Alphas Company, Inc. v. William H. Kopke, Jr., Inc.

Filing

OPINION issued by Jeffrey R. Howard, Appellate Judge; Bruce M. Selya, Appellate Judge and Kermit V. Lipez, Appellate Judge. Published. [12-1581]

Case: 12-1581

Document: 00116492481

Page: 1

Date Filed: 02/13/2013

Entry ID: 5711423

United States Court of Appeals
For the First Circuit

No. 12-1581
THE ALPHAS COMPANY, INC.,
Plaintiff, Appellant,
v.
WILLIAM H. KOPKE, JR., INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]

Before
Howard, Selya and Lipez,
Circuit Judges.

Noah B. Goodman and Law Offices of Noah B. Goodman on brief
for appellant.
Rosemary Traini on brief for appellee.

February 13, 2013

Case: 12-1581

Document: 00116492481

Page: 2

SELYA, Circuit Judge.

Date Filed: 02/13/2013

Entry ID: 5711423

This case poses the question of

whether the appeal provisions (including the bond requirements) of
the

Perishable

Agricultural

Commodities

Act

(PACA),

§§ 499a-499t, are mandatory and jurisdictional.

7

U.S.C.

Guided by the

language and structure of the statute, its legislative history, and
its traditional treatment by other courts, we answer this question
in the affirmative.

Consequently, we affirm the district court's

dismissal of an attempted appeal.
The case at hand has its genesis in an administrative
proceeding brought pursuant to the PACA by William H. Kopke, Jr.,
Inc. (Kopke) against The Alphas Company, Inc. (Alphas).

In that

proceeding, Kopke alleged that Alphas had accepted delivery of four
truckloads of grapes, peaches, and nectarines, yet failed to pay
the appropriate purchase price.

Kopke sought an award in the

amount of $68,220, with credit to be given for the lesser sum
actually paid by Alphas ($18,195).
After

the

parties

waived

an

oral

hearing,

an

administrative law judge acting on behalf of the Secretary of
Agriculture (the Secretary), see 7 C.F.R. § 47.2(c), adjudicated
the dispute in accordance with applicable regulations, see id.
§ 47.20.

On December 7, 2011, Kopke's complaint bore fruit; the

Secretary issued an order on that date awarding Kopke $50,025, plus
interest.

On

January

6,

2012,

Alphas

sought

to

appeal

the

reparation order by filing a petition and notice in the United

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States District Court for the District of Massachusetts.

See 7

U.S.C. § 499g(c).
The PACA requires that a putative appellant file a notice
of appeal and a bond within "thirty days from and after the date of
the reparation order."

Id.

The bond must be "in double the amount

of the reparation awarded against the appellant [and] conditioned
upon the payment of the judgment entered by the court, plus
interest and costs, including a reasonable attorney's fee for the
appellee, if the appellee shall prevail."

Id.

In connection with

its appeal, Alphas submitted, on January 12, 2012, a $100,000
"Business Service Bond" (Bond No. 1), dated January 10, 2012. This
bond was backdated to January 6, 2012 in an apparent attempt to
bring it within the time frame of 7 U.S.C. § 499g(c).

In terms,

the bond purposed to indemnify Kopke
against loss of money or other property, real
or personal, belonging to any and all
subscribers
(the
"Subscriber")
to
its
services, or in which the Subscriber has a
pecuniary
interest,
or
for
which
the
Subscriber is legally liable, which the
Subscriber shall sustain as the result of any
fraudulent or dishonest act, as hereinafter
defined, of an Employee or Employees of
[Kopke] . . . .
In due season, Kopke moved to dismiss the appeal, see
Fed. R. Civ. P. 12(b)(1), arguing that the district court lacked
subject matter jurisdiction because Alphas had failed to comply
with the PACA's bond requirements.
was

untimely

filed,

insufficient
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Kopke asserted that Bond No. 1
in

amount,

and

lacking

the

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Date Filed: 02/13/2013

appropriate indemnification covenants.

Entry ID: 5711423

Specifically, it pointed

out that, in this instance, the PACA required that the bond be
filed no later than January 6, 2012; that it be in an indemnity
amount of no less than $100,050; and that it inure to the benefit
of

the

obligee

attorney's

to

fees,

insure

interest

payment
and

the

of

the

like.

reparation
Bond

No.

order,

1,

Kopke

asseverated, satisfied none of these requirements.
In

opposition,

Alphas

did

not

seriously

deny

the

existence of the shortcomings enumerated by Kopke.

It argued

instead

were

that

the

statutory

bond

requirements

not

jurisdictional and that its noncompliance could be excused at the
court's discretion.

