The Issue Whether Respondent, Citrus Direct, LLC, owes Petitioner, Marvin Hajos, the sum of $5,397.00 for citrus that was purchased, but not harvested.
Findings Of Fact At all times material to the instant case, Petitioner and Citrus Direct were involved in the growing and marketing of citrus fruit in the State of Florida. On June 12, 2008, Citrus Direct agreed to purchase fruit from Petitioner. The terms of their agreement were reduced to writing. The "Fresh Fruit Contract" provided that Citrus Direct would purchase from Petitioner all of the varieties of citrus fruits of merchantable quality as delineated in the contract. More specifically, Citrus Direct was entitled to purchase "Valencia" oranges from Petitioner for "$3.00 on tree net" per box. The terms of the contract suggests that it is for "citrus fruit for the year 2005/2006 and merchantable at the time of picking. . . ." The contract does not identify a total amount of fruit expected from the grove. Prior to entering into the above-referenced contract, Petitioner had made arrangements with an unidentified third party to have the grove picked, but for some reason, that agreement fell through. Jason Cooper, known in the citrus business as a "bird dog," brought the parties together. Mr. Cooper is an independent contractor who finds grove owners who need to have their groves picked and refers them to buyers. The "Fresh Fruit Contract" was signed on June 12, 2008. The grove was picked on June 15, 17, 26 and 30, 2008. Two hundred and sixty-four boxes of fruit were picked from Petitioner's grove. Petitioner received payment of $603.00. Citrus Direct forwarded an additional check for $189.00 to Petitioner; however, Petitioner did not receive the check. No admissible evidence was received regarding the number of boxes of fruit that were anticipated from the grove. However, on June 30, 2008, all the fruit that was reasonably available to be picked in the grove had been picked.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department Agriculture and Consumer Services enter a final order dismissing Petitioner, Marvin Hajos', Amended Complaint, but requiring Respondent, Citrus Direct, LLC, to pay Petitioner $189.00, if that amount has not already been paid. DONE AND ENTERED this 27th day of April, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2009. COPIES FURNISHED: Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800 Marvin Hajos 3510 Northwest 94th Avenue Hollywood, Florida 33024 State Farm Fire and Casualty Company One State Farm Plaza Bloomington, Illinois Hans Katros Citrus Direct, LLC 61710 1406 Palm Drive Winter Haven, Florida 33884
The Issue The issue is whether Respondent owes Petitioner $13,853.00 for failure to harvest Petitioner's 2004 Valencia orange crop, as alleged in the Complaint.
Findings Of Fact Petitioner, Lionel LaGrow, is a resident of Highlands County, Florida. Respondent, Chapman Fruit Company, Inc. (hereinafter "Respondent" or "Chapman"), is a Florida corporation with its principal place of business in Hardee County, Florida. Chapman is a duly licensed fruit buyer in the State of Florida and is owned by Ray Chapman (hereinafter referred to as "Mr. Chapman"). Mr. LaGrow owns and operates a 26-acre grove in Highlands County, Florida. At all times relevant to this proceeding, Mr. LaGrow's grove contained varieties of citrus referred to as "Earlies," "Mids," and "Valencias." The Earlies and Mids varieties are picked early in each fruit season and the Valencias are picked late in each fruit season. At all times relevant to this proceeding Reggie Cooper (hereinafter referred to as "Mr. Cooper") was an employee of Chapman. Mr. Cooper was authorized by Chapman to enter into binding agreements and to make arrangements for and supervise the picking and hauling of Mr. LaGrow's citrus. Mr. LaGrow and Chapman entered into a Pick and Haul Contract (hereinafter referred to as "Contract") dated November 9, 2001, by which Mr. LaGrow agreed to sell, and Chapman agreed to purchase, fruit grown on the 26-acre tract located in Highlands County, Florida, for shipping seasons 2001-2002, 2002-2003, and 2003-2004. The Contract did not provide prices within the Agreement itself for picking and hauling the fruit. The parties verbally agreed to prices for picking and hauling at the time of each year's harvest. The Contract, as written, was a "Delivered-In" Contract, meaning that Mr. LaGrow retained the right to arrange for picking and hauling the fruit at any time during the term of the Contract. Mr. Cooper made arrangements for and supervised the picking and hauling of Mr. LaGrow's citrus. After the citrus was picked, Chapman provided Mr. LaGrow statements that accurately and fairly account for all fruit harvested by Chapman's contracted harvester. The statements showed the gross income, the costs of picking and hauling, as well as other expenses, and the net income to Mr. LaGrow. The parties followed the procedure described in paragraph 7, beginning in November 2001 of the 2001-2002 citrus shipping season through the harvesting of the Earlies and Mids in the 2003-2004 fruit season. There were 3,531 boxes of Earlies and Mids harvested by Chapman's contractor in November 2001 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (19,881.16), a gross purchase price of $15,904.93 resulted. Picking and hauling in the amount of $2.00 per box was deducted leaving $8,180.86 payable to Mr. LaGrow. Chapman tendered a check in the amount of $8,180.86 to Mr. LaGrow. There were 3,103 boxes of Valencias harvested by Chapman's contractor in March 2002 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (21,085.57), a gross purchase price of $20,031.29 resulted. Picking and hauling in the amount of $2.20 per box was deducted leaving $13,134.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $13,134.87 to Mr. LaGrow. There were 1,785 boxes of Earlies and Mids harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (11,063.98), a gross purchase price of $10,068.22 resulted. Picking and hauling in the amount of $2.86 per box was deducted leaving $4,628.44 payable to Mr. LaGrow. Chapman tendered a check in the amount of $4,628.44 to Mr. LaGrow. There were 1,594 boxes of Valencias harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (10,582.23), a gross purchase price of $10,053.12 resulted. Picking and hauling in the amount of $2.77 per box was deducted leaving $5,601.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $5,601.87 to Mr. LaGrow. There were 316 boxes of Earlies and Mids harvested by Chapman's contractor in the 2003-2004 citrus shipping season by Chapman's contractor from the LaGrow property. When multiplied by the total pounds of solids (1,847.46), a gross purchase price of $1,385.59 resulted. Picking and hauling in the amount of $3.55 per box was deducted leaving $252.57 payable to Mr. LaGrow. Chapman tendered a check in the amount of $252.57 to Mr. LaGrow. There were no problems or disputes between Chapman and Mr. LaGrow regarding the harvesting of the citrus until the 2003-2004 Valencia crop was to be picked. All harvesting of Mr. LaGrow's fruit during the Contract period was performed by Chapman's contracted harvester. There was no fruit harvested from the LaGrow property by any one other than Chapman's contracted harvester during the Contract period. During the Contract period there was a steady decline in production from the LaGrow grove property. From the first year of the Contract to the second year of the Contract there was a nearly 51 percent reduction in the number of net boxes harvested. From the second year of the Contract to the third year of the Contract, with respect to the Earlies and Mids, there was an 82.3 percent reduction in the number of net boxes harvested. There were an insufficient number of boxes of Valencia oranges on the LaGrow property available for harvest in 2004. Had Chapman harvested, or arranged to harvest the 2004 Valencia crop, once picking and hauling charges were applied, a negative balance owed would have resulted. Mr. Cooper, on behalf of Chapman, made multiple attempts to arrange for harvesting of the 2004 Valencia crop, including, but not limited to, contacting M.E. Stephens, IV, who declined to harvest the fruit based on the quantity available for harvest. For the same reason, other harvesters advised Mr. Cooper that they could not harvest the LaGrow 2004 Valencia crop. Though unsuccessful, Mr. Cooper's efforts to have the crop harvested were reasonable under the circumstances. Mr. Cooper never told Mr. LaGrow that because of the quantity of the Valencia oranges in 2004, he was unable to find a contractor to harvest the fruit. Although it became apparent that Mr. Cooper had not arranged for the Valencia oranges to be harvested, Mr. LaGrow never contacted Mr. Chapman or Mr. Cooper. Under the subject Contract, Mr. LaGrow could harvest or make arrangements to have the Valencia oranges harvested. However, Mr. LaGrow failed to take steps in 2004 to have the Valencia oranges harvested and sold. Mr. LaGrow's Complaint contends that Chapman owes him $13,853.00 for failing to harvest and sell the Valencia oranges in the 2004 season. In Petitioner's Proposed Recommended Order, he seeks $9,586.50 in "damages."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Commissioner of Agriculture enter a final order dismissing Petitioner's Complaint. DONE AND ENTERED this 7th day of November, 2007, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 2007.
