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Full text of "AGRICULTURE DECISIONS VOL 47 NO 2"

UNITED STATES DEPARTMENT OF AGRICULTURE 



DECISIONS OF THE SECRETARY OF AGRICULTURE 



ISSUED UNDER THE 



REGULATORY LAWS ADMINISTERED BY THE 



UNITED STATES DEPARTMENT OF AGRICULTURE 



(Including Court Decisions) 




VOLUME 47 NUMBER 2 



PAGES 377 - 517 



FEBRUARY 1988 



Compiled And Published By; 



Editors, Agriculture Decisions 

Hearing Clerk Unit 

Office of Administrative Law Judges 

U.S. Department of Agriculture 

Room 1083 South Building 

Washington, D.C. 20250 

Telephone (202) 447-4443 



ies regarding this publication 
- uudress indicated above. 



PREFATORY NOTE 

Agriculture Decisions is an official publication designed to facilitate access 
to decisions and orders issued by the Secretary of agriculture, or officers 
authorized to act in his stead, in matters arising under laws administered by 
the Department of Agriculture. 

The published decisions principally consist of those issued in formal 
adjudicatory administrative proceedings conducted for the Department under 
various statutes and regulations pursuant to the Administrative Procedure Act. 
Selected court decisions concerning the Department's regulatory programs arc 
also included. The Department is required to publish its rules and regulations 
in the Federal Register and, therefore, they are not included in Agriculture 
Decisions. 

Consent Decisions entered subsequent to December 31, 1986 arc no longer 
published. However, a Hst of these decisions is included. (53 F.R. 6999, March 
4, 1988.) The decisions are on file- and may be inspected upon request made 
to the Hearing Clerk, Office of Administrative Law Judges. 

Decisions are published in order of their issuance or finality under the 
principal statutes administered by the Department, which are the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1621 et seq..\ the Agricultural Marketing 
Agreement Act of 1937 (U.S. C. 601 etseq.\ Animal Quarantine and Related 
Laws (21 U.S.C. 111 et seq.), the Animal Welfare Act (7 U.S.C 2131 et 
seq.), the Federal Meat Inspection Act (21 U.S.C. 601 et seq,), the Grain 
Standards Act (7 U.S.C. 1821 et seq.), the Horse Protection Act (15 U.S.C. 
WLetseq.), the Packers and Stockyards Act, 1921, (7 U.S.C. ISletseq.), 
the Perishable Agricultural Commodities Act, 1930, (7 U.S.C. 499aetseq.}, 
the Plant Quarantine Act (7 U.S.C. 151 et seq.), the Poultry Products 
Inspection Act (21 U.S.C. 451 ct seq.) t and the Virus-Scrum-Toxin Act of 
1913 (21 U.S.C. 151 et seq.). 

The published decisions may be cited by giving the volume number, page 
number and year, e.g., 1 Agric. Dec. 472 (1942). It is unnecessary to cite a 
decision's docket or decision number. Prior to 1942 decisions were identified 
by docket and decision numbers, e.g., D-578; S. 1150 and the use of such 
references generally indicates that the decision has not been published in 
AgricuUurcJDecisiom 



in 



LIST OF DECISIONS REPORTED 
FEBRUARY 1988 

PAGE 
AGRICULTURAL MARKETING ACT. 1937 

GOLDEN STAR CITRUS AND PRODUCE, INC. 

AMA Docket Nos. F&V 907-14 and 908-5. 

RULING ON PETITIONER'S OBJECTIONS 

TO DISMISSAL OF PETITION 377 

LAND O' LAKES, INC. 

AMA Docket No. M-79-2. 

ORDER 377 

SAULSBURY ORCHARD AND ALMOND PROCESSING, 

CAL ALMOND, INC.; CARLSON FARMS. 

AMA Docket No. F&V 981-4. 

DECISION AND ORDER 378 

ANIMAL QUARANTINE AND RELATED LAWS 

LEE HUDGINS. 

A.Q. Docket No. 338. 

DISMISSAL 381 

JOE WHITE. 

A.Q. Docket No. 63. 

DECISION AND ORDER 381 

EGG RESEARCH AND CONSUMER INFORMATION ACT 

ROBERT A. HILLIARD, d/b/a 
MILLIARD EGG FARMS. 

ERCIA Docket No. 8. 

DECISION AND ORDER 383 

FEDERAL MEAT INSPECTION ACT 

DOMINICKA. CRENO. 

FMIA Docket No. 107, 

ORDER DISMISSING COMPLAINT 394 



PAGE 
PACKERS AND STOCKYARDS ACT 

GARY CHASTAIN AND JIM LEWIS. 

P&S DOCKET NO. 6606. 

DECISION AND ORDER 395 

LEO DeGRAAF AND WALTER DcGRAAF 

d/b/a DeGRAAF RANCH. 

P&S Docket No. 6889. 

DECISION AND ORDER UPON ADMISSION 

OF FACTS BY REASON OF DEFAULT 427 

JOSEPH D. GIRUZZI. 

P&S Docket No. 6885. 

ORDER DISMISSING COMPLAINT 429 

JOHNSON-HALLIFAX, INC., d/b/a 

STONE'S MEAT PACKING CO., and 

THOMAS HALLIFAX. 

P&S Docket No. 6910. 

DECISION AND ORDER 430 

ROBERT F. JOHNSON. 

P&S Docket No. 6677. 

DECISION AND ORDER 436 

CRAIG LANDEEN. 

P&S Docket No. 6626. 

DECISION AND ORDER UPON ADMISSION 

OF FACTS BY REASON OF DEFAULT 450 

HOWARD LAWRENCE. 

P&S Docket No, D-88-4. 

SUPPLEMENTAL ORDER 452 

ROGER NORRED, 

P&S Docket No, 6810. 

SUPPLEMENTAL ORDER 452 



F/ 

PERISHABLE AGRiriTf .TTTRAL COMMODITIES ACT 
Disciplinary Decisions 

MORGANTOWN PRODUCE INC 
PACA Docket No. 2-7572 
DECISION AND ORDER 



PENN-LA-TEX MUSHROOMS INC 
PACA Docket No. 2-7541. 
DECISION AND ORDER 



Reparation Decisions 

AIM FARMS, INC. v. 

AMERICAN FRUIT & PRODUCE CORP 

PACA Docket No. 2-7182 

DECISION AND ORDER 



ASIAN PACIFIC PRODUCE CO v 

FULTON MARKET PRODUCE "iNC 
PACA Docket No. R-88-43 
ORDER OF DISMISSAL . 



J.T. BAILLIE CO., INC. v 
AL NAGELBERG & CO., INC 
PACA Docket No, 2-7178. 
ORDER (Not published herein) 

C. A. BEVANS v. 

LYNN JOSEPHSON PRODUCE INC 
PACA Docket No. 2-7270 

DECISION AND ORDER 



CALAVO GROWERS OF CALIFORNIA v 
PA^Sr $" BLAS CA BROKERAGE. 
DECISION AND ORDER 



CAL/MEX DISTRIBUTORS, INC v 
DELRAY PRODUCE CORP ' ' 
PACA Docket No. 2-6995 

DECISION AND ORDER. 



PAGE 

PERISHABLE AGRTrm.TTjRAL COMMODITIES ACT (rn* ) 
Reparation npHgIn ns (Cont.) 



r*nn d/b/a STR AWBERRY CITY SALES v. 

nfPfS E ?' PAYT ON d/b/a PAYTON PRODUCE 
PACA Docket No. 2-7067 

ORDER DENYING PETITION FOR RECONSIDERATION ..... 474 

CARLIN FOODS CORP v 

WEST COAST PACKERS, INC. 

PACA Docket No. R-88-1 

ORDER OF DISMISSAL .................... 4?5 

DEL RIO GROWERS, INC., v 

ANTHONY GAGLIANO & COMPANY INC 

PACA Docket No. 2-7122 

DECISION AND ORDER 

.............................. 476 

FORT BOISE PRODUCE CO v 
SUNFRESH DISTRIBUTING COMPANY 
PACA Docket No. R-88-56. 
ORDER (Not published herein) 

JOE A. GARZA, ROBERT PEREZ, and 
ELI PEREZ v. HOWARD A. GEARING 

^v N x^ RAMOS ' and SEGUNDO SAN MIGUEL 
d/b/a AMERICAN VEGETABLE CO 
PACA Docket No, 2-7626. 
DECISION AND ORDER 



GENERAL POTATO & ONION DISTRIBUTORS LTD v 

CONSUMERS PRODUCE COMPANY INC 

PACA Docket No. 2-7156. 

DECISION AND ORDER ........................... 48Q 

GOLMAN-HAYDEN COMPANY, INC v 

F&L ENTERPRISES, INC. ' ' 

PACA Docket No. 2-7601. 

ORDER OF DISMISSAL ......................... 4g4 

HILLMEX, INC. v, MIZOKAMI BROS. 

OF ARIZONA. 

PACA Docket No. 2-7028. 

ORDER ON RECONSIDERATION . 



484 



vn 



PAGE 

PERISHABLE AGRICULTURAL COMMODITIES ACT 
Reparation Decisions fConU 



HOMESTEAD TOMATO PACKING CO., INC v 

ACME PRE-PAK CORPORATION. 

PACA Docket No. 2-694S. 

DECISION AND ORDER 485 

RALPH JARSON v. WILLIAM Y. MURPHEY 

PACA Docket No. 2-7131. 

DECISION AND ORDER 487 

J.C.'S SUNNY WINTER, INC. v. 
CONSOLIDATED PRODUCE, INC. 
PACA Docket no. 2-7190. 
ORDER (Not published herein) 

KLAMATH POTATO DISTRIBUTORS, INC v 

NICK DELIS CO., INC. 

PACA Docket No. 2-7619. 

ORDER OF DISMISSAL 489 

TONY D. LOVE AND PATRICK A. ROSALES 

d/b/a L & R ORCHARDS v. IMPERIAL BRANDS, INC 

PACA Docket No. 2-6901. 

ORDER OF DISMISSAL 489 

METRO PRODUCE, INC. v. JAMES BOGGIO, 

PACA Docket No. R-88-71. 

ORDER REQUIRING PAYMENT OF UNDISPUTED 

AMOUNT AND ORDER TO SHOW CAUSE WHY 

COMPLAINT FOR REMAINING AMOUNT 

SHOULD NOT BE DISMISSED .on 



MURAKAMI FARMS, INC,, d/b/a 
MURAKAMI PRODUCE CO., v 
SUNFRESH DISTRIBUTING COMPANY. 
PACA Docket No, R-88-52. 
ORDER (Not published herein) 

NOBLES PACKING COMPANY v. S&S PRODUCE CO INC 

PACA Docket No. 2-6904, 

DECISION AND ORDER 49Q 



PAGE 

PERISHABLE AGRICULTURAL COMMODITIES ACT fConU 
Reparation Decisions (Cont.) 

OTAY PACKING COMPANY v, 

I & S PRODUCE CORP. 

DECISION AND ORDER 493 

JOE PHILLIPS, INC. v. 

COMMODITY MARKETING COMPANY. 

PACA Docket No. 2-6859. 

DECISION AND ORDER 495 

PRODUCE SPECIALISTS OF ARIZONA, INC. 
v. SUNFRESH DISTRIBUTING COMPANY. 
PACA Docket No. R-88-53. 
ORDER (Not published herein) 

PURE GOLD, INC., v. ROBERT W. CASTO. 

PACA Docket No. 2-7146. 

DECISION AND ORDER 499 

SEABROOK BROTHERS & SONS, INC., v, 

EDWARD BOKER FROSTED FOODS, INC. 

PACA Docket No. R-88-60. 

ORDER OF DISMISSAL 500 

TAMPICO PRODUCE, INC. v. 
SUNFRESH DISTRIBUTING COMPANY. 
PACA Docket No. R-88-54. 
ORDER (Not published herein) 

TOMATO COUNTRY, INC., v. 

JEROME GROSSMAN, d/b/a 

JEROME BROKERAGE & DISTRIBUTING CO. 

PACA Docket No. 2-7534. 

DECISION AND ORDER 501 

UNITED POTATO CO., INC., v. 

MIKE SHAPIRO FROZEN FOODS, INC. 

PACA Docket No. R-88-75. 

ORDER OF DISMISSAL 503 

VAL-MEX FRUIT CO., INC., v. 
SUNFRESH DISTRIBUTING COMPANY. 
PACA Docket no. 2-7632. 
ORDER (Not published herein) 



PAC 

PERISHABLE AGRICULTURAL COMMODITIES ACT fPnnf ) 
Reparation Dedsinim 



JA WOOD C0. r VISTA, INC, a/k/a 

J.A. WOOD CO., v. TIDEWATER PRODUCE CO 

INC, and/or TAYLOR BROKERAGE COMPANY INC 

PACA Docket No. 2-6689 

ORDER ON RECONSIDERATION ....................... 5( 

YAKIMA FRUIT & COLD STORAGE CO v 

FINUCANE, GILSON, FOSTER, INC. 

PACA Docket No. 2-7130. 

DECISION AND ORDER ..................... 5C 

REPARATION DEFAHf.T 



pnpTvl INC > d/b/a BUD OF CALIFORNIA v. 

FORT WAYNE PRODUCE COMPANY INC 

PACA Docket No. RD-88-96 

ORDER OFDISMISSAL .' ...................... 5 

FRANK BADILLO & SONS v. 
U.S. FOOD MARKETING INC 
PACA Docket No. RD-88-141. . '. 



BONANZA FARMS INC, et al v ' 

DOMINIC PALAZZOLO. 

PACA Docket No. RD-88-152 ................... 

BUSHMAN'S, INC, v. 

PA^ B \ TILLMAN ' d / b / a T^LMAN PRODUCE. 
PACA Docket No. RD-88-92. 

ORDER OF DISMISSAL . 

' ' ' ' ' ................. ..... 50 1 

CARDINAL DISTRIBUTING CO. INC v 
CHAPMAN PRODUCE CO. INC ' ' 
PACA Docket No. RD-88-145 .................... 

CONTINENTAL SALES v 
CONTINENTAL FOOD IMPORT INC 
PACA Docket No. RD-88-149 ____ '...,!. 

***i*iti *J\/ / 

FISHER RANCH CORPORATION v 
JOHNNY E. FAIR d/b/a 
MRS. FAIR'S FINER FOODS 
PACA Docket No. RD-88-155 

........................... 507, 



PAGE 

PERISHABLE AGRICULTURAL COMMODITIES ACT (Cont.) 
Reparation Default Orders fCont.) 

FRUIT SALAD, INC. v. JUNE FOODS, INC. 

PACA Docket No. RD-88-142 508 

GARDEN STATE FARMS, INC. v. 

FAIRHILL WHOLESALE, INC. 

PACA Docket No. RD-88-151 508 

INDIAN RIVER GREENHOUSE COMPANY v. 

SOLAR ORGANIC SYSTEMS, INC. 

PACA Docket No. RD-88-160 508 

TOM LANGE COMPANY, INC. v. 

SIX FLAGS PRODUCE, INC. 

PACA Docket No. RD-88-146 508 

TOM LANGE COMPANY, INC. v. 
SUN-GLO, INC. 

PACA Docket No. RD-88-156 508 

JAMES MATRO & GAETANO MATRO, d/b/a 

JAMES MATRO & SON v. WENDELL L. BARNETT 

d/b/a BARNETT BROKERAGE. 

PACA Docket No. RD-87-403. 

ORDER REOPENING AFTER DEFAULT 509 

M. J. FARMS, INC. v. SUNRICH INCORPORATED. 

PACA Docket No. RD-88-159 509 

NORTHERN PRODUCE MUSHROOMS, INC. v. 

CONTINENTAL FOOD IMPORT, INC. 

PACA Docket No. RD-88-148 509 

J.R. NORTON COMPANY v. CHAPMAN PRODUCE CO., INC. 

Formerly; EDWARDS & CHAPMAN PRODUCE CO., INC. 

PACA Docket No. RD-88-144 509 

JERRY PEPELIS d/b/a JERRY PEPELIS PACKING CO. 

v. DON A. FELUCCA d/b/a DON FELUCCA. 

PACA Docket No. RD-88-38. 

ORDER DENYING MOTION TO REOPEN, 

VACATING STAY ORDER, 

REINSTATING DEFAULT ORDER 510 



PAG 

PERISHABLE AGRICULTURAL COMMODITIES ACT (Pnnt ) 
Reparation Default Orders fCont.) 

PRODUCE SPECIALISTS OF ARIZONA, INC v 
CATALINA TRADING CO. 

PACA Docket No. RD-88-158 ......................... 5- 

SALINAS MARKETING COOPERATIVE v 
H. HALL & CO., INC. 
PACA Docket No. RD-88-150 



SIX L's PACKING COMPANY, INC. v 

JON-VEG SALES, INC. 

PACA Docket No. RD-88-157 ......................... 53 

P. TAVILLA CO. MIAMI, INC. v. 

WORLD FOODS, INC. 

PACA Docket No. RD-88-147 ........................... 51 

VEG-A-MIX v. CHAPMAN PRODUCE CO INC 

Formerly: EDWARDS & CHAPMAN 

PRODUCE CO., INC. 

PACA Docket No. RD-88-143 ............................. 5l 

WASHINGTON LETTUCE & VEGETABLE ; 

COMPANY, INC. v. TRI-COUNTY 

PRODUCE, INC. 

PACA Docket No, RD-88-153 ..... 



THE WOODS COMPANY, INCORPORATED v 
JON-VEG SALES, INC. 
PACA Docket No. RD-88-154. . . 



51: 



51: 



PAGE 
PLANT QUARANTINE ACT 

AIR MAR SHIPPING. 

P.O. Docket No. 312, 

DECISION AND ORDER 512 

DOUGLAS KAI and ROYAL VSP SERVICES, INC. 

P.O. Docket No. 249. 

DECISION AND ORDER 513 

LUZ ALMA SANTA MARIA. 

P.O. Docket No. 248. 

DECISION AND ORDER 515 

KARASU DENIZCCILK Ve NAKLIYAT. 

P.Q. Docket No. 127. 

DECISION AND ORDER 516 



AGRICULTURAL MARKETING ACT, 1937 



In re: GOLDEN STAR CITRUS AND PRODUCE, INC. 
AMA Docket Nos. F&V 907-14 and 908-5. 
Ruling on Petitioner's Objections to Dismissal of Petition filed 
February 24, 1988. 

Brian C, Leighton, Fresno, California, for Petitioners. 

M. Bradley Flynn, for Respondent. 

Ruling issued by Victor W. Palmer, Chief Administrative Law Judge. 

RULING ON PETITIONER'S OBJECTIONS 
TO DISMISSAL OF PETITION 

Petitioners object to the dismissal I entered in compliance with the 
attached Ruling on Certified Question by the Judicial Officer saying I 
misunderstood it. 

The Judicial Officer's ruling is quite clear. Paragraph three begins: "The 
petition should be dismissed " 

It has been and by this ruling, so is petitioners' objection to the dismissal. 



In re: LAND O' LAKES, INC. 
AMA Docket No. M-79-2. 
Order filed February 3, 1988. 

Brent Bostrom, St. Paul, Minnesota, for Petitioner. 

Greg Cooper, for Respondent. 

Order issued by Paul Kane, Administrative Low Judge. 

ORDER 

For the reasons stated in respondent's request for modification of order, 
and to effectuate the agreement of the parties, the Order of Permission to 
Withdraw Petition filed in the proceeding on January 12, 1988, is ticreby 
modified and it is ordered that the petition filed in this proceeding on 
November 28, 1984, is dismissed with prejudice. 



377 



Decision and Order issued February 2, 1988. 

Mootness - cog,iizability of constitutional issues in 8c 15( a ) proceeding. 



i pctitionera ' ap r ' from thc 

e the SbaSe flf ,?""!?* ^^ an araended P elition ' Tllc AIJ 

and (2) allega.iL r ^ 



acces the regulations and 

agency to hear and determine n~" L T nd lhc competency of an administrative 
constitutional viSS. |2 ^S forth oZ''^ f* Jud \ ***&** with the ALJ', 
An agency has no authority " qu S X "Si, 1 ? ? y ? d '? f r the 8 uidance of (lie ALJ ' 
But the doctrine of exhaustion o^ ?Zto a C ? nSlllullo "? ht y of a nder its jurisdiction. 
the Agricultural Marketing applicable in proceedings under 

ff!^^:s^ 

he principles set LTh S e^JL | e c" "S^^ " 1 ' ? C AU should f " OW 
of an order's provisions can only be atSed f, I 8 "J "' _ (Jan ' 29 ' 1988 ' < validi 'y 
a formal rulemaking record-no on l> ^hS'J S * W i ntia 7 stand P oin[ . on the basis of 
6 turo nor on the basis of evidence adduced at the 8c(15)(A) hearing) 



DECISION AND ORDER 

instituted b y a P^ition filed pursuant to 

ment Act of 193 ^ as amended (7US 

Marketing Order 



rATrt J 2 ' ? 87 ' Adl "inistrative Law Judge Edward H McGrail 

1 k " nd " ~' * - """ " 



. 

and 557 has been delegated (7 C.F.R. 2.35). 



in January 

and Slockji^^ta^p;^"^ anQ * * eare as *'ni..tar oflhe 

378 



SAULSBURY ORCHARD AND ALMOND PROCESSING, ET AL 

Prior to filing their appeal, petitioners filed an amended petition which 
they believe satisfies the ALJ's objections as to the first issue stated above. 
Petitioners' appeal is limited to the second issue stated above. 

In my view, petitioners' filing of an amended petition made the ALJ's 
order dismissing their original petition moot, even though Lhc constitutional 
issue stated above will be an issue under the amended petition. I am mindful 
of the .Roe v. Wade doctrine 3 where it was held that the issue of the validity of 
a statute prohibiting abortions was not moot even though the original 
controversy did not presently exist (gestation had ended), since the issue was 
capable of repetition, and the legal issue would otherwise continuously evade 
review. This is not such a case. 

Nonetheless, since I disagree with the ALJ's view as to the revicwability 
of constitutional issues in a 8c(15)(A) proceeding, I am setting forth my 
views by way of dicta for the guidance of the ALJ, in order to prevent the 
possibility of a remand, which would cause a waste of lime and resources for 
all parties, 

It is well-settled that an administrative agency has no authority to question 
the constitutionality of a statute under its jurisdiction. Oestereich v. Selective 
Service System Local Board, 393 U.S. 233, 242 (1968) (concurring opinion by 
Mr. Justice Harlan); Public Utilities Commission of California v. United States, 
355 U.S. 534, 539 (1958); Panola Land Buyers Association v. Shuman , 762 F.2d 
1550, 1556-58 (llth Cir. 1985); Central Nebraska Public Power & Irrigation 
District v. FPC, 160 F.2d 782, 783 (8th Cir.), cert, denied, 332 U.S. 765 (1947); 
Engineers Public Service Co. v. SEC, 138 F.2d 936, 952-53 (D.C. Cir. 1943), 
dismissed as moot, 332 U.S. 788 (1947); Todd v. SEC, 137 F.2d 475, 478 (6lh 
Cir, 1943); Panitz v. District of Columbia, 112 F.2d 39, 41-42 (D.C. Cir. 1940). 
It has further been held as to some administrative regulatory schemes 
that, since an agency cannot "determine the constitutionality of its own 
statutory and regulatory scheme [as enacted by Congress]" (Panola Land 
Buyers Association v. Shuman, 762 F.2d 1550, 1558 (llth Cir. 1985)), the 
doctrine of exhaustion of administrative remedies is not applicable (id. at 
1556-58). However, it has been held thai the doctrine of exhaustion of 
administrative remedies is applicable in proceedings under the Agricultural 
Marketing Agreement Act of 1937, even as to constitutional issues. As stated 
in United States v. Ritzicka, 329 U.S. 287, 294 (1946), involving a milk order 
under the Agricultural Marketing Agreement Act of 1937: 

It is suggested that Congress did not authorize a district court to 
enforce an order not "in accordance with law." The short answer to tins 
rather dialectic point is that whether such an order is or is not in 
accordance with law is not a question that brings its own immediate 
answer, or even an answer which it is the familiar, everyday business of 
courts to find. Congress has provided a special procedure for 
ascertaining whether such an order is or is not in accordance with law. 



3 410 U.S. 113, 124-25 (1973); accord Storcr v. Brown, 415 U.S. 724, 737 n. 8 (1974). 

379 



The questions are not, or may not be, abstract questions of law. Even 
when they are formulated in constitutional terms, they are questions of 
law arising out of, or entwined with, factors that call for understanding 
of the milk industry. And so Congress has provided that the remedy 
in the first instance must be sought from the Secretary of Agriculture. 
It is on the basis of his ruling, and of the elucidation which he would 
presumably give to his ruling, that resort may be had to the courts. 

In addition, the constitutional issues raised by the amended petition are 
unlike the constitutional issues raised in the cases cited above in the group 
beginning with Oestereich since those cases involve constitutional issues as to 
the statutory scheme, whereas petitioners' constitutional issues relate to the 
regulations and practice of the Department. It would seem appropriate to 
permit an agency to question the constitutionality of its own regulations even 
if it could not question the constitutionality of the enabling legislation. 

Accordingly, it is my view that the constitutional issues raised by 
petitioners in the amended petition should be considered by the AU. (The 
ALJ's order is being vacated so that his ruling will not be res judicata.) The 
ALJ should also follow the principles set forth in In re Sequoia Orange Co., 47 

Agric. Dec. , slip op. at 272 (Jan. 29, 1988) (validity of an order's 

provisions can only be attacked, from an evidentiary standpoint, on the basis 
of the formal rulemaking record-not on the basis of evidence adduced at the 
8c(15)(A) hearing). 

Order 

The ALJ's order dismissing the original petition filed in this proceeding is 
vacated as moot, and the case is remanded to the ALJ for consideration of 
petitioners' amended petition. 



ANIMAL QUARANTINE AND RELATED LAWS 



In re: LEE HUDGINS. 

A.Q. Docket No. 338. 

Dismissal filed February 19, 1988. 

Jam Ruley, for Complainant. 

W. Robert Essin, for Respondent. 

Dismissal issued by Victor W. Palmer, Chief, Administrative Law Judge. 

DISMISSAL 

Upon the motion of complainant, this proceeding is hereby dismissed. 



In re: JOE WHITE. 

A.Q. Docket No. 63. 

Decision and Order filed January 11, 1988. 

Interstate movement of cattle without brucellosis certificate - Failure to appear at hearing - 
Default. 

Jaru Rulcy, for Complainant. 

Respondent, pro se. . . . t , , 

Decision and Order issued by Edward H. McGrail, Administrative Law Judge. 

DECISION AND ORDER 

This is an administrative proceeding for the assessment of a civil penalty 
for a violation of the regulations governing the interstate movement oi cattle 
because of brucellosis (9 C.F.R. 78.1 etseq.), hereinafter referred to as the 
regulations, in accordance with the Rules of Practice in 9 C.F.R. 70.1 et 
seq. and 7 C.F.R. 1-130 et scq, 

This proceeding was instituted by a complaint filed on April 16, U*4, Dy 
the Administrator of the Animal and Plant Health Inspection Service, United 
States Department of Agriculture. An amended complaint was filed on May 
29 1985 Respondent filed an answer to both complaints. The complaint 
alleged that during the month of June, 1983, on five separate occasions, the 
respondent moved a quantity of cattle interstate from the State of Florida, to 
Clovis, New Mexico, in violation of section 78.9(d)(3) of the regulations (9 
CFR 789(d)(3)) in that the cattle were not accompanied interstate by a 
certificate showing the dates and results of the required brucellosis tests. 

On June 17, 1987, the Hearing Clerk's Office mailed a Notice of Hearing, 
certified receipt requested, to the respondent at his last known address. This 
notice informed respondent that oral hearing would commence on October 22 
1987 at Amarillo, Texas. On July 10, 1987, the Hearing Clerk's office mailed 
a Notice of Hearing Location, certified receipt requested, to the respondent 

at his last known address. , i -i i i 

This second notice informed respondent that oral hearing was scheduled 
for 9:30 a.m., on October 22, 1987, at the Potter County Courts Building. 
Amarillo, Texas. These notices were duly signed for by Patsy Leonard, at the 
respondent's last known address (See 7 C.F.R. U47(b)<3)). Additionally, 



381 



I 



on the scheduled day of hearing, a notice as to the room number for Hie oral 
argument was posted in several areas of the Potter County Coin' Is Building. 

Notwithstanding the above-referenced notices, respondent failed to appeal' 
at the hearing scheduled in this matter. This failure to appear is deemed an 
admission of all the material allegations contained in the coivtplaint antl 
constitutes a waiver of the right to an oral hearing concerning those 
allegations (See 7 C.F.R. 1.139 and 1.141(e)). 

Accordingly, the material facts alleged in the complaint are. iidoplccl and 
set forth herein as the findings of fact, and this decision is issued p" rsuaiil to 
C FR n l' m f th RUlCS f PraCtiCC applicable to this proceeding. (See 7 



Findings of Fact 

1. Respondent, Joe White, is an individual whose address i P.O. Hox 
326, CIovis, New Mexico 88101. 

2. On or about the dates of June 7, 16, 18, and 23, 1987, i IT fivo separate 
movements, the respondent moved interstate a quantity of cat! lo from the 
State of Florida, to CIovis, New Mexico. The movements were in violation 
of section 78.9(d)(3) of the regulations (9 C.F.R. 78.9(d)(3>3 Ueenusc [lie 
cattle, which did not go directly to slaughter or to a quarantined feud lot, wore 
not accompanied interstate by a certificate showing the dates and results of 
official negative tests for brucellosis, as required. 

Conclusion 

By reason of the facts contained in the Findings of Fact above, the 

K5/5!f aS Vi lated section 7S ' 9 ( d )C 3 ) of th e regulations (<> CM'.R. S 
(d)(3)). 

Therefore, the following Order is issued. 

Order 

Respondent Joe White, is hereby assessed a civil penalty of two t housand 
five hundred dollars ($2,500.00). This penalty shall be paynhlu to the 
Treasurer of the United Slates" by certified check or money orclor, n ml shall 
be forwarded to U.S. Department of Agriculture, Animal and PImU Ilcallh 
Inspection Service, Field Servicing Office, Accounting Section, Bu l lor .Square 
West, 5th Floor, 100 North Sixth Street, Minneapolis, MiniiusoLti 55<l<n 
within thirty (30) days from the effective date of this order. This order 'sln'll 
have the same force and effect as if entered after a full hearing ami shall he 
final and effective 35 days after service of this Decision and Orclcr n n 
respondent unless there is an appeal to the Judicial Officer pursirm 

RUlCS f Practice a PP IicabIe to ^ proceed! ii V CF.R 



[This decision and order became final February 22, 1988.-E<Jitor] 




382 



EGG RESEARCH AND CONSUMER INFORMATON ACT 



In re: ROBERT A. BILLIARD, d/b/a MILLIARD EGG FARMS. 

ERCIA Docket No. 8. 

Decision and Order filed February 24, 1988. 

Failure to file handler reports and remit assessment obligations. 

Summary: The Judicial Officer affirmed Judge Weber's cease and desist order requiring 
respondent to cease and desist from violating the Order and regulations issued under the Egg 
Research and Consumer Information Act by failing to file handler reports and remit assessment 
obligations to the American Egg Board on a timely basis. However, the Judicial Officer 
reversed that part of Judge Weber's order that also assessed civil penalties against respondent 
totaling $20,500 ($500 for each of 41 violations). Respondent's violations were willful, even 
(hough lie was unaware of his duties under the Act and regulations, but willfulness is not 
required in order to impose civil penalties. However, civil penalties arc not automatic upon 
complainant's proof of violations. The Act and regulations authorize producers to obtain a 
refund of their assessments upon request made within 90 days after the end of the month in 
which the assessments arc due and collectable. Respondent promptly paid all of his 
assessments and obtained refunds as soon as he was made aware of the existence of (he 
program. The American Egg Board could easily have learned of respondent's existence through 
the Georgia authorities, lo whom respondent paid applicable monthly state assessments, but the 
Board did not do so. Based on all the circumstances of the case, a cease and desist order is 
the appropriale sanction. 

Robert Frisby, for Complainant. 

Albert Buckhaltcr, Jr. for Respondent. 

Initial decision issued by William J. Weber, Administrative Law Judge. 

Decision and Order issued by Donald A, Campbell, Judicial Officer. 

DECISION AND ORDER 

This is a proceeding under the Egg Research and Consumer Information 
Act, as amended (7 U.S.C. 2701 et seq,), the Egg Research and Promotion 
Order (7 C.F.R. 1250.30 1-. 363), and the Rules and Regulations thereunder 
(7C.F.R. 1250.500-.552). 

On July 2, 1987, Administrative Law Judge William J. Weber (ALT) issued 
an initial Decision and Order requiring respondent to cease and desist from 
violating the Order and regulations by failing to file handler reports and remit 
assessment obligations to the American Egg Board on a timely basis, and by 
failing to promptly remit to the Board all overdue assessment obligations 
(totaling $3,194.40). The order assesses civil penalties against respondent 
totaling $20,500 ($500 for each of 41 violations). 

On August 3, 1987, respondent appealed to the Judicial Officer, to whom 
final administrative authority has been delegated to decide the Department's 
cases subject to 5 U.S.C. 556 and 557 (7 C.F.R. 2.35).' On August 25, 
1987, complainant responded to the appeal and filed a cross-appeal, seeking 



The position of Judicial Officer was established pursuant to the Act of April 4, 19-10 
(7 U.S.C, 45Qc-450g), and Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219 (1953), 
reprinted in 5 U.S.C. app. at 1068 (1982), The Department's present Judicial Officer was 
appointed in January 1971, having been involved with the Department's regulatory programs 
since 1949 (including 3 years' trial litigation; 10 years' appellate litigation relating to appeals 
from the decisions of the prior Judicial Officer; and 8 years as administrator of the Packers and 
Stockyards Act regulatory program). 



civil penalties of $33,000 ($500 for each of 66 violations). The matter was 
referred to the Judicial Officer for decision on September 29 1987 

T F U. he I?f, on l! SG . 1 forth below > l am issuin S a cea ^ and desist order 
only. IheALJs findings and conclusions are set forth below, with a few 
changes and omissions. Additional conclusions by the Judicial Officer follow 
Judge Weber s conclusions, some of which are in disagreement with 
Weber's conclusions. 



ADMINISTRATIVE LAW JUDGE'S DECISION 

This is a proceeding under the Egg Research and Consumer Information 
Act, as amended (7 U.S.C. 2701 ct scg.\ the Egg Research and Promotion 

p f , ? ^ D 12 n 5a30K363 ) < 1987 >' and the ^Plcmenting Rules and 
Regulations (7 C.F.R. 1250. 500-. 552) (1987). 

The complaint charges respondent with failure to report and oav 
assessments to the American Egg Board for some 66 of the months between 
May 1978 and August 1984, m violation of the Egg Research and Promotion 

, fo 8 ^ 115 ' 7 CF ' R - 1250 ' 347 and 1250.348; and 7 C.F.R. 
and 1250.517. 



Respondent filed an answer in which he essentially admitted 
denMicational and t some of the occupational allegations, but claimed 
insufficient information to admit any of the other allegations, and denied that 
he was indebted to the American Egg Board in any amount. 



I. 

A. Robert t A. Billiard does business as Hilliard Egg Farms, near Cave 
Spring, Georgia. He has about 29,500 chickens. He also grades/cartons and 
o 1 erwjse handles his eggs in a fashion that brings him into a category known 

nd PromoU " rder 



handler ;V shaIi P<>y to the Egg Board (7 C.F.R. 1250.348(b)) 
CCntS PCr C9Se f commercial e gg (7 



a 5 ess ent j f are P aid ^ egg producers through collecting 

D. The Egg Research and Consumer Information Act (1 U S C 27011 

mkT, H C r 3 r n -M thC E ^ ard f r the P Ur P se of maintaining eg^ 
markets and when fea S1 ble expanding those markets. This was determined 
to be in the public interest (7 U.S.C. 2701) 

S a C llecting handlcr 



a nvr f the t . American E Board and he was not aware of 

any obligation that he may have had to the American Egg Board until 

***** b 



/"\ n L it f i 1 ' 

ij. anortiy alter that publication the American EBB Board cnnta^pH hi 

an/1 intrtt*mj=ifJ !*; j.1._j. t_ i , , OO *^*-'"*v v\jJiLt*W-ltxU 111 

ana miormed him that he had to register, report and 
American Egg Board. 

384 



ROBERT A. BILLIARD, d/b/a HILLIARD EGG FARMS 



H. In 1982 Hilliard requested advertising material from the Georgia State 
Egg Commission. Tr. pages 61-62. 

I. The bill ($2.96) for that advertising material was from the American 
Egg Board, which Hilliard paid, believing it was "just a company producing the 
logos, the stick-on labels, or whatever from the Georgia Egg Commission." 
Tr. pages 62, 67-68. 

J. From late 1984 when he was told he had an obligation to pay 
assessments to the American Egg Board, he began making payments as 
required, and filing claims for refunds' as permitted by the Act and the 
Promotion Order. 7 U.S.C. 2712; 7 C.F.R. 1250.349 (1987); 7 C.F.R. 1250.523 
(1987). . 

K. Respondent Hilliard would have reported and paid the assessments, as 
required, from 1978, had he been informed of this obligation, and requested 
a refund, as he has done since late 1984. Tr. page 66, 

L. Respondent Hilliard reports a total of 66 months between May 1978 
and September 1984 when assessments were due and payable to the American 
Egg Board. These assessments total $3,194.40. (Apparently there were about 
10 months between May of 1978 and September of 1984, when respondent 
Hilliard had no assessable obligation to the American Egg Board.) 

M. The American Egg Board vigorously pursued respondent HilHard 
after they became aware of his existence, apparently triggered by the industry 
magazine article concerning his operations. By correspondence and telephone, 
Hilliard claims he was "harassed", Tr. pages 69-70. Hilliard agreed to pay 
them the back assessments if he could obtain a refund, but no refunds for any 
assessment earlier than September 1984 were possible. He paid all 
assessments that were refundable, but did not pay older assessments which 
were no longer refundable. Tr, pages 71-72. 

N. The Egg Board sought payment of the assessments, but when it became 
clear that respondent Hilliard could not pay, or would not pay, in light of his 
financial situation, the Board shifted emphasis to merely get the reports of 
respondent's business. 2 Tr. page 69. 

O. Respondent Hilliard said they "harassed" him. American Egg Board 
representatives said they did not. 

P. In any event, the sophisticated, computerized system and telephone 
recording apparatus used by the American Egg Board required experienced 
business officials to conceive, supervise and operate. This sophistication 
continued into their communication with egg farmers. 

Q. It requires a close reading of the correspondence to see that the Egg 
Board officials were perhaps technically and precisely correct in their language 



1 Egg producers who pay these assessments but who do not favor the program may 
obtain a refund by personally applying lo the Board within 90 days of the month Hit assessment 
was due. The refund requirements are precise and detailed. 7 C.F.R. 1250,523 (1987). Failure 
to fully comply invalidates a refund request. Tr. pages 35, 39, 43, 

2 Complainant essentially made out Its case against respondent by using these reports. 

385 



when ihey informed Mr. Hilliard that "we will work out a satisfactory time- 
payment plan that will protect your right to a refund under the 90-day 
expiration deadline requirement." Respondent's Exhibit No. 1. 

R. To the casual reader, as egg farmer Hilliard was, this implied that if 
he applied for a refund within 90 days of payment, he would get his money 
back. However, the Statute, Order and Regulations all precisely require that 
a request for a refund must be made within 90 days of the month in which the 
assessment was due even if not paid. Thus, a claim for a refund for payments 
due over a five- and one-half-year period ending more than 90 days before t he 
payment was made must be denied. 7 U.S.C. 2712; 7 C F R 1250 349* 7 
C.F.R. 1250.523. ' * 

S. Thus, in January 1985, when the American Egg Board advised 
respondent Hilliard that they would "protect your right to a refund under the 
90-day expiration deadline requirement", there was no right to a refund for I h c 
assessments due from May 1978 through August 1984. (Hilliard had paid for 
September 1984, and applied for a refund.) 

T. The American Egg Board has a duty to carry out the terms of the 
Statute, Order and Regulations. It has sophisticated personnel and equipment 
to perform this function. It acts with zeal when it discovers a "delinquent" egg 
collecting handler. Tr. page 81. However, the record does not show the sam c 
zeal to ferret-out egg collecting handlers who may be innocently unaware of 
their obligations under the law, 

U. In any event, the record is clear that respondent Hilliard was an egg 
collecting handler, subject to the Act, for the period he has reported, anct 
owes the Egg Enforcement Board assessments totaling $3,194.40. 

V. Since becoming aware of his obligation, respondent Hilliard has 
promptly reported, paid and requested refunds of contemporaneous 
assessments, but was not financially able to pay the older assessments thai 
were not subject to refunding. 

W. Apparently other egg producers have problems similar to Milliard's. 
About 46 percent of the assessments paid in September 1986 were refunded. 

