In Miller v. Vilsack, five Texas farmers filed a lawsuit against the U.S. Department of Agriculture (“USDA”) alleging that its loan forgiveness payments violate the United States Constitution. This case is in addition to several other ongoing lawsuits brought in other jurisdictions. Specifically, the plaintiffs in Miller argued Section 1005 of the American Rescue Plan of 2021 (“ARPA”) violates the equal protection rights promised under the Constitution because the statutory provision limits loan forgiveness to borrowers who qualify as a socially disadvantaged farmer or rancher (“SDFR”), a designation based on race. On July 1, 2021, Judge Reed O’Connor, a federal judge serving the United States District Court for the Northern District of Texas, certified two classes of farmers and ranchers for that lawsuit. As a result, the lawsuit will proceed as a class action against the USDA.

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 the USDA expected to start issuing debt relief payments for direct loans in early July, several farmers across the nation filed various lawsuits to 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. Essentially, the plaintiffs claim the debt relief provisions of the ARPA are unconstitutional because they violate the equal protection rights of U.S. farmers and ranchers who hold eligible USDA loans but do not qualify for debt relief under the program. The plaintiffs filed a motion seeking to represent two classes of all U.S. farmers and ranchers who: (1) are experiencing, or who will experience, racial discrimination from USDA’s implementation of the debt relief program, and (2) are ineligible for loan forgiveness because they do not qualify as a SDFR under the definition. Additionally, the plaintiffs asked the court to issue a preliminary injunction to prevent the USDA from issuing debt relief payments while the lawsuit is in progress. The judge certified both classes proposed by the plaintiffs and granted the preliminary injunction. As a result, the case will proceed as a class action lawsuit and the USDA is currently prohibited from distributing debt relief payments to SDFRs.

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.

Class Certification

Typically, a class action lawsuit is filed when a large group—or “class”—of individuals have suffered a similar injury caused by the same party. The class is represented by the named plaintiffs, which generally consists of the individuals who filed the lawsuit on behalf of the class. Put simply, a class action is a type of lawsuit that allows a small number of named plaintiffs to file a single suit seeking compensation for an entire class.

In general, class actions decrease litigation costs for class members and allows courts to better manage the lawsuit. Instead of each class member bringing their own lawsuit, a class action combines all class members’ claims into a single proceeding. This allows the litigation costs to be spread among the class members. Also, a class action allows a court to manage the case more efficiently because the claims from all injured class members are litigated in the same lawsuit, rather than several different lawsuits brought by multiple different parties. In other words, class actions may provide a timely process compared to traditional lawsuits.

However, class action lawsuits do not always save time compared to traditional lawsuits. In some instances, class actions may take a long time to be resolved. Additionally, non-named parties generally do not recover as much as they otherwise would if they brought a lawsuit individually, and their compensation is usually limited to financial compensation. Furthermore, if a class action lawsuit is unsuccessful, individual class members typically do not have the right to bring their own individual lawsuit at a later date. Overall, a class action lawsuit may save time and economic resources of both the parties and courts by allowing all claims to be litigated in a single lawsuit, but there are some disadvantages someone should consider before choosing to become a class member in a class action lawsuit.

In order for a case to become a class action lawsuit, the judge must make an initial decision as to who is included in the class, an action known as class certification. For lawsuits filed in a federal court, class certification is governed by Rule 23 of the Federal Rules of Civil Procedure (“FRCP”). The FRCP contains the rules, procedures, and requirements which litigants and federal courts must follow when involved in a civil lawsuit. Rule 23 gives a judge discretion to decide whether or not to certify the plaintiff’s proposed class. Certifying a class action does not mean a judge believes that the defendant is liable for the injuries suffered by the class members or that a jury will find the defendant liable. Instead, class certification simply means a judge found that the claims among the class members are similar enough to join them together in one lawsuit, and a class action is the best method to manage the claims of the class.

To obtain class certification, the named plaintiffs must satisfy the requirements contained under Rule 23(a) and one requirement under Rule 23(b). Under Rule 23(a), the named plaintiffs must show the court that:

• The number of class members renders it impracticable to join them in the action;
• The class members’ claims share common questions of law or fact;
• The plaintiffs’ claims are typical of the claims for the entire class;
• The named plaintiffs will adequately protect the interests of the entire class.

These four conditions are commonly known as the numerosity, commonality, typicality, and adequacy of representation requirements. Once these four conditions are satisfied, the named plaintiffs must then satisfy one of the requirements under Rule 23(b)(1), (2), or (3).

Under this rule, a lawsuit may proceed as a class action if:

1. Separate lawsuits by each class members creates a risk of inconsistent judgements, or judgements that are against the interests of other members;
2. Because of the defendant’s actions or inaction, injunctive or declaratory relief is appropriate or the class; or
3. A common question of law or fact predominates over any class members’ specific questions, and class action is a superior method to resolve the dispute.

If the named plaintiffs satisfy the Rule 23 requirements and the judge determines a class action is the best option to manage the claims of all class members, the judge will likely certify the class. Once a class is certified, the litigating parties begin performing pre-trial procedures.

