United States Code

TITLE 7 - AGRICULTURE

CHAPTER 20A - PERISHABLE AGRICULTURAL COMMODITIES

§ 499a. Short title and definitions.

§ 499b. Unfair conduct.

§ 499b-1. Products produced in distinct geographic areas.

§ 499c. Licenses.

§ 499d. Issuance of license.

§ 499e. Liability to persons injured.

§ 499f. Complaints, written notifications, and investigations.

§ 499g. Reparation order.

§ 499h. Grounds for suspension or revocation of license.

§ 499i. Accounts, records, and memoranda; duty of licensees to keep; contents; suspension of

license for violation of duty.

§ 499j. Orders; effective date; continuance in force; suspension, modification and setting aside;

penalty.

§ 499k. Injunctions; application of injunction laws governing orders of Interstate Commerce

Commission.

§ 499l. Violations; report to Attorney General; proceedings; costs.

§ 499m. Complaints; procedure, penalties, etc.

§ 499n. Inspection of perishable agricultural commodities.

§ 499o. Rules, regulations, and orders; appointment, removal, and compensation of officers and

employees; expenditures; authorization of appropriations; abrogation of inconsistent statutes.

§ 499p. Liability of licensees for acts and omissions of agents.

§ 499q. Separability.

§ 499r. Repealed.

§ 499s. Depositing appropriations in fund.

§ 499t. Omitted.

§ 499a. Short title and definitions

(a) Short title

This chapter may be cited as the "Perishable Agricultural Commodities Act, 1930".

(b) Definitions

For purposes of this chapter:

(1) The term "person" includes individuals, partnerships, corporations, and

associations.

(2) The term "Secretary" means the Secretary of Agriculture.

(3) The term "interstate or foreign commerce" means commerce between any State or

Territory, or the District of Columbia and any place outside thereof; or between points

within the same State or Territory, or the District of Columbia but through any place

outside thereof. or within the District of Columbia.

(4) The term "perishable agricultural commodity" -

(A) Means any of the following, whether or not frozen or packed in ice: Fresh

fruits and fresh vegetables of every kind and character; and

(B) Includes cherries in brine as defined by the Secretary in accordance with

trade usages.

(5) The term "commission merchant" means any person engaged in the business of

receiving in interstate or foreign commerce any perishable agricultural commodity for

sale, on commission, or for or on behalf of another.

(6) The term "dealer" means any person engaged in the business of buying or selling in

wholesale or jobbing quantities, as defined by the Secretary, any perishable agricultural

commodity in interstate or foreign commerce, except that (A) no producer shall be

considered as a "dealer" in respect to sales of any such commodity of his own raising;

(B) no person buying any such commodity solely for sale at retail shall be considered

as a "dealer" until the invoice cost of his purchases of perishable agricultural

commodities in any calendar year are in excess of $230,000; and (C) no person buying

any commodity other than potatoes for canning and/or processing within the State

where grown shall be considered a "dealer" whether or not the canned or processed

product is to be shipped in interstate or foreign commerce, unless such product is

frozen or packed in ice, or consists of cherries in brine, within the meaning of

paragraph (4) of this section. Any person not considered as a "dealer" under clauses

(A), (B), and (C) may elect to secure a license under the provisions of section 499c of

this title, and in such case and while the license is in effect such person shall be

considered as a "dealer".

(7) The term "broker" means any person engaged in the business of negotiating sales

and purchases of any perishable agricultural commodity in interstate or foreign

commerce for or on behalf of the vendor or the purchaser, respectively, except that no

person shall be deemed to be a "broker" if such person is an independent agent

negotiating sales for and on behalf of the vendor and if the only sales of such

commodities negotiated by such person are sales of frozen fruits and vegetables having

an invoice value not in excess of $230,000 in any calendar year.

(8) A transaction in respect of any perishable agricultural commodity shall be

considered in interstate or foreign commerce if such commodity is part of that current

of commerce usual in the trade in that commodity whereby such commodity and/or the

products of such commodity are sent from one State with the expectation that they will

end their transit, after purchase, in another, including, in addition to cases within the

above general description, all cases where sale is either for shipment to another State,

or for processing within the State and the shipment outside the State of the products

resulting from such processing. Commodities normally in such current of commerce

shall not be considered out of such commerce through resort being had to any means

or device intended to remove transactions in respect thereto from the provisions of this

chapter.

(9) The term "responsibly connected" means affiliated or connected with a commission

merchant, dealer, or broker as (A) partner in a partnership, or (B) officer, director, or

holder of more than 10 per centum of the outstanding stock of a corporation or

association. A person shall not be deemed to be responsibly connected if the person

demonstrates by a preponderance of the evidence that the person was not actively

involved in the activities resulting in a violation of this chapter and that the person either

was only nominally a partner, officer, director, or shareholder of a violating licensee or

entity subject to license or was not an owner of a violating licensee or entity subject to

license which was the alter ego of its owners.

(10) The terms "employ" and "employment" mean any affiliation of any person with the

business operations of a licensee, with or without compensation, including ownership or

self-employment.

(11) The term "retailer" means a person that is a dealer engaged in the business of

selling any perishable agricultural commodity at retail.

(12) The term "grocery wholesaler" means a person that is a dealer primarily engaged

in the full-line wholesale distribution and resale of grocery and related nonfood items

(such as perishable agricultural commodities, dry groceries, general merchandise, meat,

poultry, and seafood, and health and beauty care items) to retailers. However, such

term does not include a person described in the preceding sentence if the person is

primarily engaged in the wholesale distribution and resale of perishable agricultural

commodities rather than other grocery and related nonfood items.

(13) The term "collateral fees and expenses" means any promotional allowances,

rebates, service or materials fees paid or provided, directly or indirectly, in connection

with the distribution or marketing of any perishable agricultural commodity.

§ 499b. Unfair conduct

It shall be unlawful in or in connection with any transaction in interstate or foreign commerce:

(1) For any commission merchant, dealer, or broker to engage in or use any unfair,

unreasonable, discriminatory, or deceptive practice in connection with the weighing, counting,

or in any way determining the quantity of any perishable agricultural commodity received,

bought, sold, shipped, or handled in interstate or foreign commerce.

(2) For any dealer to reject or fail to deliver in accordance with the terms of the contract

without reasonable cause any perishable agricultural commodity bought or sold or contracted

to be bought, sold, or consigned in interstate or foreign commerce by such dealer.

