S & S Packing, Inc. v. Spring Lake Rattle Ranch, Inc.

702 F. App'x 874
CourtCourt of Appeals for the Eleventh Circuit
DecidedJuly 19, 2017
Docket16-14431
StatusUnpublished
Cited by4 cases

This text of 702 F. App'x 874 (S & S Packing, Inc. v. Spring Lake Rattle Ranch, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
S & S Packing, Inc. v. Spring Lake Rattle Ranch, Inc., 702 F. App'x 874 (11th Cir. 2017).

Opinion

ANDERSON, Circuit Judge:

This case arises from a contractual dispute between a blueberry farm and its agent. The district court upheld a USDA judicial officer’s damages award against the agent in favor of the farm. We reverse the district court’s decision in part, affirm in part, and remand for further proceedings.

I. BACKGROUND

Spring Lake Ratite Ranch, Inc., d.b.a. Spring Lake Blueberry Farm (“Spring Lake”) is a grower of blueberries in Brooksville, Florida. 1 It is owned by Ruth and Larry Davis. Spring Lake contracted with S&S Packing, Inc. (“S&S”) to pack and market Spring Lake’s 2010 blueberry crop. S&S is owned and operated by Sam Mills (“Mills”). In 2010, S&S also packed and marketed blueberries from several other local farms, including two owned by Mills. S&S packed growers’ berries into any one of three different sizes of contain *877 er—4.4-oz. containers, 6-oz. containers, or pint containers. S&S then packed contain-, ers of the same size into “flats” for shipping. 2 S&S sold these blueberries almost exclusively through Sun Belle Inc. (“Sun-Belle”), a third-party marketer. S&S operated a “pooling” arrangement, under which it aggregated the money it received from SunBelle for all berries in each pool week and apportioned it among the growers.

Spring Lake was unhappy with S&S’s performance with regard to its 2010 crop and filed a formal complaint with the Secretary of Agriculture pursuant to the Perishable Agricultural Commodities Act (“PACA”), 7 U.S.C. § 499a et seq. (2012). The complaint made numerous allegations, including: (1) S&S had calculated packing charges on a per-pound rather than a per-flat basis in violation of the contract; 3 (2) S&S had improperly charged Spring Lake with two commissions—its own and Sun-Belle’s—in violation of PACA regulations; and (3) S&S’s method of calculating the “pool price” (that is, apportioning net receipts) led to disparities in the rates per pound that different growers received. 4 Spring Lake claimed $109,295.65 in damages on the basis of these violations. Spring Lake also alleged that S&S had failed to invoice SunBelle as required by regulations and that its records were poorly maintained, but did not allege any damages stemming from these deficiencies.

The USDA judicial officer concluded that S&S had failed to invoice SunBelle as required by its contract and to comply with various recordkeeping requirements of the applicable regulations. Specifically, the judicial officer concluded that S&S’s records were too unreliable to support an audit in violation of 7 C.F.R. § 46.14 (2017); that it had failed to produce sales tickets bearing sequential serial numbers in violation of 7 C.F.R. § 46.19; and that its treatment of “pooled losses” failed to comply with the requirements of 7 C.F.R. § 46.32. The judicial officer did not address any of Spring Lake’s other claims.

The judicial officer then calculated Spring Lake’s damages. He held that deficiencies in S&S’s recordkeeping made S&S’s figures unreliable. Consequently, instead of using the actual sales prices received by S&S, the judicial officer used the reports of market prices published by the USDA Market News service (“Market News”) to calculate the amount that Spring Lake should have received for its blueberries and subtracted S&S’s documented costs. Because this produced a figure far in excess of Spring Lake’s claimed damages, the judicial officer capped the damages at the amount Spring Lake had claimed, plus interest and fees.'

S&S posted the appropriate bond and brought suit in the district court for the Middle District of Florida to obtain review of the judicial officer’s decision under PACA. A disappointed party in a PACA proceeding may have a “trial de novo” in a district court, with the exception that “the findings of fact and order or orders of the Secretary shall be prima-facie evidence of *878 the facts therein stated.” 7 U.S.C. § 499g(c). S&S submitted additional documentation, including, most importantly, SunBelle’s records of all blueberries delivered to it by S&S. The district court affirmed the judicial officer’s decision, holding that S&S had not rebutted the judicial officer’s findings, that the judicial officer acted within his authority in relying on Market News prices, and that S&S had acted improperly in charging Spring Lake with two c'ommissions. 5 The district court did not rule on the remainder of Spring Lake’s claims.

S&S timely appealed.

II. DISCUSSION

The district court had subject-matter jurisdiction over this' case under 7 U.S.C. § 499g(c). We have appellate jurisdiction under 28 U.S.C. § 1291 (2012).

We review a district court’s findings of fact for clear error and conclusions of law de novo. Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d 1276, 1284 n.4 (11th Cir. 2016) (citing Tartell v. S. Fla. Sinus & Allergy Ctr., 790 F.3d 1253, 1257 (11th Cir. 2015)).

A. The Contract’s Requirements with Regard to Pooling

In affirming the judicial officer’s decision, the district court relied in part on its determination that the contract required berries to be traceable from the grower through to SunBelle—i.e., that S&S be able to show what SunBelle paid for each particular flat of Spring Lake’s blueberries. We reject this interpretation.

The district court determined that the judicial officer’s use of market prices was justified in part because the contract required S&S to produce records demonstrating what SunBelle paid for Spring Lake’s berries specifically. We reject this interpretation of the pooling arrangement because it is supported neither by the contract nor by USDA regulations.

PACA has some substantive requirements, but it does not constitute a complete body of law. Accordingly, when PACA is silent on a matter, state law provides the rule of decision. Rothenberg v. H. Rothstein & Sons, 183 F.2d 524, 526 (3d Cir. 1950); see also Bocchi Americas Assocs. Inc. v. Commerce Fresh Mktg.

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Bluebook (online)
702 F. App'x 874, Counsel Stack Legal Research, https://law.counselstack.com/opinion/s-s-packing-inc-v-spring-lake-rattle-ranch-inc-ca11-2017.