X. Respondent Hilliard suffers hardship due to his $600,000.00 debt to the 
Farmers Home Administration (FmHA) which is in arrears about $375,000 GO 
Tr. page 63; Respondent's Exhibit No. 3, page 4. 3 

II. 

Since it is very probable that respondent would have paid and sought a 
refund had he been aware of his obligations to the American Egg Board 
since 1978, the Board would not have had the use of this aggregated $3,194 4G* 
Essentially, respondent's violation appears to be a "victimless" violation Tr' 
pages 84-85. 

His financial situation is worse than critical. He is going down the drain 
Bankruptcy may absolve him from some of his problems (Tr. page 66), but a 



>f respondent's farming operations shows ihat his cost to 
:ents, At a selling price of 66 cents a dozen, respondent 
Interest on respondent's debt to FmHA runs $54,3QQ 
compelled to take "adverse action" against respondent per 
23, 1986. Respondent's Exhibit 3, page 5. 

386 



ROBERT A. MILLIARD, d/b/a HILUARD EGG FARMS 

civil penalty imposed here may well survive to impose the coup dc grace. 
Thus, there may be a victim - this respondent himself -- whose offense was 
merely technical in character and without any serious consequences to anyone 
other than himself. 

Respondent Hilliard's credibility and integrity is excellent. Full probative 
value is awarded to his testimony. Respondent's evidence as a whole was 
persuasive and convincing. It was not contradicted. 4 

III. 

This record does not show that respondent Billiard was acting in careless 
disregard of a statutory obligation. He had no knowledge of his obligation 
until the fall of 1984, and thereafter has complied promptly and faithfully. His 
failure to comply earlier was not willful. 

It is noteworthy that of the 66 months that respondent reports handling 
eggs subject to the Act, the assessments on 32 of the months were under 
$30.00 each. The total assessments ($3,194.40) over the 66-month period 
averaged $48.00 monthly. 

It is worthy to note, again, that since respondent became aware of his 
responsibilities under this Act, he has reported and paid the assessments 
monthly, 5 and timely requested a refund of the assessments. Presumably, 
since respondent was overwhelmingly in debt to the Farmers Home 
Administration, he would have requested refunds of each of these monthly 
assessments that he should have paid to the Egg Board. 

For his failure to report and pay the monthly assessments, complainant 
seeks a $500.00 civil penalty for each failure, aggregating $33,000.00. 

In 1974 when this law was passed, it provided for civil suits in United 
States District Court with penalties "of not more than $1,000.00 for each such 
offense..." Section 15(b), Pub. L. 93-428, October 1, 1974. _ There, 
presumably, respondent might have been entitled to a jury trial by his peers. 
Further, the original Act limited enforcement to "willful" violations. Section 
15(b), Pub. L. 93-428, October 1, 1974. 

In 1980, the Act was amended to provide for disciplinary, administrative 
proceedings under the Administrative Procedure Act, 5 U.S.C. 550, instead of 
a trial in District Court. The "willful" requirement for a violation was deleted. 
The sanction for a violation was modified to provide for a "civil penalty , . ,of 
not less than $500.00 for each such violation." Pub. L. 96-276, June 17, 1980, 
94 STAT 541, 7 U.S.C. 2714(b)(l). (Emphasis added). 



4 Milliard claimed lhat complainant "harassed" him and complainant contradicted this. 
However, this was not a material factor in the disposition here, The Board did pursue 
respondent to get the reports and the assessments, as required by law. 

5 When respondent started his business in May 1978, the Georgia State Egg Commission 
went to this farm and told him he had to pay two cents per case to the Georgia State Egg 
Commission. He has done so. Tr. 59-60, 68. There is no reason to believe, and no incentive 
for him to have ignored his duties to the American Egg Board if he had known of them. 

387 



This $500.00 mtmmitm assessment was recommended by the Department 
to Congress because "the penalty needed to be high enough to create an 
incentive for producers to come forward with their assessment " H R 96-752 
J6th Cong, 2nd Session, page 10; Commerce Clearing House, Public Laws' 
Legislative Histories, 1 Microfiche, 96th Congress, 137-F5. There i s no further' 
rationale explicitly relating to that point. 

"The Department has encountered difficulty in enforcing the assessment 
provisions. The present [1974] Act requires the Department tSreso? 
to action m the Federal courts to enforce the provisions of the Act 
The American Egg Board has referred several cases to the 
Department, four ofwhich have been referred for prosecu ion In one 
case, prosecution was declined, although partial vo/untary resolution of 
the mat cr was achieved. Of the other three, one case was successful 
resolved by the Justice Department, and two arc still pcnd no n ore 
han one year after they were referred for enforcement action 8 Durh g 

h riM nf r ' T f ' hti tw - com P 1 anic s. which are the subjects of 
inl, ni P M ^eynfo^ment actions, has gone out of business Wine 
hllle possibility that the unpaid assessments will ever be collected 



r issuet ;. c , ivil Penalties and cease and desist orders 

nmSi effectively accomplish enforcement of the Act. Department 
officials could deal directly with violations during the ncmWcv nf 
enforcement procedures, increasing the probability o^gaWngWSc? 

rt tS? I . C Urt SyStCm W ?V ^ bc s P arc(1 lhc responsibility of hcK^i 
the trial level many cases which coufd be effectively resolved throuah an 

admmistralive procedure. An administrative remecly would also cxoedS 
the process of enforcing provisions of the Act. X <PWle 

comnlfance iC Tn fofn B ard ste PP in P "?,> ^orls in the area of 
compliance. In 1980, a compliance unit w be set up to handle field 
audits to determine those individuals in violation of he Ac The 

KSlr^ W1 ' pr , mptly contact Vio , 1 ? lors who havc fe^d'to f e 
the reou icd reports and assessments. This effort is expected to keen 

both delinquent assessment collections and handler payments to ? 

bv il ?^ COU f Iod , With . aut ^ to ^ ^raSc^cn" 
by the Department against violators who ignore the Board's 

C 



. 96U - , C( ? ng " ? ml Scssion - P a e e 4 ! Commerce Clearing House 

Th, Cg ''l ^ allVC " iSt0ricS ' 1 Microfiche ' 96th Congrca, 137^24 ' 

The evidence here docs not establish that respondent was 



was no showing of careless disregard of statutory 



ss m 



ROBERT A. MILLIARD, d/b/a H1LLIARD EGG FARMS 

Ironically, it may be that respondent can survive his heavy indebtednes 

?TT ?"? e Admimstration ^ going into bankruptcy Tr p a 
tragicaUy the bankruptcy proceedings may not relieve him frU iS 
assessed in this proceeding. 

Complainant pursues the $50000 minimum civil penalty for each of the 6T, 
months of violations, aggregating $33,000. The burden of a $33,000 obSion 
on a collecting egg handler struggling from bankruptcy proceedings coud S 
be economically terminal to both his financial and occupational career 

'Great weight" must be given to the sanction recommendations of 
complainant. In re Braxton M. Worsley, 33 Agric. Dec. 1547 1567-1571 (1974V 
In re SyB. Gaiber and Company, 31 Agric. Dec. 843, 845-851 (1972V InrejJ( 
SpeightK Agric Dec. 280 310-319 (1974); / S *mud Esparto^ Agric. 
Dec. 613, 665 (1979). Little or no discretion is allowed under normal 
circumstances. 

The $33,000 sanction is not only recommended by complainant but it is a 
minimum civil penalty permitted by the Act. Presumably, complainant will 
publicize this decision to other collecting egg handlers to "deter" them from 
similar violations. This massive sanction seems hardly necessary to deter egg 
producers from violations when with a little paperwork they can get (heir 
monthly egg assessments refunded. 

The sanction seems disproportionate to the offense. On a cost/benefit 
analysis, the cost to the egg producer is probably occupationally and financially 
fatal (a farmer, egg producer, in the later stages of his life, in a tiny town of 
about 900 people in Northwestern Georgia), with little or no direct, proximate, 
material benefit to the Egg Board, except possible "deterrence". 

From 1974 to 1980, there were only about four actions referred to U.S. 
District Attorneys for enforcement proceedings, as set forth in the legislative 
history above, and since the 1980 amendments there have been only nine 
proceedings to enforce the Act (including this one). That would average out 
to about one enforcement case per year. . , . 

There is no statute of limitations in this Act (as the Egg Board very 
carefully points out in its letter to respondent Milliard; page 1, Complainant's 
Exhibit No. 69), so presumably, there may be other egg producers/collecting 
egg handlers who are accruing mind-boggling liabilities to the Federal 
Government for their failure to comply with the Act, however unwittingly it 
may be. 

Even so, the Judicial Officer in an earlier default decision called the 
$500,00 civil penalty "very modest, considering the maximum civil penalties 
that could have been imposed." In re Corbett Farms, Inc., Inc., 43 Agric. Dec. 
[1775, 1780-81] (1984). 

To assess a civil penalty of this magnitude under these circumstances 
seems incredible. To say this result could/might have been avoided if 
respondent would have only paid the delinquent assessments, is to say that the 
quality of justice is not important, 



389 



IV. 

The evidence here fails to establish that this respondent, a resident of a 
tiny rural community raising chickens and producing eggs, was aware of any 
responsibilities under the Egg Research and Consumer Information Act and 
did not in any way willfully violate any of his duties under the Egg Research 
and Consumer Information Act. His violations were unwilling. Thus 25 of 
the alleged violations occurring before the Act was amended June 17 1980 
when willfulness was required, were not established by this record. * 

Thereafter, the record does establish that respondent failed on 41 
occasions to file a monthly report and pay the appropriate assessment due 
under this Act and the implementing Order and Regulations. There were 41 
such violations alleged and established by this record. The minimum sanction 
apparently assessable is $500.00 per violation. A civil penalty of $20 500 00 
will reluctantly be assessed and the cease and desist order souiht 'bv 
complainant will be issued. ^uyu oy 



ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER 

I disagree with the ALJ's view thai respondent's violations were not willful 
Willfulness as used m regulatory statutes not involving turpitude, docs not 
require that the violator know of the regulatory requirements or know hat he 
is breaking the law. See In re Shatkln, 34 Agric. Dec. 296, 297-306 7l975\ 

In addition, I disagree with the view implicit in the ALJ's initial decision 
that the minimum $500 civil penalty is automatic upon complainant's nroo 
a elation. It is not! The Act provides (7 U.S.c' 2714(b)(l)) (emphasis 



2714. Civil enforcement proceedings 



(7 U.S.C. 2712): collectable. Specifically, the Act provides 

2712. Refund of assessment from Egg Board; procedures 



ROBERT A. MILLIARD, d/b/a MILLIARD EGG FARMS 

Notwithstanding any other provisions of this chapter, any egg 
producer against whose commercial eggs any assessment is made and 
collected from him under authority of this chapter and who is not in 
favor of supporting the programs as provided for herein shall have the 
right to demand and receive from the Egg Board a refund of such 
assessment: Provided, That such demand shall be made personally by 
such producer in accordance with regulations and on a form and within 
a time period prescribed by the Board and approved by the Secretary 
but in no event more than ninety days after the end of the month in 
which the assessments are due and collectable, and upon submission of 
proof satisfactory to the Board that the producer paid the assessment 
for which refund is sought, and any such refund shall be made within 
sixty days after demand is received therefor. 

Respondent promptly paid all of his assessments and obtained refunds as 
soon as he was made aware of the existence of the program. It appears likely 
that the American Egg Board (AEB) could easily have learned of 
respondent's existence through the Georgia authorities, to whom respondent 
paid the applicable monthly state assessments, but AEB did not bother to do 
so. Ur, James L. Bixby, Chief Compliance Officer of AEB. testified (Tr. 27- 
29): 

Q. Okay, this part of the Act then gives you the right to designate 
a cooperating agency to collect assessments on your behalf. It gives 
you that right, does it not? 

A, It gives us that right. 

Q. I presume that that could be a State agency, could it not? 

A. Could be. 

Q. And you say the Egg Board has chosen not to do that? 

A. We have never done that. 

Q. But you -- do you know whether or not Georgia has a 
organization such as the American Egg Board? 

A. Yes. 

Q, Do you know what the name of that is? 

A. Yes. 

Q, What is it? 

A. Georgia Egg Commission. 



391 



0. Do you do business with the Georgia Egg Commission in any 
fashion? 3 

A. American Egg Board does, yes, 
Q. What is the nature of that business? 

A. Well essentially the Georgia Egg Commission promotes eces 
within the State of Georgia using a good many of the materials 
produced by the American Egg Board that they acquire from us. 

Q. In other words, ya'll give them information to put out 

through their - * l 

A. (Nods affirmatively.) 

Q. Do you know that they collect assessments? 

A. Georgia Egg Commission does not collect assessments. 

Q. The Georgia Egg Commission docs not collect assessments? 

A. Not the Commission, no sir. 

Q. Do you know that they collect anything off eggs? 

A. They receive their own local assessments. 

pick? up? ya>H HaVC any Way f traCtdng lhc asscssmcnts lhat Georgia 
A. Unless they tell us. 
Q, Except what they tell you? 
A. That's right. 

Q. You have the power through that Act to do that, do you not? 
A. Yes. 

wa y.9a ch stale -Ihon would identify its own egg 



A. We could, but we don't. 
There is no indication in the record that AEB made the slightest effort to 

ccoTd ndSh L e fp P R d fr " 

ccord indicates hat AEB 



cco nh pR 

ccord indicates hat AEB waited until it learned of respondent's existence 

hrough a magazine article (about 6 years after respondent became an "S 
producer), so that the 90-day deadline for applying L refunct had long ^ 



ROBERT A. HILLIARD, d/b/a MILLIARD EGG FARMS 



expired with respect to all of the violations alleged in this case. 

In view of the voluntary nature of this assessment program (i.e., th 
producer has the absolute right to demand and receive a refund c 
assessments), AEB's lack of diligence in learning of respondent's existenci 
respondent's total ignorance of the program until he was contacted by AE: 
in 1984, and respondent's total compliance with respect to all assessments fc 
the months after he was contacted by AEB, I believe that a cease and desi; 
order with respect to future violations is the appropriate sanction to b 
imposed in this case. 

This decision is limited to the facts of this case. In other factiu 
circumstances, I affirmed civil penalties totaling $54,000 for violations of th 
program, stating (In re Corbett Farms, Inc., 43 Agric. Dec, 1775, 1780-8 
(1984)): 

In addition, the civil penalties imposed here arc very modest, 
considering the maximum civil penalties that could have been imposed. 
The Act states that the civil penalty shall not be less than $500 nor 
more than $5,000 for each violation, and that each violation shall be a 
separate offense. 7 U.S.C. 2714(b)(l). In this case, 36 of the 
violations received the minimum civil penally of $500 each. Twenty- 
four of the violations received a civil penalty of $1,500 each. These 
were instances where for long periods of lime respondent not only 
failed to send in assessments on ils own eggs, but failed to remit 
assessments which it had already collected from other producers on 
their eggs. 

Respondent's contention that his bankruptcy proceeding operates as a sU 
of this administrative proceeding is without merit. Sec 11 U.S.C, 362(b)(4 
For the foregoing reasons, the following order should be issued. 

Order 

Respondent, Robert L, Milliard, his agcnls find employees, directly ( 
indirectly through any corporate or other device, shall cease and desist froi 
future violations of the provisions of the Order and the Rcgulalioi 
promulgated under the Act by failing to file handler reports and rcm 
assessment obligations to the AEB each reporting period on a timely basis 

This order shall become effective on the day aflcr service on rcspondcn 



393 



FEDERAL MEAT INSPECTION ACT 



In re: DOMINICK A. CRENO. 

FMIA Docket No. 107. 

Order Dismissing Complaint filed February 12, 1988. 

Lori Monitor!, for Complainant. 

Respondent, pro se. 

Order Dismissing Complaint issued by Paul Kane, Administrative Law Judge. 

ORDER DISMISSING COMPLAINT 

By Motion filed February 10, 1988, complaint counsel moved for ihe 
dismissal of the complaint herein. Counsel's Motion is based upon the 
withdrawal of the respondent's application for inspection services, which is 
taken to be an expression of acquiescence in the action presented. 

Accordingly, the complaint is dismissed and complaint counsel's Motion for 
a hearing date is mooted. 



PACKERS AND STOCKYARDS ACT 

DISCIPLINARY DECISIONS 

In re: GARY CHASTAIN AND JIM LEWIS. 

P&S Docket No. 6606. 

Decision and Order issued on February 22, 1988. 

Payment to sellers on the basis of false or incorrect weights. 

Summary: The Judicial Officer affirmed Judge Palmer's Decision and Order. The order 
requires respondents to cease and desist from paying the sellers of livestock on the basis of 
false or incorrect weights, and related offenses. The order suspends respondent Chastain as 
a registrant under the Act for 3 months, prohibits both defendants from registering within the 
same 3 months, and assesses civil penalties of $2,000 against respondent Chastain and $1,000 
against respondent Lewis. The evidence supports the ALJ's findings and conclusions that 
respondents short-weighed the steers found by the ALJ to have been short-weighed, except 
where there was only a 5-pound weight difference, which could be attributed to the "break of 
the beam." It is the practice of the Judicial Officer to give great weight to the credibility 
determinations of the Department's ALJ's. The sanctions imposed by the ALJ are in 
accordance with the Department's severe sanction policy. I infer that respondents' short 
weighing was intentional, but the sanction would be the same even if it were not intentional. 
False weighing defeats the primary purpose of the Act. Although respondents have no prior 
history of weighing violations, where careless or deliberate false weighing can be proved, a 
fonnal aclion is instituted without sending a prior warning letter. 

Dennis Becker, for Complainant. 

Cecil J. Drummcmd, Tulsa, Oklahoma, for Respondents. 

Initial decision issued by Victor W. Palmer, Chief Administrative Law Judge. 

Decision and Order issued by Donald A, Campbell, Judicial Officer. 

DECISION AND ORDER 

Preliminary Statement 

This is a disciplinary proceeding under the Packers and Stockyards Act, 
1921, as amended and supplemented (7 U.S.C. 181 et seq.), 1 An initial 
Decision and Order was filed on May 20, 1987, by (now) Chief Administrative 
Law Judge Victor W. Palmer (ALJ) ordering respondents to cease and desist 
from paying the sellers of livestock on the basis of false or incorrect weights, 
and related offenses. The order suspends respondent Chastain as a registrant 
under the Act for 3 months, prohibits both defendants from registering within 
the same 3 months, and assesses civil penalties of $2,000 against respondent 
Chastain and $1,000 against respondent Lewis, 

On July!, 1987, respondents appealed to the Judicial Officer, to whom 
final administrative authority has been delegated to decide the Department's 
cases subject to 5 U.S.C. 556 and 557 (7 C.F.R. 2.35). 2 On July 23, 1987, 



See generally Campbell, The Packers and Stockyards Act Regulatory Program, in 1 
Davidson, Agricultural Law t ch. 3 (1981 and 1987 Cum. Supp.), and Carter, Packers and 
Stockyards Act, in 10 Had, Agricultural law, ch. 71 (1980). 

2 The position of Judicial Officer was established pursuant to the Act of April 4, 1940 
(7 U.S.C. 450c450g), and Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219 (1953), 
reprinted In 5 U.S.C. app. at 1068 (1982). The Department's present Judicial Officer was 
appointed in January 1971, having been involved with the Department's regulatory programs 

395 



complainant filed a Cross-Appeal and Reply to Respondents 1 Appe 
August 21, 1987, respondents filed a Reply to Complainant's Reply and 
Appeal. The case was referred to the Judicial Officer for decis 
August 24, 1987. 

Oral argument before the Judicial Officer, which is discretionary 
C.F.R. 1.145(d)), was requested by respondents, but is denied inasn 
the issues are not novel or difficult, the case has been thoroughly brief 
oral argument would seem to serve no useful purpose. 

Based upon a careful consideration of the entire record, the 
Decision and Order is adopted verbatim as the final Decision and O 
this case, with a few changes indicated by brackets. The effective date 
order is changed in view of the appeal. Additional conclusions by the J 
Officer follow the AU's conclusions. 

ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION 
Preliminary Statement 

This is a disciplinary proceeding under Title III of the Packq 
Stockyards Act, 1921, as amended (7 U.S.C. m&seq.), hereinafter ri 
to as the Act, instituted by a complaint filed on September 30, 1985, 
Administrator, Packers and Stockyards Administration, United 
Department of Agriculture. 

The complaint alleges that respondents did business as C&L Stocl 
were engaged in the business of buying and selling livestock in com mo 
their own account and the accounts of others; and engaged in the busii 
buying livestock in commerce on a commission basis, as well as aclir 
dealer and market agency within the meaning of and subject to the pro 
of the Act. The complaint charges that while acting in such cap; 
respondents weighed livestock at less than their true and correct w 
issued scale tickets and accounts of purchase to the sellers of the livosti 
the basis of false weights; paid the sellers the proceeds for such livcst< 
the basis of such false and incorrect weights; failed to comply wi 
requirements of the Act and appropriate regulations pertaining to the isf 
of scale tickets; failed to maintain accurate weights; and failed to 
livestock in strict conformity with the requirements of the regulations: 

The respondents filed individual answers on October 25, 1985 
formal answer on November 25, 1985, in which they denied the csj 
allegations of violations contained in the complaint. After further preltt 
procedural steps, a hearing was held before me on November 18 and 19 
m Little Rock, Arkansas. Complainant was represented by Dennis 13 
Oilice of the General Counsel, United States Department of Agriculture 
respondents were represented by Cecil G. Drummond, Tulsa, Okl* 
Complainant called six witnesses and introduced 15 exhibits, and rcsnoi 
A '[ s 508 and intr duccd four exhibils ' Briefin 8 was complcj 



since 1949 (including 3 years' trial litigation; 10 years' appellate litlcaiton rclafin* to i 
from the decisions of the prior Judicial Officer; and 8 years as adn inSor of t h! pj 
Stockyards Act regulatory program). aununistrator of the I acte 



396 



GARY CHASTAIN AND JIM LEWIS 

Upon consideration of the record evidence, the findings and conclusions 
proposed by the parties, and the various arguments advanced on their behalf, 
an Order is being entered against respondents Gary Chastain and Jim Lewis 
for violating the Act by the false weighing of cattle, requiring them to cease 
and desist from such practices, suspending Mr. Chastain's registration as a 
dealer and market agency for three months, precluding both respondents from 
newly registering for three months, and imposing civil penalties of $2,000 
against Gary Chastain, and $1,000 against Jim Lewis. 

The findings, conclusions and the resulting Order which supports this 
disposition of the proceedings are as follows: 

Findings of Fact 

1. Gary Chastain, hereinafter referred to as respondent Chastain, is an 
individual who, with respondent Jim Lewis, does business as C&L Stockyards. 
Respondent Chaslain's mailing address is P.O. Box 72, Maysville, Arkansas 
72747. 

2. Respondent Chastain is, and at all times material herein was: 

(a) Engaged in the business of buying and selling livestock in commerce 
for his own account and for the accounts of others; 

(b) Engaged in the business of buying livestock in commerce on a 
commission basis; and 

(c) A dealer and market agency, within the meaning of and subject 
to the provisions of the Act. 

3. Jim Lewis, hereinafter referred to as respondent Lewis, is an individual 
who, with respondent Chastain, does business as C&L Stockyards. 
Respondent Lewis' mailing address is Route 3, Jay, Oklahoma 74346. 

4. Respondent Lewis is, and at all times material herein was: 

(a) Engaged in the business of buying and selling livestock in 
commerce for his own account and for the accounts of others; 

(b) Engaged in the business of buying livestock in commerce on a 
commission basis; and 

(c) A dealer and market agency, within the meaning of and subject 
to the provisions of the Act. 

5. At the time of the transactions involved in this proceeding, the 
respondents operated their business in the manner of a partnership but 
without a formal partnership agreement. Neither individual respondent was 
registered with the Packers and Stockyards Administration of the United 
States Department of Agriculture at the time of the transactions that are the 
subject of these proceedings. Subsequently, respondent Chastain registered 
with the Packers and Stockyards Administration as an individual who is a 
dealer and who buys and sells livestock on a commission basis. The 
respondents, at the time of the transactions involved herein, held themselves 
out as co-equal individuals doing business as C&L Stockyards. The "C" stands 
for Chastain and the "L" stands for Lewis. Moreover, the answers filed by 
each respondent, individually, as well as the formal answer filed on behalf of 
them both, did not deny, and the individual answers in fact supported, the 



397 



complaint's allegations that they were in business together and jointly operated 
C&L Stockyards. 

u 6 ^ pril ; 19 ' a , S a result of a com P Iaint b y a third party not affilialed 
with C&L Stockyards, the Packers and Stockyards Administration invest fenlcd 
the respondents to determine whether they were shortweichinc cattle The 
Arkansas Bureau of Standards agreed to provide qualified personnel and a 
""* ""'""" we '8 hts fi^anteed to be correct, in assistance of ,fc 



PacL^Ld^l^T '^ n - JameS . Th mpSOn and Mr " Michael Huff of (I )(J 
and Mr Oe^S " "' Memphis ' Te essee, Regional Office, 

Ri. a C f S c? r ' j j" e ^n 00138 . a"<J Chico Hernandez, of (lie 
Bureau of Standards, went to the place of business of Mr. Mickey 



at 

approximately ten ^l^^^^^S^f W3S ? Ia ? sc ^ 
beam, which MM M. - "JP v ^et long with a type-registcriim we mh 



e y S even tve w, ' 

beam, which was capable of p Si wefchtS h typl ;- reglslci ; ins Wci 8 h 

' 



e brought a ' 

was carrying a dead calf. The cow ha^ ^ M wlu ?. due to a ^tc<l uterus, 
unh the time that it was traiS^^fT d i to . 0at , and takc Wfltcr P 
Mr. Wacker's place of business T ?^ ^? d ? s place of b soss lo 
UM9 am, by Mr. Thomp^n T f t ^KW, " M J Wack 
Stockyards Administration thr ' 5 P Unds ' Thc 



attSSP-'SMw, 1 ?-?*^- 

JSM^awtsSF.^saw 

--*.iftU{L!f S i" !~ S ft* . w " 1 



398 



GARY CHASTA1N AND JIM LEWIS 



not signed by the person who weighed it. A ticket number was absent It did 
not state who weighed the cow, 

J 1 ^ 8 , 3 rcs j u1 ' of the , transaction between Mr. Thompson, Mr. Kinder, and 
C&L Stockyards, Mr. Thompson decided to continue the investigation on the 
A 6 *-; rX t( ^ ermin , e whether C&L Stockyards was shortweighing cattle. On 
April 10, 1985, at the request of Mr. Wacker, Mr. Ted Baer brought to 
Wacker s place of business ten bull calves consisting of nine holsteins and one 
mixed breed of various weights which had been kept on fescue pasture until 
they were placed upon Baer's trailer for transportation to the Wacker scales 
m low Thompson balanc ed the Wacker scales on the morning of April 

J-Wj -LVO*J 

, *? w'' Th ? m P, son obfrved the ten bull calves for a long period of time 
at Mr Wacker's place of business. He did so in order to be able to identify 
the cattle when he would later check C&L Stockyards' weighing practices. He 
determined that there was one holstein with brownish rough hair, one mixed 
breed with a cut mark on its right jaw and one very large holstein. He also 
determined there were seven holsteins which were similar in size and weight 
As a resul of his observations, Mr. Thompson determined that more likely 
than not the seven similar size holsteins would be brought as a lot and 
weighed together by C&L Stockyards, and that each of the other three steers 
would be weighed individually. Therefore, although all ten steers were 
weighed together on the Wacker scales a record was not maintained aT o 
their total weight. In addition, the seven similar holsteins were weighed 
mdividually and recorded as group. The other three individual steeTwere 
weighed and recorded individually^ A record of this weighing method was 
made and kept. The time of weighing was between 12*23 and 17-T7 n m 
April 10, 1985 The weight of the seven holstein steers was 3,190 pounds' 1 
il^^^^ PO-ds, the wdghtTthe 



s h e, . r s . [375 i p unds ' and < he w h o h 

steer with the cut mark on its right aw was 505 pounds. It was agreed 

V h , mpS . n and , M [' Baer thal Mr " Thom P son wou!d purchase the 
fJ"L Gd Pr '? e ' ^ d tha Mr ' Thompson would pay Mr, Baer any 



o 

cat flc were caref U U) r reloaded onto Mr. Baer^s trailer and transported by Mr 
fhel Mr' Che &L S H C A ya l S * Mr ' ? mpS n and Mr ' Huff follow ^ 



H ' 

n- and I**' Thomas of the Arkansas Bureau of Standards 

of iff f ^' ^ ^u Hernandez fo "wed in the Arkansas Bureau 

from C&L Stnck "^ , J hC ?? St P , ped W*mately one half mile 

15 Wh,n^f y S V nd th ^ W ! ight tmck st PP ed about a 



steers were recorded as weighing 3,020 pounds 
399 



by Mr. Chastain, whereas previously they had been shown to weigh 3,190 
pounds. The brownish holstein steer with rough hair was recorded as 
weighing 360 pounds, whereas previously it had been shown to weigh 375 
pounds; while the steer with a cut mark on its right jaw was recorded as 
weighing 490 pounds, whereas previously it had been shown to weigh 505 
pounds; and the big holstein steer was recorded as weighing 655 pounds, 
whereas Mr. Thompson had weighed it at 665 pounds. The weighing of these 
cattle took place at approximately 1:15 p.m. Mr. Baer saw the cattle put in 
the pen nearest the street and nearest where the scales were, and did not see 
either feed or water in that pen and did not believe Gary Chastain would have 
a water trough in that pen used to hold cattle for weighing. 

16. Mr. Baer accepted payment from C&L Stockyards based upon Lhe 
weights provided by Mr. Chastain. He also accepted weight tickets from Mr. 
Chastain and then drove back to where Mr. Thompson was waiting. He gave 
Mr. Thompson the weight tickets, and told him when the cattle had been 
weighed. Mr. Thompson looked at the scale tickets given Mr. Baer by C&L 
Stockyards, and concluded that Mr. Baer may have been shorlwcightcd. He 
then drove to C&L Stockyards, followed by the Stale personnel in their iwo 
vehicles. 

17. Mr. Thompson, Mr. Huff, Mr. Chesscr, Mr. Thomas and Mr. 
Hernandez arrived at C&L Stockyards at 1;25 p.m., on April 10, 1985. Mr. 
Thompson identified each individual in his group, to Mr. Chaslain and Mr. 
Lewis, and told them the purpose of their visit. At or near the time of arrival, 
in accordance with established investigatory procedures, both Mr. Thompson 
and Mr. Huff looked at the cattle in the pen nearest the road and nearest llic 
scales and at the pen itself to determine that there was neither feed nor water 
in that pen. Mr. Thompson also identified the ten steers based upon his 
previous observation of them, 

18. The scale was the same type of scale used at Mr. Wacker's place of 
business, i.e., it was a type-registering weigh beam scale. The scale itself was 
about eight feet wide by fourteen feet long. The platform could be seen from 
the building housing the weighbeam, through a small window, 

a vt A U. :36 P - m>) Mr< Thom P son zero-balanced the scale. Mr. Thompson, 
with Mr. Chastain present, weighed three head not related to (he ten steers 
tha were provided by Mr. Baer. Mr. Thompson ascertained that the weights 
Mff^L three ,? mmals were higher than the purchase weights, but the 
weighing consuming feed and water after the firsl 

ntfo^i?^^ advise ? Mr ' Chastain lhat he wishcd t( > weigh more 



w er abT 'ColT 8 ?,?"""! T "? Which there ^as fcccl l 



GARY CHASTAIN AND JIM LEWIS 



while Mr. Chastain said, "Let's weigh these over here", or words to that effect. 
Mr. Thompson also moved the large holstcin steer from the water and feeding 
trough where it had been for about two minutes. At no time did the nine 
head of cattle have access to feed and water. The Baer cattle and two other 
head were brought back down to the scales. Mr. Chesser operated the weigh 
beam. He weighed the two head of cattle that had not been purchased from 
Mr. Baer, and balanced the scale at zero at 1:48 p.m. Mr. Thompson stayed 
near the weighing platform to sort the cattle in accordance with the way in 
which they had been previously weighed by Mr. Chastain. Mr. Chastain and 
Mr. Lewis were with him. Mr. Chastain agreed with Mr. Thompson as to the 
methodology by which Mr. Chastain had previously weighed the ten head of 
Baer cattle. 

21. The weighings showed that the seven holstein steers which were 
weighed together weighed 3,190 pounds, the same as when weighed by Mr. 
Thompson at Wackcr's, whereas previously Mr. Chastain had weighed them 
at 3,020 pounds, for a difference in excess of 5%. The large holstcin steer 
which had gotten to feed and water, weighed 680 pounds whereas Mr. 
Chastain had weighed it at 655 pounds; this steer had weighed 665 pounds 
when weighed by Mr, Thompson at Mr. Wackcr's place of business. The 
brownish holstein steer with rough hair was weighed at 365 pounds whereas 
Mr, Chastain had weighed it at 360 pounds, for a difference of approximately 
[1.4% (5 + 360 = .0138888)]; this steer had weighed 375 pounds when weighed 
by Mr. Thompson at Mr. Wacker's place of business. The steer with a cut 
mark on its right jaw was weighed at 500 pounds whereas Mr. Chastain had 
weighed it at 490 pounds, for a difference of 2%; this steer had weighed 505 
pounds when weighed by Mr. Thompson at the Wacker scale. Thus, for the 
seven head of steers, weighed and sold as a group, there was a [gain] of 170 
pounds from the time Chastain weighed them until the time they were 
weighed by Mr, Chesser. For the large holstein steer, there was a gain of 25 
pounds from the lime Chastain weighed it until the time it was weighed by 
Mr. Chesser, but a [gain] of fifteen pounds from the time it was weighed by 
Mr. Thompson until it was weighed by Mr. Chesser. For the brownish 
holstein steer, there was a gain of five pounds from the time it was weighed 
by Mr. Chastain until it was weighed by Mr. Chesser, and a loss of ten pounds 
from the time it was weighed by Mr. Thompson until it was weighed by Mr. 
Chesser. For the steer with a cut mark on its right jaw, there was a gain of 
10 pounds when it was weighed by Mr. Chesser over the weight recorded by 
Mr. Chastain, and a loss of five pounds from the time it was weighed by Mr. 
Thompson until when it was weighed by Mr. Chesser, Mr. Chesser zero- 
balanced the scale at 2:07 p.m. The ten head of steer[s] were put back in the 
same holding pen in which they had previously been placed, i.e., the pen 
nearest to the street and the scales. 

22. Mr. Thompson next arranged to have Mr. Chesser test the scales for 
accuracy. Mr. Chesser did so using the weights of the Arkansas Bureau of 
Standards. The scale tested out in conformity with requirements and a test 
report was issued. The federal and state officials then left C&L Stockyards 
after a brief discussion with Messrs. Chastain and Lewis. 

401 



23. The scale tickets provided to Mr. Baer for his ten head of cattle were 
deficient, and did not contain serial numbers, the actual weight of the 
livestock, the name of the buyer of the livestock, or the name of the person 
performing the weighing service. More importantly, the weights reported in 
resect to [eight] of the cattle were less than their actual weights and Mr. Bacr 
was underpaid for them. 

Conclusions 

1. (a) Respondents Chastain and Lewis are individuals who, in April, 
1985, were engaged in the business of buying and selling livestock in 
commerce for their own accounts and for the accounts of others; and were 
dealers within the meaning and subject to the provisions of the Act, 

(b)C&L Stockyards is a business which in April, 1985, 'was not 
registered with the Packers and Stockyards Administration. Durine (hat 
month, it was operated by Gary Chastain and Jim Lewis, either as a 
partnership, or with Mr. Chastain as the proprietor and Mr. Lewis as a co- 
equal operator acting as a dealer. 

r ^ nn i C) ! n l heir f T aI answer and in the answers individually filed by each 
E?i Stu ? com P Iam < s ^legation that the respondents jointly conducted 
C&L Stockyards was not denied and hence was admitted. The conclusion first 
proposed by respondents' attorney at the hearing and then on brief, that 

ee ChaStain ' 1S r m ' Stent Wlth this admLsi 

respecttng the conduct of the business: a 






4. &$^a^^?^ false and incorrect **** 

livestock faidt c^ their purchases of 

the Act and regulations b SaMJ.^ ? " t V*^ rdmg scale tickets un ^ 
and location Jto^$5 < a C l ! ck , ets fai1 ^ to show the name 
^^^^^S^i^^^S^ 90 ^ the Mine of the 
failed to serially numDer the ^ fefc^S ^livestock, and furthermore, 
accurate weights and fcS^? ^ failed to malntai 
section w 



ed against respondents for their 
a cease and desist order against 



402 



GARY CHASTAIN AND JIM LEWIS 



each of them; the suspension of Mr. Chastain's registration as a dealer and 
market agency for three months; precluding "each respondent" from newly 
registering as a dealer or market agency during the three months that the 
suspension is effective; a civil penalty of $2,000.00 should be assessed against 
respondent Gary Chastain; and a civil penalty of $1,000.00 should be assessed 
against respondent Jim Lewis. 

Discussion 

Respondents have interposed several issues to divert attention from the 
essential facts which show that they shortweighed cattle. 

At the hearing and on brief, respondent Jim Lewis contended that he was 
neither Chastain's partner nor a co-owner of C&L Stockyards. But this 
contention comes too late and is contrary to the answer he personally filed 
in this proceeding. Not only did he not deny his shared interest in the 
business with Mr. Chastain, he specifically ended his personal answer by 
asserting, "We are completely innocent. . . We have an honest and cooperating 
business and plan on continuing for many years to come, as we have 
previously." 

His decision to defend himself at the eleventh hour on the basis that he 
was merely an employee who should not be held responsible for the violations, 
is most disingenuous and destroys his credibility and that of Mr. Chastain who 
testified in support of this position. 

Respondents, however, were able to point out flaws in the overall 
investigation and the controls needed to establish each of the alleged 
shortweighing violations. 

The cow, with a twisted uterus carrying a dead calf should not have been 
used as part of the investigation. The weight changes such an animal may 
experience are too unpredictable to allow it to be used as a reliable test 
animal in a shortweighing investigation. 

There were also problems with the next day's investigation to determine 
whether respondents shortweighed the ten bull calves sold by Mr. Baer. 
However, those problems were largely of respondents* own making. 

After the government personnel came upon respondents' premises and 
identified themselves and their purpose, they stated that cattle in the pens 
were needed for the conduct of the reweighing investigation. Upon going in 
the pens, Mr. Chastain let loose the Baer cattle and let them into the area 
where feed and water was available. One large holstein apparently did drink 
water and valid conclusions about his actual weight when first weighed by Mr. 
Chastain cannot be properly drawn. Two others, although weighing less than 
they had at Wacker's, weighed heavier when reweighed by the government 
investigators, than the weights reported by Mr. Chastain. Moreover, the seven 
holsteins which together weighed 3,190 pounds when weighed at the Wacker's 
scales, continued to weigh 3,190 when weighed by the government 
investigator, whereas Mr. Chastain had reported and paid for them on the 
basis of their weighing 3,020 pounds, or 170 pounds less. 

Respondents scales were tested as accurate. Nine of the ten steers were 
observed by the government investigators to have not gotten to feed and water 

403 



after Chastam let them loose from their pens. The only real question 
concerning shortwelghing of these animals is whether or not there was a water 
rough in the pen in which they were held after Mr. Chastain had weighed 
them. Both Mr. Baer and Mr. Thompson testified that they do not remember 
such a water trough. Mr. Baer further pointed out that a weighing station 
would not have a water trough in a holding pen. Mr. Thompson, a trained 
mvestiga or said the presence of feed and water in the pen where cattle have 
been held after weighing is something he specifically looks for when 
conducting a shortwelghing investigation and he does not remember seeirm 
any, o 

Respondents' family members and friends testified that there was such a 
water trough m the pen. They would explain the weight differences of the 
nine steers on th e< basis that the cattle experienced excretory and/or tissue 
shrinkage after being weighed at Wacker's which they regained after beine 
weighed by Chastain when they drank the water in the pen & 

To accept this explanation, we must accept the credibility of respondents 
and their witnesses I do not. In addition to providing his partner with a 

nn ri ' 1 f . bd J g hdd responsible and the % b <4 Allowed to 
K I-K ( Tf SS ? thC CVent hls re 8 istrat ion * suspended, Mr. Chastain 
also deliberately let the cattle loose in order, it is suspected, to allow them 
to get to feed and water and thereby abort the investigation 
,HHT OV ^ U ! , S T St im P lausible 'hat 'he seven cattle weighed as a group 
HO no Hff nk ^ P re Unt f water needed to regain the 'ex c 

Mr Chal in Th" Ce m ??P? bet T en - the Weighin S s ^ Mr ' Wa <^ and 
!hn,nt K J ? m S u llkely ex P lanat in, is that they were completely 
shrunk out by the hme they were delivered and weighed at Wacker's, and 

eight either before r after the 



res P? d . ents are euty of shortweighing cattle 

aH, f ' re T ining Obli 8 ations to order them to 

cease and des.sl from continuing such violations in the future, and to impose 
appropriate sanctions against each of them under the Act 

,uh S,X ^ /^ ^ , nly ne draft f cattle was P roven to have been 
substan ally shortwe.ghed over 5%), the suspension of Mr. Chastam's 
reg is trat,on under the Act, for three months appears to be the max mm 
uKT" that 1S Warrante /' Mr ' Lewis is "^registered and may noT 

car on r.^T^ ?*?' *"?>. C ^ that if Mr " Lewis a empts to 
cary on re pondents' business during the time of the suspension of 

IS fi I > & regIS i ratlon ' the officia 's who administer the act may and 

t , e ,f? S Und ^-? CFR 20111 ' to P reclude thi * consequence 7 The 
Act a so authorizes a civil penalty of not more than $10,000 for each violation 

to onTS I' T U - nt f the ?" ' Penalt ^ l be ass;ssed > the Act requi?e S 
tha consideration be given to the gravity of the offense, the size of the 

business involved, and the effect of the penalty on the person' abiH v to 



ony ^ P' - 

only one draft of cattle was proven to have been substantially shortweiehed 

" 

and 



Accordingly, the fQllowin&rorder shall be entered. 