This was a favorable case for the exercise of

discretion, Alphas added, because the defects in Bond No. 1 were
not substantial and, in all events, it had filed (on February 15,
2012) a superseding bond (Bond No. 2) that ameliorated the defects.
Alphas also insisted that the initial defects had not in any way
prejudiced Kopke.

Faced with these conflicting contentions, the

district court summarily granted the motion to dismiss.

This

timely appeal followed.
We review de novo the district court's determination,
made without either an evidentiary hearing or any semblance of
differential

factfinding,

that

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it

lacked

subject

matter

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jurisdiction.1

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Date Filed: 02/13/2013

Entry ID: 5711423

See Fothergill v. United States, 566 F.3d 248, 251

(1st Cir. 2009).

In carrying out this task, "we take as true all

well-pleaded facts in the plaintiffs' complaint, scrutinize them in
the light most hospitable to the plaintiffs' theory . . . , and
draw all reasonable inferences therefrom in the plaintiffs' favor."
Id.
Congress enacted the PACA to regulate the sale of produce
in interstate commerce.

Ch. 436, 46 Stat. 531, 531 (1930).

The

PACA authorizes the Secretary to consider claims that parties have
not complied with its provisions.

7 U.S.C. § 499f.

Relatedly,

Congress provided that once the Secretary issues a reparation
order, an aggrieved party may appeal the order to the federal
district court in the district in which the administrative hearing
was held.

Id. § 499g(c).
This right of appeal, however, is not unconditional. The

PACA provision dealing with judicial review of reparation orders
makes pellucid that an appeal must be taken within thirty days of
the issuance of the order.

Id.

Furthermore:

Such appeal shall not be effective unless
within thirty days from and after the date of
the reparation order the appellant also files
with the clerk a bond in double the amount of

1

In other circumstances, the standard of review of an order
dismissing a case for want of subject matter jurisdiction may be
different. See Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46
F.3d 138, 147-48 (1st Cir. 1995); Boit v. Gar-Tec Prods., Inc., 967
F.2d 671, 675 (1st Cir. 1992). We need not explore these differing
standards today.
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the reparation awarded against the appellant
conditioned upon the payment of the judgment
entered by the court, plus interest and costs,
including a reasonable attorney's fee for the
appellee, if the appellee shall prevail.
Id.
In this case, it is unarguable that Alphas failed to
comply with the statutory bond requirements.

Bond No. 1 suffered

from no fewer than three material defects: it was not filed within
the prescribed thirty-day appeal period; it was in an amount less
than the amount stipulated; and it did not contain appropriate
indemnification covenants.2

Viewed in this light, our inquiry

reduces to whether the statutory bond requirements are mandatory
and jurisdictional.

If so, they demand strict compliance.

See,

e.g., Microsystems Software, Inc. v. Scandinavia Online AB, 226
F.3d 35, 41 (1st Cir. 2000).

Otherwise, a district court retains

a measure of elasticity in determining compliance.

See, e.g.,

Tapia-Tapia v. Potter, 322 F.3d 742, 745 n.4 (1st Cir. 2003).
There
jurisdictional

is
and

a

line,

albeit

sometimes

nonjurisdictional

hazy,

requirements.

between
A

jurisdictional requirement implicates a court's constitutional and
statutory power to hear and resolve a case.
Muchnick, 130 S. Ct. 1237, 1243 (2010).

2

Reed Elsevier, Inc. v.

Non-compliance with such

Kopke also suggests that Bond No. 1 is a nullity because it
was canceled by the surety company on February 29, 2012. Because
the order of dismissal is supportable on other grounds, see text
infra, we need not explore this suggestion.
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a

Document: 00116492481

requirement

deprives

Page: 7

a

Date Filed: 02/13/2013

federal

jurisdiction to adjudicate a matter.
205, 213 (2007).

court

of

Entry ID: 5711423

subject

matter

Bowles v. Russell, 551 U.S.

After all, federal courts are courts of limited

jurisdiction and, subject to constitutional constraints, Congress
has

the

exclusive

right

to

determine

"when,

conditions, federal courts can hear [cases]."
Nonjurisdictional
different vine.

requirements

and

under

what

Id. at 212-13.

are

the

fruit

of

a

Such requirements can best be understood as claim

processing rules. See Henderson ex rel. Henderson v. Shinseki, 131
S. Ct. 1197, 1203 (2011).

Such rules do not define what cases

courts can and cannot hear, and a modicum of flexibility attaches
to their administration.

See Tapia-Tapia, 322 F.3d at 745 n.4.

In determining where the PACA bond requirements fall
within this taxonomy, we are guided by the methods limned by the
Supreme

Court

for

distinguishing

between

requirements and claim processing rules.

jurisdictional

See, e.g., Gonzalez v.