The Lawsuit

In his order, Judge O’Connor determined that the five named plaintiffs in Miller satisfied the requirements under Rule 23(a) and (b)(2). Accordingly, he certified both proposed classes and the lawsuit will proceed as a class action. This means all U.S. farmers and ranchers “who are encountering, or who will encounter, racial discrimination from the USDA on account of section 1005 of the ARPA,” or who are excluded from the definition of “socially disadvantaged farmer or rancher” may join the class action lawsuit as class members.

Under Rule 23(a)(1), the numerosity requirement, Judge O’Connor found that the classes are so large that adding each class member as a named plaintiff to the lawsuit would be impractical. According to the USDA’s 2017 Census of Agriculture, over 1.9 million U.S. farmers and ranchers identify as “white only,” and there are 21,000 borrowers nationwide who hold direct or guaranteed FSA loans who do not qualify as a SDFR. Because of this, the judge found that these borrowers may have faced or will face discrimination from the USDA on the basis of their race because they do not qualify for debt relief under the ARPA. Accordingly, the judge determined the plaintiffs satisfied the numerosity requirement because each proposed class represents tens of thousands of potential members.

The judge also found that the named plaintiffs met the second requirement under Rule 23(a) because all class members of each class share a common question of law: whether the USDA is violating the Constitution by limiting eligibility for the debt relief program to SDFRs. The order explained that this question of law affects all class members because the members are subject to discrimination on the basis of race because they are excluded from the definition of “socially disadvantaged farmers and ranchers” since they are white. Because this question of law is common among all class members, the judge concluded he could resolve the issue for all class members in a single lawsuit.

Next, Judge O’Connor found that the named plaintiffs satisfied the typicality requirement under Rule 23(a)(3) because the plaintiffs’ claims are exactly the same as the claims from all proposed class members. In this case, the central claim is that the named plaintiffs and the proposed class members are suffering discrimination from the USDA because of their race, which violates their constitutional equal protection rights. Also, the plaintiffs and class members are both seeking to stop the discrimination by prohibiting the USDA from implementing the program and providing debt relief payments to SDFRs. Therefore, the judge asserted the plaintiffs’ claims are typical of the class members, and each group is seeking the same remedy.

Under Rule 23(a)(4), the judge determined that the named plaintiffs could adequately represent the interests of the absent class members. Judge O’Connor agreed with the named plaintiffs that they could represent the class members fairly and adequately because the plaintiffs have a “vested interest” in successfully resolving this case and preventing the USDA from discriminating against the class members because of their race. Accordingly, the judge found this requirement to be met, which means all four threshold requirements under Rule 23(a) were met by the named plaintiffs.

For the last class certification requirement, the judge determined that the plaintiffs satisfied Rule 23(b)(2). Usually, this requirement is satisfied when an injunction in favor of the plaintiffs would provide relief for each class member. In his order, he explained that the USDA is acting on grounds that affect the entire class because the agency is conditioning the ability to receive debt relief payments on the borrower’s race. Hence, issuing a preliminary injunction would provide relief to each class member because the injunction stops the USDA from distributing debt relief payments to SDFRs, which subsequently stops the agency from discriminating against the class members on the basis of their race. Because the named plaintiffs satisfied the requirements under Rule 23, the judge certified both classes proposed by the plaintiffs.

Conclusion

On July 1, 2021, Judge O’Connor issued an order certifying both classes of U.S. farmers and ranchers proposed by the five named plaintiffs in Miller, which means that lawsuit will proceed as a class action. In the same order, Judge O’Connor issued a preliminary injunction in favor of the plaintiffs that prevents the USDA from distributing debt relief payments to any SDFRs under §1005 of the ARPA. The injunction applies to debt relief payments to all SDFRs nationwide because preliminary injunctions are intended to preserve the status quo of the case. In other words, the injunction seeks to prevent harm and preserve the existing conditions of the case until it is resolved by the court.

While there is an opportunity for this injunction to be lifted before the case is fully resolved, two similar injunctions were recently issued by federal judges in different jurisdictions. Therefore, if these injunctions stand, it is unlikely the debt relief payments under §1005 will be issued in the coming months.

An update to this article will be published as this lawsuit moves forward.

To read the amended complaint from Miller v. Vilsack, click here.

To read the motion for class certification from Miller v. Vilsack, click here.

To read the motion for preliminary injunction 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.

To read the complaint from Wynn v. Vilsack, click here.

To read the judge’s order granting the preliminary injunction in Wynn v. Vilsack, click here.

To read the complaint from Dunlap v. Vilsack, click here.

To read the complaint from Kent v. Vilsack, click here.

To read the complaint from Holman v. Vilsack, click here.

To read the complaint in Carpenter v. Vilsack, click here.

To read the complaint from Miller v. Vilsack, click here.

To read the complaint from Faust v. Vilsack, click here.

For more on the Faust v. Vilsack case, click here.

For more information on Section 1005 of the ARPA, click here.