Rocha v. JW Produce, Inc.

Background

Jesus Rocha sued JW Produce, Inc. and Veronica Martinez Vasquez, also identified as Veronica Martinez, to enforce a November 28, 2018 reparation order issued by the U.S. Department of Agriculture. The USDA order required JW Produce to pay Rocha $27,223 for unpaid strawberry shipments, interest at 2.44% per year from October 1, 2016, and the $500 fee Rocha paid to file his USDA complaint.

Rocha alleged that JW Produce agreed to buy 57 shipments of strawberries, accepted the shipments, and failed to pay fully. The USDA previously issued an award against JW Produce and determined that Martinez Vasquez was an individual responsibly connected to JW Produce. JW Produce sought reconsideration, and the USDA granted that request in part by reducing the award from $32,745 to $27,223 and excluding damages for untimely claims.

The defendants were served but did not answer, appear, or respond to Rocha’s motion for default judgment. The clerk entered default against both defendants.

Jurisdiction and Service

The court found federal-question jurisdiction over Rocha’s claim under the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. § 499g(b), and supplemental jurisdiction over his related common-law claim. It also found personal jurisdiction over JW Produce and Martinez Vasquez. The court concluded that substituted service was proper after considering the process server’s efforts, the investigation of addresses connected with the defendants, and Raul Herrera’s statement that he had permission to accept service for both defendants.

Default-Judgment Analysis

The court applied the factors used to decide whether to enter default judgment, including prejudice to the plaintiff, the strength of the claims, the amount at stake, the possibility of factual disputes, whether the default resulted from excusable neglect, and the preference for decisions on the merits.

The court focused solely on Rocha’s PACA enforcement claim. It found that Rocha alleged the required facts: JW Produce was subject to PACA, the USDA issued a reparation award in his favor and against JW Produce, the award was not paid within the time specified, and the lawsuit was filed within three years of the USDA order. Because the defendants defaulted, the complaint’s factual allegations were treated as true except for damages. The court also relied on the USDA order as prima-facie evidence of its findings.

The court concluded that the defendants’ failure to participate left Rocha without another identified means of recovering payment, that the requested amount reflected the alleged harm, and that nothing in the record showed excusable neglect or a likely dispute over material facts. It therefore concluded that default judgment was warranted.

Amounts Recommended

The court recommended awarding:

- $27,223 in damages for the unpaid produce; - $500 for Rocha’s USDA filing fee; - $3,701.88 in interest through April 26, 2022, calculated at 2.44% per year on $27,223; - $5,811 in attorneys’ fees; and - $512 in costs, consisting of a $402 filing fee and $110 in process-server fees.

The recommended total was $37,747.88. The recommendation also stated that interest on $27,223 should continue at 2.44% per year until paid.

Disposition

Because not all parties consented to magistrate-judge jurisdiction, Judge Virginia K. Demarchi ordered the case reassigned to a district judge. She recommended that Rocha’s motion for default judgment be granted and that the amounts listed above be awarded. The opinion is a report and recommendation on the default-judgment motion, rather than a statement that the district judge had already entered the recommended judgment. Rocha was directed to serve each defendant with the report and recommendation and file proof of service.