PACA Reparation Cases

PACA decides disputes involving sales of produce against companies licensed under PACA. These disputes are called reparation cases and are similar to court cases. Normally an attorney should be consulted or hired to handle the case. A reparation complaint must be filed within nine (9) months of when payment was due.

Each case is handled in two (2) stages: an informal proceeding; and a formal proceeding. The purpose of the informal stage is to try to resolve the case by agreement. This generally takes about six (6) months and requires a $100 filing fee.

If the case is not resolved informally, a formal proceeding begins. The formal proceeding can be done based just on documents, including affidavits of witnesses; or, if the amount involved exceeds $30,000, either party can request an oral hearing. If there is an oral hearing, the prevailing party can obtain an award of lawyer fees and costs in connection with the oral hearing. A written decision is issued by PACA, based on PACA caselaw and the Uniform Commercial Code.

Companies that are nonresidents of the United States must post a bond to proceed with a formal complaint.

The average time to obtain a final decision in a PACA reparation case is about two (2) years. The total administrative fees are $600.00.

Either party can appeal the decision to a federal court, where the case can be reheard. But the appealing party must post an appeal bond in double the amount of the award.

Failure to pay the award results in a suspension of the losing party’s PACA license, meaning the company cannot operate, and the suspension is published in the trade press.

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