The User's Guide gives a simple explanation of the PACA (Perishable Agricultural Commodities Act) for produce companies which must operate under PACA. The guide was written by Stephen McCarron and published by United Fresh Fruit and Vegetable Association. Revised in 1998, the Guide can be ordered from United Fresh Fruit and Vegetable Association by calling (703) 836-3410.
        Below is the Introduction from the Guide, which explains the contents of the Guide. Below that is the complete Table of Contents.

        USING THE GUIDE

A. General Information About the Third Edition of the Guide

        Everyone in the produce business knows that the Perishable Agricultural Commodities Act (PACA) is the federal law that regulates produce companies. But did you know that PACA regulates nearly every activity of a produce company? This includes opening the business; naming the business; making contracts; performing contracts; keeping books and records; hiring employees; determining who can be officers, directors and shareholders of a company; and pay practices. In addition, the PACA provides important rights to produce companies not available to other kinds of businesses, such as rights under the PACA trust. If you are in the produce business, it is essential to be familiar with the PACA.
        The Guide has been prepared to give produce companies an easy-to-understand view of the parts of PACA that produce businesses need to understand. This Third Edition of the Guide includes a number of new sections explaining important changes that have occurred over the past few years. Some of the new topics discussed are: the recent expansion of the PACA trust to include restaurants and cruise lines; the fallout from the Hunts Point inspection scandal; the new Dispute Resolution Corporation; new licensing options; the latest PACA rulings on commercial bribery; liability of banks under the trust; how USDA calculates fines for engaging in unfair conduct; the most recent PACA ruling for deciding if a person is responsibility-connected with a violating company; and a recent court decision ruling that PACA's suspension of license without a hearing for failing to produce records is illegal. The Guide also now references websites that contain much useful information about PACA.        

B. Using the Guide

        The Guide is meant to be used when a PACA problem arises. A detailed index at the back of the Guide will get you to the section you need. For example, if you have a question about the PACA trust, you would find the term "Trust" in the index, which will lead you to a number of specific topics. If your question is very specific, such as, "Am I individually liable to PACA trust creditors as an officer of the company," you would focus on the sub-topic "Liability of Individuals" under the "Trust" term. In some situations, you may want to find out general information about an entire topic. For example, if you are involved in a dispute with another produce company, you would want to know how a reparation case proceeds before USDA. In that case, you would consult the section of the Guide dealing with reparation cases (Section V).
        The Guide is written in non-legal language so that anyone working in a produce company can learn how a particular part of the PACA works. Many topics are discussed in a question-and-answer format from the perspective of a person in a produce company who has just encountered a PACA problem. For example, what do you do when someone is not paying, or when a USDA official shows up at your door to investigate your records? Also, flow charts of major areas of the PACA are provided as a quick reference tool.
        Often, problems under the PACA will need further clarification from PACA officials or from an attorney. The Guide is not legal advice, but it will give you a basic understanding of each area of the PACA.

C. Overview of the Sections of the Guide

        The Guide is divided into 11 sections which cover each major area of the PACA. Section I contains basic information about the PACA that is important to know.
        In Section II the topic is licensing, including who must be licensed, how to obtain a license, license renewals and license fees. USDA license forms and an explanatory chart are also included.
        Section III discusses illegal business practices under PACA, including non-payment, slow payment, misbranding, failure to keep records, undisclosed rebates, kickbacks and others.
        In Section IV, the extraordinary remedy of the PACA trust is described with a full explanation of how to use the trust to obtain payment under the law. A chart gives a step-by-step guide on using the trust.
        Section V looks at the way USDA decides reparation cases, the alternative to a court suit when a dispute arises in a produce transaction. When and how to file a case is explained, along with a descriptive chart of how these cases proceed.
        Section VI reviews USDA rules enforcement if there is a violation of the PACA. This section describes both in narrative form and by way of a chart, how USDA enforces the rules, and the types of penalties USDA imposes for certain kinds of violations.
        Section VII examines the authority of USDA to conduct investigations of produce companies, including restrictions placed on that authority by Congress.
        Section VIII, Responsibly Connected Cases, discusses what happens to a person who is an officer, director of shareholder of a produce company that violates the PACA, and also includes an explanatory chart of how responsibly connected cases are decided.
        Section IX explains the types of bonds that are required in special situations.
        Section X discusses solutions to common contract problems, such as rejection and full satisfaction checks. This section also explains the options available if a seller fails to deliver or a buyer fails to accept on a long-term deal. There is also a quick reference for common sale terms which are crucial to know because they dictate the seller's and the buyer's rights.
        Section XI discusses important miscellaneous topics, such as the special PACA rules for brokers and growers agents, and the effects of bankruptcy.
        At the end of the Guide is the index.

D. Supplemental Information to the Guide

There are two websites that contain useful information about the PACA that supplements the information contained in the Guide. These are the PACA's website, described in Section I.B below; and the website at mccarronlaw.com. The mccarronlaw.com website contains a number of Packer articles written by Stephen P. McCarron over the years about the PACA, and these are arranged in topical order. The topics include Audits by PACA; Contract Terms; the Dispute Resolution Corporation; Commercial Bribery and the Hunts Point Cases. In addition, there are other sections, such as Frequently Asked Questions and links to many other produce-related websites, such as United, PACA, the Dispute Resolution Corporation, Blue Book and Red Book.
        Your comments on the Guide are welcome, and we hope that it is useful to you.