(3) For any commission merchant to discard, dump, or destroy without reasonable cause, any

perishable agricultural commodity received by such commission merchant in interstate or

foreign commerce.

(4) For any commission merchant, dealer, or broker to make, for a fraudulent purpose, any

false or misleading statement in connection with any transaction involving any perishable

agricultural commodity which is received in interstate or foreign commerce by such

commission merchant, or bought or sold, or contracted to be bought, sold, or consigned, in

such commerce by such dealer, or the purchase or sale of which in such commerce is

negotiated by such broker; or to fail or refuse truly and correctly to account and make full

payment promptly in respect of any transaction in any such commodity to the person with

whom such transaction is had; or to fail, without reasonable cause, to perform any

specification or duty, express or implied, arising out of any undertaking in connection with any

such transaction; or to fail to maintain the trust as required under section 499e(c) of this title.

However, this paragraph shall not be considered to make the good faith offer, solicitation,

payment, or receipt of collateral fees and expenses, in and of itself, unlawful under this

chapter.

(5) For any commission merchant, dealer, or broker to misrepresent by word, act, mark,

stencil, label, statement, or deed, the character, kind, grade, quality, quantity, size, pack,

weight, condition, degree of maturity, or State, country, or region of origin of any perishable

agricultural commodity received, shipped, sold, or offered to be sold in interstate or foreign

commerce. However, any commission merchant, dealer, or broker who has violated -

(A) any provision of this paragraph may, with the consent of the Secretary, admit the

violation or violations; or

(B) any provision of this paragraph relating to a misrepresentation by mark, stencil, or

label shall be permitted by the Secretary to admit the violation or violations if such

violation or violations are not repeated or flagrant; and pay, in the case of a violation

under either clause (A) or (B) of this paragraph, a monetary penalty not to exceed

$2,000 in lieu of a formal proceeding for the suspension or revocation of license, any

payment so made to be deposited into the Treasury of the United States as

miscellaneous receipts. A person other than the first licensee handling misbranded

perishable agricultural commodities shall not be held liable for a violation of this

paragraph by reason of the conduct of another if the person did not have knowledge of

the violation or lacked the ability to correct the violation.

(6) For any commission merchant, dealer, or broker, for a fraudulent purpose, to remove,

alter, or tamper with any card, stencil, stamp, tag, or other notice placed upon any container

or railroad car containing any perishable agricultural commodity, if such card, stencil, stamp,

tag, or other notice contains a certificate or statement under authority of any Federal or State

inspector or in compliance with any Federal or State law or regulation as to the grade or

quality of the commodity contained in such container or railroad car or the State or country in

which such commodity was produced.

(7) For any commission merchant, dealer or broker, without the consent of an inspector, to

make, cause, or permit to be made any change by way of substitution or otherwise in the

contents of a load or lot of any perishable agricultural commodity after it has been officially

inspected for grading and certification, but this shall not prohibit re-sorting and discarding

inferior produce.

§ 499b-1. Products produced in distinct geographic areas

(a) In general

In the case of a perishable agricultural commodity (as defined under the Perishable

Agricultural Commodity Act (7 U.S.C. 499a(4)) - (FOOTNOTE 1)

(FOOTNOTE 1) See References in Text note below.

(1) subject to a Federal marketing order under the Agricultural Marketing Agreement

Act of 1937 (7 U.S.C. 601 et seq.);

(2) traditionally identified as being produced in a distinct geographic area, State, or

region; and

(3) the unique identity, based on such distinct geographic area, of which has been

promoted with funds collected through producer contributions pursuant to such

marketing order, no person may use the unique name or geographical designation of

such commodity to promote the sale of a similar commodity produced outside such

area, State, or region.

(b) Penalties

A violation of this section shall be considered a violation of paragraphs (4) and (5) of section

2 of the Perishable Agricultural Commodities Act (7 U.S.C. 499b(4) and (5)).

A person bringing a complaint under this section shall reimburse the Secretary of Agriculture

for any and all costs associated with the enforcement of this section.

(d) Prohibition

The Secretary of Agriculture shall not increase any fees charged under the Perishable

Agricultural Commodities Act (7 U.S.C. 499a et seq.) to offset costs associated with the

operation of this section.

(e) Regulations

The Secretary shall promulgate regulations to carry out this section.

§ 499c. Licenses

(a) License required; penalties for violations

After December 10, 1930, no person shall at any time carry on the business of a commission

merchant dealer, or broker without a license valid and effective at such time. Any person who

violates any provision of this subsection shall be liable to a penalty of not more than $1,000

for each such offense and not more than $250 for each day it continues, which shall accrue to

the United States and may be recovered in a civil suit brought by the United States.

Any person violating this provision may, upon a showing satisfactory to the Secretary of

Agriculture, or his authorized representative, that such violation was not willful but was due to

inadvertence, be permitted by the Secretary, or such representative, to settle his liability in the

matter by the payment of the fees due for the period covered by such violation and an

additional sum, not in excess of $250, to be fixed by the Secretary of Agriculture or his

authorized representative. Such payment shall be deposited in the Treasury of the United

States in the same manner as regular license fees.

(b) Application and fees for licenses

(1) Application for license

Any person desiring any such license shall make application to the Secretary. The

Secretary may by regulation prescribe the information to be contained in such

application and to be furnished thereafter.

(2) License fees

Upon the filing of an application under paragraph (1), the applicant shall pay such

license fees, both individually and in the aggregate, as the Secretary determines

necessary to meet the reasonably anticipated expenses for administering this chapter

and the Act to prevent the destruction or dumping of farm produce, approved March

3, 1927 (7 U.S.C. 491-497). Thereafter, the licensee shall pay such license fees

annually or at such longer interval as the Secretary may prescribe. The Secretary shall

take due account of savings to the program when determining an appropriate interval

for renewal of licenses. The Secretary shall establish and alter license fees only by

rulemaking under section 553 of title 5, except that the Secretary may not alter the fees

required under paragraph (3) or (4) for retailers and grocery wholesalers that are

dealers. Effective on November 15, 1995, and until such time as the Secretary alters

such fees by rule, an individual license fee shall equal $550 per year, plus $200 for

each branch or additional business facility operated by the applicant in excess of nine

such facilities, as determined by the Secretary, subject to an annual aggregate limit of

$4,000 per licensee. Any increase in license fees prescribed by the Secretary under

this paragraph shall not take effect unless the Secretary determines that, without such

increase, the funds on hand as of the end of the fiscal year in which the increase takes

effect will be less than 25 percent of the projected budget to administer this chapter

and such Act for the next fiscal year. In no case may a license fee increase by the

Secretary take effect before the end of the three-year period beginning on November

15, 1995.

