Two Produce Businesses in California Sanctioned for Failure to Pay Reparation Awards
The U.S. Department of Agriculture (USDA) has imposed sanctions on three produce businesses for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA), two of which are in California.
The following businesses and individuals are currently restricted from operating in the produce industry:
Fratelli Farms LLC, operating out of Hollister, Calif., for failing to pay a $5,754 award in favor of a California seller. As of the issuance date of the reparation order, Guillermo Regalado and Johnny Regalado were listed as members of the business.
2 Mex Produce, operating out of Santa Maria, Calif., for failing to pay a $23,190 award in favor of a California seller. As of the issuance date of the reparation order, Arcelia Partida and Julio Partida were listed as partners of the business.
High Point Marketing of NJ Inc., operating out of Ridgewood, N.J., for failing to pay a $30,961 award in favor of a Florida seller. As of the issuance date of the reparation order, Michael E. Pflueger was listed as the officer, director, and major stockholder of the business.
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 sanction 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 Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce businesses operating subject to PACA, which includes buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. All oversight of actions related to PACA are conducted by AMS, an agency within USDA.
In the past three years, USDA resolved approximately 5,000 claims filed under PACA involving almost $96 million. This is just one more way USDA continues to support the fruit and vegetable industry.
