As part of its efforts to enforce the Perishable Agricultural Commodities Act and ensure fair trading practices within the U.S. produce industry, the Department of Agriculture has imposed sanctions on three produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the PACA. These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses 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.
The following businesses and individuals are currently restricted from operating in the produce industry:
- Orion Pacific International Inc., operating out of Walnut Creek, Calif., for failing to pay an $85,112 award in favor of a California seller. As of the issuance date of the reparation order, Rick Rider was listed as the officer, director and major stockholder of the business.
- El Chinelo Produce Inc., operating out of Minneapolis, Minn., for failing to pay a $12,232 award in favor of a Texas seller. As of the issuance date of the reparation order, Virginia Sanchez Gomez and Stephany Duran Sanchez were listed as the officers, directors and/or major stockholders of the business.
- C-Max Produce LLC, operating out of McAllen, Texas, for failing to pay a $6,518 award in favor of a Texas seller. As of the issuance date of the reparation order, Jose A. Malpica was listed as a member of the business.
The USDA has also filed an administrative complaint against Bella Fresh Houston LLC. The company, operating from Texas, allegedly failed to make payment promptly to 10 produce sellers in the amount of $3,154,711 from December 2017 through May 2019.
Bella Fresh Houston LLC 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.