GARY CHASTALN AND JIM LEWIS 



ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER 

Complainant cross-appeals that part of the ALJ's initial decision rejecting 
complainant's proof as to Mr. Kinder's cow, which was carrying a dead calf. 
However, I agree with the ALJ's findings and conclusions with respect to the 
Kinder cow. Accordingly, there is no need for me to consider whether the 
proof as to this cow would have supported a finding of short weighing if the 
cow had been a normal, healthy cow. 3 

The ALJ properly rejected complainant's proof as to Mr. Baer's large 
holstein steer weighed at 655 pounds by respondent Chastain and at 680 
pounds on complainant's reweighing because that animal drank water between 
the two weighings. (Complainant does not contest the ALJ's findings as to 
this steer.) In addition, I reject complainant's proof as to Mr. Baer's brownish 
holstein steer weighed by respondent Chastain at 360 pounds and reweighed 
by complainant's investigators at 365 pounds because a 5-pound difference 
could be attributed to the "break of the beam." That is, if the animal actually 
weighed 362% pounds, it could properly have been weighed at either 360 
pounds or 365 pounds. 

Respondents contend on appeal that the ALJ's findings and conclusions 
as to Mr. Baer's steers short-weighed by respondents are not adequately 
supported by the record, but the record abundantly supports the ALJ's 
findings and conclusions (except for the 5-pound difference just discussed). 
In fact, the proof here far surpasses the preponderance of the evidence, which 
is all that is required.* 1 Respondents' arguments on appeal, in this respect, 
merely reargue matters that were fully considered and correctly decided by the 
ALJ (except for the 5-pound difference). 

The ALJ properly found that Mr. Baer's mixed breed steer that was 
weighed by respondent Chastain at 490 pounds was short-weighed because it 
weighed 500 pounds on reweighing by complainant's investigators, an increase 
of 10 pounds. In addition, the ALJ properly found that Mr. Baer's seven 
holstein steers weighed as a group at 3,020 pounds by respondent _ Chastain 
were short-weighed because they weighed 3,190 pounds on reweighing by 
complainant's investigators, an increase of 170 pounds. Since these eight 
holstein steers did not eat feed or drink water after respondent Chastain 
weighed them, the 10-pound increase and the 170-pound increase on 
reweighing shows that they were originally short-weighed. 



3 The direct sales investigation as to the Kinder cow lacked the usual controlled 
conditions involved In direct sales investigations. See Campbell, The Packers and Stockyards Act 
Rcgtilatoiy Program, in 1 Davidson, Agricultural Law, 3.64 (1981 and 1987 Cum. Supp.). H 
the livestock involved in a direct sales weighing investigation is not "g^unt" and "shrunk out" 
by the lime It is weighed near the market under investigation, complainant would, of course, 
have the burden of proving thai normal shrinkage did not account for the difference in weights. 

4 See Herman & MacLcan v. Hitctdlcston, 459 U.S. 375, 387-92 (1983); Steadman v. SEC, 
450 U.S, 91. 92-104 (1981); In re Rowland, 40 Agric. Dec. 1934, 1941 n.5 (1981), affd, 713 F,2d 
179 (6th Cir, 1983); In re Gold Betl-I&S Jersey Farms, Inc., 37 Agric. Dec. 1336, 1346 (1978), affd, 
No. 78-3134 (D.N.J. May 25, 1979), aJTd mem. t 614 F.2d 770 (3d Cir. 1980). 

405 



My conclusions that Mr. Baer's seven steers weighed as a group and 
Mr Baer s mixed breed steer were short-weighed is based entirely on the 
difference between the weight as recorded by respondent Chastain and the 
weight that was later recorded by complainant's investigators on reweighine 
Accordingly, the evidence as to the original weights of Mr. Baer's 10 steers 
recorded on Mr. Wacker's scales is irrelevant. Similarly, evidence as to how 
much the 10 steers might have shrunk between the weighing on Mr. Wacker's 
scale and the weighing on respondents' scale is irrelevant. 

Respondents contend that the increase shown on complainant's reweiehine 
after respondent Chastain had weighed the Baer steers, occurred because the 
steers drank water between respondents' weighing and complainant's check- 
weighing Both respondents and two close personal friends of respondent 
Chastain (one the lady he is "dating" (Tr. 406), and the other a close friend 
with whom he socializes on a regular basis (Tr. 472-75)) testified that a water 
tough was in the pen where Mr. Baer's 10 steers were kept after respondent 
Chastain weighed them. That pen is immediately next to respondents' scale, 
and is ( marked "B" on the sketches of respondents' facilities (RX 3 4) 
indicating that that is where Mr. Baer's 10 steers were kept after respondent 
Chastain weighed them. 

On the other hand, two disinterested government investigators and 
Mr Baer, the disinterested owner of the steers, 5 testified that there was no 
leed or water in that pen. 

Complainant's principal investigator was Mr. Jimmy W. Thompson, Scales 
and Weighing Specialist for the Memphis Region, Packers and Stockyards 
Administration, United States Department of Agriculture (Tr 182) 
Mr. Thompson had been a Scales and Weighing Specialist for the Department 
tor about 11 years, the first two of which were with the Department's Federal 
Gram Inspection Service. Mr. Thompson supervises the scales and weighing 
program for tte Packers and Stockyards Administration in Arkansas 
Louisiana, Mississippi and Tennessee (Tr. 184). He has conducted about 400 
weighing investigations similar to the one involved in this case, and about 45 
additional direct sales investigations (Tr. 185). Mr. Thompson testified 
categorically that when he was check-weighing the Baer steers, he looked to 
see whether there was feed or water in the pen, as he does in every weighing 
mvestiga .on and that there was no feed or water in the pen. (The Livestock 
Check-Weighing Report requires the investigator to specify whether feed or 

siw) (e ' g '' CX 8 ' p ' 2)) ' He testified (T '- 233 ' 36 ' m43 > 

Q. Okay. Then what did you do next? 

A. .We got put of the car. As we were getting out I saw the 10 
head of cattle that Mr. Baer had sold in the pen just directlTm front 






GARY CHASTAIN AND JIM LEWIS 

Q. Please describe ~ how did you know they were the 10 head of 
cattle? 

A, Because I'd spent about 45 minutes trying to fix it in my mind 
what those 10 cattle looked like. 

Q. Was there any food or water in that pen? 

A. No. 

Q. Did you look specifically for it? 

A. Not at that time, no. 

Q. Okay. When did you notice -- did you ever notice whether there 
was water or not in the pens? 

A. Yes. 

Q. When did you notice that? 

A. When we were check weighing the cattle or reweighing the 
cattle, 

Q. And was there water in those pens? 

A. No. 

Q. Did you notice whether there was any feed in those pens? 

A, There was no feed. 

Q. And specifically with respect to the 10 cattle that were in that 
one pen, was there any feed or water? 

A. In that pen, no. 

A. We moved them back down to the [original] pen. 

Q. To one of the holding pens? 

A. The holding pen, yes. 

Q. Was there feed and water in that pen? 

A. No, 



Q. , . . You've discussed pens and you've discussed the feed lot or 
the lot up above and you said there was no feed or water in the 
pens? 

A. There was no feed or water in the holding pens. 

Q. But you said that there was feed and water in the open lot? 
A. Yes, there was. 



A. There was no water trough in that pen. 

Q. Okay. There was no water trough in that pen? 

A. No, sir. 

Q. How do you know there was no water trough in that pen? 

A. I looked. 

Q. Why did you look? 

A. Because that's what I'm supposed to do. If we're having a 
weighing investigation, we're supposed to look for feed and water. 

Q. And did you do so? 
A. Yes, sir. 

Q. And it is your testimony that you looked in Pen B and found 
no water trough? 

A. Yes, sir. 

Mr. Thompson's testimony is corroborated by the testimony of 
Mr. Michael B. Huff, also of complainant's Memphis, Tennessee, Regional 
Office. Mr. Huff assisted Mr. Thompson in the weighing investigation. 
Mr. Huff testified (Tr. 646-47): 

Q. Now, did you have an opportunity to look at the pens behind 
* u " ""tryway? 

S sir. 

re there on the left-hand side, to' the best 



with a B in it? 



GARY CHASTAIN AND JIM LEWIS 



Q. What did you see in that pen? . 

A. In the pen marked B were the 10 Holslems that we had weighed 

over at Mr. Wacker's. 

Q. What else did you see in that pen? 

A. That's all. 

0. Did you look for anything else? 

A. Yes, sir. I looked for water or feed. 

Q. Why did you look for water or feed? 

A. Because basically when we do a check weighing or direct sale, 
we don't weigh cattle that's been in a pen with feed and water. 

Q. If they had been there, could you have seen them? 

A. Yes, sir. 

Mr Baer, the disinterested owner of the 10 steers, testified categorically 
at first' that there was no feed or water in the pen where his _ steers were held, 
but, on cross-examination, he merely stated that he "positively did not see any 
water trough, and he was not "aware" of a water trough in the pen. Mr. Baer 
testified (Tr. 85, 123, 125-27): 

Q Would you please describe to me what happened to the cattle 
at C&L Stockyards when you got there, where were they put? 

A., I just unloaded them in an alleyway. 
Q. Were they given food and water? 

A. No, sir. 

Q. Then what was done with them? 

A. Oh, we weighed them. We weighed a couple or three different 
ones separate and the group of them together? 

Q. And then what was done with the cattle? 
A. They were left there in the pen. 
Q. They were left in a pen? 
A, Yes, sir. 



4TIO 



Q. Was there food and water in that pen? 
A. No, sir. 



c. 9' H ? w J on S we , re P y u at Chastain & Lewis -- at the C&L 
Stockyards after you left Wacker's place of business and drove there? 

A I wasn't there very long. You know, long enough for Gary to 

* to weifih lhem - You kn > * 



Q. What was it, about 20 minutes, would you estimate? 

A. That would be the maximum. 

0. During that period of time did you see the cattle eat food or - 

A. They didn't eat anything while I was there. 

Q. Was there any food or drink in the pens that they were in? 

A. When I left they were in a dry pen. 

in th Q o S epe y n S? And y U d n>t remember the water trough right there 

A. No, I didn't see no water trough. 

Q. There could have been a water trough there? 
he weig G h a ey c ^! dn>t ^ * **" trou * h in * Aiding pens before 



there Was 
A. What's there right now could - 



te. 
evidence? Or doVou know . n y Ur evidence " y^ change 

A. I do not recall that there was any water trough 

aBoyouWofvourownknowledge whether there was or not V 
A. I d,d not see a water trough there. 

Q. There could have been one there though? 



GARY CHASTAIN AND JIM LEWIS 

THE WITNESS: I did not see it. 

THE WITNESS: I positively didn't see one there. 



Q. All I want to know: Were you even aware of whether or not 
there was one there? 

A. I was not aware that there was a water trough there. 

The ALJ, who saw and heard the witnesses testify, found complainant's 
witnesses to be more credible than respondents' witnesses, and he found that 
there was no feed or water in the pen where the 10 Baer steers were held. 

Respondents also contend that all 10 of Mr. Baer's steers were in a 
position to eat and drink in respondents' open lot, where they were 
temporarily moved during complainant's check- weighing operation. But here, 
again, the ALJ accepted the testimony of the two disinterested Packers and 
Stockyards Administration investigators over that of respondent Chastain and 
respondent Lewis. 

The Department's investigators testified that Mr. Thompson originally 
check-weighed three head not related to Mr. Baer's 10 steers, and that after 
check-weighing those three head, respondent Chastain went by the pen in which 
Mr. Baer's 10 steers were located, unlatched the gate and shooed the steers 
out, and that they then went up an alleyway into a large holding pen or lot. 
Feed and water was available at certain locations in that large lot. (Tr. 233- 
52, 314-18, 638-39, 644-49). However, Mr. Thompson testified that 9 of Mr. 
Baer's 10 steers went to a corner where no feed or water was available, and 
that these 9 steers were taken back to be reweighed without eating or drinking 
(Tr. 242, 251). Specifically, Mr. Thompson testified (Tr. 242; see also Tr. 
632): 

A. The big Holstein stopped by the water trough. 
Q. What did the other nine steers do? 

A. The other nine when we were close behind them, they went 
over into a corner. 

Q. Was there feed and water near them? 

A. No. 

Q. How long was the Holstein at the feeding trough? 

A. Two minutes, probably. 



0. What were you doing this entire time? 

A. I was trying to -- and I think Mr. Lewis was nearby. We were 
holding the cattle in the corner and Mr. Chastain was over away from 
us a bit, saying, "Let's weigh these over here," indicating some calves 
that were eating on feed over by the barn. 

Q. And what did you say? 

t, A ^ n< J L said '," No > Mn Chastain > I'd Me to rcweigh these down 
-M r^ n ? M r \ chastain said ' " No - le ''s get these." And I finally said, 
Mr. Chastain, these are my catlle, I want them reweighcd." 6 

Q. Then what happened? 

A. And he said, "Okay." 

0. And then what happened? 

A. We moved them back down to the pen. 



Thom P so " w f W*te> that the nine steer, did not cal 
m thC 8 pen bt ' " his Livcslock 



water was availahh \ n n . , . > p> > ecausc; feed and 



Q. But you said that there was feed and water in the open lot? 
A. Yes, there was. 



A. Yes. 

Q. So you checked both of these because there had been exposure? 
A. Yes. 

Q. But had there been actual use by those cattle? 

A- By other than the big Hoistein steer, no, 
Q. Isn't this somewhat misleading? 

A. I thought it was only beinir fair i n n . . 
to feed and water. y g Iair to sa y && they were exposed 



Q. Okay. So that was just an intent to be accurate? 

A. Yes. 

Respondent Chastain and respondent Lewis, on the other hand, testified 
that respondent Chastain (Tr. 517, 605), or respondent Lewis, at the direction 
of respondent Chastain (Tr. 598), opened the pen where Mr. Baer's steers 
were held, and drove them into the lot where feed and water was available, 
before Mr. Thompson check-weighed the three other animals. In other words, 
according to respondents, Mr. Thompson watched the 10 Baer steers go up 
the alley into the open lot where feed and water was obviously available, and, 
instead of immediately preventing them from having access to feed and water, 
he left them in the pen with the feed and water while he and the two 
respondents drove three other animals, not involved in the weighing 
investigation, back to the scales; and that Mr. Thompson reweighed the other 
three animals and filled out scale tickets for them, before he went back to the 
open lot and got the Baer steers. 

Respondents' testimony would be incredible even if this had been 
Mr. Thompson's first weighing investigation! In fact, however, Mr. Thompson 
had previously conducted hundreds of similar weighing investigations, in all of 
which the absence of feed or water was a critical element of the investigation. 
Respondents' testimony as to this scenario is so incredible as to destroy their 
credibility in all respects. 

Furthermore, the ALJ, who saw and heard all of the witnesses testify, 
believed the testimony of the disinterested government witnesses, rather than 
the testimony of respondents, who had a strong reason to be biased. 

It is the practice of the Judicial Officer to give great weight to the 
credibility determinations of the Department's ALJ's. As stated in In re WJtite, 

47 Agric. Dec. , slip op. at 77-78 (Jan. 11, 1988), quoting from in In re 

Collins, 46 Agric. Dec. , slip op. at 15-16 (Mar. 4, 1987): 

( It is the consistent practice of the Judicial Officer to give great 
weight to the findings of fact by ALJ's since they have the opportunity 
to see and hear the witnesses testify. 5/ When an 



5/ E.g., In re King Meat Packing Co., 40 Agric. Dec. 552, 553 (1981); 
In re Tlwmton, 38 Agric. Dec. 1425, 1426-28 (remand order), final 
decision, 38 Agric. Dec. 1539 (1979) (affirming Judge Baker's dismissal 
of complaint where she accepted the testimony of respondent's wife-, 
respondent's employee, and respondent's "real good friend" over that 
of three disinterested USDA veterinarians); In re Unionvitte Sales Co.. 
38 Agric. Dec. 1207, 1208-09 (1979) (remand order); In re National 
Beef Packing Co., 36 Agric. Dec. 1722, 1736 (1977), affd, 605 F.2d 1167 



413 






v. Stok, . 

U.S. 967 (1976V NLRRvi.,-,-,? 75 )'. cert ' denied 424 
928 (2d C,r. 19%) Columb.a University, 541 F.2d 922, 



respondents short-wehed Mr Baer' f and u co ^ns thai 

Mr. Bae,s seven stee* S* W -^ a, 1(I 



Circuit recently ruled ,, n a PPn>Pte sanctions. The Second 



Od Cir.' 1986) (per cSmW"Ai C -'? //J ;- 1 '- ^"^..aM F.2d 20, 22 
discretion to 



a 



set o, a t lenph .P ar "s severe 

most recent &\ mm ' oa <' ie <*<*'- One of the 



GARY CHASTAIN AND JIM LEWIS 



prices and related violations), appeal docketed, No. 87-7189 (9th Cir. Apr. 27, 
1987), in which it is stated (Spencer at 207): 

It is the policy of this Department to impose severe sanctions for 
violations of any of the regulatory programs administered by the 
Department that are repeated or that are regarded by the 
administrative officials and the Judicial Officer as serious, in order to 
serve as an effective deterrent not only to the respondents, but also to 
other potential violators. The basis for the Department's severe 
sanction policy is set forth at great length in numerous 
decisions. . . , 



56 Severe sanctions issued pursuant to the Department's severe 
sanction policy were sustained, e.g. , in In re Blackfoot Livestock Comm 'n 
Co., 45 Agric. Dec. [590 (1986)], affd t 810 F.2d 916 (9th Cir. 1987); In 
re Collier, 38 Agric. Dec. 957, 971-72 (1979), a ffd per curiam, 624 F.2d 
190 (9th Cir. 1980) (unpublished); In re Gold Belt-I&S Jersey Farms, 
Inc., 37 Agric. Dec. 1336, 1362-63 (1978), affd, No. 78-3134 (D.N.J. 
May 25, 1979), affd mem., 614 F.2d 770 (3d Cir. 1980); In re 
Muehlenthaler, 37 Agric. Dec. 313, 330-32, 337- 52, affd mem., 590 F.2d 
340 (8th Cir. 1978); In re Mid-States Livestock, Inc., 37 Agric. Dec. 547, 
549-51 (1977), affd sub nom. Van Wyk v. Bergland, 570 F.2d 701 (8th 
Cir. 1978); In re Cordele Livestock Co., 36 Agric. Dec. 1114, 1133-34 
(1977), affd per curiam, 575 F.2d 879 (5th Cir. 1978) (unpublished); In 
re Livestock Marketers, Inc., 35 Agric. Dec. 1552, 1561 (1976), affd per 
citriam, 558 F.2d 748 (5th Cir. 1977), cert, denied, 435 U.S. 968 (1978); 
In re Catanzaro, 35 Agric. Dec. 26, 31-32 (1976), affd t No. 76-1613 (9th 
Cir, Mar. 9, 1977), printed in 36 Agric. Dec. 467 (1977); In re Maine 
Potato Growers, Inc., 34 Agric. Dec. 773, 796, 801 (1975), affd t 540 F.2d 
518 (1st Cir. 1976); In re M. & H. Produce Co., 34 Agric. Dec. 700, 750, 
762 (1975), affd, 549 F.2d 830 (D.C. Cir.) (unpublished), cert, denied, 
434 U.S. 920 (1977); In re Southwest Produce, Inc., 34 Agric. Dec. 160, 
171, 178, affd per curiam, 524 F.2d 977 (5th Cir. 1975); In reJ.Acevedo 
& Sons, 34 Agric. Dec. 120, 133, 145-60, affd per curiam, 524 F.2d 977 
(5th Cir. 1975); In re Marvin Tragaslt Co., 33 Agric. Dec. 1884, 1913- 
14 (1974), affd, 524 F.2d 1255 (5th Cir. 1975); In re Trenton Livestock, 
Inc., 33 Agric. Dec. 499, 515, 539-50 (1974), affd per curiam, 510 F.2d 
966 (4th Cir. 1975) (unpublished); In re Miller, 33 Agric. Dec. 53, 64- 
80, affd per curiam, 498 F.2d 1088, 1089 (5th Cir, 1974). 

The Department's sanction policy, as set forth in Spencer, is included as 
an appendix to this decision. Section XI(D) of the Spencer decision 
(Appendix at 242-51) explains the change in the Department's sanction policy 
that was made as a result of the Eighth Circuit's holding in Farrow v. USDA, 
760 F.2d 211, 212-16 (8th Cir. 1985). The Department's pott-Farrow sanction 
policy, which is the policy being applied in the present case, is stated succinctly 
as follows in Spencer (Appendix B at 250): 

In conclusion, it is the policy of the Department in this case, and 
hereafter, to impose "severe" sanctions in the case of violations that 

415 



<*T^~&^&SZ3&& 

uhfcrth^^tptLtr"' cases ', both ""fr"* 

'Packers and S.ocSC^ S = ^"'^ 



the sanction for Packers and Stockvard? I* enthas . mcreased substantially 
decision in Spencer states (/rf at SfflS)f **** m recent y ears - The 



e D 

(subsection a \ lr P reV ' US hlstor * of 

x^plaiii^^^ 

i-Ppsed here is twice a, 
nct Snfh ^ * imp sed in a Iili fi^ 



L 



* Cavort* Capital Co.^Agrk Dec '?IS7 nS? ? f Iivest0ck ): '" 
(10-year prohibition from operaTn^hilJ^ ( ? 86 i 1 (consent order ) 
o pay for livestock, misrepreS m?h JSrfJ ^ - because of failur ^ 
from_ S eller S on the basis of Talse renre^ 0m ?'^ IOns and colle cting 
deasons are not ^^^^^^f}' Consent and default 
m litigated cases, but ^^^*f^^*fa<ti 
rtr^to^te{ m i^t^t* default cases reflect the 
arcumstances, be reasonable. * san ctions can, in appropriate 

(fth Or. [Feb. 3 W^ff teL S "T n fc n)> W No. 86 ffi 
Dec. [1034 (1986)1 It-Mrm "," da y, Foo <> Services, Inc., 45 
h 6,. 1987)1; " ' 

($50,000 civil 



. o l ' 

($50,000 civil ):ft dSSi^ ^ A F' C ' Dec - IS (W86)l 

Agric. Dec. [590 f!986 1 6 m^ Ll 'od< Commission Co., 4$ 

In reSaylor, 4 Agric. Dec Sfei" 1 ^ 1 ' ' neer after l ^ ar ); 

' 







416 



GARY CHASTAIN AND JIM LEWIS 



as to Doss ) ( 2 -year suspension), appeal dismissed. No. 
4-4316 (5th dr. July 25, 1984); In re Petertnan, 42 Agric. Dec. [1848 
(1983)], affd, 770 F.2d 888 (10th Cir. 1985) ($20,000 civil penalty). 

f n - In , re , Garver > sl 'P ra > 4 5 Agric. Dec. [1090, 1101-04 (1986)], it is 
explained that 2-to-5-year suspension orders are now issued in the case 
of serious failures to pay for livestock where 30-to-60-day suspension 
orders would have been issued in comparable cases a few years ago. 

_With respect to respondents' false weighing involved in this case, short- 
weighing a single draft of seven steers by 170 pounds is an enormous 
violation! In the typical false weighing case, where the Packers and Stockyards 
Administration check-weighs livestock, the amount of short weighing on each 
draft is from 5 to 20 pounds (see e.g., In re Overland Stockyards, Inc. , 34 Agric. 
Dec. 1808, 1813 (1975)). In such cases, although excuses are seldom accepted, 
the respondents at least have the opportunity to argue that they were merely 
careless. But where, as here, respondents short- weighed a draft of steers by 
170 pounds, no excuses can be offered. Based on the amount of the false 
weighing of a single draft of steers (170 pounds), I infer that the false 
weighing was intentional. 

I also infer that the false weighing was intentional because of respondent 
Chastain's conduct during the check-weighing investigation. When 
complainant's investigators told respondent Chastain that they wanted to 
check-weigh some animals, the 10 Baer steers were being held in a pen 
immediately adjacent to the scales, where they could easily be check-weighed. 
Respondent Chastain, knowing that the investigators wanted to check-weigh 
livestock, but not knowing exactly which animals they wanted to check-weigh, 
opened the gate where the Baer steers were being held, or requested 
respondent Lewis to open the gate, and the Baer steers were driven up to the 
open lot where feed and water was available, making check-weighing much 
more difficult. 

Furthermore, when Mr. Thompson went up to where nine head of the 
Baer steers were in a corner, and requested that these nine be check-weighed, 
respondent Chastain tried to lead him to check -weigh other animals (Tr. 242, 
quoted above), 

For the foregoing reasons, I infer that respondents' short weighing was 
intentional. But the sanction would be the same even if it were not 
intentional. As stated in In re Witite, 47 Agric. Dec. _ , slip op. at 103 
(Jan. 11, 1988), "even slight false weighing is a serious violation of the Act, is 
one of the most deceptive practices under the Act, and is virulently anti- 
competitive," These principles were stated in Wliite, supra (slip op. at 103-06), 
quoting from In re Parchman, 46 Agric. Dec. _ (May 28, 1987), appeal 
docketed, No. 87-3701 (6th Cir. July 23, 1987), as follows: 

It is well-settled that auction houses have innate reasons to short weigh, 
and that careless or deliberate false weighing is an unfair and deceptive 
practice. Both the literature and the Department's cases are quite 
specific that short weighing, inter alia, harms competing markets by 

417 



taking potential sellers from them, deprives sellers of their correct full 
payment for their livestock, and induces packers to pay more per pound 
or not deduct for shrinkage, because of higher yields on short-weighed 
livestock. 

For instance, in Campbell, Tlie Packers and -Stockyards Act 
Regulatoiy Program, 1 Davidson, Agricultural Law 269-70, 271 ("1981 
and 1986 Cum. Supp.), it is stated: 

False weighing is not only unfair to the livestock sellers who 
are short-weighted but also to competing markets, since false 
weighing may draw buyers (who know of the favorable weights) 
from competing markets, and buyers who know of the favorable 
weights may pay a little more per pound for the livestock, 
thereby attracting additional sellers.' 163 



Muehlenthaler, 37 Agric Dec 313, 321, affd mem, 590 
(8 ft,? r , 1978 > ; 7 " * Cordcle Livestock Co, 36 ! Agric 
, 4 ' H 33 (1977 >> ^P^citriam, 575 F2d 879 (5th Cir 
1978); In re Loretz, 36 Agnc Dec 1087, 1095 n 5 (1977): In re 

? 5 ^ D . ec 1604 > 1622 ( 1916 1> 7 Overland 
Inc 34 Agric Dec 1808, 1819 (1975); In re Worslcy, 



, , 

Tn, ^A D?C n 547 ^ 57 c 7 " 24 < 1974 >; 7 " re Tr ton Livestoc 

SSl rl i g Q7<w C 4 ?' ^ \ 24 (19 7 4 )' ff d > 510 F2d 966 
(4th Qr 1975); In re Speight, 33 Agric Dec 280, 317 n 24 (1974). 



the ? ge , nc y does not have ^ prove the motive for 

he d e nnr a ,h d r ler ^'? ' ivest ck t0 P ackers ^d on 
e , dealer s purchase weights has a motive for short wekhine 
Packers are well aware of the yields they get from HvestocFaS 

' 



' faVOrabie **** bccauB of a 

r not deduct for 






', 321 ' a $ d > 590 
Dec iffl 1557 58 r re , Ivesoc f arketers, Inc, 



ric Dec 280, 317 n 24 (1974). 



5 a ser s 



41 8 



GARY CHASTAIN AND JIM LEWIS 



However, even slight false weighing is a serious violation of 
the Act. The cumulative effect of 10 to 20 percent of the 
livestock in the country being short-weighed even by a small 
amount is an unwarranted burden to the livestock industry which 
should be significantly reduced. False weighing, at times, is used 
as an unfair competitive practice, rather than (or in addition to) 
being a means of underpaying the seller. As stated in In re 
Kenneth W. Miller, 33 Agriculture Decisions [88], P & S Docket 
No. 4721, decided December 7, 1973: 

Mr. Matteson, Area Supervisor for the Arlington Area 
Office, which encompasses the State of North Carolina, 
testified that short- weighing is a problem in the livestock 
industry. It is one of the most deceptive practices under 
the Packers and Stockyards Act. The producer or farmer 
who sells livestock looks to the price he will receive. He 
assumes the scales are tested and accurate and that his 
livestock will be weighed correctly. He will therefore sell 
his hogs to the buyer who will pay him the highest price. 
A buyer who short-weighs livestock is able^to offer a few 
cents more per pound since he is paying it on a weight 
that is less tnan the actual weight of the livestock. The 
buyer who short-weighs livestock therefore has an unfair 
means of perpetuating himself in business at the expense 
of his competitors who weigh livestock accurately. 

The evidence shows that in several instances Mr. 
Miller sold the hog? to H. P. Beale and Sons at the same 
weight he had purchased them from Mr, Stephens. At first 
blush this may indicate that respondents did not benefit 
when they short-weighed the livestock, but this is far from 
true. It is a common practice in the industry for a buying 
station and packer to have an agreement as to shrink. It 
is common that the packer will allow a 2 or 2- 1/2 
percent shrink or weight loss during shipment from the 
buying station. If the shrink exceeds tnis amount the 
packer will bill the buying station back for the excess loss. 
If the shrink is consistently over the allowed percentage, 
a packer would probably look for another buying station 
from which to buy his hogs. A dealer who short-weighs 
hogs when he buys them and then sells them on his 
purchase weight is eliminating his shrink to the packer. 
The packer gets a high yiela hog on slaughter and the 
buying station gets a satisfied customer and sure market 
for his hogs. 

False weighing defeats the primary purpose of the Act. As stated 
supra, slip op, at 107-08, quoting from in In re Spencer Livestot 

Commission Co., 46 Agric. Dec. , slip op. at 198-200, 210-11 (Mar. 1 

1987), appeal docketed, No. 87-7189 (9th Cir. Apr. 27, 1987): 



419 







of their hvestock and to nro ,fr, ' he true mark value 
busmess practices in the Market nfT" 1 " against unfai 






act. peace> exce P ( Possibly the interstate 






GARY CHASTAIN AND JIM LEWIS 



From the foregoing, it is clear that Congress has, over the years 
recognized toe need to assure fair trade practices in the livestock 
marketing industry m view of the nature of the industry and its 
importance to the national economy. 

For the foregoing reasons, even slight false weighing is a serious violation 
of the Act. However, as stated above, the sanction imposed in this case would 
be the same even if short-weighing a single draft of steers by 170 pounds and 
another steer by 10 pounds were not, in fact (i.e., according to a reviewine 
court), serious violations. 

In reviewing this decision, the court should not determine whether this 
administratively-imposed sanction is reasonable by virtue of what the court 
itself, would have imposed. Rather, the court should only reverse if the 
sanction fails to meet the standards of the Administrative Procedure Act (5 
U.S.C. 706(2)(A)), This principle is enunciated in Spencer (supra, at 202- 
04, 206), as follows: 

g Since the views of administrative officials and industry leaders vary 
widely as to what suspension period is "reasonable" for a particular type 
ot violation, it can be expected that the same diversity ofviewpoint will 
be found among the reviewing judges throughout the country. By way 
ot analogy, it is well recognized that the sentences by judges in criminal 
proceedings vary widely, in identical situations, e.g., ranging from 3 
years to 20 years imprisonment. As staled in the legislative history of 
the recent sentencmg-reform legislation (S. Rep. No. 225, 98lh Cons 
2d Sess. 38, 41, 44-45, reprinted in 1984 U.S, Code Cong. & Ad News 
3182, 3221, 3224, 3227-28 (footnotes omitted)): 

[E]very day Federal judges mete out an unjustifiably wide range 
ot sentences to offenders with similar histories, convicted of 
similar crimes, committed under similar circumstances. One 
offender may receive a sentence of probation, while another-- 
convicted of the very same crime and possessing a comparable 
criminal history-may be sentenced to a lengthy term of 
imprisonment, ... 



2 - Disparity and uncertainty in current Federal sentencing 
a. Practices of the Federal Judiciary 

The absence of a comprehensive Federal sentencing law and 
of statutory guidance on how to select the appropriate 



In fad, the sanction should not be reviewed at all by a reviewing court since 
respondents' appeal to the Judicial Officer raises no issue as to the severity of the sanction. 
Respondents contend only that they did not short-weigh any livestock, and, therefore, that no 
sanction should be imposed. 



421 



sentencing option creates inevitable disparity in the sentences 
which courts impose on similarly situated defendants. 18 This 
occurs in sentences handed down by judges in the same district 
and by judges from different districts andfcircuits in the Federal 
system. One judge may impose a relatively long prison term 
to rehabilitate or incapacitate the offender. Another judge, 
under similar circumstances, may sentence the defendant to a 
shorter ^prison term simply to punish him, or the judge may opt 
for the imposition of a term ofprobation in order to rehabilitate 
him. 

... Similar discrepancies in Federal sentences for a number 
of different offenses were found in a landmark study by the 
United States Attorney's Office for the Southern District of New 
York. Further probative evidence may be derived from 
another 1974 study in which fifty Federal district court judges 
from the Second Circuit were given twenty identical files drawn 
from actual cases and were asked to indicate what sentence they 
would impose on each defendant. 22 The variations in the judges' 
proposed sentences in each case were astounding, as shown in 
the following chart: 



In one extortion case, for example [in the study referred to 
in the preceding paragraph], the range of sentences varied from 
twenty years imprisonment and a $65,000 fine to three years 
imprisonment and no fine. 23 

The findings of the Second Circuit study have been 
reconfirmed in a study performed for the Department of Justice 
in which 208 active Federal judges specified the sentences they 
would impose in 16 hypothetical cases, 8 bank robbery cases, 
and 8 fraud cases. In only 3 of the 16 cases was there a 
unanimous agreement to impose a prison term. Even where 
most judges agreed that a prison term was appropriate, there 
was a substantial variation in the lengths of prison terms 
recommended. In one fraud case in which the mean prison 
term was 8.5 years, the longest term was life in prison. In 
another case the mean prison term was 1.1 years, yet the longest 
prison term recommended was 15 years. 25 

The study also concluded that, while 45 percent of the 
variance in sentences for hypothetical cases was attributable to 
differences in offense and offender characteristics, 21 percent 
was directly attributable to the fact that some judges tend to 
give generally tough or generally lenient sentences, 22 percent 
of the variation was attributable to interactions between the 
"judge factor" and other factors. For example, some judges 
sentence more harshly for a particularly offense than other 
judges even though they do not sentence more harshly overall, 
and some judges sentence relatively more harshly than other 
judges if the defendant has a prior record. 27 



GARY CHASTAIN AND JIM LEWIS 



In addition, as indicated in the following chart, a study of 
the two districts in each of the 11 Federal judicial circuits that 
sentenced the greatest number of offenders in 1972 for a 
selected group of offenses shows widespread sentencing 
disparity: 



The Committee finds that this research makes clear that 
variation in offense and offender characteristics does not account 
for most of the disparity. 23 

If reviewing courts throughout the country were free to hold that 
any suspension period imposed by the Judicial Officer is not 
"reasonable" if it exceeds (or exceeds by a substantial amount) that 
which the reviewing court would have imposed, it will destroy not only 
the desired nationwide uniformity, but, also, at times, important 
regulatory programs (due to the court's lack of familiarity with the 
total administrative program). 

For example, in Glover Livestock Comm'n Co. v. Hardin, 454 F.2d 
109 (8th Cir. 1972), rev'd, 411 U.S. 182 (1973), the Eighth Circuit set 
aside as "unconscionable" (454 F.2d at 115) a 20-day suspension order 
issued against an auction market for short weighing livestock on 
February 25, 1969, after the auction had been warned about prior short 
weighing in 1966 and 1967. If the Eighth Circuit's decision had not 
been reversed, it would have totally destroyed the agency's check- 
weighing program throughout the country. In fact, if the Secretary 
could issue no more than a cease and desist order when false weighing 
was detected after two prior warning letters, it would have been 
prudent for the agency to completely discontinue any effort at check 
weighing, using the agency's limited money and manpower in other 
areas. Registrants under the Packers and Stockyards Act fear a cease 
and desist order about as much as they would fear a slap across the 
face with a wet noodle! The Eighth Circuit's decision, if not reversed 
would have made it cost-effective to run the risk of a cease and desist 
order for short weighing. And when short weighing is practiced by one 
auction market in an area, it attracts volume from other markets which 
leads to short weighing by other markets in the area to hold their 
volume. 55 



55 In re Mnehlenthaler, 37 Agric. Dec. 313 321, affdn cm. 590 F.2d 
340 (Sth Cir. 1978); In re Cordele Livestock Co K Agnc. Dec. 1114 
1133 (1977). affd per cunam, _575 ^ 879 (5t h Ur l /aj 
funDublished); In re Loretz, 36 Agnc. Dec. 1087, 1095 n.5 ay//), in re 
Townsc, M? 35 Agric. Dec. 1604, 1622 (1976); In re Overlaid Stockyards, 

526 n.24 (1974), ajfd per amam, 510 F2d 966 (4th Cir. lJ7i) 
(unpublished); In re Speight, 33 Agric. Dec. 280, 317 n.24 (1J74). 

423 



I am confident that the Eighth Circuit had no idea that its decision 
would totally destroy the agency's check-weighing program. It had little 
knowledge of the weighing problem in the livestock industry (see In re 
MMhtenthaler, 37 Agric. Dec. 313, 331-32, 353-69, off d mem., 590 F.2d 
340 (8th Or. 1978)), and the Department's check- weigh ing program. 
It is quite likely that the court was aware of only "four [prior] decisions 
of the Secretary in which suspensions of registration [were] imposed for 
short-weighing consigned cattle" (454 F.2d at 114). As a matter of fact, 
suspension orders in short-weighing cases had previously been issued 
by the Judicial Officer in 148 cases during the prior 25 years, with 
suspension periods of 5 years (1 case), 4 years (2 cases), 3 years (6 
cases), 30 months (1 case), 2 years (6 cases), 20 months (1 case), 18 
months (6 cases), 16 months (2 cases), 15 months (2 cases), and 1 year 
(15 cases). Hence prior suspension orders of a year or longer had 
previously been issued for short weighing in 42 cases by the Judicial 
Officer during the 25-year period preceding Glover. A table listing the 
suspension periods imposed for false weighing or causing false weighing 
of livestock from 1950 to January 1974 is set forth in In re Worsley, 33 
Agric. Dec. 1547, 1584-92 (1974). The table is summarized in the 
decision in that case (Id. at 1576). The maximum suspension for short 
weighing was 5 years, the average 245 days and the median 90 days (id. 
at 1575-76). All but the last 12 of the 160 cases listed in the table were 
decided by the Judicial Officer prior to the Eighth Circuit's decision in 
Glover, 

We do not know whether the Eighth Circuit would still have 
regarded the 20-day suspension in Glover as "unconscionable" if it had 
known of the 148 prior cases during the preceding 25 years in which the 
median suspension period was about 90 days. Presumably, the 
Department's appellate attorneys regarded the citation of four prior 
precedents involving 30-day suspension orders as sufficient to support 
the 20-day suspension order involved in Glover. (It is not feasible 
within the limited confines of an appellate brief to fully educate each 
reviewing court as to the totality of Facts bearing on an administrative 
sanction), 

If the congressional purpose of this remedial legislation is to be 
achieved, and if any degree of national uniformity in sanctions is to be 
achieved, reviewing courts must not determine whether an 
administratively imposed suspension period is "reasonable" based on 
what suspension period they would have imposed. Rather, they should 
reverse only if the administrative sanction fails to meet the standards 
ot the Administrative Procedure Act, i.e., if it is "arbitrary, capricious, 
??/R us c e ^S,w C * e A lon ' f .otherwise not in accordance with law" (5 
U.b.C. & 706(2](A)). And it goes without saying that an administrative 
suspension period that greatly exceeds that which would have been 
imposed by the reviewing court is not necessarily arbitrary, capricious 
or an abuse of discretion. * ' 

The sanctions imposed in false weighing cases from 1950 to 19" 
summarized in Worsley, referred to in the preceding quotation, is summariz- 
m In re Wfiite, supra, slip op. at 119-20, as follows: 



424 



CiARY CIIASTAIN AND .I1M LliWIS 



The import of the Worsley list was stated clearly in In re Spencer 
livestock Comm'n Co., 46 Agric. Dec. _^ slip. op. at 205-06 (Mar. 
19 1987), apiwal docketed, No. 87-7J89T9IK Cir. Apr. 27, 1987), to be 
that the 'maximum suspension for false weighing was 5 years, the 
average was 245 days and the median was 90 days, as follows (emphasis 
added): 

A table listing the suspension periods imposed for false weighing 
nr causing false weighing of livestock from 1950 to January 1974 
is set forth in In ro Worsley t M Agric. Dec. 1547, 1584-92 (1974). 
The table is summari/.ecl in the decision in that case (id. at 
1576). The maximum suspension for short weighing was 5 years, 
the awrtiRC 245 days and the median 90 days (id. at 1575-76). 

