United States District Court, N.D. Georgia, Atlanta Division
OPINION AND ORDER
WILLIAM S. DIJFFEY, JR. UNITED STATES DISTRICT JUDGE
matter is before the Court on Third-Party Defendant U.S.
Foods, Inc.'s (“US Foods”) Motion to Strike
 Crisp Holdings, LLC d/b/a Fresh Roots'
(“Crisp”) Amended Third Party Complaint 
(“Amended Complaint”). Also before the Court is
Crisp's Motion for Leave to File its Amended Third Party
Complaint  (“Motion to Amend”).
an action under the Perishable Agricultural Commodities Act
(“PACA”), 7 U.S.C. §§ 499a, et
seq. When perishable agricultural commodities
(“Produce”) are sold, PACA imposes a
nonsegregated, “floating” trust, in favor of
Produce sellers, on the Produce sold, products derived from
the Produce, “and any receivables or proceeds from the
sale of such” Produce or product derived from it. 7
U.S.C. § 499e(c)(2). PACA requires the buyer to hold the
trust assets “in trust for the benefit of all unpaid
suppliers or sellers of such [Produce], ” “until
full payment of the sums owing in connection with such
transactions has been received by such unpaid suppliers . . .
.” Id. A trust beneficiary may bring an action
in federal court “to enforce payment from the
trust.” 7 U.S.C. § 499e(c)(5).
bought Produce on credit from wholesale Produce suppliers,
including Classic Harvest, LLC (“Classic
Harvest”). Crisp then resold the Produce to its
customers, including U.S. Foods, on credit, generating
accounts receivable (“Receivables”). Under PACA,
Crisp was required to hold, in trust (the “PACA
Trust”), the Produce, products derived from the
Produce, and the Receivables or proceeds from the sale of the
Produce (the “Trust Assets”), for the benefit of
Crisp's unpaid Produce suppliers, including Classic
August 25, 2015, Classic Harvest filed suit against Crisp to
recover payment for Produce that Classic Harvest sold to
Crisp. Classic Harvest asserts, among others, claims under
PACA against Crisp, its principals and parent company, for
breach of their duties under PACA and to enforce the PACA
September 4, 2015, the Court entered the “Consent
Injunction and Agreed Order Establishing PACA Claims
Procedure”  (the “September 4th
Order”). The September 4th Order provides for the Court
to exercise exclusive in rem jurisdiction over
Crisp's PACA Trust Assets and directs counsel for Crisp
to preserve and collect Crisp's PACA Trust Assets,
including any unpaid Receivables. The September 4th Order
further establishes a framework for Crisp's other unpaid
PACA creditors to submit their claims against Crisp in this
action and share, on a pro rata basis, in the
recovery of Crisp's PACA Trust Assets. The Court
evaluated the claims filed by the PACA Creditors in this case
and approved claims in the total amount of $1, 860, 344.02.
(See May 31, 2017, Order ; Updated PACA Trust
August 16, 2016, Crisp filed its Third Party Complaint 
(“Complaint”) against U.S. Foods asserting claims
for Enforcement of the PACA Trust (Count I), Failure to Pay
Promptly (Count II), and Breach of Contract (Count III),
based on U.S. Foods' alleged failure to pay in full
certain invoices.Crisp also asserted claims for Declaratory
Judgment (Count IV), Breach of the PACA Trust (Count V),
Breach of Duty as PACA Trustee (Count VI), and Conversion and
Unlawful Retention of PACA Trust Assets (Count VII), based on
U.S. Foods' deduction, from amounts it owed to Crisp, of
$1, 077, 516.95 in product promotional allowances.
October 14, 2016, U.S. Foods moved to dismiss Counts IV
through VII of Crisp's Complaint for failure to state a
claim for relief. (Mot. Dismiss ).
April 28, 2017, the Court dismissed Count VI of Crisp's
Complaint for failure to state a claim for relief. ().
The Court denied U.S. Foods' Motion to Dismiss Counts IV,
V and VII. (Id.).
9, 2017, Crisp and U.S. Foods filed their Joint Preliminary
Report and Discovery Plan (“JPR”), in which they
agreed, among other things, that “[a]mendments to the
pleadings submitted LATER THAN THIRTY DAYS after the Joint
Preliminary Report and Discovery Plan is filed, or should
have been filed, will not be accepted for filing, unless
otherwise permitted by law.” (JPR  at 4). The
parties also indicated that they did not anticipate any
amendments to the pleadings. (Id.).
21, 2017, the Court entered an order approving the
parties' JPR. (June 21st Order ). The June 21st
Order states that the “time limits for adding parties,
amending the pleadings, filing motions, completing discovery,
and discussing settlement are as set out in the Federal Rules
of Civil Procedure and the Local Rules of this Court . . .
.” (Id at 1-2).
21, 2017, Crisp, without seeking U.S. Foods' consent or
leave of Court, filed its Amended Third Party Complaint 
(“Amended Complaint”). In it, Crisp asserts new
claims for “Enforcement of the PACA Trust Control of
the PACA Trust” (Count VII), Co-Fiduciary Liability
under PACA (Count VIII) and Interference with Receipt of
Trust Assets (Count IX). Crisp alleges:
• Beginning no later than January 2015, U.S. Foods was
made aware that Crisp was not paying its produce suppliers.
PACA Trust Beneficiaries of Crisp informed U.S. Foods that
Crisp's failure to pay would result in cancellation of
shipments to U.S. Foods.
• U.S. Foods, in response to these notifications from
Crisp's produce suppliers, began meeting regularly with
the Officers, Directors and/or Principals of Crisp to discuss
payment to Crisp's produce suppliers.
• During these meetings, U.S. Foods would direct Crisp
which produce suppliers to pay and when to pay them.
• U.S. Foods caused Crisp to commit a breach of the PACA
trust by transferring PACA Trust Assets from Crisp to
specific PACA trust beneficiaries, for the benefit of U.S.
Foods, in violation of its duties under PACA.
• U.S. Foods directed the priority of which the produce
suppliers of Crisp would be paid and therefore controlled the
PACA Assets of Crisp.
• Following the direction of U.S. Foods, Crisp failed to
make prompt payment in full to some of its produce suppliers
from the PACA Trust Assets of Crisp.
• Due to the direction of U.S. Foods, Crisp failed to
preserve sufficient amounts of the PACA Trust Assets freely
available to fully satisfy all qualified PACA trust claims,
such as the PACA Trust ...