Case 8:20-cv-02875-JSM-TGW Document 1 Filed 12/04/20 Page 1 of 44 PageID 1
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`UNITED STATES DISTRICT COURT
`MIDDLE DISTRICT OF FLORIDA
`TAMPA DIVISION
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`
`
`FRUITS-GIDDINGS S.A. DE C.V.; GIDDINGS
`BERRIES CHILE S.A.; AND GIDDINGS
`BERRIES PERÚ S.A.C.,
`
`
`
`
`
`
`Plaintiffs,
`
`
`
`v.
`
`
`ALWAYS FRESH FARMS, LLC; WAYNE
`GIDDINGS; AND MATTHEW GIDDINGS
`
`
`Defendants.
`
`
`
`
`
`COMPLAINT AND DEMAND FOR JURY TRIAL
`
`Plaintiffs Fruits-Giddings S.A. de C.V., Giddings Berries Chile S.A., and Giddings
`
`Berries Perú S.A.C. (collectively herein, “Plaintiffs”), for their complaint against Defendants
`
`Always Fresh Farms, LLC, Wayne Giddings, and Matthew Giddings,1 allege as follows:
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`NATURE OF THE ACTION
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`1.
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`This is an action for damages caused by Defendant Always Fresh Farms, LLC’s
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`mishandling of hundreds of millions of dollars’ worth of fruit that it was entrusted to sell on
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`behalf of Plaintiffs, representing virtually all of Plaintiffs’ supply of produce to the North
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`American export market during their 2019-2020 season.
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`2.
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`Consumers in the United States enjoy year-round availability of fresh berries,
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`including blueberries, blackberries, raspberries, and strawberries, because of a robust trade in
`
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`1 There is no familial relationship between Plaintiffs and Messrs. Giddings of Always Fresh
`Farms, LLC.
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`CASE NO. 8:20-cv-02875
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`these commodities from Mexico and South America during the months when domestic
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`production is low (the fall through early spring). Foreign producers and suppliers sell their
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`fruit in the United States directly to buyers, through the use of brokers, through “growers’
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`agents” or other “commission merchants” as those terms are defined under the Perishable
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`Agricultural Commodities Act and its regulations (the “PACA”), or through any combination
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`of those methods.
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`3.
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`In this case, defendant Always Fresh Farms, LLC and its principals, Wayne and
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`Matthew Giddings, induced Plaintiffs to supply their fruit on an exclusive basis to Always
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`Fresh Farms, LLC as their sales agent with material misrepresentations about (among other
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`things) their systems and operational capacity to handle Plaintiffs’ volume of export fruit and
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`their transparency in providing customer, sales, and other financial information.
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`4.
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`Once the season was underway, Plaintiffs were kept in the dark on material
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`information that was fundamental to the parties’ relationship. With prices yielding tremendous
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`losses to Plaintiffs, Matthew Giddings induced Plaintiffs to continue working with Always
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`Fresh Farms, LLC with false promises that the company would absorb the difference between
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`Fruits-Giddings, S.A. de C.V.’s returns and competitive grower prices in Mexico and would
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`communicate openly with Fruits-Giddings, S.A. de C.V. “to make sure we are higher th[a]n
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`the field.”
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`5.
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`Always Fresh’s mishandling of Plaintiffs’ fruit, its related acts and omissions,
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`its negligence, and its breach of the parties’ agreements, constituted “unfair practices” PACA.
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`Defendants also are liable to Plaintiffs under the Florida Deceptive and Unfair Trade Practices
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`Act (“FDUTPA”), which broadly prohibits unfair or deceptive acts or practices in the conduct
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`of any trade or commerce.
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`6.
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`As a result of Defendants’ actions in breach of their legal responsibilities to
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`Plaintiffs, Plaintiffs have suffered damages exceeding $25,000,000, for which they are entitled
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`to full recovery.
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`THE PARTIES
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`7.
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`Plaintiff Fruits-Giddings S.A. de C.V. (“Giddings Mexico”) is a Mexican
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`corporation with its principal place of business located in Mexico.
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`8.
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`Plaintiff Giddings Berries Chile S.A. (“Giddings Chile”) is a Chilean
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`corporation with its principal place of business located in Chile.
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`9.