The Issue The issue for determination is whether Department of Citrus Rules 20-1.009 and 20-1.010, Florida Administrative Code, are invalid exercises of delegated legislative authority, as alleged by Petitioners.
Findings Of Fact John Stephens, Inc., Petitioner, was at all times material hereto a Florida corporation duly licensed as a citrus fruit dealer in the State of Florida. J. A. Stephens, Inc., was a Florida corporation, and held a valid fruit dealer’s license in the State of Florida. At all times material to this proceeding, Petitioner, John A. Stephens, served as an officer and director of J. A. Stephens, Inc. John A. Stephens is not an officer, director or shareholder of John Stephens, Inc. John A. Stephens, Jr. is the president and sole director of John Stephens, Inc. and is not an officer, director nor shareholder of J. A. Stephens, Inc. On or about September 26, 1996, Petitioners, John Stephens, Inc., and John A. Stephens, applied to the Florida Department of Agriculture and Consumer Services to register John A. Stephens as an agent of John Stephens, Inc., pursuant to Section 601.601, Florida Statutes. The application form furnished by the Department of Agriculture and Consumer Services indicates that the licensed dealer seeking registration of an agent agrees to “... accept full responsibility for all his activities....” (Petitioners’ Exhibit 1) By letter dated December 26, 1996, Petitioners were advised by the Department of Agriculture and Consumer Services that their application for registration of John A. Stephens as an agent of John Stephens, Inc., had been denied on the basis of Rule 20-1.010, Florida Administrative Code. As indicated in the notice, that rule provides, in part, that an application for registration of a dealer’s agent can be disapproved if a proposed registrant has a “...record, either as an individual, co- partnership, corporation, association or other business unit, showing unsatisfied debts or orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit.” (Petitioners’ Exhibit 1.) Specifically, the Department of Agriculture and Consumer Services advised Petitioners that “...Mr. Stephens has not satisfied orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit...,” listing as the final orders in question Petitioners’ Exhibits 3 through 14. Between April 30, 1991, and September 30, 1992, the State of Florida, Department of Agriculture and Consumer Services entered a total of 12 final administrative orders in which it found that J. A. Stephens, Inc., was indebted to claimants for various sums arising from prior dealings in citrus fruit. (Petitioners’ Exhibits 3 through 14.) At the time of the action of the Department of Agriculture and Consumer Services denying Petitioners’ application, there remained amounts due and unpaid on each of the orders entered by the Department against J. A. Stephens, Inc. Petitioner, John A. Stephens was not named as a party respondent in any of the 12 proceedings culminating in final orders against J. A. Stephens, Inc., which formed the basis for the denial by the Department of the application for registration as a citrus dealer’s agent. (Petitioners’ Exhibits 2, and 3 through 14.) In denying a Motion for Relief for Final Order in the only Department of Agriculture and Consumer Services proceeding in which a claimant sought to join Mr. Stephens individually as a party, the Department found that: The complaint filed by Claimant named J. A. Stephens, Inc. as the respondent. Because the complaint was against J. A. Stephens, Inc., it was served on J. A. Stephens, Inc. J. A. Stephens, an individual, was never subjected to the jurisdiction of the Agency with regard to this matter. J. A. Stephens, an individual, was not afforded an opportunity to defend against the allegations of the complaint. There was no discussion at the hearing about whether J. A. Stephens, Inc. was or was not the proper respondent. There was no allegation at the hearing that J. A. Stephens, an individual, was the proper respondent. The Claimant has failed to express any legal basis for grant of his motion and this Agency could find no such basis. This Agency has no personal jurisdiction over J. A. Stephens, an individual, with regard to this matter and therefore cannot enter an order with respect to him. Further, even if such an order were to be entered, it would be of no force or effect because of the lack of personal jurisdiction. (Petitioners’ Exhibit 4, pg. 2.) The rules that are the subject of this proceeding had their inception in 1964, when the Florida Citrus Commission considered and adopted rules governing the registration of agents acting on behalf of licensed citrus dealers. These rules, which appear in the text of the minutes of the Commission as Regulation 105-1.05, are almost verbatim the same rules now found in Chapter 20-1, Florida Administrative Code. (Respondent’s Exhibits 1 and 2.) As reflected in the minutes of the Florida Citrus Commission, the rules were adopted to help protect the grower and shipper or processor in matters involving the normal movement of citrus fruit in all channels of distribution. The regulation was recommended by the Fresh Citrus Shippers Association and was endorsed by a resolution of the Florida Sheriffs Association. In presenting the Sheriffs’ resolution to the Commission, Sheriff Leslie Bessenger of the Florida Citrus Mutual Fruit Protection Division cited the results of a seven-month investigation that found 71 out of 200 registered agents with criminal records. Those two hundred agents represented only nine dealers. (Respondent’s exhibit 1, June 19, 1964, meeting.) Minutes of Commission meetings after rule adoption thoroughly explain the efforts to require accountability and curb abuse of the dealer- agent relationship. The rules, as they appear today in the Florida Administrative Code, have not been revised since July 1, 1975.
The Issue The issues concern the complaint by Petitioner against Respondents for the alleged failure to pay for $125.00 worth of medium zucchini squash also referred to as medium green squash. See Sections 604.15 through 604.30, Florida Statutes.
