals from the United States District Court
for the District of Columbia
(No. 97cv01978)
(No. 98cv01693)
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David M. Schnorrenberg argued the cause for appellant.
With him on the briefs were Richard T. Seymour, Teresa A.
Ferrante, Stephon J. Bowens, Marcus Jimison, J. Michael
Klise and Matthew C. Hans. Julie Nepveu and Julie L. Gantz
entered appearances.
Alexander J. Pires, Jr. argued the cause for appellees
Freddie Jones, et al. With him on the brief was Phillip L.
Fraas.
Robert M. Loeb, Attorney, U.S. Department of Justice,
argued the cause for appellee Dan Glickman, Secretary, The
United States Department of Agriculture. With him on the
brief were David W. Ogden, Acting Assistant Attorney Gen-
eral, Marleigh Dover, Special Counsel, and Wilma A. Lewis,
U.S. Attorney.
Before: Sentelle, Rogers and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge: Leonard C. Cooper appeals the
district court's order approving a consent decree settling
lawsuits brought by a class of approximately 20,000 African-
American farmers, of which Mr. Cooper is a member, against
the United States Department of Agriculture ("USDA").1
See Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999). Un-
der the decree, the United States is likely to provide an
estimated $2 billion in debt relief and monetary payments in
consideration for the dismissal of the class' complaint alleging
that USDA systematically discriminated against them on the
basis of their race. See id. at 111. Making no claim that the
farmers' individual claims cannot be fairly and justly resolved
under the decree, Mr. Cooper contends instead that the
benefits of the consent decree are illusory because USDA has
__________
1 Mr. Cooper is the only member of the class to appeal although
in noting his appeal he purported to file on behalf of himself
individually and as a representative of a class of African-American
farmers, sending copies to nine named persons. None of those
persons is a named appellant, however. The class representatives,
the named plaintiffs in the district court, and the Secretary of
Agriculture are appellees.
reserved the right in paragraphs 19 and 21 to undo the
decree by regulatory fiat, depriving the farmers of any judi-
cial relief and, thus, the district court abused its discretion in
approving the decree as fair, adequate, and reasonable under
Rule 23(e) of the Federal Rules of Civil Procedure. As
clarified by stipulations in the briefing and oral argument on
appeal, no basis exists to conclude that USDA would promul-
gate such a regulation under laws in effect when the decree
was approved by the district court. While paragraph 19
leaves the class exposed to potential congressional enact-
ments nullifying or modifying the consent decree, the class
would bear that risk in any event, at least so long as the
decree remains executory. Additionally, Mr. Cooper's con-
tention concerning the limitation of the district court's author-
ity by paragraph 21 is inconsistent with the plain language of
that provision. Accordingly, because Mr. Cooper's conten-
tions are unpersuasive on their own terms, and, in light of the
benefits conferred on the class by the decree taken as a
whole, we find no abuse of discretion by the district court,
and we affirm.
I.
The consent decree settling the class action was the prod-
uct of lengthy and, at times, contentious negotiations. The
background is set forth in Judge Friedman's comprehensive
opinion, Pigford, 185 F.R.D. at 89-92, familiarity with which
is assumed, and we repeat only the details necessary for this
opinion.2
USDA indirectly administers programs that provide credit
and other benefits to farmers. The USDA's credit and
benefit programs are federally funded, but the decisions to
approve or deny applications for credit or benefits are made
at the county level by a committee of three to five members
elected by local farmers and ranchers. In addition to acting
on credit and benefit applications, the county committee
appoints a county executive to assist farmers in completing
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2 The district court's opinion appears as an appendix to this
opinion.
their applications and to recommend to the county committee
which applications should be approved. Id. at 86. USDA has
promulgated a number of regulations governing how these
officials are to administer the credit and benefit programs,
but the evidence before the district court shows that USDA
has exercised little oversight regarding how applications his-
torically have been processed at the county level. Id. at 86-
88. For years, African-American farmers, who have been
significantly underrepresented on the county committees, see
id. at 87, have complained that county officials have exercised
their power in a racially discriminatory manner, resulting in
delayed processing or denial of applications for credit and
benefits by African-American farmers not experienced by
white farmers who are similarly situated. Id. at 87-88. Such
discriminatory treatment is prohibited by statute and by
regulation. See 15 U.S.C. s 1691(a) (1994); 7 C.F.R.
ss 15.51, 15.52 (1999). In December 1996, the Secretary of
Agriculture appointed a Civil Rights Action Team to investi-
gate allegations of racial discrimination in the administration
of USDA credit and benefit programs, and, in February 1997,
the USDA Inspector General reported that USDA had a
backlog of discrimination complaints in need of immediate
attention. The President and the Secretary thereafter
sought appropriations to carry out the recommendations to
improve USDA's civil rights efforts. Pigford, 185 F.R.D. at
111.