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`Plaintiff Giddings Berries Perú S.A.C. (“Giddings Peru”) is a Peruvian
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`corporation with its principal place of business located in Peru.
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`10.
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`Plaintiff Giddings Mexico, Giddings Chile, and Giddings Peru are related
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`business entities that are part of a larger consortium known as “Grupo Giddings.”
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`11.
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`Giddings Mexico supplies high-quality, conventional and organic fresh
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`blueberries, strawberries, blackberries, and raspberries for the North American export market
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`(United States and Canada) from Mexico.
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`12.
`
`Giddings Chile and Giddings Peru supply high-quality, conventional and
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`organic blueberries for the North American export market (United States and Canada) from
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`Chile and Peru, respectively.
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`13.
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`Plaintiffs each supply their produce from a combination of farms they own and
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`third-party farms with which they contract in their respective home countries.
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`14.
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`Always Fresh Farms, LLC (“Always Fresh”) is a Florida limited liability
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`company with its principal place of business in Winter Haven, Florida. The members of
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`Always Fresh, and Wayne Giddings and Matthew Giddings, are citizens of Florida.
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`15.
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`At all times relevant hereto, Always Fresh has operated its business under a
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`valid United States Department of Agriculture (“USDA”) PACA License, which the USDA
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`has identified as License No. 20010241. The principals listed on Always Fresh’s PACA
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`License are Matthew Giddings and Wayne Giddings.
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`16.
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`At all times relevant hereto, Always Fresh was engaged in the business of
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`receiving perishable agricultural commodities in interstate or foreign commerce for sale, on
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`commission, for or on behalf of another and is therefore a “commission merchant” as defined
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`in PACA. See 7 U.S.C. § 499a(b)(5).
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`17.
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`At all times relevant hereto, Always Fresh was engaged in the business of
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`purchasing and/or selling produce in wholesale or jobbing quantities and is therefore a “dealer”
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`of produce as defined in PACA. See 7 U.S.C. § 499a(b)(6).
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`18. Wayne Giddings is a citizen of Florida and at all relevant times was Manager,
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`President, and an owner of Always Fresh.
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`19. Matthew Giddings is a citizen of Florida and at all relevant times was Chief
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`Operating Officer, Chief Commercial Officer, and an owner of Always Fresh.
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`JURISDICTION AND VENUE
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`20.
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`The Court has subject matter jurisdiction over this action under 7 U.S.C. §
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`499e(b)(2) and 28 U.S.C. § 1331.
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`21.
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`The Court has subject matter jurisdiction over this action under 28 U.S.C. §
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`1337 because PACA is an “Act of Congress regulating commerce” and several of Plaintiffs’
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`claims herein arise under 7 U.S.C. § 499e(b)(2), 7 U.S.C. § 499p, and 7 C.F.R. § 46 et seq.
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`22.
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`The Court also has subject matter jurisdiction over this action under 28 U.S.C.
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`§ 1332 because there is complete diversity of citizenship between the parties and the amount
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`in controversy exceeds $75,000, exclusive of any claims for the recovery of exemplary
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`damages, pre or post-judgment interest, costs, or attorneys’ fees.
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`23.
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`The Court has supplemental jurisdiction over Plaintiffs’ other claims pursuant
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`to 28 U.S.C. § 1367(a).
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`24.
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`The Court has personal jurisdiction as to Defendants, each of whom is a Florida
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`citizen whose acts and omissions giving rise to Plaintiffs’ claims occurred within Florida.
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`25.
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`Venue in this district is proper under 28 U.S.C. § 1391(b) because a substantial
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`part of the acts or omissions giving rise to Plaintiffs’ claims occurred in this district and a
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`substantial part of the property that is the subject of this action is or was situated within this
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`district.
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`FACTUAL ALLEGATIONS
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`I.
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`The Parties Discuss Legal Integration and a Marketing Arrangement
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`26.
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`Plaintiffs have historically marketed their fruit in the United States and Canada
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`through sales agents who are paid on commission.
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`27.
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`For many years before the 2019-2020 export season, which generally runs
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`between late August and late April, Plaintiffs contracted with another entity to market and sell
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`their fruit throughout the United States and Canada.
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`28.
