SECTIONS 55721-55725 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 55721-55725

55721. (a) If, in the opinion of the department, there appears to
be reasonable grounds for investigating a complaint or notification
made under the provisions of this chapter, the department shall
investigate the complaint or notification. In the course of the
investigation, if the department determines that violations of this
chapter are indicated other than alleged violations specified in the
complaint or notification that served as the basis for the
investigation, the department may expand the investigation to include
the additional violations.
(b) In the opinion of the department, if an investigation
substantiates the existence of violations of this chapter, the
department may cause a complaint to be issued.
(c) The investigation may include, but shall not be construed to
require, examinations and audits of the books and records of any
processor that pertain to the solvency of the processor of, or to the
purchase of, or to the handling and accounting for, any farm product
that is purchased or received on a pack-out or other basis from the
producer of the farm product. The department may examine and audit
all pertinent books, records, weight certificates, receipts, ledgers,
journals, papers, contracts, bank statements, canceled checks and
other documents of the processor that show or tend to show facts
regarding the financial condition and the number and status of
accounts of growers and others that are doing business with the
processor.

55722. If the examination discloses evidence of any violation of
this chapter, the department may issue a complaint detailing the
charges and the discipline sought in accordance with this chapter.

55722.5. (a) An aggrieved grower or licensee with a complaint that
is not subject to the federal Packers and Stockyards Act, 1921 (7
U.S.C. Sec. 181 et seq.) or the federal Perishable Agricultural
Commodities Act, 1930 (7 U.S.C. Sec. 499a et seq.) may seek
resolution of that complaint by filing a complaint with the
department within nine months from the date a complete account of
sales was due. The complaint shall be accompanied by two copies of
all documents in the complainant's possession that are relevant to
establishing the complaint, a filing fee of one hundred dollars
($100), and a written denial of jurisdiction from the appropriate
federal agency unless the commodity involved clearly does not fall
under either the federal Packers and Stockyards Act, 1921 (7 U.S.C.
Sec. 181 et seq.) or the federal Perishable Agricultural Commodities
Act, 1930 (7 U.S.C. Sec. 499a et seq.). Within five business days of
receipt of a signed and verified complaint, the filing fee, and the
denials of federal jurisdiction, the department shall serve the
verified complaint on the respondent. Service shall be by certified
mail. The department, the secretary, the department's employees, the
department's agents, the boards and commissions associated with the
department, their employees or agents, and the State of California
are not parties to the dispute in a proceeding brought under this
section.
(b) The respondent served shall answer within 30 calendar days of
service. The respondent's response shall include two copies of all
relevant documentation of the transactions referred to in the
verified complaint.
(c) Within 30 calendar days of receipt of the answer, the
department shall issue to both parties a written factual summary on
the basis of the documents that have been filed with the department.
(d) If a settlement is not reached within 30 calendar days after
the department's summary is issued, the department, on request of the
claimant or respondent and upon payment of a filing fee of three
hundred dollars ($300), shall schedule alternate dispute resolution,
to commence within 90 calendar days. The department shall serve both
parties with a notice of hearing, which sets out the time, date,
street address, room number, telephone number, and name of the
hearing officer. Service of the notice of hearing shall be by
certified mail.
(e) The alternate dispute resolution shall proceed as follows:
(1) The hearing shall be conducted by hearing officers in
accordance with standard procedures promulgated by the American
Arbitration Association or other acceptable alternative dispute
resolution entities.
(2) The hearing officers shall be familiar with the type of issues
presented by those claims, but need not be attorneys.
(3) The sole parties to the proceedings shall be the complainant
and the respondent.
(4) The disputes, claims, and interests of the department or the
State of California are not within the jurisdiction of the
proceedings.
(5) The validity of a regulation of the department or order
promulgated pursuant to this code is not within the jurisdiction of
the proceedings.
(6) Law and motion matters shall be handled by the assigned
hearing officer.
(7) The hearing officer has no authority to enter into settlement
discussions except upon stipulation of the parties involved.
(8) The parties may represent themselves in propria persona or may
be represented by a licensed attorney at law. A party may not be
represented by a representative who is not licensed to practice law.
(9) To the extent of any conflict between any provision of Chapter
4.5 (commencing with Section 11400) of Part 1 of Division 3 of Title
2 of the Government Code and this article, this article shall
prevail.
(10) The hearing officer may order a review of records or an audit
of records by a certified public accountant. The review or audit
shall be conducted under generally accepted auditing standards of the
American Institute of Certified Public Accountants, and upon
completion of the review or audit the nature and extent of the review
or audit shall be disclosed to the parties by the auditor in the
audit report. The audit report shall disclose the number of
transactions reviewed and the rationale for selecting those
transactions. The department shall advance the costs of the audit or
review of records, but the hearing officer shall apportion the costs
at the conclusion of the hearing. The department shall pursue
repayment in accordance with the hearing officer's apportionment and
may bring an action in a court of competent jurisdiction to recover
funds advanced. Nothing in this subdivision shall be construed to
require the department to pursue any specific remedy or to prohibit
the department from accepting a reasonable repayment plan.
(f) The hearing officer shall render a written decision within 60
days of submission of the case for decision. In addition to rendering
a written finding as to what is owed by whom on the substantive
allegations of the complaint, the hearing officer shall decide
whether or not to order the full cost of the alternative dispute
resolution proceeding, and in what ratio or order the losing party is
to pay the costs of the proceeding. For these purposes, the cost of
the alternative dispute resolution proceeding does not include the
filing fee, the parties' attorney fees, or expert witness fees. The
hearing officer may also award a sanction against a complainant for
filing a frivolous complaint or against a respondent for unreasonable
delay tactics, bad faith bargaining, or resistance to the claim, of
either 10 percent of the amount of the award or a specific amount, up
to a maximum of one thousand dollars ($1,000). Any sanction award
shall not be deemed to be res judicata or collateral estoppel in any
subsequent case in which either the complainant or respondent are
charged with filing a frivolous complaint, unreasonable delay
tactics, bad faith bargaining, or resistance to the claim. The
department may consider the written decision of the hearing officer
in determining any related licensing action. The written decision of
the hearing officer may be introduced as evidence at a court
proceeding.
(g) Nothing in this section prohibits the parties to the dispute
from settling their dispute prior to, during, or after the hearing.
(h) Nothing in this section alters, precludes, or conditions the
exercise, during any stage of the proceedings provided by this
chapter, of any other rights to relief a party may have through
petition to a court of competent jurisdiction, including, but not
limited to, small claims court.

55724. (a) Every licensee shall prepare and preserve the accounts,
records, and memoranda required by this chapter which shall fully and
correctly disclose all transactions involved in his business.
Licensees shall keep records which are adapted to the particular
business that the licensee is conducting and in each case such record
shall fully disclose all transactions in the business in sufficient
detail as to be readily understood and audited. Minimum records
required under this chapter are:
1. A record of cash received.
2. A record of cash disbursed.
3. A general ledger or its equivalent.
4. A record of amounts due California producers.
5. A record of amounts due others.
(b) Every licensee shall prepare and preserve records and
memoranda required by this chapter which shall fully and correctly
disclose the true ownership and management of such business.

55725. The failure or refusal of any licensee to produce and make
available to the director any books or records requested pursuant to
this article, or otherwise to obstruct the examination or audit, is
sufficient ground to suspend or revoke the license issued pursuant to
this chapter.