(April 26) Repayment of attorneys’ fees — the latest weapon used by some lawyers and shippers in their legal battles to win payment in Perishable Agricultural Commodities Act cases — is being fought in the courts.

Whether shippers can include legal fees in their contracts depends on the court’s location.

In March, the Atlanta-based 11th Circuit U.S. Court of Appeals reversed a lower court that ruled interest and attorneys’ fees could not be included in sellers’ contracts as part of PACA Trust claims. The ruling followed an earlier ruling by the San Francisco-based 9th Circuit court.

In an unpublished and nonbinding opinion, an 8th District Court judge in Kansas City, Mo., in January attacked the 9th Circuit’s reasoning.

Judge Gary Fenner, in ruling on PACA claims in the bankruptcy case for Kansas City, Mo.-based Gallo Produce Food Products Inc., called the decision circular and unpersuasive.

“The ruling certainly has highly persuasive authority, especially within that circuit, where it could easily be adopted by another judge faced with the same issue,” said Jason Read, a partner with the Newport Beach, Calif.-based Rynn & Janowski law firm that represents a group of plaintiffs in the case.

Shippers say the issue depends on enforcement by the courts.

“Sometimes we get it, sometimes we don’t,” said Marlene Rodrigues, director of credit for Dole Fresh Vegetables Inc., Salinas, Calif.

Dole has put the attorneys’ fees clause in its invoices for at least five years, she said.

Legal fees may be the latest item to be in the definition of charges incurred in connection with produce sales in PACA trust claims. In past PACA cases, judges have allowed shipping, handling, inspection fees and fuel surcharges.

Mike Keaton, partner in Palatine, Ill., law firm Keaton & Associates, said the legal fees issue never plays well with the 94 U.S. District Courts. He said he expects the 13 appeals courts to eventually approve the practice.

“Everyone thought the 9th Circuit was crazy at the time,” he said. “Then the 11th Circuit said it was right. Now there’s clearly a trend.”

Other PACA lawyers say seeking additional legal fees drains funds for all creditors, especially in cases where PACA trust claims exceed a firm’s assets.

Read said he expects attorneys’ fees to be vigorously challenged in PACA Trust enforcement cases that occur in the 8th Circuit states of Missouri, Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Arkansas.

He said most cases outside of the 8th Circuit are going in the opposite direction.

While U.S. Department of Agriculture PACA branch officials said they did not have an active role in the recent court decisions allowing for the recovery of legal fees, USDA PACA program assistant chief Bruce Summers said he welcomes anything that helps reduce injured parties’ costs and assists suppliers in recovering payments.