Investigations
How an Investigation Begins
Enforcement actions begin with an investigation of a produce company by PACA. An investigation starts when PACA receives a written notice of a possible violation of the PACA. Anyone can file such a notice except a PACA Branch employee. The notice need not be in any particular format. A letter explaining the facts is all that is required.
The law requires the identity of the person filing the written notice remain confidential and cannot be divulged, even under a Freedom of Information Act request.
If PACA finds evidence of other violations in the course of an investigation, the investigation can be expanded to include the additional violations.
Documents not designated as written notices of a violation can also trigger an investigation. These include trust notices or official certificates of the state or federal government, like inspection or weight certificates.
Notifying the Produce Company of the Investigation
PACA must notify the produce company of the investigation and the violations being investigated. The law requires such notification be made “promptly.” What this means depends on the circumstances of each case. But it does not mean advance warning of an investigation. Like any regulatory agency, PACA depends on an element of surprise in its investigations to reduce opportunities for removing relevant evidence. Thus, many investigations begin with unannounced appearances by PACA officials who briefly describe the nature of the violation and request specific documents.
Within six (6) months after the investigation has begun, PACA officials must notify the company of the status of the investigation and any further action PACA intends to take. If the investigation continues, PACA must provide additional status reports of the investigation at the request of the produce company. PACA must also advise the company of the termination of the investigation.
What To Do If Notified Of An Investigation
PACA acts as the police force of the produce industry. The consequences of violating PACA can be termination of the business and severe restrictions on individuals working in the produce industry. See Sanctions and Responsibly Connected Cases. So, just as one seeks the aid of an attorney in a state or federal police investigation of a crime, the same applies to a PACA investigation.
What Records Can PACA Obtain
PACA can only obtain documents relevant to the complaint. Usually PACA asks for all documents of the company. If a company allows PACA officials to review all documents, the investigator will do so, even if the investigator may not be entitled to the records if the company had objected. Any evidence found by PACA can be used against the company.
Talking With Investigators
Company officials do not have to talk with PACA investigators. Investigators will try to talk with employees to gain as much information as possible. However, a company should designate one person to have all communications with the investigator, and that person should not talk to the investigator until a lawyer has been consulted.
Failing To Cooperate With An Investigation
A produce company which does not provide PACA with requested documents is subject to a suspension of its license until it cooperates. PACA will issue a notice to the company giving it time to comply, after which PACA suspends the company’s license if the records are not produced. PACA does not provide a hearing before issuing such a suspension order. Therefore, if the matter cannot be resolved with PACA, the company must go to court to challenge the request and the suspension.