Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D.N.H.: Buying goods with no intent to pay was an unfair and deceptive practice, (Feb 13, 2014)

By Jody Coultas, J.D.

A & H Farms, Inc. violated the Massachusetts Consumer Protection Act (CPA) by placing orders for produce from B 7 R Produce Packaging Company, Inc. and others that it knew it could not pay for, the federal district court in Concord, New Hampshire has held (B & R Produce Packing Company, Inc. v. A & H Farms, Inc., February 11, 2014, DiClerico, J.).

A & H Farms allegedly bought produce from B & R knowing it would not be able to pay and intending not to make timely payment for the produce. B & R also alleged that A & H Farms dissipated Perishable Agricultural Commodities Act trust assets so that there were insufficient trust assets to pay B & R.

Unfair or deceptive practices under the CPA are those that fall “within the penumbra of some common-law, statutory, or other established concept of unfairness; [are] immoral, unethical, oppressive, or unscrupulous; and cause[] substantial injury to other businessmen.”

A & H Farms violated the CPA, according to the court. Although a failure to pay invoices ordinarily does not constitute a CPA violation of Chapter 93A, a person who buys goods he does not intend to pay for does violate the CPA. In this case, A & H Farms violated the CPA by ordering produce for which it knew or should have known that it would not be able to pay.

B & R was not entitled to multiple damages, according to the court. To be entitled to multiple damages, B & R needed to show that A & H Farms willfully or knowingly violated the statute. The court declined to find that A & H Farms’ actions were a willful or knowing violation of the CPA. Therefore, B & R was only entitled to the amounts owed by A & H Farms. B & R was also entitled to attorney’s fees and costs.

The case is No. 13-cv-367-JD.

Attorneys: Marc W. McDonald (Kazan Shaughnessy Kasten & McDonald) for B & R Produce Packing Co., Inc., Grant Stanton Produce Co., Inc., Gregg Dziama, Inc., J. Bonafede Co., Inc. and State Garden, Inc.

Companies: B & R Produce Packing Company, Inc.; A & H Farms, Inc.

Cases: StateUnfairTradePractices NewHampshireNews