A string of legal defeats for a groundbreaking program to forgive the debts of minority farmers is presenting the Biden administration with a stark choice. It can continue the fight and risk further setbacks or give up and disappoint activists and lawmakers who have championed the cause.
The estimated $4 billion program is under siege by conservative legal groups — including one founded by close aides to former President Donald Trump — who have filed at least 13 lawsuits arguing the debt relief effort unconstitutionally discriminates on the basis of race.
So far, three different judges have issued preliminary injunctions blocking the program nationwide as litigation proceeds. The Justice Department could appeal, but hasn’t yet.
DOJ rarely gives up without a fight in such cases, but legal experts say the Biden administration’s best move at the moment might be to huddle with congressional allies and come up with a program more likely to pass muster. Otherwise, they say, there’s a danger of provoking court rulings that might undermine other programs aimed at remedying past discrimination.
One legal expert said he would be shocked if the administration allowed the fights over the debt relief program to reach the Supreme Court or even pressed forward with appeals.
“Obviously with this cluster of cases… they’re not going to blindly go before a federal court of appeals and run the risk of that kind of defeat, setting the stage for a Supreme Court defeat,” William & Mary Law School professor Neal Devins said. “Probably better hope that Congress will clean up the statute.”
Another lawyer involved in crafting affirmative action programs said the minority farmers debt relief law — in the form passed in March — would be a sure loser given the present make-up of the Supreme Court.
“I don’t think they have a chance in hell of prevailing with the current court,” said the attorney, who asked not to be named, citing sensitivities due to ongoing work with groups active on the issue.
Several lawyers said they believe that if the program reached the Supreme Court in its current form, the justices would reject it, perhaps by as much as an 8-1 margin.
Congressional remedy: The debt relief program — also known as section 1005 of the American Rescue Plan — would cover the USDA loans of an estimated 16,000 farmers and ranchers who have been identified as Black, Native American, Alaskan Native, Asian American, Pacific Islander, and Hispanic and Latino in the Farm Service Agency’s records.
The debt relief, according to supporters and activists, is key to bringing justice to farmers of color who were left out of USDA programs and assistance as a result of abusive lending practices and outright discrimination over the last century and into the present.
To dole out the payments, the Treasury was set to pay 100 percent of the farmers’ outstanding debt and an additional 20 percent to cover tax liabilities, fees and other loan costs. While the payout process was set to start in June, a temporary restraining order and preliminary injunctions issued have stopped the payment process — but USDA is still allowed to continue readying the payments and notifying farmers of eligibility in case the program is ever deemed constitutional.
The legislation is one of several follow-on measures to a major legal agreement struck in 1999, known as the Pigford settlement. The deal, which settled class-action litigation alleging long-standing discrimination against Black farmers by USDA, led to about $1 billion in payments or other relief. A cumbersome application process in that deal that left many farmers without a payout led to a second settlement struck in 2010 and backed by about $1.2 billion in congressional funding. But many activists call Pigford a failure and hoped the Biden administration, and the debt relief, would provide a long-sought remedy.
The provision Congress passed in March sought to address complaints that the earlier rounds of payments and debt relief did not reach enough farmers or go far enough to remedy discrimination. In the new legislation, lawmakers used a definition of “socially disadvantaged” — which came from the 1990 Farm Bill — that first drew backlash from Republicans for excluding white women. The department and advocates maintain that the program is already tailored narrowly enough to address specific discrimination — an argument that has recieved skepticism from judges and legal scholars.
Several legal experts said the minority farmers statute seems to suffer from exactly the same problem the Supreme Court seized on in 1989 to torpedo an affirmative action program in Richmond, Va., that sought to give minority-owned firms a 30 percent set-aside of city construction contracts.
“I found it sort of weird that Congress, when it enacted the [farmers’ debt relief] statute seemed to maybe make the same mistake,” Devins said. “You have sort of a poorly drafted statute … I’m reading this and thinking, ‘This is just the same stuff.’”
In City of Richmond v. Croson, the Supreme Court faulted the affirmative action program at issue for sweeping in Latinos, Asians, Eskimos and Aleuts despite a lack of evidence of discrimination against those groups in the city — or that some had ever sought contracts there at all.
“Under Richmond’s scheme, a successful Black, Hispanic, or Oriental entrepreneur from anywhere in the country enjoys an absolute preference over other citizens based solely on their race. We think it obvious that such a program is not narrowly tailored to remedy the effects of prior discrimination,” Justice Sandra Day O’Connor wrote.
“I don’t know where they got the definition of who was included,” Devins said of the farmer debt program. “It’s really what happened in Croson. It’s really irresponsible.”
The sentiment was shared by U.S. District Court Judge Marcia Morales Howard, who issued the first preliminary injunction on the debt relief.
“It appears that in adopting Section 1005’s strict race-based debt relief remedy Congress moved with great speed to address the history of discrimination, but did not move with great care. Indeed, the remedy chosen…appears to fall well short of the delicate balance accomplished when a legislative enactment employs race in a narrowly tailored manner to address a specific compelling governmental interest,” wrote Morales Howard. “The Court has carefully balanced the equities and is convinced that they favor the halting of a program that is significantly likely to violate the constitutional guarantee of equal protection under the law.”
Howard and the other two judges who issued preliminary injunctions against the program are appointees of President George W. Bush, as is a federal judge in Wisconsin who issued a temporary restraining order last month.
A narrower program targeted to only African-American farmers might pass muster with the current Supreme Court, some legal experts said, but they warned that the Biden administration would still be endangering all affirmative action programs by taking such a dispute to the justices.
