Court Opinion

ID: 820429
Source: CourtListenerOpinion
Date Created: 2013-02-13 20:30:05.947524+00
Date Added: 2024-06-11T09:03:04.559329
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 12-1581

                   THE ALPHAS COMPANY, INC.,

                     Plaintiff, Appellant,

                               v.

                  WILLIAM H. KOPKE, JR., INC.,

                      Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

               FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. William G. Young, U.S. District Judge]

                             Before

                    Howard, Selya and Lipez,
                         Circuit Judges.

     Noah B. Goodman and Law Offices of Noah B. Goodman on brief
for appellant.
     Rosemary Traini on brief for appellee.

                       February 13, 2013
            SELYA, Circuit Judge.         This case poses the question of

whether the appeal provisions (including the bond requirements) of

the   Perishable    Agricultural     Commodities        Act    (PACA),     7    U.S.C.

§§ 499a-499t, are mandatory and jurisdictional.                      Guided by the

language and structure of the statute, its legislative history, and

its traditional treatment by other courts, we answer this question

in the affirmative.        Consequently, we affirm the district court's

dismissal of an attempted appeal.

            The case at hand has its genesis in an administrative

proceeding brought pursuant to the PACA by William H. Kopke, Jr.,

Inc. (Kopke) against The Alphas Company, Inc. (Alphas).                        In that

proceeding, Kopke alleged that Alphas had accepted delivery of four

truckloads of grapes, peaches, and nectarines, yet failed to pay

the appropriate purchase price.               Kopke sought an award in the

amount of $68,220, with credit to be given for the lesser sum

actually paid by Alphas ($18,195).

            After    the      parties    waived        an     oral    hearing,      an

administrative law judge acting on behalf of the Secretary of

Agriculture (the Secretary), see 7 C.F.R. § 47.2(c), adjudicated

the dispute in accordance with applicable regulations, see id.

§ 47.20.    On December 7, 2011, Kopke's complaint bore fruit; the

Secretary issued an order on that date awarding Kopke $50,025, plus

interest.     On    January    6,   2012,     Alphas    sought       to   appeal   the

reparation order by filing a petition and notice in the United

                                        -2-
States District Court for the District of Massachusetts.              See 7

U.S.C. § 499g(c).

           The PACA requires that a putative appellant file a notice

of appeal and a bond within "thirty days from and after the date of

the reparation order."     Id.   The bond must be "in double the amount

of the reparation awarded against the appellant [and] conditioned

upon the payment of the judgment entered by the court, plus

interest and costs, including a reasonable attorney's fee for the

appellee, if the appellee shall prevail."        Id.     In connection with

its appeal, Alphas submitted, on January 12, 2012, a $100,000

"Business Service Bond" (Bond No. 1), dated January 10, 2012. This

bond was backdated to January 6, 2012 in an apparent attempt to

bring it within the time frame of 7 U.S.C. § 499g(c).             In terms,

the bond purposed to indemnify Kopke

           against loss of money or other property, real
           or personal, belonging to any and all
           subscribers   (the    "Subscriber")    to its
           services, or in which the Subscriber has a
           pecuniary   interest,    or  for    which the
           Subscriber is legally liable, which the
           Subscriber shall sustain as the result of any
           fraudulent or dishonest act, as hereinafter
           defined, of an Employee or Employees of
           [Kopke] . . . .

           In due season, Kopke moved to dismiss the appeal, see

Fed. R. Civ. P. 12(b)(1), arguing that the district court lacked

subject matter jurisdiction because Alphas had failed to comply

with the PACA's bond requirements.        Kopke asserted that Bond No. 1

was   untimely   filed,   insufficient    in   amount,    and   lacking   the

                                    -3-
appropriate indemnification covenants.                    Specifically, it pointed

out that, in this instance, the PACA required that the bond be

filed no later than January 6, 2012; that it be in an indemnity

amount of no less than $100,050; and that it inure to the benefit

of   the   obligee    to   insure    payment         of    the     reparation       order,

attorney's   fees,     interest     and   the    like.           Bond   No.    1,    Kopke

asseverated, satisfied none of these requirements.

            In    opposition,     Alphas     did      not     seriously       deny     the

existence of the shortcomings enumerated by Kopke.                            It argued

instead    that      the    statutory       bond          requirements        were     not

jurisdictional and that its noncompliance could be excused at the

court's discretion.        This was a favorable case for the exercise of

discretion, Alphas added, because the defects in Bond No. 1 were

not substantial and, in all events, it had filed (on February 15,

2012) a superseding bond (Bond No. 2) that ameliorated the defects.

