The following summaries of precedent-setting reparation decisions issued under the Perishable Agricultural Commodities Act (PACA) are intended to help companies understand their rights and responsibilities under PACA. The key facts and core reasoning used to decide cases are presented.
TOPIC: USDA INSPECTION OF A PORTION OF A LOAD
Western Vegetable Exchange
R. Moyers & Sons Wholesale Produce
50 A.D. 1001, decided April 04, 1991
Western Vegetable Exchange (Western) shipped 927 cartons of lettuce from Salinas, California to R. Moyers & Sons Wholesale Produce (Moyers) in Akron, Ohio. Upon arrival in Akron, Moyers accepted delivery of the product but called for a U.S. Department of Agriculture (USDA) inspection.
The inspection certificate showed that 477 cartons of lettuce were affected by 8% serious defects and 3% decay. Upon receiving the inspection results, Moyers sold the product and paid Western a total of $4,542.30. Western, however, argued that it had not breached the warranty of suitable shipping condition and sought the remaining balance of its invoice price, or $7,416.00.
While the USDA inspection appeared to show defects in excess of good delivery standards for lettuce (see 7 CFR Sec. 46.44(b)), the inspection was made on only 477 cartons, or approximately half of the 927 cartons shipped. The missing lettuce (the product that was not inspected), PACA explained, must be assumed to be free of defects for the purposes of assessing whether the shipment as a whole made good delivery. After accounting for the missing cartons, the percentage of defects for the entire load fell within the good delivery standards.
As a result, PACA concluded that Moyers had failed to show a breach of the sales contract and awarded Western payment of $7,416.00, plus interest.
These summaries are not issued by the USDA, nor the PACA Branch, and should not be mistaken for an official government statement or release.