Findings Of Fact Petitioner sells produce. East Coast purchases produce and resells that produce at wholesale. The transaction which is in dispute here concerns an April 25, 1990 sale of medium zucchini squash. On that date Jerry B. Portnoy, Vice President for East Coast who runs the day to day operations of the company and buys produce spoke with Petitioner. In that conversation, which took place early in the morning, Petitioner stated that he had the squash to sell. Portnoy told Petitioner that he had plenty of that form of produce on hand. Petitioner stated that this was the last picking and that he would give Portnoy a good price. The price that Petitioner mentioned was $2.50 a crate. Mr. Portnoy said that he could use about 100 crates and he reiterated that he had plenty of that type of produce on hand. That comment by Mr. Portnoy met with the remark by Petitioner which was to the effect, that there might be a few additional crates above the 100 discussed. Portnoy said that he did not need any more than 100 crates in that he had plenty of that produce on hand. As Portnoy described at hearing, he felt that he really did not even need 100 crates; however, based upon the past working relationship between the Petitioner and Portnoy he agreed to take 100 crates. Contrary to the agreement between Portnoy and the Petitioner, sometime on the evening of April 25, 1990, Petitioner delivered 236 crates of the squash. No one was at East Coast at its Jacksonville, Florida business location to receive the squash and inspect them. East Coast would not have accepted 236 crates that were delivered if it had known of that number of crates. No one was available to inspect the squash until the following morning. On April 26, 1990, Mr. Portnoy examined the squash and found that some of the product was inferior and was in a state of decay. As a consequence, Mr. Portnoy called the Petitioner on the telephone on that morning and told the Petitioner that the Petitioner had sent too many crates and some of the squash were bad. Nonetheless, Mr. Portnoy told Petitioner that he would work it out as best he could, meaning that he would sell as much of the product as possible. During contact with the Petitioner on the part of East Coast, Petitioner did not ask for a federal inspection. East Coast was able to sell all but 50 crates of the squash as delivered. It submitted payment in the amount of $465 as reflected on the face of the invoice which Petitioner sent to East Coast. That exhibit is Respondent's Exhibit No. 1, admitted into evidence. It reflects that 50 crates were dumped which had they been sold would have been worth $125.00. It is that $125.00 which is in dispute. Mr. Portnoy called the Petitioner after the squash had been sold. That call took place a couple of weeks later. In the course of this conversation the Petitioner said that he did not want to hear about problems anymore and that he wanted to be paid for the full amount of all crates delivered. Mr. Portnoy said that 50 crates had been lost and that the amount being remitted through a check would relate only to those crates that had been sold. This describes the amount remitted on June 15, 1990 set out in Respondent's Exhibit No. 1. Petitioner replied that he did not know if he would cash the check or not. Mr. Portnoy said that the check in the amount of $465.00 was for payment in full. This concluded their business until the time of the complaint filed by the Petitioner. On that facts as reported, there was no agreement to sell more than 100 crates. The additional crates that were sold by East Coast was a gratuitous gesture on the part of East Coast for which Petitioner was paid the full amount. The 50 crates that were not paid for contained inferior products for which Petitioner was not entitled to payment. This speaks to the 50 crates that were dumped which had they been sold would have been worth $125.00.
Recommendation Based upon the consideration of the facts found and the conclusions of law, it is recommended that a Final Order be entered which dismisses the complaint of the Petitioner and relieves the Respondents of any financial obligation to pay the contested $125.00 claim. RECOMMENDED this 8th day of April, 1991, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1991. COPIES FURNISHED: David Browning c/o David Browning Wholesale Produce 234 Church Street Starke, FL 32091 East Coast Fruit Company Jerry Portnoy, Vice President Post Office Box 2547 Jacksonville, FL 32203 James W. Sears, Esquire 511 North Ferncreek Avenue Orlando, FL 32803 Clinton H. Coulter, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, FL 32399-0800 Bob Crawford, Commissioner Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
Findings Of Fact Based on the factual stipulations and the deposition testimony of Mr. Alfred Poucher, I hereby make the following findings of fact: During the 1982-1983 citrus fruit season Congen delivered various varieties of citrus fruit to Blue Prize. Congen is a grower as well as a processor, and the fruit which was delivered to Blue Prize was owned by Congen. During the 1982-1983 citrus season Blue Prize operated a fresh fruit packing house. The citrus fruit referred to in the preceding paragraph was delivered pursuant to an oral contract negotiated between Jack Neitzke on behalf of Congen and Alfred Poucher on behalf of Blue Prize. Neitzke served as general manager of Congen. Poucher served as president of Blue Prize. The contract provided that Congen would deliver citrus fruit to Blue Prize on an account sales basis and that Blue Prize would pay for the fruit in the following manner: For Novas delivered to Blue Prize by Congen and Packed by Blue Prize, Blue Prize agreed to pay an amount at least equal to the net return to Congen from its sale of Novas to A. S. Herlong during the same citrus season. Congen's sales to Herlong netted Congen $8.026 per packed box. For White Grapefruit delivered to Blue Prize by Congen, Blue Prize agreed to pay Congen the average net per box return Congen received during the same citrus season for White Grapefruit Congen sold for processing, inclusive of any applicable picking, roadside, and hauling charges incurred by Congen, for all field boxes delivered. The average return per box was $1.5475. For Temples, Hamlins, and Valencias delivered to Blue Prize by Congen, Blue Prize agreed to pay Congen for all field boxes delivered an amount at least equal to the average amount returned per box on the Citrus Belle processing plant seasonal pool. The Citrus Belle pool returned $.96 per pound of solids for early and mid-season fruit which includes Temples and Hamlins. The average pounds of solids per box for Temples was 6.1052, and the average pounds of solids per box for Hamlins was 5.4. The pool returned $1.10 per pound of solids for Valencias, and the average pounds of solids per box for Valencias was 6.0137. Congen agreed to give Blue Prize credit for all eliminations (fruit which could not be packed by Blue Prize as fresh fruit) which were either returned to Congen or which were sent to a processing plant and for which the proceeds from the processing plant were ultimately paid to Congen. The elimination credit was to be calculated according to the same formulae used by Congen to charge Blue Prize for the fruit. The Valencia eliminations totaled 4,038.63 pounds of solids. The Temple and Hamlin eliminations totaled 1,119.52 pounds of solids. The total elimination credit due Blue Prize was $5,517.23. During the 1982-1983 citrus season Congen delivered 5,920 field boxes of Novas, 920 field boxes of Temples, 1,380 field boxes of white Grapefruit, 120 field boxes of Hamlins, and 1,748 field boxes of Valencias to Blue Prize. 5,589 boxes of Novas, 682 boxes of Temples, 101 boxes of Hanlins, and 1,330 boxes of Valencias were packed. According to these figures and the agreed upon prices to be paid, Blue Prize owed Congen $44,857.31 for Novas which were packed, $5,462.769 for Temples which were delivered, $2,135.55 for white Grapefruit which were delivered, $622.080 for Hamlins which were delivered, and $11,597.753 for Valencias which were delivered. These amounts total $64,675.45. Blue Prize paid Congen $30,000 for the fruit delivered by Congen during the 1982-1983 citrus fruit season, and after giving Blue Prize credit for this amount and also giving Blue Prize credit for the eliminations and harvesting and trucking charges, the amount Blue Prize owes Congen is $25,278,86.
Recommendation Based on all of the foregoing, it is recommended that the Department of Agriculture and Consumer Services enter a Final Order concluding the Blue Prize Packers, Inc., is indebted to Congen Properties, Inc., in the total amount of $25,278.86, and ordering that the full amount of the debt be paid within 30 days from the date of the Final Order. DONE and ORDERED this 15th day of March, 1985, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1985. COPIES FURNISHED: H. Richard Bates, Esquire Anderson & Rush 322 East Central Blvd. P.O. Box 2288 Orlando, Florida 32802 M. David Alexander, III, Esquire Post Office Box 2376 Bartow, Florida 33830 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 McDonald Insurance Agency, Inc. Post Office Box 940 Winter Haven, Florida 33880 Blue Prize Packers, Inc. 1200 Highway 27, North Winter Haven, Florida 33880 Congen Properties, Inc. Post Office Box 847 Labelle, Florida 33935 Honorable Doyle A. Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue The issue presented for decision is whether Proposed Rules 20-15.001, 20-15.002, and 20-15.003 constitute an invalid exercise of delegated legislative authority pursuant to Section 120.52(8)(a)-(e), Florida Statutes.