Alphas also insisted that the initial defects had not in any way

prejudiced Kopke.      Faced with these conflicting contentions, the

district court summarily granted the motion to dismiss.                              This

timely appeal followed.

            We review de novo the district court's determination,

made without either an evidentiary hearing or any semblance of

differential      factfinding,       that       it        lacked     subject        matter

                                      -4-
jurisdiction.1   See Fothergill v. United States, 566 F.3d 248, 251

(1st Cir. 2009).    In carrying out this task, "we take as true all

well-pleaded facts in the plaintiffs' complaint, scrutinize them in

the light most hospitable to the plaintiffs' theory . . . , and

draw all reasonable inferences therefrom in the plaintiffs' favor."

Id.

            Congress enacted the PACA to regulate the sale of produce

in interstate commerce.       Ch. 436, 46 Stat. 531, 531 (1930).      The

PACA authorizes the Secretary to consider claims that parties have

not complied with its provisions.           7 U.S.C. § 499f.   Relatedly,

Congress provided that once the Secretary issues a reparation

order, an aggrieved party may appeal the order to the federal

district court in the district in which the administrative hearing

was held.    Id. § 499g(c).

            This right of appeal, however, is not unconditional. The

PACA provision dealing with judicial review of reparation orders

makes pellucid that an appeal must be taken within thirty days of

the issuance of the order.      Id.    Furthermore:

            Such appeal shall not be effective unless
            within thirty days from and after the date of
            the reparation order the appellant also files
            with the clerk a bond in double the amount of

      1
       In other circumstances, the standard of review of an order
dismissing a case for want of subject matter jurisdiction may be
different. See Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46
F.3d 138, 147-48 (1st Cir. 1995); Boit v. Gar-Tec Prods., Inc., 967
F.2d 671, 675 (1st Cir. 1992). We need not explore these differing
standards today.

                                      -5-
          the reparation awarded against the appellant
          conditioned upon the payment of the judgment
          entered by the court, plus interest and costs,
          including a reasonable attorney's fee for the
          appellee, if the appellee shall prevail.

Id.

          In this case, it is unarguable that Alphas failed to

comply with the statutory bond requirements.        Bond No. 1 suffered

from no fewer than three material defects: it was not filed within

the prescribed thirty-day appeal period; it was in an amount less

than the amount stipulated; and it did not contain appropriate

indemnification covenants.2         Viewed in this light, our inquiry

reduces to whether the statutory bond requirements are mandatory

and jurisdictional.     If so, they demand strict compliance.         See,

e.g., Microsystems Software, Inc. v. Scandinavia Online AB, 226

F.3d 35, 41 (1st Cir. 2000).        Otherwise, a district court retains

a measure of elasticity in determining compliance.           See, e.g.,

Tapia-Tapia v. Potter, 322 F.3d 742, 745 n.4 (1st Cir. 2003).

          There   is    a   line,    albeit   sometimes   hazy,    between

jurisdictional    and       nonjurisdictional      requirements.        A

jurisdictional requirement implicates a court's constitutional and

statutory power to hear and resolve a case.       Reed Elsevier, Inc. v.

Muchnick, 130 S. Ct. 1237, 1243 (2010).         Non-compliance with such

      2
       Kopke also suggests that Bond No. 1 is a nullity because it
was canceled by the surety company on February 29, 2012. Because
the order of dismissal is supportable on other grounds, see text
infra, we need not explore this suggestion.

                                     -6-
a     requirement     deprives    a     federal     court    of    subject       matter

jurisdiction to adjudicate a matter.                Bowles v. Russell, 551 U.S.

205, 213 (2007).        After all, federal courts are courts of limited

jurisdiction and, subject to constitutional constraints, Congress

has    the    exclusive   right    to    determine     "when,      and    under       what

conditions, federal courts can hear [cases]."                    Id. at 212-13.

              Nonjurisdictional       requirements         are    the    fruit    of    a

different vine.       Such requirements can best be understood as claim

processing rules. See Henderson ex rel. Henderson v. Shinseki, 131

S. Ct. 1197, 1203 (2011).             Such rules do not define what cases

courts can and cannot hear, and a modicum of flexibility attaches

to their administration.          See Tapia-Tapia, 322 F.3d at 745 n.4.

              In determining where the PACA bond requirements fall

within this taxonomy, we are guided by the methods limned by the

Supreme       Court     for   distinguishing          between        jurisdictional

requirements and claim processing rules.                   See, e.g., Gonzalez v.

Thaler, 132 S. Ct. 641, 648-49 (2012); Reed Elsevier, 130 S. Ct. at

1243-44.      A requirement is jurisdictional "[i]f the Legislature

clearly states that a threshold limitation on a statute's scope

shall count as jurisdictional."            Arbaugh v. Y & H Corp., 546 U.S.

