Petition for Writ of Certiorari — Moore v. Espy

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Bupreme Court, U.S.

92-1971 FILED

JUN 11 1993

OFFICE OF THE CLERK

IN THE UNITED STATES SUPREME COURT

1993 TERM

JACKIE MOORE, INDIVIDUALLY AND AS THE

OPERATOR OF

JOPLIN REGIONAL STOCKYARDS; and

JOPLIN REGIONAL STOCKYARDS, INC.,

a Missouri Corporation,

PETITIONERS,

EDWARD MADIGAN

SECRETARY OF THE UNITED STATES

DEPARTMENT OF AGRICULTURE,

AND THE UNITED STATES,

RESPONDENTS,

ON PETITION FOR WRIT OF CERTIORARI TO

THE 8TH CIRCUIT COURT OF APPEALS

PETITION FOR WRIT

OF CERTIORARI

Ernest H. Van Hooser, Mo Bar # 27130

Counsel of Record

Gerard D. Eftink, MO Bar # 28683

Co-Counsel

Van Hooser, Olsen & Eftink, P.C.

5800 East Bannister Road, Suite 250

Kansas City, MO 64134

JUNE 1993 (816) 767-1500

QUESTIONS PRESENTED

1. Whether the USDA may promulgate a

regulation which provides that thereafter it can adopt

regulations without following the notice and comment

requirements of 5 U.S.C. 553.

y a Whether, while disregarding the "notice and

comment" requirements of 5 U.S.C. 553, the USDA can

adopt new rules of practice which deviate from the "Uniform"

Rules of Practice Governing Adjudicatory Proceedings which

had previously been promulgated pursuant to 5 U.S.C 553 by

the USDA.

3. Whether under the law the USDA has the

authority to deprive the Petitioners of the use of their

property where the USDA found that independent third

parties committed violations.

PARTIES

PETITIONERS:

RESPONDENTS:

Jackie Moore;

Joplin Regional Stockyards, Inc.

(There is no parent company or

subsidiary to be listed under

Rule 29.)

The Secretary of the United

States Department of

Agriculture;

The United States.

Questions

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Constitutional and Statutory ProvisiONs............cseseseseeees ix

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Reasons for Granting the Wit..........cceseseseseseeceeeeeeenenenees 1]

I. CERTIORARI SHOULD BE GRANTED BECAUSE IN

ALLOWING THE USDA TO USE THE INFORMAL

RULES OF PRACTICE THAT WERE ADOPTED

WITHOUT NOTICE AND OPPORTUNITY FOR

COMMENT THE EIGHTH CIRCUIT FAILED TO

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FOLLOW THELAW AND THE DECISION OF THE 8TH

CIRCUIT RESULTS IN CONFLICTS IN PRINCIPLE

AMIUING THE LFW COUR Ti ivccccssrcsscsnssssosesessessewssses 12

II. CERTIORARI SHOULD BE GRANTED BECAUSE

IN ALLOWING THE USDA TO SUSPEND MOORE

THE 8TH CIRCUIT FAILED TO FOLLOW THE LAW

AND THE DECISION OF THE 8TH CIRCUIT RESULTS

IN CONFLICTS IN PRINCIPLE AMONG THE LOWER

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TABLE OF AUTHORITIES

CASES

Air Transport Association of America v. Department of

Transportation, 900 F.2d 369 (D.C. Cir. 1990), vacated 111

S.Ct. 944, on remand 933 F.2d 1043..........ssseeseee 14,20,22

Belsinger v. District of Columbia, 295 F.Supp. 159 (D.C.

1969) reversed, 4396 FAG 2146 ...rcccscesseseccerssconcosesesscsnsonasocs 26

Brown Express, Inc. v. U.S., 607 F.2d 695 (Sth Cir. 1979)

Capitol Packing v. U.S., 350 F.2d (10th Cir.