On August 28, 1997, three African-American farmers filed
suit on behalf of a putative class of similarly situated African-
American farmers alleging racial discrimination in the admin-
istration of USDA programs and further harm from the
allegedly surreptitious dismantling of USDA's Office of Civil
Rights in 1983, which together were alleged to violate the
Fifth Amendment, the Administrative Procedure Act, 5
U.S.C. s 551 et seq.; Title VI of the Civil Rights Act of 1964,
42 U.S.C. s 2000d; and the Equal Credit Opportunity Act
("ECOA"), 15 U.S.C. s 1691, prohibiting discrimination in
consumer credit. Following amendments to the complaint,
the district court granted class certification in October 1998.
See Pigford, 185 F.R.D. at 90. At that time, most of the
farmers' ECOA claims were arguably barred by a two-year
statute of limitations. See 15 U.S.C. s 1691e(f). Responding
to petitions from class members, Congress enacted, and the
President signed in November 1998, an amendment to retro-
actively extend the limitations period for persons who had
filed administrative complaints between January 1, 1981, and
July 1, 1997, for acts of discrimination occurring between
January 1, 1981, and December 31, 1996.3 A second class
action, Brewington v. Glickman, Civ. No. 98-1693, filed in
July 1998 and making similar allegations covering a different
time period, was consolidated with Pigford for purposes of
settlement, and a new class was certified. See Pigford, 185
F.R.D. at 90.
As the February 1999 trial date drew near, the parties'
negotiations shifted from individual claims to a global settle-
ment, id., and with the assistance of a court-appointed media-
tor, the parties developed and agreed to a consent decree that
contemplated a two-track dispute resolution mechanism to
determine whether individual class members had been the
victims of discrimination and, if so, the amount of monetary
relief to which they were entitled. If a class member opts for
resolution under Track A, "class members with little or no
documentary evidence [will receive] a virtually automatic cash
payment of $50,000 and forgiveness of any debt owed to
USDA," id. at 95; whereas, class members opting for Track
B resolution have the opportunity to prove their claims in a
one-day mini-trial before an arbitrator and, if successful, the
amount of monetary damages is not capped. Id. Class
members dissatisfied with the opportunity for resolution of
their claims under either Track A or Track B could opt out of
the class within 120 days of entry of the consent decree, and
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3 See Pub. L. No. 105-277, s 741, 112 Stat. 2681 (codified at 7
U.S.C. s 2297, notes); see also Statement By President William J.
Clinton Upon Signing H.R. 4328, 34 Weekly Comp. Pres. Doc. 2108
(Nov. 2, 1998) ("This bill will also address the long-standing discrim-
ination claims of many minority farmers by adopting my request to
waive the statute of limitations on USDA discrimination complaints
that date back to the early 1980s."), reprinted in 1998 U.S.C.C.A.N.
582.
file individual lawsuits. Id. The district court is to appoint a
monitor from a list of names provided by the parties "to track
and report on USDA's compliance with the terms of the
Consent Decree." Id. at 109.
By law, the proposed consent decree could not take effect
until the district court had approved it, see Fed. R. Civ. P.
23(e), and the district court's approval could not be granted
until notice had been given to the class of the proposed
settlement and a fairness hearing had been held to determine
whether the "settlement is fair, adequate, and reasonable and
is not the product of collusion between the parties." Pigford,
185 F.R.D. at 98 (quoting Thomas v. Albright, 139 F.3d 227,
231 (D.C. Cir. 1998)). The district court held a day-long
hearing in which representatives of eight organizations and
sixteen individuals, including Mr. Cooper, voiced their objec-
tions to the terms of the proposed consent decree. Many,
including Mr. Cooper, objected to the absence of certain
forms of prospective structural relief, notwithstanding the
fact that the complaint, as amended, did not seek such
injunctive relief. Id. at 110. While USDA was likely to face
billion-dollar monetary liability under the decree, no changes
to the county committee system were mandated, and objec-
tors feared that no improvements would be made to the way
in which the farm credit and non-credit programs are admin-
istered. See Transcript of Fairness Hearing ("Tr."), Mar. 2,
1999 at Joint Appendix (JA) 388 (Mr. Bowens); 493 (Mr.
