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UNITED STATES OF AMERICA DEPARTMENT OF AGRICULTURE In Re: WILL SYLVESTER WARREN, USDA Docket No. 1194 HUDALJ No. 00-19-NA December 19, 2002
Complainant fComplainant, Pro S8 Assisted by John Warren Ronald VTalkow, Esq. Fcr the Government Before: Constance T. O'Bryant Administrative Law Judge DETERMINATION
This case arises out of complaints dated January 10, 1992, May 14, 1995, and January 2$,1997, filed with the United States Department of Agriculture ("USDA"); by Will Sylvester Warren ("Complainant") alleging that an agency within USDA, the Farmers I-Tome Administration ("FmHA") and its successor agency, the Farm Service Agency ("FSA"), (hereinafter referred to as FSA), discriminated against him based on race ("Black") in violation of the Equal Credit Opportunity Act ("ECOA"). 15 U.S.C. 1691 et seq. Mr. Warren alleges that the USDA discriminated against him based on his race by denying his loan and/or loan servicing applications and then retaliating against him for filing a discrimination complaint. The USDA's Office of Civil Rights ("OCR") determined that Mr. Warren's complaints were eligible for consideration under the provisiorr> of Section 741 of the Agriculture, Rural Development, Food and Drug
'Th.e term "USDA" shall include the U. S. Department of Agriculture and all of its agencies, instrumentalities, agents, officers, and employees, including, but not limited to, the state and county conunittees and their staffs which administer USDA credit programs-
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-2_ Administration, and Related Agencies Appropriations Act, 1999, enacted in Division A, section 101 (a) of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. 105-277 ("Section 741 "). On August 16, 2001, Mr. Warren requested a hearing before an administrative law judge. OCR then forwarded the administrative record to this office, with its Position Statement on the merits of the matter, for review pursuant to Section 741. The trial of the case was delayed after the parties requested the assistance of a settlement judge. The USDA stipulated to liability on the complaints and sought the assistance of a settlement judge in resolving the remedy issue. When settlement was not reached, the case was again put on the trial calendar and came on for hearing on Decembef04, 7001, in Virginia Beach, Virginia. Because the USDA "stipulated" to liability for racial discrimination in the case, the trial was limited .to the issue of damages and other appropriate remedy. At trial, the USDA stipulated that Mr. Warren was . entitled to an award of actual damages for injuries he suffered as a result of discrimination at least since 1985. Following the trial, the parties submitted post-trial briefs, the: last being received on May 4, 2002. The case is now ready for decision. BACKGROUND alleged in his several complaints that FSA discriminated against him based on his race, as follows; 1) since the early 1980`s - by failing to keep an accurate account of his indebtedness to FSA, including the inclusion of incorrect loans on his account; 2) since 1985 in the denial of his application for Farm Operating loan, Primary and Preservation Loan Servicing, and disaster benefits; and 3) since 1992 - by retaliating against him for filing a series of successful appeals and for filing a race discrimination complaint. The act of retaliation, he alleged, was the mailing of a finding that he had acted wit1i "lack of good faith" in his dealings with FSA, a finding which barred him further participation in FSA's loan programs. Mr. Warren alleges that FSA consistently employed a pattern and practice of discrimination against him based on his race - that FSA county supervisors and/or the county committee members involved in his case consistently used his illiteracy and lack of understanding of the complicated FSA and USDA, regulations to impede and harm him and that as a result he has suffered severe economic and emotional harm. In his 1992 complaint he wrote:
I believe I am the victim of an insidious scheme of racial discrimination, designed to cause or to permit African-American farmers in this rural, peanut-rich, southeastern Virginia county, to lose their land to the sons Mfi. Warren
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-Sand grandsons of wealthy white farmers and businessmen in this area. The scheme, I believe, involves the cooperation, wittingly or unwittingly, of at least one Farmers Home Administration ("FHA") official, viz., Mr. Ronald E. Norton, FHA's Southampton
County Supervisor. RR,Ex 1 a? Mr. Warren filed two other complaints, one in 1995 and another in 1997, in which he repeated the same allegations. However, in these complaints he added the allegation that Mr. Norton had retaliated against him for filing the 1992 discrimination complaint. In 1997, OCR contracted with a law firm to conduct an investigation of Mr. Warren's ;omplaints. An extensive investigation was done. On the basis of the investigator's report and recommendation, OCR concluded that there was merit to Mr. Warren's complaints, atleast since 1988. It found insufficient evidence to establish discrimination prior to that date. At trial, the USDA "stipulated" to liability for acts of discrimination since 1985. Based on the USDA's stipulation of discrimination, the testimony of the witnesses at the hearing, and the documentary evidence of record, I make the following findings of fact. These findings are based on the preponderance of the evidence. FINDINGS OF FACT 1. Mr. Will Sylvester Warren is a 77-year old, African-American male farmer who has resided in Southampton County, Virginia for his entire life. He was born and raised on a 104-=e farm that he purchased from his father in or about 1951. His father had been a "share farmer" on the land before he purchased it in the 1940's. Mr. Warren's present home is about four miles from where he was born. Cx-119. 2. Mr. Warren received no formal education, and as a result cannot read or write, except for his name. He has spent his entire life working on the farm Farming has been his life - it is all that he knows. Id.. 3. Mr. Warren married at age 21 and through the course of his marriage had fourteen surviving children, nine sons and five daughters. Mr. Warren's wife died in 1988 of a heart attack at age 56. Her death was abrupt and unexpected. Id.
2The abbreviations used in this decision are as follows: RR-#, for the bound volume or "running record" submitted by FSA; Cx-# for the Complainant's exhibits; Rx-# for the Respondent's exhibits; and Tr. #, for the hearing transcript.
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4. Throughout the years leading up to the discrimination, Mr. Warren had been an active and respective member of his local community. He is a deacon and trustee of his church. lie is considered by those who know him as a God-fearing man, and one of decency, honesty and integrity. Cx-18, Cx-107, RRex11. At the trial, r found him to be a highly credible witness. . 5. In or about 1959, Mr. Warren and his wife, bought an additional 76-acre farm, giving him a total of 180 acres of owned farm land. His successful farming allowed him and his wife to raise and support fourteen children. The land is rich in fertility and with the help of his children, Mr. Warren was able to produce excellent crops. He was a "firstrate farmer." Cx-18, Cx 107. r. _ 6. Diring the years from 1950 to the late 1969s, Mr. Warren lived in a rural, racially segregated community. In Southampton County, White residents owned all of the major commercial enterprises in the community - farm supply companies, feed companies, equipment sales companies, financial lenders, etc. 7. As a Black farmer, Mr. Warren enjoyed a fairly good relationship with the local commercial banks and local farm suppliers until about 1969-1970, when he spoke up at a local school board meeting. At the meeting, he "publicly and vehemently" opposed segregated school busing in the County. Immediately afterwards, he began to feel repercussions from his outspoken stance. Many White residents expressed disapproval of his position on the busing issue and of his perceived activism. When he next went to the bank where he had done business for years, the bank called in his demand loan, and refused to extend him further credit. Tr. 52-60, Cx-71. Other banks followed suit, refusing to extend credit to him, even though at the time he was quite creditworthy in that he had one farm free and clear of debt. Thus, in 1970, he turned to FSA for financial assistance, as a lender of last resort. 3 8. Mr. Warren's relationship with FSA was not without difficulty. He, as did all Black farruers in the County, had to deal with the local FSA county committee members who approved or disapproved farm loans. The committee members were all local White farmers. Despite these substantial odds, he was able to thrive as a farmer through his hard work and industry. Tr. 59, Cx-119.
