PACA decides disputes involving sales of produce against companies licensed under PACA. They are called reparation cases, and are similar to court cases, and normally a lawyer should be consulted or hired to handle the case. A reparation complaint must be filed within nine (9) months of when payment was due.
Every case is handled in two (2) stages: an informal proceeding and a formal proceeding. The purpose of the informal proceeding is to resolve the case by agreement, and generally takes about six (6) months.
If the case is not resolved informally, the 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 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.
Most companies that are nonresidents of the United States must post a bond to proceed with a formal complaint. See PACA website for more detailed information about nonresident complaint bonds.
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 to the federal court, where the case starts all over again. But the appealing party must post an appeal bond in double the amount of the award.
Failure to pay the award results in suspension of the losing party’s PACA license, and this suspension is published in the trade press.