In this case arising under the Perishable Agricultural Commodities Act, 7 U.S.C. Sec. 499a, et seq., the A. Gagliano Company appeals the decision of the district court which, after a de novo trial, affirmed a reparation order issued by the Department of Agriculture. Because we believe that the district court employed an erroneous standard in its evaluation of the evidence on the issue of whether Tom Lange Company consented to Gagliano's dumping of produce, we reverse the judgment of the district court and remand for further proceedings.

* BACKGROUND

Tom Lange Co. ("Lange") agreed to ship lettuce and artichokes for growers John and Stephen Jordan. Lange shipped the produce from California to A. Gagliano Company's ("Gagliano") facility in Milwaukee, Wisconsin on a "price after sale" basis.1 The produce arrived on September 13, 1988. Gagliano inspected it and determined that, although the artichokes were fine, the lettuce was of poor quality. Mr. Gagliano telephoned David Osborn, an agent of Lange, and discussed "dumping" the lettuce. Mr. Gagliano received oral authority to dump whatever lettuce he could not sell. Moreover, Osborn informed Mr. Gagliano that Lange would not require a federal dumping certificate because Lange did not wish to incur the extra cost of obtaining the certificate.

Gagliano was able to sell only a small quantity of the lettuce. The remaining lettuce was never inspected by government officials. However, on September 28, 1988, Gagliano obtained three letters from disinterested merchants who stated that the lettuce they inspected (376 cartons) had no commercial value. Gagliano dumped 485 of the 665 cartons of lettuce it had received from Lange.2 Gagliano did not pay Lange for any of the lettuce that it dumped. On October 14, 1988, Gagliano remitted an "account of sale" to Lange which stated that net sales of the lettuce were $1,931.50. After various deductions, including Gagliano's commission, and after a revised accounting, Gagliano issued Lange a check for $942.05, which Lange accepted.

The Jordans requested full payment from Lange, and Lange in turn from Gagliano. The parties ultimately filed claims under the Perishable Agricultural Commodities Act, which were consolidated before the Department of Agriculture. Because less than $15,000 was at stake, the Department's Judicial Officer, acting for the Secretary pursuant to 7 C.F.R. Sec. 2.35(a), conducted an expedited proceeding that did not allow for oral testimony, see 7 U.S.C. Sec. 499f(d); 7 C.F.R. Sec. 47.15(a). After reviewing documentary evidence and the parties' arguments, the Judicial Officer determined that Gagliano owed Lange $3,468.26 plus interest. See Tom Lange Co. v. Gagliano, 50 Agric.Dec. 1027, 1991 WL 295171 (1991). The Judicial Officer concluded that Gagliano had violated 7 C.F.R. Sec. 46.23, which requires merchants to obtain a federal certificate before dumping more than five percent of a shipment. He noted that Gagliano could not explain its failure to obtain the required governmental inspection. Alternatively, he found that the three letters Gagliano obtained on September 28, 1988 were not probative of the lettuce's quality on September 13. Gagliano moved for reconsideration on the ground that 7 C.F.R. Secs. 46.22 and 46.23 did not apply to price after sale transactions. The Judicial Officer rejected Gagliano's claim, citing Cleveland Celery Market Co. v. Central Foods, Inc., 40 Agric.Dec. 858, 1981 WL 31818 (1981). The Judicial Officer also noted that Anonymous, 5 Agric.Dec. 25 (1943), which predated the promulgation of sections 46.22 and 46.23, indicated that Gagliano was subject to a general requirement to procure a dumping certificate.