3'fh, FSA, an agency of the USDA, lends money to farmers and ranchers who are
unable to obtain loans
elsewhere. 7 U.S.C. § 1922 (1988)- USDA's regulations provide that if a person is able to obtain credit from another source at a reasonable rate, they have an obligation to obtain credit froth that source. Cx-i06.
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9. Ire May 1970, Mr. Warren and his wife obtained from FSA a Farm Operating Loan of $58,280. His two farms were used as collateral. 10. With the help of FSA; Mr. Warren enjoyed a successful farm operation into the early 1989s- For more than ten years, Mr. Warren received and paid off numerous operating loans made to him by FSA. He expanded his operation beyond his 180 acres of land by leasing farm land owned by others. He was selected as one of an elite group of farmers to grow certified, registered foundation peanuts in cooperation with the Agricultural Experiment Station at Virginia Polytechnic Institute and State University ("VPI"j. In order to qualify to participate in the VPI program, he had to meet the high standards of the Virginia Crop Improvement Association, which placed him in the top echelon cf Virginia farmers. Only one out of one hundred farmers were so selected. Cx 18, Cx-99. He grew certified, registered foundation peanuts for nearly twenty years for Severn Peanut Company, under the scrutiny of the VPI program, ending in the early 1990's. Cx-18.
By the early 1980's, Mr. Warren was producing on 763 acres of land, all of it leased except for 170 acres that he owned. In 1983 and 1984, he was farming 300 acres of soybeans, 250 acres of peanuts, 213 acres of corn, and was producing hogs for market. Tr. 46. Cx-99.` He had become one of the largest farmers in Southampton County of any race. Cx-99, Cx-121, CX-38, Cx-79, Cx-80. 11.
12. All of Mr. Warren's children grew up on the farm. All nine of his sons worked on the farm after school and during vacations. All of his sons worked on the farm after finishing high school. Moreover, all of his sons had intentions of making their living on the farm. Mr. Warren had intended to expand his farm. It was his goal to leave land to each of his sons upon his death so that they could continue the successful farming tradition in his family. However, as of 1992 only one son was still in the business. Cx-37. 13. Beginning in the early 1980's, Mr. Warren began to experience significant problems in his dealings with FSA. Although he obtained Farm Operating loans from
4Tbe USDA has challenged this number of acres farted in 1983. However, Mr. Warren submitted affdavits from two county farm extension agents who worked with him in the late 1970's and early 1980's who stated that Mr. Warren farmed approximately 800 acres of land during that time. Moreover, in his own affidavit. Mr. Warren identified the farms he leased by owner, acreage and farm number. Cx-99. The USDA has not rebutted this information- 1, therefore, find that Mr. Warren farmed 763 acres i» 1983 and 1984.
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1984, he usually received funds late in the planting season.' He noticed that White farmers were being given their money early in the spring, while he and other Black farmers received their money late in the spring. Cx-103, Cx-119.
FSA up to
14. The county supervisor serves as the local office manager as well as the loan approval official. The county supervisor is required by FSA regulations to offer sincere assistance to the farmer. 7 C.F.R_ 1910.3. and 1910.7. The county supervisor is responsible for completing loan applications, with the farmer's input, if the farmer is illiterate. It is FSA's policy to do so. Cx-106. Because he could not read or write, Mr. Warren necessarily relied upon the county supervisors for their sincere assistance.
RR, ex.7.
15 Because Mr. Warren cannot read or write, he relied upon the county supervisor to prepare his application package, including the required Farm and Home Plan ("FHP") - a plan used to determine farm loan eligibility.' When he applied for loans he often signed a blank application. On other occasions he would signed an application after it had been completely filled in by the county supervisor. Mr. Warren depended on the county supervisor for accurate and fair assistance in helping him fill out virtually all of the loan application package. He trusted the county supervisor to act in his best interest in helping him to obtain the maximum loan and services for which he qualified. Mr. Warren believes that in the 1980's, the county supervisors did not always include accurate information on his MIN to his detriment.' Tr. 46-54.
50p.-,rating loans are critical to farmers because they are used to purchase livestock, poultry. equipment, need, seed, farm chemicals and supplies and to provide soil and water conservation. In general, farmers come in to their local offices between November and February to obtain and submit their applications. The goal is to get the operating money in hand before planting season. Cx-106. 6In order to qualify for an operating loan, the farmer fills out an application packet.. bcludel in the packet is a farm and home plan. This plan shows financial details of the farmer's operation. It shows assets, liabiIities, capital expenditure, household expenditures, live stock, debts and payment of debts. The plan is the foundation of the application and is critical for FSA_ Cx-106. 'The record shows that Mr. Warren obtained an FSA loan in ,April 1983 for $48,380. Cat-3. He stated that he learned, well after the fact, that his FHP for 1983 showed that he farmed 299 acres of land. C5c-99. I have found that the preponderance of the evidence supports his claim that he farmed 763 acres of land in 1983. F.of F. at 111. Had the FHP accurately reflected the full 763 acres cultivated by Mr. Warren, Mr. Warren would likely have qualified for a substantially higher loan in 1983 than he received. In 1983, operating loans were available up to $200,000. Cx-106.