Moreover, even if only litif>tttwl false weighing cases are considered, 
the "average suspension imposed in such litigated cases [from 1950 to 
19741 was 252 days lor slightly more than 8 months]." In re Worxlcy, 33 
Agrii- Dec. 1547; 1^76 n. 22 (1974). 

For the foregoing reasons, the sanctions imposed by the ALI are certainly 
not too severe. Complainant's requests that the suspension- and denial-of- 
rccislration period bo increased to 1 year, and that the civil penalties be 
increased to $5,(HK), are denied because a number of the alleged violations 
were not proven. The sanction as to respondent Lewis would ordinarily be 
identical to that of respondent Chastain, but respondent Lewis' civil penally 
is only $1,000 because of his financial condition. _ _ 

Although respondents have no prior history of weighing violations, as 
stated in Campbell, The Packers and Stockytmls Act Regulatory Program, in 1 
Davidson, Agricultural Law 271 (I.9K1 and 1987 Cum. Supp,), '[wjhere Hie 
Packers and Stockyards agency finds evidence sufficient lo prove careless or 
deliberate false weighing, a formal action is instituted without sending a prior 
warning letter," citing In re DttQuoln Packing Co., 41 Agric. Dec, 1367, 1381 
n.2(1982); and In re Cortlele Livestock Co., 36 Agric. Dec. 1114, 1135 (1977), 
tfffdper ciwto/M, 575 K2d 879 (5th Cir. 1078). , , , . . . 

For the foregoing reasons, the following order should be issued. 

Order 

The respondents, Gary Chastain and Jim Lewis, their agents or employees, 
directly or through any corporate or other device, shall cease and desist Irom: 

1. Weighing livestock at other than their true and correct weights; 

2. Issuing scale tickets, purchase invoices, or other accounts of sale on 
the basis of false or incorrect weights; . tm!fl ui e . 

3. Paying the sellers of livestock on the basis of false or incorrect weights, 

4. Failing to issue scale tickets in conformity with the requirements ot & 
201.49 of the regulations (9 C.F.R. 201.49); and 

5. Failing to operate a livestock scale owned or contr oiled by t he 
respondents in such a manner as lo insure accurate weights or otherwise 
failing io weigh livestock in strict conformity with the requirements ot a 
201.73-1 of the regulations (9 C.F.R. 201.73-1). 



425 



Respondent Chastain is suspended as a registrant under the Act for a 
period of three months during which period of time both he and rcspomlcnl 
Uwis shall be subject to 201.11 of the regulations (9 C.F.R. 201.11) and 
may not individually or otherwise register. 



pcnalty in thc amoum of 

e " alty in lhe amm ' n t t 
The civil penalties shall be paid by each respondent by certified clicck 



i urn uruer. ine suspension provisions 

rZ 8 7h SCrViCe f this rder on KPndcirt 
r, inai ]i oy any means or device, whafm/oi- .>n ... ,., 

i r r i "v-ri^ij wiJaiLfVur, HJ1 Or f] 

'cfSivelaic oMhe bSn nfnTl^"^ thc - P erio(i . intjicatc ^ 
>f not effectively served) shfll h H "? pe " Slon P enod ( or l[ IMirt 
competent jurisdiction which issues an annrnnr Lf..^ M by a TOUrr of 
r 00 upon a showing marf P h . Appropriate order with respect thereto, 

ordc/wSTbc ^^4^=5^21^ K 3t If 1S n0t likcl * that ch il " 
Officer (jurisdiction is Leby 7e S ^^H^j?^ * Uio Jadictnl 
'h.s limited purpose). by Ehe Judlclal Offi ccr indefinitely for 



Appendix 
1987). ""'A "/* ^tej' No! ^Viro^L? arTAi?;, 2?,' 

U.S.D.A. Sanction Policy 

[Excerpt omitted.-Editor.] 



LEO DeGRAAF & WALTER DeGRAAF 



In re: LEO DeGRAAF AND WALTER DeGRAAF d/b/u DeGRAAF RANCH 
P&S Docket No. 6889. ' -n. 

Decision and Order filed January 11, 1988, 

Failure to pay, wlicn due, the full purchase price of livestock - Failure to keep proucr records 
Failure to file answer. ' 1 

Jory ITochbcrg, for Complainant. 
Respondent, pro sc. 

Decision and Order Upon Admission of Facts by Reason of Default issued by Edward II McGrail 
Administrative Law Judge. 

DECISION AND ORDER UPON ADMISSION 
OF FACTS BY REASON OF DEFAULT 

This is a disciplinary proceeding under (he Packers and Stockyards Act 
1921, as amended and supplemented (7 U.S.C. 181 et seq.), herein referred 
to as the Act, instituted by a complaint filed by the Administrator, Packers 
and Stockyards Administration, United States Department of Agriculture 
charging that the respondents wilfully violated the Act and the regulations 
promulgated thereunder (9 C.F.R. 201,1 et setj.), 

Copies of the complaint and Rules of Practice (7 C.F.R, 1.130 et seq.) 
governing proceedings under the Act wore served on the respondents by 
certified mail. Respondents were informed in a letter of service that an 
answer should be filed pursuant to the Rules of Practice and that failure to 
answer would constitute an admission of all the material allegations contained 
in the complaint, 

Respondents have failed to file an answer within the time prescribed in 
the Rules of Practice, and the material facts alleged in the complaint, which 
are admitted by respondents' failure to file an answer, are adopted and set 
forth herein as findings as fact. 

This decision and order, therefore, is issued pursuant to section 1.139 of 
the Rules of Practice (7 C.F.R. 1,139). 

Findings of Fact 

1. (a) Leo DeGraaf, hereinafter referred to as respondent Leo DeGraaf 
is an individual whose business address is 9501 E. French Camp Road, 
Manleca, California 95336. 

(b) Walter DeGraaf, hereinafter referred to as respondent Walter 
DeGraaf, is an individual whose business address is 9501 E. French Camp 
Road, Mantcca, California 95336. 

(c) Respondents Leo DeGraaf and Walter DeGraaf are and at all 
times material herein were partners doing business as DeGraaf Ranch. 

(d) Respondents Leo DeGraaf and Walter DeGraaf are and at all 
times material herein were: 

(1) Engaged in the business of buying and selling livestock in 
commerce for their own account; and 



427 



t (2) ^Registered with the Secretary of Agriculture as a dealer, buying 
and selling livestock in commerce. 

2. During the period January 1, 1985 through December 31, 1985 
respondents Leo DeGraaf and Walter DeGraaf purchased livestock as a 
dealer subject to the Act at posted stockyards in the State of California 
including Cattle Place, Inc., Overland Stockyards, Farmers Livestock Market' 
Escalon Livestock Market, Orland Livestock Commission Yard, Inc., Modesto 
Livestock Commission Yard and Turlock Livestock Action. In connection 
with all of their livestock purchases as a dealer at these markets, respondents 
failed to pay, when due, for such livestock. 

3. Respondents Leo DeGraaf and Walter DeGraaf, failed to keep and 
maintain accounts, records and memoranda which fully and correctly disclosed 
the true nature of all of their transactions subject to the Act, in that 
respondents failed to keep and maintain; 

(a) accounts, records and memoranda sufficient to show respondents 
assets, liabilities, income, expense and net worth; 
_ (b) accounts, records and memoranda sufficient to identify all livestock 

re'cofdf whth h by P? nda !? as a dealer subject to the Act, including 
records which show the disposition of such livestock; and 

***** trUCki " g rCC rds ' Bnd b '' J "' d 



Conclusions 



Order 



livestock pured S m " due ' " le fu " P urchasc ! 



nature of all of iock n ^ ,' y u. nd C rreCtly disclose thc lr c 
not limited to transact.ons subject to the Act, including bi,l 



showing the 



identity of the seller an the ^f he ^ * me 0randum 
respondents for the livestock; ' We ' ght and P rices P aid 



cash book detaiHng al, cash received and disbursed by 



respondents; 
/no 



LEO DeGRAAF & WALTER DeGRAAF 



6. All scale tickets, trucking records and brand inspection records received 
by respondents. 

In accordance with section 203{b) of the Act (7 U.S.C. 193(b), respondents 
Leo DeGraaf and Walter DeGraaf are jointly and severally assessed a civil 
penalty in the amount of Ten Thousand Dollars ($10,000.00). 

The provisions of this order shall become effective on the sixth day after 
service of this order on the respondents. 

This decision and order shall become final without further proceedings 
35 days after service hereof unless appealed to the Judicial Officer within 30 
days after service (7 C.F.R. 1.139, 1.145). 

Copies hereof shall be served on the parties. 

[This decision and order became final February 26, 1988,-Editor] 



In re: JOSEPH D. GIRUZZI. 

P&S Docket No. 6885. 

Order Dismissing Complaint filed February 5, 1988. 

Edward Silvcrstcin, Tor Complainant, 
Anthony J. LaPachc, for Respondent. 
Order Dismissing Complaint issued by Paul Kane, Administrative Law Judge, 

ORDER DISMISSING COMPLAINT 

Complaint counsel's motion to dismiss the complaint herein, as filed 
February 3, 1988, is hereby granted. Accordingly, the complaint is dismissed 
with prejudice. 

The hearing scheduled to commence on February 11, 1988, in this matter 
is hereby cancelled, 



In re: JOHNSON-HALLIFAX, INC., d/b/a STONE'S MEAT PACKING 

CO., and THOMAS HALLIFAX. 

P&S Docket No. 6910. 

Decision and Order issued February 22, 1988. 

Failure to pay, when due, ihe full purchase price of livestock - Failure to file answer. 

Summary: The Judicial Officer affirmed Judge McGrail's order requiring respondents to cease 
and desist from failing (o pay, when due, the full purchase price of livestock. The order also 
assesses a $1,500 civil penalty against respondents, jointly and severally. Respondents' failure 
to file a timely answer constitutes an admission of the allegations in the complaint and a waiver 
of hearing. Even if respondents were permitted to present a defense, it would be to no avail. 
It is the consistent practice of this Department to issue a disciplinary order even though the 
violator ceases violating or discontinues business. In closely held corporations, the corporate 
veil is pierced in order to make the order applicable to the responsible owners and officers of 
the corporation. 

Allan Kahan, for complainant. 

Respondent, pro se. 

Initial decision issued by Edward H. McGrail, Administrative Law Judge. 

Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 

This is a disciplinary proceeding under the Packers and Stockyards Act, 
1921, as amended and supplemented (7 U.S.C. 181 et seq,}, 1 An initial 
Decision and Order was filed on October 7, 1987, by Administrative Law 
Judge Edward H. McGraii (ALJ) ordering respondents to cease and desist 
trom failing to pay, when due, the full purchase price of livestock. The order 
also assesses a $1,500 civil penalty against respondents, jointly and severally. 

On November 3, 1987, respondents appealed to the Judicial Officer, to 
whom final administrative authority has been delegated to decide the 
Department's cases subject to 5 U.S.C. 556 and 557 (7 C.F.R. 2.35) 2 
case was referred to the Judicial Officer for decision on December 1, 

Based upon a careful consideration of the entire record, the initial 

C ?i. 0r i er ' ad ? pted as the final Decision and Order in Ms case, 
ri he , e ? ecti r e d ? te ? f . the order Banged in view of the appeal 

*, n r Paym f g n he ^ penalt y is s P ecified - Additional conclusions 
' 



hv r , n r f n - 

by the Judicial Officer follow the ALJ's conclusions. 



in 1 
b 10 HaicuUuSHaw nd S? 1 ^ a " d Carter ' *"** 



(7 VACTSX^ J !S^ P uraua t to the Act of April 4, 1940 

appointed in January 1971 havi hL i \A D .fP a r tnient ' s present Judicial Officer was 
since 1949 (including 3 years' trial Sigat Z W - ^nSf^'Iv 6 "? **?*?** ** 
from the dccUions of the prior JudcSS;,!^!!^ 

as administrator of the Packers and 



430 



JOHNSON-HALLIFAX, INC., ET AL 



ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION 
Preliminary Statement 

This is a disciplinary proceeding under the Packers and Stockyards Act, 
1921, as amended and supplemented (7 U.S.C. 181 et seq.} t herein referred 
to as the Act, instituted by a Complaint and Notice of Hearing filed by the 
Administrator, Packers and Stockyards Administration, United States 
Department of Agriculture, charging that the respondents wilfully violated the 
Act. 

Copies of the Complaint and Notice of Hearing and Rules of Practice (7 
C.F.R. 1.130 et seq.) governing proceedings under the Act were served upon 
respondents by the Hearing Clerk by certified mail. Respondents were 
informed in a letter of service that an answer should be filed pursuant to the 
Rules of Practice and that failure to answer would constitute an admission of 
all the material allegations contained in the Complaint and Notice of Hearing. 

Respondents have failed to file an answer within the time prescribed in 
the Rules of Practice, and the material facts alleged in the Complaint and 
Notice of Hearing, which are admitted by respondents' failure to file an 
answer, are adopted and set forth herein as findings of fact. 

This decision and order, therefore, is issued pursuant to section 1.139 of 
the Rules of Practice (7 C.F.R. 1.139). 

Findings of Fact 

1. (a) Johnson-Hallifax, Inc., hereinafter referred to as the corporate 
respondent, is a corporation doing business as Stone's Meat Packing Co., and 
was organized and operates in the State of Michigan, Its business mailing 
address is 01821 73rd Street, South Haven, Michigan 49090. 

(b)The corporate respondent is, and at all times material herein was: 

(1) Engaged in the business of buying livestock in commerce for 
purposes of slaughter and manufacturing or preparing meats or meat food 
products for sale or shipment in commerce; and 

(2) A packer within the meaning of the Act and subject to the 
provisions of the Act. 

(c) Thomas HalHfax, hereinafter referred to as the individual 
respondent, is an individual whose mailing address is 11413 56th Avenue, 
Allendale, Michigan 49401. 

(d)The individual respondent is, and at all times material herein was: 

(1) Secretary-Treasurer and owner of 50% of the stock of the 
corporate respondent until June 13, 1986, and the sole owner and officer of 
the corporate respondent thereafter; and 

(2) Responsible for the management, direction and control of the 
practices and activities of the corporate respondent. 

(e)The individual respondent is, and at all times material herein was, 
a packer within the meaning of the Act and subject to the provisions of the 
Act. 

2. Respondents, in connection with their operations as a packer, in the 
transactions set forth in paragraph II of the Complaint and Notice of Hearing 



431 



and at divers other times, purchased livestock for purposes of slaughter and 
failed to pay, when due, the full purchase price of such livestock, 

Conclusions 

By reason of the facts found in Finding of Fact 2 herein, respondents have 
wilfully violated sections 202(a) and 409 of the Act (7 U.S.C. 192(a), 228b). 

ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER 

Under the Department's rules of practice governing formal adjudicatory 
administrative proceedings instituted by the Secretary, a respondent's failure 
to file a timely answer or deny the allegations of the complaint constitutes an 
admission of the allegations in the complaint and a waiver of hearing, 
Specifically, the rules of practice provide (7 C.F.R. 1.136(a)-(c), .139 



1.136 Answer. 

fa} Filing and service. Within 20 days after the service of the 
complaint ... the respondent shall file with the Hearing Clerk an 
answer signed by the respondent or the attorney of record in the 
proceeding. . . . 

(b)Contents. The answer shall: (1) Clearly admit, deny, or explain 
each ot the allegations of the Complaint and shall clearly set forth any 
defense asserted by the respondent; or 

(2) State that the respondent admits all the facts alleeed in the 
complaint; or fa 

(3) State that the respondent admits the jurisdictional allegations 
or the complaint and neither admits nor denies the remaining 
allegations and consents to the issuance of an order without further 
procedure. 



iindSPi^fw ^ Fa . il S ^ u 1 5 file ^n answer within the time provided 
' $ S S a11 b - e def r me , d ' for P ur Pses of the proceeding, an 
SriSST tk , alegatI , I ! S in . th e Complaint, and failure to deny or 
fnr^S ^ 5? t0 an al l- gatl n of the c U>fcmt shall be deemed, 
he nSc Lv^ C P r c ? edin 8> an admission of said allegation, unless 
the parties have agreed to a consent decision pursuant to 1.138. 



t139 Procedure upon failure, tp file an answe.r nr a H m i{n o f 
facjs. ' - 



r^tSf;^ ans f T'. 0r the admission by the answer of all 

oS^: 



=s- oS^: 



JOHNSON-HALLIFAX, INC, FT AL 



Within 20 days after service of such motion and proposed decision, 
the respondent may file with the Hearing Clerk objections thereto. If 
the Judge finds that meritorious objections have been filed, 
complainant's Motion shall be denied with supporting reasons. If 
meritorious objections are not filed, the Judge shall issue a decision 
without further procedure or hearing. 



1.141 Procedure for Hearing. 

(a) Request for Hearing. Any party may request a hearing on the 
facts by including such request in the complaint or answer, or by a 
separate request, in writing, filed with the Hearing Clerk within the 
time in which an answer may be filed. Failure to request a hearing 
within the time allowed for the filing of the answer shall constitute a 
waiver of such hearing. 

The complaint contained allegations virtually identical to the findings of 
fact, supra, and advised respondent that an answer must be filed with the 
Hearing Clerk within 20 days after receipt of the complaint, and that "[fjailure 
to file an answer shall constitute an admission of all the material allegations 
of this Complaint . . ." (Complaint at 3). 

In addition, the letter from the Hearing Clerk serving a copy of the 
roraplaint on respondents expressly and accurately advised respondents of 
ic effect of failure to file an answer or plead specifically to any allegation 
f the complaint. The letter states: 

In accordance with the rules of practice governing proceedings under 
the Act, a copy of which is enclosed, you will have 20 days from the 
receipt of this letter within which to file with the Hearing Clerk an 
original andy/ve copies of your answer. Your answer should contain 
a definite statement of the facts which constitute the grounds of 
defense, and should specifically admit, deny or explain each of the 
allegations of the complaint. Failure to file an answer to or plead 
specifically to any allegation of the complaint shall constitute an 
admission of such allegation. 

Within the same time allowed for the filing of your answer, you may. 
if you wish, request an oral hearing. Failure to file such a request will 
constitute a waiver, on your part, of oral hearing. 

After respondents failed to answer the complaint within 20 days, the 
(earing Clerk notified respondents by a letter dated August 7, 1987, that an 
nswer had not been timely filed. Even when served with complainant's 
eptember 4, 1987, Motion for Adoption of Proposed Decision, respondents 
id not file any response. Accordingly, the default order was properly issued 
i this case. Although on rare occasions default decisions have been set aside 



Ai w Keg-ft-o Distributors, 42 Acric Der w noon / j 

Agnc. Dec. 1173 (1983) (defau t decfs"on ? 2L ( h ' (iemiind . . 

registered and regular mai was returaeH^m^f u"" SemCC f thc ^plaint l>) 
Perishable Agricultural Co^ "Ac h Td Iff H% and rcs P? ndcnt ' s Hcewe under thc 



h d H 

ric Dec 789 mw P !f ? ef ? re Service was 



, 

(IWBJj/^CMff L A D^ 

Agnc. Dec. 195 (1976); and see In re ASL dn A ' A ? 2 (rcniand order )' P nal fabton, 35 
C^e remandedNo dcteS^ 
decision, 40 Aric. D J C CX ' S1S for P er '"i'"ng "ate answer nal 



remaneo dcte 
decision, 40 Agric. Dec. 1254 (IMM). J C CX ' S1S for P er '"i'"ng "ate answer), final 



an er . %% A D - T-- ( J 'y % ^87) (default order proper whore 

where time | y answer not fS^^S,. ^ n ' , (J " nc 22 ' 1987 ) (default order proper 
for thc complain,, forgo, to i^ff h ?m P K V 6 "? CVe " lh ugh his sister ' wh '"fi"" 1 
. 46 Agric. bec. g & U XV H r^ f r ^ ^^ P criod had Pid): / 
/;, reJcA/JJ ,y^ 5 ^^^ June ^ 19 8J (default order proper where timely answer ,lol 

answer not Hied n r' ' (A|Wl 198 Cdefai " t Or 






answer admits o does no dcnmE;, ^ ~- ^ 4 ' 1986 ^ ( default or 
(1986) (default order ^^ ^^S^^f? 1 ^ ^ In re Gtt > 45 Agrte. Dec. 1742 
fl/aw ( 45 Agric. De C P mTaSfdeS/al ''^ ^l 1 " 1 deny matertal -"^HonsJ; / 
allegations); / re ^/,w,/oSffl^ 

where (imcly answer not filed^ rc^S/, af f -' D ^ 2I9 (1986 ? ( defaul1 ! proper 
where timely answer not flledj tow^Sj^. 8 " 6 -,^ 1473 ( 1986 > (default orderproj>cr 
OKler proper where answer Gl37.te to^SR"" 1 ' ^" 4 . 5 , Agric> Dec ' 1676 ( 1986 ) (^r" 
Agrtc Dec. 956 (1986) (dcfau ^p Sre an^'? 1 aile p ioM )J / Giiiwi. -15 
J w aitf/. 45 Agric. Dec. 556 (l^SjiTnS." ' ^ nOt de " y maleripl alle g al [oiis >! 
deny material allegations); //, ^ ( S / L? P ]?? r * hcrC answer ' filed la[e ' docs " ol 
proper Where , irac ly answer il^\\^^^^ 2192 C 1985 > C*flt order 
forward complaint to Its attorneys! InleC^ M^^ main ffice did not P>niplly 
proper where timely answer noTfiied. % SSl'i r ?n' R M> 1573 (1985 > t dcfa!l!t ^ d 
complaini sent by certified mai to hhTSKSw i P' CultO " C PI>erly served where 
Cultone), apdptrwriw, 8M F.M 153 D C ^C ^ Toiw"" Tf SignCd f r ^ J e P' A - 
Aic. 43 Agric. Dec. 1775 (1984) (defau t order , ^ (V n P ublishe d ; / re Corbcil Farms, 
cannot present evidence thaV tVunablet ^41^ !! me| y answ "ot filed; respontTcm 
to a hearing by not fifing a limely anSerV K^,'T CIV1 J, ^ na " y where U 'd Us rifjJil 
order proper where timely answe y r ^ ed( f S "' i 3 Aeric ' Dec ' 78 ( 198 ^> (dcfaull 
order proper where timelJanTer n^ t |? S^nSm ^ iH*' eC ' ?51 (1984 dcfftu " 
complaint sent by certified mail to his rSn^S ^ eph Buzun P r P erI y scived ** 
JW^ 43 Agric. Dec. 439 1^4) Me 3 ""S 8 " ? r b ^ ^^one named Buzun); //, 
where timely answer not filed; Ltent1SS e f Jf "'J 01 " 16111 DoSS ' f defau!t order proper 
-JPM/ dbmtotf, No. 84^(316 (S Sr Mv iSS? r ent ,** B , U " able tO afford an 
de a t order proper wh^re timely an^rnS K r" re ^'"* m ' 43 A S^- D. 
gefaul order proper where timely anZer not Hi'? W *fS w ' 42 A 8 ric ' Dec " 764 
(default order proper where iwpoSdSrited i7i ? "*'"*'' 42 A S ric ' Dec ' 80 

S55? u , enM aai1 -"i* of a ^SSr7S P M auor f yand did not undcKta 

(1980) (default order Vroper W hC ^S/ ?"?"* /flc - 39 Agric. Dec. 395, 376-97 
would be issued); / '& 3 ?AgSc oS ?S 37? * 16 natUre f the Ordcr thal 



JOHNSON-HALLIFAX, INC., ET AL 



The requirement in the Department's rules of practice that respondent 
deny or explain any allegation of the complaint and set forth any defense in 
a timely answer is necessary to enable this Department to handle its large 
workload in an expeditious and economical manner. During the last fiscal 
year, the Department's five ALJ's (who do not have law clerks) disposed of 
496 cases. The Department's Judicial Officer disposed of 42 cases. In a 
recent month, 66 new cases were filed with the Hearing Clerk. 

The courts have recognized that administrative agencies "should be 'free 
to fashion their own rules of procedure and to pursue methods of inquiry 
capable of permitting them to discharge their multitudinous duties/' If 
respondents were permitted to contest some of the allegations of fact at this 
late date, or raise new issues, all other respondents in all other cases would 
have to be afforded the same privilege. Permitting such practice would greatly 
delay the administrative process and would require additional personnel. 
However, there is no basis for permitting respondents to present mailers by 
way of defense at this time. 

Even if respondents were permitted to present a defense at this late date, 
the matters presented in their appeal would be to no avail. It is the consistent 
practice of this Department to issue a disciplinary order even though the 
violator ceases violating or discontinues business. 6 Similarly, in closely held 
corporations, the corporate veil is pierced in order to make the order 
applicable to the responsible owners and officers of the corporation. 7 

Oral argument before the Judicial Officer, which is discretionary (7 C.F.R. 
1.145(d)), was requested by respondents, but is denied inasmuch as the 
issues are well settled and oral argument would seem to serve no useful 
purpose. 



5 Cella v, United Slates, 208 F.2d 783, 789 (7th Cir, 1953), cert, denied, 347 U.S. 1016 
(1954), quoting from FCC v. Pottsvillc Broadcasting Co., 309 U.S. 134, 143 (1940); accord Swift 
& Co. v. United States, 308 P.2d 849, 851- 52 (7lh Cir. 1962). 

fi Jit re 11T Continental Baking Co. , 44 Agric. Dec. 748 (1985) (remand order), final order, 
44 Agric. Dec. 1971 (1985) (consent order); In re Trenton Livestock, Inc., 41 Agric. Dec. 1965, 
1976 (1982); //; re Roberts Enters., Inc,, 41 Agric. Dec, 80, 83-84 (1982); In re Sterling Colo. Beef 
Co., 39 Agric. Dec. 184, 238-39 (19SO), appeal dismissed, No. 80-1293 (10th Cir. Aug. 11, 1980); 
In re DcJong Packing Co., 36 Agric. Dec. 1181, 1218-21 (1977), affti, 618 R2d 1329 (9th Cir.) 
(2-1 decision), cert, denied, 449 U.S. 1061 (1980); //; re Sltatkin, 34 Agric. Dec. 296, 313 (1975). 

7 Scbastopol Meat Co. v. Secretary of Agriculture, 440 F.2d 983, 983-86 (9th Cir. 1971); 
Bmhn's Freezer Meats v. USDA t 438 F.2d 1332, 1342-43 (8th Cir. 1971); In re Holiday Food Sens., 
Inc., 45 Agric. Dec. 1034 (1986), remanded, 820 F.2d 1103 (9lh Cir. 1987); In re Corn State Meat 
Co., 45 Agric. Dec. 995 (1986); In re Trenton Livestock, Inc., 41 Agric. Dec, 1965, 1971-80 (1982); 
In re Pastures, Inc., 39 Agric. Dec. 395, 397, 401 (1980); lit re Tnomaston Beef& Veal, Inc., 39 
Agric. Dec, 171 (1980); In re Norwich Veal & Beef, Inc., 37 Agric. Dec. 1202, 1205 (1978); In re 
Mid-States Livestock, Inc., 37 Agric. Dec. 547, 566-68 (1977), ajfdsiib now. Van Wyk v. Berg/and, 
570 F.2d 701 (8th Cir. 1978); and see Hedrick v. S. Bonaccnrso & Sons, Inc,, 466 F, Supp. 1025, 
1030-31 (E.D, Pa. 1978); Fiftippo v, S, Bonaccnrso & Sons, Inc., 466 F, Supp. 1008, 1015-18 (E.D. 

Pa. 1978); In re Rotchcs Pork Packers, Inc., 46 Agric. Dec. (Apr. 13, 1987); In re MCM 

Livestock, Inc., 39 Agric. Dec, 893, 900-02 (1980). 

435 



For the foregoing reasons, the following order should be issued. 

Order 

M dT^? ) Ir -!f te i rMp0nd J ent( its . officers ' Actors, agents and employees, 
del, in , U ? res P l nd u en , t ' directI V or trough any corporate or otl.c 
device m connection with their operations subject to the act, shall cease and 
desjjl from fading to pay, when due, the full purchase' price oSstock 

Respondents are jointly and severally assessed a civil penalty of tl'si 
The cml penalty shall be paid by certified check made navaWe to t 



In re: ROBERT F. JOHNSON. 

P&S Docket No. 6677. 

Decision and Order issued February 29, 1988. 

Operation without a bond or equivalent. 




DE CISION AND ORDER 



T,,ona v 20 lr?f , U J I "*)' An inilial 
Law Judge Victor W. Palmer (AuTo7de r ^V y ^ Chie f Administrative 
from engaging in business withouT he S-H ^ f"'. l CCaSe and desis ' 



ROBERT F. JOHNSON 



Z35). 2 On July 21, 1987, respondent filed an appeal, contending that 
respondent's failure to have the required bond does not violate 312(a) of the 
Act (7 U.S.C. 213(a)), and, therefore, neither a cease and desist order nor 
a civil penalty is authorized. 

Based upon a careful consideration of the entire record, the initial 
Decision and Order is adopted as the final Decision and Order in this case 
except for the omission of two sentences concluding that a civil penally is not 
warranted. Additional conclusions by the Judicial Officer follow the ALJ's 
conclusions, explaining why a $4,000 civil penalty is warranted. 

ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION 

The complainant and the respondent have stipulated to, and I therefore 
find the following facts: 

Findings of Fact 

1. This proceeding was instituted under the Packers and Stockyards Act 
(7 U.S.C. 181 et seq.) by a complaint filed by the Administrator, Packers and 
Stockyards Administration, United States Department of Agriculture, alleging 
that the respondent willfully violated section 312(a) of the Act (7 U.S.C. 
213(a)), and sections 201.29 and 201.30 of the regulations (9 C.F.R. 201.29, 
201.30). The complaint was filed February 13, 1986. The answer of 
respondent was filed March 31, 1986, and the parties have previously agreed 
and now agree that the answer shall be considered to have been timely filed. 

2. (a) Robert F. Johnson, hereinafter referred to as the respondent, is an 
individual whose business mailing address is P.O. Box 101, Martinsburg, 
Missouri 65264. 

(b) Respondent is, and at all times material herein was: 

(1) Engaged in the business of buying and selling livestock in 
commerce for his own account; and 

(2) Registered with the Secretary of Agriculture as a dealer to buy 
and sell livestock in commerce for his own account, and as a market agency 
to buy livestock in commerce on a commission basis. 

3. Respondent has been registered with the Secretary of Agriculture as a 
dealer from January 27, 1969, to the present, and as a market agency to buy 
on commission from May 8, 1980, to the present. 

4. The Packers and Stockyards Administration notified respondent by 
certified mail on November 18, 1985, that the $80,000 surety bond he 
maintained to secure the performance of his livestock obligations under the 



The position of Judicial Officer was established pursuant to (he Act of 
April 4, 1940 (7 U.S.C. 450c-450g), and Reorganization Plan No. 2 of 
1953, 18 Fed, Reg. 3219 (1953), reprinted in S U.S.C. app. at 1068 (1982). The Department's 
present Judicial Officer was appointed in Januaiy 1971, having been involved with the 
Department's regulatory programs since 1949 (including 3 years' trial litigation; 10 years' 
appellate litigation relating to appeals from the decisions of the prior Judicial Officer, and S 
years as administrator of the Packers and Stockyards Act regulatory program) (December 1962- 
January 1971). 

437 



Act would terminate on December 15, 1985, and further notified respondent 
that if he continued his livestock operations without adequate bond coverage 
or its equivalent, he would be hi violation of section 312(a) of the Act and 
sections 201.29 and 201.30 of the regulations. 

5. Before November 18, 1985, respondent was diligent in seeking the 
renewal of his bond, and had a good faith belief that it would be renewed. In 
fact, respondent had become concerned about the situation with his bond 
before receiving the notice from the Administration, and had made what he 
then thought were arrangements to renew his bond through the Kasmann 
Insurance Agency of Columbia, Missouri. His bond had been with the 
Hartford Accident and Indemnity Company of Chicago. All necessary 
materials had been sent Hartford on November 5, 1985, and Hartford had 
assured the Kasmann Agency that the bond would be renewed when these 
materials arrived. Ultimately, around December 15, 1985, Hartford made a 
final decision not to renew the bond, Reasons given were some financial 
losses respondent had experienced and the fact that he did not have the rest 
of his insurance business with them. He was also told by other sources that 
Hartford sustained a large loss on a cattle dealer's bond in St. Joseph, 
Missouri, and quit writing such bonds except for those who had related 
business insurance with Hartford. 

6. Respondent's prior bond with Hartford was cancelled for Hartford's 
business reasons and without any fault on the part of respondent on 
December 15, 1985. 

7. Immediately upon being told that Hartford would not reissue his bond, 
respondent contacted Rodes Insurance Agency in Mexico, Missouri. That 
agency told him they could obtain a bond for him, but eventually told him they 
in fact could not obtain the bond. 

8. This same process was repeated with Livestock Marketing Insurance 
Agency in Kansas City, Missouri, Melahn Insurance Agency in Mexico, 
Missouri, and Scott Agency, Inc. in Montgomery City, Missouri. In each case, 
after initially being told the bond probably would be issued, respondent was 
later told that the bond would not be issued. 

9. Respondent was diligent in seeking a new bond after he learned his 
bond with Hartford would not be renewed. 

10. Respondent finally was able to obtain a bond through an agent in St. 
Louis, Missouri, with Aetna, and his bond (number 51-5-100196474) is now on 
file with the Packers and Stockyards Administration. It was originally filed 
with an effective date of March 12, 1986, in the amount of $50,000. 

11. Respondent filed his Annual Report for the calendar year 1985 on 
April 17, 1986. The Annual Report indicated that respondent purchased such 
volume as to require a bond in the amount of $80,000. By letter dated 
May 20, 1986, respondent was notified by the Packers and Stockyards 
Admmistration that the $50,000 bond was insufficient and must be increased 
to the former level of $80,000; his attorney was so notified by complainant's 
attorney on Maj ' 2L1986 Respondent procured an increase in the amount 
of his bond to $80,000, effective May 20, 1986. 



in ^ ich res P ndent P^ated from December 15, 

Mn 1 - ^, thout , a bond in force > or from M * r <* 12 to 

May 20 1986, wUh a bond of less than $80,000, all livestock sellers which sold 

livestock to respondent were paid in full. During virtually all of the time 



ROBERT F. JOHNSON 



respondent was without proper bond coverage, respondent was under the 
impression that a bond was being issued by one company or another and 
simply had not been filed yet. As described above, in each instance, he later 
learned that this belief was incorrect. 

13. This is the first time respondent has ever failed to maintain a bond for 
his livestock operations. No prior complaints, investigations, or orders have 
ever been made by the Packers and Stockyards Administration concerning 
respondent's livestock operations. 

14. Prior to the facts surrounding this matter, no complaint has ever been 
made by the Packers and Stockyards Administration that respondent has 
engaged in any unfair, unjustly discriminatory, or deceptive practice or device 
in his livestock operations. 

15. For the calendar year 1984, the annual report filed by respondent under 
the Packers and Stockyards Act shows that respondent purchased 
approximately $13,533,054 of livestock. For the calendar year 1985, the annual 
report filed by respondent under the Act shows that respondent purchased 
approximately $10,831,837 of livestock. 

16. The Packers and Stockyards Administration recommends the 
assessment of a civil penalty against respondent in the amount of $4,000; 
calculated on the basis of five percent of the amount of the bond required, as 
well as entry of an order directing respondent to cease and desist from 
engaging in any business for which bonding is required under the Packers and 
Stockyards Act and the regulations without maintaining a reasonable bond or 
its equivalent. 

17. The imposition of a civil penalty in an amount of up to $4,000 would 
not affect respondent's ability to continue in business to such an extent that 
he would have to cease business. 

18. The Packers and Stockyards Administration considers the failure to 
have and maintain adequate surety bond coverage or its equivalent to 
constitute a serious violation under the Act. The administration's position is 
that the Packers and Stockyards Act was enacted, in part, to insure that 
producers of livestock received full and complete payment for their product, 
and that the surety bond is required to be maintained to secure a ready source 
of funds in the event of financial default by the buyer. 

19. Respondent and the complainant disagree as to the Secretary s 
jurisdiction to assess a civil penalty or enter the order sought by the 
complainant, but have consented that this matter may be considered upon 
these stipulated facts. 

Conclusions 

1. Under the facts of this case as stipulated by the parties, respondent did 
violate the Packers and Stockyards Act, 7 U.S.C. 181 et seq., and the 
Regulations, 9 C.F.R. 201.29, 201.30, by failing to keep in force a surety 
bond in the amount required. 

2, Respondent's continuation of his livestock operations without an 
adequate bond, after being notified that his existing bond would terminate, 
constituted an unfair and deceptive practice in violation of 7 U.S.C. & 2l3(a). 

439 



3. Respondent's violation of the Act was "willful" as that term is used in 
the context of cases of this sort, and a cease and desist order to prevent such 
future violation is fully warranted and should be entered. 

4. Though respondent should have ceased his livestock operations when 
he became aware that he was unbonded, and in that sense committed a 
"willful" violation of the Act by continuing to so operate, he diligently sought 
a new bond, and his temporary inability to obtain one was not due to his 
financial insolvency or lack of appropriate efforts by him. 

Discussion 

The parties chose to stipulate the facts and to proceed to decision without 
an oral hearing. The stipulated facts make it very clear that respondent made 
every effort to obtain a new bond after being informed that his old bond 
would not be renewed. Through a series of mishaps and misunderstandings, 
he was under the impression throughout the three-month period he wa^ 
' th , at a ncw b d w ? m the P rocess f being issued. He was never 

a financial loss because respondcnt " ol 



nor M- ~, that Under thesc circumstances there has 

rovS oft T ? f / ^ S ; C 21 , 3(a)> Conte nding that the only operative 
fn 7 T S C sf^/^ fa H U ^^ be b nded are those expressly'c 

and desisf ordl^ -, and ^ res P ondent ar 6 Ues that neither 
and desist order nor cml penalties may be imposed under 7 U S C 

projections against "unfair and deceptive practices" 



entitlcd to 
l "^ an appropriatbond. 



tS Sl " JeCt ' ""' the 

' and 



S ano e d De T ' -Ir-rtlve 

proceeding. Inasmuch aLdL?f P<int ' ha ? been ch aengcd in this 
sought i/,hi s SHTfc 1 ^ S <T ( nSi0n nor . re cati has been 
"wiUfulness.' See 5 USC i SfflW S ,L atUt ^, re 1 u remei for proving 
respondent understand that 'his conlL r SS ' " .' S im P r > "'at 
three months when he kne/ne wa ?,nh f? 1 " 011 aS a livestock dealer fof 
a "willful- violation. A eeale andl? ? ^ u^ e within the standard <> r 
future violation of ihis t^e ' rder sha " be issued l Preclude a 



three-month period that a bond wa^" 1 ^ [ he im P ression throughout the 
SlJ d K d Wa f not terminated 1 nor were his -Sioisfor' 80 Iear that 

ad risk. For example, he 



40 



ROBERT P. JOHNSON 

tjally foiled to obtain a new bond because the insurance currier did nol wish 
Cbond a livestock dealer who gave it no other insurance business. None ol" 
jjs customers suffered economic injury or loss due to respondent's 
itae-month unbonded status. ... 
Thft following order shall therefore be issued. 