Findings Of Fact Based on the stipulated facts, and the entire record in this proceeding, the following findings of fact are made: The Florida Citrus Commission was established in 1935 to organize and promote the growing and sale of various citrus products, fresh and processed, in the State of Florida. The purpose of the Citrus Commission is today reflected in Section 601.02, Florida Statutes. The powers of the Florida Citrus Commission ("the Commission") and the Department, are set forth in full in Section 601.10, Florida Statutes. The powers of the Department include the power to tax and raise other revenue to achieve the purposes of the Department. In particular, Section 601.10(1) and (2), Florida Statutes, state: The Department of Citrus shall have and shall exercise such general and specific powers as are delegated to it by this chapter and other statutes of the state, which powers shall include, but shall not be confined to, the following: To adopt and, from time to time, alter, rescind, modify, or amend all proper and necessary rules, regulations, and orders for the exercise of its powers and the performance of its duties under this chapter and other statutes of the state, which rules and regulations shall have the force and effect of law when not inconsistent therewith. To act as the general supervisory authority over the administration and enforcement of this chapter and to exercise such other powers and perform such other duties as may be imposed upon it by other laws of the state. The Department is authorized to set standards by Section 601.11, Florida Statutes, as follows: The Department of Citrus shall have full and plenary power to, and may, establish state grades and minimum maturity and quality standards not inconsistent with existing laws for citrus fruits and food products thereof containing 20 percent or more citrus or citrus juice, whether canned or concentrated, or otherwise processed, including standards for frozen concentrate for manufacturing purposes, and for containers therefor, and shall prescribe rules or regulations governing the marking, branding, labeling, tagging, or stamping of citrus fruit, or products thereof whether canned or concentrated, or otherwise processed, and upon containers therefor for the purpose of showing the name and address of the person marketing such citrus fruit or products thereof whether canned or concentrated or otherwise processed; the grade, quality, variety, type, or size of citrus fruit, the grade, quality, variety, type, and amount of the products thereof whether canned or concentrated or otherwise processed, and the quality, type, size, dimensions, and shape of containers therefor, and to regulate or prohibit the use of containers which have been previously used for the sale, transportation, or shipment of citrus fruit or the products thereof whether canned or concentrated or otherwise processed, or any other commodity; provided, however, that the use of secondhand containers for sale and delivery of citrus fruit for retail consumption within the state shall not be prohibited; provided, however, that no standard, regulation, rule, or order under this section which is repugnant to any requirement made mandatory under federal law or regulations shall apply to citrus fruit, or the products thereof, whether canned or concentrated or otherwise processed, or to containers therefor, which are being shipped from this state in interstate commerce. All citrus fruit and the products thereof whether canned or concentrated or otherwise processed sold, or offered for sale, or offered for shipment within or without the state shall be graded and marked as required by this section and the regulations, rules, and orders adopted and made under authority of this section, which regulations, rules, and orders shall, when not inconsistent with state or federal law, have the force and effect of law. The Department is authorized to conduct citrus research by Section 601.13, Florida Statutes. To help pay for these duties of the Department, the Legislature first enacted the "box tax" in 1949. The box tax is now codified as Section 601.15(3), Florida Statutes. Section 601.15(3)(a), Florida Statutes, provides in relevant part: There is hereby levied and imposed upon each standard-packed box of citrus fruit grown and placed into the primary channel of trade in this state an excise tax at annual rates for each citrus season as determined from the tables in this paragraph and based upon the previous season's actual statewide production as reported in the United States Department of Agriculture Citrus Crop Production Forecast as of June 1. Section 601.15(3)(a), Florida Statutes, goes on to set forth specific rates for fresh grapefruit, processed grapefruit, fresh oranges, processed oranges, and fresh or processed tangerines and citrus hybrids. Section 601.15(1), Florida Statutes, sets forth the Department's authority to administer the box tax, as follows: The administration of this section shall be vested in the Department of Citrus, which shall prescribe suitable and reasonable rules and regulations for the enforcement hereof, and the Department of Citrus shall administer the taxes levied and imposed hereby. All funds collected under this section and the interest accrued on such funds are consideration for a social contract between the state and the citrus growers of the state whereby the state must hold such funds in trust and inviolate and use them only for the purposes prescribed in this chapter. The Department of Citrus shall have power to cause its duly authorized agent or representative to enter upon the premises of any handler of citrus fruits and to examine or cause to be examined any books, papers, records, or memoranda bearing on the amount of taxes payable and to secure other information directly or indirectly concerned in the enforcement hereof. Any person who is required to pay the taxes levied and imposed and who by any practice or evasion makes it difficult to enforce the provisions hereof by inspection, or any person who, after demand by the Department of Citrus or any agent or representative designated by it for that purpose, refuses to allow full inspection of the premises or any part thereof or any books, records, documents, or other instruments in any manner relating to the liability of the taxpayer for the tax imposed or hinders or in anywise delays or prevents such inspection, is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The box tax was challenged in 1936 under various provisions of the Florida Constitution as well as the Export Clause, Article 1, s. 9, cl. 5, of the United States Constitution. The Florida Supreme Court issued an opinion in 1937 upholding the validity of the box tax. C.V. Floyd Fruit Company v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248 (1937). In 1970, the Legislature enacted the "equalization tax," codified as Section 601.155, Florida Statutes. The statute mirrored Section 601.15, Florida Statutes, but added certain processors who were mixing foreign citrus products with Florida products. The purpose of the equalization tax was to have all Florida processors of citrus products help pay for the costs of the Department, rather than have the burden fall entirely on the Florida growers subject to the box tax. Section 601.155, Florida Statutes, provides, in relevant part: The first person who exercises in this state the privilege of processing, reprocessing, blending, or mixing processed orange products or processed grapefruit products or the privilege of packaging or repackaging processed orange products or processed grapefruit products into retail or institutional size containers or, except as provided in subsection (9) or except if a tax is levied and collected on the exercise of one of the foregoing privileges, the first person having title to or possession of any processed orange product or any processed grapefruit product who exercises the privilege in this state of storing such product or removing any portion of such product from the original container in which it arrived in this state for purposes other than official inspection or direct consumption by the consumer and not for resale shall be assessed and shall pay an excise tax upon the exercise of such privilege at the rate described in subsection (2). Upon the exercise of any privilege described in subsection (1), the excise tax levied by this section shall be at the same rate per box of oranges or grapefruit utilized in the initial production of the processed citrus products so handled as that imposed, at the time of exercise of the taxable privilege, by s. 601.15 per box of oranges. In order to administer the tax, the Legislature provided the following relevant provisions in Section 601.155, Florida Statutes: Every person liable for the excise tax imposed by this section shall keep a complete and accurate record of the receipt, storage, handling, exercise of any taxable privilege under this section, and shipment of all products subject to the tax imposed by this section. Such record shall be preserved for a period of 1 year and shall be offered for inspection upon oral or written request by the Department of Citrus or its duly authorized agent. Every person liable for the excise tax imposed by this section shall, at