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-716. Any loans proceeds paid to Mr. Warren by FSA were deposited into an FSA
account saperviscd and controlled by the county supervisor. All Mr. Warren did was sign the application and waited for the check to arrive, once the application was approved. With a supervised account, the farmer brings a bill in from a supplier or other creditor. Both the farmer and the county supervisor sign the check arid the creditor is paid. 17. Li 1981 and 1983 to 1984, Southampton County farmers experienced disastrous farm conditions. '1 "his severely affected all farmers, Black and White. In those years, Mr. Warren applied for and received three loans. However, Mr. Warren has questioned whether he received the full face value of the loans reported. RR, ex. l a. 18. Reany event, the loans of 1983 and 1984 would be the last loans Mr. Warren would obtain from FSA, although he applied each year thereafter. Beginning in 1985, and continuing through 1991, Mr. Warren would go through a process where he would apply for a loan or loan services, his application would be denied, he would appeal the denial, FSA's decision would be reversed, and FSA would be ordered to continue to process his application. However, despite these victories on appeal, FSA never approved any of Nh-. Warren's applications after 1984. 19. Throughout the 1980's, White farmers would come to Mr. Warren wanting to buy his farm. Mr. Warren had no intention of selling any part of his farm and had given no indication that he was interested in doing so. DENIAL OF OPERATING LOAN APPLICATIONS - 1985 20. In early 1985, Mr. Warren applied for a Farm Operating Loan, and debt set-aside. His applications were denied on May 29, 1985. The county committee certification shows that the denial was based on lack of managerial ability. Cx-39. The letter to Mr. and Mrs. Warren stated the specific reasons as: You have shown poor managerial ability. Your past history shows no progress over the past three years. You did not follow farm plan, as submitted in the spring, as indicated by the actual analysis of your operation. Cx 40 Mr. Warren appealed the denial of his application to the National Appeals Division, USDA, ("NAD"). His appeal was heard on September 16, 1985. He was represented at the hearing by an attorney. The NAD reversed FSA's denial on October 10, 1985. The Appeals Officer stated:
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Based on information presented at the hearing and information contained in your case file, it appears that the county committee's decision was based on generality rather than specificity. Records kept by F7nHA county supervisor indicate an excellent attitude and good managerial ability on your part. Therefore, I question whether all the facts were presented to the county committee when its decision was made to certify you ineligible for a farm operating loan." emphasis added. Cx-41. The evidence shows that the records to which the Appeals Officer referred included two farm visit checklists, previously completed by the county supervisor. On one visit check sheet ratu;g for-farm ownership and farm operating loan dated September 9, 1993, Mr. Warren's farm operation was described, in part, as follows: Borrower's crops look good considering dry weather. Should repay operating loan and other debts. Equipment and security on land is (sic) adequately maintained. CjA2
An October 5, 1984,$ visit check sheet for farm ownership/operating loan/emergency loan showed the following notation:
Borrower crops look very good. Prospect for making obligations as stated for farm and home plan . . . is excellent. Equipment is well maintained and buildings are in good condition. Taxes and insurance have been paid Cx-43
Ben S. Lee, a Southampton county farm extension agent (Black), showed that Mr. Warren's 1985 FHf showed repayment ability of an operational loan, and his opinion that Mr. Warren had the managerial ability to have carried out a successful farming operation in 1985. He also testified that it was not unusual for farmers not to follow a farm plan for a certain year because "farmers often make changes to earn more money." Cx-44. Further, Mr. Lee testified that Mr. Warren did not make any unusual deviation in his farming operation in 1983. Finally, the extension agent testified that due to weather conditions, very few farmers had made progress during the last three years. Disasters had been declared from July 1980 - 1981 and from September 10, 1983 through March 30, 1984, due to drought. Cx 31, 39, 41- 44.
gAIthough the year date is not clear on the document, it is made clear in the testimony of the county supervisor at the heating on September 16, 1985. Cx-44.
Further, testimony from
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_9_ The chairman of the county committee was asked to explain why the committee determined Warren's to be ineligible for the Operating Loan. He was asked the following question and he gave his reply: Attorney for Mr. Warren: Did the 1985 Plan show he [Mr. Warren) would be able to repay the operating loan for this year? Committee Chair: I don't recall what his plan was. I think we considered his past history as much as the plan he presented. Finding that the evidence did not support the basis for the denial of the operating loan, the Appeals Officer required the county supervisor and committee to reprocess Mr. Warren's loan applications. The county sought review of the reversal to the State Director, FSA. The State Director upheld the Appeal Officer's decision. Cx-41. Despite this victory, and the evidence which supported his qualification for a loan, Mr. Warren 1985 loan application was never approved. 21. OCR concluded that the evidence regarding the 1985 application denial was insufficient to make a determination that discrimination played a part in the denial of the application. However, I find, base on a preponderance of the evidence, that Mr. Watren's was qualified for the 1985 FSA operating loan for which he applied, that the reasons for denial of his application given by the county committee were not legitimate reasons, and that the reasons were a pretext for discrimination based on race. The fmding by the committee that Mr. Warren lacked management ability was not supported by FSA's own records. In addition to the evidence of the check sheets ratings recounted above, Mr. Warren's long and successful history of farming, which included being certified by VPI to grow registered foundation peanuts, seriously contradicted the finding that he lacked managerial ability." 22. As a result of the denial of his 1985, Farm Operating loan application, Mr. Wan= suffered significant economic loss. He was unable to adequately plant and maintain his crops. His yields dropped dramatically. FSA then used his low yields to deny him further loans. Without proper operating funds, Mr. Warren found it increasingly more difficult to produce a profit on his farm. He had the acreage and the labor, but insufficient funds to properly plant, cultivate and harvest his crops. He was forced to surrender his leases on other farms that had constituted the majority of his farm acreage. The severe cash
9 Also. evidence in the record sows that in Southampton County, disaster caused by drought had been declared for the period from September 30, 1983 to March 30, 1984.
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_ 10flow problem also hampered his ability to make payments on loan obligations he had with FSA and other creditors. Cx-102. 23. The denial of Mr. Warren's loan application for 1985 contributed signifcantly to his failure to demonstrate a positive cash flow in subsequent applications and FHPs filed with FS A. 24. By letter .from FSA dated Feb. 19, 1986, Mr. Warren was notified that, as of December 31. 1985, his loan(s) with FSA were in default. Cx-08. 25. In 1986, Mr. Warren applied for a Farm Operating loan, loan servicing and debt set-aside, and for a disaster loan. His applications were denied in March 1986 due to no feasible plan of operation, in that his FHP plan did not show sufficient cash flow to pay all his debts. Cx-04, Cx05. 26. In April 1986, Mr. Warren went to the county supervisor, seeking to have his delinquem loans rescheduled. The county supervisor agreed to reinstate Mr. Warren's application for a Farm Operating Loan for 1986, if Mr. Warren sold a portion of his farm. Money from the sale of his farm, the county supervisor advised, would give Mr. Warren money to reduce his total debt load and give his operation a positive cash flow. Cx-09. Mr. Warren reluctantly agreed to put his faun up for sale, believing he had no choice but to do so. He put the asking price for sale on his farm at $150,000. 27. Evidence of record indicates that a Farm Operating Loan was approved for Mr. Warren for $46,200, and the deal closed on June 2, 1986. The county supervisor wrote to Mr. Wan-en on September 26, 1986, that as of that date Mr. Warren had not met the condition for the loan, i.e., that he had not sold a part of his farm. Cx 10. By letter dated March 9, 1987, Mr. Warren was given 120 days from February 5, 1987 to liquidate his assets. He was informed that if he did not do so, FSA would reject his request for restructuring the debts by forcing the sale of a portion of his assets. The only significant asset he owned was his farm. Cx-12. Mr. Warren never was able to obtain a buyer of his farm at his asking price, and he never received the-benefit of the $46,200 that reportedly had been approved fox him. The county supervisor notified him that the $46,200 loan had been canceled. Cx-100, Cx 10. . 28. For the next several years Mr. Warren would apply for loan or loan servicing and his applications would be denied. Most often, the denial would be based on a mere technicality. Mr. Warren would appeal the denials, always hopeful that the appeals process would work to correct what he was sure was an unfairness at the county level. He
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would win at the NAD level, and had faith in the appeals process. However, each victory on appeal was met with further denial of his applications on remand.