ADDITIONAL CONCLUSIONS BY THE JUDICIAL OW'ICKK 

TlicALJ correctly concluded that operating without a bond is an "unfair" 
and 'deceptive" practice in violation of 312(u) of the Act. Section 3 12 of the 
Acl provides (7 U.S.C. 233); 

213, Prevention of unfair, discriminatory, or deceptive prm-Uci's 

(a) It shall be unlawful for any stockyard owner, market agency, or 
dealer Lo engage in or use any unfair, unjustly di.scrimimitnry, or 
deceptive practice or device in connection wilh determining whether 
persons should be aulhori/ed to operate at the stockyards, or with the 
receiving, marketing, buying, or selling on a commission basis or 
otherwise, feeding, watering, holding, delivery, shipment, wci^hin^, or 
handling of livestock, 

(b) Whenever complaint is made to the Secretary by any person, 
orwhcnevcr (ho Secretary has reason to believe, tluU any stockyard 
owner.markcl agency, or dealer is violating the provisions m subsection 
(a) of this section, IhoSccrclnry afler notice and full hearing may nuikc 
an order that lie shall cease and desist from continuing such violation 
lo the extent that the Secretary finds it does or will exist. The 
Secretary may also assess a civil penally of not more than UltMKX) Cor 
each such violation. In determining the amount of (he civil penalty to 
be assessed under this section, the Secretary shall consider tne gruviiy 
of the offense, the slxc of the business involved, and the effect of the 
penally on the person's ability lo continue in business. If, after the 
lapse of the period allowed for appeal or after the affirmance of Mich 
penalty, the person against whom the civil penally is assessed fails to 
pay such penalty, (he vSecrelary may refer the matter to the Attorney 
General who may recover such penally by an action in the appropriate 
"""'" court of the United States. 



\Mted States v. Hillings, 44 F. Supp. 562, 563-67 (D. Kan. WHO), which 
TOanaclionto collect civil penalties for defendant's violation of n prior cease 
and desisl order, the court held that operating without u livestock burnt is a 
teptto practice in violation of 7 U.S.C. 2O(a). and, therefore. th:U ihu 
Salary's prior cease and desist order was valid, and civil penalties were 
foper. The court held (484 F. Supp, al 564-67): 

Defendant argues that 213(a) proscribes the commission of imy 
? unjustly discriminatory, or deceptive practice or device," and 
Bat failure to have a bond is not an unfair or deceptive practice, isnil 
soisnotwilhm the ambit of 213(a). Therefore, he contends, if there 
wwwolatloflof 213(a), no action for the recovery of civil penalties 

441 



can be maintained under 215(a). In support of his argument. 
defendant notes that 204, authorizing the Secretary to require 
reasonable bonds from market agencies and dealers, provides for 
suspensions by the Secretary for violations of the Act by a registrant 
Defendant^ maintains that Congress did not intend a bonding violation 
to be considered an unfair or deceptive practice because. If failure to 
have a bond were so construed, there would be no place for the 
application of 204. Defendant contends that plaintiffs only remedy 
against defendant for failure to have a bond is an order of suspension 



- eS ! h ? wh . eth ? t^ [original cease and desist] 



w en th n " T' n s <**> or controvers 

the ma er ,S h, ' ' M ^ th f e ., Court is ^thout jurisdiction to hear 
be an P ^ fai ' S l State a da u P n which relicf 



several 



Sa^fteHiSnS-rw 1 



ROBERT F. JOHNSON 



its administration.'" Hays Livestock Comm'n. Co. v, Malv Livestock 

PT&fr 498 F -' 2d 925 ^ 3 ( 10th Cir - 1974 ) The ^ghth cS 
has held that a practice prohibited by the regulations (failure to pay for 

livestock in a timely manner) is a violation of 2I3(a). Even thoueh 
the regulation does not mention the words "unfair" or "deceptive " the 
Court felt the proscription by the regulation brought the practice within 
the proscription of 213(a) of the Act because the regulation 
represented the Secretary's construction of the statute, which was 

W '" 



70l 704 ' ' > 57 



This Court must decide wbether the Secretary's issuance of the 
cease and desist order was unwarranted in law or without justification 
m fact. See Amencan Power & Light Co. v. Securities and Exchange 

naSTr!?' T ? ^V> ^J 113 ' ?7 S ' Ct ' 133 ' 145 ^> 91 ^ l& 
C1946). ( The Tenth Circuit has said: "The words, 'unfair, unjustly 

discriminatory, or deceptive practice or device,' as used in 312(a) [7 
U.S.C. 213(a)] of the Act are not defined, and their meaning must be 
determined by the facts of each case within the purposes of the Packers 

?" Capit l Packin g Co. v. United States, 350 F.2d 67, 
ir. 1965). 



One purpose of the Act is to protect farmers and ranchers from 
receiving less than fair market value for their livestock and to protect 
2 s ~ m ? ~ om unfair practices. Solomon Valley Feed! ot, Inc. v. Bittz, 
557 F.2d 717 718 (10th Cir. 1977). "Among the means employed to 
accomplish this purpose is ihe use of surety bonds," Id at 720. 

The Court is convinced that the Act through the regulations entitles 
sellers and buyers of livestock to the protection of their middleman's 
surety bond securing his obligations. Since it is the vSecretary's duty to 
construe and implement the Act, the Court finds he has the authority 
to construe failure to maintain a bond on the part of a dealer or a 
market agency as a deceptive practice. Thus, if failure to maintain a 
bond is lawfully construed to be a violation of 213(a), the Secretary 
has the choice of suspending the dealer or market agency under 204 
or issuing a cease and desist order tinder 213(b), or both. The Court 
further finds that the Secretary's imposition of both sanctions against 
this defendant was within the range of choices allowed him by the 
statutory language and purpose. 

. Caving found that the cease and desist order issued by the Secretary 
m 1975 was warranted under the law, the Court also finds that such 
order was justified by the facts in this case. All the Secretary had to 
find was that defendant did not have a bond in effect ____ 

Therefore, under the law and the facts, the 1975 order was lawfully 
issued, and the action in this Court to recover forfeitures under 215, 
and for an injunction under 216 for a violation of that order in 1977 
is appropriate. 



443 



In United Slates v. Wehrheim, 332 F.2d 469, 472-73 (8th Cir. 1964) 
aclion to recover civil penalties under 303 of the Act (7 U.S.C. 203) ft 
court referred to the evil of operating without a bond, and the rcsuL 
jeopardy to the public welfare, stating: 



District Court was in error; that the defendants did 
- -* 3 registration when they failed to file the required 
7 U S CA $"m' " Cre efore sub J ect to the penalties provided by 



^ 

'" "4 atute ' n was direct againsl the , i 



' s rec agansl te , i 






in the ^*^?** * of a bjnd as a safeguard 

provision P Up tects the snuffiS?"? 1S ^ a r reason able and necessary 
and lends to (Kafc S& ? f .h r S d f H 1 "^ ^ ith mark ^ agcncicl 
believe Congress had ^?h i r 6 ' V * tock marketing industry. We 
U P ' y m nd n 



a . 

. antha P t ( ne^' y ? m nd l n ( . he P ass of 7 
defendants w^^^^^^tf ^singto rcg&tcr the 

regu ations, was nSS^SS o^rnn^ ^ J9 uW ^ his 
conclude that the purposes of th?A^ Congressional mtcnt. We 
interpretation an/S^e ni^ft?^ ^ defeated ^ a y o^cr 
reference to bonds and (S s"tSSS/?I h i e ,? lalutor y P rov ion with 
Authpnties relied on by the defSnf ^ fiul ^ 10ns are aPy justified. 
p 1S trict Court's conclusfon deaf whh- - f lVC parti ^ SII PP O " to the 

barlotheenforcementTthecivn^ 

and Stockyards Act. penalties provided for in the Packers 



the responsibility for 

e required bo Sn i 5 3 . lways held the view thai 
ess ffi Se ^nhLS H d e ^ uivalent ) ^ ""fair to (he 



operatuig without the requre bo n . 

do business ffi S d e ^ uivalent ) 



. 



ROBERT F. JOHNSON 



bond, or had an inadequate bond, is a serious violation that jeopardized the 
public welfare and the livestock industry in respondent's area 

A person who is unable to procure the required bond has only two lawful 
alternatives. He can either cease operating, or file a bond equivalent The 
regulations provide (9 C.F.R. 201.27(b)): 

201.27 Underwriter: equivalent in lieu of bonds; standard forms. 

(b) A bond equivalent may be filed in lieu of a bond. A bond 
equivalent shall be in the form of a trust fund agreement based on 
funds actually deposited and readily convertible to currency in the 
amount required by 201.30. Such funds shall be invested or 
deposited, in the name of a trustee as set forth in g 20132 in- C11 
Fully negotiable obligations of the United States, or (2) deposits or 
accounts insured by the Federal Deposit Insurance Corporation of the 

R ??S -ST 88 a i?onVS n h u [ ance Corporation. The provisions of 
201.27 through 201.34 shall be applicable to such trust agreements. 

Assuming that respondent did not have the funds to deposit in a trust fund 
or the credit rating that would have enabled him to borrow such funds, 3 that 
is all the more reason why respondent should not have been operating without 
a bond, subjecting other persons in the livestock industry to an unwarranted 
risk. 

Complainant's recommendation for a $4,000 civil penalty is based on 5% 
of the amount of the required bond. In In re Molnar Packing Co., 41 Agric. 



One of the insurance companies from which respondent attempted to obtain a bond 
stated that he would have been ineligible, even if the company otherwise would have written 
the bond, because of his "heavy indebtedness." The insurance company slated (Stipulation of 
Facts, Ex. E): 

We have reviewed the information submitted. Unfortunately, we do not handle clause 
3 Packers and Stockyards bonds, which is what this individual needs since he is an 
order buyer. While we do consider clause 1 and clause 2 Packers and Stockyards 
Bonds, if this individual needs one of these clauses, we still would not be able to 
handle this bond for him as the financial statement would not meet our requirements 
for this type of bond. The financial statement is showing very heavy indebtedness. 
Therefore, we are unable to handle this bond for your agency. We are returning all 
information submitted, 

Another insurance company that declined to issue respondent a bond stated (Stipulation 
of Facts, Ex. D): 

The information provided by those [financial] statements does not meet the minimum 
underwriting requirements of the bonding company. 

You might want to consider the possibility of establishing an Irrevocable Letter of 
Credit with the P & S in lieu of the bonding requirement, To assist you with that 
process, please find enclosed a photocopy of the regulations for a Letter of Credit and 
a sample letter to be used by the bank providing that security. 

445 



Dec. 935, 936-40 (1982), a $1,000 civil penalty was imposed against a packer 
who operated for just over 6 months without a required $15,000 bond or 6 7? 
of the amount of the required bond. The ALJ's initial decision in (hat case" 
adopted by the Judicial Officer, states (41 Agric. Dec. at 938-39); 

Although Respondent's brief recites the many difficulties 
encountered m obtaming a $15,000 bond, it nevertheless con nuc 3 to 
purchase livestock in commerce for slaughter without boScoveraM 



lo 



<lays> and 



civil 
required 



t to 

under the Packers and Sfn,t! , A taen> reccnt scverc 

, 47 Agric. Dec tt"'' 1 1?, a , ro ,' et forlh as fol! w.s (/;, 

and civil p e naI l i-e^f$2o P 00 P and$i n mr (F ? b ,- 22 ' ' 9 , 88) (3 - lnomh 
Spmcer Lh '^ Con Co Ik A ' ^ wei S hi "B)> 

" " Ct Doc ' 



e00and$i n mr, , 

<<%",",:? Spmcer Lh '^ Con^n Co Ik A ' ^ wei S hi "B)> V^V 
H-H(Mar. 19,1987)(lo.yearsu,nin 5 ! " ^" Ct Doc ' __ sli i' P- "' 
increased wcighls and pricK aid XT- T d . $30 ' 000 civil P^I'y CoV falsely 
71S9 (9,h Cir. Apr. 27, WS^f "^"ons), appeal docketed, No. 87- 



Wa^aaSesys 



" -* : a 



ROBERT R JOHNSON 

administrative determination that 10-year sanction* /.= ; 
circumstances, be reasonable. sanctions can, m appropriate 

In addition (> the sanctions imposed under the Packers an H 
Stockyards Act in recent years have been much more severe than 
during earlier years, e.g., In re Welch, 45 Aerie Dec 
1986) dcctt.on as to, Benson) ($lb,000 S ^5 
prohibition from engaging in business subject to the 



penalty ; //, re Blackfoot Lv est Commn Cn 

8 F 2d 9S?9 h 

n inw-'- c w , Inc., 45 AKric 

Dec. J234 (1986)] (decision as to Millspaugh) (5-year susnension hn,' 
permitting respondent to be employed as an a uctimee a i 5J .rV 
A * ^K 44 Agric Dec. [22*38 (1985)] (STSi^.M' 
month suspension and $10,000 civil penalty)- In re IW^hlnL 

Dfc'%^ 

Dec. Wl (1985)] ($10,000 civil penally ; In re Powell, 44 Agric. 5cc 

- (Mar. 7 1985) (5 : ycar suspension for failure to pay for livestock)' 

f^Jfw^ v ^n nC ' ? CC " t 1220 ^ 1985 )J (^pcal not Ume^ 
In re Mid-West Veal Distributors, 43 Agric, Dec 1124 f!984M 77 f 

llh 2 )J D ( ec[43 



, , 

&M ly ^ lh $2 7'n TO sndcd ) . AgH Dec[43 

443[/^hrT^V^?f^^ 
84-4J10 (5th Cir. July 25, 1984); In re Petcrtnan, 42 Aerie Dec lisas 

(1983)], //X 770 F.2d 888 (10h Cir. 1985) ($20,000 cSpenStyj 

In In re 'Carver, , supra, 45 Agric. Dec. [1090, 1101-04 (1986)], It is 
explained tha 2-lo-5-year suspension orders are now issued in the case 
of serious failures to pay_ for livestock where 30-to-60-day suspension 
orders would have been issued in comparable cases a few years ago. 

Respondent is an exceptionally large dealer. In 1984, he purchased 
approximately $13^ million worth of livestock. In 1985, he purchased almost 
$11 mil ion worth of livestock. In view of the size of his operations, his 
financial condition which did not meet the underwriting requirements of some 
insurance companies (see note 3, supra), and his continued operation without 
a bond for almost 3 months (and with an inadequate bond for over 2 
additional months), the $4,000 civil penalty recommended by complainant and 
imposed here is extremely modest. (The Act authorizes a $10,000 civil penalty 
tor each violation (7 U.S.C. 203(b)); every day respondent operated without 
the required bond was a separate violation.) It should be noted that 
respondent's argument that his license could not be suspended for operating 



447 



wilhout a bond because he now has the required bond is erroneoiK 

Suspension orders are frequently issued even though the violation has ceased* 

The sanction imposed in this case is so modest that if I did not have 



neither serious "CranV l J d ' ng '? (hc re *wing court), 
(he adminisSeX^ - 

according to the reviewing r 



*h* of the 

serve as an effective deterrenUn uS vl, f ' E ^ n< : tions im P oscd d '" 
a potential violator identically told Zr "!i T "'"'"-ate, assume U, al 
Problem faced by respondent iehfshnnr P nde ?, tl , S faced with " Ic 
<%ent efforts, he is unable to obta n a h !! f anCe " ed aml ' "otwlllulanding 
a bond equivalent. Would 'he pro 'e c( nf J^^ CTal m nlhs ' or P v ' 
d.scont,nue his $ n million $$?! $4 ? P vil P enal 'y cause him lo 



a n a f 

a bond equivalent. Would he pro 'e c( nf J^^ CTal m nlhs ' or P v ' 
d.scont,nue his $ n million $$,?! $4 ;? P vil P enal 'y cause him lo 
^ouraged by the prospect of I CtomMl, bUSmeSS < Or would ''" be 
Wkout the required bond? From? Pe " aUy t0 conlinuc business 



** &%:%''.. .s,w 197S ' ;; * *o *?* re *&** 

g^^3SS-?^w^ 

iJ^^.^Vift^^?j*'^i^ ffli^ftes ^ "? 112t 







ROBERT F. JOHNSON 

several months, and suffer the continued loss of business 
from new arrangements made by his customers 
of business. 



h 

Ite sanction for violating would be no more severe ft III ^ b " " leSS ' if 
in ,he present cas, Specir.caUy, uniess a poSa, S tttTed Si'the" 
prospect of a suspension order greater than the period in which he T~ 
without the required bond, or a civ 1 penalty exceeding fh,, !,. operates 
raak e during the period in which he" ope/at^u h " e" bon " 
economic reality favors violating the law! '^uirea oond, 

As to the deterrent effect of a cease and desist order it k v!rh, a ii,, 
"Registrants under the Packers and Stockyards Jtoffii^^JS 
order about as much as they would fear a slap across the face with a we 
noodle!" In re Spencer Livestock Common Co., 46 Agric Dec ,l!n nn ! 

204 (Mar. 19, 1987), appeal docketed, No. 87-7189 (9th S ApT^ 19871 

Potential violators should not regard the modest ''slap-on-the wrist'' 
imposed here as the sanction that will be imposed in a future case. Whirl 
the Judicial Officer determines that sanctions previously imposed under the 
Act for s.m, ar violations do not serve as an adequate deterrent, it is his policy 
to mcrease the sanction in the pending case, rather than merely announce I 
change for future cases (In re Spencer Livestock Common Co., 46 Aerie Dec 

T-'o^n^x 1 S? (Ma f- 19 1987 )' Q PP eal doc ^^ No. 87-7189 SthCir' 
Apr. 27 1987)). That policy is not being followed here only because I am too 
busy with other cases to raise this issue, ma sponte, in the present case 
For the foregoing reasons, the following order should be issued. ' 

Order 

Respondent Robert F. Johnson, his agents and employees, directly or 
hrough any corporate or other device, in connection with his activities subject 
to the Packers and Stockyards Act, shall cease and desist from engaging in 
business in any capacity for which bonding is required under the Ac? and the 
regulations without filing and maintaining a reasonable bond or its equivalent 
as required by the Act and the regulations. 

Respondent is hereby assessed a civil penalty of $4,000. The civil penalty 
sha 1 be paid by certified check made payable to the Treasurer of the United 
Mates, and mailed to the Assistant General Counsel, Packers and Stockyards 
Division^ Office of the General Counsel, Room 2446 South Building, United 
Mates Department of Agriculture, Washington, D.C. 20250-1400, not later 
lhan (he 90th day after service of this order on respondent. 
( The cease and desist provisions of this order shall become effective on the 



In re: CRAIG LANDEEN 

P&S Docket No. 6626. 

Decision and Order filed November 4, 1986. 



Operation without bond - p 
failure ,o file answer. 



pay ' when dlie > full purchase price of Hves.ock 



UP N ADMISSION 



, 

to as the Act, instituted by a corn 
and Stockyards Administration 
chargmg that .he re^ond 
galed t hereiln(| P cr by 



fi,1 



,, 

Administral ''. Packer, 
? Cp lmen ! of Agriculture, 



ar mail.' Respondent was nfo/ re , S f rVed ,. 0n the res P<te"( 
be filed pursuant to the " "" " 
an adraission 



' hat an 



admitted by respondent's faTlure o fife " Cged m the com P laint . wl * a.'c 
1'crein as Hndings of fact. a " answer > are ad Pted and set forth 

the tote of ftacfc (7 CRR 



n 



to Secti 



Findings of Fact 

Box 366, Canby, Oregon ^^"^ Wh sc busine "ailing address 
(b) The respondent at all times material herein was- 

f 3 market ^ney.'buying livestock 



as de fi ,,e (i 

Abject to [he Act reg ' Stered "*" ^ & ^ of Agriculture in any capacity 
2. Sections 201.29 and 201 in f .u 

--- 



agenc.es furnsh an adequate bond. During the period from May 11 loss 
through July 1, 1985, and thereafter respondent has engaged uuhc bus S 
of a market agency buying livestock in commerce on a common ' 
without having or maintaining a reasonable bond or its eauivalenTl t 
by (he Act and the regulations. equivalent as requ.rcd 

3. (a) The respondent, in connection with his onpraHnnc C,,K- , . T 
Ad, on or about June 21, 1985, purchased 22 head o* oc " * ^ of 
$6,575.11, and in purported payment therefor issued a check which la 
returned unpaid by the bank upon which it was drawn because the respond 
d,d not have sufficient funds on deposit and available in the accouTupon 
which such check was drawn to pay such check when presented 

(b) The respondent, in connection with his operations 'as a mark* 
agency subject to the Act on or about the date and in the transaction sc 
forth in paragraph I(a) of the complaint and in the transactions set forth In 
paragraph I(b) of the complaint, purchased livestock and failed to pay when 
due, the full purchase price of such livestock 

fC) , ^ t i7 f ri/S b r Cr I 2 ' ,- 985 ' thcre remaincd u "P aid total of 
approximately $17,614.57 for the livestock purchases set forth in paragraphs 
III (a) and (b) of the complaint. F b ' 



Conclusions 

By reason of the facts found in Finding of Fact 2 herein, respondent has 
wilfully violated section 312 a of the Act (7 U.S.C. 213(a}), and sections 
201,29 and 201.30 of the regulations (9 C.F.R. 201 29 29 201 30) 

By reason of the facts found in Finding of Fact 3 herein,' respondent has 
wilfully violated sections 312(a) and 409 of the Act (U.S.C. 213(a), 228(b). 

Order 

Respondent Craig Landecn, directly or through any corporate or other 
device, in connection with his operations subject to the Packers and 
Stockyards Act, shall cease and desist from: 

1. Engaging in business in any capacity for which bonding is required 
under the Act and regulations without filing and maintaining a reasonable 
bond or its equivalent, as required by the Act and the regulations; 

2. Issuing checks in payment for livestock without having and maintaining 
sufficient funds on deposit and available in the bank account upon which they 
are drawn to pay the checks when presented; 

3. Failing to pay, when due, for livestock purchases; and 

4. Failing to pay for livestock purchases. 

Respondent is prohibited from engaging in business as a market agency 
or dealer under the Act for a period of five years, provided, however, that a 
supplemental order will be issued terminating this prohibition at any time 
after the expiration of one hundred and twenty (120) days upon demonstration 
by respondent that all livestock sellers have been paid in full and that 
respondent is in full compliance with the bonding requirements of the Act and 
the regulations. It is provided further that this prohibition may be modified 
upon application to the Packers and Stockyards Administration to permit 



451 



respondent's salaried employment by another registrant after the expiration 
ot Lhe^l20-day period of prohibition. 

This decision and order shall become final without further proceedings 
J5 days after service hereof unless appealed to the Judicial Officer within 30 
days after service (7 C.F.R. 1.139, 1.145). 

Copies hereof shall be served on the parties. 

[This decision and order became final February 16, 1988,-Editor] 



In re: HOWARD LAWRENCE. 

P&S Docket No. D-88-4. 

Supplemental Order filed February 2, 1988. 

Allan Kahan, for Complainant. 

Respondent, pro se. 

Supplemental Order issued by Dorothea A. Baker, Administrative Law Judge. 

SUPPLEMENTAL ORDER 

On January^ 1988, an order was issued in the above-captioned matter, 
which, inter alia, suspended respondent as a registrant under the Act "until 
he complies fully with the bonding requirements under the Act and [he 
regulations.". 

Respondent is now in full compliance with the bonding requirements untler 
tne Act and the regulations. Accordingly, it is hereby ordered thai the 
suspension provision of the order issued January 5, 1988, is terminated. The 
order shall remain in full force and effect in all other respects. 



In re: ROGER NORRED. 

P&S Docket No. 6810. 

Supplemental Order filed February 15, 1988. 

Ben Bruner, for Complainanl. 

Respondent, pro se. 

Supplemental Order issued by Edwin A. Bernstein, Administrative Law Judge, 

SUPPLEMENTAL ORDER 

On November 18, 1987, an order was issued in the above-captioned matter 
which ^teraha, suspended respondent as a registrant under the Act for a 
period of 90 days and thereafter until restitution of $5,185.31 was made to 
Shapiro Packing Co., of Augusta, Georgia. 
*K 75? required fetation has been made. Accordingly, it is hereby ordered 

PrLnl^ USP ?l? 1011 S rOWS t! i? f the rder issued September 18, 1987, is 
terminated. The order shall remain in full force and effect in all other 
respects. 



PERISHABLE AGRICULTURAL COMMODITIES ACT 
DISCIPLINARY DECISIONS 



In re: MORGANTOWN PRODUCE, INC. 

PACA Docket No. 2-7572. 

Decision and Order issued February 22, 1988. 

Failure to make full payment promptly for produce - Failure to file answer. 

Summary; The Judicial Officer affirmed Judge Baker's order finding that respondent has 
committed willful, flagrant and repeated violations of 2 of the Perishable Agricultural 
Commodities Act by failing to make full payment promptly to 10 sellers for 185 lots of produce 
from August 1985 through June 1986, totaling $145,751.04. Much of those amounts remains 
unpaid. Respondent's failure to file an answer within 20 days constitutes an admission of the 
allegations in the complaint and a waiver of hearing. Even if respondent were permitted to 
present a defense, it would be to no avail. The fact that 2 of the 10 sellers filed suit to 
preserve their statutory trust rights does not preclude the Department from filing a disciplinary 
complaint, even as to those 2 sellers. This is not an action to render judgment against 
respondent in favor of unpaid sellers. 

Peter V. Train h for Complainant. 

Woodrow A. roteste, Fairmont, West Virginia, for Respondent. 
Initial decision issued by Dorothea A. Baker, Administrative Law Judge. 
Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 

This is a disciplinary proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.), in which 
Administrative Law Judge Dorothea A. Baker (ALT) filed an initial Decision 
and Order on September 11, 1987, finding that respondent has committed 
willful, flagrant and repeated violations of 2 of the Act by failing to make 
full payment promptly to 10 sellers for 185 lots of produce from August 1985 
through June 1986, totaling $145,751.04. Much of those amounts remains 

unpaid. 

On September 24, 1987, respondent appealed to the Judicial Ofhcer, to 
whom final administrative authority to decide the Department's cases subject 
to 5 U.S.C. 556 and 557 has been delegated (7 C.F.R. 2.35), On 
October 5, 1987, the case was referred to the Judicial Officer for decision. 



1 Seegeneraffy Campbell, The Perishable Agna^ralCommod.ties Act Re^ 
En 1 Davidson, Agricultural Law, ch. 4 (1981 and 1987 Cum Supp), and Becker nd mitten, 
Perishable Agricultural Commodities Act, in 10 Harl, Agricultural Law, ch. 72 (1980). 






Slockyards Act regulatory program) 



ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION 

Preliminary Statement 



received, and cepted g Tn imefsS r JUne m6 ' "** V"****- 
185 lots of fruits and vo^r, wi UK . e ! g " commerce > f <" sellers, 
bm fa led to mifc f,,n nf ' "" be ' n S P crish <*le agricultural commodities, 

total amount cf$l45,7 P 5S e "^P"* f "" agreed pUrchaSC P ricos . '" lhc 



not^LwTieuJfr Se 7r d " P0n rCSp ndent Which rom P""''' "- 1S 



of Fact 



, 
2. Pursuant n ' or ? i ! nto , West Virginia 26505. 

wai ssued "<^ L n M g P? 5 f lhe Act ' licellsc "*' 
annual buUerrnatHr M Ven ; ber " W71 ' s license s 

iheAaVus^Siw I November J M ' lm - P ursuant toSecti " "W rf 

license fee W) Whe " res P nde "t failed to pay the required annual 



^^^^^^^^^^^^^ 

ana veeetaKIpc all k: n . i 1 1 . ' ot-ijcij>, ioj iois 01 iriiiis 

make full paym^n nrornDtlvanh? ag " cultu [ al "mmoditiw, but failed to 
of $145,75UK greed P urchase P"ces, in the total amount 

Conclusions 



, 



MORGANTOWN PRODUCE, INC. 



ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER 

Under the Department's rules of practice governing formal adjudical 
administrative proceedings instituted by the Secretary, a respondent's fail 
lo file a timely answer or deny the allegations of the complaint constitutes 
admission of the allegations in the complaint and a waiver of hear 
Specifically, the rules of practice provide (7 C.F.R. 1.136(aVcV .: 



1.136 Answer. 

(a^ Filing and service. Within 20 days after the service of the 
complaint ... the respondent shall file with the Hearing Clerk an 
answer signed by the respondent or the attorney of record in the 
proceeding. . . . 

(b) Contents. The answer shall: (1) Clearly admit, deny, or explain 
cadi of the allegations of the Complaint and shall clearly set forth any 
defense asserted by the respondent; or 

(2) Stale that the respondent admits all the facts alleged in the 
complaint; or 

(3) State that the respondent admits the jurisdictional allegations of 
the complaint and neither admits nor denies the remaining allegations 
and consents to the issuance of an order without further procedure. 

(c) Default. Failure to file an answer within the time provided 
under 1.136(a) shall be deemed, for purposes of the proceeding, an 
admission of the allegations in the Complaint, and failure to deny or 
otherwise respond to an allegation of the Complaint shall be deemed, 
for purposes of the proceeding, an admission of said allegation, unless 
the parties have agreed to a consent decision pursuant to 1.138. 



1.139 Procedure upon failure to file an answer or admission of 
facts. 

The failure to file an answer, or the admission by the answer of all 
(he material allegations of fact contained in the complaint, shall 
constitute a waiver of hearing. Upon such admission or failure to file, 
complainant shall file a proposed decision, along with a motion for the 
adoption thereof, both of which shall be served upon the respondent by 
(he Hearing Clerk, 

Within 20 days after service of such motion and proposed decision, 
the respondent may file with the Hearing Clerk objections thereto. II 
the Judge finds that meritorious objections have been filed 
complainant's Motion shall be denied with supporting reasons, I: 
meritorious objections are not filed, the Judge shall issue a decisior 
without further procedure or hearing. 



LWl Procedure for Hearing. 

(a) Bequest for Hearing. Any party may request a hearing on the 
facts by including such request in the complaint or answer, or by a 
separate request, in writing, filed with the Hearing Clerk within flic 
time in which an answer may be filed. Failure to request a hvarine 
within the time nllnwri f or th e filing of th **?*.. ... . & 



141 of h e 



a "^ ations vir ""% identical lo the 
rs P" dent>s att ='"io" to "Sections 1.136, 1.139 , 
(1 CFR t136 ' t13 



complaint. The letter states: 



of 



within 



efinite sIatemen( of 
se, and should 

r tl0 n S of lhe 
specifically to any allega ion of 

adm.ss.on of such allegation 



to any allegation 



governing proceeding under 

ff" *?? h , avo 20 ^y 8 ^> m lhc 
thc Hearil ^ Cicrk ilrl 
a . nswor sllolllcl c "" (i ' i " 

constltllte the grounds of 

r explain each of (he 

. f . an a r s y cr to OI ' P 1 ^"' 
c mplamt shall constUulo nu 



of 

a Waiver , on tofib such a reqest 



eJ dec. s . 0ns have been set as idc 



MORGANTOWN PRODUCE, INC. 



for good cause shown or where complainant did not object/ respondent has 
shown no basis for setting aside the default decision here. 4 



In re Veg-Pro Distributors, 42 Agric. Dec. 273 (1983) (remand order), final decision, 42 
Agnc. Dec, 1173 (1983) (default decision set aside because service of Ihe complaint by 
registered and regular mail was returned as undeliverable, and respondent's license under the 
Perishable Agricultural Commodities Act had lapsed before service was attempted); In re 
J. Fleishman & Co., 38 Agric. Dec. 789 (1978) (remand order), final decision, 37 Agric. Dec. 1175 
(1978); In re Christ, L.A.W.A. Docket No. 24 (Nov. 12, 1974) (remand order), final decision, 35 
Agric. Dec. 195 (1976); and see In re Gallop, 40 Agric. Dec. 217 (order vacating default decision) 
(case remanded to determine whether just cause exists for permitting late answer), final 
decision, 40 Agric, Dec. 1254 (1981). 

4 See In re Johnson-Halllfax, Inc., 47 Agric. Dec. (Feb. 22, 1988) (default order 

proper where answer not filed); In re Charton, 46 Agric. Dec. (July 13, 1987) (default order 

proper where answer not filed); In re Bejarano, 46 Agric. Dec. (June 22, 1987) (default 

order proper where timely answer not filed; respondent properly served even though his sister, 
who signed for the complaint, forgot to give it to him until after the 20-day period had expired); 

Jn re Zedric, 46 Agric. Dec. (June 10, 1987) (default order proper where timely answer not 

filed); In re Schmidt & Son, Inc., 46 Agric. Dec. (Apr. 6, 1987) (default order proper where 

timely answer not filed); In re Carter, 46 Agric. Dec. (Mar. 3, 1987) (default order proper 

where timely answer not filed; respondent properly served where complaint sent to his last 

known address was signed for by someone); In re McDaniel, 45 Agric. Dec. (Dec, 8, 1986) 

(default order proper where timely answer not filed); In re Mayes, 45 Agrie. Dec. (Nov. 24, 

1986) (default order proper where answer not filed), rev'd on oilier grounds, No. 87-3066 (6lh 

Clr. Dec. 18, 1987); In re Pieszko, 45 Agric. Dec. (Nov. 12, 1986) (default order proper 

where answer not filed); In rcffenson, 45 Agric. Dec. (Nov. 4, 1986) (default order proper 

where answer admits or does not deny material allegations); In re Gitffy, 45 Agric. Dec, 1742 
(1986) (default order proper where answer, filed late, does not deny material allegations); In 
re Binser, 45 Agric. Dec. 1727 (1986) (default order proper where answer does not deny material 
allegations); In re Northwest Orient Airlines, 45 Agric. Dec. 2190 (1986) (default order proper 
where timely answer not filed); In re Schwartz, 45 Agric, Dec. 1473 (1986) (default order proper 
where timely answer not filed); In re Midas Navigation, Ltd., 45 Agric. Dec. 1676 (1986) (default 
order proper where answer, filed late, does not deny material allegations); In re Gtitman, 45 
Agric. Dec. 956 (1986) (default order proper where answer does not deny material allegations); 
In rcDaul, 45 Agric. Dec, 556 (1986) (default order proper where answer, filed late, docs not 
deny material allegations); In re Eastern Air Lines, Inc., 44 Agric. Dec. 2192 (1985) (default 
order proper where timely answer not filed; irrelevant that respondent's main office did not 
promptly forward complaint to its attorneys); In re Cuttone, 44 Agric. Dec. 1573 (1985) (defaull 
order proper where timely answer not filed; respondent Carl D. Cuttone properly served where 
complaint sent by certified mail to his last business address was signed for by Joseph A. 
Cuttone), tiffd per cutiam, 804 F.2d 153 (D.C. Cir. 1986) (unpublished); In re Corbeit Farms, 
Inc., 43 Agric. Dec. 1775 (1984) (default order proper where timely answer not filed; respondent 
cannot present evidence that it is unable to pay $54,000 civil penally where it waived its right 
to a hearing by not filing a timely answer); In re Jacobson, 43 Agric, Dec. 780 (1984) (defau t 
order proper where timely answer not filed); In re Buzun, 43 Agric. Dec. 751 (1984) (default 
order proper where timely answer not filed; respondent Joseph Buzun properly served where 
complaint sent by certified mail to his residence was signed for by someone named Buzun); //t 
re Mayer, 43 Agric, Dec. 439 (1984) (decision as to respondent Doss) (defaull order proper 
where timely answer not filed; irrelevant whether respondent was unable to afford an attorney), 
appeal ^missed, No. 84-4316 (5th Cir. July 25, 1984); In re Lambert, 43 Agnc. 1 Dec 46 (1984 
(default order proper where timely answer not filed); In re Berhow, 42 Agnc. Dec. 764 (983) 
(default order proper where timely answer not filed); In re Rubel, 42 Agnc. Dec 800 (1983) 
(default order proper where respondent acted without an attorney and did not understand the 
consequences and ope of a suspension order); In re Pastures, Inc., 39 Agnc. Dec^95,^396-97 

457 



The requirement in the Department's rules of practice that respondent 
deny or explain any allegation of the complaint and set forth any defense in 
a timely answer is necessary to enable this Department to handle its large 
workload in an expeditious and economical manner. During the lasl fiscal 
year, the Department's five ALJ's (who do not have law clerks) disposed of 
496 cases. The Department's Judicial Officer disposed of 42 cases. In a 
recent month, 66 new cases were filed with the Hearing Clerk. 

The courts have recognized that administrative agencies "should be 'free 
to fashion their own rules of procedure and to pursue methods of inquiry 
capable of permitting them to discharge their multitudinous duties. If 
respondent was permitted to contest some of the allegations of fact at this laic 
date, or raise new issues, all other respondents in all other cases would have 
to be afforded the same privilege. Permitting such practice would greatly 
delay the administrative process and would require additional personnel. 
However, there is no basis for permitting respondent to present matters by 
way of defense at this time. 

Even if respondent was permitted to present a defense at this late (late, llic 
matters presented in the appeal would be to no avail. The complaint alleges 
that respondent failed to make full payment promptly to 10 sellers in the total 
amount of $145,751.04 for its purchase of 185 lots of perishable agricultural 
commodities. Respondent argues on appeal that two of these sellers, 
Consumers Produce Company and Golden Triangle Packing Company, filed 
suit in federal district court to preserve their statutory trust rights. But that 
docs not preclude the Department from filing a disciplinary complaint alleging 
violation of 2(4) of the Perishable Agricultural Commodities Act (7 U.S.C. 
499b(4)). Furthermore, respondent's appeal acknowledges that the federal 
court action was resolved through the entry of an order in which responded! 

T J Sr Bme !! 1 ( these two scllcrs admittin S ^at it owed a total amount 
ol Ul.787.86. That the settlement in the statutory trust case was for an 
amount $5,821.66 less than that alleged in the administrative complaint is of 
no concern here. Significantly, there is no showing that this $9L787,% 
judgment has been satisfied. 

Respondent, in its appeal, offers to confess judgment to the amounts 
alleged in the comp amt owed to the sellers exclusive of Consumers Produce 
Company and Golden Triangle Packing Company, totaling $48,141,52. 
However, this is not an action to render judgment against respondent in fiwor 
the un paid sel ers Rather, the decision and order here only publishes the 
fact that respondent has failed to make full payment promptly as alleged. 



4 (...continucd) 

r 






PENN-LA-TEX MUSHROOMS, INC 



Respondent's appeal essentially admits the facts alleged in the complaint. 
The two sellers who were forced to file suit to protect their statutory trust 
rights obviously were not paid promptly and in full even if they have settled 
their claims. Respondent admits that the other sellers remain unpaid. 

For the foregoing reasons, the following order should be issued. 

Order 

A finding is made that respondent has committed willful, flagrant and 
repealed violations of 2 of the PACA (7 U.S.C. 49%), and the facts and 
circumstances set forth above shall be published. 

This order shall become effective on the 30th day after service on 
respondent. 



In re; PENN-LA-TEX MUSHROOMS, INC. 

PACA Docket No. 2-7541. 

Decision and Order filed August 26, 1987. 

Failure to make full payment promptly for produce and maintain statuory trust - Failure to file 
answer. 

Andrew Y. Stanlon, for Complainant. 

Steve Tiemann, for Respondent. 

Decision and Order issued by Victor W. Palmer, Administrative Law Judge, 

DECISION AND ORDER 

This is a disciplinary proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.) hereinafter 
referred to as the "Act", instituted by a complaint filed on May 28, 1987, by 
the Deputy Director, Fruit and Vegetable Division, Agricultural Marketing 
Service, United States Department of Agriculture, It is alleged in the 
complaint that during the period June 1985 through April 1986, respondent 
purchased, received, and accepted, in interstate and foreign commerce, from 
Iwo sellers, 17 lots of fruits and vegetables, all being perishable agricultural 
commodities, but failed to make full payment promptly of the agreed purchase 
prices, in the total amount of $122,544.91, and failed to maintain the statutory 
trust interests of one seller in the amount of $36,605.20. 

A copy of the complaint was served upon respondent which complaint has 
not been answered. The time for filing an answer having run, and upon the 
motion of the complainant for the issuance of a Default Order, the following* 
Decision and Order is issued without further investigation or hearing pursuant 
to section 1.139 of the Rules of Practice (7 C.F.R. 1.139). 

Findings of Fact 

1. Respondent, Penn-La-Tex Mushrooms, Inc., is a corporation, whose 
address is 9241 LBJ Parkway, Suite 114, Dallas, Texas 75243. 

2. Pursuant to the licensing provisions of the Act, license number 852038 
was issued to respondent on September 27, 1985. This license renewed 



459 



annually, but terminated on September 27, WKfi mimi-mi , ,- . 

j?oActf7U&C499d(a))wl^ 

license fee. ' " lnt required annn 

3. As more fully scl forth in |>m<iigrn|>h 5 ,,r || lc ,..., . , , 
penod June 1985 (hrough April 1W, re, fp,,nd cm ! W 1 '"' lllri 8i 
accepted in interstate and foreign commerce, fro,,, iw , ' i^T* 011 ' 
and vegetables, all being perishable agricultural c.Z i'. ' , IO 'V' ffillil 

!^ 



^ 



REPARATION DECISIONS 



AJM FARMS, INC. v. AMERICAN FRUIT & PRODUCE CORP. 

