USDA Restricts PACA Violators in California from Operating in the Produce Industry

USDA/AMS Press Release:

Release No.: 202-14

Contact: Nadine Wilkins, (202) 720-8998, nadine.wilkins@ams.usda.gov

WASHINGTON, Oct. 1, 2014 – The U.S. Department of Agriculture (USDA) has imposed sanctions on two produce businesses for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).

The following businesses and individuals are currently restricted from operating in the produce industry:

–Golden State Food Packaging Inc., operating out of Ventura, Calif., for failing to pay a $41,003 award in favor of a California seller. As of the issuance date of the reparation order, Olvin J. Servellon was listed as an officer, director, and major stockholder of the business. Another principal of the business at the time of the order was Humberto Nateras. He has challenged his responsibly connected status.

–Terra Produce LLC, operating out of Los Angeles, Calif., for failing to pay an $18,901 award in favor of a Washington seller. As of the issuance date of the reparation order, Daniel Garcia was listed as the sole member 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 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.

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 4,600 claims filed under PACA involving more than $87 million. This is just one more way USDA continues to support the fruit and vegetable industry.

For more information, contact John Koller, Chief, Dispute Resolution Branch at (202) 720-2890, by fax at (202) 690-2815, or by email at PACAdispute@ams.usda.gov regarding this matter.