Gold Medal Produce, Inc. v. Duong

Background

Gold Medal Produce, Inc. sued Hung Duong and Lien (“Linda”) Luong, doing business as GA Chinatown and Hing Wong Meat. Gold Medal sought payment for unpaid produce, asserting a claim under Section 5(c) of the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. § 499a et seq., and a claim for “failure to pay for goods sold.” Gold Medal alleged that the defendants placed eleven produce orders in July and August 2018 totaling $51,438.00, with $44,619.85 remaining unpaid after credits.

PACA creates a trust over produce, related inventories, and sale proceeds received by a qualifying commission merchant, dealer, or broker. The trust benefits unpaid produce suppliers and sellers until they are paid. To recover under this provision, a plaintiff must show, among other things, that the purchaser was a qualifying PACA entity and that the plaintiff preserved its trust rights by timely written notice.

Motion and Evidence

Gold Medal moved for summary judgment under Federal Rule of Civil Procedure 56. Summary judgment may be entered only when the evidence shows that no genuine dispute of material fact requires a trial. The court must view disputed evidence in the light most favorable to the party opposing the motion and may not decide credibility disputes at this stage.

There was no jury demand, and the case management plan provided that the case would not be tried to a jury. The record consisted primarily of sworn affidavits from William Taubenfeld, an officer of Gold Medal, and from Duong and Luong, along with invoices and receipts. The defendants declined to stipulate to a summary bench trial based on that record.

Court’s Analysis

The court held that Gold Medal had not presented enough evidence for a reasonable factfinder to be required to conclude that the defendants were PACA “dealers.” PACA defines a dealer as a person engaged in buying or selling perishable agricultural commodities in wholesale or jobbing quantities in interstate or foreign commerce. The applicable regulation defines wholesale or jobbing quantities as aggregate quantities of produce totaling at least one ton, or 2,000 pounds, in a day shipped, received, or contracted to be shipped or received.

The court found that Taubenfeld’s statement that the defendants purchased “significant quantities” of produce did not establish the required quantity. The invoices also did not conclusively show that the defendants dealt in wholesale or jobbing quantities. Gold Medal did not provide evidence that the defendants held a PACA license, although dealers are required to be licensed. The court rejected the defendants’ contention that there was no evidence relevant to this and other PACA elements.

The court also rejected Taubenfeld’s statement that a person becomes subject to PACA by buying or selling more than 2,000 pounds in one day or by having annual agricultural-commodity sales exceeding $230,000. The court explained that the $230,000 threshold applies when a person buys produce solely for retail sale. The evidence did not conclusively establish either that the defendants dealt in wholesale or jobbing quantities or that they purchased the produce solely for retail sale. The court therefore found the asserted $230,000 threshold and the statement that the defendants purchased $494,645.60 in produce in 2017 irrelevant to the summary-judgment decision.

The court further found genuine factual disputes about whether Gold Medal preserved its PACA trust rights by giving the defendants timely written notice. Although Gold Medal argued that the defendants’ affidavits contained inconsistencies and improbable statements, the court found that the affidavits were not so unreliable that all of their contents should be rejected. The court identified Duong’s statement that the invoices did not look like the typical documents he received when purchasing produce from Gold Medal as an example of a statement that was not plainly incredible.

The court noted that whether the defendants were qualifying PACA entities could also affect subject-matter jurisdiction. Because the jurisdictional evidence overlapped with the merits evidence, the court stated that it could proceed to trial and decide the jurisdictional issue at the close of the evidence.

Disposition

Judge Lorna G. Schofield denied Gold Medal’s motion for summary judgment because genuine issues of material fact remained, including whether the defendants qualified as PACA dealers and whether Gold Medal properly preserved its trust rights. The court stated that a bench-trial scheduling order would issue separately and directed the Clerk of Court to close Docket No. 50.