UPDATE: On December 8, 2021, the United States District Court for the Northern District of Texas denied the Federation’s motion to intervene. See Miller v. Vilsack, No. 4:21-CV-0595-O, 2021 WL 6129207, at *3 (N.D. Tex. Dec. 8, 2021).
UPDATE: On March 22, 2022, the United States Court of Appeals for the Fifth Circuit reversed the district court’s denial of intervention and remanded the case with the directive to permit the Federation’s intervention. See Miller v. Vilsack, No. 21-11271, 2022 WL 851782 (5th Cir. Mar. 22, 2022). Info here.
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The Federation of Southern Cooperative/Land Assistance Fund (“Federation”) has filed a motion to intervene as a defendant in the class action lawsuit Miller v. Vilsack. In Miller, Judge Reed O’Connor, a federal judge serving the United States District Court for the Northern District of Texas, issued a preliminary injunction which prevents USDA from distributing debt relief payments to socially disadvantaged farmers and ranchers (“SDFR”) under Section 1005 of the American Rescue Plan Act (“ARPA”). Accordingly, the Federation—a nonprofit cooperative association for Black farmers—is seeking to become a party to represent its members in this lawsuit. Specifically, the Federation claims it is entitled to intervene as a defendant to this case because its members have an interest in accessing the debt relief funds allocated to them through §1005, and the organization is the only party that can adequately represent its members.
Background
In response to the economic crisis caused by the coronavirus pandemic, Congress passed the ARPA stimulus relief bill. Section 1005 of the bill instructs the USDA to provide loan forgiveness in an amount up to 120% of a SDFR’s outstanding debt for certain direct and guaranteed USDA loans. While USDA expected to start issuing debt relief payments for direct loans in early July, several farmers across the nation filed various lawsuits challenging the USDA-led program.
On June 2, 2021, five Texas farmers filed a class action lawsuit against the USDA (Miller, et al., v. Vilsack, No. 4:21-cv-00595 (N.D. Tex., 2021)) to challenge the debt relief program created under §1005 of the ARPA. They argued that the program is unconstitutional and violates the equal protection rights of farmers and ranchers who do not qualify for the program. They requested a permanent prohibition on the distribution of debt relief money under the statute. Currently, USDA is prohibited from distributing debt relief payments to SDFRs because Judge O’Connor granted a preliminary injunction in favor of the plaintiffs.
For a more in-depth discussion on ARPA, the debt relief provisions under §1005 of the ARPA, and the requirements that litigants must satisfy to obtain a preliminary injunction, check out a recent NALC article entitled “Legality of Minority Debt Relief Payments Called Into Question” here.
Intervention as Defendant
Recently, the Federation filed a motion to intervene as a defendant in the Miller case. Because the plaintiffs in this case seek to prohibit USDA from administering the debt relief program under §1005 of the ARPA, they only sued the agency itself. However, the Federation believes it should also be named as a defendant in the case because several of its members qualify as SDFRs and are eligible to receive loan forgiveness under the program. The organization claims that its members’ interests are not adequately represented by USDA in this case, and its members will suffer irreparable harm if the agency is permanently prohibited from forgiving eligible loans under the program. Thus, the Federation asked the court to allow the organization to intervene as a defendant in this lawsuit in order to represent its members and to defend the constitutionality of the debt relief program.
In general, a nonparty (someone not named by the plaintiff when filing a lawsuit) may file a motion to join an ongoing lawsuit. Nonparties seek to intervene when a lawsuit may affect their rights, and they want the opportunity to be heard in defense of those rights. A proposed intervenor can join a lawsuit either as a matter of right or at the discretion of the court, which is known as permissive intervention. To intervene as a matter of right, a party must satisfy the requirements under Rule 24(a) of the Federal Rules of Civil Procedure. For permissive intervention, a party must satisfy Rule 24(b).
Under Rule 24(a), a party has a right to intervene as a matter of right if they show:
- Its motion to intervene is timely;
- It has an interest relating to the property or transaction that is the subject of the lawsuit;
- Disposing the lawsuit may impair the party’s ability to protect its interest; and
- The existing parties do not adequately represent the party’s interest.
A court may allow a party to permissively intervene under Rule 24(b) when:
- A federal statute confers a conditional right upon the party to intervene; or
- The party’s claim or defense shares a common question of law or fact with the main action.