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`Grupo Giddings began to explore opportunities to change its North American
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`sales agent to one that would provide full transparency on information related to customers,
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`sales, charges against, and handling of their fruit. Grupo Giddings also sought to work with a
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`sales agent that it could own an equity interest in, allowing Grupo Giddings to maximize the
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`returns on its fruit, and approached Always Fresh about this subject in or about January 2019.
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`29.
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`Plaintiffs’ representatives Jorge Salman and Francisco Alvariño traveled to
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`Always Fresh’s headquarters in Winter Haven, Florida and met with Wayne Giddings,
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`Matthew Giddings, and Keith Mixon in January 2019 to begin discussing a commercial
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`relationship between Plaintiffs and Always Fresh. Messrs. Giddings represented in this
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`meeting that Always Fresh was fully capable of handling, marketing, and selling Plaintiffs’
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`entire supply of fruit for the North America export market at competitive prices. They
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`represented that Always Fresh had been growing exponentially in recent years and that its
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`current customers and prospective customers with whom Messrs. Giddings had high-level
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`contacts had a large demand for Plaintiffs’ products that Always Fresh was not yet meeting
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`because of a lack of sufficient volume, explaining that they spent 70 percent of their time trying
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`to procure fruit. As discussed in the meeting, Plaintiffs’ sourcing of fruit from many growers,
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`including over a thousand growers with whom Giddings Mexico had a relationshp, would
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`allow Always Fresh access to a large volume of fruit to market without needing to contract and
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`manage relationships and logistics with thousands of individual growers.
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`30.
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`Always Fresh prepared a Memorandum dated January 30, 2019, titled “Re:
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`Grupo Giddings and Always Fresh Farms, LLC” (hereafter, “January Memorandum”)
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`regarding its discussions with Grupo Giddings to that point. The Memorandum began: “The
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`purpose of this memorandum is to outline a proposed model of an alliance between Grupo
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`Giddings and Always Fresh Farms for the marketing in North America (the United States and
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`Canada) of Grupo Giddings western hemisphere produced blueberries, blackberries,
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`raspberries and strawberries.”
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`31.
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`The January Memorandum summarized Grupo Giddings’ “stated objectives” as
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`including, among other things: “Complete transaction and supply chain transparency” and
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`“[d]efined operational procedures and cost transparency.”
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`32.
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`The January Memorandum also summarized Always Fresh’s “stated
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`objectives” as including transaction and supply chain transparency and defined operational
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`procedures and cost transparency, as well as exclusivity with respect to Plaintiffs’ fruit for the
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`North American export market.
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`33.
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`The January Memorandum provided a framework for Grupo Giddings to
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`become a co-owner of Always Fresh, but with Plaintiffs and Always Fresh nonetheless
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`operating independently as supplier and commission merchant.
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`34.
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`Grupo Giddings and Always Fresh paused their discussions while Grupo
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`Giddings considered other opportunities. They resumed their discussions in June 2019.
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`35.
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`On June 21, 2019, Keith Mixon of Always Fresh, copying Wayne and Matthew
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`Giddings, wrote to principals of Grupo Giddings suggesting that they use the January
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`Memorandum as a starting point for further discussion and asked Grupo Giddings to “re-review
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`the memorandum and give us some feedback as to what works and what doesn’t.”
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`36.
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`On July 3, 2019, Mr. Alvariño wrote to Mr. Mixon, Wayne Giddings, and
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`Matthew Giddings that Grupo Giddings decided to “seriously evaluate and validate the
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`distribution of Giddings in North America with Always Fresh (AF) and Keith Mixon as CEO.”
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`He proposed a meeting to resolve details, writing: “it is imperative to develop the start [sic]
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`business plan (temp 19/20) of the new company considering a likely scenario with 50% of the
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`GF volume. That also will allow AF to be prepared for the 2020-2021 season.”
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`37.
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`Grupo Giddings inquired about Always Fresh’s qualifications, focusing on its
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`experience selling different fruit varieties and volumes, customers, packing formats, pricing,
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`cost chain, logistics, and other suppliers.
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`38.
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`Defendants touted Always Fresh’s existing customers and relationships,
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`operational capabilities, low costs and ability to obtain strong prices, assuring Grupo Giddings
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`that Always Fresh would be able to market 100% of Plaintiffs’ fruit beginning immediately
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`with the 2019-2020 export season as opposed to Giddings’ proposal for 50 percent of
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`Plaintiffs’ fruit.
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`39.
