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 two 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:
- Maya Fruit Corporation, Inc., operating out of Miami Lakes, Fla., for failing to pay a $9,735 award in favor of a Texas seller. As of the issuance date of the reparation order, Richard Vega was listed as the officer, director and/or major stockholder of the business.
- G & K Citrus LLC, operating out of Miami, Fla., for failing to pay a $57,779 award in favor of an Illinois seller. As of the issuance date of the reparation order, Karen Thompson and Gary Thompson were listed as a members or managers of the business.
The USDA has also filed an administrative complaint against Jones Potato Chip Co. The company, operating from Ohio, allegedly failed to make payment promptly to four produce sellers in the amount of $438,673 from November 2018 through March 2019.
Jones Potato Chip Co. 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.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in USDA’s issuance of a reparation order 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.
Click here for an overview of companies who previously violated PACA.