USDA Suspends Florida Company’s PACA License Over Breach of Contract
According to reporting from Produce Blue Book, the United States Department of Agriculture (USDA) has imposed sanctions on five companies, including one Florida-based firm, for the alleged failure to meet their contractual obligations and failure to then pay awards under the Perishable Agricultural Commodities Act (PACA).
The PACA is an important federal law that governs the majority of businesses that operate within the American produce industry. In this article, our Miami commercial litigation attorneys provide an overview of the sanctions issued in this case. In addition, we explain how the Perishable Agricultural Commodities Act (PACA) affects sellers and buyers of produce in Florida.
Putnam County, Florida Company Failed to Pay PACA Award
The USDA reports that it has suspended the PACA license of Black Hog Farms Inc. Located in East Palatka, Florida, Black Hog Farms is a company that markets itself as offering a wide array of “farm-to-door” farm products, produce, and related services. Produce Blue Book reports that previously, an unnamed Florida seller was awarded $14,772 in a contract dispute with this company. The USDA states that the award has not been paid by Black Hog Farms. As such, the Florida company’s PACA license has been suspended in accordance with federal regulations.
Many Companies Involved in Produce Market Need a PACA License
Under federal law, many buyers and sellers that operate in the produce industry are required to obtain a Perishable Agricultural Commodities Act (PACA) license. Without an active PACA license, companies are largely restricted from operating in the produce industry. PACA licenses are issued by the USDA, and most companies in this industry must have a PACA license that is in good standing. Though, there are some basic exceptions. For example, farmers who only sell their own produce do not need a license. Likewise, certain retailers that only deal with relatively small amounts of produce may be exempt from the general requirement to obtain a license.
The purpose of the PACA licensing system is to promote fair trading practices within America’s produce industry. PACA establishes an administrative forum and dispute resolution system that helps to resolve contract claims within the industry. Companies that fail to pay PACA awards in a timely manner will have their license suspended. This means that they will be prevented from legally operating within the American produce industry until the issue is resolved. In addition, corporate officers and directors at companies that violate produce industry regulations can also be prevented from re-joining the industry at other firms.
Get Help From Our Miami Commercial Litigation Attorneys Today
At Pike & Lustig, LLP, our Florida commercial litigation attorneys have extensive experience handling the full range of breach of contract disputes. Our business lawyers can assist your company in any type of PACA dispute or any other related commercial lawsuit. If you are currently locked in a breach of contract case, we are available to help. With offices in Miami and West Palm Beach, we handle breach of contract litigation claims throughout Southeastern Florida.