Gagliano sought review in the district court. See 7 U.S.C. Sec. 499g(c).3 The court adopted the Secretary's findings of fact as supplemented by Anthony Gagliano's unrebutted trial testimony that Lange, through its agent David Osborn, had given Gagliano permission to dump the lettuce without obtaining a federal certificate. Despite this additional evidence, the district court affirmed. See 859 F. Supp. 356 (E.D.Wis.1994). The court initially determined that Department of Agriculture regulations 7 C.F.R. Secs. 46.22 and 46.23 were applicable. It reasoned that, although they did not mention "price after sale" transactions by name, the regulations applied to any transaction in which one party handled goods "for or on behalf of another person." Next, the court held that, even though the regulations provided that reasonable cause for dumping could be established by the shipper's "specific consent," 7 C.F.R. Sec. 46.23, and that no dumping certificate was necessary if there was a "specific agreement to the contrary," id. Sec. 46.22, Gagliano's oral agreement with Lange was insufficient. The court noted that 7 C.F.R. Secs. 46.14 and 46.15 require parties to keep detailed records for "all transactions" and "each lot" of produce. Relying on these provisions, the court concluded that any "specific consent" to dump or "specific agreement" that a dumping certificate was unnecessary had to be in writing.

The Perishable Agricultural Commodities Act ("PACA") "was enacted in 1930 for the purpose of providing a measure of control and regulation over a branch of industry which is engaged almost exclusively in interstate commerce, which is highly competitive, and in which the opportunities for sharp practices, irresponsible business conduct, and unfair methods are numerous." S.Rep. No. 2507, 84th Cong., 2d Sess. 3 (1956) (incorporating H.R.Rep. No. 1196, 84th Cong., 1st Sess. 2 (1956)), reprinted in 1956 U.S.C.C.A.N. 3699, 3701. "The law was designed primarily for the protection of the producers of perishable agricultural products--most of whom must entrust their products to a buyer or commission merchant who may be thousands of miles away, and depend for their payment upon his business acumen and fair dealing--and for the protection of consumers who frequently have no more than the oral representation of the dealer that the product they buy is of the grade and quality they are paying for." Id.; see also In re Lombardo Fruit & Produce Co., 12 F.3d 806, 808 (8th Cir.1993) ("PACA was designed to protect small farmers and growers from the sharp practices of financially irresponsible and unscrupulous brokers in perishable commodities.") (quotation and citations omitted); Harry Klein Produce Corp. v. U.S. Department of Agric., 831 F.2d 403, 405 (2d Cir.1987) ("The PACA is a remedial statute designed to ensure that commerce in agricultural commodities is conducted in an atmosphere of financial responsibility.").

Pursuant to these congressional goals, PACA proscribes a series of "sharp business practices." See 7 U.S.C. Sec. 499b. One provision makes it unlawful "in or in connection with any transaction in interstate or foreign commerce,"

[f]or any commission merchant to discard, dump, or destroy without reasonable cause, any perishable agricultural commodity received by such commission merchant in interstate or foreign commerce.

Id. Sec. 499b(3). The operative phrases in this subsection are "commission merchant" and "reasonable cause." PACA explicitly defines the former term, see id. Sec. 499a(b)(5),4 but nowhere defines the latter. However, a Department of Agriculture regulation provides that "reasonable cause" for dumping exists when produce "has no commercial value or when it is dumped by order of a local health officer or other authorized official or when the shipper has specifically consented to such disposition." 7 C.F.R. Sec. 46.23. The Department's regulations further provide that "a clear and complete record shall be maintained showing justification for produce received on joint account, on consignment, or handled for or on behalf of another person." 7 C.F.R. Sec. 46.22. Additional requirements apply in such circumstances to commission merchants who dump an appreciable percentage of a shipment. Section 46.22 provides that "if five percent or more of a shipment is dumped an official certificate, or other adequate evidence, shall be obtained to prove the produce was actually without commercial value, unless there is a specific agreement to the contrary between the parties." Id.5 In addition, section 46.23 provides that "proof as to the quantities of produce destroyed or dumped in excess of five percent of the shipment shall be provided by procuring an official certificate showing that the produce has no commercial value from any person authorized by the Department to inspect fruits and vegetables." Id. Sec. 46.23. Section 46.23 authorizes alternative means of certification when federal inspectors are unavailable.6B. Gagliano's Dumping