PACA Docket No. 2-7182. 

Decision and Order filed February 3, 1988. 

Transportation - excessive period of time - protection agreement - Prompt resale - Failure to 
accomplish. 

Complainant was found to have breached contract relative to carload of carrots sold to 
respondent by shipping wrong size as to one-half of the load, however, no breach as to 
condition was found due to abnormally long transit time. The parties entered into a protection 
agreement following arrival of the carrots, however, respondent was dilatory in its handling of 
the carrots pursuant to the protection agreement. Complainant was awarded reparation. 

Complainant, pro se. 

Richard L. Katz, for Respondent. 

Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq,). ^ A timely 
complaint was filed in which complainant seeks an award of reparation against 
respondent in the amount of $13,963.00 in connection with the sale in 
interstate commerce of a railway carload of carrots. 

A copy of the report of investigation made by the Department was served 
upon the parties. A copy of the formal complaint was served upon 
respondent, which filed an answer thereto denying liability to complainant. 

The amount claimed in the formal complaint does not exceed $15,000.00, 
and the shortened method of procedure provided in section 47.20 of the Rules 
of Practice (7 C.F.R. 47.20) is applicable. Pursuant to this procedure, the 
verified pleadings of the parties are considered a part of the evidence in the 
case, as is the Department's report of investigation. In addition, the parties 
were given an opportunity to file evidence in the form of sworn statements, 
however, neither party did so. Respondent filed a brief. 

Findings of Fact 

1. Complainant, AJM Farms, Inc., is a corporation whose address is P. O. 
Box 5001, Chandler, Arizona. 

2. Respondent, American Fruit & Produce Corp., is a corporation whose 
address is 1335 N.W. 21st Terra Street, Miami, Florida. At the time of the 
transaction involved herein, respondent was licensed under the Act, 

3. On or about June 5, 1985, complainant sold to respondent through 
Farmers Potato Distributing Co., Inc., of Jacksonville, Florida, acting as 
broker, one railway carload of 85% U.S. No. 1 Arizona carrots, consisting of 
1,100 master bags, each containing 48 one pound bags (4-5 count) at $4.00 per 
bag and 1,100 50 pound bags of jumbo carrots at $6.50 per bag; plus 650 per 
bag for hydrocooling, and 20<J per bag for brokerage. In addition, there was 
a charge of $22.50 for a temperature recorder and $300.00 for ice. 



461 



4. On June 7. 198<| *t s. 
carrots described Wo 
shipped instead of 1 100 The 
June 18, 1985. The car wls p 
mspection was made on Fr dav 
inspection report thecar w^J' 
60 ' R 6th layer, and ' F bo 
covered 1,100 48 pound master 
spection further^tated ~ 



ca ots wer 

i ' Florida ' 

June 19 ' and a 
:4 a ' ra ' According to Ih, 
were 34? P. top 

that the i 



6 to 7 carrots Mr h u 

in diameTe Generallv'y " 
QUALITY AND COTOITION F 
misshapen, poorly trimmed a 



ranges 2 to 44% in 
each lot is Waterl st 
lower 8 layers 

No'Tor u 

Confirmation called for 4 to 5 
nearest doors and upper 
REMARKS' Count 
amount 




3 / 4 t0 ! V2 inches in 
m le "S th ' Ran 8 es 5 to 11, 
??""y 1 1/4 to 1 1/2 

m Ien 8 th ' 
-Grade defects average 3% 

fresh 



n ne ' avera S e 15% - 

Va " OUS sta S es and occurring mostly in 

re " uire . m ^ but fails to grade U.S. 

reSP p'? y ^ C mt of condilio "- 
. Restnc ! ed ' 2 stacks each side 
m remain der. 

re q ,,es, 



resul 



carrots. Complainant asked 
claim with the railroad. 



the 

3S necessar y on lllc 
ms P e ctor be called to set up a 



hour, at which point the 
until tL end of 



fallin g ^mediately to 
., e next 24 h "> 
PPOX " ately *> until about " "Oil, 

belWee " 30 



and 
carrots and 11% d^cay m S?,"" 15% d a y - ^ jumbo 

Therep^no^^^^ 27, 1985, at 7:45 a.m. 

F. top, 80 F. 6th layer, and SO" Fh^^ n ted tem P^'^ 
applicant stated that 8O ^master h a r ?"', Accordin S to * report, "' 
stated to be as follows "*" remamed in th e car. Condition was 



AJM FARMS, INC. v. AMERICAN FRUIT & PRODUCE CORP 

Upper 3 laver bags- Generally firm. Decay ranges 4 to 6% in most 
samples in many none, average 3% Watery Soft Rot. Lower 9 laver 
bags and incomplete stacks-Decay ranges 20 to 100%, average 75% 
Watery Soft Rot generally advanced and leaking. 
REMARKS: Applicant states Lower 9 layer bags and incomplete 
stacks to be dumped. 

9. Respondent rendered an undated accounting showing gross proceeds 
from the sale of 400 master bags in the amount of $2,399.75 or an average of 
$6.00 per bag; and gross proceeds from the sale of 1,130 bags of $9,041.25, or 
$8.00 average per bag. Freight was shown at $7,523.00, dump certificate 
$35.00, inspection fee $42.00, a dumping charge of $450,00, and a handling 
charge of 750 per bag for 1,530 bags or $1,147.50. Net proceeds were shown 
as $2,243,50, and such amount has not been paid to complainant. 

10. The formal complaint was filed on February 20, 1986, which was within 
nine months after the cause of action herein accrued. 

Conclusions 

Complainant seeks to recover the entire purchase price for the carload of 
carrots. Respondent, in its answer, asserts that complainant breached the 
contract by delivering merchandise that was not of the kind, quality, grade and 
size of commodity called for in the contract of sale. Respondent also asserts 
that complainant breached the contract by improperly loading the merchandise 
in the railcar to permit proper air circulation and icing. Respondent's answer 
was signed by its attorney and there is no sworn statement in the record al 
any point by any individual associated with respondent who had personal 
knowledge of the transaction in question. However, the Department's report 
of investigation contains an unsworn statement from a Hugo Acosta on the 
letterhead of respondent corporation. While there is no showing as to what 
position Hugo Acosta occupies with respondent, it is evident from the 
statement itself that Mr. Acosta had personal knowledge concerning the 
transaction and was closely involved in such transaction, Mr. Acosta's 
speculation concerning the source of the damage to the carrots differs 
markedly with the defense set forth by respondent's attorney. In his 
statement, Mr. Acosta states, "Apparently the car ran cold and didn't allow the 
$300.00 worth of top ice to melt, consequently poor circulation occurred and 
heated some of the carrots." We see no need to join in the speculations of 
respondent and its attorney concerning this matter since it is obvious that the 
railway car was in transit an abnormally long period of time, thus voiding the 
suitable shipping condition warranty. Se&Harvest Fresh Produce, Inc. v. Clark- 
Ehre Produce Co., 39 Agric. Dec. 703 (1980). _ 

The record clearly establishes that respondent is correct in its first defense 
in that complainant failed to furnish the size of carrots called for by the 
contract in regard to the 1,100 master bags. However, the statement by Mr. 
Acosta makes it clear that the parties reached a settlement on June 21, m 
regard to this breach, as well as in regard to any supposed breach concerning 
conditions of the carrots. The terms of this settlement were that respondent 



463 



However, the second ferW 
1985 a 

8 



27, 800 



complainant. 
on the morning of June 27 



of car 

" 



, 
" of the carrots. On June 



bags in thVlowegver lot 



states that only the 
* ' h m ' !mm 



from the 



agreement, such a fee is not a lowable 



n 

I! nder " P rotcctio11 
M ' K "' fars " 



, 

i, Tf M ?' K "' fars " & 
: , AIs0 ' the dumping fee of $450.00 



a owa 

ZerilliCompmy, 9 Agric ec 1230 rt 
must be disallowed and I m n i' , ( - 
respondent"' Sn "ng nThTo ^ 
respondent. The total an,? u" u 
respondent to 'orn c ra Ch 

amo,nt includesThe $ n ,. ' 

proceeds of sal afterxo of tt ^^T T 1 ^ a " d " 1C " e 
Respondent's failure to oav r^nl , \ rges for handli "6 and dl P i "E 
2 of the Act CvK^L^ T?^ am mtis a la ' f section 
Interest. reparation should be awarded to complainant will. 



. 
.50 which was never paid by 

t0 be due and "S f"' 
is $8 ' 041 ' 00 ' 

a " d " 1C " et 



to 



per annum from . 

Cop,es of this order shall be served'upon the parties. 



the rate f 



Order of Dismissal filed February 1, 1988. 
Order of Dismissal issued by Donald A, 



This is 
Commodities 



;, INC. 



ORDEROF DISMISSAL 

the Perishable Agricultural 

l i' s - c> 4 ". a et *> A (ime >y 

seeks reparation against respondent 



CA BEVANS v. LYNN JOSEPHSON PRODUCE, INC. 

in the amount of $7,082,50 in connection with transactions involving the 
shipment of perishable agricultural commodities in interstate commerce, 

A copy of the formal complaint was served on respondent. Respondent 
filed an answer to the complaint indicating that a settlement had been reached 
by the parties and, in support of such contention, filed a copy of the 
settlement agreement signed by the complainant. Settlement between the 
parties having been reached, no further action is warranted. 

Accordingly, the complaint is hereby dismissed. 

Copies of this order shall be served upon the parties. 



C, A. BEVANS v. LYNN JOSEPHSON PRODUCE, INC. 

PACA Docket No. 2-7270. 

Decision and Order filed February 17, 1988. 

Consign ment-Burden of Proof-Failure to Account-Damages. 

Where consignee fails to account and fails to demonstrate that produce was without commercial 
value, it was liable to consignor for fair market price. 

Complainant, pro se. 

Respondent, pro se. 

Edward M. Silverstein, Presiding Officer. 

Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding brought pursuant to the provisions of the 
Perishable Agricultural Commodities Act, 1930, as amended (7 U.S.C. 499a 
et seq.\ A timely complaint was filed in which complainant seeks reparation 
in the amount of $11,400.26 in connection with three transactions involving 
onions, a perishable agricultural commodity, in interstate commerce. 

Each party was served with a copy of the Department's report ot 
investigation. Respondent also was served with a copy of the complaint, and 
filed an answer thereto denying any further liability to complainant with 
respect to the subject transactions. 

Since the amount involved herein is less than $15,000.00, the shortened 
procedure, provided in section 47.20 of the Rules of Practice (7 C.F.R. & 
47.20), was followed. Under this procedure, the Department's report ot 
investigation is considered as part of the evidence in the case, as are the 
verified pleadings of the parties. In addition, the parties were given the 
opportunity to submit further evidence by way of verified documents. 
Complainant filed an opening statement, respondent filed an answering 
statement, and complainant filed a statement in reply. Respondent, also, filed 
a brief. 



Findings of Fact 

1 Complainant, C. A. Bevans, is an individual whose mailing address is 
Route 1, Box 1470, Harper, Oregon 97906. 

2. Respondent, Lynn Josephson Produce, Inc., is a corporation whose 
mailing address is P.O. Box 579, Payette, Idaho 83661. At all material times, 
respondent was licensed under the Act. 

3. On or about October 22, October 25, and November 7, 1984, in the 
course of interstate commerce, respondent received a total of 113^ bins of 
white and red onion, on consignment, from complainant. Each bin weighed 
1,350 pounds, and the total weight of the onions, therefore, was 153225 
pounds. 

4. The fair market value of the onions was $5.00 f.o.b. per 50# sack. 

5. The parties agreed that complainant would receive, as payment for his 
onions, the f.o.b. price less a $2.00 per 50# sack packing charge. 

6. Respondent has paid complainant $6.00 per bin for eight bins of Ike 
subject onions, or $48.00.' 

7. An informal complaint was filed on March 20, 1985, which was within 
nine months after the causes of action herein accrued. 

Conclusions 

Respondent does not dispute that it received 113% bins of onions on 
consignment from complainant. As a consignee, respondent was obligated to 
promptly and properly sell the onions which it received on consignment and 

LS^rTT*?, 1116 com P lainant for *em, but it appears thai 
respondent, at least, failed to account to complainant for 105^ of the 113% 



A .^ c f lved f m Complainant on consignment. Respondent's 

^^^ 201 ^^^ 13 ^^ 499b >< ^ho Bonded 
rouce v. ann Market Service, 42 Agric. Dec. 1679, 1681 (1983). Having 

T"? f r the T 10115 * reCeived ' ^Pondent is liable fa? 
UC Ie j* 3ny Char 8 es which ma X be properly assessed 



1175 > (^1). In the instant case, as 
that 105 ^ bin. of tlie 



t. 

hat thenS Unmerchan 1 t f ble - Respondent has the burden of 

be sold> se 



, 

proving its affirm^ /f u ( 968): a res P on dent has the burden of 
As nc ted S1 ", SCS b ? a P re P"<lerance of the evidence. 

bins refer ed SS^W? ^-^ WUh the CXCe P tion of ** ^ 
the were n unmeXSl ***?>* ^ ft dum P ed the onions tc 
^d^eEo^SSS C ltl ??' I f owww ' nPondent has not 
poor a ^J^^^^^^ ^^^^^^^^ 

inconclusive,^. , it offers wJSw'r , ^l"" 06 which il does offer is 
had freeze dam 4 and Tl \ re ? orts to show that the onio "s may have 

evidence, such Ts f fedelSn. r been ., Wet ' but k has not offer ^ 
en as a federal mspect.on certificate, by which we could conclude 



"* * <W Parent for lhese eight bins . 



C.A. BEVANS v. LYNN JOSEPHSON PRODUCE, INC. 

that the onions were damaged. 2 In view of that, we conclude that respondent 
has failed to show that any of the onions it received from complainant were 
not merchantable. .1-1 j 

Moreover, respondent has failed to prove its allegation that it dumped 
10533 bins of the subject onions. See 1 C.F.R. 46.22: a consignee is required 
to keep a clear and complete record showing justification for dumping of 
consigned produce; if more than five percent of a shipment is dumped, 
adequate evidence must be obtained to prove that the produce was without 
commercial value. 3 Respondent did show that, from time to time, it dumped 
onions. However, the onions which it showed were dumped were never 
identified as the onions in question. , , 

Since respondent has failed to show that the onions it received on 
consignment from complainant were without commercial value and had to 
be dumped, we must hold it liable to complainant for the fair market value 
of the onions less the $2.00 per 50# sack packing charge on which the parties 
agreed, and less any other charges which the respondent was required to hold 
back from such payment for payment to third parties. We, further, horn mat, 
based on the Idaho Potato and Onion Report, Federal-State Market News 
Idaho Falls, Idaho, the fair market value of the onions which the respondent 
should have received was $5.00 f.o.b. per 50 # sack. The evidence, also 
reflects that each bin of onions which respondent received from complainant 
weighed an average of 1,350 pounds. Based on the above, and on an average 
packout rate of 83%, 4 respondent should have been able to sell 2,848.5 sacks 
of onions. 5 At $5.00 f.o.b. per 50# sack, the gross sales which respondent 
should have realized is $14,242.50. Subtracting from thu i, the $2 ,.00 per sack 
packing charge ($5,691.00), less a storage charge of $1,186.50 the Malhcur 
County Onion Growers charge of .060 per cwt. ($8.55), the Idaho-Eastern 
Oregon Onion Assessment of 7$ per cwt. ($99.70), a Maggot Assessment of 



1 -me record does contain an unverified statement from a B.I Pf f * ho cl "* 
a "USDA Inspector of Fresh Pn.it and Vegetables; in which he indicates that ^c saw a lot of 
white onions which he understood were complainant's onions on some mwpc iofied date 
November 1984, and states that the onions he saw did not meet grad le jcqu remen, As the 
document is unsworn, docs not properly claim to have seen any d on^ns In thi S reg ard we 
note that Page docs not claim to have seen any red onions ^' te h' ^ ^U 
onions complainant shipped to respondent), does not specify the date on which the onions were 
viewed, and is not an official certificate, it has no probative value. 

3 Also, see C.F.R. 46.23 which describes "Evidence of Dumping." 

Complainant concedes that some of the onions would have been lost in the packing 
process, 

* 113.5 bins delivered, less 8 bins already accounted for (105.5 bins), multiplied by the 
weight (1,350 pounds) of the bins (142,425), divided by 50 (2,848.5). 

6 Complainant concedes respondent is entitled to $1,186*) in storage charges. 

467 



^^^ffl-^pSLtsr of - 05 * P 7^ ($m >' fc - 






Copies of this order shall be served^upon t he parties. 



PACA Docket No. 2-7117 

Decision and Order filed Febm.^ 4, 1988. 






f -' he oods ' but 

rate by .he preZd er an ce n? X " mstallmeilt >'. he had the burden 



- entanswer an d .n o B 

statements and therofore^t part of .Je^d e nl ( S subse( ) ucn t statements were not sworn 

SW* S a ' fCgalion thal a P siuTw 5? Wa , S ' ' heref0re ' " Cvidcnce 10 S W 
Pay full contract price, F y sctlcdulc was a g^ed upon. Accordingly, he is IJalile (o 

Complainant, pro se. 

Respondent, pro se. 

Peter V. Train, Presiding Officer 

Dm 



DECISION AND ORDER 

This is a rpnar t- Prelimina ry Statement 



aseduc 

referred to as the Act. A timelv orlnl "', ' ,, 4! ? a c/ ^' hereinafter 
seeks a reparation award aS r ?' a "' " aS filed in which complainant 
connection with the sale oS 'ad ?nf ? ' he amount of >- "' 
. A copy of the formal coCan^ t ^, avocad s "'erstate commerce 
mvestigation were served mo? r?l A Py f the De P" r "ent's ^Prt 
'" P A 



of 
the 



of Aevo s aegedtTa < a"n ?/ " ""^ he admitted the P" rcl 
allowing him to pay for the avotlTLf^T' Was ^bsequently reached 
S, nce the amount claimed Sd'-^ ' ^ * P^-'schedule. 
shortened procedure proS for wJF" ^ n t eMeed *15,000.00, the 
C.F.R. 47.20) apples. P ursU anu n !, 'T 47 - 20 f the Rul f ^clice f 
^ opportunit^ to submit a dd^L-5 r Cedure ' th e parties were given 
statements. Complainant filed ^S rt^ '"^ hm l rerified 
Respondent did not submit "nJ , ^^ .^ emeati .^ 'hree employees. 



CALAVO GROWERS OF CA v. BLAS S. CATALAN! 

Findings of Fact 

1. Complainant Calavo Growers of California, hereinafter referred to as 
complainant, is and at all times material herein was, a corporation whose 
mailing address is Box 3486, Terminal Annex, Los Angeles, California 90051. 

2. Respondent Bias S. Catalan!, hereinafter referred to as respondent, 
was at all times material herein doing business as Bias S. Catalan! Brokerage 
whose mailing address is Suite 242, 1500 Zarzamora Street, San Antonio, 
Texas 78207. 

3. Both parties are, and at the time of the transactions involved herein 
were, licensed to do business under the Act. 

4. On April 19, 1985, complainant sold to respondent two loads of 
avocados. Invoice number 1141606R1 pertains to the shipment of 521 cartons 
at a price of $5.20 per carton or a total of $2,709.20, Invoice number 
1044995R1 refers to the shipment of 1,159 cartons at a price of $5.20 for a 
total of $6,026.80. The total of the two invoices was $8,736.00. 

5. Respondent received and accepted the avocados, but has failed to pay 
complainant. 

6. The formal complaint was filed on November 22, 1985, which was 
within nine months after the cause of action herein accrued. 

Conclusions 

This case involves a dispute over whether the parties entered into an 
agreement allowing respondent to pay pursuant to an installment payment 
schedule. Respondent claims that he made an arrangement with a former 
employee of complainant to pay his debt on an installment basis. As the party 
alleging modification of the contract, respondent has the burden of proving by 
the preponderance of the evidence the existence of an agreement to make 
installment payments and the specific terms thereof. F.H. Hogiie Produce 
Company v. M. Singer's Sons Corp., 33 Agric. Dec, 451 (1974) Respondent has 
offered various statements asserting that an agreement was reached with a Mr. 
Hurst and then subsequently reaffirmed in a conversation with David 
Freistadt, complainant's president. None of these statements, including 
respondent's answer, are verified. They are, therefore, not properly in 
evidence. 9 C.F.R. 47.20(a); H. & U. Fujishige v. Mike Phillips Enterprises, 
Inc., 30 Agric. Dec. 1095 (1971) Calavo, on the other hand, has filed a sworn 
statement from Mr. Freistadt per month commencing in April 1986, he never 
agreed to such a plan. In an affidavit, Jerry Freimund, Assistant Treasurer, 
also denied the existence of such an agreement. Freimund's statement reflects 
not an agreement to accept installment payments, but rather a series of 
attempts by Calavo to recover payment and to ascertain when payment would 
be made. Respondent filed no rebuttal to these affidavits. 

Respondent was informed in a letter dated July 28, 1986, that because his 
answer was unverified, it was not part of the evidence as he was given an 
opportunity to file a verified answering statement in support of his pleading, 
but he did not do so. Since respondent has submitted no evidence in support 
of its pleading in accordance with section 47.20 of the Rules of Practice, we 
can only find that respondent has failed to sustain its burden to show an 



469 



rv , - 

and therefore able fohf " ^ ff "?"" had the answer bee 



the entire 

is a violation 



. te f .' his order ' ^spondent shall pay to 

thereon at ehe ""* 13 



is Order shall be served upon the parties. 



Decision and Order filed February 3, 1988. 

Agency - Burden of proof - Failure to sustain - Dismissal 



aT!h^ s S uash , ? to an unverified oral 

employee of, respondent aTd rSt 13!! yUI!C 'L 0n ^ ( f ^^ as an n & cnt or 
participation in thrp U rchas e anHrS?-r u "'?' SUCh ra P res entation as well .is any 
complainant's fal^l?^^',; f lhe shi P mcnt - lhe mpWnt is dismissed ,,pon 



Complainant, pro se 

, n p L ; f? 118 * for Po 
c Paul, Presiding Officer. 
c^o 



DECISION AND ORDER 
Tim i. . Prclim >narj> Statement 

Commodties AcTT9M n a r a OCeed ; n ^" ' he Perishable Agricultural 
complaint was ffle'd k whth " d ,^ (? U ' S ' C - 499a et se ti- A timely 
amount of $9354791 1 T^l* Seeks a ^paration award in (he 
interstate commerce C " neCt ' On Wlth a shi P m ( f zucchini squash in 



A ^ tr XompS ti0n W T ""^ UP " each of the P a "- 
answer thereto, denying Habitoy d UP " res P nde t. *h filed an 



f 

47.20 of the rules of practke f7 C F R 47 9m . proce ^, P rovid ^ Action 

procedure, the parties were BVn^ 0) ' S appicable ' p uant to such 

evidence in support of thrir^I ? opportunity to submit additional 

upport ot the,r respechve positions by means of verified 



CAL/MEX DISTRIBUTORS, INC v. DELRAY PRODUCE CORP 

statements. Complainant filed an opening statement. Respondent did not file 
an answering statement. Complainant filed a brief. 

Findings of Fact . 

1. Complainant, Cal/Mex Distributors, Inc., is a corporation whose 
address is P.O. Box 1757, Chula Vista, California. 

2. Respondent is a corporation, Delray Produce > Corporat on whose 
address at all times material herein was P.O. Box 968, Ppmpano Beach 
Florida. Although respondent ceased business operations in 1985, ana is 
license under the Act terminated on February 13, 1986 it wa actively 
operating under its PACA license at the time of the transact, on herein. 

P 3. On the morning of January 21, 1985, Earl Tachiki, the v^eadrat 
of Otay Packing Co! Chula Vista, California telep^nedcorar^amants 
president, Robert Villalobos, and advised him that a Nat Singer would be 
contacting him in regard to shipping a load of zucchini squash to Delray 
Produce Corp., in Pompano Beach, Florida. wn rVina 

4. Mr. Singer had orally represented to Mr Tach.ka hat ^"* 
in conjunction with Delray Produce Corp., and that Delray Produce Corp., 

would be the receiver. . Mf _,._,i : n t n an 

5. Mr. Singer subsequently telephoned complaman and ente *" 
oral contract for the purchase on a f.o.b. basis of one trucklo-ad h ' n 
squash at an agreed price of $7.65 per lug plus Ryan re "fer. M . Smge 
also requested that complainant acquire a truck at a ^'^ 
2,600 to carry the squash to Delray Produce Corp., m Pompano Beach, 



6.The language used by Mr. Singer in this telephone "P*"'^ 
part of the record in this proceeding, however , complamant . present Mr 
Robert Villalobos understood him as representmg that he f s actmg as an 
agent of Delray Produce Corp. Complamant, m confom ty wft m 
understanding, invoiced ^shipped some M^^"^^ 

^ptn^ptfof 1 ^^ 

January 24, 1985, and arrived at respondent's P'^^^rf the shbment 

Beach/Florida, at 9 a.m. on Monday, January 28, 1985, where the sn.pment 

WaS 7 rei Noce of this rejection was communicated to complainant on January 
28, 1985, by a telegram with the typed signatures "Nat . Smger K. Hegv^c 
above respondenFs' P.O. Box number and zip code. The bas,s 
rejection was stated as follows: 



customer. 



8. Complainant responded to receipt of this telegram with a reply 
telegram, also dated January 2S, 1985, that stated "Not accepting rejection load 
1450 lugs zucchini squash disposed of load to minimize loss." This telegram 
was addressed to Delray Produce Corp., Attn. Nat Singer. 

9. ^ Respondent, by letter dated January 30, 1985, denied having purchased 
the rejected shipment stating "It was purchased by Nat Singer, who is not part 
of our organization. Please refer your invoice to him." This letter was signed 
by one Kenton Hajdic, an employee of respondent. 

10. The net proceeds realized by complainant from the sale of the rejected 
zucchini squash after payment of commission, freight and storage totaled 
$1,760.21, leaving $9,354.79 of the $11,115.00 purchase amount unpaid. 

11. The formal complaint was filed on May 10, 1985, which is within 9 
months after the alleged cause of action herein accrued. 

Conclusions 

Complainant alleges that respondent was the purchaser of the truckload 
of zucchini squash involved herein, that respondent improperly refused to 
accept delivery, and that complainant was damaged by such rejection in ihc 
net amount of $9,354.79. 

Respondent denies that it was the purchaser of this truckload, and also 
denies _that "Nat Singer," the individual who negotiated the sale whli 
complainant, was an employee or agent of respondent. 

As the moving party, complainant has the burden of proving, by a 
preponderance of the evidence, that the zucchini squash was purchased by 
respondent, that the refusal to accept delivery was unjustified, and that the 
actual damages suffered were as alleged. Complainant has sustained Us 
burden onfall points except that of the identity of the purchaser. 

The critical question that has not been satisfactorily answered by I lie 
evidence presented in this proceeding is who Nat Singer is and what his 
relationship with respondent was. Mr. Singer did represent to Mr. Earl 
Tachiki of Otay Packing Co., that he was working in conjunction with Defray 
Produce Corp., and that he and Delray would be the receivers. This is not a 
representation of employment by respondent, nor is it a representation as to 
who would be the purchaser. It may be a representation of participation in 
a joint venture or of the existence of a principal and agent relationship. If Ihe 
latter, it is unclear who the agent was, and who was the principal in such 
relationship. Mr. Robert Villalobos, president of complainant, has not 
asserted the^aclual wording of the oral representation he received from Nat 
Singer.^ It is _ reasonable to assume that he would have indicated in llie 
complaint, or in the opening statement he signed, if such oral representation 
had been materially different from the one made to Mr. Tachiki. Mr, 
Villalobos concluded that Mr. Singer had represented that he was acting on 
behalf of respondent and his subsequent actions were consistent with such an 
understanding. We cannot determine on the basis of the evidence presented 
m this proceeding that this understanding was justified. However, even if we 
were able to find that Nat Singer had orally represented to complainant that 
respondent was the purchaser of the zucchini squash, such a representation by 
itself would be insufficient to support a finding that respondent was the 
purchaser. It is the acts and conduct of the principal, and not those of a 
purported agent that must be relied on to show the agency. Central & South 

472 



CAL/MEX DISTRIBUTORS, INC v. DELRAY PRODUCE CORP 



American Imports Company v. West Indies Food & Importing, Inc. 34 Agric. 
Dec. 1015 (1975); Hunter Produce v, L. A. Potato Distributors, 31 Agric. Dec. 
1415 (1972); Paramount Citnts v. Central Washington Produce 23 Agric. Dec. 
256 (1964); Senini v. Fruit Supply Co. 19 Agric. Dec. 394 (1960). 

Complainant shipped the zucchini squash without verifying the authority 
of Nat Singer to act as an agent for respondent, and without reliance on any 
act or course of conduct by respondent that would have made Nat Singer 
appear to be respondent's agent. "The burden of any necessary diligence to 
ascertain the agent's authority rests on the party dealing with the agent." 
Pasco County Peach Association v. J.F. Solly and Company 146 F.2d. 880 (4th 
Cir. 1945). 

Complainant relies upon the telegram received January 28, 1985, from "Nat 

Singer" and "K, Hegvic" to establish agency. Anyone could have sent this 

telegram. The fact that respondent's address was given, and that Western 

Union may have received this telegram from respondents' telephone number 

is not sufficient to establish that respondent sent this telegram. Respondent's 

answer denies that Nat Singer was respondent's agent or employee. The 

name "K. Hegvic" is apparently a misspelling of the name Kenton Hajdic. 

Although, Mr. Hajdic was an employee of respondent at the time of this 

transaction and respondent represented in writing that Mr. Hajdic was 

authorized to handle sales for respondent, Mr. Hajdic expressly denied that 

this truckload was purchased by respondent in a letter dated January 30, 1985, 

which referred complainant to Nat Singer. The official license records 

maintained under the PACA do not show the name Nat Singer in connection 

with respondent or the produce market located at Pompano Beach, Florida. 

Although a PACA license was issued to a "Nat Singer" operating at New York 

City Terminal Market on July 30, 1985, there is nothing in the official records 

of the Department to link such licensee with respondent. Moreover, no 

inference adverse to respondent may be drawn from respondents failure to 

present a verified statement from Kenton Hajdic because of he closing down 

of respondent's business and discharge of its employees fol owing the death 

of respondent's president in April 1985. Since respondent s habiUty, it any, is 

predicated upon proof that respondent was the purchaser of t^ shipment 

involved herein, and since that has not been established by a preponderance 

of the evidence, complainant has failed to state a cause of action as to 

respondent. The complaint, therefore, should be dismissed. 

Order 

The complaint is dismissed. Copies of this order shall be served upon the 

parties. 



CITY SALES v - GEORGE 

PACA Docket No. 2-7067. 

Decision and order issued February 10, 1988. 

Thomas Oliveri, for Complainant. 

Clifford Hardy, Jr., for Respondent. 

George S. Whitten, Presiding Officer. 

Dtcwon and order issued by Donald A. Campbell, Judicial Officer. 

ORDER DENYING PETITION FOR RECONSIDERATION 



amera fh? m P lainant filed a f^m for reconsideration, and 
$8S4m R pnor , orde f s js t '""ease the award of reparation to 
?8? 1 S Ed . a Petki n f r ""^deration of the 
Th, !',v ^ reqUeS ^ g *"' the Julv 13 > 1987 ' rder * 
P I f " eCOnsideration is denied without service upon 

e uffi^T ' ? ^ . 47 ' 24 ^' as the 1 uestions raised ther " 
order Sufflcientl y "s,dered in the issuance of the December 9, 1987, 



n a ? dr f ed two i^ues which he argues were wrongly 
oro ecn Decen ; b . er V 987 ' rder ' The ""Wherries re sold with a 
D otec n^ en '" effCCt ; The order stated 'hat pursuant to this 
rri P ^r m ? nt 'J eSpOIldent had a fiduciar y dut y to handle th, 
the ,f a T ^ ^T 1 res P nde t violated this duty by negligently 
e " '" "i C Urse f his efforts to re ^ them, resulting in 
and more rapid deterioration. The order noted 

evou **$* Strawberries kept in the front cooler, 

whch a Tnw f a f eSSlbIe Customers, rather than the rear cooler, i, 
concluded ?r at ^r ra " re W U ' d be m0re ^"^istently maintained, and 
arautthat if h P ^ L m ^ d g%t storage. Respondent now 
S been ^ fl T^ 5 had bee " ^ in the rear cooler . they would 
to order nltpHS SSe , t0 TS"""" 1 and W U ' d " Ot have soli HoweTCr . 
fronTcooler o S Lntf mP f f fhe s ! r ? wberries could have been stored in the 
coobr The L,ln ' ^ mers ' th the bulk of the load s tred in the rear 
prope;. C nClUS10n that res P nd t's method of storage was negligent was 



"?**. res P onden ' that the December 9, 1987, 
resDondent nf , '^ ""* com P lainan t violated its duty to inform 

Z Sar)t0rage C0nditions for the strawberries. 



onons - tllOSC 

TUs amumen.TS ant ' " res P ndent is only a general produce house, 

should k ^xrl P/ f " P t U ^ Ve ' aS "7 Produce flrm handlin g strawberries 
beTnt at Sn, , W f * a ' strawbe s are highly perishable, and must 
for thrstraberT/ re / f JUS ' above , freezi ng. Further, the bill of lading 



to M degrees F 



f ,. , 

r P rl T com P laina t, which is part of the evidence 
temperature should be maintained at from 34 



CARLIN FOODS CORP v. WEST COAST PACKERS, INC 

For the reasons heretofore set forth, respondent has not presented 
sufficient grounds for reconsideration, and his petition is, therefore, denied 

The reparation awarded in the December 9, 1987, order, mcludmg interest, 
shall be paid within 30 days from the date of this order. 

_ - M .1 > i * if i . . 1 .. n + It a rtarMpc 



111 UG LJalU wit-" 1 ** -jw UUJD *m v t .-** .- -- ^ 

Copies of this order shall be served upon the parties. 



CARLIN FOODS CORP. v. WEST COAST PACKERS, INC. 

PACA Docket No. R-88-1. 

Order of Dismissal issued February 12, 1988. 

Thomas R. Olivcri, for Complainant 

George S. Whitten, Presiding Officer _,..,,,; 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer. 

ORDER OF DISMISSAL 

This is a reparation proceeding under the Perishable AgncuHu 1 
Commodities Act, 1930, as amended (7 U.S.C. 499a it seq A tmdy 
complaint was filed in which complainant seeks reparation again ri ^^ondent 
in the amount of $18,000.00 in connection with a transaction uwolvmg the 
shipment of strawberries in interstate commerce, Ru ip tfPr dated 

A copy of the format complaint was served on re sponden ^ ^ 
January 12, 1988, complainant notified the Department tha the part.es have 
settled complainant's claim. Complainant, in its letter of January 12, 1988, 
authorized dismissal of its complaint filed herein 

Accordingly, the complaint is hereby dismissed. t 

Copies of this order shall be served upon the parties. 



DEL RIO GROWERS, INC., v. ANTHONY GAGUANO & COMPANY, INC 

PACA Docket No. 2-7122. 

Decision and Order filed February 10, 1988. 

f Invoicc - P roof of contract 



terms. 



22S louS^inf'^r by , " P rc P nderance of (he evidence (hot Ihe 
orcca 10 a purchase cojitraci, the complaint must be dismissed. 



Complainant, pro sc. 

LcRoy W. Gudgeon, for Respondent. 

Sharlene W. Lassiler, Presiding Officer. 

and Order issued by Donald A. Campbell, Judicial Officer 



DECISION AND ORDER 
Preliminary Statement 

Perishable Agricultuni! 



Practice (7 C.F.R 472m i, r T, e '"^O" +'.20 of the Rules of 
Pleading of the ar iesf r fc ' * ' his . prOcedure - llle ^n" 



ng o te par ies r e con . - le 

"e D eparlment F s ^,5^StSr /n Lv den \ e '" " le CaSE ' 8S is 
opportunity to nio evidence nZSf I " ad J d ' t ' n ' the P arties llad thc 
filed neither an openin7 s tate"e n f n rK.T'I' edstatements - Coraplainanl 
statement and a brief "" 3 b " ef ' R ^P"^M filed an answering 



DEL RIO GROWERS, INC. v. ANTHONY GAGLIANO & CO,, INC. 

6, Gagliano objected to the terms stated on the invoice and returned 1 the 
oice to Del Rio on or about July 15, 1985, with a handwritten message 
sch reads as follows: 

"Gentlemen: As per arrangement with Ralph Jarson this load was sent 
to us with the understanding that these melons are to be sold for your 
account price to be established after completion of our sales, hiease 
adjust your records accordingly. Sincere, A. Gagliano, inc. 

7. Jarson sent a confirmation of sale to Gagliano on or about July 6, 1985, 
ich reads: 

To Del Rio Growers, Brawley, CA 

Confirms PURCHASE for account of Joe Pinto (Receiver) 
Shipped to: same City: Philadelphia 
Date Shipped: 7/4/85 by Truck Broker: Dawn 
Manifests: 1184 Juan Canary Melons 8's @1.50 
TNT 18870 22/50 



8. Gagliano objected to the terms stated on the <^^5 
returned lame to Jarson with a handwritten message wh.ch reads as follows 



shipped to us and Resold for account of shipper- 
to be established upon completion of our sales. 

Please send us new confirmation indicating same. 
A. Gagliano, Co., Inc." 



9. Gagliano sold the melons for the account oti ^ei iuo ^^ 

10. Gagliano remitted the net proceeds, $2^.UU, to ^e 

11. Del Rio filed a formal complaint on December 17, W*>> wn 
within nine months after the cause of action accrued. 

Conclusions n , 

This proceeding involves Del Rio's '^g^*^^ oral 

Rio alleges that it ^.^ <~^^^ * tered int a 

contract for sale negotiated by J ^ rson ;, Gas T ns on a consignment basis for 
contract for sale, but rather received the in whethef Del Rio sus tained its 
the account to Del Rio. The issue ne 

bUr ^ n ;i. rtv the complainant has the burden to prove by a 

As the moving party, the comp mu ga ^ & allegations of its complaint. 
preponderance of the evidence t he JL ir - / 1Q7 -i\ pel Rio did not sustain 
New York v. Sandier, 32 Agric. Dec. 702, /u^ ^ / > cQnsists of 1} the 

its burden in this case. The evidence su bmittea oy u^ ^^ .^.^ wWch 
invoice sent to Gagliano dated July ^, ^^^ messag e ( as set forth 
Gagliano returned on July 13, ^ OJ W11 



477 



a C fi a " of S a,e #1 390 from Jarson 
To Del Rio Growers, Brawley, CA 



s @ 
22/50 



*e pLK^C a", 'I 6 d "? ? presen < a b ~ 
oral contract between the pS whT ^ agreed Upon terms of an 
receive without objedion by the buverr^ mv ' c , e and the confirmation arc 
317 (1972); HanoJer Instill m 7, R ^* BI 5"' 31 A 8" c ' D - 311, 
The notation on the inSe rettnX; ?r n'p^ t 8 ^ ^ 655 ' ^ ( 1975 
th Rl b ' Gal 



m , , 

The notation on the ine retnX; r n'p^ t 8 ^ ^ 655 ' ^ ( 1975 
that Gagliano did not recdve Sl ! -i. Rl b >'. Ga g lia '' dearly shows 
that the invoice i ssu e d b^ ^ /R^ Ta ' 't M bJeCti ^ He " Ce ' we B " 



a M ' 

between itself and Gagliano On ,h, ^ be , evl ^" ce of the contract te ^ 
was not objected to at Km e of ^ " ^ lhe broker ' 5 confirmation 
find that the confirmat on ofM rf e '?, by Ga S Jiano - Accordingly, we 
contract terms f Sa ' C proffered b y Del Rio is evidence of the 



, alone, is no, sufficient to 

of sale "suallrecefcoiteable webhf l %' A br ker ' S '"nation 
Kr Di ms fiedEMev^nrl wt as jf vi <ience of the contract terms. 
Dec. 1523 (1973) T3S? ca e (h ?"" C * F ?"' *. ^., 32 Agric. 
confirmations proffered SermnVh''" 00 ! 1 .! 1 ? 6110165 P resent in *e two 
defects in Del Rio's evidence Rr.fh ? and U ' ility - There are ^ 
not identical to that which appears on t h '"T' 5 " ame a " d city s(ated are 
Jarson and set forth in FindingSc, No 7 Def T %* ( Gaglia " by 
for this discrepancy Second r,r ' 7 ' Del . Rl P roffer s no explanation 

confirmation of salient by Jaton a 8 d an t r f eC r d ?" d ob J ected to the 
Del Rio proffers no evidence To S h 1 f i 6 "" 1 '" ^"""S of Fact No ' ' 
confirmation which supporU De) R^ t 'r f'* ""^ the version of the 
the confirmation without objection l! ,? a ' g)lan ' r . that Ga liano received 
from Jarson, contained in he De n a r f ^' 0n ' W nnd that the two kttere 
minimal probative value. A 1 eS nd ol'T'' f ""^tio^ have 
myestigation report are automaMcal v rn , IH , d C u Uments contai "ed in the 
evMence in this proceeding 7 CFR I ^ ^ part of the adl n^abl e 
submitted in support of the 'comnT.!^', , H . owever . Jarson's letters, 

the complain,. The letters fTtfnZi" 1 ^ T*"?" lhe alle S a tns in 
regarding the existence S contract b an ,? xplana . tion f Perttoat facts 
as: a Contract betw een the parties and its terms, such 



Pint " - si f *e confirmation of 
' objection to the terms 



JOE A. GARZA, BT AL. v. HOWARD A. GEARING, UT AL 

3, Did Jarson ever send the revised "Gagliano" confirmation of sale to 
Gagliano? 