such times and in such manner as the Department of Citrus may by rule require, file with the Department of Citrus a return, certified as true and correct, on forms to be prescribed and furnished by the Department of Citrus, stating, in addition to other information reasonably required by the Department of Citrus, the number of units of processed orange or grapefruit products subject to this section upon which any taxable privilege under this section was exercised during the period of time covered by the return. Full payment of excise taxes due for the period reported shall accompany each return. All taxes levied and imposed by this section shall be due and payable within 61 days after the first of the taxable privileges is exercised in this state. Periodic payment of the excise taxes imposed by this section by the person first exercising the taxable privileges and liable for such payment shall be permitted only in accordance with Department of Citrus rules, and the payment thereof shall be guaranteed by the posting of an appropriate certificate of deposit, approved surety bond, or cash deposit in an amount and manner as prescribed by the Department of Citrus. * * * (11) This section shall be liberally construed to effectuate the purposes set forth and as additional and supplemental powers vested in the Department of Citrus under the police power of this state. In March 2000, certain citrus businesses challenged Section 601.155(5), Florida Statutes, as being unconstitutional. At the time of the suit, Section 601.155(5), Florida Statutes, read as follows: All products subject to the taxable privileges under this section, which products are produced in whole or in part from citrus fruit grown within the United States, are exempt from the tax imposed by this section to the extent that the products are derived from oranges or grapefruit grown within the United States. In the case of products made in part from citrus fruit grown within the United States, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. The citrus businesses claimed the exemption in Section 601.155(5) rendered the tax unconstitutionally discriminatory, in that processors who imported juice from foreign countries to be blended with Florida juice were subject to the equalization tax, whereas processors who imported juice from places such as California, Arizona and Texas enjoyed an exemption from the tax. The case, Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated) ("Tampa Juice"), was brought in the Tenth Judicial Circuit Court, in and for Polk County. Judge Dennis P. Maloney of that court continues to preside over that case. In a partial final declaratory judgment effective March 15, 2002, Judge Maloney found Section 601.155, Florida Statutes, unconstitutional because it violated the Commerce Clause of the United States Constitution due to its discriminatory effect in favor of non-Florida United States juice. In an order dated April 15, 2002, Judge Maloney severed the exemption in Section 601.155(5), Florida Statutes, from the remainder of the statute. The court's decision necessitated the formulation of a remedy for the injured plaintiffs. While the parties were briefing the issue before the court, the Florida Legislature met and passed Chapter 2002-26, Laws of Florida, which amended Section 601.155(5), Florida Statutes, to read as follows: Products made in whole or in part from citrus fruit on which an equivalent tax is levied pursuant to s. 601.15 are exempt from the tax imposed by this section. In the case of products made in part from citrus fruit exempt from the tax imposed by this section, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. Chapter 2002-26, Laws of Florida, was given an effective date of July 1, 2002. By order dated August 8, 2002, Judge Maloney set forth his decision as to the remedy for the plaintiffs injured by the discriminatory effect of Section 601.155(5), Florida Statutes. Judge Maloney expressly relied on the rationale set forth in Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 574 So. 2d 114 (Fla. 1991)("McKesson II"). In its initial McKesson decision, Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 524 So. 2d 1000 (Fla. 1988), the Florida Supreme Court affirmed a summary judgment ruling that Florida's alcoholic beverage tax scheme, which gave tax preferences and exemptions to certain alcoholic beverages made from Florida crops, unconstitutionally discriminated against interstate commerce. The Florida Supreme Court also affirmed that portion of the summary judgment giving the ruling prospective effect, thus denying the plaintiff a refund of taxes paid pursuant to the unconstitutional scheme. The decision was appealed to the United States Supreme Court. In McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), the United States Supreme Court reversed the Florida Supreme Court's decision as to the prospective effect of its decision. The United States Supreme Court held that: The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. 496 U.S. at 31 (footnotes omitted). The United States Supreme Court set forth the following options by which the state could meet its obligation to provide "meaningful backward-looking relief": [T]he State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. . . . Alternatively, to the extent consistent with other constitutional restrictions, the State may assess and collect back taxes from petitioner's competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. . . . Finally, a combination of a partial refund to petitioner and a partial retroactive assessment of tax increases on favored competitors, so long as the resultant tax actually assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce, would render Petitioner's resultant deprivation lawful and therefore satisfy the Due Process Clause's requirement of a fully adequate postdeprivation procedure. 496 U.S. at 40-41 (citations and footnotes omitted). The United States Supreme Court expressly provided that the state has the option of choosing the form of relief it will grant. In keeping with the United States Supreme Court opinion, the Florida Supreme Court granted the Division of Alcoholic Beverages and Tobacco (the "Division") leave to advise the Court as to the form of relief the state wished to provide. The Division proposed to retroactively assess and collect taxes from those of McKesson's competitors who had benefited from the discriminatory tax scheme. McKesson contended that a refund of the taxes it had paid was the only clear and certain remedy, because retroactive taxation of its competitors would violate their due process rights. McKesson II, 574 So. 2d at 116. The Florida Supreme Court remanded the case to the trial court for further proceedings on McKesson's refund claim, with the following instructions: While McKesson may not necessarily be entitled to a refund, it is entitled to a "clear and certain remedy," as outlined in the Supreme Court's opinion. Because nonparties, such as amici, will be directly affected by the retroactive tax scheme proposed by the state, all affected by the proposed emergency rule must be given notice and an opportunity to intervene in this action. Therefore, on remand, the trial court not only must determine whether the state's proposal meets "the minimum federal requirements" outlined in the Supreme Court's opinion, it also must determine whether the proposal comports with federal and state protections afforded those against whom the proposed tax will be assessed. We emphasize that the state has the option of choosing the manner in which it will reformulate the alcoholic beverage tax during the contested period so that the resultant tax actually assessed during that period reflects a scheme which does not discriminate against interstate commerce. Therefore, if the trial court should rule that the state's proposal to retroactively assess and collect taxes from McKesson's competitors does not meet constitutional muster and such ruling is upheld on appeal, the state may offer an alternative remedy for the trial court's review. However, any such proposal likewise must satisfy the standards set forth by the Supreme Court as well as be consistent with other constitutional restrictions. 