C.H. Robinson Strikes Back Against Farmers in Alleged $1.1 BILLION Cheating Scandal
Minneapolis, MN – C.H. Robinson (CHR) says it will countersue a group of produce farmers who recently filed $1.1 billion class action lawsuit alleging the mega-broker cheated them.
In a newly released statement, Michael Castagnetto, President of Robinson Fresh (RF), a division of CHR specializing in the produce market, called claims made by more than a dozen produce growers (the Growers) “entirely meritless.”
“We deny any and all allegations of wrongdoing and look forward to vigorously defending our actions, as well as filing legitimate counterclaims against the Growers,” Castagnetto said.
Transportation Nation Network (TNN) was among the first news outlets in the world to report the gigantic new lawsuit alleging that between 2012 and 2019 C.H. Robinson engaged in “deceptive business practices,” and then cooked the books in order to conceal the “secret profits” made at the Growers’ expense.
The Growers allege that after entering into consignment agreements with RF, the company “knowingly” deceived them by making “secret, self-dealing profits” on both the sale and transportation of the Growers’ produce, a practice known as “freight topping.”
The Growers also assert RF negotiated other undisclosed volume and prompt-pay incentives in the form of “rebates” from trucking companies, truckers, third-party vendors, and final customers, which it collected and neither disclosed or passed on to the Growers.
Not disclosing these agreements and additional revenue, the Growers argue, is a violation of the Perishable Agricultural Commodities Act (PACA) of 1930, which requires brokers to be transparent in “any transaction involving any perishable agricultural commodity.”
Further, the Growers claim CHR used two separate accounting systems in order to conceal its illegal activity.
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In a departure from its normal handling of pending litigation, CHR says it is speaking out on this case because “we feel it is important to share our views on this.”
CHR claims the suit was filed to gain “media attention” and “contains an enormous amount of self-serving falsehoods as well as blatant mischaracterizations and fabrications.”
For instance, the company says it loaned several of the growers listed in the complaint money to finance their businesses.
CHR alleges, “these growers are using this complaint to avoid paying their debts,” and promised to pursue legal remedies to “collect the significant amounts it is owed.”
Moreover, CHR is claiming vindication after a 7-day onsite investigation by the United States Department of Agriculture’s (USDA) PACA division into the allegations contained in the complaint found no “irregularities.”
“CHR cooperated and supported their thorough investigation and at no time during or after the investigation, did the USDA PACA division advise of any irregularities or take any disciplinary actions against CHR as a result of their investigation,” the company said.
The Growers are asking for damages of $1.1 billion — which could balloon even higher during discovery — and for the court to certify additional classes to join the suit.
CHR is vowing to fight “any attempt to certify it as such.”
Stay with TNN for the latest on this developing story.
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