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Keepseagle v. Johanns

March 23, 2006

GEORGE P. KEEPSEAGLE, ET AL., PLAINTIFFS,
v.
MIKE JOHANNS, SECRETARY, UNITED STATES DEPARTMENT OF AGRICULTURE DEFENDANT.



MEMORANDUM OPINION

Pending before the Court is the Ft. Berthold Movants'(hereinafter "movants") fifth motion to opt out and plaintiff's motion for class certification of economic relief claims. A motions hearing was held on November 10, 2005. The Court considered the motions, the oppositions and replies thereto, the entire record and the relevant statutory and case law. On November 10, 2005, the Court found the movants' claims to be sufficiently distinct from those of the plaintiff class under Federal Rule of Civil Procedure 23 and the holding of Eubanks v. Billington, 110 F.3d 87 (D.C. Cir. 1997) and granted movants' motion for leave to opt out of the plaintiff class. The Court also denied plaintiff's motion for class certification of economic relief claims without prejudice to refile at the conclusion of discovery. The Court issued a minute order memorializing the Court's findings on the same day. This Memorandum Opinion articulates the justification for the Court's November 10, 2005 Order.

I. FACTUAL AND LEGAL BACKGROUND

1. The Existing Plaintiff Class

The plaintiff class of Native American farmers and ranchers (hereinafter "farmer(s)") allegedly applied for United States Department of Agriculture ("USDA") farm loan and benefit programs between January 1, 1981 and November 24, 1999. The eight hundred and thirty-eight (838) plaintiffs named in the Sixth Amended Complaint, and the absent class members, make three common claims: (1) USDA discriminated against them on the basis of race in processing their farm program applications; (2) USDA did not investigate complaints of discrimination and (3) USDA discriminated against them on the basis of race in the operation of USDA's loan servicing programs. See Sixth Am. Compl. at 2. According to the plaintiffs and class members, the USDA discriminated against them by, inter alia, denying them access to the programs or treating them less favorably than non-Native American farmers in processing their applications, servicing loans, and/or administering benefits. See id. The plaintiffs and class members also allege that they complained of this discrimination to USDA, but that USDA failed to properly process and investigate their complaints. See id.

The plaintiffs and class members allege that USDA's discrimination against them in the administration of farm loan and benefits programs violates the Equal Credit Opportunity Act ("ECOA") and 15 U.S.C. § 1691e and the Administrative Procedures Act ("APA"), 5 U.S.C. § 706(2)(A). In particular, plaintiffs allege that the discrimination in USDA's processing of credit applications and its failure to investigate is a violation of ECOA, and that discrimination in the department's processing of applications for non-credit programs and its failure to investigate such discrimination is a violation of the APA. Sixth Am. Compl. at 3.

Plaintiffs seek declaratory, injunctive relief and damages pursuant to the ECOA. See Sixth Am. Compl. at 41. Under the APA, plaintiffs pray for "appropriate relief," including "an accounting of discrimination complaints made to the USDA, whether orally or in writing, by members of the Class, investigation and redress of such complaints, and such changes to the civil rights complaint system as are necessary to bring it into compliance with the APA." Id.

2. The Movants

The movants are a group of twenty-seven registered tribal members of the Three Affiliated Tribes, Fort Berthold Indian Reservation, located in north central North Dakota. Each of the movants has farmed, owned or leased land on the Reservation between 1981 and 2005. Mov.'s 5th Mot. to Opt Out at 3. Movants have contended since the inception of this lawsuit that they are distinct from the plaintiff class. Like plaintiffs, movants claim that USDA discriminated against them in the administration of its lending programs and failed to process their discrimination complaints. Movants also submit, however, that they are entitled to pursue their claims against the USDA administratively under Section 741 of the Agricultural, Rural Development, Food and Drug Administration and Related Agencies Appropriations Act of 1999, codified as 7 U.S.C. § 2279. (Hereinafter "Section 741") See Mov.'s 5th Mem. at 3. The conditions for making Section 741 claims are specified in regulations promulgated as 7 C.F.R. 15f.1 et seq. Movants contend that they, unlike plaintiffs, have met the numerous requirements imposed by the regulations and, therefore, are eligible for administrative relief. Chief among these is the requirement of evidence of a discrimination complaint filed with USDA prior to January 1, 1997 and further filings requesting adjudication of that complaint prior to October 21, 2000. Movants submit that under this statutory scheme, they are entitled to an "accelerated administrative settlement and adjudication process" otherwise unavailable to plaintiff class members. See Mov.'s 5th Mem. at 5-7. Movants claim that their involuntary inclusion in the plaintiff class is a barrier to the expedient adjudication of their claims against the USDA, and they request leave to opt out of the class. Plaintiffs have dropped their opposition to movants' motion. See Pl.'s Mem. at 21 n.15. Defendants continue to oppose movants' request, although their opposition is now relegated to a footnote. See Def. Opp. at 36 n. 33.

3. Requirements of Federal Rule of Civil Procedure 23(a)

Federal Rule of Civil Procedure 23 governs all issues of class certification. Fed. R. Civ. P. 23. The four prerequisites of Rule 23(a) require plaintiffs to demonstrate that:

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed. R. Civ. P. 23(a). In addition to the above requirements, putative classes must also show that they meet the specific requirements of at least one of three distinct class categories outlined in Rule 23(b), namely, either the (b)(1) action, the (b)(2) action, or the (b)(3) action. The three categories are not mutually exclusive, and a class may be certified under more than one category. Eubanks v. Billington, 110 F.3d 87, 91-92 (D.C. Cir. 1997)(internal citations omitted). This Court certified the plaintiff class pursuant to Rule 23(b)(2) in its Order of September 28, 2001 finding that the putative plaintiff class satisfied both the prerequisites of Rule 23(a) and the specific requirements for class certification under 23(b).

4. Rule 23(b)2 Certification of Plaintiff Class

Rule 23(b)(2) provides that a class may be certified where "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." Fed. R. Civ. P. 23(b). See Eubanks, 110 F.3d at 92. While courts have generally allowed plaintiff classes to seek monetary relief under each of the three categories, there are important procedural distinctions between the (b)(1) and (b)(2) actions and the (b)(3) action. Id. "Rule 23(c)(2) provides that all class members in a (b)(3) action are entitled to notice and an opportunity to exclude themselves from the class and the preclusive effect of any judgment by opting out of the lawsuit. The rule has no comparable provision for (b)(1) and ...


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