(3) One-time fee for retailers and grocery wholesalers that are dealers

During the three-year period beginning on November 15, 1995, a retailer or grocery

wholesaler making an initial application for a license under this section shall pay the

license fee required under subparagraph (A), (B), or (C) of paragraph (4) for license

renewals in the year in which the initial application is made. After the end of such

period, a retailer or grocery wholesaler making an initial application for a license under

this section shall pay an administrative fee equal to $100. In either case, a retailer or

grocery wholesaler paying a fee under this paragraph shall not be required to pay any

fee for renewal of the license for subsequent years.

(4) Gradual elimination of annual fees for retailers and grocery wholesalers that are

dealers

In the case of a retailer or grocery wholesaler that holds a license under this section as

of November 15, 1995, payments for the renewal of the license shall be made pursuant

to the following schedule:

(A) For anniversary dates occurring during the one-year period beginning on

November 15, 1995, the licensee shall pay a renewal fee in an amount equal to

100 percent of the applicable renewal fee (subject to the $4,000 aggregate limit

on such payments) in effect under this subsection on the day before November

15, 1995.

(B) For anniversary dates occurring during the one-year period beginning at the

end of the period in subparagraph (A), the licensee shall pay a renewal fee in an

amount equal to 75 percent of the amount paid by the licensee under

subparagraph

(A).

end of the period in subparagraph (B), the licensee shall pay a renewal fee in an

amount equal to 50 percent of the amount paid by the licensee under

subparagraph

(A).

(D) After the end of the three-year period beginning on November 15, 1995,

the licensee shall not be required to pay any fee if the licensee seeks renewal of

the license.

(5) Perishable Agricultural Commodities Act Fund

Such fee, when collected, shall be deposited in the Treasury of the United States as a

special fund, without fiscal year limitation, to be designated as the "Perishable

Agricultural Commodities Act Fund", which shall be available for all expenses

necessary to the administration of this chapter and the Act approved March 3, 1927,

referred to above. Any reserve funds in the Perishable Agricultural Commodities Act

Fund may be invested by the Secretary in insured or fully-collateralized interest-bearing

accounts or, at the discretion of the Secretary, by the Secretary of the Treasury in

United States Government debt instruments. Any interest earned on such reserve funds

shall be credited to the Perishable Agricultural Commodities Act Fund and shall be

available for the same purposes as the fees deposited in such fund. Financial statements

prescribed by the Director of the Office of Management and Budget for the last

completed fiscal year, and as estimated for the current and ensuing fiscal years, shall be

included in the budget as submitted to the Congress annually.

A licensee may conduct business in more than one trade name or change the name under

which business is conducted without requiring an additional or new license. The Secretary

may disapprove the use of a trade name if, in his opinion, the use of the trade name by the

licensee would be deceptive, misleading, or confusing to the trade, and the Secretary may,

after notice and opportunity for a hearing, suspend for a period not to exceed ninety days the

license of any licensee who continues to use a trade name which the Secretary has

disapproved for use by such licensee. The Secretary may refuse to issue a license to an

applicant if he finds that the trade name in which the applicant proposes to do business would

be deceptive, misleading, or confusing to the trade if used by such applicant.

§ 499d. Issuance of license

(a) Authority to do business; termination; renewal

Whenever an applicant has paid the prescribed fee the Secretary, except as provided

elsewhere in this chapter, shall issue to such applicant a license, which shall entitle the licensee

to do business as a commission merchant and/or dealer and/or broker unless and until it is

suspended or revoked by the Secretary in accordance with the provisions of this chapter, or

is automatically suspended under section 499g(d) of this title, but said license shall

automatically terminate on the anniversary date of the license at the end of the annual or

multiyear period covered by the license fee unless the licensee submits the required renewal

application and pays the applicable renewal fee (if such fee is required): Provided, That notice

of the necessity of renewing the license and of paying the renewal fee (if such fee is required)

shall be mailed at least thirty days before the anniversary date: Provided, further, That if the

renewal fee (if required) is not paid by the anniversary date the licensee may obtain a renewal

of that license at any time within thirty days by paying the fee provided in section 499c(b) of

this title, plus $50, which shall be deposited in the Perishable Agricultural Commodities Act

fund provided for by section 499c(b) of this title: And provided further, That the license of

any licensee shall terminate upon said licensee, or in case the licensee is a partnership, any

partner, being discharged as a bankrupt, unless the Secretary finds upon examination of the

circumstances of such bankruptcy, which he shall examine if requested to do so by said

licensee, that such circumstances do not warrant such termination.

(b) Refusal of license; grounds

The Secretary shall refuse to issue a license to an applicant if he finds that the applicant, or

any person responsibly connected with the applicant, is prohibited from employment with a

licensee under section 499h(b) of this title or is a person who, or is or was responsibly

connected with a person who -

(A) has had his license revoked under the provisions of section 499h of this title within

two years prior to the date of the application or whose license is currently under

suspension;

(B) within two years prior to the date of application has been found after notice and

opportunity for hearing to have committed any flagrant or repeated violation of section

499b of this title, but this provision shall not apply to any case in which the license of

the person found to have committed such violation was suspended and the suspension

period has expired or is not in effect;

Federal court of having violated the provisions of sections 491, 493 to 497 of this title,

relating to the prevention of destruction and dumping of farm produce; or

(D) has failed, except in the case of bankruptcy and subject to his right of appeal under

section 499g(c) of this title, to pay any reparation order issued against him within two

years prior to the date of the application.