Thaler, 132 S. Ct. 641, 648-49 (2012); Reed Elsevier, 130 S. Ct. at
1243-44.

A requirement is jurisdictional "[i]f the Legislature

clearly states that a threshold limitation on a statute's scope
shall count as jurisdictional."
500,

515

(2006).

Because

Arbaugh v. Y & H Corp., 546 U.S.

this

is

so,

an

appraisal

of

the

jurisdictional character of a statutory requirement must focus on
the text, context, and historical treatment of the requirement.
Reed Elsevier, 130 S. Ct. at 1246.

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As we previously have explained, the language of section
499g(c) is "unambiguous and mandatory: a party's appeal 'shall not
be effective' unless the bond is timely filed."

Alphas Co. v. Dan

Tudor & Sons Sales, Inc., 679 F.3d 35, 39 (1st Cir.), cert. denied,
133

S.

Ct.

652

(2012)

(quoting

7

U.S.C.

§

499g(c)).

This

definitive language was added when Congress amended the PACA in
1962.

Pub.

congressional
manifest

L. No.

87-725,

report

that

that

compliance

76

Stat.

accompanied
with

the

673, 675
these

bond

(1962).

The

amendments

made

requirements

prerequisite for subject matter jurisdiction.

was

a

See H.R. Rep. No.

87-1546, at 7 (1962), reprinted in 1962 U.S.C.C.A.N. 2749, 2754.
The language of the amendment, read through the prism of this
report,

removes

any

doubt

that

may

have

existed

about

the

centrality of the bond requirement; Congress bluntly stated that it
amended the appeal provisions of the PACA specifically to ensure
that
an appeal from a reparation award . . . shall
not be effective as an appeal, and therefore
not a matter within the jurisdiction of the
district court of the United States in which
the petition is filed, unless the required
bond is filed with the court within 30 days
from and after the date of the Secretary's
order.
Id.
An examination of the structure of the statute conduces
to the same conclusion.

The bond requirements are part and parcel

of the very statutory provision that grants federal district courts
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subject matter jurisdiction to review reparation orders.
U.S.C. § 499g(c).

This is an important datum.

See 7

Cf. Reed Elsevier,

130 S. Ct. at 1245-47 (holding the registration requirement of the
Copyright Act nonjurisdictional as it is located in a provision
separate

from

jurisdiction).

those

granting

federal

courts

subject

matter

The short of it is that our inquiry into context

provides further evidence of Congress's intent to make the bond
requirements jurisdictional.
The historical treatment of the appeal provisions of the
PACA buttresses the conclusion that the statutory bond requirements
were meant to be compulsory.
consistency

with

which

other

This conclusion is inherent in the
courts

have

held

that

the bond

requirements are jurisdictional. See, e.g., Kessenich v. CFTC, 684
F.2d 88, 91-93 (D.C. Cir. 1982) (analogizing the jurisdictional
bond requirements of the Commodities Exchange Act with those of the
PACA); Chidsey v. Geurin, 443 F.2d 584, 586 (6th Cir. 1971)
(affirming district court's holding that PACA bond requirements
jurisdictional).
In this case, all roads lead to Rome: the text of the
statute, its context, and its historical treatment point unerringly
in the same direction.

In line with these signposts, we hold that

the bond requirements of the PACA are mandatory and jurisdictional,
and that the timely filing of a proper bond is a prerequisite for
judicial review of a reparation order.

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Consequently, a party's

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failure to file a proper bond within the time prescribed by law
renders an attempted appeal nugatory.

See Kessenich, 684 F.2d at

91-93; Chidsey, 443 F.2d at 586; Miloslavich v. Frutas del Valle de
Guadalupe, 637 F. Supp. 434, 436 (S.D. Cal. 1986), aff'd, 815 F.2d
714 (9th Cir. 1987) (table); see also Alphas Co., 679 F.3d at 39-40
(dismissing

appeal

for

failure

to

file

bond).

It

follows

inexorably that if an appellant fails to comply with the statutory
bond requirements, a federal court cannot exercise subject matter
jurisdiction.
We need go no further.

Because Alphas did not file a

proper bond within the prescribed period, the district court
correctly ruled that it lacked subject matter jurisdiction to
entertain an appeal of the reparation order.3

Affirmed.

Costs to appellee.

3

We note in passing that the shortcomings of the proffered
bonds were not trivial; they were the wrong type of bond.
The
purpose of an appeal bond under the PACA is to "assure[] an
appellee that he can later collect his litigation expenses and
judgment if the reparation award is affirmed." Miloslavich, 637 F.
Supp. at 439. Both Bond No. 1 and Bond No. 2 had a different set
of covenants and, thus, offered no such assurance.
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