### §499b. Unfair conduct

It shall be unlawful in or in connection with any transaction in interstate or foreign commerce:

(1) For any commission merchant, dealer, or broker to engage in or use any unfair, unreasonable, discriminatory, or deceptive practice in connection with the weighing, counting, or in any way determining the quantity of any perishable agricultural commodity received, bought, sold, shipped, or handled in interstate or foreign commerce.

(2) For any dealer to reject or fail to deliver in accordance with the terms of the contract without reasonable cause any perishable agricultural commodity bought or sold or contracted to be bought, sold, or consigned in interstate or foreign commerce by such dealer.

(3) For any commission merchant to discard, dump, or destroy without reasonable cause, any perishable agricultural commodity received by such commission merchant in interstate or foreign commerce.

(4) For any commission merchant, dealer, or broker to make, for a fraudulent purpose, any false or misleading statement in connection with any transaction involving any perishable agricultural commodity which is received in interstate or foreign commerce by such commission merchant, or bought or sold, or contracted to be bought, sold, or consigned, in such commerce by such dealer, or the purchase or sale of which in such commerce is negotiated by such broker; or to fail or refuse truly and correctly to account and make full payment promptly in respect of any transaction in any such commodity to the person with whom such transaction is had; or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction; or to fail to maintain the trust as required under section 499e(c) of this title. However, this paragraph shall not be considered to make the good faith offer, solicitation, payment, or receipt of collateral fees and expenses, in and of itself, unlawful under this chapter.

(5) For any commission merchant, dealer, or broker to misrepresent by word, act, mark, stencil, label, statement, or deed, the character, kind, grade, quality, quantity, size, pack, weight, condition, degree of maturity, or State, country, or region of origin of any perishable agricultural commodity received, shipped, sold, or offered to be sold in interstate or foreign commerce. However, any commission merchant, dealer, or broker who has violated—

(A) any provision of this paragraph may, with the consent of the Secretary, admit the violation or violations; or

(B) any provision of this paragraph relating to a misrepresentation by mark, stencil, or label shall be permitted by the Secretary to admit the violation or violations if such violation or violations are not repeated or flagrant;

and pay, in the case of a violation under either clause (A) or (B) of this paragraph, a monetary penalty not to exceed $2,000 in lieu of a formal proceeding for the suspension or revocation of license, any payment so made to be deposited into the Treasury of the United States as miscellaneous receipts. A person other than the first licensee handling misbranded perishable agricultural commodities shall not be held liable for a violation of this paragraph by reason of the conduct of another if the person did not have knowledge of the violation or lacked the ability to correct the violation.

(6) For any commission merchant, dealer, or broker, for a fraudulent purpose, to remove, alter, or tamper with any card, stencil, stamp, tag, or other notice placed upon any container or railroad car containing any perishable agricultural commodity, if such card, stencil, stamp, tag, or other notice contains a certificate or statement under authority of any Federal or State inspector or in compliance with any Federal or State law or regulation as to the grade or quality of the commodity contained in such container or railroad car or the State or country in which such commodity was produced.

(7) For any commission merchant, dealer or broker, without the consent of an inspector, to make, cause, or permit to be made any change by way of substitution or otherwise in the contents of a load or lot of any perishable agricultural commodity after it has been officially inspected for grading and certification, but this shall not prohibit re-sorting and discarding inferior produce.

(June 10, 1930, ch. 436, §2, 46 Stat. 532; Apr. 13, 1934, ch. 120, §§2, 3, 48 Stat. 585; June 19, 1936, ch. 602, §1, 49 Stat. 1533; Aug. 20, 1937, ch. 719, §§2–4, 50 Stat. 725, 726; June 29, 1940, ch. 456, §§3, 4, 54 Stat. 696; Apr. 6, 1942, ch. 211, 56 Stat. 200; July 30, 1956, ch. 786, §1, 70 Stat. 726; Pub. L. 93–369, Aug. 10, 1974, 88 Stat. 423; Pub. L. 97–352, §1, Oct. 18, 1982, 96 Stat. 1667; Pub. L. 98–273, §2, May 7, 1984, 98 Stat. 166; Pub. L. 104–48, §§9(b), 10, Nov. 15, 1995, 109 Stat. 430.)

#### **Editorial Notes**

#### Codification

Section was formerly classified to section 552 of this title.

#### Amendments

1995—Pub. L. 104–48, §9(b)(1), substituted "commerce:" for "commerce—" in introductory provisions.

Pars. (1) to (3). Pub. L. 104–48, §9(b)(2), substituted period for semicolon at end.

Par. (4). Pub. L. 104–48, §9(b)(2), (3), substituted period for semicolon after "section 499e(c) of this title" and inserted at end "However, this paragraph shall not be considered to make the good faith offer, solicitation, payment, or receipt of collateral fees and expenses, in and of itself, unlawful under this chapter."

Par. (5). Pub. L. 104–48, §§9(b)(2), 10, substituted "foreign commerce. However," for "foreign commerce: Provided, That", substituted period for semicolon after "miscellaneous receipts", and inserted at end "A person other than the first licensee handling misbranded perishable agricultural commodities shall not be held liable for a violation of this paragraph by reason of the conduct of another if the person did not have knowledge of the violation or lacked the ability to correct the violation."

Par. (6). Pub. L. 104–48, §9(b)(2), substituted period for semicolon at end.

1984—Par. (4). Pub. L. 98–273 inserted "or to fail to maintain the trust as required under section 499e(c) of this title;".

1982—Par. (5). Pub. L. 97–352 substituted "Provided, That any commission merchant, dealer, or broker who has violated (A) any provision of this paragraph may, with the consent of the Secretary, admit the violation or violations; or (B) any provision of this paragraph relating to a misrepresentation by mark, stencil, or label shall be permitted by the Secretary to admit the violation or violations if such violation or violations are not repeated or flagrant; and pay, in the case of a violation under either clause (A) or (B) of this paragraph," for "Provided, That any commission merchant, dealer, or broker who has violated this paragraph may, with the consent of the Secretary, admit the violation or violations and pay".

1974—Par. (5). Pub. L. 93–369 inserted proviso for consent admission of violations, payment of monetary penalty not in excess of $2,000 in lieu of formal proceedings for suspension or revocation of license, and for deposit of the payments into the Treasury of the United States as miscellaneous receipts.

1956—Par. (5). Act July 30, 1956, struck out "for a fraudulent purpose" after "broker", and included misrepresentation of region of origin.

1942—Par. (4). Act Apr. 6, 1942, inserted "and make full payment" and "or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction".

1940—Par. (1). Act June 29, 1940, §3, among other changes, inserted "dealer" after "merchant".

Par. (5). Act June 29, 1940, inserted "quantity, size, pack, weight" after "quality".

1937—Par. (5). Act Aug. 20, 1937, §2, among other changes, inserted "mark, stencil, label, statement" after "act" and "the character, kind, grade, quality, condition, degree of maturity" after "or deed".

Par. (6). Act Aug. 20, 1937, §3, inserted "or in compliance with any Federal or State law or regulation" after "inspector".

Par. (7). Act Aug. 20, 1937, §4, added par. (7).

1936—Par. (4). Act June 17, 1936, struck out "or concerning the condition of the market for" after "involving".

1934—Par. (2). Act Apr. 13, 1934, §2, inserted "or consigned" after "sold".

Par. (4). Act Apr. 13, 1934, §3, substituted "in connection with any transaction involving or concerning" for "concerning the condition, quality, quantity or disposition of" and inserted "or consigned" after "contracted to be bought or sold".