Cooper). They also maintained that insufficient information
had been exchanged during the discovery period leading up to
the settlement. However, at the fairness hearing, neither
Mr. Cooper nor his counsel voiced the objections raised now
on appeal to paragraphs 19 and 21 of the decree. Instead the
National Council of Community Based Organizations in Agri-
culture ("NCCBOA") argued to the district court that para-
graph 19 "contemplates that a future statute or regulation
may interfere with the relief that is provided by the decree."
Tr. at JA 410. Without specifically mentioning paragraph 21,
NCCBOA objected to that provision on the grounds that the
class members "are remitted to contract law claims against
the Government, but the contract here expressly provides
that they can't have their claims reinstated and the Govern-
ment has got a defense because of its new regulation to the
relief that's provided by the Consent Decree." Tr. at JA 411.
Following the hearing, the district court suggested fourteen
changes to the proposed consent decree, including modifying
paragraph 19 to require USDA to use its best efforts to
comply with laws prohibiting discrimination and modifying
paragraph 21 to make clear that the district court retained
jurisdiction to enforce the consent decree with its contempt
power. The class and USDA rejected the first suggestion
and adopted the second. The district court then allowed
another round of written objections to be filed to the revised
consent decree.4 After considering all of the objections and
the entire record, the district court approved the proposed
consent decree as fair under Rule 23 and ordered that the
decree be entered. Mr. Cooper noted an appeal from the
order, but he did not seek a stay of proceedings under the
consent decree pending appeal.5
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4 Objections made directly by Mr. Cooper questioned whether
class counsel truly represented the interests of the class members
and suggested that the decree contain a provision rendering it void
if either USDA or class counsel took steps to obstruct the district
court's jurisdiction to enforce the proposed decree. Mr. Cooper's
counsel, on behalf of Mr. Cooper, filed eight pages of objections,
which also questioned the capacity of class counsel to represent the
class, but made no mention of either paragraphs 19 nor 21 nor of
the enforceability of the decree as a general matter. In addition,
the North Carolina Association of Black Lawyers Land Loss Pre-
vention Project at North Carolina Central University Law School
filed a set of objections jointly with three other organizations,
including NCCBOA, which stressed, among other things, the view
that in light of paragraphs 19 and 21, the district court's contempt
power was inadequate to enforce the decree.
5 Although the figures differ, USDA and class counsel repre-
sented in their respective briefs that more than 20,000 persons have
filed claims under the decree. See Appellee USDA's Br. at 15;
Appellee Plaintiff Class' Br. at 12. At oral argument, class counsel
represented that as of February 25, 2000, decisions in 9,573 Track A
cases had been rendered of which 5,746 claims were granted and
II.
The law is well settled that the decision to approve a
consent decree is committed to the sound discretion of the
district court. See, e.g., In re Prudential Ins. Co. of Am. Sales
Practices Litig., 148 F.3d 283, 299 (3d Cir. 1998). The
district court's role in reviewing the decree is to protect the
interests of absent class members, and that is done primarily
by evaluating the terms of the settlement in relation to the
strength of their case. See Thomas, 139 F.3d at 231. The
appellate court is not to substitute its views of fairness for
those of the district court and the parties to the agreement,
see Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th
Cir. 1992), but is only to determine whether the district
court's reasons for approving the decree evidence apprecia-
tion of the relevant facts and reasoned analysis of those facts
in light of the purposes of Rule 23. See Thomas, 139 F.3d at
231; see also Kickapoo Tribes v. Babbitt, 43 F.2d 1491, 1495
(D.C. Cir. 1995). Mr. Cooper bears the burden on appeal of
making a "clear showing" that an abuse of discretion has
occurred. See Moore v. National Ass'n of Sec. Dealers, 762
F.2d 1093, 1107 (D.C. Cir. 1985). He has not done so; on the
contrary, the district court fulfilled the requirements of Rule
23 in exemplary fashion.