termination of bond; increase or decrease in amount; payment of increase An applicant

ineligible for a license by reason of the provisions of subsection (b) of this section may, upon

the expiration of the two-year period applicable to him, be issued a license by the Secretary if

such applicant furnishes a surety bond in the form and amount satisfactory to the Secretary as

assurance that his business will be conducted in accordance with this chapter and that he will

pay all reparation orders which may be issued against him in connection with transactions

occurring within four years following the issuance of the license, subject to his right of appeal

under section 499g(c) of this title. In the event such applicant does not furnish such a surety

bond, the Secretary shall not issue a license to him until three years have elapsed after the

date of the applicable order of the Secretary or decision of the court on appeal. If the surety

bond so furnished is terminated for any reason without the approval of the Secretary the

license shall be automatically canceled as of the date of such termination and no new license

shall be issued to such person during the four-year period without a new surety bond covering

the remainder of such period. The Secretary, based on changes in the nature and volume of

business conducted by a bonded licensee, may require an increase or authorize a reduction in

the amount of the bond. A bonded licensee who is notified by the Secretary to provide a

bond in an increased amount shall do so within a reasonable time to be specified by the

Secretary, and upon failure of the licensee to provide such bond his license shall be

automatically suspended until such bond is provided. The Secretary may not issue a license to

an applicant under this subsection if the applicant or any person responsibly connected with

the applicant is prohibited from employment with a licensee under section 499h(b) of this title.

(d) Withholding license pending investigation

The Secretary may withhold the issuance of a license to an applicant, for a period not to

exceed thirty days pending an investigation, for the purpose of determining (a) whether the

applicant is unfit to engage in the business of a commission merchant, dealer, or broker

because the applicant, or in case the applicant is a partnership, any general partner, or in case

the applicant is a corporation, any officer or holder of more than 10 per centum of the stock,

prior to the date of the filing of the application engaged in any practice of the character

prohibited by this chapter or was convicted of a felony in any State or Federal court, or (b)

whether the application contains any materially false or misleading statement or involves any

misrepresentation, concealment, or withholding of facts respecting any violation of the chapter

by any officer, agent, or employee of the applicant. If after investigation the Secretary believes

that the applicant should be refused a license, the applicant shall be given an opportunity for

hearing within sixty days from the date of the application to show cause why the license

should not be refused. If after the hearing the Secretary finds that the applicant is unfit to

engage in the business of a commission merchant, dealer, or broker because the applicant, or

in case the applicant is a partnership, any general partner, or in case the applicant is a

corporation, any officer or holder of more than 10 per centum of the stock, prior to the date

of the filing of the application engaged in any practice of the character prohibited by this

chapter or was convicted of a felony in any State or Federal court, or because the application

contains a materially false or misleading statement made by the applicant or by its

representative on its behalf, or involves a misrepresentation, concealment, or withholding of

facts respecting any violation of the chapter by any officer, agent, or employee, the Secretary

may refuse to issue a license to the applicant.

(e) Refusal of license

The Secretary may refuse to issue a license to an applicant if he finds that the applicant, or in

case the applicant is a partnership, any general partner, or in case the applicant is a

corporation, any officer or holder of more than 10 per centum of the stock, has, within three

years prior to the date of the application, been adjudicated or discharged as a bankrupt, or

was a general partner of a partnership or officer or holder of more than 10 per centum of the

stock of a corporation adjudicated or discharged as a bankrupt, and if he finds that the

circumstances of such bankruptcy warrant such a refusal, unless the applicant furnishes a

bond of such nature and amount as may be determined by the Secretary or other assurance

satisfactory to the Secretary that the business of the applicant will be conducted in

accordance with this chapter.

§ 499e. Liability to persons injured

(a) Amount of damages

If any commission merchant, dealer, or broker violates any provision of section 499b of this

title he shall be liable to the person or persons injured thereby for the full amount of damages

(including any handling fee paid by the injured person or persons under section 499f(a)(2) of

this title) sustained in consequence of such violation.

(b) Remedies

Such liability may be enforced either (1) by complaint to the Secretary as hereinafter

provided, or (2) by suit in any court of competent jurisdiction; but this section shall not in any

way abridge or alter the remedies now existing at common law or by statute, and the

provisions of this chapter are in addition to such remedies.

agents; preservation of trust; jurisdiction of courts

(1) It is hereby found that a burden on commerce in perishable agricultural

commodities is caused by financing arrangements under which commission merchants,

dealers, or brokers, who have not made payment for perishable agricultural

commodities purchased, contracted to be purchased, or otherwise handled by them on

behalf of another person, encumber or give lenders a security interest in, such

commodities, or on inventories of food or other products derived from such

commodities, and any receivables or proceeds from the sale of such commodities or

products, and that such arrangements are contrary to the public interest. This

subsection is intended to remedy such burden on commerce in perishable agricultural

commodities and to protect the public interest.

(2) Perishable agricultural commodities received by a commission merchant, dealer, or

broker in all transactions, and all inventories of food or other products derived from

perishable agricultural commodities, and any receivables or proceeds from the sale of

such commodities or products, shall be held by such commission merchant, dealer, or

broker in trust for the benefit of all unpaid suppliers or sellers of such commodities or

agents involved in the transaction, until full payment of the sums owing in connection

with such transactions has been received by such unpaid suppliers, sellers, or agents.

Payment shall not be considered to have been made if the supplier, seller, or agent

receives a payment instrument which is dishonored. The provisions of this subsection

shall not apply to transactions between a cooperative association, as defined in section

1141j(a) of title 12, and its members.

(3) The unpaid supplier, seller, or agent shall lose the benefits of such trust unless such

person has given written notice of intent to preserve the benefits of the trust to the

commission merchant, dealer, or broker within thirty calendar days (i) after expiration

of the time prescribed by which payment must be made, as set forth in regulations

issued by the Secretary, (ii) after expiration of such other time by which payment must

be made, as the parties have expressly agreed to in writing before entering into the

transaction, or (iii) after the time the supplier, seller, or agent has received notice that

the payment instrument promptly presented for payment has been dishonored. The

written notice to the commission merchant, dealer, or broker shall set forth information

in sufficient detail to identify the transaction subject to the trust. When the parties

expressly agree to a payment time period different from that established by the

Secretary, a copy of any such agreement shall be filed in the records of each party to

the transaction and the terms of payment shall be disclosed on invoices, accountings,

and other documents relating to the transaction.

(4) In addition to the method of preserving the benefits of the trust specified in

paragraph (3), a licensee may use ordinary and usual billing or invoice statements to

provide notice of the licensee's intent to preserve the trust. The bill or invoice statement

must include the information required by the last sentence of paragraph (3) and contain

on the face of the statement the following: "The perishable agricultural commodities

listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of

the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of

these commodities retains a trust claim over these commodities, all inventories of food

or other products derived from these commodities, and any receivables or proceeds

from the sale of these commodities until full payment is received.".