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`Defendants represented that Always Fresh’s enterprise resource planning
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`software, Famous, would provide Plaintiffs’ desired level of transparency on pricing, sales,
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`and related information, and that they would provide this information to Plaintiffs.
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`40.
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`The parties, including Messrs. Giddings, arranged a meeting in Winter Haven,
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`Florida, on or about July 18 and 19, 2019. Shortly in advance of that meeting, Defendants
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`shared with Grupo Giddings a presentation titled “Always Fresh Farms Overview and
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`Amalgamated Business Financial Outlook” (“AFF Presentation”).
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`41.
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`Defendants, including Messrs. Giddings, used the AFF Presentation to promote
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`Always Fresh’s customer base, record of exponential growth in recent years, and history of:
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`“Accurate and timely information, constant communication;” “Creation of distribution
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`channels to maximize fresh deliveries, increasing consumption;” and “Executing logistics and
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`supply chain.” Defendants presented Always Fresh as a “[s]pecialist berry grower and supply
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`chain company with activity and therefore knowledge of every step in the supply chain,”
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`promoted its size and power, and listed as a key strength “[i]nvestment in the supply chain to
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`enhance freshness and service.”
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`42.
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`Defendants also represented in the AFF Presentation and their July 2019
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`meetings with Plaintiffs’ representatives that (1) Always Fresh uses a “[d]emand forecasting
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`tool that allow[s] for detailed weekly view by customer and commodity type” and that this
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`resource would be leveraged to Plaintiffs’ advantage; (2) Always Fresh’s experience in the
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`berry business, including that the experience of Wayne Giddings, Matthew Giddings, and
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`Keith Mixon, was “unrivaled;” and (3) that Always Fresh uses a “Sales Strategy Driven by
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`Demand.”
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`43.
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`In presenting their Sales Strategy Driven by Demand, Defendants represented
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`averages of forecasted weekly demand for blackberries, blueberries, and raspberries in various
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`pack sizes for both current customers and prospective customers that were consistent with
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`Plaintiffs’ supply of fruit.
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`44.
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`Upon information and belief, Always Fresh had never marketed or sold fruit in
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`the volumes Defendants represented they could handle based on customer demand, Always
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`Fresh was incapable of handling such high volumes of fruit, and Defendants knew this when
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`they represented Always Fresh was prepared to handle Plaintiffs’ entire production of fruit.
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`45.
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`The parties’ principals signed a document titled “Always Fresh – Giddings
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`PARTNERSHIP Matters for consideration” (hereafter referred to as, “Transaction Term
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`Sheet”), which was fully executed by early August 2019.
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`46.
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`The Transaction Term Sheet reflects its signers’ agreement to enter into
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`contracts effective in January 2020. In particular:
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`a. One or more contracts whereby Grupo Giddings would “acquire shares in AF”
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`through “its Florida entity – with attempt to rename this company ‘Giddings
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`Always Fresh LLC;’”
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`b. One or more contracts governing the activities and affairs of Always Fresh,
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`including matters such as membership, capital contributions and dividends,
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`company management, business planning and budgeting, transfer of ownership
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`units, and restrictions on competition; and
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`c. One or more contracts governing branding, sales commissions, costs,
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`competitivity benchmarking, sales liquidations and payments, marketing
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`expenditures, and supply strategy.
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`47.
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`Under the Transaction Term Sheet, Grupo Giddings would “receive a rebate of
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`0.6% on all sales revenues of AF for the period 1st September 2019 until 31st December 2019.”
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`48.
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`The Transaction Term Sheet is prefaced with the following statement: “Post
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`Winter Haven July 19 meeting, the following table updates the principle agreements between
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`AF and GF in preparation for lawyers to draft an agreement.” The preface also notes that
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`certain terms in the table were “not yet agreed.”
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`49.
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`The parties promoted their agreement to work together internally within their
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`organizations and in industry press. Full transparency on customers, sales, prices, and related
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`information on Always Fresh’s part was a material aspect of the parties’ discussions and was
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`featured in announcements of the new relationship.
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`50.