                                        Stephen P. McCarron and Tom Stenzel, President UFF&VA

TABLE OF CONTENTS

                                                                                                                                                                                  
USING THE GUIDE
        A. General Information About the Third Edition of the Guide
        B. Using the Guide
        C. Overview of the Sections of the Guide
        D. Supplemental Information to the Guide 

I. OVERVIEW OF THE PACA
        A. The PACA Branch
        B. PACA's Website
        C. Enforcing PACA's Rules
        D. The PACA Trust
        E. Dispute Resolution
        F. Advice About PACA
        Chart: Main Parts Of The PACA
        PACA OFFICES

II. LICENSING UNDER PACA
        A. Who Must Be Licensed
        B. What If A Company Does Not Obtain A License?
        C. Obtaining A License
        D. Reporting Changes
        E. License Fees
        F. License Renewal
        G. Denial Of License
        H. Licensing Ruses
        Form: License Application
        Form: License Renewal Application
        Chart: Businesses That Must Be Licensed, License Fees And The Application Process

III. UNFAIR CONDUCT
        A. Operating Without A License
        B. Engaging In Fraudulent Activity
                1. Rebates
                2. Kickbacks
        C. Failing To Pay Or Paying Slowly
        D. Using Unapproved Trade Name
        E. Failing To Maintain The Trust
        F. Employing A Restricted Person
        G. Failing To Maintain Records
        H. Refusing To Allow USDA To Re-view Records
        I. Misbranding
        J. Altering Inspection Certificates

IV. THE TRUST
        A. Preserving Trust Rights
                1. The Invoice Method
                        a. Paper Invoicing
                        b. Electronic Invoicing
                2. The Trust Notice Method
                3. Payment Terms
                4. Restaurants
                5. Non-U.S. Shippers
        B. What To Do After You Are A Trust Creditor
        C. What Assets Are Subject To The Trust
        D. Liability Of Individuals
        E. Liability of Banks
        Form: Trust Notice For Non-Licensees
        Chart: How A Produce Seller Preserves Its Trust Rights And Collects In The Event Of Nonpayment

V. REPARATION CASES
        A. Informal Proceedings
                1. Mediation
                2. Informal Opinion
        B. Formal Proceedings
                1. Complaint And Answer
                2. Evidence Stage
                        a. Shortened Procedure Case
                        b. Oral Hearing Case
                3. Briefing Stage
                4. Decision And Order
                5. After The Decision
                        a. Reconsideration
                        b. Satisfy The Order
                        c. Appeal
                        d. Do Nothing
        C. How Long Does A Reparation Case Take?
        D. Why Not Just Go To Court?
        E. When Is A Lawyer Necessary?
        F. Dealing With Canada and Mexico
        Form: Reparation Complaint
        Chart: Course Of A Reparation Case

VI. DISCIPLINARY CASES
        A. The Formal Complaint And Answer
        B. The Hearing Stage
        C. The Decision
        D. Sanctions
                1. Revocation
                2. Suspension
                3. Fines
                4. Publication
        E. Appeal Rights
        F. Need For A Lawyer
        Chart: Course Of A Disciplinary Case

VII. USDA INVESTIGATIONS
        A. How An Investigation Begins
        B. Notification Requirements
        C. What To Do If Notified Of An Investigation
        D. What Records Can USDA Obtain
        E. Do Company Officials Have To Talk With Investigators
        F. Failing To Cooperate With An Investigation
        Chart: How A PACA Investigation Proceeds

VIII. RESPONSIBLY CONNECTED CASES
        A. Who Is Responsibility Connected?
        B. Can A Person Challenge A Responsibly Connected Determination?
        C. What Are The Restrictions?
                1. Suspension
                        a. Employment Restrictions
                        b. Licensing Restrictions
                2. Revocation
                        a. Employment Restrictions
                        b. Licensing Restrictions
        D. What Happens To A Responsibly Connected Person Who Works When Prohibited?
        E. What Happens To An Employer That Hires A Responsibly Connected Person?
        F. What Is Employment?
        Chart: How A Responsibly Connected Case Proceeds

IX. BONDS
        A. Employee Bond
        B. Licensee Bond
        C. Appeal Bond
        D. Nonresident Bond In Reparation Cases
        Form: License Bond
        Form: Employment Bond

X. CONTRACT PROBLEMS
        A. Rejection, Acceptance And Revocation Of Acceptance
                1. Rejection
                        a. Time
                        b. Notice
                        c. Basis For Rejection
                        d. After Rejection
                        e. Mexican Tomatoes
                2. Acceptance
                3. Revocation of Acceptance
        B. Failure to Deliver
        C. Long-Term Contracts
                1. Failure to Accept
                2. Failure to Pay
        D. Full Satisfaction Check
        E. Common Sale Terms

XI. MISCELLANEOUS TOPICS
        A. Brokers
                1. Written Memorandum Required
                2. Duties After The Sale
                3. Fees
                4. Responsibility For Payment Of The Price 68
                5. Restrictions
        B. Grower's Agents
                1. Written Agreement Or Statement
                2. Record Keeping
                3. Buying As A Grower's Agent
                4. Payment Of Price And Fees
                Checklist for Growers' Agents' Contracts
        C. Bankruptcy And PACA
                1. Disciplinary Cases
                2. Trust Claims
                        a. Against The Company
                        b. Against Individuals
                3. Reparation Cases
                4. Licensing
        D. Other Industries
                1. Cut Flowers
                2. Truckers
        E. Hunts Point Scandal
        F. Dispute Resolution Corporation (DRC)
                1. Background
                2. Standards and Dispute Resolution
                3. Membership