DENIAL, OF APPLICATION FOR PRIMARY AND PRESERVATION LOAN SERVICINGI0
29. By 1988, Mr. Warren's financial situation had significantly worsened. He continued to be pressured to sell one of his farms. He was having difficulty paying his real estate taxes due to lack of funds. 30. In July 1988, a new county supervisor, Ronald Norton, arrived in Southampton County.. IGIr. Norton is White. On July 8, 1988; Mr. Norton wrote Mr. Warren that his tax matters had to be turned over to the county attorney for possible foreclosure action. Cx-55. Ire early 1988, Mr. Warren's application for Primary Loan Servicing was denied. The basis for denial was failing to show a positive cash flow. A former State Director, FSA, in his 1997 affidavit, stated that an FHP showing a lack of cash flow should help a farmer qualify for Primary Loan Servicing, not harm him. Cx-106. In November 1988, Mr. Norton wrote Mr. Warren offering Primary Loan Servicing (debt restructure) due to the delinquency of his accounts. On April 19, 1989, Mr. Norton denied Mr. Warren's application. The denial was because Mr. Warren had failed to return the paperwwork within the 45-days allotted. As to this basis for denial, a former FSA State Director stated that the county supervisors have discretionary authority and routinely use it to avoid the rejection of late applications. Cx-106 31. In 1989, Mr. Warren applied for Preservation Loan Servicing. Mr. Norton denied this application in January 1990 for failure to circle a required item on the application. Mr. Warren appealed this denial, as well. Cx-45. 32. The appeals on the denial.of both the Primary Loan Servicing and the Preservation Loan Servicing applications were heard in June 1990. The evidence at the hearing showed that Mr. Warren was sent the Primary Loan Servicing application package shortly
'/ The Primary Loan Servicing Program is available when FSA borrowers are unable to make scheduled payments on their debts to FSA due to reasons beyond their control. In such case, federal law provides a process by which their loan accounts can be serviced to avoid foreclosure or liquidation. Pteservaticn Loan Servicing Program comes into play after foreclosure. When foreclosure occurs and FSA takes the secured property into its inventory, the borrower is provided the opportunity to apply to lease or purchase his homestead and up to 10 acres of land, including farm buildings. 7 C.F.R. § 1951.909.
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-12after the sudden and unexpected death of his wife. It showed that Mr. Norton at first accepted the application under the good faith policy (due to bereavement period) and processed it. He developed a FHP, and ran eligibility programs, etc., necessary. to qualify Mr. Warren for the loan. Inexplicably, after going through all the steps for determining eligibility for Primary Loan Servicing for 1988 and 1989, Mr. Norton denied Mr. Warren's loan servicing application due to not having provided a completed application within the stated deadline. Cx-47. The Appeals Officer determined that the original good faith finding should not have been rescinded under the circumstances and also that Mr. Norton had failed to follow the regulations and FSA policy by denying the application for failure to return within the 45-day period. FSA's regulation required the county supervisor to send follow-up notices before denial of loan servicing. Cx45. The Appeals Officer re4ersed the denial and required Mr. Norton and FSA to continue processing Mr. Warren's Primary Loan Servicing application. With regard to the denial of the Preservation Servicing Loan application for failure to circle an item, the Appeals Officer found again that Mr. Norton had failed to follow FSA regulations and policy. 33. As to the technical reasons for denial, one USDA official commented that the idea that an application is rejected by the county supervisor because something is not circled is "absurd"and "I would have to wonder what his motivation was. Typically, if there was a mistake in an application, the county supervisor contacted the farmer and told him or her that the information was missing and needed to be provided." He stated that the county supervisor had discretion to allow Mr. Warren to correct the item, and that FSA's guidelines encouraged the county supervisors to assist farmers in filling out applications to avoid and correct these kinds of omissions. Affidavit of State Director, USDA Rural Development, Virginia. RR.-ex 7, p.131, Cx-45. Another official, an Agricultural Credit Director for FSA stated: "I cannot fathom that an application would be turned down because something was not circled." Cx-109. 34. Despite the July 1990 ruling of the Appeals Officer, Mr. Norton denied another of Mr. Warren's application for the technical reason of failure to return an application or document within the 45-day period allotted. Cx- 47. 35. On September 20, 1990, Mr. Norton offered Preservation Loan Servicing (Homestead ProtectionllreasebacklBuyback) to Mr. Warren. Mr. Warren had not wanted Preservation Loan Servicing but Primary Loan Servicing. In any event, Preservation Loan senicing was denied because Mr. Norton determined that FSA could not obtain clear title to Mr. Warren's land because of a junior lien on the property. Mr. Warren appealed this denial. On June 27, 1991, the Appeals Officer reversed the county's decision, again, finding that the reason for denial did not comport with FSA's regulations. The regulations required that FSA, before denying an application, determine whether it
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-13was in the best interest of the government to settle the junior liens and then accept the voluntary conveyance. The Appeals Officer urged that FSA not only reprocess the Preservation Loan Servicing application, but believing that Mr. Warren had not been given appeal rights on a denial of a previous Primary Loan Servicing Application, encouraged FSA to give Mr. Warren opportunity to restart that process. Cx-03 36. Upon the reprocessing of Mr. Warren's Primary Loan Servicing application, it was again denied. Cx-47. 37. In 1991, Mr. Warren came under rapidly escalating financial pressures. FSA was continuing to threaten foreclosure on his farm." He had become delinquent on an SBA loan, as will. Fe borrowed money from his sister to prevent a judgment against him by SBA. RETALIATION: THE TIMBER INCIDENT/FINDING OF LACK OF GOOD FAITH 38. By the fall of 1991, Mr. Warren's financial situation had become desperate. Mr. Warren sought permission from Mr. Norton to sell some timber on his land so that he could make money to pay his sister back and to help pay on other bills. The approval was needed because FSA had a secured interest on the farms. Mr. Norton approved the cutting of the timber. During that same time period, Mr. Warren brought the subject of cutting 'timber on his farm in conversation with an attorney with whom he had dealt for years. He told the attorney that Mr. Norton had no objection to his cutting the timber. His attorney told him that it would be fine to cut the timber since Mr. Norton had no objection to the cutting: of the timber. Selling the timber on the land did not significantly put at risk FSA's li--n on the property. The timber that was cut had not been on the property when the lien ivas placed. Cx-06. 39. It was not uncommon for FSA county supervisors to give approval for such used of secured property, and to give it orally, rather than in writing. Cx-45. However, Mr. Norton would later deny giving Mr. Warren such approval.
z t1-7SA may acquire title to property securing a particular loan if the borrower defaults on the FSA loan. 7 U.S.C.§ 1985(3).