The parties do not dispute that Gagliano is a "commission merchant" as defined by the Act. Thus, the relevant inquiry in this case is whether Gagliano had reasonable cause for dumping the lettuce it received from Lange. Initially, Gagliano argues that 7 C.F.R. Secs. 46.22 and 46.23 do not apply to "price after sale" transactions. Gagliano maintains that the regulations cover those transactions involving unexpected damage to produce, but not transactions that are based on an implicit understanding that the produce is already substandard. Gagliano also contends that it had reasonable cause to dump. It emphasizes that unrebutted trial testimony established that Lange gave Gagliano authority to dump the lettuce and that Lange specifically instructed Gagliano that no federal certificate was necessary. Lange responds that the language of sections 46.22 and 46.23 make clear that they apply to the transaction at issue. It then submits that the district court properly determined that the regulations require written evidence of any "specific consent" to dump or "specific agreement" that no dumping certificate is necessary.

We begin our analysis with the statutory directive. The statute makes it unlawful, "in connection with any transaction in interstate or foreign commerce," for commission merchants to dump any perishable agricultural commodity without "reasonable cause." 7 U.S.C. Sec. 499b(3) (emphasis added). This language makes clear that the standard set forth in the first sentence of 7 C.F.R. Sec. 46.23 applies to all transactions, including the one between Lange and Gagliano. See also 7 C.F.R. Sec. 46.23 ("Reasonable cause for dumping any produce exists ... [.]") (emphasis added). The transaction in this case occurred in interstate commerce and consequently was subject to the statutory prohibition on dumping. Therefore, the transaction was subject to 7 C.F.R. Sec. 46.23's definition of "reasonable cause." The transaction likewise was subject to the second sentence of section 46.23, which defines the term "commercial value," used in section 46.23's first sentence, as "any value that a commodity may have for any purpose that can be ascertained by the exercise of due diligence without unreasonable expense or loss of time." 7 C.F.R. Sec. 46.23.

Whether the transaction between Lange and Gagliano is subject to the remainder of section 46.23 and section 46.22 is less clear. The remaining portions of these regulations are limited in scope; rather than applying to "any transaction," they apply only to situations in which the relationship of the seller and purchaser is more interdependent than that found in a simple seller-purchaser agreement. The precise scope of this part of the regulations, in particular, the regulations' applicability to the transaction in this case, is a difficult question. The remainder of section 46.23, by its terms, sets out requirements that apply only "[w]hen produce is handled for or on behalf of another person." 7 C.F.R. Sec. 46.23. Similarly, section 46.22, in its entirety, applies only when produce is "received on joint account, on consignment, or handled for or on behalf of another person." Id. Sec. 46.22.

It is possible to conclude that these remaining parts of the two regulations apply only to transactions in which title is not passed completely to the purchaser upon the arrival of the goods. The regulations specifically speak of "consignment" transactions; the shipper retains title in such transactions. Moreover, the regulations define "joint account transactions" as those involving joint ventures between two or more persons who agree to share costs, profits, and losses. See 7 C.F.R. Sec. 46.2(s); see also 7 C.F.R. Sec. 46.43(hh) (indicating that those involved in joint account transactions are partners). Finally, the regulations can be read as suggesting that the phrase "for or on behalf of another person" is generic terminology intended to encompass all consignment-type transactions.7 It also can be argued that several interpretations of the regulations by the Secretary support the view that these parts of sections 46.22 and 46.23 are limited to transactions in which title does not pass completely to the "purchaser" upon delivery.8 In one decision, the Secretary noted that, when a transaction involves "a sale, [and] not a consignment," the certification provisions of sections 46.22 and 46.23 are inapplicable. See Carmack v. Selvidge, 51 Agric.Dec. 892, 1992 WL 694322, at * 8 (1992). Carmack involved a "price after arrival" sales arrangement, as opposed to a "price after sale" transaction, and the two are distinct.9 However, both involve open price terms, see M. Offutt Co. v. Caruso Produce, Inc., 49 Agric.Dec. 596, 1990 WL 320373, at * 5 (1990), and the Secretary specifically held in La Verne Co-Operative Citrus Ass'n v. Mendelson-Zeller Co., 46 Agric.Dec. 1673, 1987 WL 118971, at * 5 (1987), a case that did not involve an interpretation of the regulations at issue here, that "price after sale" arrangements, as open-priced sales transactions, are not consignments. Carmack and La Verne can be read together to conclude that price after sale transactions are not subject to section 46.22 and the third sentence of section 46.23 because there is no consignment.