City of Webster Groves v. Erickson, 789 S.W.2d 824

CTA, TG Daccescesnsneninsiensnszentcineneninnennentencesatiasansanse 26

Chrysler Corp. v. Brown, 441 U.S. 281, 99 S.Ct. 1705, 60

I a iniscciuiaisinienonstnontigaaiaes 20

Committee For Fairness v. Kemp, 791 F.Supp. 888 (D.C.

Esch v. Yeutter, 876 F.2d 976 (D.C. Cir.

RL TON er: 19

Gulf States _v. NLRB, 579 F. 2d 1298 (Sth Cir

Ingram Barge Company v., U.S., 691 F.Supp. 474 (D.C. 1988),

Se se OO rs Cs BCI Pactcisscsssasasnsseniesinniseinaibianinni 22

Lyng v. Payne, 476 U.S. 926, 90 L.Ed 2d 921, 106 S.Ct. 2333

EELS, a oa EO ea I Ene ewes 24

National Association of Home Health Care Agencies v.

Schweiker, 690 F.2d 932 (D.C. Cir. 1982), cert. denied, 103

ET ical alas cia ahenceeianianliiainaleiniilibabecil eC teas 23

r Frei Traffi iation v

Py ee Gils BIMUEF Paciinnsensinicincilinnactnrinaitiniisbeisisinann 20

Oglala Sioux _v. Andrus, 603 F.2d 707 (8th Cir.

TTT Tish sits sentsesieneeneesinnnsienisinnsnaninceenslinanenibdasiaaunlidndinisotia 19

U.S. ex rel, Accardi v, Shaughnessy, 347 U.S. 260, 98 L.Ed

ee Fe ee I CR dicinisnnthscenicniiilnisiponnatisienietibbadeainadl 21

U.S. v. Johnson, 35 F.2d 256 (D.Nev. 1929).........ssssse00 26

USS. v. Hoover, 133 F. 950 (D.Neb. 1904)... essseseesees 27

STATUTES

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iia cenmmnnoanens xi,6,16,17

i i cieinliniateeaniensle 16,17

| A Te xii,15-17,27

es OR ae Rear 16-17,27

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SL ne a eee 16-17

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ON IIE i scsccstiticnieniininetersanicieainsssigmioiiall ix,1

REGULATIONS

I SO is iisisincinvesannncrenen 3,6-7,16-17

icine 2,18

OTHER

In re David Harris, P.Q. Docket No. 91-27, decided May 1,

1991 (Ag. DOC. __)acovccecsccscecsssoneers viciniaiedinaniinibaiamiiial 15

vil

i is |

Scalia, 1978 Supreme Court Review [University of Chicago

FN IP Aievaisieicecnaiaedaaieesiinniiadeehilaiadanitilansciin 13

FP Ned tig PURINE, UII SB avsccincensecnerientsvensnensinnionsinnan 26

U.S. Code Congressional Service, 79th Cong. (1946), pp.

RRO ay: Mae aninissncisieeniinstainncvachaiialieteeiensanannidicanieiaihiin 13

Federal Register, Vol 36, no. 143, July 24, 1971, page

OPINIONS

The April 1, 1993, opinion of the Court of Appeals for

the 8th Circuit, whose judgment is herein sought to be

reviewed, is reported at 1993 WL 92430, and is reprinted in

the appendix to this Petition beginning at page 1. The prior

opinion of the United States District Court for the District of

Missouri, Western Division, also reprinted in the appendix at

page 15, is reported at 789 F. Supp. 1479 (W.D. Mo. 1992).

The decision of the United States Department of Agriculture,

decided on December 10, 1990, which was not published, is

found in the appendix at page 34.

JURISDICTION

Vili

The judgment of the Court of Appeals was entered on

April 1, 1993. Rehearing was denied on May 5, 1993. The

jurisdiction of the Supreme Court is invoked pursuant to 28

U.S.C. 1254, and 5 U.S.C. 702-704. The jurisdiction of the

Court of Appeals and the U.S. District Court was based on 5

U.S.C. 702-704, 28 U.S.C. 1331, 28 U.S.C. 2201, and 28

U.S.C. 1361.

