Farmers slam America's largest trucking brokerage with a $1.1 billion lawsuit

trucking

  • Farmers in North and South America sued C.H. Robinson, the world's third-largest logistics company, alleging illegal business practices they say defrauded them, Texas Public Radio reported Friday.
  • Dozens of farmers claim the company overcharged for shipping costs of produce, illegitimately held onto additional profits, and underpaid farmers for many types of products including melons and asparagus.
  • C.H. Robinson denies all allegations and said some farmers owed them money for loans the company granted.
  • The farmers are seeking $1.1 billion over claims of concealed and unpaid profits as well as punitive damages against C.H. Robinson.
  • Visit Business Insider's homepage for more stories.

Farmers in North and South America are suing C.H. Robinson, the world's third-largest logistics company, alleging illegal business practices that they claim defrauded them, Texas Public Radio reported Friday.

David Moore and nearly a dozen other farmers claim C.H. Robinson, particularly fresh product and products distributor Robinson Fresh, overcharged for shipping costs, illegitimately held onto additional profits, and underpaid farmers for many types of products including melons and asparagus.

C.H. Robinson denied the farmers' accusations.

"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," Michael Castagnetto, President of Robinson Fresh, told Business Insider in a statement.

The lawsuit was filed in U.S. District Court in Minnesota mid-January seeking $1.1 billion over claims of concealed and unpaid profits as well as punitive damages.

"To me, this is a critical lawsuit because farmers have struggled financially and the company has as a legal and fiduciary responsibility to act in the grower's economic best interest," Andrew Thomasson, a New Jersey-based consumer-protection attorney representing the farmers, told Business Insider in a statement. "But it's actually hurting these farmers and their community."

The farmers accuse C.H. Robinson in the lawsuit of "freight topping," or charging farmers additional hidden fees for transportation costs. Thomasson said the alleged freight topping negatively affected all stakeholders including truckers, investors, and bankrupted framers in some cases.

The case joins other legal actions that allege trucking companies are charging extraneous fees. In December, the Federal Trade Commission sued Atlanta, Georgia-based FleetCor, claiming the company garnished "at least hundreds of millions" in extra fees from small businesses.

The suit against C.H. Robinson accuses the company of tracking the profits from freight topping in an internal accounting system while presenting incomplete invoices from a separate system to farmers and grocers.

But the company maintains the position that the suit is wholly illegitimate and that several farmers were using the lawsuit to avoid paying back loans from the company.

"C.H. Robinson will assert its right to collect the significant amounts it is owed by the growers," Castagnetto said.

Farmers are dependent on C.H. Robinson during the growing season because it is difficult to market their crops to or find loans elsewhere, Thomasson said. He claimed that farmers are afraid that if they make waves, C.H. Robinson would harm them with financial repercussions.

"Someone needs to stand up for the people that don't have the ability to stand up for themselves," Thomasson said, "It is legally, morally and ethically wrong what Robinson is doing and it needs to stop."

The lawsuit is seeking class-action status, according to Thomasson. However, to proceed as a class action lawsuit the court must certify it as such.

C.H. Robinson said it would oppose any attempt to grant the lawsuit class-action status, which would allow other farmers to join.

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