The district court did not follow the interpretative path outlined in the above paragraph. Rather, it concluded that the "for or on behalf of another" language of the regulations "very easily applies to 'price after sale' transactions." See 859 F. Supp. at 362. The district court's interpretation can command a good deal of support in the policy that clearly animates both the statute and the regulations read as a whole. The "price after sale" arrangement at issue here, like a consignment, does not assure the shipper of produce that he will receive a specific price for his goods. In each instance, the shipper faces a not insignificant risk of being victimized by the "sharp business practices" of the recipient of the goods. By his unilateral actions, the recipient can control the price. Cf. In re Lombardo Fruit & Produce Co., 12 F.3d at 808 (noting that PACA was designed to protect small farmers and growers from sharp business practices). Indeed, the interpretation of the Secretary's rulings as not applying sections 46.22 and 46.23 to price after sale transactions is open to criticism on its own terms. In several decisions prior to Carmack, the Secretary applied either section 46.22 or the certification requirement of section 46.23 in cases involving sales transactions as opposed to consignments. See, e.g., Jameson v. Valerio's Produce Co., 46 Agric.Dec. 653, 1985 WL 62906 (1985); Cleveland Celery Market Co. v. Central Foods, Inc., 40 Agric.Dec. 858, 1981 WL 31818 (1981); Bagley Produce Co. v. Simpson, 39 Agric.Dec. 456, 1980 WL 21163 (1980). In at least one of these transactions, Jameson, a "price after" arrangement was at issue. Indeed, in this very case, the Secretary applied the regulations to a "price after sale" transaction, and, on reconsideration, cited Cleveland Celery in response to Gagliano's argument that the regulations did not apply. Therefore, it is quite possible that the district court's interpretation of the regulations is correct or that, at the very least, no reasoned interpretation of the regulations to which we owe deference exists.10 Carmack did not explain why it apparently was departing from the Secretary's earlier decisions; in this case, the Secretary similarly failed to explain why Carmack did not govern.

Although we suggest that the Secretary clarify the regulations at the earliest possible opportunity, we need not resolve in this case the question whether section 46.22 and the third sentence of section 46.23 apply to price after sale transactions. Whether these explicit provisions apply or not, this case, as our colleague in the district court noted, turns upon whether Lange consented to Gagliano's dumping and agreed that no dumping certificate was necessary. As we noted above, the first sentence of section 46.23 requires Gagliano to establish reasonable cause for dumping via (1) evidence that the lettuce had no commercial value, or (2) proof that a local health officer ordered the dumping, or (3) evidence that Lange "specifically consented" to the dumping. Gagliano provided no certificate or other evidence establishing that the lettuce lacked commercial value when it arrived September 13, 1988. It therefore cannot establish "reasonable cause" absent proof that Lange "specifically consented" to the dumping. Assuming the certification requirements of section 46.22 and the third sentence of section 46.23 do not apply, Gagliano still faced a general obligation to document its dumping. Indeed, in Carmack, the Secretary noted that, although the regulations did not apply, "in a sale transaction, dumping of any portion must [still] be substantiated by a dump certificate or other appropriate evidence." 51 Agric.Dec. 892, 1992 WL 694332, at * 8.