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40. Sometimes around December 1991, Mr. Wairen and his sons began cutting, hauling and selling the timber in question. Mr. Warren used the proceeds to pay his sister and other non-FSA bills. 41. At the He was was not farmers were coming to lm trying to buy his land. He did not want to sell. He had seen other Black farmer lose their land which was then bought up by White farmers. He stated his belief that it was the intent of Mr. Norton and the county committee to force Black farmers into foreclosure go that White farmers could buy their land. TI-ie Appeals Officer found that in denying the application for Primary Loan Servicing, FSA had not complied with its regulations. He reversed the denial and directed the county to again process Mr. Warren's Primary Loan Servicing application. He also informed Mr. Warren on how to file a discrimination complaint. 42. In late December 1991 to early January, 1992, Mr. Warren, aided by his attorney, Robert H. Cooley, 111, filled out the application for Primary Loan Servicing for reprocessing pursuant to the Appeals Officer's decision. Attorney Cooley assisted Mr. Warren in filing his FHP'for the operational loan being sought. The FHP showed a positive ;.ash flow, but was not complete because Mr. Warren needed information on how much he needed to pay the USDA." 43. On January 7, 1992, Mr. Warren filed an official complaint of race discrimination with the USDA. In his complaint, he specifically named Mr. Norton as one of the chief perpetrators of the discrimination. Cx-102. 44. In March, 1992,1vlr. Norton invited Mr. Warren to come to his office to discuss the Primary Loan Service package Mr. Warren had submitted. When Mr. Warren mentioned the timber cutting, Mr. Norton said to him "I got you, now." Mr. Norton then asked Mr. Warren for an:: accounting of the timber. Mr. Waxen realized at that time that he had been "set up" by Mr. Norton with regard to the timber matter. Id., RR-ex8.
"'According to Attomey Cooley. he tried for months to get the information needed for the f
The heating on Mr. Warren's July 1991 appeal was held on December 19, 1991. hearing, Mr. Warren raised, for the first time, a claim of race discrimination. frustrated that the appeals process had not worked for him. Fee asserted that FSA willing to help Black farmers as they did White farmers. He observed that White
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-1545. Mr. Norton subsequently sent a memorandum to USDA's Office of General Counsel ("OGC") for an opinion on whether the facts, as he alleged them, supported the prosecution of Mr. Warren for fraudulent conversion of secured property, lie reported that Mr. Warren had cut and sold timber from land on which FSA had a security interest without approval by FSA,and had then spent the money on non-FSA bills. OGC declined to pursue prosecution, citing a lack of evidence of criminal intent. However, it was OGC's opinion that the facts allowed for a finding of "lack of good faith," based on the scenario sent to it by Mr. Norton. Cx-21. 46. FSA regulations require that before eligibility is established for a loan, a showing must be made that a borrower has acted in good faith by demonstrating sincerity and honesty immexiing agreements made with FSA. A farmer who has received such a finding can never receiveloans or assistance from the USDA, with one exception - a farmer can benefit from Homestead Preservation, i.e., he can retain his farmhouse and ten acres on which it sits. 7 C.F.R. § 1951.909 (c)(2). 47. 'The underlying decision on whether good faith exists is a determination to be made by the FSA county super*isor who has wide discretion in deciding whether to make a finding of lack of good faith. Cx-21. While a technical conversion could occur, the county supervisor may nonetheless decide that, based on the borrower's sincerity, that the borrower- did operate in good faith. Cx-21,22. 48. On May 29, 1992, Mr. Warren wrote Mr. Norton, statinng that he had told him on two different occasions wing the past winter that he was going to cut some timber off his land and that he had never told him of any negative consequences. He stated that he believed he bad increased the value of the land, overall, because he would soon be able to farm more acres that had been cleared. off. He sought help in getting his debt restructured. Cx-17.
49.
;By letter dated July 20, 1992, Robert H. Cooley, III, a local attorney, wrote to the
FSA State Director, on heir. Warren's behalf, regarding the timber incident. Attorney Cooley stated his knowledge of Mr. Warren as an honest, Christian man, a hardworking, "master farmer" and that he "believed him completely when he said that he sought Mr. Norton approval before cutting the timber. He described Mr. Warren and his family as one of the "most industrious, hardworking, gentle, and God-fearing families" that he had the pleasure of knowing ;and working with." Cx-18. Attorney Cooley stated that he had known Mr. Warren for at least 18 years and that Mr. Warren had been a law client of his late father. He stated that he was convinced that Mr. Warren had acted innocently
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-15land in that he had relied ion the apparent authority of the county supervisor in cutting the timber. Attorney Cooley, stated that Mr. Warren was still actively engaged in farming, even though he has had no substantial funding assistance from FSA or any other commercial source since '1985. He related that Mr. Warren had sought and obtained Mr. Norton's approval to cut the timber in the fall of 1991, and that Mr. Warren, after cutting the timber, took the timber receipts to Mr. Norton. These facts, he argued, certainly negated Amy conclusion that Mr. Warren acted in bad faith. Moreover, he stated, Mr. Norton. vas a neighbor of Mr. Warren's and he could not have concealed the timber cutting from Mr. Norton, even had he wanted to. Attorney Cooley stated that the issue of the timber cutting came after Mr. Warren's success, after numerous appeals, in obtaining the opportunity to apply for Primary Loan Servicing and on the heels of a January 10, 1992, complaint file with [EEO] in which Mr. Warren complained of having been racially discriminated against by FSA, in general, and by Mr. Norton, in particular. He stated his view that Mr. Norton used the timber incident as an opportunity to interfere with, or to completely block, Mr. Warren's efforts to qualify for additional financing ahd Primary Loan Servicing, and was being most unfair to Mr. Warren. He noted that the timber that was cut represented "absolutely no impairment to the Government's security." That the FSA loans were well-secured by the vast farmlands of Mr. RYarren's and were in no way jeopardized by Mr. Warren's efforts to survive. He asked thaxt FSA forgive Mr. Warren's actions and, assist him in restructuring his debt and continuing his farming operation. Cx-18. Attorney Cooley later signed an Affidavit to the same effect. RR-ex.8. 50. Attorney Cooley also stated that, in December 1991, Mr. Warren asked him about the propriety of cutting the timber, and that he told him that as long as he had obtained the concurrence of Mr. Norton, then he saw no objection. He regretted having given Mr. Warren that advice, although it was appropriate at the time. He knows now that, considering all the difficulties Mr. Warren was having with Mr. Norton, that he should have told Mr. Norton to get the approval in writing. RR-exs. 51. In September 1992, Mr. Norton made the finding that Mr. Warren had acted with a "lack of good faith" by cutting and selling timber on property secured by FSA without FSA's prior approval. Using this finding, he denied Mr. Warren's 1992 application for Primary Loan Servicing. Cx-57, 58.
