C.H. Robinson/Robins Fresh has been accused of “illegal and deceptive” business practices in a lawsuit by a number of U.S. and foreign growers.
According to press reports, the lawsuit was filedby a group of farmers in mid-January in federal court in Minnesota asking for a total of $1.1 billion for allegedly overcharging shipping costs while pocketing the additional profits and underpaying farmers for various types of produce from both North America and South America.
The lawsuit reportedly claims that these freight profits exceeded $1,000 per load of produce.
Filed January 16th, the complaint claims C.H. Robinson/ Robinson Fresh of Eden Prairie, MN :
- Represented fees from growers as their own donations to breast cancer organizations;
- Structured the transportation of consigned produce in a way — termed freight topping — that benefited C.H. Robinson rather than growers;
- Contracted for an additional reduction of 2 percent of freight charges and did not pass the savings on to plaintiffs;
- Received rebates from seed suppliers and didn’t pass them on to growers; and
- Received rebates from pallet company CHEP USA but did not pass them on to growers.
The plaintiff’s lawsuit was filed by Craig Stokes, of Stokes Law Office, San Antonio.
Plantiffs are:
- David Moore, doing business as Moore Family Farms;
- Terry Lusk, Jason Lusk and Justin Lusk, doing business as JTJ Farms;
- Kevin Rentz, Amanda Calhoun Rentz, Dennis Bruce Rentz and Karla Jo Rentz, doing business as Rentz Family Farms;
- Kevin Coggins, doing business as Mek Farms;
- Bowles Farming Co. Inc.;
- Agropecuaria Los Americanos S.C. de R.L. de C.V.;
- Phil Sandifer & Sons Farms LLC;
- JMB Farm LLC;
- Powe Farms Management LLC
- CA Comercial S.A.C.;
- Global Fresh S.A.C.; and
- Pepas Tropicales Del Peru S.A.C;
C.H. Robinson has until early March to respond to the complaint in court, but the company issued a statement to trade newspaper The Packer February 10 stating the “complaint was designed to capture media attention, and it contains an enormous amount of self-serving falsehoods as well as blatant mischaracterizations and fabrications about our company, teams and the actual agreements signed by the growers themselves.”
C.H. Robinson plans to oppose the plaintiffs’ plan to pursue class-action status of the lawsuit.
“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.”
In the company’s statement, C.H. Robinson said it loaned several of the growers listed in the complaint money to finance their businesses.
“Now that the money is due to be repaid, these growers are using this complaint to avoid paying their debts. C.H. Robinson will assert its right to collect the significant amounts it is owed by the growers,” according to the statement.
Stokes said plaintiffs are seeking class action status from the court, and that claims of freight topping could apply to “hundreds if not thousands of growers.” Stokes said he was aware of only one grower plaintiff who owes money to C.H. Robinson.
Stokes alleges that C.H. Robinson inflated freight costs and included that number in the delivered cost to the buyer.
“So you take the delivered cost, minus the freight inflated by (X percent), and then that number was reported to the grower as the f.o.b. price,” he said.
While contracts with growers clearly spelled out the sales commission charged by C.H. Robinson, Stokes said the contracts made no mention of C.H. Robinson making money on freight.
“If you are going to charge for something, you put it in the contract and get permission,” Stokes said. “Tell the grower how much you’re going to mark up the truckers’ invoices and get the growers’ permission.”
C.H. Robinson said in its statement that the company did not violate any expressed or implied duties to the growers.
“We are proud of the work we do with our teams, growers, and customers throughout the world, and we look forward to putting this entirely meritless complaint behind us,” said Michael Castagnetto, President of Robinson Fresh, a division of C.H. Robinson.