Jacobs Silver K Farms, Inc. et al v. Taylor Produce, LLC, et al

Filing 168

MEMORANDUM DECISION (138 in 4:13-cv-00535-BLW) re: MOTION for Entry of Judgment under Rule 54(b) Against Defendants, Taylor Produce, LLC and Alan L. Taylor, Jointly and Severally filed by Reynolds Bros., LLP, Jacobs Silver K Farms, I nc., Kirk M Jacobs.. Signed by Judge B. Lynn Winmill. Associated Cases: 4:13-cv-00535-BLW, 4:14-cv-00141-BLW, 4:14-cv-00247-BLW(caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (jp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
JACOBS SILVER K FARMS, INC., et al.,
Plaintiffs,

Case No. 4:13-CV-535-BLW

v.

Consolidated Cases:
4:14-CV-141-BLW
4:14-CV-247-BLW

TAYLOR PRODUCE, LLC, et al.,
Defendants.

MEMORANDUM DECISION

INTRODUCTION
The Court has before it a motion for entry of final judgment under Rule 54(b)
against certain defendants. The motion is fully briefed and at issue. For the reasons set
forth below, the Court will grant the motion.
LITIGATION BACKGROUND
Plaintiffs delivered over $1 million worth of agricultural produce to defendant
Taylor Produce LLC but were never paid. To recover their loss, plaintiffs – referred to
collectively as “Jacobs” – brought this lawsuit against Taylor Produce under the
Perishable Agricultural Commodities Act of 1930 (PACA).
In addition to their claims against Taylor Produce1, Jacobs sued a group of
defendants referred to as the Nonpareil Defendants. Jacobs claims that the produce it
delivered to Taylor Produce was turned over to the Nonpareil Defendants for sale, but

1

The Court will use the term “Taylor Produce” to refer to defendants Taylor Produce LLC and
Alan Taylor.
Memorandum Decision – page 1

that the Nonpareil Defendants never remitted the sale proceeds to Taylor Produce, who in
turn was unable to pay Jacobs. Jacobs sues the Nonpareil Defendants for conversion of
PACA Trust assets, arguing that the Nonpareil Defendants breached a duty to hold the
sale proceeds in trust for the PACA beneficiaries, specifically Jacobs. While there are a
number of entities comprising the Nonpareil Defendants,2 Jacobs asserts that they are all
alter-egos of each other and should be equally liable.
Thus, there are two sets of defendants for the purposes of the motion at issue: (1)
Taylor Produce, and (2) Nonpareil Defendants. The threshold issue between these parties
was whether Jacobs was entitled to a PACA Trust as against Taylor Produce.
Jacobs filed a motion for summary judgment against Taylor Produce arguing that
it had satisfied all the legal requirements for establishing a PACA Trust against Taylor
Produce. While Taylor Produce did not file a cross-motion for summary judgment, it did
seek dismissal of the PACA Trust claims in its response brief on the ground that Jacobs’
PACA notices were insufficient.
At the same time, the Nonpareil Defendants filed a motion for summary judgment
against Jacobs, making arguments identical – word-for-word identical – to those
advanced by Taylor Produce that Jacobs’ PACA notices were insufficient. Compare
Taylor Produce Brief (Dkt. No.120-1) with Nonpareil Defendants Brief (Dkt. No. 103-5)

2

The Nonpareil Defendants include Idaho Potato Packers Corporation (“IPPC”), Nonpareil Corporation,
Nonpareil Farms Incorporated, Nonpareil Processing Corporation, and Nonpareil Dehydrated Potatoes
Incorporated.

Memorandum Decision – page 2

Judge Lodge, who was presiding at the time, granted Jacobs’ motion for summary
judgment finding as a matter of law that (1) the PACA notices were sufficient, and (2)
Jacobs had a valid PACA Trust claim over Taylor Produce in the amount of
$1,327,478.16. See Order (Dkt. No. 136). On the same day, Judge Lodge issued a
separate decision denying the motion for summary judgment filed by the Nonpareil
Defendants, incorporating by reference his other decision finding a valid PACA Trust
had been established against Taylor Produce. See Order (Dkt. No. 135) at p. 13.
Thereafter the case was transferred to this Court and a trial date was set for
November 7, 2016. Jacobs filed the motion now before the Court to enter a final
Judgment under Rule 54(b) against Taylor Produce declaring that Jacobs has a valid
PACA Trust against Taylor Produce in the amount of $1,327,478.16.
ANALYSIS
The Nonpareil Defendants object to Jacobs’ motion, arguing that further issues
remain for trial and that Rule 54(b) certification is therefore inappropriate. The
Nonpareil Defendants argue that Judge Lodge’s decision cannot be deemed final because
they are entitled to challenge the sufficiency of the PACA notices at trial.
The Nonpareil Defendants offer no reason to reconsider Judge Lodge’s ruling.
They argue simply that because summary judgment was not granted against them
specifically, they retain the right to challenge the PACA notices at trial. The Court
disagrees. The Nonpareil Defendants had a full and fair opportunity to challenge the
PACA notices in the summary judgment proceedings, and made arguments in their brief
that were word-for-word identical with those made by Taylor Produce. Judge Lodge
Memorandum Decision – page 3