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-1753. Tire finding of "lack of good faith" has not been made against any other farmer in Southampton County, Virginia - only in Mr. Warren's case. Cx-16, Rx-1. 54. In a letter to the FSA State Director, in July, 1992, Mr. Norton never flatly denied that Mr. Warren spoke to him about cutting the timber, but said that he "did not recall" ever discussing the sale of timber with Mr. Warren. He stated, however, that he learned of the cutting of the timber on January 30, 1992, when one of Mr. Warren's creditors called hiin to tell him so. Cx-113, Cx-19. When asked why he did not speak to Mr. Warren about the matter, or intervene to stop the cutting, Mr. Norton responded that he was too busy preparing a loan package for Mr. Warren -which package was required by the NAD decision - to do so. Cx-19. He later told the investigator that he had not spoken to Mr. Warren because he wanted to investigate the allegation before speaking with Mr. Warren. Rx-1. 55. USDA guidelines require a county supervisor to use his discretion to prevent a farmer's conversion of secured property in the interest of the farmer and to protect FSA's lien interest. Cx-106. 56. Internal USDA memoranda showed that USDA State officials believed that Mr. Warren'. problems were caused by incompetent legal advice. They believed that Mr. Warren had a claim of malpractice against the attorney who told him it was fine to cut the timber and advised that he should obtain money for restitution from the attorney. Cx-14, Cx-24. 57. Mr. Warren appealed the denial of his Primary Loan Service application which was based on lack of good faith. His appeals hearing was held in 1993. For the first tine in his dealings with FSA, the denial of his application was upheld. Cx-57, 58. 58. All applications filed by Mr. Warren after 1992 were denied for lack of good faith. Cx-62, C-63, C-64. The denial notices stated, in part, that "it has been determined that you have not acted in good faith when timber on which FmHA [FSA) holds a first deed of trust was sold . . . ." See, e.g. Cx-63. 59. Mr. Warren was informed that he could be considered again for loan servicing if he made restitution of the amount of money he obtained from the cutting of the timber (approximately $26,000.) He did not have the funds to do so. Attorney Cooley tendered a promissory note to FSA on Mr. Warren's behalf. His note was rejected for lack of adequate consideration. RR-ex8. Mr. Warren's church offered to pay the amount on Mr. Warren's behalf, but that offer, too, was rejected. The church's bishop was told that it
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-I8was too late for Mr. Warren to make restitution. Cx-110. Mr. Warren also sought to develop a repayment installment plan, but his plan was rejected. Rx-1.
Despite the finding of lack of good faith which Mr. Norton made, and FSA maintained, Mr. Norton continued to send Mr. Warren invitations to apply for loans and debt restructuring, as well as announcements of new programs available to farmers. When Mr. Warren would apply for these, he would be rejected based on the finding in his record of lack of good faith. In 1993, e.g., the USDA offered two programs for disadvantaged farmers. The first offered farmers loans at market or below market rates to purchase or enlarge farms, exclusive opportunity to purchase farm land in USDA inventory, and debt restructuring at a reduced rate of interest. Cx-53. The second offered low interest loans to low income farmers who could not afford to borrow at regular rates under other programs Debt restructuring was also available. Cx-60. Mr. Warren was notified of these programs on March 25, 1993. It had always been Mr. Warren's dream to significantly expand the number of acres he owned; however, because of the lack of good faith finding, he was not eligible for these programs.
61 _ On September 24, 1994, Mr. Norton notified Mr. Warren that he was eligible for Homestead Protection services. The letter listed ten items Mr. Warren was required to provide azthin 30 days. Cx6.5. piny November 1, 1994, without further correspondence with Mr. Warren, Mr. Norton denied Mr. Warren's application for Homestead Protections because of his failure to supply the ten items within the 30-day time period required. Cx-66. 62. Mr. Warren, through his daughter, Vivian, repeatedly wrote and made telephone calls to the USDA, seeking a resolution of his discrimination complaint. A notation made by one USDA staffer indicated: "Vivian Warren continues to call on a regular basis, requesting the status of her father's discrimination complaint." Cx-72. When he received no resolution, he corresponded with his Congressman, seeking assistance in getting his claim resolved. He complained to the Congressman that the finding of lack of good faith had been made in retaliation for his filing a civil rights complaint. The Congressman wrote to the USDA, yet the USDA took no apparent effort to resolve the complaint. Cx-20, 26-28, 33. 63. Still receiving no formal response, Mr. Warren filed two other complaints of discrimination: the second was filed on May 15, 1995,(Cx-74) and a third on January 22, 1997. Cx-102. He was repeatedly told that his complaints were being considered and would be resolved. Cx-54, 84, 25, 116-117.
60.
