Class Action: U.S. Government Reneged on Debt Relief for Socially Disadvantaged Farmers by Passing Inflation Relief Act [DISMISSED]

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Four plaintiffs allege the United States of America has attempted to skirt its obligation to socially disadvantaged farmers by failing to pay off their eligible debt under the American Rescue Plan Act, the $1.9 trillion economic stimulus bill signed into law in March 2021. 

The 28-page lawsuit says that although the United States Department of Agriculture (USDA), under the American Rescue Plan Act (ARPA), offered to relieve Farm Service Agency loan debt held by farmers such as the plaintiffs, who by law are considered socially disadvantaged in that they belong to groups that have traditionally suffered racial or ethnic prejudice, the federal government “broke its promise and breached its contractual obligations” when it not only failed to pay the farmers’ debts but repealed the ARPA by way of 2022’s Inflation Reduction Act. 

The case, filed in the United States Court of Federal Claims on October 7, says that the effects of the government’s “breach” have been “devastating” as socially disadvantaged farmers (SDFs) who relied on the promised debt relief had, for instance, invested in new equipment or land after they had entered into ARPA contracts with the government. 

As a result of the government’s “breach of its contractual obligations,” proposed class members are unable to pay certain debts and are at risk of losing their farms and livelihoods, the filing claims. 

Further, the government’s repeal of the ARPA also erased compensation earmarked for socially disadvantaged farmers who alleged that they suffered discrimination at the hands of the USDA, the lawsuit alleges. 

“All Plaintiffs, by this action, ask the Court to defend the principle that no party may unilaterally opt out of its own contractual obligations,” the complaint reads. 

Agriculture was one of the key sectors targeted by the ARPA as the act appropriated billions to programs designed to strengthen the U.S. farming system, the case says. After the enactment of the ARPA, the USDA sent to eligible socially disadvantaged farmers a debt relief form that relayed the department would pay off the amount of debt listed in the letter if the farmer accepted the USDA’s calculation of their eligible debt and waived their right to appeal it, the suit explains. The plaintiffs and similarly situated farmers accepted the government’s offer and, as the government intended, proceeded to maintain or expand their operations in an effort to strengthen the country’s food supply during the pandemic, the lawsuit states. 

The plaintiffs, three Black farmers and a Native American farmer, look to represent all socially disadvantaged farmers who received an FSA-2601 form, selected Option 1 on that form, and returned the form to the federal government before it repealed the American Rescue Plan Act. 

The case also looks to represent all socially disadvantaged farmers who were entitled to compensation for past discrimination under the ARPA before the Inflation Reduction Act amended the relevant provision. 

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