(5) The several district courts of the United States are vested with jurisdiction

specifically to entertain (i) actions by trust beneficiaries to enforce payment from the

trust, and (ii) actions by the Secretary to prevent and restrain dissipation of the trust.

§ 499f. Complaints, written notifications, and investigations

(a) Reparation complaints

(1) Petition; process

Any person complaining of any violation of any provision of section 499b of this title by

any commission merchant, dealer, or broker may, at any time within nine months after

the cause of action accrues, apply to the Secretary by petition, which shall briefly state

the facts, whereupon, if, in the opinion of the Secretary, the facts therein contained

warrant such action, a copy of the complaint thus made shall be forwarded by the

Secretary to the commission merchant, dealer, or broker, who shall be called upon to

satisfy the complaint, or to answer it in writing, within a reasonable time to be

prescribed by the Secretary.

(2) Filing and handling fees

A person submitting a petition to the Secretary under paragraph (1) shall include a filing

fee of $60 per petition. If the Secretary determines under paragraph (1) that the facts

contained in the petition warrant further action, the person or persons submitting the

petition shall submit to the Secretary a handling fee of $300. The Secretary may not

forward a copy of the complaint to the commission merchant, dealer, or broker

involved until after the Secretary receives the required handling fee. The Secretary shall

deposit fees submitted under this paragraph into the Perishable Agricultural

Commodities Act Fund provided for by section 499c(b) of this title. The Secretary

may alter the fees specified in this paragraph by rulemaking under section 553 of title 5.

(b) Disciplinary violations

Any officer or agency of any State or Territory having jurisdiction over commission

merchants, dealers, or brokers in such State or Territory and any other interested person

(other than an employee of an agency of the Department of Agriculture administering this

chapter) may file, in accordance with rules prescribed by the Secretary, a written notification

of any alleged violation of this chapter by any commission merchant, dealer, or broker. In

addition, any official certificates of the United States Government or States or Territories of

the United States and trust notices filed pursuant to section 499e of this title shall constitute

written notification for the purposes of conducting an investigation under subsection (c) of this

section. The identity of any person filing a written notification under this subsection shall be

considered to be confidential information. The identity of such person, and any portion of the

notification to the extent that it would indicate the identity of such person, are specifically

exempt from disclosure under section 552 of title 5 (commonly known as the Freedom of

Information Act), as provided in subsection (b)(3) of such section.

(1) Commencing or expanding an investigation

If there appears to be, in the opinion of the Secretary, reasonable grounds for

investigating a complaint made under subsection (a) of this section or a written

notification made under subsection (b) of this section, the Secretary shall investigate

such complaint or notification. In the course of the investigation, if the Secretary

determines that violations of this chapter are indicated other than the alleged violations

specified in the complaint or notification that served as the basis for the investigation,

the Secretary may expand the investigation to include such additional violations.

(2) Issuance of complaint by Secretary; process

In the opinion of the Secretary, if an investigation under this subsection substantiates the

existence of violations of this chapter, the Secretary may cause a complaint to be

issued. The Secretary shall have the complaint served by registered mail or certified

mail or otherwise on the person concerned and afford such person an opportunity for a

hearing thereon before a duly authorized examiner of the Secretary in any place in

which the subject of the complaint is engaged in business. However, in complaints

wherein the amount claimed as damages does not exceed $30,000, a hearing need not

be held and proof in support of the complaint and in support of respondent's answer

may be supplied in the form of depositions or verified statements of fact.

(3) Special notification requirements for certain investigations

Whenever the Secretary initiates an investigation on the basis of a written notification

made under subsection (b) of this section or expands such an investigation, the

Secretary shall promptly notify the subject of the investigation of the existence of the

investigation and the nature of the alleged violations of this chapter to be investigated.

Not later than 180 days after providing the initial notification, the Secretary shall

provide the subject of the investigation with notice of the status of the investigation,

including whether the Secretary intends to issue a complaint under paragraph (2),

terminate the investigation, or continue or expand the investigation. The Secretary shall

provide additional status reports at the request of the subject of the investigation and

shall promptly notify the subject of the investigation whenever the Secretary terminates

the investigation.

(d) Decisions on complaints

After opportunity for hearing on complaints where the damages claimed exceed the sum of

$30,000 has been provided or waived and on complaints where damages claimed do not

exceed the sum of $30,000 not requiring hearing as provided herein, the Secretary shall

determine whether or not the commission merchant, dealer, or broker has violated any

provision of section 499b of this title.

(e) Bond required for certain complaints

In case a complaint is made by a nonresident of the United States, or by a resident of the

United States to whom the claim of a nonresident of the United States has been assigned, the

complainant shall be required, before any formal action is taken on his complaint, to furnish a

bond in double the amount of the claim conditioned upon the payment of costs, including a

reasonable attorney's fee for the respondent if the respondent shall prevail, and any reparation

award that may be issued by the Secretary of Agriculture against the complainant on any

counter claim by respondent: Provided, That the Secretary shall have authority to waive the

furnishing of a bond by a complainant who is a resident of a country which permits the filing of

a complaint by a resident of the United States without the furnishing of a bond.

§ 499g. Reparation order

(a) Determination by Secretary of Agriculture of amount of damages; order for payment

If after a hearing on a complaint made by any person under section 499f of this title, or

without hearing as provided in subsections (c) and (d) of section 499f of this title, or upon

failure of the party complained against to answer a complaint duly served within the time

prescribed, or to appear at a hearing after being duly notified, the Secretary determines that

the commission merchant, dealer, or broker has violated any provision of section 499b of this

title, he shall, unless the offender has already made reparation to the person complaining,

determine the amount of damage, if any, to which such person is entitled as a result of such

violation and shall make an order directing the offender to pay to such person complaining

such amount on or before the date fixed in the order. The Secretary shall order any

commission merchant, dealer, or broker who is the losing party to pay the prevailing party, as

reparation or additional reparation, reasonable fees and expenses incurred in connection with

any such hearing. If, after the respondent has filed his answer to the complaint, it appears

therein that the respondent has admitted liability for a portion of the amount claimed in the

complaint as damages, the Secretary under such rules and regulations as he shall prescribe,

unless the respondent has already made reparation to the person complaining, may issue an

order directing the respondent to pay to the complainant the undisputed amount on or before

the date fixed in the order, leaving the respondent's liability for the disputed amount for

subsequent determination. The remaining disputed amount shall be determined in the same

manner and under the same procedure as it would have been determined if no order had been

issued by the Secretary with respect to the undisputed sum.

