Cuddy & Feder Secures Complete Victory in PACA Litigation in the Eastern District of New York

Cuddy & Feder’s litigation team, led by Joshua J. Grauer and Seth M. Pavsner, achieved a complete victory in a case in the Eastern District of New York based on the Perishable Agricultural Commodities Act (“PACA”), a federal statute that offers sweeping protections to sellers of perishable agricultural goods provided those sellers take necessary steps to perfect those protections. In a through decision by Judge Diane Gujarati, the Court dismissed the case against our clients, a produce merchant corporation and its managing officer, finding that the plaintiff, a wholesale produce seller, had not adequately notified our clients of its intent to preserve an interest in a trust under PACA for produce. The Court’s decision endorsed Cuddy & Feder’s position that, under PACA, a seller of produce must provide direct notice to the buyer of the seller’s intent to preserve its PACA trust rights. The Court determined that notice to the U.S. Department of Agriculture was jurisdictionally deficient, rejecting the seller’s argument that substantial statutory compliance was sufficient. This result clarifies ambiguity between federal courts of different circuits as to how to interpret PACA’s statutory language and is a major win for our clients. The decision may be found at Solata Foods, LLC v. Farmers Direct Corp., 2024 WL 3106106 (E.D.N.Y. June 24, 2024).