Summary of a Recent
Judicial Development in
Perishable Agricultural Commodities Act

Sufficient Involvement in Perishable Agriculture
to be Held Liable Under PACA

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In "R" Best Produce, Inc. v. DiSapio, 540 F.3d 115 (2d Cir. 2008), the Second Circuit Court of Appeals held that a party's signature of sales documents containing a consent-to-jurisdiction clause did not establish consent to jurisdiction, and that the appellant had not waived his right to challenge personal jurisdiction by other means, but remanded the case for determination as to whether the appellant was sufficiently involved in corporate marketing of agricultural produce to be liable under the Perishable Agricultural Commodities Act.

Background

A produce seller sued several corporate officers of supermarkets to recover the unpaid balance of produce delivered to the stores. Id. at 117. One of the defendants moved to vacate a default judgment due to a lack of personal jurisdiction, but the court denied the motion and found that the defendant had consented to personal jurisdiction by signing several receipts that contained a consent to jurisdiction, and the defendant appealed the decision. Id. at 118.

Analysis and Holdings

The court adopted a ten-day time limit in which to file a notice of appeal from denial of a motion to reconsider, and therefore held that the appellant's motion to reconsider, filed within ten days of the lower court's denial of his motion to vacate default judgment, was sufficient to bring that order up for review. Id. at 121-22. The court also found that because the appellant had not made a court appearance, he had not waived the lack of personal jurisdiction, and that he had properly and timely invoked Federal Rule of Civil Procedure 60(b)(4) to challenge lack of personal jurisdiction. Id. at 123. The court concluded that the appellant had not consented to personal jurisdiction by simply signing sales documents with a consent-to-jurisdiction clause, because the signature line was right above the words "RECIEVED IN GOOD ORDER" which suggested that the signing party had not intended to represent anything more than that. Id. at 124. The court then remanded the case for determination as to whether the appellant had significant involvement in the affairs of the corporate defendants to render him liable for Perishable Agricultural Commodities Act obligations. Id. at 125-26.

The case was decided on August 26, 2008.