574 So. 2d at 116. In the Tampa Juice case, Judge Maloney assessed the options prescribed by the series of McKesson cases and concluded that the only fair remedy was to assess and collect back assessments from those who benefited from the unconstitutional equalization tax exemption. His August 8, 2002, order directed the Department to "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." On September 18, 2002, the Department promulgated the Emergency Rules that were at issue in DOAH Case No. 02-3648RE. The Emergency Rules were filed with the Department of State on September 24, 2002, and took effect on that date. Those emergency rules were held invalid in Peace River, and are not at issue in the instant case. In the November 15, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 46, pp. 4996-4998), the Department published the Proposed Rules that were at issue in DOAH Case No. 02-4607RP. In the March 7, 2003, issue of the Florida Administrative Weekly (vol. 29, no. 10, p. 1036), the Department published amendments to the Proposed Rule. The Proposed Rules, as amended, read as follows: EQUALIZATION TAX ON NON-FLORIDA UNITED STATES JUICE 20-15.001 Intent. The Court in Tampa Juice Service, et al v. Florida Department of Citrus in Consolidated Case Number GCG-003718 (Circuit Court in and for Polk County, Florida) severed the exemption contained in Section 601.155(5), Florida Statutes, that provided an exemption for persons who exercised one of the enumerated Equalization Tax privileges on non-Florida, United States juice. The Court had previously determined that the stricken provisions operated in a manner that violated the Commerce Clause of the United States Constitution. On August 8, 2002, the Court ordered that the Florida Department of Citrus "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." It is the Florida Department of Citrus' intent by promulgating the following remedial rule to implement a non- discriminatory tax scheme, which does not impose a significant tax burden that is so harsh and oppressive as to transgress constitutional limitations. These rules shall be applicable to those previously favored persons who received favorable tax treatment under the statutory sections cited above. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, , 601.155 FS. History-- New . 20-15.002 Definitions. "Previously favored persons" shall be defined as any person who exercised an enumerated Equalization Tax privilege as defined by Section 601.155, Florida Statutes, but who was exempt from payment of the Equalization Tax due to the exemption for non-Florida, United States juice set forth in the statutory provision, which was ultimately determined to be unconstitutional and severed from Section 601.155(5), Florida Statutes. The "tax period" during which the severed provisions of Section 601.155(5), Florida Statutes, were in effect shall be defined as commencing on October 6, 1997, and ending on March 14, 2002. "Tax liability" shall be defined as the total amount of taxes due to the Florida Department of Citrus during the "tax period," at the following rates per box for each respective fiscal year: Fiscal Year Processed Rate Orange Grapefruit 1997-1998 .175 .30 1998-1999 .17 .30 1999-2000 .18 .325 2000-2001 .175 .30 2001-2002 .165 .18 Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, , 601.155 FS. History-- New . 20-15.003 Collection. The Florida Department of Citrus shall calculate the tax liability for each person or entity that exercised an enumerated Equalization Tax privilege outlined in section 601.155, Florida Statutes, upon non-Florida, United States juice based upon inspection records maintained by Florida Department of Agriculture and Consumer Services and the United States Department of Agriculture. Subsequent to adoption of this rule, the Florida Department of Citrus will provide to the previously favored persons by certified mail a Notice of Tax Liability which shall contain a demand for payment consistent with the above-referenced itemized statement. The Department will deem late payment of Equalization Taxes owed by previously favored persons to constitute good cause, and shall waive the 5 percent penalty authorized by Section 601.155(10), F.S., as compliance with either of the following is established by Department [sic]: Lump sum payment of the tax liability remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection 20-15.002(3), F.A.C., within 61 days of receiving Notice of Tax Liability; or Equal installment payments remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20- 100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection subsection [sic] 20-15.002(3), F.A.C., over a 60-month period, the first payment being due within 61 days of receiving Notice of Tax Liability pursuant to subsection 20- 15.003(2), F.A.C.; or The Good Cause provisions of 601.155(10), F.S., shall not apply to persons who do not comply with paragraph 20- 15.003(2)(a), F.A.C., or paragraph 20- 15.003(2)(b), F.A.C. Failure to pay the taxes or penalties due under 601.155, F.S. and Chapter 20-15, F.A.C., shall constitute grounds for revocation or suspension of a previously favored person's citrus fruit dealer's license pursuant to 601.56(4), F.S., 601.64(6), F.S., 601.64(7), F.S., and/or 601.67(1), F.S. The Florida Department of Citrus will not oppose the timely intervention of persons who previously enjoyed the subject exemption that wish to present a claim to the Court in the Tampa Juice Service, Inc., et al v. Florida Department of Citrus. However, the Florida Department of Citrus does not waive any argument regarding the validity of the calculation of the tax liability or that imposition of this tax is constitutional. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New . The Final Order in Peace River held that the Proposed Rules were not an invalid exercise of delegated legislative authority, for reasons discussed in the Conclusions of Law below. Judge Maloney has yet to rule on the backward-looking remedy proposed by the Department. On March 26, 2003, Judge Maloney entered an order extending until May 1, 2003, the time for interested parties to file motions to intervene with regard to the Department's proposed backward-looking relief. The order noted that the parties have stipulated to the suspension of the back tax as to plaintiffs and objecting non-parties until further order of the court. On February 19, 2003, Judge Maloney entered an "Order Granting Plaintiffs' Motion for Partial Summary Judgment-- Import-Export." The sole issue before Judge Maloney was "whether Section 601.155, Florida Statutes, (the 'Equalization Tax'), as it existed in 1997, violates Article I, Section 10, clause 2 of the Constitution of the United States (the 'Import- Export Clause')." (Emphasis in original) After setting forth the standard for analysis of whether a taxing scheme violates the Import-Export Clause under Michelin Tire Corp. v. Wages, 423 U.S. 276, 96 S. Ct. 535, 46 L.Ed.2d 495 (1976), Judge Maloney ruled as follows: It is precisely [the exemption for United States products found in 601.155(5), Florida Statutes] that causes the 1997 Equalization Tax to contravene the Import-Export Clause. Specifically, the court finds that because the statute exempts "citrus fruit grown within the United States," but does not exempt citrus fruit grown in foreign countries, the exemption causes the tax to "fall on imports as such simply because of their place of origin." Michelin, 423 U.S. at 286. Additionally, because the tax falls on foreign-grown citrus as such simply because of its origin but does not fall on domestic-grown citrus, the Equalization Tax, with the exemption, creates a "special tariff or particular preference for certain domestic goods." Id. (i.e. California, Arizona, and Texas citrus products). * * * In conclusion, because the court finds the exemption contained within the 1997 Equalization Tax violates both the first and third elements of the Michelin test,1 the court finds the 1997 Equalization Tax violates Article I, Section 10, clause 2 of the Constitution of the United States (the "Import-Export Clause"). On March 31, 2003, Judge Maloney entered an "Order Granting Plaintiffs' Motion for Partial Summary Judgment." In this order, Judge Maloney found that the box tax itself, Section 601.15, Florida Statutes, violates the First Amendment to the United States Constitution. Petitioners and Intervenor in the instant case are licensed citrus fruit dealers regulated by Chapter 601, Florida Statutes. As such, they are subject to the rules of the Department. Petitioners and Intervenor buy, sell, and manufacture citrus juices. They shipped products made with non- Florida U.S. juice during the tax period without paying equalization taxes. Petitioners and Intervenor have been notified by the Department that they are liable to pay back taxes pursuant to the Proposed Rules, as well as the invalid Emergency Rules.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Citrus Hill Manufacturing Company (Citrus Hill) is a wholly owned subsidiary of Proctor and Gamble. Citrus Hill is in the business of producing, manufacturing, packaging and distributing citrus products throughout the United States. It's main product has been "Select" orange juice which is 100 percent orange juice. Its principal manufacturing facility is located in Frostproof, Florida. While Citrus Hill has four other manufacturing sites outside the State of Florida, its Florida plant is the only facility for manufacturing frozen products. While it can produce chilled products at its plants located outside Florida, Citrus Hill's Florida plant is necessary to supply the demand for its chilled products on a national basis. In an effort to expand its market, Citrus Hill developed three products which it produces and packs at its plant in Frostproof, Florida. These products are and have been labeled as follows: "Lite Citrus Hill Orange Juice Beverage - 60 percent Orange Juice," "Lite Citrus Hill Grapefruit Juice Beverage - 45 percent Grapefruit Juice," and "Plus Calcium Citrus Hill, Calcium Fortified Grapefruit Juice Beverage - 60 percent Grapefruit Juice." The "lite" beverages are reduced calorie diluted juice beverages with the addition of Nutrasweet. The third product is a diluted grapefruit juice beverage fortified with calcium. By a letter