500,    515   (2006).     Because       this   is    so,    an   appraisal       of   the

jurisdictional character of a statutory requirement must focus on

the text, context, and historical treatment of the requirement.

Reed Elsevier, 130 S. Ct. at 1246.

                                         -7-
             As we previously have explained, the language of section

499g(c) is "unambiguous and mandatory: a party's appeal 'shall not

be effective' unless the bond is timely filed."                    Alphas Co. v. Dan

Tudor & Sons Sales, Inc., 679 F.3d 35, 39 (1st Cir.), cert. denied,

133    S.   Ct.    652   (2012)    (quoting      7    U.S.C.   §   499g(c)).       This

definitive language was added when Congress amended the PACA in

1962.       Pub.    L. No.     87-725,    76    Stat.    673, 675     (1962).      The

congressional       report     that     accompanied       these     amendments    made

manifest     that     compliance       with     the    bond    requirements      was   a

prerequisite for subject matter jurisdiction.                      See H.R. Rep. No.

87-1546, at 7 (1962), reprinted in 1962 U.S.C.C.A.N. 2749, 2754.

The language of the amendment, read through the prism of this

report,     removes      any   doubt     that    may    have    existed   about    the

centrality of the bond requirement; Congress bluntly stated that it

amended the appeal provisions of the PACA specifically to ensure

that

             an appeal from a reparation award . . . shall
             not be effective as an appeal, and therefore
             not a matter within the jurisdiction of the
             district court of the United States in which
             the petition is filed, unless the required
             bond is filed with the court within 30 days
             from and after the date of the Secretary's
             order.

Id.

             An examination of the structure of the statute conduces

to the same conclusion.           The bond requirements are part and parcel

of the very statutory provision that grants federal district courts

                                          -8-
subject matter jurisdiction to review reparation orders.                See 7

U.S.C. § 499g(c).    This is an important datum.         Cf. Reed Elsevier,

130 S. Ct. at 1245-47 (holding the registration requirement of the

Copyright Act nonjurisdictional as it is located in a provision

separate   from    those   granting     federal   courts      subject   matter

jurisdiction).     The short of it is that our inquiry into context

provides further evidence of Congress's intent to make the bond

requirements jurisdictional.

           The historical treatment of the appeal provisions of the

PACA buttresses the conclusion that the statutory bond requirements

were meant to be compulsory.          This conclusion is inherent in the

consistency   with   which    other    courts   have   held   that   the bond

requirements are jurisdictional. See, e.g., Kessenich v. CFTC, 684

F.2d 88, 91-93 (D.C. Cir. 1982) (analogizing the jurisdictional

bond requirements of the Commodities Exchange Act with those of the

PACA); Chidsey v. Geurin, 443 F.2d 584, 586 (6th Cir. 1971)

(affirming district court's holding that PACA bond requirements

jurisdictional).

           In this case, all roads lead to Rome: the text of the

statute, its context, and its historical treatment point unerringly

in the same direction.       In line with these signposts, we hold that

the bond requirements of the PACA are mandatory and jurisdictional,

and that the timely filing of a proper bond is a prerequisite for

judicial review of a reparation order.            Consequently, a party's

                                      -9-
failure to file a proper bond within the time prescribed by law

renders an attempted appeal nugatory.        See Kessenich, 684 F.2d at

91-93; Chidsey, 443 F.2d at 586; Miloslavich v. Frutas del Valle de

Guadalupe, 637 F. Supp. 434, 436 (S.D. Cal. 1986), aff'd, 815 F.2d

714 (9th Cir. 1987) (table); see also Alphas Co., 679 F.3d at 39-40

(dismissing   appeal   for   failure    to   file   bond).   It   follows

inexorably that if an appellant fails to comply with the statutory

bond requirements, a federal court cannot exercise subject matter

jurisdiction.

            We need go no further.      Because Alphas did not file a

proper bond within the prescribed period, the district court

correctly ruled that it lacked subject matter jurisdiction to

entertain an appeal of the reparation order.3

Affirmed.   Costs to appellee.

     3
       We note in passing that the shortcomings of the proffered
bonds were not trivial; they were the wrong type of bond.      The
purpose of an appeal bond under the PACA is to "assure[] an
appellee that he can later collect his litigation expenses and
judgment if the reparation award is affirmed." Miloslavich, 637 F.
Supp. at 439. Both Bond No. 1 and Bond No. 2 had a different set
of covenants and, thus, offered no such assurance.

                                 -10-