Royal Foods Co. v. RJR Holdings Inc.

Opinion by Judge SILVERMAN; Dissent by Judge TROTT.

Is a restaurant that buys wholesale quantities of perishable agricultural commodities and uses them in the preparation of meals “in the business of buying or selling” such commodities, and therefore, a “dealer” as defined by the Perishable Agricultural Commodities Act of 1930? We join the two other circuits that have considered this question in holding that it is— a restaurant that buys in the requisite quantities falls within the definition of a “dealer” even though it does not also sell the commodities in unchanged form.

I. BACKGROUND

RJR, a Delaware corporation, owned and operated seven TGI Friday restaurants in California. From the fall of 1993 through 1997, RJR purchased large quantities of perishable produce for these restaurants from Royal Foods. In 1996, for example, RJR purchased $550,000 worth of produce from Royal; in 1997, RJR increased its purchases to approximately $650,000.

RJR’s corporate office controlled the purchases from Royal; however, the manager of each TGI Friday restaurant ordered the kind and quantity of produce needed for his or her particular restaurant. Royal delivered the produce to each…

Dissenting:

I respectfully dissent. Basically, I accept and agree with the Secretary of Agriculture’s comment made in a preamble to a related 1996 regulation. The Secretary said,

61 F.R. 13385 , 13386 (March 27, 1996). Because the Secretary and the United States Department of Agriculture administer this statute, I think it appropriate to consider seriously what the Secretary says, not wave it off.

Second, I am persuaded that the district court’s careful and discerning analysis of the issue has merit. The district court did not allow its reasoning to become trapped in a series of misleading premises, interpretative tools, and syllogisms that lead one to a conclusion never intended by Congress. On rare occasion, we can be so right with our legalistic approach and labels that we are wrong. With all deference to my colleagues, I believe that is what is happening here: the trees are obscuring the forest. This case provides an example of how plain language divorced from context can be very misleading. We call a table implement used for spreading butter a butter “knife,” but plain language notwithstanding, it is not a “knife” at all. It has no sharp blade for cutting, no point for…