On appeal Mr. Cooper has abandoned the objections he
raised in the district court regarding the lack of prospective
structural relief and confines his challenge to the consent
decree to paragraphs 19 and 21, which he contends give
USDA, in effect, the right to unilaterally withdraw from the
consent decree leaving class members with no judicial reme-
dy. Mr. Cooper thus contends that the district court erred
by failing to notify class members specifically of the terms of
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paid in an amount totaling $359,125,000. Of the 3,827 Track A
claims that were denied in whole or in part, one third have been
appealed under the terms of the consent decree. In addition,
approximately 146 class members have opted for resolution under
Track B. Four cases have been completed, and eighty others are in
discovery.
the two paragraphs and by approving the decree without
requiring alteration or deletion of the two paragraphs.6
In his opening brief, Mr. Cooper contended that USDA can
use paragraph 19 to renege on its agreement in the consent
decree in one of three ways: (1) Congress could pass new
legislation that USDA could interpret to preclude some or all
of the relief provided by the decree; (2) USDA could promul-
gate new regulations to the same effect without new legisla-
tion; or (3) USDA could interpret existing law to bar the
relief provided in the decree without promulgating a rule. In
subsequent briefing by appellees class counsel and USDA,
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6 The paragraphs under attack provide:
19. Defendant's Duty Consistent With Law and Regulations
Nothing contained in this Consent Decree or in the Final
Judgment shall impose on the defendant any duty, obligation or
requirement, the performance of which would be inconsistent
with federal statutes or federal regulations in effect at the time
of such performance.
....
21. No Effect if Default
Subject to the terms of p 17, above, [conditioning the decree's
obligations on a final judgment dismissing the complaint] and
following entry by the Court of Final Judgment, no default by
any person or party to this consent Decree in the performance
of any of the covenants or obligations under this Consent
Decree, or any judgment or order entered in connection there-
with, shall affect the dismissal of the complaint, the preclusion
of prosecution of actions, the discharge and release of the
defendant, or the judgment entered approving these provisions.
Nothing in the preceding sentence shall be construed to affect
the Court's jurisdiction to enforce the Consent Decree on a
motion for contempt filed in accordance with p 13 [requiring
parties to conciliate before filing contempt motion].
The last sentence of paragraph 21 was added after the fairness
hearing.
and at oral argument, it has been clarified that there was no
intent that paragraph 19 include the second and third possi-
bilities; rather, USDA stipulates, and class counsel concurs,
in their respective briefs that paragraph 19 "simply recog-
nizes the legal reality that Congress makes the laws, and that
it is the obligation of the government to perform prospective-
ly in conformance with the then binding laws enacted by
Congress." See Appellee USDA's Br. at 25; Appellee Plain-
tiff Class' Br. at 11.
With that clarification, USDA's promise to perform under
the consent decree is not illusory because USDA has not
reserved a unilateral right to withdraw, cf. Gray v. American
Express Co., 743 F.2d 10, 19 (D.C. Cir. 1984) (interpreting
New York law), rather it would take action by Congress to
enable USDA to withdraw from the consent decree. Conse-
quently, under elementary principles of contract law, USDA's
promise to perform was backed by consideration at the time
it was made and the parties have assigned to the plaintiff
class the marginal risk that Congress might nullify the agree-
ment in some respect by future legislation. Although the
evidence before the district court establishes the basis for
class members' mistrust of USDA and concern that the risk
may be more than hypothetical, see Pigford, 185 F.R.D. at
110, the fact that Congress and the President acted quickly to
remove a limitations bar to the plaintiffs' recovery indicates
that as of October 1998 all three branches of the federal
government had taken steps to aid in the final resolution of
the farmers' claims on the merits. The district court noted
the priority commitment of the President and the Secretary
of Agriculture, spurred by the efforts of the African-Ameri-
can farmers, to obtain funding to carry out recommendations
improving USDA's civil rights efforts, as well as Congress'
"unprecedented action of tolling the statute of limitations."
Id. at 111. And Mr. Cooper acknowledged through counsel
on appeal that he has no evidence that this three-branch
commitment has waned. The district court could therefore
reasonably conclude when approving the decree that the risk
of a radical about-face in current federal policy was remote.
More fundamentally, even in the absence of paragraph 19,
the class would bear the risk of such hypothetical legislation,
at least so long as the decree remains executory. See Penn-
sylvania v. Wheeling and Belmont Bridge Co., 59 U.S. (18
How.) 421, 431-32 (1855); BellSouth Corp. v. FCC, 162 F.3d
678, 692-93 (D.C. Cir. 1998); see also Landgraf v. USI Film
Products, 511 U.S. 244, 273-274 (1994); Rufo v. Inmates of
Suffolk County Jail, 502 U.S. 367, 378 (1992).7 Thus, we
need not pass upon Mr. Cooper's' contentions concerning
possible constitutional limitations on Congress' power to enact
such legislation, see Plaut v. Spendthrift Farm, Inc., 514 U.S.