4. If Jarson sent the revised confirmation to Gagliano, did Gagliano object 

60 its terms? 

Without such information, the weight we give to Jarson's letters is minimal. 
Accordingly, we find that the confirmation proffered is not sufficient to prove 
lhat Gagliano agreed to its terms. . . 

On the other hand, the evidence proffered by Gagliano is suHicient to 
show that it agreed to sell the melons for the account of Del Rio. Gagliano 
proffered an affidavit from Anthony Gagliano, a copy of the confirmation ol 
sale with the handwritten message of objection received by and returned to 
Jarson, set forth in Finding of Facts Nos. 7 and 8, and an account of sale lor 
the 1188 cartons of melons as evidence of its agreement with Jarson to sell the 
melons for the account of Del Rio. Del Rio did not proffer any explanation, 
or evidence to rebut Gagliano. Therefore, we find that the evidence 
dispositively shows that Gagliano agreed to sell the melons for the account o 
Del Rio. Del Rio failed to sustain its burden in this case. The complaint 
must be dismissed. 

Order 

The complaint is hereby dismissed. 
Copies of this order shall be served upon the parties. 



JOE A. GARZA, ROBERT PEREZ, and ELI PEREZ v. HOWARD A. 

GEARING, RAMON R. RAMOS, and SEGUNDO SAN MIGUEL d/b/a 

AMERICAN VEGETABLE CO. 

PACA Docket No. 2-7626. 

Decision and Order filed February 24, 1988. 

Respondent, Pro se. 

Complainant, Pro se. 

Dennis Becker, Presiding Officer. ...-,,., ,/,... 

Decision and Order issued by Donald A. Campbell Judicial Vftcer. 

DECISION AND ORDER 
(Summarized) 

Within thirty days from the date of this Order respondent shall pay -to 
complainant $4,208^6, with interest thereon at the rate of 13 percent per 
annum from April 1, 1986, until paid. 

Copies of this Order shall be served on the parties. 



479 



oN ms TRIB u TORS) LTD . , CONSUMm 

i ACA Docket No. 2-7156 

Decision and Order flledVebr uary 17, 1988 







r- 

.. 

yuonaUA. Campbell, Judicial Of/leer. 

DECISION AND ORDER 

s is a renaratinn Prelimil ;. aI 7 Statement 

Commodities Ac" as* ^ ? der the Perishable Agricultur,,] 
complainant dn^fflf^^^^ (7 U.SC. 499a 4 T 
an award of reparation aga n "2,7- ^ the com P lai { ,, 
C0n " ec "th as hip ffi e n ? fonSint ^ ^ am Unt f -0W in 

Copies of (he Report of In?," ," mterstate commerce. 
served npon the partie^ .A ^ copy of'fheT ""^ by the Department we re 
respondent which fifed an answer the etorf' C 7S int Was serre(J -I 
, Because (he amount chim^ } denym S liabi ''ty. 
shortened method of proceZe 0^17-^ W ? S Iess than 5,000, (he 
PractKe (7 C.F.R, 47 2m iT^ r M ln section 47 - 2 of the Rules nf 
Pleadings of the parti^'S SStt^ this .r Ced " re ' fl ^ 
the Department's Report of InveSfnn / the e" dence in *e case, as is 



an<J 

1 Cnmni ' Findings of Fact 

referred to aT & n n Dist ^>- Ltd., hereinafter 



3. Raymond L. Park 
" the terms of the 



GENERAL POTATO & ONION DISTRB., LTD., v. CONSUMERS PRODUCE CO., INC. 

4. Misty Mountain Trading Co., a brokerage firm located in Oxnard, 
California, hereinafter referred to as Misty Mountain, negotiated the 
transaction involved herein on behalf of Consumers Produce, 

5. On August 3, 1985, Mr. Park negotiated an oral contract with Misty 
Mountain to sell 900 50# sacks of U.S. No. 1 "A-l" Jumbo Yellow Onions, @ 
$10.00 per sack, for a total F.O.B. price of $9,000.00, to Consumers Produce. 

6. On August 3, 1985, General Potato shipped 900 50# sacks of jumbo 
yellow onions from I & I Farms, Inc., Lament, California to Consumers 
Produce, Pittsburgh, Pennsylvania, via West Motor Freight, trailer number FA 
AA 17418. . , 

7. On or about August 4, 1985, Misty Mountain sent a memorandum ol 
sale to Mr. Park which contained the terms of the oral contract as follows: 

Seller: Raymond Park 

Shipping Point: Lament, California 

Carrier Western Motor Freight PA AA 17418 

FOB contract terms 

900 501b. sax Yellow Onions, Jumbo US #1 A-l @ $10.00 

Shipper to protect against market decline. 

Receiver to pay brokerage. Signed by broker Sheila Smith 

8. Mr. Parks received the memorandum of sale from Misty Mountain and 
accepted the terms contained therein without objection on behalt ot Oenerai 

S!The truckload of onions arrived in Pittsburgh, Pennsylvania on August 
7, 1985, whereupon Consumers Produce received and ace cPfd *^ ! P e ; 
10. General Potato sent an invoice dated August 16, 1985 to Consumers 
Produce which contained the terms of the oral contract as follows. 

Sold and Shipped to: Consumers Produce Co., Inc. of Pittsburgh 

Carrier: West Motor Frt 

Date Shipped: 8/3/85 

Date Sold; 8/3/85 

Sold by: Ray Park 

Sale Terms: FOB Lament , 

900 sk 50# US1 JBO Yellow Onions A-l Price: lu.uu SK 

Total: $9,000.00 



Invoice due and payable within 30 days of receipt ^ "^^ <* 
merchandise. No deduction from this invoice will be allowed unless 
properly documented, 

11. Consumers Produce received and accepted (he invoice from General 

'-ice price o Genera, Potato. 



481 



13. General Potato filed a formal complaint on January 31, 1986, which was 
within the nine months after the cause of action accrued. 

Conclusions 

This proceeding involves an oral contract to sell a truckload of onions 
negotiated by two brokers on behalf of the parties, Genera! Potato and 
Consumers Produce, General Potato alleges that Consumers Produce has yel 
to remit the full contract price for the onions. In response, Consumers 
Produce contends that General Potato is not a party to the transaction and, 
in the alternative, the protection against market decline term of the contract 
functions to reduce its liability for the full contract price. There is no dispute 
that Consumers Produce purchased, received and accepted a truckload of 
onions pursuant to an oral contract negotiated by Mr. Parks and Misty 
Mountain, Consequently, absent other considerations, Consumers Produce is 
liable for the full contract price of $9,000.00. However, two issues remain for 
consideration: First, whether General Potato is the principal for whom Mr. 
Park negotiated the contract and to whom Consumers Produce must remit the 
contract price; and second, whether Consumers Produce can reduce its 
liability for the full contract price under the protection against market decline 
term of the contract. 

General Potato sustained its burden to prove that it is the principal from 
whom Consumers Produce purchased the truckload of onions pursuant to the 
oral contract negotiated by Mr. Park. As the moving party General Potato 
has the burden to prove that it is a party to the oral contract in issue by a 
preponderance of the evidence. New York v. Sandier, 32 Agric. Dec, 702 
(1973) The evidence presented clearly supports the conclusion that General 
Potato is the principal for whom Mr. Park negotiated the sale of onions to 
Consumers Produce and the party to whom Consumers Produce must remit 
the contract price. First, General Potato proffers 1) the invoice sent to 
Consumers Produce and received without objection which identifies Mr. Park 
as the broker, and 2) the memorandum of sale issued by Misty Mountain on 
behalf of Consumers Produce received without objection by Mr. Park. An 
invoice and memorandum of sale issued here are sufficient evidence of the 
terms of the contract as each party received the documents without objection. 
Casey Woodwyk, Inc. v. Albanese Wallace Fruit and Vegetable Co., 32 Agric. 
1523 (1973) General Potato's invoice clearly sets forth the terms of the oral 
contract, consistent with Misty Mountain's memorandum of sale, and identifies 
Mr. Park as the broker, to which Consumers Produce did not object upon 
receipt. Next, General Potato proffers 1) the bill of lading which shows GPO 
or General Potato and Onion as the broker who arranged the shipment of the 
onions from the I & I Farms in Lament, California, to Consumers Produce, 
and 2) an affidavit from Mr. Park in which he states that he negotiated the 
oral contract with Bill Forman initially and Sue Howerton 30 days after 
delivery, both brokers with Misty Mountain who knew General Potato to be 
his principal. In response, Consumers Produce proffers affidavits from Alan 
Siger and Sue Howerton of Misty Mountain in which both attest to personal 
involvement in the transaction. However, neither Ms. Howerton nor Mr. 
Siger 1) deny receipt of the invoice from General Potato, and 2) identify, 
challenge or clarify the involvement of Mr. Forman in the contract negotiation 
or Sheha Smith who signed the memorandum sent to Mr. Park, 

482 



JENERAL POTATO & ONION DISTRB., LTD., v. CONSUMERS PRODUCE CO., INC 



:otisequently, the statements proffered on behalf of Consumers Produce fail 
o rebut the evidence presented by General Potato. Therefore, we find thai 
jEneral Potato is the principal for whom Mr. Park negotiated the oral 
ntract with Misty Mountain, to sell onions to Consumers Produce. 
: nsuraers Produce 'is liable to General Potato for the full contract price, 
$,000.00, less any justified and proven adjustments. 

Consumers Produce cannot justify a reduction of its liability for the total 
Mntract price under the protection against market decline provision of the 
contract. Consumers contend that the market for onions declined in August 
1985 such that it is entitled to an adjustment of the contract price m 
accordance with the protection against market decline provision. Consumers 
Produce proffers copies of USDA Market News Reports for Pittsburgh trorn 
August 8, to August 22, 1985. The reports show the market price for jumtx. 
yellow onions to be as follows. 

Reort No. Report Pate Price Range 



153 
154 


Aug. 8, 85 
Aug. 9, 85 


$13-14, few 15 
12-13, few 14.50 


156 


Aug. 13, 85 


10-12 


157 


Aug. 14, 85 


10-11 


158 


Aug. 15, 85 


9-10 


159 


Aug. 16, 85 


9, few 10 


160 
161 
162 


Aug. 19, 85 
Aug. 20, 85 
Aug. 21, 85 


8-9 
8-9, mostly 8-8.50 
7.50-8,50 


163 


Aug. 22, 85 


7-8 



i- A /laiu However, the market 
We acknowledge that the market P^X the day of arrival in 
supported the contract price for at least 8 days a. e j ^ ^ 

Pittsburgh. Consumers Produce ^^^^ L omens withoul 
fob price for the onions and had 8 days mwh ch ^ ^ proffer 

sustaining any injury. In addition .Consumers r dfortheonionst o support 
accounting of sale to show the actu al pr ices obtam , 

its claim for an adjustment to the con act pr c^ ^ ^ indefmitel y ( and 
provide protection against market dec m , D w ^ Consc?ue ntty, ^ 

not with proper documentation. ^Finding , of ^d ffl k t 

find that it would be ^J^* have here. Therefore 
decline provision under cjcumstances ^^ ato f or the full conve nee of 
Consumers Produce is ^ble to General ro^ . & a ^^ of 

the onions, $9,000.00 Its ^ * Jjlx ^awarded, with interest. 
2 of the Act for which reparation must DC 



Order 

Within 30 days from the date of this Order, respondent Consumers 
Produce Company, Inc., of Pittsburgh, shall pay to General Potato & Onion 
Distributors, Ltd, as reparation, $9,000.00, with interest thereon at the rate 
of 13% per annum from September 1, 1985, until paid. 

Copies of this Order shall be served upon the parties. 



GOLMAN-HAYDEN COMPANY, INC., v. F&L ENTERPRISES INC 

PACA Docket No. 2-7601. 

Order of Dismissal filed February 1, 1988. 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer. 

ORDER OF DISMISSAL 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a el seq.}. A timely 
complaint was filed in which complainant seeks reparation against respondent 
m the amount of $11,200.00 in connection with a transaction involving the 
shipment of potatoes in interstate commerce. 

A copy of the formal complaint was served on respondent. By letter dalcd 
Novembers, 1987, respondent notified the Department that complainant had 
made a choice of forums and was prosecuting this same cause of action in 
Mate court The presiding officer gave complainant an opportunity to show 
cause why, because of its state court action, the instant complaint should nol 
be dismissed. Complainant did not file any response to this notice to show 
cause, in view of that, it is appropriate to dismiss its complaint. Hitter & 
LenJwffv. Phillips Packing Co., 15 Agric. Dec. 744 (1956) 
Accordingly, the complaint is hereby dismissed. 
Copies of this order shall be served upon the parties. 



HILLMEX, INC. v. MIZOKAMI BROS. OF ARIZONA 

PACA Docket No. 2-7028. 

Order on Reconsideration filed February 1, 1988. 

Order on Reconsideration issued by Donald A, Campbell, Judicial Officer. 

ORDER ON RECONSIDERATION 
(Summarized) 

In this reparation proceeding under the Perishable Agricultural 
Commodrt.es Act 1930, as amended (7 US.C. 499a et seq.), a Decision and 
Order was issued on September 2, 1987, requiring respondent to pay 
reparation, m the ; amount of $57,788.10 plus interest, to complainant. On 
September 30, 1987, the respondent filed a petition for reconsideration. 

Respondent s petition raises no contentions or issues which were not raised 
and fully considered in our order of September 2, 1987. In our opinion the 
September 2, 1987, Decision and Order is supported by the evidence and the 



484 



HOMESTEAD TOMATO PKG CO., INC. v. ACME PRE-PAK CORP. 

law applicable thereto. Accordingly, respondent's _ "Motion for 
Reconsideration" is denied without prior service upon complainant. 

The order of September 2, 1987, is reinstated except that respondent has 
30 days from the date of issuance of this order in which to pay complainant 
(he reparation awarded therein. 

Copies of this order shall be served upon the parties. 



HOMESTEAD TOMATO PACKING CO., INC. v. ACME PRE-PAK 

CORPORATION. 

PACA Docket No. 2-6948. 

Decision and Order filed February 3, 1988. 

Open price contracts - Market News Reports - Brokers - statements given great weight. 

Where tomatoes were sold on an open price bases, with the price to be determined on a date 
certain market news reports for the specific sizes of tomatoes at date nearest to date certain 
to establish the contract price. 

Complainant, pro se. 

Respondent, pro se. 

Dennis Becker, Presiding Officer. 

Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et ?.)-. A tlinel y 
complaint was filed in which complainant seeks an award of reparation against 
respondent in the amount of $6,662.52 in connection with the sale m interstate 
commerce of a truckload of tomatoes. 

A copy of the report of investigation made by the Department was served 
upon the parties. A copy of the formal complaint was served upon 
respondent, which filed an answer thereto liability to complainant. 

The amount claimed in the formal complaint does not exceed 515,OOO.OU, 
and the shortened method of procedure provided in section 47.20 ot the Rules 
of Practice (7 C.F.R. 47.20) is applicable. Pursuant to this procedure, the 
verified pleadings of the parties are considered a part of the evidence in he 
case, as is the Department's report of investigation. In addition, the parties 
were given the opportunity to file additional evidence m the form of sworn 
statements. Neither party did so. Although given an opportunity to file briefs, 
neither party did so. 

Findings of Fact 

1, Complainant, Homestead Tomato Packing Co Inc., fa a corporation 
with an address at P.O. Box 3064, Florida City, Florida 33034. 



2. Respondent, Acme Pre-Pak Corporation, is a corporation with an 
address at 350 Plantation Street, Worcester, Massachusetts 01604. At the time 
of the transaction involved herein, respondent was licensed under the Act. 

3. On January 19, 1985, complainant shipped to respondent a truckload 
of tomatoes to be priced at the market price of January 21, 1985, through 
January 26, 1985, f.o.b. In addition, complainant charged respondent 15<? per 
carton for palletizing and $22.50 for a Ryan temperature recorder. There 
were included in the truck 1,200 cartons of 6x6 tomatoes, and 400 cartons of 
6x7 tomatoes. Seymour Co. & Brokerage Company, located in Florida City, 
Florida, was the broker in this proceeding. The broker issued a broker's 
memorandum of sale on or about January 19, 1985, which reflected, among 
other things, the following information: 

To be priced on or about Wed. 1/23/85 in line with Florida tomato 
industry market. 

Upon arrival, respondent received and accepted the tomatoes. 

4. The Florida Fruit & Vegetable Report for Winter Park, Florida, 
published by the Federal-State Market News Service, shows shipping point 
prices for 85% or better U.S. No. 1 6x7 tomatoes of $16.00 per carton for 
January 24 and January 25, 1985. No prices for this size tomato were given 
for January 22 or January 23, 2985. The Federal-State Market News Service 
for Winter Park, Florida, showed a price of $18.00 per carton for U.S. No. 1 
6x6 tomatoes shipped on January 23, 1985. 

5. A formal complaint was filed on June 10, 1985, which was within nine 
months from the time the cause of action herein arose. 

Conclusions 

At the time the time the contract was entered between complainant and 
respondent, there had been a cold spell in Florida which caused the market 
price for tomatoes to be extremely unsettled. As a result, the parties agreed 
to what amounted to an open price contract. Acting through a broker they 
agreed that the tomatoes should be priced in accordance with the January 23, 
1985, Florida tomato industry price. Although respondent contends that 
complainant acknowledged that the prices on or about that date were too high 
because in subsequent transactions it offered to adjust later invoice prices, we 
cannot give credence to its theory that through subsequent transactions, 
complainant gave a price concession in the transaction in issue in this 
proceeding. Each transaction must stand on its own. Therefore, as an 
ostensibly neutral third party, the statements of the broker must be given great 
weight. Kern Ridge Growers v. TJ, Power & Co., 40 Agric. Dec. 425 (1981). 
The broker having stated that the tomatoes were to be priced based upon 
Florida tomato industry market prices on or about January 23, 1985, we Find 
that the nearest price which is applicable for the 6x6 tomatoes is that of 
January 23, 1985, which is $18.00 per carton, and that the price for the 6x7 
tomatoes should be computed for the January 24, 1985, price at $16.00 per 
carton. These are the prices at which complainant invoiced respondent. It did 
so correctly. Including palletizing and the Ryan recorder, the total amount 
due was $28,262.50, of which respondent has paid $21,600.00. 

486 



RALPH JARSON v. WILLIAM Y. MURPHEY. 

In view of the above, we find that respondent has failed to pay $6,662.50 
to complainant. Its failure to pay complainant such amount is a violation of 
section 2 of the Act for which reparation must be awarded with interest. 

Order 

Within thirty days from the date of this order, respondent shall pay to 
complainant, as reparation, $6,662.50, with interest thereon at the rate of 13% 
per annum, from March 1, 1985, until paid. 

Copies of this order shall be served upon the parties. 



RALPH JARSON v. WILLIAM Y. MURPHEY. 

PACA Docket No. 2-7131. 

Decision and Order filed February 3, 1988. 

Brokerage claim - Valid Contract negotiated by broker - Reparation of brokerage commission 
awarded. 

Complainant (Broker) negotiated a valid contract including a term giving the buyer protection 
against fall in market price. Seller (Respondent) was ordered to pay brokerage when market 
price reduction caused buyer to pay less than original contract price. 

Complainant, pro se. 

Respondent, pro se. 

Thomas C. Heinz, Presiding Officer. 

Decision and Order issued by Donald A, Campbell, Judicial Officer. 

DECISION AND ORDER 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C, 499 et seq.} t hereinafter The 
Act." A timely complaint was filed in which complainant sought a reparation 
award against respondent in the amount of $193.40 in connection with the sale 
and shipment of three lots of melons in interstate commerce. 

Copies of the report of investigation prepared by the Department were 
served upon the parties. Thereafter respondent filed an answer denying 



Since the amount claimed does not exceed $15,000.00, the shortened 
procedure provided in section 47.20 of the Rules of Practice (7 C.F.R. 47.2UJ 
is applicable. Pursuant to such procedure, the report of investigation is 
considered to be part of the evidence, as are the verified complaint and 
answer. The parties were given opportunities to submU additional evidence 
in the form of verified statements and to file briefs. Neither party did so. 

Findings of Fact . 

1. Complainant Ralph Jarson (hereinafter "Jarson") is an ^ual doing 
business as Ralph Jarson Produce with a mailing address at 75 W. Lmwood, 
Phoenix, Arizona 85003. 



487 



2. Respondent William Y. Murphey (hereinafter "Murphey") is an 
individual doing business as Native American Farms with a mailing address 
at P.O. Box M, Blythe, California 92226. 

3. On June 12, 1985, Jarson, acting as a broker, negotiated the sale in 
interstate commerce of 23 bins of cantaloupes and 20 bins of honeydews. 
Jarson acted as agent both for Murphey, the seller, and for Francies Date 
Company, the buyer, in this sale. 

4. On June 14, 1985, Jarson, acting as a broker, negotiated the sale in 
interstate commerce of 37,361 pounds of cantaloupes. Jarson acted as agent 
for both Murphey, the seller, and for Francies Date Company, the buyer, in 
this sale. 

"L Pu [ suant to the sales contracts > the produce was shipped and received, 
but Murphey has not paid Jarson any commission for his services as a broker 

6 The complaint was filed on December 30, 1985, which was within nine 
months of the time the cause of action accrued. 

Subsidiary Findings and Conclusions 

Murphey contends Jarson is not due any brokerage on these transactions 
because he violated his brokerage contract by quoting to the shipper sales 
prices different from those quoted to the buyer. Jarson contends that the 
fnHfh? [ a r ? nt " med ^T P rotectin g th e buyer against market decline, 
5?H n ^ r PnC S u paid by the receiver were Iower b "ause the market 
sent n Mnr t "J* ^ T"" 1 C ^ br ker ^malion memoranda 

decline^ S L f **?** "^ ^ bUyerS Were P rotected a g ains * * 
decline, which Murphey does not expressly dispute 



the Arizona-Imperial Valley-Palo Verd.^ [ Valtey are . fo M 18 

s^^ 

ioo< r > 7 -JJ.JU ro *4.uu per halt carton on June 

, 1985. Jarson's contentions therefore appear to be we.ll-fn,,nH," T '. "u 



TONY D. LOVE, BT AL. v. IMPERIAL BRANDS, INC. 



Order 

Within 30 days from the date of tins order, respondent William Y. 
Murphey shall pay complainant Ralph Jarson as reparation $193.40, with 
interest thereon at the rate of 13% per annum from August 1, 1985, until 
paid. 

Copies shall be served upon the parties. 



KLAMATH POTATO DISTRIBUTORS, INC. v. NICK DELIS CO., INC. 

PACA Docket No. 2-7619. 

Order of Dismissal filed February 28, 1988. 

Order of Dismissal issued by DoitaldA. Campbell, Judicial Officer. 

ORDER OF DISMISSAL 
(Summarized) 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a etseq.). By letter dated 
January 8, 1988, complainant notified the Department that it wished to 
withdraw its complaint. 

Accordingly, the complaint is hereby dismissed. 

Copies of this order shall be served upon the parties. 



TONY D. LOVE AND PATRICK A, ROSALES d/b/a L & R ORCHARDS 

v. IMPERIAL BRANDS, INC. 

PACA Docket No. 2-6901. 

Order of Dismissal filed February 1, 1988. 

Thomas L. Kirbo, Morcltrie, Georgia, for Complainant. 

Respondent, pro se. 

George S. Whitten, Presiding Officer. 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer, 

ORDER OF DISMISSAL 

In this reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.), the Department 
has been informed by complainant's attorney that the parties have reached a 
settlement agreement. Accordingly, the complaint is dismissed. 

Copies of this order shall be served upon the parties. 



489 



METRO PRODUCE, INC. v. JAMES BOGGIO. 
PACA Docket No. R-88-71. 
Order filed February 24, 1988. 

Complainant, pro se. 

Respondent, pro se. 

Andrew Stanton, Presiding Officer, 

Order issued by Donald A. Campbell, Judicial Officer, 

ORDER REQUIRING PAYMENT OF UNDISPUTED 

AMOUNT AND ORDER TO SHOW CAUSE WHY 

COMPLAINT FOR REMAINING AMOUNT 

SHOULD NOT BE DISMISSED 

(Summarized) 

Respondent alleges that the amount remaining in dispute of $207.15 has 
been paid. Complainant shall have 20 days from its receipt of this order to 
show cause why its claim for this amount should not be dismissed. If 
complainant should file a timely response in which it alleges that the $207.15 
has not been paid, and states that it wishes to maintain this reparation 
proceeding, respondent's liability for payment of the disputed amount will be 
left for subsequent determination in the same manner and under the same 
procedure as if no order for the payment of the undisputed amount had been 
issued. 

Copies of this order shall be served upon the parties. 



NOBLES PACKING COMPANY v. S&S PRODUCE CO., INC. 
PACA Docket No. 2-6904. 
T- Decision and Order filed February 17, 1988. 

Open price salt - market news reports. 

Where tomatoes were sold on an open price basis, with settlement to be on a specific future 
date, Market News Reports at destination for date nearest specific date established the price 
for the sizes of tomatoes involved. 

Boardman C. Martin, for Complainant. 

Respondent, pro se. 

Dennis Becker, Presiding Officer. 

Decision and Order issued by Donald A, Campbell, Judicial Officer. 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S..C. 499a el seq.). A timely 
complaint was filed in which complainant seeks an award of reparation against 
respondent in the amount of $8,894.25 in connection with the sale in interstate 
commerce of a truckload of tomatoes. 

A copy of the report of investigation made by the Department was served 
upon the parties. A copy of the formal complaint was served upon 
respondent, which filed an answer thereto liability to complainant 



NOBLES PACKING COMPANY v. S&S PRODUCE CO.. INC. 

The amount claimed in the formal complaint f^^ 
and the shortened method of procedure P^^^^f^his procedure, the 
of Practice (7 C.F.R. 47.20) is applicable. Pursuant ^ ims p ^ ^ 

" 



verified pleadings of the parties are ^"on. the parties 
case, as is the Department's report f^^^^ the form of sworn 
were given the opportunity to file additional evidence in ,i it to 

statements. Neither party did so. Both parties were given the opp 
File a brief, and complainant did so. 



, Complainant, L,wis ^ 

Nobles Packing Company, with an address at Post Office 
Florida 33934. T . ^ nt . nnrn |i n with an address 

2. Respondent, S&S Produce Co, Inc u " S^* At the time of 
at Louisville Terminal, Units 8-10, ^"^'^'^^d under the Act. 
the transaction involved herein, ^P? nd ^Tf t ! l f e "p e onden t 1,520 boxes of 

3. On January 21, l^^^S^^Ss tomatoes and 800 
combination tomatoes, which included 720 boxes ^ hfi tomatocs , for 

boxes of 6x6 tomatoes. It ^"^^TmSt/w-s unsettled, the 

a total palletizing charge of $228 00. Because , i 

tomatoes were shipped, open price, and also were smpp - n this 

4. Adam's Brokerage of Bonita Springs, Florida, was 

transaction. , . .-...fb-ioad of tomatoes. 

5. Respondent received and accepted ^ihe tru ^' oad ^ s in e ff ec t for 

6. Complainant billed respondent ^^^ t00 a to for Ihc 5*6 
applicable tomatoes on January 28, 1*. " *- com bination tomatoes, 
combination tomatoes and $14.00 a box for the 6x6 co ( u 
plus 150 a box for the palletizing hereof, for a to al p ^^ 3Q 
sent an invoice for this amount to [^pondent wMchj ^ ^ ^ 
1985. Respondent has paid complainant $ 19 jJ 8 ;^ooO. 
oftomatoel leaving a claimed amoun t ungl ^Om,^ ^ 

7. Respondent and complainant had dealt on ar ^ t ^ traduionally 

tfao transaction involved in this P^^^^^s of prices in effect on 
settled on these types of transactions on t he bas^ s ^ ^ T Th 

Tuesdays rather than on Mondays. In 1983 , Jan y dcnt>s place O f 

Market News for <^^^^^S^, *c price per box was 

business, showed that for 5x6 Ration toma ^ $K(JO a 

$15.00, and for 6x6 combination tomatoes incp ^ wthm nme 



Conclusions ( ^ temporary situation 

This case is one of a number of cases arising ;o ^ ^ th& markel 

in Florida in mid-January, ^* ^^Krf did kn 

for tomatoes became very unsettled as a resu ^ ihe tomaloes to 

what price to charge. Therefore,^ ^ <mm ^ week ftft ^ 



caused considerable difficulty between the parties in determining what was the 
appropriate price for the tomatoes shipped during the period immediately 
prior thereto. 

In this proceeding, complainant sought a price of $16.00 a box for the 5x6 
combination tomatoes, and $14.00 a box for the 6x6 combination tomatoes 
which it sent to respondent. Respondent initially paid complainant $14,053.75 
with respect to this transaction. In its Answer, it admitted owing $19,188.00 
based on a price of $13.00 per box for the 5x6 tomatoes and $12.00 per box 
foMhe 6x6 combination tomatoes, plus $228.00 for the palletizing. Therefore, 
by its own admission, respondent still owed complainant $5,134.25. It paid 
complainant this amount, leaving $3,760.00 in issue. In support of its position 
that the prices should have been $13.00 and $12.00 per box, respectively 
respondent submitted a Market News Report for Cincinnati, Ohio, of January 
JU, 1JS5. However, this Market News Report is, In our view, inappropriate. 

in ap 7f r0pna j tc Market New Re P rt is that which was dated January 29, 
-US5. Respondent also submitted that Report. It showed that the price per 

tiJm 5x6 u tomatoes was $15 - P^ box and for the 6x6 tomatoes, it was 
414.00 per box. Complainant did not contest the efficacy of the use of Ihc 
Market News Reports for Cincinnati, Ohio. Therefore, we shall award 
damages based upon the prices for January 29, 1985, for that city 

I he price for the 720 boxes of 5x6 combination tomatoes is $10,800.00. 
ifle price tor the 800 boxes of 6x6 combination tomatoes is $11,200.00. The 

S m' C F l e t . t ? S - is $22 ' a 0- To this must be added a charge of 
W28.00 for palletizing, bringing the total contract price to $22,228.00. 

feKn ?^ P 3 "*? 19 ' 188 - 00 * leaving $3,040 unpaid. Respondent's 

tailure to pay complainant this amount is a violation of section 2 of the Act 
lor which reparation must be awarded, with interest. 

Order 

lii r' rly dayS - rOI V he date Of this order Despondent shall nay to 

thereon at the rale of 13% 



Copies of this order shall be served upon the parties. 



OTAY PACKING COMPANY v. J&S PRODUCE CORP. 



ACKING COMPANY v. J & S PRODUCE CORP. 
Docket No. 2-7040. 
Decision and Order Hied February 10, 1988. 

Burden to establish essential elements of contract - counsel fees. 



Complainant, pro se. 

Lcroy Gudgeon, for Respondeni 

Peler V. Train, Presiding Officer. 

and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 

Preliminary Statement 



was served uoc, 
denied ever receivfng "him d "' ed P urchasi "S 



was represented by oy W. 



tomatoes and 
22, 1987 . 



of its 



Findings of Fact 



i "' b th 



Censed to 



493 



4. On or about September 11, 1984, complainant shipped 1600 cartons of 
tomatoes to Joseph A. Cuttone Co., Chicago, Illinois, hereinafter Cuttone at 
a total invoice price of $12,742,50 (Invoice 5715). 

5. On or about September 13, 1984, complainant shipped 1584 cartons of 
tomatoes to Joseph A. Cultone Co., at a total invoice price of $12 636 90 
(Invoice 5735). 

6. The parties stipulated that the tomatoes were received by the Josenh 
A. Cuttone Co. F 

7. Respondent was billed for these tomatoes but has refused to remit 
payment. 

8. The formal complaint was filed on March 21, 1985, which was within 
nine months after the cause of action herein accrued. 

Conclusions 

This case involves a dispute over whether complainant sold the tomatoes 
to respondent for shipment to Cultone. Respondent denies purchasing the 
tomatoes, and has refused to remit any payment. 

It is well established that complainant, as the moving party, has the burden 
of proving the essential allegations of his complaint, including the existence of 
a contract, the terms thereof, a breach by respondent, and damages resulting 
from the breach. See e.g., Vemon C Justice v. Milford Packing Co., Inc., 34 
Agnc. Dec. 533, 535 (1975); New York Produce Trade Association, Inc. v. 
Sidney Sandier, 32 Agric. Dec. 702, 705 (1973). There 
is some question as to whether complainant's position is that it sold the 
tomatoes in question to respondent for shipment to Cuttone, or whether the 
sale was to Cuttone but that respondent agreed to pay for them on Cuttone's 
bchalr It is not necessary to resolve that question because, for the reasons set 
torth below, complainant has failed to prove by the preponderance of the 
evidence that respondent was the purchaser or that it agreed to pay for the 
tomatoes, 

Complainant's evidence consisted of the testimony of Earl Tachiki, its 
president, who testified that he refused to bill Cuttone for the tomatoes 
because he was aware that Cuttone had a poor credit rating. He further 
testified that his salesman, Jose Gomez, told him that respondent had agreed 
to be responsible for payment. 

Respondent called two of its officers who testified that Cuttone was their 
competitor and they, too, knew of Cuttone's poor credit rating and they did 
not, therefore, sell the tomatoes to Cuttone and certainly did not agree to pay 
on Cuttone's behalf. Steve Pappas, an individual with whom Mr. Gomez 
purportedly had made the arrangement, testified that he was out of the 
country at the time of these transactions and subsequent telephone 
conversations. Mr. Gomez was not called as a witness and we, therefore, have 
no direct evidence as to his understanding of any arrangements made with 
respondent prior to the shipment of the tomatoes. While Mr. Tachiki had a 
conversation with respondent's bookkeeper who acknowledged receipt of 
Otays invoices, the bookkeeper clearly did not admit liability. In view of 
respondents credible evidence that Cuttone's poor credit rating was well- 
known and that Cuttone was a competitor, we find it extremely unlikely that 
respondent would have purchased tomatoes for shipment to Cuttone or 
alternately, agreed to pay for Cuttone's purchase of the tomatoes. In the 

494 



JOE PHILLIPS, INC. v. COMMODITY MARKETING COMPANY 

absence of Mr. Gomez' testimony as to the exact nature of the conversations 
with respondent's officials, we find that complainant has failed to meet its 
burden of proving that respondent was liable to pay for the tomatoes in 
question. The complaint must therefore be dismissed. 

Respondent's counsel timely filed a claim for fees and expenses incurred 
in connection with the oral hearing herein. Counsel's fees of $725.00 were 
claimed for time spent in preparation for and appearing at the oral hearing. 
Additionally, expenses of $155.40 were claimed for the procurement of the 
transcript and $8.94 for service of subpoenas. No objection was made to this 
claim. Upon review of the record, we find that the fees and expenses are 
reasonable and necessarily incurred in connection with the oral hearing and 
they will be awarded. 

Order 

The complaint herein is dismissed. 

Respondent's claim for fees and expenses is granted. Within 30 days from 
e ,. hlS rdcr ' com P ]ainant shall pay the respondent the sum of 
, with interest thereon at the rate of 13 percent per annum until paid. 

Copies of this Order shall be served upon the parlies 



MARKE COMPANY. 
Decision and Order filed February 24, 1988. 



Thomas R. Oliveri, for Complainant. 

Respondent, pro se. 

Eric Paul, Presiding Officer 

Decision and Order issued by Donald A. Campbell, j H( ficial Officer. 

DECISION AND ORDER 
,. . Preliminary Statement 

ibis is a reparation proceeding under the Perishable Aericultunl 
Commodities Act, 1930, as amended (7 U.S.C. 499a e tsc^ A mc'lv 

^^ 

S^^SBS o 

lnvolvme the shipment of a railcar of ~ * 



495 



A copy of the report of investigation was served upon each of the parties. 
A copy of the formal complaint was served upon respondent, which filed an 
answer thereto, denying liability. 

Since the amount of damages claimed in the formal complaint does not 
exceed $15,000.00, the shortened method of procedure provided in section 
47.20 of the rule of practice (7 C.F.R. 47.20) is applicable. Pursuant to such 
procedure, the parties were given the opportunity to submit additional 
evidence in support of their respective positions by means of verified 
statements. Complainant filed an opening statement. Respondent filed an 
answering statement in reply. Complainant filed a brief. 

Findings of Fact 

1. Complainant, Joe Phillips, Inc., is a corporation whose post office 
address is 1617 West Shaw, Suite A, Fresno, California 93711. 

2. Respondent is a corporation, Commodity Marketing Company whose 

S2 u ddfeSS ' S 8401 Patterson Avenue > Suite 202, Richmond, Virginia 
Zi229. At the time of the transaction involved herein, respondent was licensed 
under the Act. 

3. On or about May 7, 1984, Mr. Jerry Grossman of Jerome Brokerage 
& Distributing Co, (hereinafter Jerome) telephone Mr. Joe Phillips, president 

or complainant and negotiated the purchase for its own account of 1,000 100 
lb. sacks of long white potatoes, U.S. No. 1 size A, at a price of $9.60 cwt plus 
*Z2 50 for thermagard. In the course of this telephone conversation, Mr. 
Wulhps ascertained from Mr. Grossman that the respondent, Commodity 
Marketing Company, was the prospective buyer of the potatoes from Jerome, 
and that shipment was to be by refrigerated railcar SPFE 453025 to Joseph 
Formosa & Sons (hereinafter Formosa) in Nashville, Tennessee. 
t 4. On May 7, 1984, the potatoes were inspected on railcar SPFE 453025 
in Edison, California, and found to grade U.S. No. 1 size A. They were then 
J2 IP J!21 y Way NeW Orleans > and arrived in Nashville, Tennessee on May 

lo, Iyo4. 

5. Because of a declining market, complainant agreed to a $1.00 per cwl 
price allowance while the load was in transit. 

6. Complainant billed Jerome on May 8, 1984, for payment of the total 
f.o.b. amount, $9,622.50. 

7. No broker's confirmation or memorandum of sale was produced by 
either party or included in the investigation report. 

8. On the day of shipment, May 7, 1984, Jerome prepared a record 

XS^? llS USC) that Hsted the *> m sacks of P tatoes on ilcar 
MTfc 453025 as coming from complainant at a total f.o.b. price, including 

thermagard, of $9 622.50, and billed the goods to respondent at a total 
delivered amount of $10,022.50. The difference in these amounts, $400.00, was 
separately shown, but was not identified as being either a broker's commission 
or a dealer mark up. The freight charge of $2,622.00 and the name of the 
receiver, Joseph Formosa, were also shown on this record. 

9. By invoice, NO. 0100, Jerome billed respondent $10,022.50 for this 
shipment on May 7, 1984. This invoice did not include mention of 
complainant or of the $9,622.50 and $400.00 amounts shown on the other 
Jerome record of this date. 



496 



JOE PHILLIPS, INC. v. COMMODITY MARKETING CO. 

ig*l' F ; osa /epted delivery of railcar SPFE 453025 on Friday, May 18 

T, ChCCk M' 70 t 4 ' I" the am Unt f the $2 ' 622 in 
charge, payable to Seaboard System, on the same date. 



on MavQ ' Iess 65 sacks 

f A* ' was / nspected ^ a USDA inspector in the Formosa cooler 

raU 



was M M, ' ' 

was stated as follows: 

"Generally firm. From 3 to 13%, average 5% damaae by sunken 
discolored areas, most of which are sticky. Average l^soft rot" 

and\^ r ?SJ S< ; ld l - he entire . 1 ' 000 sacks of potatoes between May 19, 1984, 

res D en ; ^n1n P K Ce V an , g ^ ng ^ 5 ' 25 CWt ' genera11 * 5 ' 50 cwt " and P ai ^ 
respondent $4980.50 by check dated June 7, 1984. An invoice dated May 18 

rtheri^f V**** m ^ Fo !; mosa $S.522.50 (8.50 cwt P 1 US $22.50 
Cthermagard) was altered to show $5,022.50 (5.00 cwt plus $22 50V the 
deduction of the $42.00 fee paid for the inspection pelrmed on M y 21 
1984; and resulting net amount of $4 980 50 



. 

9 month?afterTe IZST ^ f" De ? mbcr H ^ Which Was ^ 
> montns alter the alleged cause of action herein accrued. 