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`Defendants induced Plaintiffs to select Always Fresh as their North American
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`sales agent with representations that, among other things:
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`a. Always Fresh possessed the skill, knowledge, expertise, and processes to
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`handle and sell Plaintiffs’ entire supply of fruit for the North American market
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`at competitive prices;
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`b. Always Fresh was committed to and would adhere to transaction and supply
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`chain transparency, defined operational procedures, and cost transparency;
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`c. Always Fresh’s Famous software would provide Plaintiffs’ desired level of
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`transparency on pricing, sales, and related information;
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`d. Always Fresh provides its growers “[a]ccurate and timely information, constant
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`communication;”
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`e. Always Fresh had created “distribution channels to maximize fresh deliveries,
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`increasing consumption;”
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`f. Always Fresh excelled in “[e]xecuting logistics and supply chain;”
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`g. Always Fresh was a “supply chain company with activity and therefore
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`knowledge of every step in the supply chain,” that had “[i]nvest[ed] in the
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`supply chain to enhance freshness and service;”
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`h. Always Fresh used a “[d]emand forecasting tool that allow (sic) for detailed
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`weekly view by customer and commodity type;” and
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`i. Always Fresh’s represented that based on its experience in the berry business,
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`including the “unrivaled” experience of Wayne Giddings, Matthew Giddings,
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`and Keith Mixon, Always Fresh had the wherewithal to handle and sell 100%
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`of Plaintiffs’ fruit at competitive prices.
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`51. With respect to the fast-approaching 2019-2020 season, Plaintiffs immediately
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`focused on how the parties would coordinate and share information. They proposed hiring an
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`experienced industry professional, Ian Grigg, to oversee logistics of importing fruit to the
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`United States, communication between the parties, and to be immersed in the sales and
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`operations activity of Always Fresh with respect to Plaintiffs’ fruit. Mr. Grigg had experience
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`with Plaintiffs and their product from a role at their prior North American marketing firm.
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`52.
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`On August 20, 2019, Plaintiffs shared with Defendants a draft job description
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`for Mr. Grigg and a draft presentation on how they saw his role interacting with the parties,
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`prompting a severe backlash from Defendants and insistence that the role was unnecessary
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`because they were fully capable of handling the logistics and operational functions involved.
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`As a result, Mr. Grigg was not hired at that time. Specifically, Mr. Mixon wrote to Mr. Salman,
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`copying Wayne and Matthew Giddings, that “we have a firestorm here in the USA over this”
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`and “we are derailed over here” because Defendants had “[n]o need for an intermediary getting
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`between AFF and 3 country coordinators” and “[n]o desire for an agent to be involved in daily
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`operations of AFF.” He added that Always Fresh insisted on having “complete control over
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`the sales and distribution.”
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`II.
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`The Parties’ Commercial Relationship During the 2019-2020 Export Season
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`53.
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`Plaintiffs began shipping fruit to Always Fresh in August 2019. No written
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`contract or statement of terms was made for Always Fresh’s handling of this fruit or any of the
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`fruit that Plaintiffs continued to supply during the 2019-2020 export season.
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`54.
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`Always Fresh circulated drafts of two of the contracts named in the Transaction
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`Term Sheet in September 2019, still with the intention that they become effective in January
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`2020 after various future restructuring actions occurred. Little progress, however, was made
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`in negotiating these drafts and they were never signed (nor were the restructuring actions
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`recited in them ever taken).
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`55.
`
`Giddings Mexico delivered to Always Fresh a total of 3,394,618 boxes
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`(8,296,926 kilos) of blueberries, blackberries, raspberries, and strawberries between late
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`August 2019 and April 2020.
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`56.
`
`Giddings Chile delivered to Always Fresh a total of 1,040,667 boxes (3,386,487
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`kilos) of blueberries between late August 2019 and April 2020.
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`57.
`
`Giddings Peru delivered to Always Fresh a total of 824,714 kilos of blueberries
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`between late August 2019 and January 2020.
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`58.
`
`Plaintiffs delivered fruit to Always Fresh during the 2019-2020 season on a
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`consignment basis and Always Fresh charged a commission of 8% and deducted charges
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`related to handling the fruit from the sales proceeds, which Always Fresh agreed to liquidate
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`and pay to Plaintiffs within 30 days after the fruit’s delivery to Always Fresh.
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`59.
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`Under PACA, consignment is not a sale. It creates an agency relationship
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`between the consignor and the consignee, where the produce continues to belong to the
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`consignor until the consignee sells it on the consignor’s behalf. After such sale, the proceeds
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`of the sale belong to the consignor, with the consignee allowed only to retain expenses of the
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`resale and commission.