We therefore turn to the question whether Gagliano presented sufficient evidence of Lange's consent. At trial, Mr. Gagliano provided unrebutted testimony that Lange, through its agent David Osborn, orally consented to Gagliano's dumping of the lettuce by telling Gagliano "try to sell it, and if you can't sell it, dump it." R.30 at 46. The precise terms of the waiver, however, are not clear. Mr. Gagliano testified that he was told not to incur the expense of obtaining a federal inspection. At one point, he claimed that Lange told him, "just get some certification of the dump at your local level," id. at 38, although he later testified that Lange declined any type of certification, id. at 39 ("[Lange] declined the certificates. They declined anything."). There was also evidence that Lange accepted a check tendered in payment for the lettuce that was sold and that Gagliano obtained assessment from other merchants to corroborate his estimation of the condition of the lettuce. The district court did not address this evidence at length because it believed that "specific consent" for dumping and "specific agreements" to waive certification had to be in writing.

It is on this point that we find ourselves in respectful disagreement with our colleague in the district court. Our disagreement is, however, a very narrow one. We agree, given the policy concerns that animate PACA and the general record-keeping requirements set forth in the regulations, see, e.g., 7 C.F.R. Secs. 46.14, 46.15, that, in the absence of a writing, there is a presumption against finding that a shipper either has consented to dumping or has agreed that no certification for dumping is necessary. Cf. Jameson v. Valerio's Produce Co., 46 Agric.Dec. 653, 1985 WL 62906, at * 3 (1985) (indicating that proof of dumping rule is intended to protect shippers and growers of produce and holding that, although there therefore is a presumption against waiver, oral waivers of the proof of dumping requirement are permissible); Bagley Produce Co. v. Simpson, 39 Agric.Dec. 456, 1980 WL 21163, at * 2 (1980) (holding that shipper "acquiesce[d] in the dumping of produce," because unrebutted evidence established that shipper's agent consented to dumping; no written agreement evincing such consent was produced or mentioned). As the above cases illustrate, however, the Secretary has not held, on a consistent basis,11 that a writing is necessary in all cases. Nothing in sections 46.22 or 46.23 expressly requires that a shipper's "specific consent" to dump or "specific agreement" to waive certification be in writing. In contrast, several of the Secretary's regulations make clear when a writing is necessary for compliance,12 and one expressly requires "specific written permission." See 7 C.F.R. Sec. 46.29(a) (discussing averaging or pooling of sales). Because the regulations demonstrate that the Secretary has required specifically that a document be in writing, the absence of any writing requirement in sections 46.22 and 46.23 is significant.13

Because the district court was of the view that sections 46.22 and 46.23 required written waivers in all cases, it did not evaluate whether, despite the presumption against oral waivers, there was sufficient evidence to hold that Lange orally consented to Gagliano's dumping and likewise agreed that a dumping certificate was not necessary. As we have noted above, at trial, Mr. Gagliano testified that Lange orally consented to the dumping and also orally agreed that no federal certificate was needed. Although Gagliano's testimony was not corroborated by a neutral third-party, it was unrebutted. Cf. Jameson v. Valerio's Produce Co., 46 Agric.Dec. 653, 1985 WL 62906, at * 2 (1985) (finding oral waiver of dumping requirements based on third-party testimony when parties disputed waiver's existence). There is other evidence that might corroborate Mr. Gagliano's testimony. Lange's acceptance of the check might suggest that it knew not all the lettuce could be sold. Gagliano's obtaining the three merchant affidavits might be considered as corroborative of Lange's request that it sell what it could, dump the rest, and obtain local certification. However, Lange's request for "local certification" suggests that any waiver it provided was limited; perhaps, Lange was willing to waive the need for a costly federal inspection but required that Gagliano have the lettuce inspected by a local official.

We cannot resolve these evidentiary issues. Accordingly, we shall remand the case so that the district court, making the appropriate credibility findings, may evaluate the evidence. We hold only that, although there is a presumption against oral waivers, 7 C.F.R. Secs. 46.22 and 46.23 do not require written waivers in all cases. We stress that nothing in this opinion should be construed as reflecting a view on whether there is sufficient evidence for Gagliano to overcome the presumption against oral waivers. That is a matter for the district court to address on remand.

For the foregoing reasons, the decision of the district court is reversed and remanded for additional proceedings.