Summary of a Recent
Judicial Development in
Perishable Agricultural Commodities Act

Produce Purchasers Failed to Satisfy Prima Facie
Elements in a Malicious Prosecution Action Against Growers

Eric H. Foy
National AgLaw Center Research Associate

Summary of Decision

In G & T Terminal Packaging Co., Inc. v. West Growers Association, 867 N.Y.S.2d 58 (N.Y. App. Div. 2008), the New York Supreme Court, Appellate Division, affirmed the judgment of the Supreme Court, Bronx County, which granted produce growers' motion for summary judgment. Produce purchasers brought the instant action against produce growers following the dismissal of purchasers' complaint with the United States Department of Agriculture (USDA). Because growers had probable cause to file complaints with the USDA and purchasers did not prevail in the earlier proceeding, granting growers' motion for summary judgment was appropriate.

Background

Plaintiffs purchased produce from growers to sell to wholesalers and retailers. Id. at 59. In 1999, nine USDA produce inspectors pleaded guilty to taking bribes from employees of produce purchasers in the Hunts Point Market. Id. In exchange for money, the produce inspectors agreed to downgrade the quality rating of produce obtained by wholesalers. Id. Because the growers were paid according to the quality of their produce, they received less money under the bribing scheme. Id.

In 2001, after being notified of the scheme, several growers filed formal complaints with the USDA seeking reparations pursuant to the Perishable Agricultural Commodities Act of 1930 (PACA), 7 USC § 499(a). Id. In 2002, by order of the Secretary of Agriculture, the growers were awarded reparations, plus interest and filing fees. Id. Plaintiffs appealed the reparations award to federal court, but, in time, they agreed to dismiss their reparations complaints and vacatur of the reparations award. Id. In June 2003, the USDA filed an unsuccessful administrative complaint against plaintiffs for violating PACA, but a judicial official reversed the administrative law judge's decision and revoked plaintiffs' PACA licenses. Id. The United States Court of Appeals for the Second Circuit affirmed. Id. After purchasers' reparations complaints were dismissed, they commenced the instant action. Id.

Arguments

In their opposition to summary judgment, plaintiffs attempted to raise factual issues as to probable cause and malice. Id. at 60.

Analysis and Holdings

To maintain a cause of action for malicious prosecution, a plaintiff must show: 1) the elements of commencement or continuation of a judicial proceeding; 2) malice; 3) want of probable cause; and 4) the successful termination of the precedent action in the plaintiff's favor. Id.

In the instant action, the court held that plaintiffs' attempt to raise issues regarding probable cause and malice was untimely. Id. Additionally, plaintiffs failed to satisfy the prima facie elements to maintain an action for malicious prosecution, because the indictment of the principle briber constituted probable cause, and plaintiffs were not successful in the preceding action. Id.

The case was decided on November 6, 2008.