USDA restricts PACA violator in South Dakota from operating in the produce industry

The U.S. Department of Agriculture (USDA) has imposed sanctions on a produce business for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).

The Fruit Club Inc., operating out of Sioux Falls, S.D., continues to be restricted from operating in the produce industry for failing to pay a $108,384 award in favor of a Florida seller. As of the issuance date of the reparation order, Matthew Kleinsasser was listed as the officer, director and major stockholder of the business.

Subsequent to the issuance of the reparation order listed above, a new reparation order was issued against The Fruit Club Inc., to pay $67,500 to a Michigan seller. The Fruit Club Inc. has not made payment to the Michigan seller within the time designated in the new reparation order. As a result, the sanction period levied against the company and its principal has been extended to reflect this new violation.

PACA provides an administrative forum to handle disputes involving produce transactions; this may result in a reparation order being issued that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued.

Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders may not be employed by or affiliated with any PACA licensee without USDA approval.

The PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA including buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.

In the past three years, USDA resolved approximately 3,350 PACA claims involving more than $63 million. PACA staff also assisted more than 8,000 callers with issues valued at approximately $156 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.

For more information:
John Koller
Tel: (202) 720-2890

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