Source: https://law.justia.com/cases/federal/appellate-courts/F2/669/1000/149200/
Timestamp: 2019-11-12 21:10:09
Document Index: 11769938

Matched Legal Cases: ['§ 206', '§ 2101', '§ 201', '§ 206', '§ 206', '§ 409', '§ 228', '§ 409', '§ 206', '§ 2000']

In Re Gotham Provision Company, Inc., Debtor/debtor in Possession,the First State Bank of Miami, Appellant, v. Gotham Provision Company, Inc., et al., Appellees, 669 F.2d 1000 (5th Cir. 1979) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fifth Circuit › 1979 › In Re Gotham Provision Company, Inc., Debtor/debtor in Possession,the First State Bank of Miami, App...
In Re Gotham Provision Company, Inc., Debtor/debtor in Possession,the First State Bank of Miami, Appellant, v. Gotham Provision Company, Inc., et al., Appellees, 669 F.2d 1000 (5th Cir. 1979)
US Court of Appeals for the Fifth Circuit - 669 F.2d 1000 (5th Cir. 1979)
Of particular concern to the livestock producers ... (in the case of American Beef Packers ("ABP")) was the fact that ABP's principal source of financing, General Electric Acceptance Corporation, stood ahead of them among the bankrupt's creditors by virtue of its duly protected security interest in ABP's inventory, i.e., livestock and derivative products which the producers had sold on a cash basis and for which they had not been paid.
As finally adopted by Congress, the 1976 amendments, Pub. L. No. 94-410, 90 Stat. 1251, create a comprehensive framework for the protection of the interests of livestock producers in their dealings with packers. The amendments empower the Secretary to require large packers to be bonded, empower the Secretary, after notice and hearing, to order an insolvent packer to cease purchasing livestock, allow the Secretary to seek temporary injunctions and restraining orders against packers, create a private right of action against packers for violation of the Act, require packers to make prompt payment for cash purchases, create a statutory trust for the benefit of unpaid cash sellers, and preempt certain provisions of state law.
The Bank argues that the appellees must trace the particular accounts receivable derived from the sale of their livestock into the Bank's hands in order to recover. The Secretary of Agriculture, as amicus curiae, advances a different interpretation of the statute. The Secretary argues that no specific identification of the accounts receivable that cover the products of an individual cash seller was intended by Congress. The bankruptcy court below agreed with the Secretary, holding that the trust consisted of a floating pool of those assets derived from appellees' livestock as well as inventories, receivables and proceeds derived from other cash sellers' livestock. In re Gotham Provision Co., Inc., 1 B.R. 255, 260-61 (Bkrtcy.S.D. Fla. 1979)
We see no reason why the method of Rule 6(a) should not be invoked for purposes of computing the 30-day notice and filing period prescribed by § 206 of the Packers and Stockyards Act. The justifications offered by the Supreme Court in Union National Bank v. Lamb, 337 U.S. 38, 41, 69 S. Ct. 911, 912, 93 L. Ed. 1190 (1949), for applying the method of Rule 6(a) in connection with 28 U.S.C. § 2101(c) (1948) have equal force here: "(s)ince the rule had the concurrence of Congress, and since no contrary policy is expressed in the statute governing this review, we think that the considerations of liberality and leniency which find expression in Rule 6(a) are equally applicable ... (to the statutory time period involved here)." Moreover, the Packers and Stockyards Act is a remedial statute. Therefore, as we noted in connection with the Truth In Lending Act, the application of "Rule 6(a) is particularly appropriate in light of the remedial purposes of the Act." Lawson v. Conyers Chrysler, Plymouth and Dodge Trucks, Inc., 600 F.2d at 466.