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`60.
`
`Each shipment from Plaintiffs to Always Fresh also was subject to the terms on
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`which Plaintiffs supplied the fruit, as evidenced by the export/import documentation, and by
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`the laws applicable to the parties’ commercial relationship, including PACA.
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`III. Always Fresh’s Deficient Performance
`
`61.
`
`Starting early in the 2019-2020 export season, Always Fresh’s performance was
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`deficient, including with regard to its handling, sales, and accounting for Plaintiffs’ fruit.
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`62.
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`Plaintiffs were alerted to problems with Always Fresh’s handling and sale of
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`their fruit primarily through the liquidation statements and payments they received one month
`
`or longer after the fruit was delivered to Always Fresh. Always Fresh did not provide detailed
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`information about its sales, prices, or other commercial information in addition to its summary
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`liquidation statements, despite its representations that it would do so.
`
`63.
`
`Liquidation statements are documents that sales agents in the produce industry
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`use to account for their sales. In a consignment relationship, sales agents are required under
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`PACA to “truly and correctly account” for their sales “by rendering a true and correct statement
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`showing the date of receipt and date of final sale, the quantities sold at each price, or other
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`disposition of the produce, and the proper, usual or specifically agreed upon selling charges
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`and expenses properly incurred or agreed to in the handling thereof, plus any other information
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`required by § 46.29.” 7 C.F.R. § 46.2(y)(1).
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`64.
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`In addition to these deficiencies in performance early in the export season, the
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`prices that Always Fresh reported to Plaintiffs and net returns plummeted for Giddings Mexico
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`and Giddings Chile beginning in early October 2019 and throughout the rest of their season,
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`and were at their worst for Giddings Peru between mid-November 2019 and the end of its
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`program in January 2020. Plaintiffs analyzed their returns throughout the season, taking
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`particular note of the issues after multiple weeks of unexplained, low returns.
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`65.
`
`Compared to average prices reported by the USDA’s Agricultural Marketing
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`Service in its Market News publication, Giddings Chile found that its returns fell hundreds of
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`thousands of dollars short of reported industry “average” prices for the same commodities on
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`a weekly basis, and as much as $892,808 below in a single week.
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`66.
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`Giddings Peru found that its returns were as much as $525,217 below the
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`USDA’s published “average” prices in a single week.
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`67. While the prices Always Fresh liquidated and paid to Giddings Mexico were
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`also dramatically below the USDA’s Market News averages, they were especially low when
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`compared to the prices Giddings Mexico paid to its growers that were needed to retain those
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`vital relationships.
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`68.
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`The parties discussed the importance of benchmarking Giddings Mexico’s
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`returns against the prices that others in the industry pay growers for their fruit to make sure
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`that Giddings Mexico did not lose money by buying fruit for a higher price than what it
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`received from Always Fresh after resale. The parties referred to this as “competitivity
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`benchmarking” and agreed on it before Plaintiffs began shipping fruit to Always Fresh. They
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`accounted for it in the Transaction Term Sheet by agreeing to “[b]ench mark Mexico liquidated
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`Case 8:20-cv-02875-JSM-TGW Document 1 Filed 12/04/20 Page 16 of 44 PageID 16
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`returns for competitivity. GF to highlight to AF if/when concerns occur. Where unremedied
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`in commercial settlement, issue to be discussed at board level with potential temporary margin
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`subsidisation.”
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`69.
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`Benchmarking returns to competitive prices was of vital importance for
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`Giddings Mexico because it was required to pay the growers it sourced fruit from upon or
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`within eight days after their deliveries, which was before Giddings Mexico would know the
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`prices at which Always Fresh sold that fruit and before Giddings Mexico received the net
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`returns. Defendants understood that Giddings Mexico must pay competitive prices to its
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`growers up front in order to secure their fruit and that Always Fresh needed that fruit to be able
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`to obtain and keep its customer relationships. The parties’ agreement on competitivity
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`benchmarking served all of the parties’ interests.
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`70.
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`In mid-November 2019, Matthew Giddings requested that Mr. Salman relocate
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`to Always Fresh’s Florida headquarters for an extended period to improve the parties’ working
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`relationship.
