Summary of a Recent
Judicial Development in
Perishable Agricultural
Commodities

Award of Attorneys' Fees Allowed
in PACA Action

Harrison M. Pittman
Staff Attorney

In Koam Produce, Inc. v. Dimare Homestead, Inc., 222 F.Supp.2d 399 (S.D.N.Y. 2002), the United States District Court for the Southern District of New York has approved a produce shipper's motion for attorneys' fees that totaled more than sixteen times the reparations award entered by the United States Department of Agriculture. See id. at 400-02. The district court had previously approved the USDA's reparations award of $4,800.00 in favor of the produce shipper in Koam Produce, Inc. v. Dimare Homestead, Inc., 213 F.Supp.2d 314 (S.D.N.Y. 2002).

Dimare Homestead, Inc. ("DiMare"), a produce supplier, requested $73,250.00 in attorneys' fees and $7,067.67 in cost and fees, for a total of $80,317.67. See id. This amount was more than sixteen times the amount of the $4,800.00 reparations award entered by the USDA and previously approved by the district court in a previous and separate action. See id. See also Koam, 213 F.Supp.2d at 314.

The district court explained that under the PACA "when a decision of the Secretary is appealed to the district court, the '[a]ppellee shall not be liable for costs in said court and if appellee prevails he shall be allowed a reasonable attorney's fee to be taxed and collected as part of his costs.'" Id. at 400-01 (quoting 7 U.S.C. § 499g(c)). It also explained that "[i]f the appellee prevails, an award of attorney's fees is mandatory; it is not within the discretion of the district court." Id. at 401 (citing Robinson Farms Co. v. D'Acquisto, 962 F.2d 680, 684 (7th Cir. 1992) and Tray-Wrap, Inc. v. Meyer Tomatoes, No. 90 Civ. 7688(DLC), 1996 WL 54321 at *1 (S.D.N.Y. Feb. 9. 1996)).

Koam Produce, Inc., the produce buyer that the USDA ordered to pay the $4,800.00 reparations award, asserted that § 499g(c) of the PACA was "unconstitutional . . . because it allows for fees to an appellee but not to an appellant." Id. (citation omitted). The court rejected this argument,

stating that

Congress recognized that in almost every case the amount of the Secretary's award would be less than the cost of appeal to, and trial de novo in, a federal district court. Accordingly, it provided for attorneys fees and costs to a prevailing appellee, regardless of whether the appellee was a shipper or a purchaser. That involves no denial of due process to either party . . . . If the costs of defending its favorable decision by the Secretary were not reimbursed to a prevailing appellee, then the losing party could destroy the value of the Secretary's award, by merely noticing an appeal. As between shippers and buyers, the statute is neutral.

Id.

The court stated that "[t]ogether with the preparation, court conferences, and other necessary incidental work, 307.6 hours of work were required. Thus, the $73,250 of legal fees represents a blended rate of $238 per hour." Id. at 400. It also stated that the per-hour rates for the attorneys involved in the action and their $7,067.67 bill for costs and expenses were reasonable. See id. at 401. The court awarded prejudgment interest "at ten percent per annum from November 16, 2000, the date of the award," and allowed the $300 handling fee awarded by the USDA Judicial Officer. Id. (citation omitted).

The case was decided on September 30, 2002; this summary was posted May, 2003