AMS No. 234-12
Nadine Wilkins (202)720-8998
WASHINGTON, Nov. 6, 2012 – The U.S. Department of Agriculture (USDA) announced the stay of Perishable Agricultural Commodities Act (PACA) employment restrictions previously imposed on Celso D. Paganini of Paganini Foods LLC.
The sanctions previously imposed on Paganini were the result of his company’s failure to satisfy an order for payment of a reparation award issued in favor of a California seller. On June 13, 2012, Paganini filed suit in U.S. District Court for the Southern District of New York seeking a preliminary injunction and temporary restraining order against the USDA. As a result of this action, the employment restrictions against Celso D. Paganini are stayed pending the outcome of the civil proceeding and Paganini may be employed by or affiliated with any PACA licensee.
PACA provides for 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. The USDA is required to impose sanctions 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. USDA also requires any unlicensed company that fully satisfies all unpaid reparation awards to obtain a license if it continues to operate in the industry.
The Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce businesses operating subject to the PACA, which includes buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. All oversight of actions related to the PACA are conducted by the AMS, an agency within the USDA.
In the past three years, USDA resolved approximately 5,000 claims filed under the PACA involving almost $96 million. This is just one more way the 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 email@example.com
regarding this matter.
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