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`71. Mr. Salman sent an email to Matthew Giddings on November 14, 2019, with a
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`proposed plan for his time in Florida covering a range of topics including commercial issues,
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`supply chain, financial matters, corporate management and marketing. Among the commercial
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`issues, Mr. Salman requested access to online daily sales reports containing information about
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`pricing, quantities, and customers, weekly management reports summarizing price projections
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`and volumes, and benchmarking information to evaluate how Always Fresh’s sales compared
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`to the competition. Plaintiffs made similar requests for information throughout the 2019-2020
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`season.
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`Case 8:20-cv-02875-JSM-TGW Document 1 Filed 12/04/20 Page 17 of 44 PageID 17
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`72.
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`Although Mr. Salman spent approximately two months with Always Fresh in
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`Florida, he was not given access to any detailed sales, inventory, pricing, or customer
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`information. Wayne Giddings explained to Mr. Salman that this information was being
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`withheld because Wayne Giddings thought Grupo Giddings would not want to move forward
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`with the legal integration contemplated by the parties if it received the information.
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`73.
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`Plaintiffs analyzed the divergence between their returns and USDA average
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`prices and competitive prices and presented their analysis to Always Fresh on multiple
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`occasions, seeking an explanation and solutions. Attending to these issues made the
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`anticipated legal integration of the parties impossible and was made worse by Defendants’
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`refusal to share information.
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`74.
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`On November 27, 2019, Julio Giddings, the founder of Grupo Giddings, sent
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`an email to Matthew Giddings expressing his great concern about the low prices at which
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`Giddings Mexico’s fruit was sold by AFF and the utter lack of information from Always Fresh
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`to explain the prices. He explained that Giddings Mexico with only 10% of its total volume
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`exported had already accumulated losses of nearly $400,000 as a result of the prices it had to
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`pay its independent growers/farmers to obtain fruit at competitive prices. He also requested
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`detailed information about sales, inventories, prices, rejections, and customers and asked that
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`Always Fresh confirm whether it had the capacity to sell Plaintiffs’ fruit so that Giddings
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`Mexico could consider alternative distribution channels if necessary.
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`75. Matthew Giddings replied on November 27, 2019: “I understand your concern
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`completely and am putting more pressure to get this corrected then (sic) you can imagine, we
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`as well do not like representing returns lower then (sic) the market… We will start absorbing
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`Case 8:20-cv-02875-JSM-TGW Document 1 Filed 12/04/20 Page 18 of 44 PageID 18
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`the difference to reflect competitive field prices, I will as well keep an open line in Mexico
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`to make sure we are higher then (sic) the field.” (Emphasis added.)
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`76.
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`Giddings Mexico agreed to continue working exclusively with Always Fresh as
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`its sales agent for the North American export market based on Always Fresh’s promise, but
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`the situation only worsened. The gap between the sales prices AFF was able to obtain for
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`Giddings Mexico fruit and the payments Giddings Mexico was required to make to its
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`independent growers/farmers in order to remain competitive widened by more than $6,000,000
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`in subsequent weeks, with weekly gaps exceeding $1,000,000.
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`77.
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`These gaps persisted in spite of Always Fresh’s request in mid-December 2019
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`that approximately one-third of Giddings Mexico’s fruit be diverted to another marketing
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`agency to allow Always Fresh to clear its backed up inventory and reduce volume going
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`forward, which Giddings Mexico agreed to do.
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`78.
`
`Always Fresh provided Mr. Salman with an aged inventory report on December
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`27, 2019, revealing that it had tens of thousands of boxes of Plaintiffs’ fruit in inventory long
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`after it should have been sold, including tens of thousands of boxes of fruit kept longer than
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`10 days after Always Fresh received them, tens of thousands more kept more than 20 days,
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`and some kept as long as 31 days without being sold.
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`79.
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`Fruit of the varieties Plaintiffs supplied to Always Fresh is highly perishable
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`and should be sold within 5 days after arrival to obtain its best price and avoid customer
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`rejections and other losses due to deteriorating condition.
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`80.
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`Always Fresh’s inability to properly handle and promptly sell Plaintiffs’ fruit
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`resulted in Always Fresh dumping or otherwise discarding Plaintiffs’ fruit throughout the
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`Case 8:20-cv-02875-JSM-TGW Document 1 Filed 1