Before allowing intervention under Rule 24(b), a court must consider whether the permissive intervention will “unduly delay or prejudice the adjudication of the original parties’ rights.” (Fed. R. Civ. P. 24(b)(3)). In other words, even if a party satisfies the requirements under Rule 24(b), a judge will decide whether or not that party can intervene in a lawsuit. This is different from 24(a), where the court has no choice—it must allow the intervention as long as the party meets the requirements. In its motion in the Miller case, the Federation asserts it meets the requirements to intervene either as a matter of right under 24(a) or as a permissive intervenor under 24(b).
The Federation claims it is entitled to intervene as a matter of right because it satisfies all four requirements under Rule 24(a). First, the organization argues its motion to intervene is timely because it was filed less than six months after the original lawsuit, and the existing parties to the case will not be prejudiced by the Federation’s intervention. Therefore, according to the Federation, it has met the first factor.
The organization also claims it meets the second factor because its members have a substantial interest in the debt relief program. Essentially, the Federation contends that it has an interest in its members’ ability to access debt relief funds because they have a property interest in the debt relief program under §1005. According to the organization, governmental benefits, such as debt relief payments, are legally protected property interests because USDA notified some members that they qualify to receive loan forgiveness under the program. Further, some of its members have planned their farming season and incurred additional farming costs in reliance upon receiving debt relief. Because the debt relief program is crucial to the survival of some members’ farms, the Federation argues it has a substantial interest in USDA implementing the program and distributing the debt relief funds allocated to its members through §1005.
Next, the Federation argues that its interests would be impaired by the disposition of this case. The proposed intervenor claims a ruling in favor of the plaintiffs in this case will cause irreparable harm to its members because such a ruling will prohibit USDA from forgiving any debt of SDFRs under the program. Therefore, the organization argues that it meets the third element and should be permitted to intervene in this lawsuit to protect its interests and prevent any prejudice its members may suffer from an adverse judgment.
The Federation also insists it meets the final requirement under Rule 24(a) because USDA does not adequately represent the interests of its members in this lawsuit. Specifically, the organization claims USDA has different interests from that of the members, even though the agency is attempting to defend the constitutionality of the debt relief program. Essentially, USDA does not and will not sufficiently represent the Federation’s members because the agency does not have a personal stake in the debt relief funds, according to the organization. On the other hand, the Federation claims that its members do have a personal stake in receiving funds because some members will lose their farms to foreclosure and bankruptcy if the program is not administered. Thus, according to the Federation’s motion, it is entitled to intervene as a matter of right in this lawsuit because the interests of its members “will be adequately represented only if the organization is permitted to intervene.”
However, if the court determines that the Federation does not qualify to intervene as a matter of right, the organization argues it should be permitted to intervene under Rule 24(b). According to the Federation, it satisfies Rule 24(b) because it has a claim or defense that shares a common question of law or fact to the lawsuit, and its intervention will not unduly delay or prejudice the original parties’ rights in a final judgment of the case. The proposed intervenor claims its arguments relate to the claims in the lawsuit because the main concern of this case is whether USDA can distribute debt relief payments under §1005 of the ARPA, and a judgment prohibiting the agency from administering the program will affect some Federation members’ property interests. Additionally, the organization argues its intervention does not unduly delay or prejudice the other parties because its motion is timely and the discovery procedure of the lawsuit is still ongoing. For these reasons, according to the Federation, they are entitled to intervene as a defendant under Rule 24(b).
Conclusion
If Judge O’Connor grants this motion, the Federation will be named a defendant in the Miller case. Going forward, the organization would be involved in the pretrial procedures, such as requesting documents and questioning witnesses. Also, the Federation would have the ability to appeal any adverse rulings from the district court. However, if the motion is not granted, the Federation would not be named a defendant in the Miller case, and USDA would continue as the sole defendant in this lawsuit.
As the lawsuit continues, Congress is currently considering an amendment of the debt relief program through the budget reconciliation bill. The bill seeks to amend the debt relief program by extending eligibility to farmers who are “economically distressed.” If this amendment becomes law, borrowers will qualify for debt relief based on their financial situation rather than racial classification. However, Congress may not include this provision in the final version of the bill, which means §1005 will only provide eligibility to SDFRs, and the Miller case will likely proceed.
To read the Federation’s motion, click here.
To read the complaint from Miller v. Vilsack, click here.
To read the judge’s order certifying the classes and issuing the preliminary injunction in Miller v. Vilsack, click here.
For more information on Section 1005 of the ARPA, click here.