The complaint must be accompanied by true copies of all available supporting papers related to the transaction at issue. This includes, for example, shipping documents, letters, invoices, account statements, credit memorandums, payment term agreements, contracts, sale confirmations, bills of lading, manifests, and inspection certificates. Do not overlook pertinent emails or faxes sent or received related to the transaction.
Upon receipt of your complaint, an investigation of sorts will begin, as is justified by the facts. If the informal complaint and subsequent investigation “seem to warrant such action,” (yes, that is the standard language contained in the pertinent regulation), the deputy administrator will give written notice to your buyer (“respondent”) of the facts or conduct (nonpayment in this case), and give the respondent an opportunity to comply (i.e., pay you).
A PACA Division representative will then try to mediate or otherwise resolve the dispute. If a settlement is reached, it is best to get it in writing, and signed by the buyer. (For more information about filing an informal reparation complaint, visit the USDA website’s “Fair Trading Regulations” page).
Formal Complaints
As the name suggests, the informal reparation process does not result in a binding outcome (unless you and the buyer voluntarily enter into a settlement agreement). If a mutually satisfactory resolution proves illusive, you have the right (usually explained in a notification letter received from PACA upon conclusion of the informal proceedings) to continue pursuing the buyer on a formal basis. You will typically have ninety days from such notification to file a formal reparation complaint with the USDA.
The formal and informal complaint processes are similar in that both require filing a written complaint with supporting documents. The USDA has a sample formal complaint for nonpayment on its website, along with drafting suggestions, but it should not simply be copied, pasted, and filed. Instead, you should be sure to include only allegations pertinent to your claim (such as omitting references to an inspection or broker involvement if they do not apply), while adding important facts (references to any admissions by the buyer).
The complaint and notarized verification statement should be signed by someone with firsthand knowledge of the transaction and must be accompanied by a $500 handling fee (you can typically recover this fee if your buyer is found to have violated PACA procedures).
As you proceed with the formal reparation process, keep in mind that upon written request, the USDA may grant you an extension at any given stage of the process.
You should not, however, assume you will always get an extension, nor abuse the USDA’s discretion in this regard. If you truly require an extension, include a short statement in your written request explaining your reasons, and submit it to the USDA in advance of the actual deadline at issue—and always be aware of the next deadline in your case.
After filing the formal complaint, things begin to diverge from the informal complaint process. The respondent will have a deadline for filing its answer or response. If the buyer has claims against you, it may assert them in a counterclaim, to which you must reply. If the buyer admits to owing some, but not all, of the amount claimed, the USDA may promptly enter an order directing payment of the undisputed amount by a certain date.
