Oakes Farms victorious in PACA Suit
The Perishable Agricultural Commodities Act was enacted at the request of the fruit and vegetable industry to promote fair trade in the industry back in 1930, and it established a code for produce companies to follow.
It’s something that Oakes Farms takes seriously, and it has been abiding by the rules of PACA since inception.
With more than 2,000 acres of crops in Florida between Immokalee, Plant City and Naples, Oakes Farms maintains a diversified portfolio of services that reach a global market and includes farming, packing, shipping, retail markets and food service and seafood distribution. And it’s been a valuable partner for many through the years.
That’s why when C-Squared Farms in Clanton, AL, which contracted Oakes Farms to sell its produce, brought suit against the company claiming violation of PACA, leadership at Oakes Farms wasn’t going to let them ruin its reputation and fired back.
In 2018, Oakes Farms invested money into C-Squared, owned by Joe and Cynthia Calloway, but the farm performed poorly early in the season because it suffered crop damage from Tropical Storm Alberto.
Steven Bracci, attorney for Oakes Farms, noted that while the farmers struggled, Oakes Farms kept supporting them financially, only to have the farmers opportunistically sue his client, out of nowhere and without notice, claiming breach of contract and violation of PACA. The suit was for $1.5 million.
“There are a handful of lawyers out there who represent farmers and opportunistically sue on grower’s agents under this federal statute, which is seemingly written very favorably to the farmer,” he said. “Grower’s agents oftentimes do not know how to push back on such a lawsuit, oftentimes resulting in a forced settlement or judgment against the grower’s agent that can be substantial.”
However, Oakes Farms wasn’t going to have any of that in this instance, and counter-sued C-Squared for breach of contract, because C-Squared sued without cause, replacing Oakes with other sales, when Oakes was contractually entitled to be the exclusive sales agent in exchange for Oakes’ substantial financial investment in the farm.
“After summary judgment proceedings and a three-day trial, the Court denied all of C-Squared claims against Oakes Farms and instead found in favor of Oakes Farms that C-Squared had in fact breached the contract,” Bracci said. “The judge rewarded over $750,000 in damages to Oakes Farms.”
The message here, the attorney said, is that often times these PACA lawyers catch the grower agent off guard and they have a built-in advantage for the farmer alleging things against the grower agent, even when their claims are false or unsubstantiated.
“Grower’s agents should know that they can successfully oppose these claims because the rights under PACA are not as powerful as the PACA lawyers think that they are, and often times the PACA claims lack merit,” Bracci said. “It is almost as though whenever a farmer fails financially, they file a case against the grower agent as a type of insurance policy. That was never the intent of PACA.”
Steven Veneziano, vice president of Oakes Farms, would like to see grower agents ban together and advocate for PACA reform as Oakes Farms has seen other farmers try to copy this practice, which proves to be unsubstantiated and without any merit.