The ending to the suit comes after several years of legal wrangling. The suit -- originally brought by Lonoke, Ark., farmer Jimmy Wallace – was filed after the AmAg insurance company withdrew coverage it had promised on with their 1999 CRCPlus rice insurance. Delta rice farmers signed up for 3 cents per pound coverage that was, after a deluge of sign-ups, abruptly cut by the company to 1.5 cents.
Speaking after filing the suit, Wallace mentioned a CRCPlus informational meeting (such meetings occurred across the Delta) he’d attended at his local bank. “It didn’t take a rocket scientist to realize that the product was a good deal for farmers. It was the only thing I saw that was based on price, not production. It offered 3 cents per pound. That was promising because rice prices were going down at the time. I’d say everyone in the room – 75 to 80 people – immediately wanted to sign up.”
When the company suddenly cut the 3-cent coverage in half, the action didn’t sit well with the government. Farmers, who had already made their growing plans and secured loans by March when AmAg announced the coverage slash, were incensed.
“We were all upset. It looked like such a good deal – I think it guaranteed me $3.84 per bushel of rice. When they yanked it away, they didn’t offer anything worthwhile to fill the void they’d made…Believe me, had the shoe been on the other foot, say the rice price had gone up to $6 per bushel, they’d have been here with a hand out saying, ‘Pay me my premium,’” says Wallace.
AmAg eventually paid substantial fines to both federal and state agencies. Wallace’s suit, which alleged fraud and deceptive practices among other things, was settled on July 5, 2000. Then came the arduous process of calculating who got what. All farmers who signed up for CRCPlus coverage were eligible for a cut of the $3.7 million settlement (by the time attorney and “special master” fees were removed, the pot for farmers to share was actually $2.3 million).
The judge overseeing the case appointed a special master to determine what each claimant should receive. Checks were originally promised last October. But after reviewing the Special Master’s initial report, class attorneys discovered, “what we thought were miscalculations and a couple of errors. We went back to the judge and told him our point of view on that. The judge sent it back to the Special Master to recalculate with some instructions. The Special Master did that and sent his new calculations to the judge who approved them. We received a copy of the order, had the checks printed and sent them out,” says class counsel, Cindy Green.
Farmers who have called Delta Farm Press to speak about the checks have been generally positive. “To be honest, after all this time, I wasn’t expecting a check at all. We got a few hundred dollars, which isn’t a whole bunch of money. But I think it was fair,” says one.
Since checks were mailed, calls to class counsel’s New Orleans office have been from claimants typically wanting an explanation of how their check amounts were calculated. A cover letter from the law firm – including the firm’s address and phone number was put in the envelope with each check. Class members with questions are urged to contact the firm.
“We’re glad to finally get this resolved. I hope the class members are happy,” says Green.