The Fine Print

As it stands now, the USDA refuses to award attorneys’ fees, without explanation, even when the invoices state that a prevailing party should be reimbursed for such fees and costs. This practice seems to fly in the face of Section 5 of the PACA statute which states that “[i]f any commission merchant, dealer, or broker violates any provision of Section 2 he shall be liable to the person or persons injured thereby for the full amount of damages…” Certainly, when the contract relied upon by the parties specifies that attorneys’ fees shall be awarded to the prevailing party, that is a portion of a prevailing party’s damages to which it is entitled under the Act.

As the court reasoned in the Coosemans Specialties, Inc. v. Garguilo decision (cited by the Secretary in the Johnston Farms decision) “…the district court properly noted additional terms are to be construed as proposals for addition to the contract (N.Y. UCC § 2-207(2)). When the parties are two merchants, the additional terms become part of the contract unless the party opposing those terms can establish [an exception under § 2-207] . . . plaintiffs’ invoices created an enforceable contract providing for attorneys’ fees.” Inexplicably, the USDA wholly abandons the invoice language pertaining to the recovery of legal fees but embraces and enforces language on an invoice in connection with the rate of interest which should apply to late payments. Perhaps this is because the PACA statute also provides for an award of attorneys’ fees incurred in connection with an oral hearing [7 U.S.C. § 499g], but this provision should be relied upon only in those cases in which there is no invoice-based contractual right to recover such fees.

Conclusion
The USDA’s refusal to award attorneys’ fees based on section 2-207 ignores the bargained-for terms of the contract between two parties (as reflected upon the invoices), and fails to award to the injured party “the full amount of damages . . . sustained as a consequence” of a PACA violation, as mandated by PACA, 7 U.S.C. § 499e(a).

As long as the Secretary selectively enforces certain terms on the invoices relied upon by produce merchants but turns a blind eye toward attorney fee verbiage reflected upon such invoices, a prevailing complainant will be denied the full amount of its damages.