7 U.S.C. § 499e : US Code - Section 499E: Liability to persons injured

Search 7 U.S.C. § 499e : US Code - Section 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.
(c) Trust on commodities and sales proceeds for benefit of unpaid
suppliers, sellers, or 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.