(Nov. 13) ATS LLC has settled a Perishable Agricultural Commodities Act case, but the defunct Nogales, Ariz.-based shipper still has additional debts to pay.

Priscilla Grannis, Naples, Fla.-based attorney for Rynn & Janowsky LLP, Newport Beach, Calif., said creditors were paid nearly $500,000 to settle a PACA case filed Oct. 22 in the U.S. District Court for the Eastern District of Arkansas.

That case originally was brought by Lange Trading Co., Springfield, Ill., and Oxnard, Calif.-based Eclipse Berry Farms LLC. Those two companies were seeking a combined $192,022, but additional creditors joined the case before it was settled Nov. 5.

“All these groups have reached a settlement with ATS,” Grannis said. “It’s over and done with.”

Grannis, however, said she was representing two other companies with smaller claims against ATS.

“I know there are additional PACA creditors, and they too will be looking for payment,” she said.

PAYMENT EFFORTS LAUDED

Grannis praised ATS – formerly Arkansas Tomato Shippers — and its attorneys for the quick and professional manner in which the lawsuit was resolved.

Hani Hashem, Monticello, Ark.-based attorney for ATS, said the company was “making every effort to maximize payments to all creditors.”

He declined to specify how many creditors the company has or how much it owes.

Former ATS sales manager Brooks Lisenbey told The Packer last year that the company shipped 2.7 million packages a year from Mexico and about 750,000 from Arkansas. Lisenbey, who couldn’t be reached for comment Nov. 13, has opened a new business — JBL Produce LLC, in Nogales.

WORKERS’ COMPLAINT

ATS had a four-star credit rating in The Red Book, but things began to unravel in June when a lawsuit was filed in the U.S. District Court for the Western District of Arkansas on behalf of Mexican migrant workers.

An attorney for the workers, Jennifer Rosenbaum of the Southern Poverty Law Center, Montgomery, Ala., said damages in excess of $5 million will be sought.

Hashem said that lawsuit was one of the factors that led Charles Searcy, the principal manager and a part-owner of ATS, to get out of the business. ATS reported to Red Book Credit Services Oct. 24 that it had closed.

According to court documents, ATS employed more than 2,500 Mexican workers under provisions of the H-2A guest agricultural worker program from 2002-07.

The lawsuit alleges that ATS did not properly reimburse workers for travel-related expenses and did not pay them minimum wage.

TRIPPED UP BY JUDGE’S RULING

“It’s entirely untrue,” said Randy Clanton, owner of Hermitage, Ark.-based Randy Clanton Farms, a former ATS grower and a co-defendant in the lawsuit. “As a matter of fact, we paid workers $8.01 an hour last year.”

Clanton said the lawsuit stems primarily from a disputed visa fee. He said H-2A regulations don’t specify that growers are obligated to reimburse workers for that expense, but a judge’s ruling in a similar case set a precedent that changed that in favor of workers.

“I know a lot of growers around the country that don’t pay that fee and think what they’re doing is legal,” he said. “I’m afraid there are a lot of companies that think they’re doing things the right way but could still get hit with a lawsuit.”

Clanton said he had not decided who will market his tomatoes next year. He said his 400 acres produce 500,000 to 750,000 boxes a year, or more than half the state’s total from its June and July harvest.