(b) Failure to comply with order of Secretary; suit to enforce liability; order as evidence; costs

and fees

If any commission merchant, dealer, or broker does not pay the reparation award within the

time specified in the Secretary's order, the complainant, or any person for whose benefit such

order was made, may within three years of the date of the order file in the district court of the

United States for the district in which he resides or in which is located the principal place of

business of the commission merchant, dealer, or broker, or in any State court having general

jurisdiction of the parties, a petition setting forth briefly the causes for which he claims

damages and the order of the Secretary in the premises. The orders, writs, and processes of

the district courts may in these cases run, be served, and be returnable anywhere in the United

States. Such suit in the district court shall proceed in all respects like other civil suits for

damages, except that the findings and orders of the Secretary shall be prima-facie evidence of

the facts therein stated, and the petitioner shall not be liable for costs in the district court, nor

for costs at any subsequent state of the proceedings, unless they accrue upon his appeal. If

the petitioner finally prevails, he shall be allowed a reasonable attorney's fee, to be taxed and

collected as a part of the costs of the suit.

Either party adversely affected by the entry of a reparation order by the Secretary may, within

thirty days from and after the date of such order, appeal therefrom to the district court of the

United States for the district in which said hearing was held: Provided, That in cases handled

without a hearing in accordance with subsections (c) and (d) of section 499f of this title or in

which a hearing has been waived by agreement of the parties, appeal shall be to the district

court of the United States for the district in which the party complained against is located.

Such appeal shall be perfected by the filing with the clerk of said court a notice of appeal,

together with a petition in duplicate which shall recite prior proceedings before the Secretary

and shall state the grounds upon which the petitioner relies to defeat the right of the adverse

party to recover the damages claimed, with proof of service thereof upon the adverse party.

Such appeal shall not be effective unless within thirty days from and after the date of the

reparation order the appellant also files with the clerk a bond in double the amount of the

reparation awarded against the appellant conditioned upon the payment of the judgment

entered by the court, plus interest and costs, including a reasonable attorney's fee for the

appellee, if the appellee shall prevail. Such bond shall be in the form of cash, negotiable

securities having a market value at least equivalent to the amount of bond prescribed, or the

undertaking of a surety company on the approved list of sureties issued by the Treasury

Department of the United States. The clerk of court shall immediately forward a copy thereof

to the Secretary of Agriculture, who shall forthwith prepare, certify, and file in said court a

true copy of the Secretary's decision, findings of fact, conclusions, and order in said case,

together with copies of the pleadings upon which the case was heard and submitted to the

Secretary. Such suit in the district court shall be a trial de novo and shall proceed in all

respects like other civil suits for damages, except that the findings of fact and order or orders

of the Secretary shall be prima-facie evidence of the facts therein stated. Appellee shall not be

liable for costs in said court and if appellee prevails he shall be allowed a reasonable

attorney's fee to be taxed and collected as a part of his costs. Such petition and pleadings

certified by the Secretary upon which decision was made by him shall upon filing in the district

court constitute the pleadings upon which said trial de novo shall proceed subject to any

amendment allowed in that court.

(d) Suspension of license for failure to obey reparation order or appeal

Unless the licensee against whom a reparation order has been issued shows to the satisfaction

of the Secretary within five days from the expiration of the period allowed for compliance with

such order that he has either taken an appeal as herein authorized or has made payment in full

as required by such order his license shall be suspended automatically at the expiration of

such five-day period until he shows to the satisfaction of the Secretary that he has paid the

amount therein specified with interest thereon to date of payment: Provided, That if on appeal

the appellee prevails or if the appeal is dismissed the automatic suspension of license shall

become effective at the expiration of thirty days from the date of the judgment on the appeal,

but if the judgment is stayed by a court of competent jurisdiction the suspension shall become

effective ten days after the expiration of such stay, unless prior thereto the judgment of the

court has been satisfied.

§ 499h. Grounds for suspension or revocation of license

(a) Authority of Secretary

Whenever (1) the Secretary determines, as provided in section 499f of this title, that any

commission merchant, dealer, or broker has violated any of the provisions of section 499b of

this title, or (2) any commission merchant, dealer, or broker has been found guilty in a Federal

court of having violated section 499n(b) of this title, the Secretary may publish the facts and

circumstances of such violation and/or, by order, suspend the license of such offender for a

period not to exceed ninety days, except that, if the violation is flagrant or repeated, the

Secretary may, by order, revoke the license of the offender.

(b) Unlawful employment of certain persons; restrictions; bond assuring compliance; approval

of employment without bond; change in amount of bond; payment of increased amount;

penalties Except with the approval of the Secretary, no licensee shall employ any person, or

any person who is or has been responsibly connected with any person -

(1) whose license has been revoked or is currently suspended by order of the

Secretary;

(2) who has been found after notice and opportunity for hearing to have committed any

flagrant or repeated violation of section 499b of this title, but this provision shall not

apply to any case in which the license of the person found to have committed such

violation was suspended and the suspension period has expired or is not in effect; or

(3) against whom there is an unpaid reparation award issued within two years, subject

to his right of appeal under section 499g(c) of this title. The Secretary may approve

such employment at any time following nonpayment of a reparation award, or after one

year following the revocation or finding of flagrant or repeated violation of section 499b

of this title, if the licensee furnishes and maintains a surety bond in form and amount

satisfactory to the Secretary as assurance that such licensee's business will be

conducted in accordance with this chapter and that the licensee will pay all reparation

awards, subject to its right of appeal under section 499g(c) of this title, which may be

issued against it in connection with transactions occurring within four years following the

approval. The Secretary may approve employment without a surety bond after the

expiration of two years from the effective date of the applicable disciplinary order. The

Secretary, based on changes in the nature and volume of business conducted by the

licensee, may require an increase or authorize a reduction in the amount of the bond. A

licensee who is notified by the Secretary to provide a bond in an increased amount

shall do so within a reasonable time to be specified by the Secretary, and if the licensee

fails to do so the approval of employment shall automatically terminate. The Secretary

may, after thirty days notice and an opportunity for a hearing, suspend or revoke the

license of any licensee who, after the date given in such notice, continues to employ any

person in violation of this section. The Secretary may extend the period of employment

sanction as to a responsibly connected person for an additional one-year period upon

the determination that the person has been unlawfully employed as provided in this

subsection.

