A group of about a dozen farmers from across North and South America have filed a federal class action complaint against the Fortune 500 logistics company C.H. Robinson Worldwide, Inc.
The farmers claim the Minnesota-based company engaged in illegal business practices that shortchanged them, which C.H. Robinson strongly denies.
At the center of the complaint are allegations of “freight topping.” According to the complaint, C.H. Robinson allegedly overcharged for shipping costs while pocketing the additional profits and underpaying farmers for many types of produce, from melons grown in Texas to asparagus produced in Peru.
Andrew Thomasson is a New Jersey-based consumer protection attorney. He represents the farmers, including David Moore, the lead plaintiff from Dalhart, Texas. He and others filed the class action complaint in U.S. District Court in Minnesota in mid-January seeking $1.1 billion for concealed and unpaid profits as well as punitive damages.
“This multibillion dollar company — we know through their internal memos — have deliberately sought to steal money from the most vulnerable segment of society — our backbone. [Farmers] are the salt of the earth — as American as you can get,” Thomasson said. “And that [C.H. Robinson] would steal from them is beyond me. I don't think there's any class of person that Robinson is not willing to deceive or take money from in the name of profit.”
Because grocers pay the cost of freight and produce in one transaction, overcharged shipping can lead to undervalued produce, said Thomasson. According to the complaint, the company allegedly tracked profits from freight topping in a secret, internal accounting system while presenting incomplete figures from a separate system to farmers and grocers.
Thomasson said C.H. Robinson’s actions have brought some farmers to — or over — the brink of bankruptcy.
“They've slowly bankrupted or are pushing some farmers into bankruptcy,” he said. “The farmer may not need to go that route had Robinson not been taking this money from them without their knowledge. It's just very unfortunate.”
San Antonio-based agricultural law attorney Craig Stokes also represents the farmers.
He said C.H. Robinson has regularly overcharged for freight costs, pocketed the profits, failed to disclose those profits to farmers in violation of the federal Perishable Agricultural Commodities Act (PACA), and then underpaid them for their produce.
“We are easily in the hundreds of thousands of transactions,” he said. “But I can't give you a definitive number because I only have access to the records of the clients that our law firms represent.”
Stokes said the alleged freight topping charges differed from transaction to transaction and range from hundreds to thousands of dollars per load.
In a written statement, C.H. Robinson said Robinson Fresh — a division of the company — is “proud of its long-standing relationships with growers around the world,” and asserted that “the allegations in [the plaintiffs’] complaint are self-serving and untrue. Any insinuation of wrongdoing or unfair dealing are unfounded and we look forward to aggressively defending our actions.”
If the class action is certified, hundreds of farmers could opt in to the suit. Jason Klinowsi is an agricultural and food law attorney at Wallace, Jordan, Ratliff & Brandt in Birmingham. He has no involvement with the case.
“On the single issue of freight topping, this will be the largest case as far as the sheer number of potential participants and the sheer dollar volume directly related to the single issue of whether freight topping occurred in violation of PACA,” Klinowski said.
Thomasson said he believes the court process could take months — or years — to reach a judgment or settlement.