dated March 19, 1987, the Department of Citrus ordered Citrus Hill to change its diluted citrus products labels and informed Citrus Hill that the Department would enforce Rule 20-66.001(4), Florida Administrative Code. That rule provides "Labels for diluted citrus products shall not include the word "juice" in the name of the product." As noted above, Citrus Hill markets and sells its product line throughout the United States. It desires to utilize the names of its diluted juice products as indicated in paragraph two above for three reasons. First, Citrus Hill believes that its labeling is in compliance with federal law. Second, it believes that a product name which includes the word "juice" more fully informs the consumer of the nature of the product because it is more exact, descriptive and less ambiguous than any name not using the word "juice", such as "drink", "ade", or "beverage". Third, Citrus Hill fears that if it were unable to disclose through its product name that the product is primarily a juice product, it would be placed at a competitive disadvantage in the national marketplace where non-Florida producers of similar products would not be bound by the challenged Rule's ban on the use of the word "juice" in the name of diluted juice products. While Citrus Hill could move its packaging facilities outside the state and utilize two product labels (one for Florida shipment and one for the non-Florida market), this alternative would be extremely expensive and would constitute a "distribution nightmare." Many distributors and large retail grocery stores work in multi-state regions and may not be willing to segregate and keep track of petitioner's different product labels for shipment in Florida and in non-Florida states. No other state in the United States prohibits the word "juice" in the labeling of diluted citrus juice products. In the late 1960's and early 1970's, the subject of proper labeling of diluted fruit juice beverages was under discussion by both the Florida Department of Citrus and the Federal Food and Drug Administration (FDA) under the Food, Drug and Cosmetic Act. The FDA ultimately rejected the proposal of prohibiting the word "juice" from the name of any product that was not 100 percent pure juice, and also rejected the approach of defining different products through "standards of identity." This latter method of labeling products would have defined a product as "ades" only if containing more than 10 percent, but less than 20 percent, juice, and various other category names based upon the percentage of fruit juice contained in the product. The prohibition against the word "juice" and the "standards of identity" proposals for the labeling of diluted juice products were rejected by the FDA in favor of a common or usual name approach, with a percent declaration of any characterizing ingredient. The pertinent federal regulations addressing the labeling of food products are contained in 21 C.F.R. Chapter 1. The more general regulation appears in 21 C.F.R. 102.5(a) and (b), and states, in pertinent part, as follows: Section 102.5 General Principles. The common or usual name of a food . . . shall accurately identify or describe, in as simple and direct terms as possible, the basic nature of the food or its characterizing properties or ingredients. The name shall be uniform among all identical or similar products and may not be confusingly similar to the name of any other food that is not reasonably encompassed within the same name. Each class or subclass of food shall be given its own common or usual name that states, in clear terms, what it is in a way that distinguishes it from different foods. The common or usual name of a food shall include the percentage(s) of any characterizing ingredient(s) or component(s) when the . . . component(s) . . . has a material bearing on . . . consumer acceptance or when the labeling . . . may otherwise create an erroneous impression that such . . . component(s) is present in an amount greater than is actually the case. The following requirements shall apply unless modified by a specific regulation in Subpart B of this part. The percentage of a characterizing ingredient or component shall be declared on the basis of its quantity in the finished product. . . . The percentage of a characterizing ingredient or component shall be declared-by the words "containing (or contains) --- percent (or percent) ---" . . . with the first blank filled in with the percentage expressed as a whole number not greater than the actual percentage of the ingredient or component named and the second blank filled in with the common or usual name of the ingredient or component. The FDA has also promulgated regulations dealing with the labeling of specific nonstandardized foods, including diluted orange juice beverages and diluted fruit or vegetable juice beverages other than diluted orange juice beverages. With respect to diluted orange juice beverages, 21 C.F.R. Section provides as follows: Diluted Orange Juice Beverages. The common or usual name of a non- carbonated beverage containing less than 100 percent and more than 0 percent orange juice shall be as follows: A descriptive name for the product meeting the requirements of Section 102.5(a) (e.g., diluted orange juice beverage or another descriptive phrase), and A statement of the percent of each juice contained in the beverage in the manner set forth in Section 102.5(b)(2). The percent of the juice shall be declared in 5 percent increments, expressed as a multiple of five not greater than the actual percentage of orange juice in the product, except that the percent of orange juice in products containing more than 0 percent but less than 5-percent orange juice shall be declared in the statement as "less than 5" percent. Diluted fruit or vegetable juice beverages other than diluted orange juice beverages are the subject of 21 C.F.R. Section 102.33, 1/ which provides as follows: Diluted fruit or vegetable juice beverages other than diluted orange juice beverages. The common or usual name of a non- carbonated beverage containing less than 100 percent and more than zero percent fruit or vegetable juice(s), other than only orange juice, shall be as follows: A descriptive name meeting the requirements of Section 102.5(a)(e.g., "diluted grape juice beverage", "grape juice drink", or another descriptive phrase) and A statement of the percent of each juice contained in the beverage in the manner set forth in Section 102.5(b)(2). The percent of the juice shall be declared in five percent increments, expressed as a multiple of five not greater than the actual percentage of juice in the beverage except that the percentage of any juice in beverages containing more than zero percent but less than 5 percent of that juice shall be declared in the statement as "less than 5" percent. The Department of Citrus has conducted two consumer surveys for the purpose of determining whether the word "juice" in a product name of a diluted citrus juice product is confusing or misleading. The Drossler study was conducted in 1972, and concluded that consumers are confused by the word "juice." However, that conclusion appears to be founded on the premise that the only proper use of the word "juice" is in the technical sense of "100 percent pure juice." In other words, what was measured in the survey was the consumer's failure to use the word "juice" in a limited sense to mean "100 percent pure juice." The surveyed consumer was asked to look at several products, and then state "what kind of product is this?" The products viewed consisted of several different dairy products and a citrus beverage. If the consumer used the word "juice" to describe the kind of product pointed to, he was treated as being confused if the product was less than 100 percent juice. No follow-up questions were asked concerning the consumer's understanding of the content of the product. The Chelsea study was conducted at the request of the Department of Citrus in 1987. It, too, concludes that there would be less consumer confusion if the word "juice" were eliminated from products comprised of less than 100 percent pure citrus juice. However, there was evidence that this study attempted to address too many issues, including consumer preferences, and that "question contamination" could well have occurred. This refers to the intentional or unintentional biasing of the interviewees by the ordering or phraseology of the questions asked. Both the Burke study and the Chelsea study indicate that consumers are not confused by a beverage label using the word juice in the product name when it is accompanied by the declaration of the percentage of juice contained in the product. The Burke study was conducted on behalf of the petitioner in 1987. After conducting interviews of 1200 people from all age groups in six different cities throughout the United States, it concluded that there was no significant difference in consumer confusion between the use of the word "juice" and "beverage" in the product name when the percentage of citrus juice content is indicated on the label. In other words, whether the label identified the product as a "juice beverage" or a "beverage", the respondents were able to determine the amount of actual juice contained in the product.
