USDA looks into PACA violations for two California companies

 As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair trading practices within the U.S. produce industry, the U.S. Department of Agriculture (USDA) has imposed sanctions on Huxtable’s Kitchen Inc. (Huxtable’s), Vernon, California, for failing to meet its contractual obligations to the sellers of produce it purchased. These sanctions include barring the business and the principal operators of the business from engaging in PACA-licensed business or other activities without approval from USDA. By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.

Huxtable’s failed to pay $551,829 to six sellers for produce that was purchased, received and accepted in interstate and foreign commerce from October 2015 to May 2016.  This is in violation of the PACA.  Huxtable’s cannot operate in the produce industry until July 15, 2021, and then only after they apply for and are issued a new PACA license by USDA.

The company’s principals, Perry Morgan, Jay Pack, and Huxtable’s Kitchen Holding Corp., may not be employed by or affiliated with any PACA licensee until July 15, 2020, and then only with the posting of a USDA approved surety bond.  Another principal of the business at the time of the order was Lewis Macleod. He has challenged his responsibly connected status. 

Furthermore, the U.S. Department of Agriculture (USDA) has filed an administrative complaint under the PACA against Versa Marketing Inc. The company, operating from California, allegedly failed to make payment promptly to three produce sellers in the amount of $792,939 from February 2018 through August 2018.

Versa Marketing, Inc. will have an opportunity to request a hearing.  Should USDA find that the company committed repeated and flagrant violations, it would be barred from the produce industry as a licensee for three years, or two years with the posting of a USDA-approved surety bond.  Furthermore, its principals could not be employed by or affiliated with any PACA licensee for two years, or one year with the posting of a USDA-approved surety bond.

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 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million.  These are just two examples of how USDA continues to support the fruit and vegetable industry.

Click here for an overview of companies who previously violated PACA.

For more information:
John Koller
USDA
Tel: +1 202 720 2890
Email: PACAdispute@usda.gov   


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