Court Opinion

ID: 9439971
Source: CourtListenerOpinion
Date Created: 2023-08-03 07:03:10.341096+00
Date Added: 2024-06-11T17:26:51.926205
License: Public Domain

SELYA, Circuit Judge
(dissenting).
As the majority correctly notes, this appeal involves a difficult question of statutory construction that constitutes an issue of first impression in the federal courts. Because I read the statutory imperative differently than my colleagues, I respectfully dissent.
*11A core feature of the Perishable Agricultural Commodities Act, 7 U.S.C. § 499e(c)(l)-(4) (Supp. II 1996) (PACA), impresses a trust in favor of the supplier of a covered agricultural commodity. Under the statute and the associated regulations promulgated by the Secretary of Agriculture, "that trust is superi- or to the interests of a purchase-money lender (or any other security interest, for that matter) as long as the transaction meets certain criteria and the trust beneficiary takes certain specified actions. See 7 C.F.R. § 46.46(e)(l)-(2) (1996). For example, to qualify for trust protection, the terms of sale must call for payment within ten days of the date of acceptance of a particular shipment. See 7 C.F.R. § 46.2(aa)(5)(1986). This period may be extended up to a maximum of thirty days by an express written agreement executed prior to the time of shipment, but cannot be extended for any more protracted period. See 7 U.S.C. § 499e(c)(3); 7 C.F.R. § 46.46(e)(2). The plaintiff does not challenge either the efficacy of this regulation or the Secretary’s authority to set the thirty-day limit.
The supply agreement at issue in this case is a hybrid: it requires that 75% of the purchase price for each shipment be paid within ten days after acceptance of that shipment (i.e., within the PACA-prescribed payment period), but defers payment of the remainder of the purchase price for more than thirty days (i.e., to a date beyond the PACA-prescribed payment period). The question, then, is whether the transaction is divisible for PACA purposes. If so, the plaintiff, qua supplier, can claim the benefit of the trust for that part of the payment (here, 75%) which falls within the statutorily prescribed period. If, however, the transaction is indivisible for PACA purposes, the statute would not apply because “[t]he maximum time for payment for a shipment to which a seller, supplier, or agent can agree and still qualify for coverage under the [PACA] trust is 30 days after receipt and acceptance of the commodities.” 7 C.F.R. § 46.46(e)(2).
The majority today decides that individual transactions are, in fact, divisible for this purpose. In my view, the contours of the trust itself, as framed by the statute, do not seem elastic enough to permit such a construction. Commodities sold pursuant to the act “shall be held ... in trust for the benefit of all unpaid suppliers or sellers ... until full payment of the sums owing in connection with such transactions has been received.” 7 U.S.C. § 499e(c)(2) (emphasis supplied). It is difficult for me to fathom how a partial payment of the purchase price for a particular shipment can-constitute “full payment of sums owing in connection with” that shipment. The majority’s holding reads the concept of “full payment” out of the statute. Basic canons of construction prohibit courts from taking such liberties. See United States v. Ven-Fuel, Inc., 758 F.2d 741, 751-52 (1st Cir.1985) (“All words and provisions of statutes are intended to have meaning and are to be given effect, and no construction should be adopted which would render statutory words or phrases meaningless, redundant or superfluous.”).
The regulations reinforce the view that the statute constructs an all-or-nothing paradigm. They unambiguously provide that any circumstance that extends the payment period “for a shipment” beyond thirty days constitutes a waiver of any entitlement to the benefits of a PACA trust. See 7 C.F.R. § 46.46(e)(2) (declaring that “[t]he maximum time for payment for a shipment to which a seller, supplier, or agent can agree and still qualify for coverage under the [PACA] trust is 30 days after receipt and acceptance of the commodities”) (emphasis supplied). Courts ought to attribute to an undefined word in a statute or regulation its ordinary usage. See Bailey v. United States, 516 U.S. 137, 145, 116 S.Ct. 501, 133 L.Ed.2d 472 (1995); United States v. Ron Pair Enters., Inc., 489 U.S. 235, 240-41, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). Under this approach, the regulation determines PACA eligibility shipment by shipment. I simply do not believe that this emphasis on the unitary conception of “a shipment” is an awkward locution. The regulation, as I read it, means exactly what it says — and we ought to give effect to its meaning. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (“We have long recognized that considerable weight should be accorded to an *12executive department’s construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations.”).
In sum, the statute and the regulations clearly indicate that transactions cannot be balkanized in order to obtain partial PACA protection. The case law, while scanty, trends in the same direction. Those courts that have addressed claims involving payment terms of more than thirty days uniformly have held PACA inapplicable on the ground that the thirty-day maximum period is to be imposed as written. See In re Lombardo Fruit & Produce, 12 F.3d 806, 809 (8th Cir.1993); In re Altabon Foods, Inc., 998 F.2d 718, 720 (9th Cir.1993); In re Davis Distributors, Inc., 861 F.2d 416, 417-18 (4th Cir.1988); Mid-Valley Produce Corp. v. 4-XXX Produce Corp., 819 F.Supp. 209, 211 (E.D.N.Y.1993). Today’s decision represents the first break in this seamless string of decisions. And although none of these cases is precisely on point, in cumulation they furnish a persuasive set of analogs. The district court embraced this analogy, see Hiller Cranberry Prods., Inc. v. Koplovsky Foods, Inc., 2 F.Supp.2d 157, 160-61 (D.Mass.1998), and I believe it had good reason to do so.
The majority overrides the logical import of the statute, regulations, and ease law on the ground that “PACA is a remedial statute that should be given a liberal construction. ...” Ante at 6. I have two problems with this usurpation. First, statutory construction starts with the statutory text, read in light of applicable regulations. See Riva v. Commonwealth of Mass., 61 F.3d 1003, 1007 (1st Cir.1995); Strickland v. Commissioner, Me. Dep’t of Human Servs., 48 F.3d 12, 17 (1st Cir.1995). Where, as here, Congress has spoken to an issue with reasonable clarity, there is little room left for judicial rumination. See Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 112 S.Ct. 2589, 120 L.Ed.2d 379 (1992); Riva, 61 F.3d at 1007. Put another way, an inquiring court need not consult other aids to construction when the words of a statute, as embellished by the implementing regulations, neither create an ambiguity nor lead to an unreasonable result. This is such a case — and in such circumstances, a euphemistic label cannot serve as a magic wand to transform statutory meaning.
Second, the majority misperceives Congress’s purpose. In enacting the PACA, Congress sought to strike a balance between the interests of growers and the interests of those who purchase perishable commodities from them. As written, the law in effect provides that growers who sell their crops for cash retain a security interest in the crops if payment is not made when due, while those who extend significant credit to buyers forgo such protection. This arrangement balances the seller’s right to payment against the buyer’s need to finance its operations, thus serving the public interest by alleviating the “burden on commerce,” 7 U.S.C. § 499e(c)(1), with which PACA’s progenitors were primarily concerned. The remedy that PACA crafts for growers is merely incidental to the overall regulatory purpose of the law.
I need go no further. The short of it is that Congress and the Secretary of Agriculture have made reasonably clear their intention to treat each shipment of perishable goods as a unit for the purpose of determining that shipment’s eligibility for PACA protection. By like token, Congress and the Secretary have made “full payment” an integral part of the test for eligibility. By permitting a grower to divide a single shipment into discrete units in accordance with the terms of an installment sale, and divide the payment accordingly, the majority here disrupts the symmetry of the statutory scheme. I think that the court, in charting such a course, invites untold mischief. Because I read the statute and regulations differently-— and more literally — I would reject the plaintiffs appeal in its entirety.