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-1964. On September 5, 1995, the District Director, FSA, wrote Mr. Warren that if he did not pay his loans in 30 days, foreclosure action would begin- Cx-29. Upon receipt of this notice, Mr. Warren and Vivian Warren repeatedly called USDA officials, and the Congressman in an attempt to stop the foreclosure until there had been an investigation of the discrimination complaints. Cx-72. 65. In October 1995, Mr. Warren received notice that the foreclosure action was being rescinded pending the resolution of the civil rights claim. Cx-30-31. However, his case was flagged, erroneously, for foreclosure in June, 1996. Cx-32. 66. In 1997, OCR commissioned an investigation of Mr. Warren's complaint by the independent law firm of Delany, Siegel, Zorn & Associates. The investigating attorney spent three months on the investigation and provided a report and recommendation to OCR in October 1997. RR-ex. l . 67. In March 1999, based on the investigator's report, the Special Assistant to the Director, Office of Civil Rights, made a "Decision" on Mr. Warren's complaint. He concluded. that the evidence supported finding that Mr. Norton had discriminated against Mr. Warren, based on race. Rx-1. Based on all the evidence available, the "Decision" found that Mr. Norton discriminated against Mr. Warren by: 1) denying him adequate loan servicing from 1988 to the present; and 2) by retaliating against Mr. Warren by giving hun a bad faith determination for the sale of timber which secured his loans. It made the credibility determination that Mr. Warren informed Mr. Norton of his intentions to cut and. sell timber from his property to pay non-FSA debts, and concluded that Mr. Norton decided to make a finding of lack of bad faith against Mr. Warren in retaliation for his successful NAD appeals and for the filing of his race discrimination complaint on January 10, 1992. It concluded:"[w]e can find no other credible explanation fpr [Mr. Norton's] actions." Rx-1. I agree with the "Decision" and .accept these findings as they are adequately supported by the evidence of record. See Cx18, Cx-19, Cx-104, Cx-108, Cx-106-7, Cx-110, 113 and 114. In the words of the investigator regarding the timber incident and Mr. Norton's involvement: 'This action reeks of retaliation." RR-ex. 1. 68. Considering all the evidence, I further conclude that the preponderance of the evidence supports these additional findings: a) that the objective of the county committee in denying Mr. Warren's Farm Operating Loan in 1985 and every year thereafter, and Mr. Norton's and the county committee's objective, beginning in 1988, was to deprive Mr. Warren of the financing he
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-20needed to successfully operate his farm with the ultimate goal of forcing Mr, Warren to lose his land. Cx-12, Cx-13. Cx-106. b) that the USDA, through its FSA county supervisors, failed to provide Mr. Warren the assistance he needed to understand the application process and to correctly and fairly complete his Farm and Home Plans. Its failure to do so was based on race. c) that Mr. Norton, knowing Mr. Warren was uneducated and illiterate, used technicalities contained in the USDA regulations against Mr. Warren in direct violation of his responsibility as county supervisor. His objective in doing so was to deny Mr. Warren loan benefits based on race. Cx-104. His ultimate objective was to cause Mr. Warren to lose his land. 69. Mr. Warren continues to be ineligible for FSA loan services based on the finding of lack of good faith. FAILURE TO GIVE PROPER ACCOUNTING OF LOAN HISTORY: 70. Mr. Warren and lawyers, acting on his behalf, have attempted to get an accurate accounting of Mr. Warren's loans, yet the USDA has not given Mr. Warren an official and accurate accounting of his FSA loan record.. An internal memoranda from USDA reflects the fact that FSA's accountants could not fully explain some entries on Mr. Warren's account. Cx-06, Cx-117.'3 Mr. Warren had never received an official accounting of three loans he received in 1983 and 1984. While Mr. Warren was charged with the full face value of the loans, it is unclear how much of the money was used on Mr. Warren's behalf. One note accompanying Mr. Warren's records from FSA stated: "I could not locate the old management card, but I did piece together the information for you with the exception of one loan that I could not find." Cx 112. In 1995, the District Director wrote to Mr. Norton that Mr. Warren's "ageredit history" must be corrected before FSA proceed to foreclosure. Cx-06. On January 13, 1997, the Agricultural Credit Manager stated that the "Problem Explanation Sheet" concerning Mr. Warren's Farm Ownership loan showed a principal halance significantly larger than the note amount. The Finance Office had attempted. to follow the history of the loan to determine how the numbers were developed, but had difficulty doing so. Cx-07.
'3As
of the date of the trial, Mr. Warren's request for an official accounting of the balance due
and owing on his
account still was not available. Tr. 12.
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-21BEGINNING DATE OF DISCRIMINATION 71. h-Ir. Warren alleges damaging beginning 1983. Cx-99_ However, he has not established, by a preponderance of the evidence, any act of discrimination occurring before 19 35. USDA'S ADMISSION OF NATIONWIDE RACIAL DISCRIMINATION 72. The USDA has admitted that FSA county supervisors and county committees throughout the United States discriminated against Black farmers. It has admitted that as a result of that discrimination, Black farmers have lost their land and their livelihoods. See Conscht Decree in Pigford et al v. Glickman, Dist Ct. DC (Civil Action No. 98-1693 (PI-F)) FINDINGS ON DAMAGES Economic
Due to USDA's discrimination against him, based on race, Mr. Warren suffered substantial economic loss. He: 1) lost the opportunity to expand his farming operation, including opportunity to purchase his sister's farm of 365 acres of land; 2) lost all leases he had on farmland in the County; 3) lost his prized peanut production under the VPI program; and 4) was forced to give up his swine operation. Moreover, his ability to obtain credit was destroyed. 73.
.
Emotional 74. A , a direct result of the USDA's discrimination against him, Mr. Warren has suffered severe emotional distress over nearly a 17-year period. He has watched the emotional suffering of his family, as well. DISCUSSION AND SUBSIDIARY FINDINGS Mr. Warren brings this claim pursuant to the provisions of the Equal Credit Opportunity Act ("ECOA"), 15 USC §§ 1691 et seq., which was enacted in 1974, and became effective on October 28, 1975, and amended in 1976. It is a provision of the Consumer Credit Protection Act, 15 USC §§ 1601 et seq.
The ECOA prohibits creditors from discriminating against any applicant, with respect to any
aspect of a credit transaction on the basis of race. 15 USC § 1691(a)(1)_
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Regulation B defines "credit transaction" as including "[e]very aspect of an applicant's dealings with a creditor regarding an application for credit, or an existing extension of credit (including but not limited to information requirements; investigation procedures; standards of creditworthiness; terms of credit; furnishing of credit information; revocation, alteration, or termination of credit; and collection procedures.)" Reg. B, 12 C.F.R..§ 202.2 (m). The ECOA applies to the USDA and the FSA. The statute provides that when the government or a governmental subdivision, agency or instrumentality extends credit, it is subject to the provisions of the ECOA, except that no action can be brought against a governm3ntal creditor for punitive damages. 15 USC 1691e(b). The USDA agrees that the ECO,*applies to FSA's loan servicing transactions. Rx-1. The USDA stipulated to liability in this case for discriminating against Mr. Warren on the basis of race, beginning in 1985.'/' The evidence supports that finding. Accordingly, I find that the USDA discriminated against Mr. Warren with respect to aspects of numerous credit transaction on the basis of race in violation of 15 U.S.C § 1691(x)(1). Specifically, the USDA, through Mr. Norton, the county supervisor and/or the county committee members, discriminated against Mr. Warren, based on his race, regarding an application for a loan or loan servicing, including, but not limited to, deliberatoly delaying action on his loan applications, denying his applications for loan or loan servicing, setting unfair conditions for the approval of loan or loan servicing, and falsifying information and using that information to deny loan servicing. In addition, the USDA, through FSA and Mr. Norton, violated the ECOA by retaliating against Mr. Warren for exercising a right granted him under the Consumer Credit Protection Act, i.e., the right to protest the illegal and discriminatory action of a credit lender. Sec. 1691a(3). DAMAGES Section 7t6(a) and (b) and 702(g) of the ECOA provides that any creditor that fails to comply with a requirement imposed by the Act or the regulation is subject to civil liability for actual damages suffered by the individual. 15 U.S.C. 1691e. See also 12 CFR 202.14. Actual damages are damages deemed to compensate the injured party for losses sustained as a direct result of the injury suffered. They "are the damages awarded to a persona. a compensation, indemnity or restitution for harm sustained by him." Restatement (Second) of Torts § 903 (1979). One purpose of actual damages is "to make
14
Sw Rx_3.
