(March 9) Perishable Agricultural Commodities Act lawyers and shippers are often on the same side of the aisle in court when seeking payment of delinquent produce bills.

The two sides, however, disagree about how recent federal court decisions regarding recovery of attorneys’ fees in PACA cases could help shippers.

Shippers say the change will help them recover collection expenses while some PACA attorneys say the ruling could pit creditors against each other.

The U.S. Court of Appeals for the 11th Circuit in Atlanta March 1 reversed a lower court ruling that said interest and attorneys’ fees could not be included in a seller’s contract as part of a PACA Trust claim.

The decision follows a 2002 9th Circuit Court decision in San Francisco.

“PACA was designed to give produce sellers a meaningful opportunity to recover full payment of the amounts due for their sales,” the 11th circuit justices wrote in their decision that reversed a case heard in the federal Northern District Court of Georgia regarding Forest Park, Ga.-based tomato packer John Manning Co. Inc., which closed its doors owing 42 suppliers $2 million.

Shippers say the development will make it easier to do business and help them battle frivolous lawsuits.

“It will give all of us some more ammunition to get fair and reasonable pricing for our products,” said Chuck Weisinger, president of Weis-Buy Farms Inc., Fort Myers, Fla.

“This change in the law will kind of level the playing field for us.”

Weis-Buy and eight other shippers asked the court to enforce requests for interest on past due balances and attorney fees that were part of the suppliers’ contracts.

Darrell Holifield, office manager and president of Capital Produce Distributors Inc., said the provision will help recover several thousand dollars the Columbia, S.C.–area shipping and brokering firm recently spent in legal fees trying to collect an overdue bill.

“More distributors, brokers and growers will have it in there in case they do get shortchanged,” he said.

Larry Meuers, owner of Meuers Law Firm, Naples, Fla., which represented the Springfield, Ill.-based Tom Lange Co. Inc., one of the claimants in the Manning case, said the subject has been a hot potato issue that forces some creditors who don’t have legal fees written into their contracts to pay for other PACA creditors’ claims.

“I’m afraid the decision can be misconstrued to say, ‘Let’s race to the courthouse and run up our fees because we can get someone else to pay them’,” he said.

Mike Keaton, partner in Keaton & Associates, a Palatine, Ill., PACA law firm that represented Weis-Buy, said the decision won’t be a boon for lawyers.

“It’s a boon for the growers that have already paid their lawyers,” he said.

Keaton, who said the 11th Circuit used his rebuttal argument at the end of its opinion, said he expects similar opinions to follow the two issued by the 9th and 11th circuits.

PACA attorneys said they will now advise their clients to include payment of attorney fees and interest into their contracts. Only a fourth of sellers have such language in their contracts, they say.

USDA officials declined to comment on pending litigation.