211 (1995), nor address the ramifications of such legislation
under the reasoning of United States v. Winstar Corp., 518
U.S. 839 (1996), to conclude that the district court did not
abuse its discretion by approving the proposed consent de-
cree, as amended, which assigns a risk to the plaintiff class
that it would have borne in any event.
As to Mr. Cooper's contention that paragraph 21 deprives
the farmers of the right to ask the district court to modify the
decree or reinstate their lawsuit in the unlikely event that
Congress passes legislation nullifying the decree, it too relies
on a misplaced concern. Paragraph 21 provides that if the
government defaults on its obligations under the decree, the
plaintiff class can enforce the decree only by motion for civil
contempt. Mr. Cooper reads this provision to also "strip[ ]
the district court of its authority to reopen the final judg-
ment" if Congress enacts legislation allowing for the decree to
be nullified in whole or in part. However, the very basis for
Mr. Cooper's contention concerning paragraph 19 is, and
USDA agrees, that USDA would not be in default under the
agreement if Congress passed new legislation nullifying, or
directing the Secretary to nullify by regulation, the consent
decree. Because that action would not qualify as a default,
the provisions of paragraph 21 would not apply. Thus, Mr.
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7 It is to be noted that the relief Mr. Cooper seeks, an order
vacating the decree and remanding for trial, could require that
plaintiffs' cases be tried over a number of years, see Pigford, 185
F.R.D. at 104, and thus could expose class members to this risk for
a far longer period.
Cooper's contention that the consent decree is unfair because
the class would not be able to seek relief under Rule 60(b) of
the Federal Rules of Civil Procedure is mistaken. On its
face, paragraph 21 does not foreclose that avenue of relief
when USDA has not defaulted, and thus were Congress to
enact the hypothesized legislation, paragraph 21 would not
bar the class from seeking modification of the decree, subject
to its ability to "establish that a significant change in facts or
law warrants revision of the decree and that the proposed
modification is suitably tailored to the changed circumstance."
Rufo, 502 U.S. at 393.
Moreover, not only do Mr. Cooper's contentions collapse
under their own weight, but even were they to retain some
persuasive force, the court must evaluate the district court's
decision to approve the consent decree, with whatever short-
comings paragraphs 19 and 21 might present, in light of the
agreement as a whole. See Thomas, 139 F.3d at 231. In that
context, there is no doubt that the district court exercised its
discretion well within the boundaries of the law. The serious
concerns and objections to the proposed consent decree were
carefully considered by the district court and balanced
against the likely alternatives in a manner reflecting a consid-
ered and compassionate conclusion. See, e.g., Pigford, 185
F.R.D. at 101-04, 109-111. Neither Mr. Cooper nor, to our
knowledge, any other class member contends at this point
that the provisions of the consent decree providing monetary
payments and loan forgiveness are unfair or unreasonable,
and we have no occasion to consider whether these provisions
are otherwise unfair or unreasonable. As a result, Mr.
Cooper has failed to meet his burden to show that the
enforcement provisions of the decree are so infirm as to
render the entire agreement unfair or unreasonable. Fur-
thermore, our reasons for finding Mr. Cooper's substantive
contentions unpersuasive also lead us to reject his procedural
contentions that the district court did not address the objec-
tions to paragraphs 19 and 21 with sufficient specificity and
that notice to the class was inadequate because it did not
specifically describe paragraphs 19 and 21.
The ultimate question before the court is whether the
district court abused its discretion by approving a consent
decree, the principal provisions of which are an indisputably
fair and reasonable resolution of the class complaint, contain-
ing one paragraph that assigns to the class a risk it would
have borne in any event and another paragraph that limits
the mode of enforcing the decree in the event of default. To
ask the question is to answer it. Because it is clear that no
abuse of discretion occurred we do not reach the govern-
ment's alternative argument concerning whether it would be
equitable for this court to vacate the decree in light of the
number of claims that have been resolved in reliance on the
decree.
Accordingly, we affirm the order of approval of the district
court.
APPENDIX
(Pages 14 through 79 of slip opinion not available electronically)