§ 499e. — Liability to persons injured.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC499e]
TITLE 7--AGRICULTURE
CHAPTER 20A--PERISHABLE AGRICULTURAL COMMODITIES
Sec. 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.
(June 10, 1930, ch. 436, Sec. 5, 46 Stat. 534; Aug. 20, 1937, ch. 719,
Sec. 7, 50 Stat. 728; Pub. L. 98-273, Sec. 1, May 7, 1984, 98 Stat. 165;
Pub. L. 102-237, title X, Sec. 1011(3), Dec. 13, 1991, 105 Stat. 1898;
Pub. L. 104-48, Secs. 6, 8(b), Nov. 15, 1995, 109 Stat. 427, 429.)
Codification
Section was formerly classified to section 555 of this title.
Amendments
1995--Subsec. (a). Pub. L. 104-48, Sec. 8(b), inserted ``(including
any handling fee paid by the injured person or persons under section
499f(a)(2) of this title)'' after ``damages''.
Subsec. (c)(3). Pub. L. 104-48, Sec. 6(a), (b), struck out ``and has
filed such notice with the Secretary'' before ``within thirty calendar
days'' in first sentence and inserted after first sentence ``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.''
Subsec. (c)(4), (5). Pub. L. 104-48, Sec. 6(c), added par. (4) and
redesignated former par. (4) as (5).
1991--Subsec. (c)(2). Pub. L. 102-237 substituted ``, as'' for
``(as'' before ``defined''.
1984--Subsec. (c). Pub. L. 98-273 added subsec. (c).
1937--Subsec. (a). Act Aug. 20, 1937, struck out ``paragraph (1),
(2), (3), or (4) of'' after ``provisions of''.
Section Referred to in Other Sections
This section is referred to in sections 499b, 499f of this title.
