CH Robinson Produce Consignment Sales PACA Violations Class Action

The Lusks had what they believed to be a consignment arrangement for their farm’s produce with CH Robinson companies (CH Robinson Worldwide, Inc., CH Robinson Company, Inc., and CH Robinson Company). This class action arose when they found, they claim, that the companies were making additional money from that same produce with other arrangements the Lusks knew nothing about. The complaint alleges that the Robinson companies violated the Perishable Agricultural Commodities Act (PACA) with their other arrangements.

Plaintiffs Terry, Jason, and Justin Lusk have an exclusive sales agreement with the Robinson companies concerning the growing, packing, and sale of fresh produce from the Lusks’ Texas farm. The complaint claims that the Robinson companies’ “compensation under the contracts was commissions from the consignment sales of [the Lusks’] produce.”

Under the consignment agreement, the growers (the Lusks) were to take “all quality risks associated with” the its farm produce until a customer accepted it. The Robinson companies were to collect the money from the customer, deduct certain specific costs, take their percentage, and remit the rest of the money to the Lusks.

However, the complaint alleges the Robinson companies reduced the amounts they were supposed to pass on to the Lusks. It claims they deducted costs “paid or payable by [the Robinson companies] under the contracts”—but that these deducted amounts included “undisclosed profits” that were going into the Robinson companies’ pockets.

Because the produce must be delivered to the customers, the complaint speculates that the Robinson companies engaged in a practice called “freight topping,” or adding an extra amount on to the transportation charges, and may have received other price adjustments, such as prompt payment discounts. It claims the companies keep two different sets of books, on two different kinds of software, so that the Lusks have been unable to see full information about the transportation and sale of their produce.

In addition, the complaint claims that the companies arranged to get rebates from certain farm suppliers whenever the Lusks bought from them. The Robinson companies did not disclose these arrangements to the Lusks, the complaint says, and they kept the rebates for themselves.

Finally, the complaint alleges that the companies misrepresented unauthorized charges, so that they seemed to be in authorized categories. These included promotional rebates, expenses and allowances for customers, and even charitable contributions made in the Robinson companies’ names.

The class for this action is each person identified in a written contract with CH Robinson (or CH Robinson, Inc.) as a Grower or Grower/Supplier, where the contract appoints CH Robinson as the Grower’s “exclusive sales agent.”

The complaint anticipates that the class claims will be revised at discovery or with further investigation.

Article Type: Lawsuit
Topic: Agriculture

Most Recent Case Event

CH Robinson Produce Consignment Sales PACA Violations Complaint

April 3, 2020

The Lusks had what they believed to be a consignment arrangement for their farm’s produce with CH Robinson companies (CH Robinson Worldwide, Inc., CH Robinson Company, Inc., and CH Robinson Company). This class action arose when they found, they claim, that the companies were making additional money from that same produce with other arrangements the Lusks knew nothing about. The complaint alleges that the Robinson companies violated the Perishable Agricultural Commodities Act (PACA) with their other arrangements.

CH Robinson Produce Consignment Sales PACA Violations Complaint

Case Event History

CH Robinson Produce Consignment Sales PACA Violations Complaint

April 3, 2020

The Lusks had what they believed to be a consignment arrangement for their farm’s produce with CH Robinson companies (CH Robinson Worldwide, Inc., CH Robinson Company, Inc., and CH Robinson Company). This class action arose when they found, they claim, that the companies were making additional money from that same produce with other arrangements the Lusks knew nothing about. The complaint alleges that the Robinson companies violated the Perishable Agricultural Commodities Act (PACA) with their other arrangements.

CH Robinson Produce Consignment Sales PACA Violations Complaint
Tags: Agriculture, Breach of Contract, Failure to Provide Accurate or Itemized Statements