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-23persons vehole for injuries suffered on account of unlawful discrimination." Albemarle Paper Ca. v. Moody, 422 U. S. 405, 418 (1975) There are two categories of actual or compensatory damages: tangible and intangible Tangible includes economic loss. Intangible damages include compensation for emotional distress, and pain and suffering, Bohac v. Dept ofAgriculture, 239 F. 3d 1334, (Fed. Cir. 2001); injury to personal and professional reputation, Fabry v Comm'r of IRS, 223 F. 3d 1261 at 1265, (11th Cir_ 2000); injury to credit reputation, mental anguish, humiliation or embarrassment, (Fischl v. General Motors Acceptance Corp., C.A.5 (La.) 1983, 708 F. 2d 143); "impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering" U. S. v. Burke, 504 U. S. 229,112 S. Ct. 1867 at 1874 (1992); and intentional infliction of emotional distress. Ricci v_ Key Bancshares, Inc.,662 F. Supp 1132 (D.C. Me. 1987). While damages, may not be determined by mere speculation or guess, it will be enough if the evidence show the extent of the damages as a matter of just and reasonable inference= although the result be only approximate. Tri County Industries, Inc. v. District of Columbia, et al, 200 F. 3d 836 at 851 (D. C. Cir. 2000) The inquiry must be whether the damage award is within a "reasonable range within which the jury may properly operate." Langevine v D. C., 106 F. 3d 1018 at 1024 (D.C. Cir 1997). TANGIBLE DAMAGES Loss of Farm Income As a result of the USDA's discrimination against him, Mr. Warren suffered loss of income from farming operations. FSA never approved a loan for him after 1985. He was denied farm operating loans, disaster assistance loans and/or grants, Primary and Preservation Loan Servicing. Because he was denied a loan in 1985 and every year thereafter, Mr. Warren did not have the money to buy fertilizer, seed, chemical, equipmen t, etc. that was needed to carry on a successful farm operation. Despite his best efforts, without funds, he could not hold'on to the leased lands that he farmed, and thus suffered a devastating loss of farm income from that year forward. Moreover, the finding that Mr. Warren had acted with lack of good faith precluded him from qualifying for these benefits. Cx-79. Mr. Warren seeks a total of $3,972,104 in loss of farm income for the period from 1983 to 2001, This claim is based upon the report and analysis of his expert economist, Dr. Adell Brown. Specifically, he seeks $1,389,429.31 for farm crop and swine losses,
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-24$270,0D0 for replacement costs on farm equipment and machinery from 1983-2001 (@ $15,000 per year), and interest on $1,561,677.08 at 9_9% compounded over the 17-year period. Cx-99.
The USDA challenges Dr. Brown's assessment of loss and presents instead a calculation of loss that is between $301,731 and $323,720, minus actual income earned by Mr. Warren over the same 17-year period. Accordingly, the determination of which expert opinion should be accepted is of critical importance in this case.
Both economists have similar academic backgrounds, both having obtained PhD degrees in Agricultural Economics - Dr. Brown from Louisiana State University (1983) and Dr. Glaze from Mississippi State (1985). Dr. Brown is currently associated with Southern. University and has spent a substantial amount of time working with farmers in his capacity as Agricultural Program leader in the Universities' Cooperative Extension Program at Baton Rouge, Louisiana. He has worked as an extension specialist in the area of farm management and as a consultant for the National Office for Small-Scale Agricultire. He has also worked with farmers, assisting them in putting together budgets, preparing their FHPs and helping them in their management practices. Dr. Glaze has worked as an economist for OCR-USDA since 1997. His resume shows that he has received recognition for leadership in developing and implementing farm-level budgets. Both Mr. Warren and the USDA agree that the way to calculate Mr. Warren's economic damages is to calculate what he would have earned with a fully functioning farm during the years since 1983, adjusted for actual income earned during the same time. Thus, both parties have not attempted to do a specific proximate cause analysis that seeks to trace the damages caused by each distinct act of discrimination. The method used by both parties takes into account all types of damages by looking at the net income that Mr. Warren would have made from farming (i.e. gross income minus costs) during the years in question if his farm operation had been unaffected by discrimination. The formula used by both is as follow: Net Returns - crops = [Price x (Yield x Acres) - [Costs per Acre x Acres) + Net Returns - hogs = (Price x (Market Wt. x Hogs sold] - (Cost per 100 Ibs x hogs sold] Economic Loss = Net Returns (crops + hogs) - Actual Net Returns(crops +hogs)"
"'The First Circuit Court of Appeals found no fault with the trial court's jury instruction in an employment case that= "Actual damages include any wages or fringe benefits you find plaintiff would
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-25Further, both used published figures from the Economic Research Service (ERS) and the National Agricultural Statistics Service (NASS), as a data source. The ERS reports price, yield and cost data based on survey of farms on a regional and state wide level. The NASS reports price and yield data based on a survey of farms at the county level. The NASS does not report on costs of production. Tlie parties agree on the overall methodology, but have serious disagreements on the calculation of lost income. First, the USDA believes that Mr. Warren can only recover economic damages from 1985 to present, since 1985 is the earliest that discriminatory conduct was alleged in an eligible complaint. I agree. I have already determined that the evidence is insufficient to establish a basis for economic loss for any year priorto 1985. See Finding of Fact, 17 1. Second, the USDA contends that there is no support in the record for the 763 acres Mr. Warren allegedly farmed in 1983. 1 disagree. The evidence supports finding that Mr. Warren farmed 763 acres in 1983. See Finding of Fact, 111, and fn 4. However, since I have found that there is no basis for a finding of economic damages resulting from discriminatory acts which occurred before 1985, the first year for which Mr. Warren may be compensated is 1985. Dr. Brown used 1983 as a base year and determined losses beginning with the year 1984. Because I find that the evidence does not establish calculable economic injury before 19 85, Dr. Brown's figures must be modified to show 1984 as the base year and to calculate loss beginning in 1985. By extrapolating from his data, the calculation of loss beginning 1985 can be made. Dr. Glaze provided calculation for loss beginning in 1985 in his report. '6 See Rx-3, tables l and 2. The USDA's most fundamental disagreement with Mr. Warren's economic claim is the methodology used by Dr. Brown. Dr. Glaze, USDA's economist, believed there were serious problems with Dr. Brown's analysis. Dr. Brown attempted to simulate Mr. Warren's farming practice as it would likely have been had he had the funds and resources unfairly denied to him during the years in question. Before doing so, he visited Southampton County, and over several days talked with individuals in the community to get a feel
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