If, after a license shall have been issued to an applicant, the Secretary believes that the license

was obtained through a false or misleading statement in the application therefor or through a

misrepresentation, concealment, or withholding of facts respecting any violation of this chapter

by any officer, agent, or employee, he may, after thirty days' notice and an opportunity for a

hearing, revoke said license, whereupon no license shall be issued to said applicant or any

applicant in which the person responsible for such false or misleading statement or

misrepresentation, concealment, or withholding of facts is financially interested, except under

the conditions set forth in section 499d(b) of this title.

(d) Injunction

In addition to being subject to the penalties provided by section 499c(a) of this title, any

commission merchant, dealer, or broker who engages in or operates such business without a

valid and effective license from the Secretary shall be liable to be proceeded against in any

court of competent jurisdiction in a suit by the United States for an injunction to restrain such

defendant from further continuing so to engage in or operate such business, and, if the court

shall find that the defendant is continuing to engage in such business without a valid and

effective license, the court shall issue an injunction to restrain such defendant from continuing

to engage in or to operate such business without such license.

(e) Alternative civil penalties

In lieu of suspending or revoking a license under this section when the Secretary determines,

as provided by section 499f of this title, that a commission merchant, dealer, or broker has

violated section 499b of this title or subsection (b) of this section, the Secretary may assess a

civil penalty not to exceed $2,000 for each violative transaction or each day the violation

continues. In assessing the amount of a penalty under this subsection, the Secretary shall give

due consideration to the size of the business, the number of employees, and the seriousness,

nature, and amount of the violation. Amounts collected under this subsection shall be

deposited in the Treasury of the United States as miscellaneous receipts.

§ 499i. Accounts, records, and memoranda; duty of licensees to keep; contents; suspension

of license for violation of duty

Every commission merchant, dealer, and broker shall keep such accounts, records, and memoranda

as fully and correctly disclose all transactions involved in his business, including the true ownership of

such business by stockholding or otherwise. If such accounts, records, and memoranda are not so

kept, the Secretary may publish the facts and circumstances and/or, by order, suspend the license of

the offender for a period not to exceed ninety days.

§ 499j. Orders; effective date; continuance in force; suspension, modification and setting

aside; penalty

Any order of the Secretary under this chapter other than an order for the payment of money shall

take effect within such reasonable time, not less than ten days, as is prescribed in the order, and shall

continue in force until his further order, or for a specified period of time, accordingly as it is

prescribed in the order, unless such order is suspended, modified, or set aside by the Secretary or is

suspended, modified, or set aside by a court of competent jurisdiction. Any such order of the

Secretary, if regularly made, shall be final, unless before the date prescribed for its taking effect

application is made to a court of competent jurisdiction by the commission merchant, dealer, or

broker against whom such order is directed to have such order set aside or its enforcement,

operation, or execution suspended or restrained.

§ 499k. Injunctions; application of injunction laws governing orders of Interstate

Commerce Commission

For the purposes of this chapter the provisions of all laws relating to the suspending or restraining of

the enforcement, operation, or execution, or the setting-aside, in whole or in part, of the orders of

the Interstate Commerce Commission are made applicable to orders of the Secretary under this

chapter and to any person subject to the provisions of this chapter.

§ 499l. Violations; report to Attorney General; proceedings; costs

The Secretary may report any violation of this chapter for which a civil penalty is provided to the

Attorney General of the United States, who shall cause appropriate proceedings to be commenced

and prosecuted in the proper courts of the United States without delay. The costs and expenses of

such proceedings shall be paid out of the appropriation for the expenses of the courts of the United

States.

§ 499m. Complaints; procedure, penalties, etc.

(a) Investigation by Secretary of Agriculture; inspection of accounts, records, and

memoranda; penalty for refusing inspection The Secretary or his duly authorized agents shall

have the right to inspect such accounts, records, and memoranda of any commission

merchant, dealer, or broker as may be material (1) in the investigation of complaints under this

chapter, or (2) to the determination of ownership, control, packer, or State, country, or

region of origin in connection with commodity inspections, or (3) to ascertain whether section

499i of this title is being complied with, and if any such commission merchant, dealer, or

broker refuses to permit such inspection, the Secretary may publish the facts and

circumstances and/or, by order, suspend the license of the offender until permission to make

such inspection is given. The Secretary or his duly authorized agents shall have the right to

inspect any lot of any perishable agricultural commodity covered by this chapter, and if any

commission merchant, dealer, or broker having ownership of or control over such lot fails or

refuses to authorize or allow such inspection, the Secretary may, after thirty days' notice and

an opportunity for a hearing, publish the facts and circumstances and/or, by order, suspend

the license of the offender for a period not to exceed ninety days.

(b) Inspection of records; surety bond; suspension of license

The Secretary or the Secretary's duly authorized agents, in order to insure that the prompt

payment provision of section 499b(4) of this title is being complied with, shall from time to

time inspect the accounts, records, and memoranda of any commission merchant, dealer, or

broker determined in a formal disciplinary proceeding under section 499f(b) of this title to

have violated such provision. The Secretary may also require that any such commission

merchant, dealer, or broker furnish, maintain, and from time to time adjust a surety bond in

form and amount satisfactory to the Secretary as assurance that such commission merchant's,

dealer's, or broker's business will be conducted in accordance with this chapter and that such

commission merchant, dealer, or broker will pay all reparation awards, subject to its right of

appeal under section 499g(c) of this title: Provided, That if such surety bond is furnished,

maintained, and adjusted as required by the Secretary, the Secretary shall not thereafter

inspect the accounts, records, and memoranda of such commission merchant, dealer, or

broker under this subsection more than once a year. If any such commission merchant, dealer,

or broker refuses to permit such inspection or fails or refuses to furnish, maintain, or adjust

such surety bond, the Secretary may publish the facts and circumstances and, by order,

suspend the license of the offender until permission to make such inspection is given or such

surety bond is furnished, maintained, or adjusted.