rejected those arguments and held as a matter of law that the PACA notices were
sufficient and that a valid PACA Trust was established. To allow the Nonpareil
Defendants to plow this same ground in the trial would be to ignore Judge Lodge’s
decision. In the absence of any ground for reconsidering Judge Lodge’s ruling – and the
Nonpareil Defendants offer none – the Court refuses to delay Judgment on this ground.
The Nonpareil Defendants argue that they did not raise every issue in their
summary judgment motion. More specifically, they cite to their summary judgment brief
where they expressly set aside a specific challenge to the PACA notices. In that section
of their brief, the Nonpareil Defendants argued that they had evidence that “multiple
shipments by [Jacobs] will be shown at trial to have been made outside of the applicable
time period and thus not subject to [Jacobs’] PACA claims.” See Nonpareil Defendants
Brief (Dkt. No. 103-5) at p. 11, n. 8. They argued that they need not produce specific
evidence of these “multiple shipments” during the summary judgment proceedings
because this “complex” issue was better resolved at trial. Id. Taylor Produce made this
identical word-for-word argument in its brief in response to Jacobs’ summary judgment
motion.
Judge Lodge expressly rejected this argument, holding that specific facts were
required to avoid summary judgment, and that the failure to produce those facts relating
to “multiple shipments” warranted ignoring the argument altogether. See Order (Dkt. No.
136) at pp. 11-12. Judge Lodge went on to reject all challenges to the PACA notices, and
to find as a matter of law that they were sufficient under PACA.

Memorandum Decision – page 4

Rule 54(b) gives the Court discretion to grant a final judgment as to one or more,
but fewer than all, claims if “there is no just reason for delay.” This inquiry asks whether
(1) certification would result in successive appeals on the same facts or legal issues; (2)
the adjudicated claims are independent of the remaining claims; (3) future developments
in the case might moot the appeal; and (4) delay in the entry of the judgment would cause
financial harm. Wood v. GCC Bend, LLC, 422 F.3d 873, 878-82 (9th Cir. 2005).
“Analyzing a Rule 54(b) judgment requires a pragmatic approach with focus on
severability and efficient judicial administration.” S.E.C. v. Platforms Wireless Int'l
Corp., 617 F.3d 1072, 1084 (9th Cir. 2010).
Here, all issues regarding Taylor Produce are resolved. The remaining issues for
trial are separate from the PACA Trust issues resolved by Judge Lodge. His decision
establishes the existence of a PACA Trust – the issue for trial will be whether the
Nonpareil Defendants improperly converted those PACA Trust funds. More specifically,
a primary issue will be whether the Nonpareil Defendants remitted all the proceeds (from
the produce sales) to Taylor Produce as they allege. The result at trial will have no
impact on Judge Lodge’s ruling regarding the PACA Trust. Either the Nonpareil
Defendants converted PACA Trust assets or they did not – neither result will affect the
ruling that Taylor Produce owes Jacobs the $1.3 million. The trial issues are therefore
entirely separate from the issues resolved by Judge Lodge, and future developments will
not moot the appeal. These considerations weigh in favor of certifying a final Judgment
under Rule 54(b). Moreover, Jacobs would suffer financial harm through further delay.
This case is almost three years old, and by the time trial is completed and further appeals
Memorandum Decision – page 5

resolved, it will likely be five or six years old. There should be no further delay in
entering Judgment against Taylor Produce.
It is true that certifying a final Judgment will cause two separate appeals where
only one would result if the certification was denied. But the equities and the
considerations identified above outweigh this consideration. When all the factors are
weighed, the Court finds that certification under Rule 54(b) is warranted. The Court will
therefore issue a separate Judgment pursuant to Rule 54(b).

DATED: September 24, 2016

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision – page 6