Two opinions written by Judge Hannum have reached the same conclusion. See Fillippo v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1008, 1020 (E.D. Pa. 1978); Hedrick v. S. Bonaccurso & Sons, Inc., 466 F. Supp. 1025, 1032 (E.D. Pa. 1978)
On this date I am entering into a written agreement for the sale of livestock on credit to __________, a packer, and I understand that in doing so I will have no rights under the trust provisions of section 206 of the Packers and Stockyards Act, 1921, as amended (7 U.S.C. 196, Pub. L. 94-410), with respect to any such credit sale. The written agreement for such selling on credit
(b) Purchasing livestock for which payment is to be made by a draft which is not a check, shall constitute purchasing such livestock on credit within the meaning of paragraph (a) of this section. (See also § 201.43(b) (1)),
In brief, the Bank raises some question about the effect of this regulation. Specifically, the Bank argues that since the definition of "cash sale" in § 206(c) does not explicitly state that a writing is required to establish a credit sale, the regulations may not impose such a writing requirement. As outlined above, we interpret § 206(c), in conjunction with § 409 of the Act and the legislative history, to require a writing in order to establish a credit sale under the Act. Therefore, we believe that the regulations clearly "carry into effect the will of Congress as expressed by the statute." Ernst & Ernst v. Hochfelder, 425 U.S. 185, 214, 96 S. Ct. 1375, 1391, 47 L. Ed. 2d 668 (1976); Manhattan General Equipment Co. v. Commissioner, 297 U.S. 129, 134, 56 S. Ct. 397, 399, 80 L. Ed. 528 (1936). Since there is no question that the Secretary was empowered by § 228b(b) to issue this regulation, since the regulation certainly is a substantive rule affecting individual obligations, see Morton v. Ruiz, 415 U.S. 199, 232, 94 S. Ct. 1055, 1073, 39 L. Ed. 2d 270 (1971), and since there is no argument that the procedural requirements of the Administrative Procedure Act were not complied with, we hold that the Bank's argument that the regulations do not have the force and effect of law is devoid of merit. See United States v. Harvey, 659 F.2d 62 (5th Cir. 1981) (setting forth the test for determining the "force and effect" of a regulation)
Of course, the mere failure of a packer to comply with the prompt payment provisions of § 409 of the Act cannot serve as the basis for holding that the transaction is a credit sale, since such an interpretation would destroy the trust provisions of the Act. See Hedrick v. S. Bonaccurso & Sons, Inc., 466 F. Supp. at 1032
We note that the bankruptcy court in In re Frosty Morn Meats, Inc., No. BK-77-31707 (M.D. Tenn. Aug. 31, 1978), held the § 206 trust extended to all inventories, receivables and proceeds derived from cash sales of livestock, but would not extend to assets which could be identified as being derived from credit sales. Since the Bank introduced no evidence to identify any of the accounts receivable as being derived from credit sales, we need not decide the issue reached by the Frosty Morn court
The Secretary cites two Miller Act cases, United States v. H. I. Lewis Construction Co., 375 F.2d 194, 199-201 (2d Cir. 1967) and United States for the Use of Greenwald-Supon v. Gramercy Contractors, Inc., 433 F. Supp. 156 (S.D.N.Y. 1977), for the proposition that remedial statutes should be liberally construed, in order to effectuate congressional intent, to allow timely actual notice to satisfy statutory notice requirements. While we agree that this statute is remedial in nature, we would be forced to ignore clearly stated congressional intent in order to accept the actual notice standard advanced by the Secretary. This we decline to do
Although other courts have applied the method of Rule 6(a) to time limits imposed by remedial statutes such as Title VII, see, e.g., Pearson v. Furnco Construction Co., 563 F.2d 815, 818-19 (7th Cir. 1977); Kane v. Douglas, Elliman, Hollyday & Ives, 635 F.2d 141 (2d Cir. 1980), the district court in Smith v. Bailor, 22 FEP Cases 1378 (N.D. Ga. 1980), declined to apply Rule 6(a) to the 30-day period for filing suit against the federal government under 42 U.S.C. § 2000e-16. We recognize that the Smith case is inconsistent with the rule set forth above. However, the underlying rationale of Smith, that the Title VII time period involved was jurisdictional (and, therefore, in the view of the Smith court, not subject to extension under Rule 6(a)) is questionable in view of the en banc opinion of this court in Coke v. General Adjustment Bureau, Inc., 640 F.2d 584 (5th Cir. 1981)
The court in Hedrick v. S. Bonaccurso & Sons, Inc., 466 F. Supp. at 1032, did not address this issue, but assumed that filing occurred on the date stamped