The Secretary, or any officer or employee designated by him for such purpose, may hold

hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence,

and require by subpoena the attendance and testimony of witnesses and the production of

such accounts, records, and memoranda as may be material for the determination of any

complaint under this chapter.

(d) Disobedience to subpoenas; remedy; contempt

In case of disobedience to a subpoena, the Secretary or any of his examiners may invoke the

aid of any court of the United States in requiring the attendance and testimony of witnesses

and the production of accounts, records, and memoranda. Any district court of the United

States within the jurisdiction of which any hearing is carried on may, in case of contumacy or

refusal to obey a subpoena issued to any person, issue an order requiring the person to

appear before the Secretary or his examiner or to produce accounts, records, and

memoranda if so ordered, or to give evidence touching any matter pertinent to any complaint;

and any failure to obey such order of the court shall be punished by the court as a contempt

thereof.

(e) Depositions; production of accounts, records and memoranda

The Secretary may order testimony to be taken by deposition in any proceeding or

investigation or incident to any complaint pending under this chapter at any stage thereof.

Such depositions may be taken before any person designated by the Secretary and having

power to administer oaths. Such testimony shall be reduced to writing by the person taking

the deposition or under his direction and shall then be subscribed by the deponent. Any

person may be compelled to appear and depose and to produce accounts, records, and

memoranda in the same manner as witnesses may be compelled to appear and testify and

produce accounts, records, and memoranda before the Secretary or any of his examiners.

(f) Fees and mileage of witnesses

Witnesses summoned before the Secretary or any officer or employee designated by him shall

be paid the same fees and mileage that are paid witnesses in the courts of the United States,

and witnesses whose depositions are taken and the persons taking the same shall severally be

entitled to the same fees as are paid for like service in the courts of the United States.

§ 499n. Inspection of perishable agricultural commodities

(a) Employment of inspectors; fees and expenses; inspection certificate as evidence

The Secretary is authorized, independently and in cooperation with other branches of the

Government, State, or municipal agencies and/or any person, whether operating in one or

more jurisdictions, to employ and/or license inspectors to inspect and certify, without regard

to the filing of a complaint under this chapter, to any interested person the class, quality,

and/or condition of any lot of any perishable agricultural commodity when offered for

interstate or foreign shipment or when received at places where the Secretary shall find it

practicable to provide such service, under such rules and regulations as he may prescribe,

including the payment of such fees and expenses as will be reasonable and as nearly as may

be to cover the cost for the service rendered: Provided, That fees for inspections made by a

licensed inspector, less the percentage thereof which he is allowed by the terms of his contract

of employment with the Secretary as compensation for his services, shall be deposited into the

Treasury of the United States as miscellaneous receipts; and fees for inspections made by an

inspector acting under a cooperative agreement with a State, municipality, or other person

shall be disposed of in accordance with the terms of such agreement: Provided further, That

expenses for travel and subsistence incurred by inspectors shall be paid by the applicant for

inspection to the United States Department of Agriculture to be credited to the appropriation

for carrying out the purposes of this chapter: And provided further, That official inspection

certificates for fresh fruits and vegetables issued by the Secretary of Agriculture pursuant to

any law shall be received by all officers and all courts of the United States, in all proceedings

under this chapter, and in all transactions upon contract markets under Commodities

Exchange Act (7 U.S.C. 1 et seq.), as prima-facie evidence of the truth of the statements

therein contained.

(b) Issuance of fraudulent certificates; penalties

Whoever shall falsely make, issue, alter, forge, or counterfeit, or cause or procure to be

falsely made, issued, altered, forged, or counterfeited, or willingly aid, cause, procure or assist

in, or be a party to the false making, issuing, altering, forging, or counterfeiting of any

certificate of inspection issued under authority of this chapter, sections 491, 493 to 497 of this

title, or any Act making appropriations for the Department of Agriculture; or shall utter or

publish as true or cause to be uttered or published as true any such false, forged, altered, or

counterfeited certificate, for a fraudulent purpose, shall be guilty of a misdemeanor and upon

conviction shall be punished by a fine of not more than $500 or by imprisonment for a period

of not more than one year, or both, at the discretion of the court.

§ 499o. Rules, regulations, and orders; appointment, removal, and compensation of officers

and employees; expenditures; authorization of appropriations; abrogation of inconsistent

statutes

The Secretary may make such rules, regulations, and orders as may be necessary to carry out the

provisions of this chapter, and may cooperate with any department or agency of the Government,

any State, Territory, District, or possession, or department, agency, or political subdivision thereof,

or any person; and shall have the power to appoint, remove, and fix the compensation of such

officers and employees not in conflict with existing law, and make such expenditures for rent outside

the District of Columbia, printing, binding, telegrams, telephones, lawbooks, books of reference,

publications, furniture, stationery, office equipment, travel, and other supplies and expenses,

including reporting services, as shall be necessary to the administration of this chapter in the District

of Columbia and elsewhere, from the Perishable Agricultural Commodities Act fund provided for by

section 499c(b) of this title and any supplements to such fund, and as may be appropriated for by

Congress; and there is authorized to be appropriated, out of any money in the Treasury not

otherwise appropriated, such sums as may be necessary for such purposes. This chapter shall not

abrogate nor nullify any other statute, whether State or Federal, dealing with the same subjects of

this chapter; but it is intended that all such statutes shall remain in full force and effect except insofar

only as they are inconsistent herewith or repugnant hereto.

§ 499p. Liability of licensees for acts and omissions of agents

In construing and enforcing the provisions of this chapter, the act, omission, or failure of any agent,

officer, or other person acting for or employed by any commission merchant, dealer, or broker,

within the scope of his employment or office, shall in every case be deemed the act, omission, or

failure of such commission merchant, dealer, or broker as that of such agent, officer, or other

person.

§ 499q. Separability

If any provision of this chapter or the application thereof to any person or circumstances is held

invalid, the validity of the remainder of the chapter and of the application of such provision to other

persons and circumstances shall not be affected thereby.

§ 499r. Repealed. Pub. L. 102-237, title X, Sec. 1011(8), Dec. 13, 1991, 105 Stat. 1898

§ 499s. Depositing appropriations in fund

Any unexpended balances of appropriations for the current fiscal year, and any subsequent

appropriations, made to carry out the Acts referred to in section 499c(b) of this title, may be

deposited in the Perishable Agricultural Commodities Act fund.

§ 499t. Omitted