“That’s the risk factor if the court gets its hands on this,” Devins said. “That would be devastating for affirmative action programs.”
While Chief Justice John Roberts has proven to be a swing vote on some issues in recent years, questions of race are not among them. Indeed, he’s one of the court’s most vocal conservatives on cases that involve race-conscious government action.
“The way to stop discrimination on the basis of race is to stop discriminating on the basis of race,” Roberts famously wrote in a 2007 case about Seattle’s use of race in public school assignments.
“When people talk about, ‘What are the issues the chief justice cares about?’ This is one of them,” Devins said.
Murky legal vetting: Although many politicians took credit for the debt relief provisions when they were passed and signed into law, their offices declined repeated requests to explain whether the measure was legally vetted and by whom.
The White House, which conducted direct outreach to farmers about the program, has declined to comment on specific questions surrounding next steps and the way the provisions were drafted. However, Chris Meagher, a White House spokesperson, noted that Agriculture Secretary Tom Vilsack and “White House leadership are engaged on this issue.”
A White House official also emphasized that farmers of color were disproportionately excluded from earlier rounds of aid during the coronavirus pandemic.
Vilsack has previously noted that more than 99 percent of the Coronavirus Food Assistance Program, meant to aid producers as supply chains crumbled, went to white farmers, even though farmers of color account for about 5 percent of all producers.
“That disparity is due to the long-term, cumulative effects of discrimination and systemic barriers that have existed in USDA programs and lending,” a White House spokesperson said in email comments to POLITICO. “The (American Rescue Plan) addresses these systemic issues in light of the economic damage done by Covid to the socially disadvantaged borrowers.”
Several lawmakers who championed the cause have been silent on the issue as the aid program was stalled by legal challenges.
Sen. Cory Booker (D-N.J.), who introduced the first bill this session to address discrimination at USDA and provide debt relief, declined through a spokesperson to comment on next steps or other options. House Agriculture Committee Chair David Scott (D-Ga.), who included the debt relief in the House version of the pandemic relief bill, also declined to comment on the drafting process and potential solutions.
Only Sen. Raphael Warnock (D-Ga.), who introduced the bill whose provisions were later adopted by Scott, addressed part of the issue.
“The Justice Department has indicated that they will defend the law,” Warnock told POLITICO. “In the meantime, I am supportive of Sen. (Kirsten) Gillibrand’s bill that would provide debt relief to farmers who make under $250,000.”
Gillibrand’s bill, the Relief for America’s Small Farmers Act, was introduced in May 2020 in an attempt to stem the growth of USDA debt held by small farmers and combat the rise of farm bankruptcies. While the bill isn’t aimed directly at providing redress for historical discrimination, benefits based on economic critera raise fewer legal issues.
And most farms operated by people of color are small. The average size of a Black-run farm is 132 acres, according to the 2017 Agricultural Census, compared with 431 acres for white farmers.
The goal, according to Gillibrand, is to pass the bill within reconciliation.
Agriculture Department officials say that in the meantime they’re trying to provide relief through other programs already authorized by Congress.
“The ARP also directs us to do more than debt relief,” a USDA spokesperson told POLITICO, adding that the pandemic relief package also allocated $1 billion to address equity issues, though the department hasn’t rolled out a plan for spending the money.
Some of the funds may be used as grants and loans for land access, addressing heirs’ property issues, establishing an equity commission, research and provisioning financial assistance to former loan borrowers.
“USDA is a very large, very old department. It’s different from HUD or DOT, because it dates back to Lincoln,” the USDA spokesperson said. “So when we are making these changes, it’s huge. This is a big, historic shift in attitude at USDA and it’s going to be hard work.”
Last week, USDA made multiple announcements of funding that is a part of the larger equity push, including money for a program that provides outreach and technical assistance for underserved and veteran producers, funding for Historically Black Colleges and Universities in the land-grant system and the implementation of another long-stalled program to help heirs to family farms hang on to their land.
Conspicuously mum: Vilsack said in a statement that his agency is standing behind the current minority farmer debt-relief program despite the grim legal picture.
“USDA remains committed to implementing the program in accordance with congressional direction and also in compliance with direction from the court. Working in partnership, USDA and DOJ are litigating the cases aggressively in all of the district courts where the debt relief program is being challenged,” Vilsack said.
A Justice Department spokesperson declined to comment on the string of court losses or on the claims that the DOJ is committed to pressing on with the legal fight for the program.
However, there is one notable sign that some in the administration may be skittish about soldiering on.
When a judge issued a ruling last month striking down the program protecting and giving work permits to so-called Dreamers, the White House wasted no time in announcing that the administration would appeal. Before 9 a.m. the following morning, Biden issued a statement calling the ruling “deeply disappointing” and saying that the Justice Department would pursue an appeal to “fortify” the initiative, known as DACA, or Deferred Action for Childhood Arrivals.
The first preliminary injunction blocking the minority farmer relief program was handed down by a judge in Jacksonville, Fla. on June 23. In the more than a month since that decision, the Justice Department and White House have been conspicuously silent about whether an appeal is planned. The deadline for an appeal is now about three weeks away.
With the legal picture looking bleak, farmers of color are still pressing aggressively for the debt relief they say they were promised, and they are calling on Biden to take action.
“This is a bad situation here,” said John Boyd, president of the National Black Farmers Association. “That’s why I am urging the president to come to the table here and let’s find a resolve for it. It could be a new legislative fix with a new definition, some sort of executive order, but I don’t see the fix coming from the secretary.”