Tenaha and Shelby County have agreed to an "impartial policing policy" that will better document and monitor traffic stops to settle the suit, which brought national attention to the town of 1,160 near the Louisiana border when it was filed four years ago.
The suit accuses former District Attorney Lynda Kaye Russell and four other ex-law enforcement officials of forcing motorists, most of them black, to forfeit their cash or face criminal charges.
The filings Friday show that the defendants, including the city and the county as well as the named individuals, also have agreed to pay the plaintiffs' legal fees of $520,000. The 2011 ruling by U.S. District Judge T. John Ward granting class certification limited the case to injunctive and declaratory relief.
The plaintiffs' attorneys said they were pleased by the far-reaching nature of the proposed settlement.
"I'm not aware of any law enforcement agencies that operate with these types of safeguards," said Tim Garrigan, a Nacogdoches attorney who worked on the case with the American Civil Liberties Union.
The attorney representing Russell in the lawsuit didn't immediately respond to messages from The Associated Press on Friday.
The suit contends that a drug enforcement program established in Tenaha in 2006 was actually a scheme to threaten innocent motorists with money laundering charges if they didn't agree to sign over their cash under civil asset forfeiture proceedings. The traffic stops occurred on U.S. Highway 59, which runs from the U.S.-Mexico border to Canada and is known as a major drug trafficking route.
The AP reported last October that more than $800,000 was collected from the stops in less than a year and that, in some instances, motorists who fit the profile of drug traffickers received leniency in exchange for agreeing to forfeit their cash.
Friday's filings state that the defendants deny violating the plaintiffs' constitutional rights but agree to dozens of procedures directed at making sure future traffic stops and searches aren't impacted by racial profiling and other violations or motorists' rights.
The documents detail a number of preventive measures, including audio and video recordings of all traffic stops. In addition, any money collected through future asset forfeitures can only be used for audio and video equipment, law enforcement training or donations to nonprofits dedicated to mental health, rehabilitation services or victims' rights, according to the filings.
The measures would apply to all law enforcement in Tenaha and Shelby County except the sheriff's office, which isn't part of the suit or the settlement, plaintiff attorneys said.
Shelby County Judge Rick Campbell said Friday that approving the settlement was a "business decision" for the county, which is bound by the agreement even though it wasn't named in the original complaint.
"The county is between a rock and a hard place," he said. "If you fight this, it could cost $1 million. It was in our best interest, because of the dollars, to settle the case."
The traffic stops remain under investigation by the Department of Justice's civil rights division. They are also part of an ongoing probe in which federal authorities in Texas are investigating a Tenaha constable who is alleged to have secretly bugged the offices of other officials involved in the scheme.