USDA PACA complaints and reparations update

As part of its efforts to enforce the Perishable Agricultural Commodities Act and ensure fair trading practices within the U.S. produce industry, the U.S. Department of Agriculture has filed an administrative complaint against three companies:

  • Hunter Bros. Inc., operating from Pennsylvania, allegedly failed to make payment promptly to 26 produce sellers in the amount of $1,260,161 from May 2017 through September 2019.
  • PK Produce Inc., operating from Ohio, allegedly failed to make payment promptly to 14 produce sellers in the amount of $827,222 from November 2017 through October 2018.
  • Evergreen Fresh Farms Inc., operating from California, allegedly failed to make payment promptly to three produce sellers in the amount of $350,629 from October 2018 through January 2019.

The companies 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 USDA also announced that New York Produce Inc. satisfied a reparation order in the amount of $2,394 issued under the Perishable Agricultural Commodities Act (PACA) involving an unpaid produce transaction.

The Secaucus, N.J., company has met its obligations and is now free to operate in the produce industry. Elio Valdivia was listed as a member of the business and may now be employed by or affiliated with any PACA licensee.

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 on a 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.

Once a reparation order is fully satisfied and it is confirmed that there are not any outstanding unpaid awards, USDA lifts the employment restrictions of the previously named, responsibly connected individuals.

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
www.ams.usda.gov


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