The Issue The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, breached an agreement with Petitioner relating to the purchase of citrus fruit during the 1993-1994 citrus shipping season; and further whether the breach of such agreement constitutes a violation of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petititioner pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, BBC & F Corporation, Inc., is a Florida corporation located in Zolfo Springs, Florida, which is in the business of buying and selling citrus fruit. Charles J. "Chuck" Young is the vice-president and a director of Petitioner. Respondent, Jim Robinette, is a citrus fruit dealer with an office in Lakeland, Florida, who was licensed during the 1993-1994 citrus shipping season by the Florida Department of Agriculture and Consumer Affairs. Co-Respondent, Aetna Casualty and Surety Company, is a surety company qualified to do business in Florida, which pursuant to Section 601.61, Florida statutes, executed Respondent's citrus fruit dealer's bond for the 1993-1994 citrus shipping season in the amount of $5,000.00. On or about March 1, 1994, Petitioner, by and through its director and representative, Charles J. "Chuck" Young, entered into an oral contract with Respondent for the sale and delivery of certain citrus fruit from Petitioner's grove in Dundee, Florida. At that time, Respondent had made a prior agreement with the Redi-Made Foods Corporation to supply citrus fruit to Redi-Made's facility in Tampa, Florida. Specifically, the contract between Petitioner and Respondent provided for the purchase of valencia oranges to be used as salad fruit. The fruit was to be delivered by Petitioner to Redi-Made's facility in Tampa, Florida. The initial terms of the contract provided for a purchase price of $10 per box for fruit delivered to Redi-Made. Of the $10 contract price, $7 was for the grower (Petitioner), $1.90 was to cover the harvesting costs, $.25 was a brokerage fee paid to James Porter of Redi-Made, and $.85 was for Respondent. The first few loads were delivered to Redi-Made and paid for at the contract price of $10 per box. Subsequent to the delivery of the initial few loads, the terms of the contract were amended to incorporate a deduction of $.20 per box of fruit delivered for the purpose of expediting the processing of the payments from Redi-Made. The Petitioner and Respondent agreed to share equally this reduction from the original price. Accordingly, under the amended terms of the contract, Petitioner would receive $6.90 per box delivered, the harvesting costs remained at $1.90 per box delivered, the payment to James Porter remained at $.25 per box delivered, and the Respondent would receive $.75 per box delivered. In accordance with the terms of the amended contract, Petitioner during March of 1994, delivered six loads of valencia oranges totalling 2210 boxes to Redi-Made for which payment has not been made by Respondent. Under the terms of the amended contract, Petitioner is owed $15,249 for the fruit delivered. In addition, Petitioner paid for the harvesting costs of the fruit, for which under the terms of the amended contract, Petitioner is owed $4,199. Respondent was paid by Redi-Made for three of the six loads. These loads are evidenced by trip tickets 70144, 70146 and 82960, and show that 930 boxes of fruit were delivered by Petitioner to Redi-Made; however, Redi-Made paid Respondent for only 890 boxes of this fruit, and did not pay Respondent for the remainder of the 2210 boxes of fruit delivered by Petitioner. There is an ongoing dispute between Respondent and Redi-Made regarding Redi-Made's failure to make payment for the remainder of the fruit; however, resolution of the Respondent's dispute with Redi-Made is independent of, and does not affect the obligations of the Respondent with respect to Respondent's contract with Petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to Petitioner from Respondent is $19,488.00, that Respondent shall have thirty (30) days in which to satisfy such indebtedness, and that upon failure of the Respondent to make satisfaction of this claim, the proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th day of May, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of May, 1995. APPENDIX Petitioner's Findings 1.-3. Adopted and Incorporated COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399-0800 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Allan L. Casey, Esquire Post Office Box 7146 Winter Haven, Florida 33883-7146 Jim Robinette 2025 Sylvester Road, Suite J4 Lakeland, Florida 33803
The Issue The issue in this case is whether Respondent owes Petitioner money on a citrus contract and, if so, how much.
Findings Of Fact Petitioner owns citrus groves in Wauchula and one is near Zolfo Springs. Due to its proximity to a homesite, the latter grove is called the homeplace grove. Respondent operates a citrus packinghouse and a small retail outlet for citrus. On October 7, 1994, Petitioner and Respondent entered into a contract under which Petitioner agreed to sell to Respondent naval oranges at the price of $6 per box on the tree. Petitioner insisted on the contract and supplied the form. The contract states that the fruit "will be picked by Dec. 20, 1994." This is handwritten in the blank space for quantity of fruit. Elsewhere the contract provides a space for a completion date for picking, but this space is left blank. The contract adds: "However, notwithstanding the foregoing provision, Buyer, at its sole discretion[,] shall determine the dates and times for accomplishing the picking, loading, or hauling of said fruit." The contract notes that there are an estimated 3000 boxes at the Wauchula grove and an estimated 500 boxes at the homeplace grove. The contract states: Buyer shall only be required hereunder to accept delivery of the estimated quantity of fruit set forth herein; however, Buyer may, at its sole option, elect to accept delivery of all fruit grown or being grown at the grove locations described above at the prices specified herein. After signing the contract, the price of navel oranges dropped considerably. Also, Respondent had been relying on a third party to purchase much of the fruit from him, but the third party did not do so. Through December 9, 1994, Respondent took delivery on 1662 boxes of navel oranges. Petitioner picked the first 820 boxes, for which Respondent paid an additional, agreed-upon $2 per box. Respondent picked the remainder of the 1662 boxes, for which Respondent paid $11,612, pursuant to the contract. Petitioner became increasingly concerned with Respondent's slow progress. They agreed to reduce the price to $5 per box for 60 boxes picked on December 13, 1994, and then $4 per box for 360 boxes picked after the December 20 picking date stated in the contract. Pursuant to their new agreement, Respondent paid $300 for the 60 boxes picked on December 13, 1994, and $1440 for the remaining 360 boxes picked between December 27, 1994, and January 11, 1995. Believing that Respondent was obligated to take the entire output from the two groves, which proved to be a total of 4232 boxes, Petitioner's principal concluded that Respondent could not meet its contractual obligations. Without notice to Respondent, Petitioner agreed with Mt. Dora Growers Cooperative to pick the remaining fruit. The growers coop picked 920 boxes on January 11, 1995, 900 boxes on January 12, 1995, and 330 boxes on January 16, 1995. For a total of 2150 boxes, the growers coop paid Petitioner $498.84, or $0.23 per box. Petitioner had better luck with the homeplace oranges. By contract dated January 24, 1995, again without notice to Respondent, Petitioner sold 500 boxes of navel oranges to Keith Watson, Inc. for $2 per box. Respondent took delivery of 1220 boxes in October, 122 boxes in November, 320 boxes through December 9, 380 boxes at reduced prices for the rest of December, and 40 boxes in the first 11 days of January. This declining trend suggests problems. However, this fact alone does not prove an anticipatory breach by Respondent. Nothing in the record establishes Respondent's intent to repudiate the contract. There was still time for Respondent or, more likely, a third party to pick the remaining boxes for which Respondent was liable (1418). The growers coop removed 1820 boxes in two days. Also, the price and urgency of the growers coop sale are undermined by the sale two weeks later of 500 boxes at $2 per box.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order dismissing the complaint. ENTERED on July 7, 1995, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on July 7, 1995. COPIES FURNISHED: W. Ralph Durrance, Jr. P.O. Box 5647 Lakeland, FL 33807-5647 Gary Whidden Whidden Citrus & Packinghouse, Inc. 396 Country Road 630A Frostproof, FL 33843 Florida Farm Bureau General Insurance Company P.O. Box 147030 Gainesville, FL 32614-7030 Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, FL 32399-0800
