Summary of a Recent
Judicial Development in
Perishable Agricultural Commodities Act

Attorney Fees Allowed If Provided for in Contract

Jillian Hishaw
National AgLaw Center Graduate Assistant

In In re Fleming, 316 B.R. 809 (D. Del. 2004), the United States District Court for the District of Delaware held that suppliers could collect attorney fees from a statutory trust to the extent provided for in the suppliers' contracts. The court explained that the statutory trust created under the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. §§ 499a-499t, "is available for the payment of all ‘sums owing in connection with such transactions.'" Id. at 815 (quoting 7 U.S.C. § 499e) (emphasis omitted). Suppliers who provided produce to distributors sought attorney fees owing in connection with sales of produce for which the suppliers had not been paid. The court explained that "attorney fees can be awarded if there is a statutory basis or evidence of Congressional intent to award fees" and that § 499e does not provide for the award of attorney fees. Id. The court stated that "[c]learly, Congress understood that the award of attorney fees in the trust provision would require express language in the statute. If Congress had intended the trust provision to include attorney fees, it would have included such a statement." Id. (citations omitted). The court also held that attorney fees can be awarded as "sums owing in connection with such transactions" if there exists a contractual basis for such an award. See id. (citation omitted). The court noted that several suppliers included provisions in their contracts that required the distributors to pay attorney fees incurred as a result of collecting overdue payments. See id. The court held that these plaintiffs were entitled to collect attorney fees since the fees "were directly associated with the transactions at issue." Id.

The case was decided on November 8, 2004; this summary was posted Dec. 2, 2005.