United States District Court, M.D. Tennessee, Cookeville Division
MEMORANDUM AND ORDER
WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE.
the Court is Tom Lange Company, Inc.'s Motion to Rule of
Objection to General Produce, Inc.'s Perishable
Agricultural Commodities Act (the “Act”) claim.
(Doc. No. 84.) For the following reasons, Tom Lange
Company's Motion (Doc. No. 84) is
GRANTED, its Objection (Doc. No. 80) is
SUSTAINED, and General Produce's claims
(Doc. No. 75) are DENIED.
April 6, 2017, the Honorable Kevin H. Sharp entered an Agreed
Order, in relevant part, establishing a claims procedure
under the Act. (Doc. No. 63.) In short, any unpaid supplier
of perishable goods to J.R. Produce, Inc., was to file a
claim, and then the parties had a chance to object to any
claim. (Id.) If there was an objection, the party
objecting and the party with the claim were to try to resolve
the claim, and if no resolution was reached, they were to
file a Motion to Rule on Objections. (Id.) All
deadlines have now passed, and the parties followed the
procedures established in Judge Sharp's Order. The only
objection is Tom Lange Company's objection to General
Produce's invoices. (Doc. No. 80.)
STANDARD OF REVIEW
determining whether an unpaid supplier of perishable goods
preserves its trust benefits, the Court treats the objection
under the same standard as a motion for summary judgment.
See Overton Distributors, Inc. v. Heritage Bank, 340
F.3d 361, 366 (6th Cir. 2003) (reversing the district
court's denial of summary judgment when the produce
wholesaler failed to preserve its trust benefits). In
reviewing a motion for summary judgment, this Court will only
consider the narrow question of whether there are
“genuine issues as to any material fact and [whether]
the moving party is entitled to judgment as a matter of
law.” Fed.R.Civ.P. 56(c). A motion for summary judgment
requires that the Court view the “inferences to be
drawn from the underlying facts . . . in light most favorable
to the party opposing the motion.” Matsushita Elec.
Ind. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)
(quoting United States v. Diebold, Inc., 369 U.S.
654, 655 (1962)). The opponent, however, has the burden of
showing that a “rational trier of fact [could] find for
the non-moving party [or] that there is a ‘genuine
issue for trial'” Matsushita, 475 U.S. at
587. “The mere existence of a scintilla of evidence in
support of plaintiff's position, however, ] will be
insufficient; there must be evidence on which the jury could
reasonably find for the plaintiff.” Anderson v.
Liberty Lobby, 477 U.S. 242, 252 (1986). If the evidence
offered by the nonmoving party is “merely colorable,
” “not significantly probative, ” or not
enough to lead a fair-minded jury to find for the nonmoving
party, the motion for summary judgment should be granted.
Anderson, 477 U.S. at 479-52. “A genuine
dispute between the parties on an issue of material fact must
exist to render summary judgment inappropriate.”
Hill v. White, 190 F.3d 427, 430 (6th Cir. 1999)
(citing Anderson, 477 U.S. at 247-49).
Lange Company, an intervening plaintiff, objects to General
Produce's claim based on its failure to comply with 7
U.S.C. § 499e(c)(3). (Doc. No. 80.) Specifically, Tom
Lange Company argues that because General Produce's
invoices did not include the words “retains a trust
claim over these commodities” (Doc. No. 75-3), General
Produce's claims should be denied. (Doc. No. 80 at 3.)
General Produce does not dispute that it did not include the
words “retains a trust claim over these commodities,
” (Doc. No. 81 at 3), but instead argues that it
substantially complied with the Act, which is all that is
provides a “comprehensive regulatory scheme for the
sale of produce in interstate commerce.” Six
L's Packing Co., Inc. v. Beale, 524 Fed.Appx. 148,
152 (6th Cir. 2013). “Under the Act, when a seller,
dealer, or supplier ships produce to a buyer, a statutory
trust is created upon acceptance of the commodities.”
Id. (quoting Golman-Hayden Co. v. Fresh Source
Produce, Inc., 217 F.3d 348, 350 (5th Cir. 2000).
“The trust protects sellers against buyers'
financing arrangements by giving sellers priority over
secured creditors.” Id. “To invoke the
Act's protection, sellers must provide buyers written
notice of their intention to preserve trust rights.”
Id. (citing 7 C.F.R. § 46.46(f)(1)).
unpaid supplier, seller, or agent must give written notice of
its intent to preserve the benefits of a trust to the
commission merchant, dealer, or broker within a time
specified in the statute. 7 U.S.C. § 499e(c)(3) (2012).
The written notice may be a usual billing or invoice
statement. Id. at (c)(4). However, if it is an
invoice statement, it “must include the information
required by the last sentence of paragraph (3) and contain on
the face of the statement the following: ‘. . . The
seller of these commodities retains a trust claim over these
commodities . . . .'” Id. If the
provisions of this statute are not followed, the
“unpaid supplier, seller, or agent shall lose the
benefits of such trust.” Id. at (c)(3).
undisputed that General Produce did not include the statutory
language: “The seller of these commodities retains a
trust claim over these commodities . . . .” (Doc. No.
75-2.) The Court is only aware of one case in a district
court within the Sixth Circuit where the seller did not use
the statutory language, and the court denied the seller's
claim. Chiquita Fresh, NA v. Specialty Produce Co.,
Inc., Nos. 1:02-cv-269, 1:02-cv-272. 1:02-cv-276, 2003
WL 24272404, at *4 (E.D. Tenn. May 2, 2003), adopted
by 2004 WL 1876746 (Jan. 12, 2004). Courts that overrule
objections to claims, however, consistently noted that the
seller included the statutory language on the invoices.
Heeren, LLC v. Cherry Growers, Inc., No. 1:15-cv-47,
2015 WL 9450851, at *1 (W.D. Mich. Dec. 23, 2015);
Crosset Co., LLC v. Al's Produce, LLC, No.
2:15-cv-11619-GCS-DRG, 2015 WL 4506621, at *1 (E.D. Mich.
July 23, 2015); In re Cipriano, No. 14-14826, 2015
WL 3441212, at *1 (E.D. Mich. May 28, 2015) Bearden v.
Great Lakes Produce and Mktg. LLC, No. 1:12-cv-700, 2013
WL 2318857, at *1 (W.D. Mich. May 28, 2013); La Grasso
Bros. Inc. v. Am. Foodservice, L.L.C., No. 10-10711,
2011 WL 891221, at *1 (E.D. Mich. Mar. 11, 2011). The Court
agrees that the plain language of the statute must control
here. See Cty. of Oakland v. Fed. Hous. Fin. Agency,
716 F.3d 935, 939 (6th Cir. 2013) (“Departure from the
plain language of a statute is disfavored and
‘appropriate only in rare cases in which the literal
application of the statute will produce a result demonstrably
at odds with the intentions of its drafter or when the
statutory language is ambiguous.'”) (quoting
Hoge v. Honda of Am. Mfg., Inc., 384 F.3d 238, 246
(6th Cir. 2004)). Accordingly, General Produce did not
include the statutorily-required language, and thus lost its
foregoing reasons, Tom Lange Company's Objections (Doc.
No. 80) are SUSTAINED. General Produce's
claims (Doc. No. 75) are DENIED. Tom Lange
Company's Motion to Rule on Objection (Doc. No. 84) is
GRANTED. Southern Fruit and ...