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Monday, December 27, 2010

Garcia v. Vilsack: A Policy and Legal Analysis of a USDA Discrimination Case

Jody Feder
Legislative Attorney

Tadlock Cowan
Analyst in Natural Resources and Rural Development

The U.S. Department of Agriculture (USDA) has long been accused of unlawfully discriminating
against minority and female farmers in the management of its various programs, particularly in its
Farm Service Agency loan programs. While USDA has taken concrete steps to address these
allegations of discrimination, the results of these efforts have been criticized by some.
Meanwhile, some minority and female farmers who have alleged discrimination by USDA have
filed various lawsuits under the Equal Credit Opportunity Act (ECOA) and the Administrative
Procedure Act (APA). Pigford v. Glickman, filed on behalf of African-American farmers, is
probably the most widely known, although Native American and female farmers also filed suit in
Keepseagle v. Vilsack and Love v. Vilsack, respectively.

In addition, a group of Hispanic farmers filed a similar lawsuit against USDA in October 2000.
The case, Garcia v. Vilsack, involves allegations that USDA unlawfully discriminated against all
similarly situated Hispanic farmers with respect to credit transactions and disaster benefits in
violation of the ECOA, which prohibits, among other things, race, color, and national origin
discrimination against credit applicants. The suit further claims that USDA violated the ECOA
and the APA by systematically failing to investigate complaints of discrimination, as required by
USDA regulations. Because the Garcia case has been tied up in litigation for 10 years, there has
been no decision on the merits of certain claims, nor has any compensation been paid to any of
the plaintiffs. During the lengthy course of litigation, however, there have been numerous rulings
on procedural and substantive issues that are discussed in detail in this report.

There are several possible options for Congress to consider if it wishes to respond to the Garcia
dispute. On the one hand, Congress could choose not to intervene in the Garcia case, leaving the
ECOA as the standing legislative remedy. On the other hand, Congress could create a specific
fund to aid farmers who are deemed to have been victims of USDA. Such a response would be
similar to other compensation programs established by Congress to assist victims of certain
specific circumstances (e.g., negligence, terrorism, and “acts of God”). Congress might also
choose to adopt the model used in the Pigford settlements, which defined eligible claimants and
established a system of notice, claims submission, consideration, and review. Although Congress
was not involved in the creation of the compensation system established under the original
Pigford consent decree, Congress did make $100 million available in the 2008 farm bill (P.L. 110-
246) and an additional $1.15 billion available in the Claims Resolution Act of 2010 (P.L. 111-
291) to settle claims of Pigford class participants who did not receive a decision on the merits of
their claims against USDA (this litigation is commonly referred to as Pigford II). Congress could
also choose to have the Garcia case considered by the U.S. Court of Federal Claims as a nonbinding
congressional reference case.

Date of Report: December 17, 2010
Number of Pages: 17
Order Number: R40988
Price: $29.95

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