. Conclusions 



D fabud Co w M h f Jerome Brokera 8e and 

distributing Co., which firm served as complainant's agent for Durooses of 

collection and remittance of the purchase amount. 8 RpoffiTedv 



PU K CaSC an Ver y f these P tatoes ' but ged h fu 
payment of the purchase amount owing was made to the seller from which 
respondent purchased the shipment, Jerome Brokerage and Diluting 
Company m accordance with the terms of a purchase agreement which 
provided for the price to be determined after delivery 
p Both parties submitted verified statements and various documents 
including unverified letters from Jerome Brokerage and Distributing Company 
and Joseph Formosa and Sons, Inc., in an attempt to establish the condition 
of the potatoes upon delivery and the full purchase amount applicable under 
their conflicting versions of what was the applicable purchase and saS 



497 



agreement. Complainant has established that it received $3,642 less than it 
was entitled to receive under the oral contract it entered into, but did not 
establish that respondent was responsible for paying such obligation. A 
preponderance of the credible evidence establishes that complainant sold the 
potatoes to Jerome Brokerage and Distributing Company and failed to file a 
reparation complaint against this buyer. The self-serving and unverified letter 
from Mr. Jerry Grossman, dated October 1, 1984, claiming that Jerome acted 
as a collection agency is not credible. 

We do not need to determine whether respondent paid the full purchase 
amount owing to Jerome Brokerage and Distributing Company because that 
purchase transaction is not encompassed by this reparation proceeding. 

Complainant's president, Mr, Joe Phillips, was obviously confused as to 
which firm was the buyer of the shipment, and originally named Joseph 
Formosa & Sons, Inc., as respondent in an informal reparation complaint. 
When advised that the investigation conducted by the PACA Branch did not 
support the existence of a contractual relationship between complainant and 
Formosa, be elected to pursue respondent instead of Jerome Brokerage 
Distributing Company. Unfortunately, for complainant, Jerome was not acting 
as a broker in this transaction. Jerome Brokerage and Distributing Company, 
had a history of operating as a broker or as a dealer. In the transaction here 
it acted solely as a dealer, buying and reselling with a markup. This 
conclusion is compelled by the absence of a broker's confirmation or 
memorandum of sale, and by the absence of any accounting disclosing the 
brokerage fee or commission charged. The single Jerome record showing a 
$400.00 entry is consistent with the type of record that it would maintain as a 
dealer, and this amount must be found to be a dealer markup in the absence 
of a broker's confirmation or memorandum of sale. Most importantly, 
including the invoice issued by complainant, no single invoice issued at the 
time of the transaction names complainant and respondent as the seller and 
buyer, respectively. This contractual relationship did not exist and, 
accordingly, complainant has failed to state a cause of action as to respondent. 
The complaint, therefore, should be dismissed. 

Order 

The complaint is dismissed. 

Copies of this order shall be served upon the parties. 



PURE GOLD, INC. v. ROBERT W. CASTO 



PURE GOLD, INC., v. ROBERT W. CASTO. 

PACA Docket No. 2-7146. 

Decision and Order Hied February 3, 1988. 

Failure lo justify admitted failure lo pay - reparation awarded. 

tnn^ r , a f IOn aW ? rdcd Wh ?" Res P ndent failcd to prove any justification for his admitted failure 
to pay for produce received from Complainant, 

Thomas R. Oliveri, for Complainant. 

Respondent, pro se. 

Thomas C. Heinz, Presiding Officer. 

Decision and Order issued by Donald A, Campbell, Judicial Officer. 

DECISION AND ORDER 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499 et seq.}. A timely 
complaint was filed m which complainant sought a reparation award against 
respondent m the amount of $104,489.40 in connection with the sale and 
shipment of eleven truckloads of mixed fruit in interstate commerce. Copies 
oi the report of investigation prepared by the Department was served upon 
the parties. A copy of the formal complaint was served upon the respondent 
who filed a timely answer admitting most of the allegations of the complaint 
but denying he owes complainant the amount demanded in the complaint 

nmviS ^^ ^ ^ wd Oral hcarin & thc shortened procedure 
provided m section 47.20 of the Rules of Practice (7 C.F.R 47201 is 
applicable Pursuant to such procedure, the report of investigation s 
cornered part of the evidence, as are thc vcrifiedpleadings. Thf parties 
SfT ^j^T/'l 5 t, submU Additional evidence in the form of verified 
nnT, hH f y* t t0 filC ^ iefS - Complainant submitted an opening statement 
and a brief, but respondent submitted neither an answering statement nor a 

Findings of Fact 

t Pn n P ]H n ! Pu ? G ^,V nC " is a cor P ration with a mailing address 
at P.O. Box 40, Redlands, California 92373. 

2. Respondent Robert W. Casto, is an individual doing business as Prima 
Citrus & Fruit Exchange with a mailing address at P.O. Box 60070, Phoenix, 
Arizona 85082 At the time of the transactions involved herein, rcsnonden 
was subject to license. 

r H' ? n ,noc Ul C , t0 . bcr 24 ' 26 ' 27 ' 29 ' and 30 ' 1985 ' and November 1, 2, 
0, /, and y, 1985, complainant by oral contracts sold and shipped in interstate 
commerce to respondent eleven truckloads of grapefruit, lemons and Valencia 
oranges at agreed prices totaling $104,489.40. Respondent accented these 
shipments upon arrival, but has failed to pay complainant any part of the 
purchase prices. 

t 4. A formal complaint was filed on January 10, 1986, which was within 
nine months of the time the causes of action accrued. 



499 



Conclusions 

Respondent contends in his answer that oral adjustments were made by 
the parties reducing the prices of some of the loads involved in this proceeding 
and that his records reflecting these changes were stolen. In its verified 
opening statement complainant convincingly refutes respondent's claim that 
the parties agreed to any price reductions. Since there is no evidence in the 
record to support respondent's claims, respondent has failed to justify his 
admitted failure to pay for the produce received from complainant 
Reparation therefore will be ordered. 

Order 

Within 30 days from the date of this order, respondent shall pay to 
complainant as reparation $104,489.40, with interest thereon at the rate of 
13% per annum from December 1985, until paid. 

Copies of this order shall be served upon the parlies. 



SEABROOK BROTHERS & SONS, INC., v. EDWARD BOKER FROSTED 

FOODS, INC. 

PACA Docket No. R-88-60. 

Order of Dismissal filed February 12, 1988. 

Order of Dismissal issued by Donald A, Campbell, Judicial Officer. 

ORDER OF DISMISSAL 
(Summarized) 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.}. By letter dated 
December 24, 1987, complainant notified the Department that it wished to 
withdraw its complaint. 

Accordingly, the complaint is hereby dismissed. 

Copies of this order shall be served upon the parties. 



TOMATO COUNTRY, INC v. JEROME GROSSMAN 

TOMATO COUNTRY, INC., v. JEROME GROSSMAN, d/b/a JEROME 

BROKERAGE & DISTRIBUTING CO. 

PACA Docket No. 2-7534. 

Decision and Order filed February 3, 1988. 

Burden of proof - Course of conduct - Invoices-weigh I to be given lo conlents. 

Where parties had dealt wilh each other numerous times, respondent was held to have 
knowledge of terms prinled on invoice. Having accepted the peppers respondent had the 
burden of proof to show they were not in accordance with contract specifications. It failed 
to do so because it did not meet contract requirement that the goods be subjected to an 
immediate inspection. 

Complainant, pro se. 

J. Anthony Sedgewick, Esq., for Respondent. 

Dennis Becker, Presiding Officer. 

Decision and Order issued by Donald A. Campbell, Judicial Officer. 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.). A timely 
complaint was filed in which complainant seeks an award of reparation against 
respondent in the amount of $1,338.00 in connection with the sale and 
shipment of peppers in interstate and foreign commerce. 

A copy of the report of investigation made by the Department was served 
upon the parties. A copy of the formal complaint was served upon the 
respondent which filed an answer thereto denying the material allegations of 
the complaint. 

The amount claimed in the formal complaint does not exceed $15,000.00 
and the shortened method of procedure provided in section 47.20 of the Rules' 
of Practice (7 C.F.R. 47.20) is applicable. Pursuant to this procedure, the 
verified pleadings of the parties are considered a part of the evidence in the 
case, as is the Department's report of investigation. In addition, the parties 
were given an opportunity to file additional evidence in the form of sworn 
statements. Complainant filed an opening statement and respondent filed an 
answering statement. Although given the opportunity to do so, neither party 
filed a brief. 

Findings of Fact 

1. Complainant, Tomato Country, Inc., is a corporation with an address 
at P.O. Box 1582, Nogales, Arizona 85628. 

2. Respondent, Jerome Grossman, is an individual doing business as 
Jerome Brokerage & Distributing Company, with an address at P.O. Box 6517, 
Nogales, Arizona 85628. At the time of the transaction involved herein, 
respondent was licensed under the Act. 

3. On February 13, 1986, complainant sold to respondent in interstate and 
foreign commerce 84 boxes of Mexican grown red bell peppers, FARMERS 
BEST brand, U.S. No. 1, at $17.80 per box plus $.65 per box for palletizing, 
for a total contract price of $1,549.80, F.O.B. The peppers were shipped from 

501 



Nogales, Arizona, to respondent's customer in Indianapolis, Indiana, on that 
date. 

4. The peppers arrived in Indianapolis, Indiana, on February 16, 1986, and 
were received and accepted by respondent's customer on that date. On 
February 19, 1986, respondent subjected the peppers to a federal inspection 
which showed that they were 100% red, and had 19% condition defects. 
Respondent had the peppers sold by another company than the one which 
received them, and remitted the net proceeds of $211.00 from the resale to the 
complainant. 

5. A formal complaint was filed on May 8, 1986, which was within nine 
months of the date the cause of action in this proceeding arose. An amended 
complaint was filed on November 17, 1986. 

Conclusions 

Complainant contends that the peppers were received and accepted by 
respondent through its customer at destination. We agree since an act or 
unloading is an act of acceptance, Crown Orchard Co. v. Mid-Valley Produce 
Co,, 34 Agric. Dec. 1381 (1975). Therefore, respondent has the burden to 
prove that the peppers did not make good delivery. Thereon Hooker Co. v. 
Ben Gatz Co., 30 Agric. Dec. 1109, 1112 (1971). It has failed to do so. 

Respondent relies on the findings of a federal inspection made on 
February 19, 1986, to prove that the peppers were not as warranted. 
However, as pointed out by complainant, and not controverted by respondent, 
a term of the contract of which respondent was fully aware, having dealt with 
complainant numerous times prior to the transaction in issue here, was that: 

NO CLAIMS ACCEPTED UNLESS SUPPORTED BY USDA 
INSPECTION WITHIN 24 HOURS FROM ARRIVAL AND WHEN 
CONFIRMED BY ADJUSTMENT MEMO FROM US. 
NOTIFICATION BY MAILGRAM IS REQUIRED. 

Respondent failed to notify complainant within 24 hours of arrival as to 
my potential condition defects, to provide an inspection within 24 hours of the 
irrival of the goods, or to send a mailgram to notify complainant of possible 
>roblcms. Further, it failed to complain of the terms set on the invoice, 
nvoiccs which are not challenged at the time of receipt are given great weight 
is regards the terms of the contract. Casey Wood\vyk, Inc. v. Albanese Famts t 
11 Agric. Dec. 311, 317 (1972). Thus, respondent failed to meet an essential 
equircment as to a breach of contract on the part of complainant. In view 
)f this, we need not consider whether the inspection three days after the 
arrival of the peppers could show that they failed to make good delivery, 
wticularly considering that respondent offered no evidence to show that 
.ransportation conditions were normal, which was its burden. Watson 
Distributing v. Fntlt Unlimited, Inc., 42 Agric. Dec. 1613 (1983), 

In view of the above, we find that respondent has violated section 2 of the 
Aid for which reparation must be awarded in the amount of $1,338,80, plus 
interest at the rate of 13% per annum. 



502 



J.A. WOOD CO..-VISTA, INC. v. TIDEWATER PRODUCE CO., INC. 



Order 

Within thirty days from the date of this order, respondent shall pay to 
complainant, as reparation, $1,338.80 with interest thereon at the rate of 13% 
per annum, from March 1, 1986 until paid. 

Copies of this order shall be served on the parties. 



UNITED POTATO CO., INC., v. MIKE SHAPIRO FROZEN FOODS, INC. 

PACA Docket No. R-88-75. 

Order of Dismissal issued February 12, 1988. 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer. 

ORDER OF DISMISSAL 

(Summarized) 

This is a reparation proceeding under the Perishable Agricultural 
Commodity Act, 1930, as amended (7 U.S.C. 499a el seq.). By letter dated 

heTi^ H '.,iTE Iai ? ant n . lificd lhc Dc P ar[ment lh* th* matter has 
been amicably settled by the parties. 

Accordingly, the complaint is hereby dismissed 
Copies of this order shall be served upon the parties. 



' WOOD co - v - 

R KERAGE COMPANY, INC 
Order On Reconsideration issued February 17, 1988. 
Order issued by Donald A. Campbell, Judicial Officer. 

ORDER ON RECONSIDERATION 

On January 12, 1988, a Decision and Order was issued ordering that 

amoun? 'I teK Pr ? U H Ce Ca >. InC ' P3y reparati n to <>PWnant in the 
amount or $2,092.25, and dismissing as to respondent Taylor Brokerage 

Company, Inc. On January 27, 1988, Tidewater filed a request for 
reconsideration. 

The request for reconsideration is denied without prior service on the 
other parties. The matters raised by Tidewater in its request were adequately 
considered by this tribunal previously. Nothing contained in the request would 
alter our opinion. 

In view of the above, the original Decision and Order remains in effect. 



503 



YAKIMA FRUIT & COLD STORAGE CO., v. FINUCANE, GILSON, 

FOSTER, INC. 

PACA Docket No. 2-7130. 

Decision and Order filed February 18, 1988. 

Failure to prove breach of contract - Dismissal of complaint. 

Complainant failed to sustain its burden to prove by a preponderance of the evidence the 
terms of the contract and respondent's breach thereof. Therefore, the complaint is dismissed. 

Complainant, pro se. 

Respondent, pro se. 

Thomas C. Heinz, Presiding Officer. 

Decision and Order issued by Donald A. Campbell, Judicial Officer, 

DECISION AND ORDER 
Preliminary Statement 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq.), hereinafter 
referred to as the PACA. A timely complaint was filed in which complainant 
sought a reparation award against respondent in the amount of $1,643.40 in 
connection with the sale and shipment of one trucklot of peaches in interstate 
commerce, 

A copy of the report of investigation made by the Department was served 
upon the parties. A copy of the formal complaint was served upon 
respondent, which filed an answer thereto denying liability to complainant. 

The amount claimed in the formal complaint docs not exceed $15,000.00, 
and the shortened method of procedure provided in section 47.20 of the Rules 
of Practice (7 C.F.R. 47.20) is applicable. Pursuant to this procedure, the 
verified pleadings of the parties are considered a part of the evidence in the 
case, as is the Department's report of investigation. In addition, the parties 
were given opportunities to file evidence in the form of sworn statements and 
to file briefs, but neither party did so. 



YAKIMA FRUIT & COLD STORAGE CO. v. FINUCANE, GILSON, FOSTER, JNC, 

$1,128.60, which amount has been remitted to Yakima. Yakima seeks 
reparation of $1,643.40, the difference between the contract price and the 
amount remitted. 

^ 5. The formal complaint was filed on December 12, 1985, which was 
Within nine months of the time the cause of action accrued, 

Conclusions 

As the moving parly, Yakima has the burden of proving by a 
preponderance of evidence the terms of the contract, Finucane's breach 
thereof, and the resulting damages, if any, sustained by Yakima. Justice v. 
Mtlford Packing Co., 34 Agric. Dec. 533, and cases cited at 535 (1975) 
Yakima has not met that burden. 

Yakima contends that the contract called for field pack peaches (peaches 
which have not been washed to remove naturally occurring fuzz and dirt) and 
that field pack peaches were shipped to Finucane. Finucane agrees that field 
pack peaches were shipped, but contends the contract called for shed pack 
peaches (peaches which have been washed and defuzzed). Yakima's invoice 
does not clearly indicate whether the contract called for field pack or shed 

' "" ndCr " C 1Umn \ Eaded " Grade and Pac " the fcvoicc 
arfiues that in the trade thi * term applies to 



cor, enuon, m the face of Finucane's sworn denial tha The contrac cK fo 

" 



fo prsf . ma aS c 

pre^rtl e oahe f ettnr raCt "* " S ad " ere " CE to 

Since we cannot conclude from the evidence of record [hat Finucane 






TU , , 

1 he complaint is hereby dismissed. 

Copies of this decision shall be served on the parties. 



505 



REPARATION DEFAULT ORDERS ISSUED BY 

DONALD A. CAMPBELL, JUDICIAL OFFICER 

(SUMMARIZED) 

BUD ANTLE, INC., d/b/a BUD OF CALIFORNIA v. FORT WAYNE 

PRODUCE COMPANY, INC. 

PACA Docket No. RD-88-96. 

Order of Dismissal Hied February 4, 1988. 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer. 

ORDER OF DISMISSAL 
(Summarized) 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a ct scq.}. By letter dated 
December 10, 1987, complainant notified the Department that respondent 
tendered $3,121.00 to complainant in full settlement of complainant's claim. 
Complainant, in its letter of December 10, 1987, authorized dismissal of its 
complaint filed herein. 

Accordingly, the complaint is hereby dismissed. 

Copies of this order shall be served upon the parties. 



FRANK BADILLO & SONS v. U.S. FOOD MARKETING INC, 
PACA Docket No. RD-88-141. 
Default Order filed February 8, 1988. 

Respondent was ordered to pay complainant, as reparation, $7,840.96, plus 
13 percent interest theron per annum from May 1, 1986, until paid. 



BONANZA FARMS INC., et al. v. DOMINIC PALAZZOLO. 

PACA Docket No. RD-88-152. 

Default Order issued February 18, 1988. 

Respondent was ordered to pay complainant, as reparation, $4,035.75, plus 
interest thereon per annum from April 1, 1987, until paid. 



REPARATION DEFAULT ORDERS 

BUSHMAN'S, INC., v. CLYDE B. TILLMAN, d/b/a TILLMAN PRODUCE. 

PACA Docket No. RD-88-92. 

Order of Dismissal filed February 4, 1988. 

Order of Dismissal issued by Donald A. Campbell, Judicial Officer 

ORDER OF DISMISSAL 
(Summarized) 

This is a reparation proceeding under the Perishable Agricultural 
Commodities Act, 1930, as amended (7 U.S.C. 499a et seq,). By letter 
received by the Department on December 22, 1987, complainant notified the 
Department that respondent tendered to complainant a check in full 
settlement of complainant's claim. Complainant, in its letter received 
December 22, 1987, authorized dismissal of its complaint filed herein. 

Accordingly, the complaint is hereby dismissed. 

Copies of this order shall be served upon the parties. 



CARDINAL DISTRIBUTING CO., INC. v. CHAPMAN PRODUCE CO., 

PACA Docket No. RD-88-145. 
Default Order issued February 8, 1988. 

Respondent was ordered to pay complainant, as reparation, $1,572.40, plus 
13 percent interest thereon per annum from February 1, 1987, until paid. 



CONTINENTAL SALES v. CONTINENTAL FOOD IMPORT, INC 
PACA Docket No. RD-88-149. 
Default Order issued February 9, 1988. 

Respondent was ordered to pay complainant, as reparation, $2,952.25, plus 
13 percent interest thereon per annum from April 1, 1987, until paid. 



FISHER RANCH CORPORATION v. JOHNNY E. FAIR d/b/a MRS. FAIR'S 

FINER FOODS. 

PACA Docket No. RD-88-15S. 

Default Order issued February 18, 1988. 

Respondent was ordered to pay complainant, as reparation, $4,377.20, plus 
13 percent interest thereon per annum from April 1, 1987, until paid. 



507 



FRUIT SALAD, INC. v. JUNE FOODS, INC. 

PACA Docket No. RD-88-142. 

Default Order issued February 8, 1988. 

Respondent was ordered to pay complainant, as reparation, $3,208,00, plus 
13 percent interest thereon per annum from May 1, 1987, until paid. 



GARDEN STATE FARMS, INC. v. FAIRHILL WHOLESALE, INC. 

PACA Docket No. RD-88-151. 

Default Order issued February 18, 1988. 

Respondent was ordered to pay complainant, as reparation, $8,343.98, plus 
13 percent interest thereon per annum from April 1, 1987, until paid. 



INDIAN RIVER GREENHOUSE COMPANY v. SOLAR ORGANIC 

SYSTEMS, INC. 

PACA Docket No. RD-88-160. 

Default Order issued February 22, 1988. 

Respondent was ordered to pay complainant, as reparation, $7,098.45, plus 
13 percent interest thereon per annum from April 1, 1986, until paid. 



TOM LANGE COMPANY, INC. v. SIX FLAGS PRODUCE, INC. 

PACA Docket No. RD-88-146. 

Default Order issued February 9, 1988. 

Respondent was ordered to pay complainant, as reparation, $8,981.13, plus 
13 percent interest thereon per annum from October 1, 1987, until paid. 



TOM LANGE COMPANY, INC. v. SUN-GLO, INC. 

PACA Docket No. RD-88-156. 

Default Order issued February 22, 1988, 

Respondent was ordered to pay complainant, as reparation, $36,629.10, 
plus 13 percent interest thereon per annum from December 1, 1986, until 
paid. 



REPARATION DEFAULT ORDERS 



JAMES MATRO & GAETANO MATRO, d/b/a JAMES MATRO & SON v. 
WENDELL L. BARNETT d/b/a BARNETT BROKERAGE. 
PACA Docket No. RD-87-403. 
Order issued February 4, 1988. 

ORDER REOPENING AFTER DEFAULT 
(Summarized) 

Respondent filed a motion to reopen the proceeding after default and 
allow the filing of an answer. Since respondent's failure to file a timely answer 
was the result of misunderstandinging, there is a good reason to reopen the 
proceeding. Accordingly, respondent's default in the filing of an answer is set 
aside. 



M. J. FARMS, INC. v. SUNRICH INCORPORATED. 

PACA Docket No. RD-88-159. 

Default Order issued February 22, 1988. 

Respondent was ordered to pay complainant, as reparation, $1,129.85, plus 
13 percent interest thereon per annum from September 1, 1985, until paid. 



NORTHERN PRODUCE MUSHROOMS, INC. v. CONTINENTAL FOOD 

IMPORT, INC. 

PACA Docket No. RD-88-148. 

Default Order issued February 9, 1988. 

Respondent was ordered to pay complainant, as reparation, $5,509.30, plus 
13 percent interest thereon per annum from February 1, 1987, until paid. 



J.R. NORTON COMPANY v. CHAPMAN PRODUCE CO., INC. 
Formerly: EDWARDS & CHAPMAN PRODUCE CO., INC. 
PACA Docket No. RD-88-144. 
Default Order issued February 8, 1988. 

Respondent was ordered to pay complainant, as reparation, $1,230.37, plus 
13 percent interest thereon per annum from May 1, 1987, until paid. 



509 



JERRY PEPELIS d/b/a JERRY PEPELIS PACKING CO. v. DON A 
FELUCCA d/b/a DON FELUCCA. 
PACA Docket No. RD-88-38. 
Order issued February 4, 1988. 

ORDER DENYING MOTION TO REOPEN, VACATING STAY ORDER 

REINSTATING DEFAULT ORDER 

(Summarized) 

A default order was issued on November 10, 1987, awarding reparation to 
complainant m the amount of $4,446.00 plus interest. Respondent moved thai 
the matter be reopened after default. On December 11, 1987, a stay order 
was issued. Respondent has not proffered a good reason why his answer was 
not timely filed, as he was given an opportunity to do. Rather, he has merely 
submitted a copy of his original motion to reopen, which he had previously 
been informed was inadequate to warrant reopening after default. 
Respondent's motion to reopen is denied, the December 11, 1987, stay order 
is vacated, and the November 10, 1987, default order is reinstated The 
amount awarded in the November 10, 1987, deault order, including interest 
shall be paid within 30 days from the date of this order. 



PRODUCE SPECIALISTS OF ARIZONA, INC. v. CATALINA TRADING 

PACA Docket No. RD-88-158. 

Default Order issued February 22, 1988. 

Respondent was ordered to pay complainant, as reparation, $5,370.60, plus 
13 percent interest thereon per annum from May 1, 1986, until paid. 



SALINAS MARKETING COOPERATIVE v. H. HALL & CO INC 

PACA Docket No. RD-88-150. 

Default Order issued February 9, 1988. 

Respondent was ordered to pay complainant, as reparation, $3,179.34, plus 
13 percent interest thereon per annum from December 1, 1986, until paid. 



SIX L's PACKING COMPANY, INC. v. JON-VEG SALES, INC. 

PACA Docket No. RD-88-157. 

Default Order issued February 22, 1988. 

Respondent was ordered to pay complainant, as reparation, $5,508.33, plus 
13 percent interest thereon per annum from February 1, 1987, until paid. 



REPARATION DEFAULT ORDERS 



P. TAV1LLA CO. MIAMI, INC. v. WORLD FOODS, INC. 
PACA Docket No. RD-88-147. 
Default Order issued February 9, 1988. 

Respondent was ordered to pay complainant, as reparation, $5,145.00, plus 
13 percent interest thereon per annum from October 1, 1986, until paid. 



VEG-A-MIX v. CHAPMAN PRODUCE CO., INC. 
Formerly; EDWARDS & CHAPMAN PRODUCE CO., INC 
PACA Docket No. RD-88-143. 
Default Order issued February 8, 1988. 

Respondent was ordered to pay complainant, as reparation, $457.75, plus 
13 percent interest ihereon per annum from February 1, 19S7, until paid. 



WASHINGTON LETTUCE & VEGETABLE COMPANY, INC v TRI- 

COUNTY PRODUCE, INC. 

PACA Docket No. RD-88-153. 

Default Order issued February 18, 1988. 

Respondent was ordered to pay complainant, as reparation, $4,175.75, plus 
13 percent interest thereon per annum from December 1, 1986, until paid. 



THE WOODS COMPANY, INCORPORATED v. JON-VEG SALES INC 

PACA Docket No. RD-88-154. 

Default Order issued February 18, 1988. 

Respondent was ordered to pay complainant, as reparation, $39,516.25, 
plus 13 percent interest thereon per annum from March 1, 1987, until paid. * 



511 



PLANT QUARANTINE ACT 

In re: AIR MAR SHIPPING. 

P.Q. Docket No. 312. 

Decision and Order filed December IS, 1987. 

Importation of dasheens and sweet potatoes without inspection -.Failure to file answer 

Robert Broussard, for Complainant. 

Respondent, pro se. 

Decision issued by Victor W. Palmer, Administrative Law Judge. 

DECISION AND ORDER 
Preliminary Statement 

This proceeding was instituted under the Act of August 20, 1912, as 
amended (Act) (7 U.S.C. 151-164a and 167), by a complaint filed by the 
Administrator of the Animal and Plant Health Inspection Service, United 
States Department of Agriculture. The complaint alleged that respondent 
violated section 319.56(a)) of the regulations promulgated thereunder (7 CFR 
329.56(a)). Copies of the complaint and the Rules of Practice governing 
proceedings under the Act were served by the Hearing Clerk, by certified 
mail, upon respondent. 

Pursuant to section 1,136 of the Rules of Practice (7 CFR 1.136) 
applicable to this proceeding, respondent was informed in the complaint and 
the letter of service that an answer should be filed within twenty (20) days 
after ^ service of the complaint, and that failure to file an answer would 
constitute an admission of the allegations in the complaint, under 7 CFR 
U36(c). The respondent was also informed that failure to file an answer 
would constitute a waiver of hearing, as provided in section 1.139 of the Rules 
of Practice (7 CFR 1.139). 

The respondent filed no answer during the twenty-day period allowed. 
Respondent's failure to file an answer within the time provided constitutes an 
admission of the allegations hit he complaint, under section 1.136(c) of the 
Rules of Practice (7 CFR 1.136(c)). Respondent's failure to file an answer 
also constitutes a waiver of hearing under section 1.139 of the Rules of 
Practice (7 CFR 1.139). Since respondent is deemed to have admitted the 
material allegations of fact in the complaint, they are adopted and set forth as 
the Findings of Fact. 

Findings of Fact 

1. Air Mar Shipping, respondent, is a corporation having a mailing 
address at P.O. Box 2664, San Juan, Puerto Rico 00903. 

2. On or about July 17, 1986, in San Juan, Puerto Rico respondent 
imported dasheens and sweet potatoes from the Dominican Republic in 
violation of 7 CFR 319.56(a), because the shipment was not available for 
USDA inspection at the respondent's facility in San Juan. 



DOUGLAS KAI AND ROYAL VSP SERVICES INC. 

Conclusion 

The respondent has failed to file any answer to any of the allegations in 
cne complaint. The consequences of such a failure were explained to the 
respondent in the complaint and in the letter of service that accompanied it 
iiy its silence respondent has admitted all of the material allegations of fact 
in the complaint and has waived a hearing. 



vinl^TYf the . FSndi ?B? of Fact set forth above, the respondent has 
violated the Act and regulations promulgated thereunder. The followine 
order is therefore issued. fa 



Respondent Air Mar Shipping is hereby assessed a civil penalty of seven 

H <f 7 " K^ 5 C$ f 7 r 0) J W l! ich , Shan bC Payable t0 the "'reasu'rer of S 
United States by certified check or money order, and which shall be 

forwarded to USDA, APHIS Field Servicing Office AccoSng Se ion 
Butler Square West 5th Floor 100 North 6th Street, Mlun^X^ 
55403 within tlurty (30) days from the effective date of this order 

This order shall have the same force and effect as if entered after full 
heanng and shall be fi , and c f fec , ive 35 after * *JU 

and Order upon respondent, unless there is an appeal to the Judicial Officer 

(7CFR ri S 145) n U45 f thC RUlCS f PraCUCe aPPliCable l ** 
[This decision and order became final February 2, 1988.-Editor.J 



In re: DOUGLAS KAI and ROYAL VSP SERVICES INC 
P.Q. Docket No. 249. ' 

Decision and Order filed December 23, 1987 

Failure to present baggage for inspection - Failure lo Hie answer. 

Joseph Pembroke, for Complainant. 

Respondent, pro se. 

Decision issued by Victor W. Palmer, Administrative Law Judge. 

DECISION AND ORDER 
Preliminary Statement 

This proceeding was instituted under the Act of August 20 1912 as 
amended, (7 U.S.C. 161 and 162) hereinafter the Act, by a complaint 
issued by the Administrator of the Animal and Plant Health Inspection 
Service, United States Department of Agriculture. The complaint alleged 
that respondent violated sections 161 and 162 of the Act (7 US C 161- 
162) and sections 318.13-10 and 318.13-12(a) of the regulations promulgated 
thereunder (7 CFR 318.13-10 and 318.13-12(a)). 

Copies of the complaint and the Rules of Practice governing proceedings 
under the Act were served by the Hearing Clerk, by certified mail, upon 
respondents. Pursuant to section 1.136 of the Rules of Practice (7 C.F.R. 
1.136) applicable to this proceeding the respondents were informed in the 



513 



complaint and the letter of service that an answer should be filed within (20) 
twenty days after service of the complaint, and that failure to file an answer 
would constitute a waiver of hearing, as provided in section 1.139 of the Rules 
of Practice (7 C.F.R. 1.139). 

The respondents filed no answers during the twenty-day period allowed. 
Respondents' failure to file an answer within the time provided constitutes an 
admission of the allegations in the complaint, under section 1.136(c) of the 
Rules of Practice (7 C.F.R. U36(c)). Respondents' failure to file an answer 
also constitutes a waiver of hearing under section 1.139 of the Rules of 
Practice (7 C.F.R. 1.139). Since respondents are deemed to have admitted 
the material allegations of fact in the complaint, they are adopted and set 
forth as Findings of Fact. 

Findings of Fact 

1. Douglas Kai, herein referred to as a respondent, is an individual whose 
business address is 1777 Ala Moana Boulevard, Suite 224, Honolulu, Hawaii 

2. Royal VSP Services, Inc., herein referred to as a respondent, is a 
corporation whose business address is 1777 Ala Moana Boulevard Suite 224 
Honolulu, Hawaii 96815. 

3. On or about February 9, 1986, the respondents violated sections 318 13- 
12(a) and 318.13-10 of the regulations (7 C.F.R. 318.13- 12(a) and 318.13-10) 
in that the respondents failed to present two (2) pieces of baggage at 
Honolulu International Airport for agricultural inspection, as required. 

Conclusion 

By reason of the facts in the findings of fact set forth above, respondents 
have violated the Act and regulations promulgated thereunder. Therefore, the 
following order is issued. 

The respondent Douglas Kai is hereby assessed a civil penalty of five 
hundred dollars ($500.00), and respondent Royal VSP Services, Inc., is hereby 
assessed a civil penalty of seven hundred and fifty dollars ($750.00) The civil 
penalties shall be payable to the "Treasurer of the United States" by certified 
check or money order, and which shall be forwarded to USDA, APHIS Field 
Servicing Office, Accounting Section, Butler Square West, 5th Floor, 100 
North 6th Street, Minneapolis, Minnesota 55403, within (30) days from the 
effective date of this order. This order shall have the same force and effect 
as if entered after full hearing and shall be final and effective 35 days after 
service of this Decision and Order upon respondent, unless there is an appeal 
to the Judicial Office pursuant to section 1.145 of the Rules of Practice 
applicable to this proceeding (7 CFR 1,145). 

[This decision and order became final February 7, 1988,-Editor.] 



LUZ ALMA SANTA MARIA 

In re: LUZ ALMA SANTA MARIA. 

P.Q. Docket No. 248. 

Decision and Order filed January 15, 1988. 

Importation of mangoes without permit - Admission of material allegations, 

Joseph Pembroke, for Complainant. 

Respondent, pro se. 

Decision issued by Edward II McGrail, Administrative Law Judge. 

DECISION AND ORDER 
Preliminary Statement 

This proceeding was instituted under the Act of August 20 1912 as 
amended, (7 U.S.C. 151-164a et scq. and 167) hereinafter the' Act by a 
complaint issued by the Administrator of the Animal and Plant Health 
Inspection Service, United States Department of Agriculture. The complaint 
alleged that respondent violated sections 154-164 and 167 of the Act (7 U S C 

*^ of thc reeulations 



Copies of thc complaint and thc Rules of Practice governing proceeding 
under the Act were served by thc Hearing Clerk, by certified mail, upon 
respondent. In response to the complaint, the respondent filed an answer in 
which she admitted all the material allegations of fact. Based upon such 
admission and in accordance with section 1.139 of thc Rules of Practice (7 
CfR & 1.139), the complainant now files a proposed decision along with a 
motion for thc adoption thereof with the Hearing Clerk 

The respondent was informed that the filing of an answer which admitted 
all the material allegations contained in the complaint, would constitute a 

J? K i i r ,m 8 a !P rovidcd undcr section 1-139 of the Rules of Practice. 
(/ CfK & 1.139). The respondent has filed an answer which admit all the 
material allegations contained in the complaint. 

This Decision and Order, therefore, is issued pursuant lo section 1.139 of 
the Rules of Practice applicable to this proceeding (7 CFR 1 139) 

Accordingly, the material facts alleged in the complaint, which are 
admitted by thc respondent in her answer, are adopted and set forth herein 
as the findings of fact. 

Findings of Fact 

1. Luz Alma Santa Maria, respondent, is an individual whose address is 
40-50 Glcanc, Elmhurst, New York 11373. 

t 2. On or about December 15, 1985, at Jamaica, New York, respondent 
imported stx mangoes from the Philippines into the United States in violation 
of 7 C.F.R. 319.5G-2(c), because thc fruit was not accompanied by a permit 
as required. 

Conclusion 

By reason of thc facts in the findings of fact set forth above, respondent 
has violated the Act and regulations promulgated thereunder. Therefore, the 
following order is issued. 



515 



The respondent is hereby assessed a civil penalty of two hundred and fifty 
dollars ($250.00)' which shall be payable to the "Treasurer of the United 
States" by certified check or money order, and which shall be forwarded to 
USDA, APHIS Field Servicing Office, Accounting Section, Butler Square 
West 5th Floor, 100 North 6th Street, Minneapolis, minnesota 55403, within 
(30) days from the effective date of this order. This order shall have the same 
force and effect as if entered after full hearing and shall be final and effective 
35 days after service of this Decision and Order upon respondent, unless there 
is an appeal to the Judicial Officer pursuant to section 1.145 of the Rules of 
Practice applicable to this proceeding (7 CFR 1.145). 

[This decision and order became final February 28, 1988.-Editor] 



In re: KARASU DENIZCCILK Ve NAKLIYAT. 

P.Q. Docket No. 127. 

Decision and Order Hied December 16, 1987. 

Failure to store foreign garbage in proper containers - Failure to file answer. 

Joseph Pembroke, for Complainant. 

Respondent, pro se. 

Decision and Order issued by Victor W. Palmer, Administrative Law Judge 

DECISION AND ORDER 
Preliminary Statement 

This proceeding was instituted under the Act of February 2, 1903, amended 
(Act) (21 U.S.C. 111 and 120), the Federal Plant and Pest Act, as amended 
(7 U.S.C. 150 et seq.\ and the Act of August 20, 1912, as amended (7 
U.S.C. 161 and 162) by a complaint filed by the Administrator of the 
Animal and Plant Health Inspection Service, United States Department of 
Agriculture. The complaint alleged that respondent violated section 
330.400(b)(l) of the regulations (7 C.F.R. 330.400(b)(l) and 94.5(b)(l) of 
the regulations (9 C.F.R. 94.5(b)(l)) promulgated under the above mentioned 
Acts. Copies of the complaint and the Rules of Practice governing proceedings 
under the Act were served by the Hearing Clerk, by certified mail, upon 
respondent. 

Pursuant to section 1.136 of the Rules of Practice (7 CFR 1.136) 
applicable to this proceeding, respondent was informed in the complaint and 
the letter of service that an answer should be filed within twenty (20) days 
after service of the complaint, and that failure to file an answer would 
constitute an admission of the allegations in the complaint, under 7 CFR 
1.136(c), The respondent was also informed that failure to file an answer 
would constitute a waiver of hearing, as provided in section 1.139 of the Rules 
of Practice (7 CFR 1.139). 

The respondent filed no answer during the twenty-day period allowed. 
Respondent's failure to file an answer within the time provided constitutes an 



This civil penalty is in conformance with the guidelines set forth in In re Lopez. 44 A,D. 
(October 7, 1985), ^ 

516 



KARASU IMJNI/CCILK Vc NAKUYAT 

admission of the allegations in the complaint, under section l.J3o'(c) of the 
Rules of Practice (7 CFR U36(c)). Respondent's failure to fie an answer 
also constitutes a waiver of hearing under section 1 139 of the Rules ol 
Practice (7 CFR 1.139). Since respondent is deemed to have admitted the 
material allegations of fact in the complaint, they are adopted and set forth as 
the Findings of Fact. 

Findings of Fact 

1 Karasu Dcnizccilk Ve Nakliyat, herein referred to as respondent, is the 
owner of the M/V C. Filyos, whose home address is Istanbul, Tin-key. 
Respondent's agent in the United Stales is Barber Steamship Company, whose 
address is 17 Battery Place, New York, New York 10004. 

2. On or about April 10, 1985, the respondent on its ship the M/V C. 
Filyos, which arrived at Albany, New York, violated section 330.400(b)(l) of 
the regulations (7 C.F.R. 94.5(b)(l)), because it had foreign origin garbage 
on board, which was not contained in tight, leak-proof covered receptacles, as 
required. 

Conclusion 

The respondent has failed to file any answer to any of the allegations in 
the complaint. The consequences of such a failure were explained to the 
respondent in the complaint and in the letter of service that accompanied it. 
By his silence respondent has admitted all of the material allegations of fact 
in the complaint and has waived a hearing. 

By reason of the Findings of Fact set forth above, the respondent has 
violated the Act and regulations promulgated thereunder. The following 
order is therefore issued. 

Order 

Respondent, Karasu Dcnizccilk Vc Nakliyat, is hereby assessed a civil 
penalty of five hundred dollars ($500), which shall be payable to the 
"Treasurer of the United States" by certified check or money order, and which 
shall be forwarded to USDA, APHIS Field Servicing Office, Accounting 
Section, Butler Square West, 5th Floor, 100 North 6th Street, Minneapolis, 
Minnesota 55403, within thirty (30) days from the effective date of this order 

This order shall have the same force and effect as if entered after full 
hearing and shall be final and effective 35 days after service of this Decision 
and Order upon respondent, unless there is an appeal to the Judicial Officer 
pursuant to section 1.145 of the Rules of Practice applicable to this proceeding 
(7 CFR 1.145). 

[This decision and order became final February 9, 1988.-Edilor]