N TA Y PR I

ADMINISTRATIVE PROCEDURE ACT

5 U.S.C. § 553. Rule making.

(a) This section applies, according to the provisions

thereof, except to the extent that there is involved -

(1) A military or foreign affairs function of the

United States; or

(2) A matter relating to agency management or

personnel or to public property, loans, grants, benefits or

contracts.

(b) General notice of proposed rule making shall be

published in the Federal Register unless persons subject

thereto are named and either personally served or otherwise

have actual notice thereof in accordance with law. The notice

shall include -

(1) | Astatement of the time, place, and nature of

public rule making proceedings;

(2) | Reference to the legal authority under which

the rule is proposed; and

(3) Either the terms or the substance of the

proposed rule or a description of the subjects and issues

involved.

Except when notice or hearing is required by statute,

this subsection does not apply -

(A) To interpretative rules, general statements of

policy, or rules of agency organization, procedure, or

practice; or

(B) When the agency for good cause finds, and

incorporates the finding and a brief statement of reasons

therefore in the rules issued that notice and public

procedure thereon are impracticable, unnecessary, or

contrary to the public interest.

give interested persons an opportunity to participate in the

rule making through submission of written data, views, or

arguments with or without opportunity for oral presentation.

After consideration of the relevant matter presented, the

agency shall incorporate in the rules adopted a concise

general statement of their basis and purpose. When rules are

required by statute to be made on the record after

opportunity for an agency hearing, sections 556 and 557 of

this title apply instead of this subsection.

(d) The required publication or service of a substantive

rules shall be made not less than 30 days before its effective

date, except -

(1) A substantive rule which grants or recognizes

an exemption or relieves a restriction;

(2) Interpretative rules and statements of policy;

(3) As otherwise provided by the agency for good

cause found and published with the rule.

(e) | Each agency shall give an interested person a right to

petition for the issuance, amendment or repeal of a rule.

5 U.S.C § 558. Imposition of Sanctions; Determination of

Applications for Licenses; Suspension, Revocation, and

Expiration of Licenses.

(a) This section applies, according to the

provisions thereof, to the exercise of a power or authority.

(b) Asanction may not be imposed or a

substantive rule or order issued except within jurisdiction

delegated to the agency and as authorized by law.

required by law, the agency with due regard for the rights and

privileges of all. the interested parties or adversely affected

persons and within a reasonable time, shall set and complete

proceedings required to be conducted in accordance with

sections 556 and 557 of this title or other proceedings

required by law and shall make its decision. Except in cases

of willfulness or those in which public health, interest, or

safety requires otherwise, the withdrawal, suspension,

revocation or annulment of a license is lawful only if, before

the institution of agency proceedings therefore, the licensee

has been given -

(1) notice by the agency in writing of the facts or

conduct which may warrant the action; and

(2) opportunity to demonstrate or achieve

compliance with all lawful requirements.

When the licensee has made timely and sufficient application

for a renewal or a new license in accordance with agency

rules, a license with reference to an activity of a continuing

nature does not expire until the application has been finally

determined by the agency.

CATTLE CONTAGIOUS DISEASES ACT

21 U.S.C. § 111. Regulations to Prevent Contagious

Diseases.

The Secretary of Agriculture shall have authority to

make such regulations and take such measures as he may

deem proper to prevent the introduction or dissemination of

the contagion of any contagious, infectious, or communicable

disease of animals and/or live poultry from a foreign country

into the United States or from one state or territory of the

United States or the District Columbia to another, and to

seize, quarantine, and dispose of any hay, straw, forage, or

similar material, or any meats, hides, or other animal

products coming from an infected foreign country to the

United States, or from one state or territory or the District of

Columbia in transit to another state of territory or the

District of Columbia whenever in his judgment such action is

advisable in order to guard against the introduction or spread

of such contagion.

21 U.S.C § 122. Offenses; Penalties.

Any person, company, or corporation knowingly

violating the provisions of this act or the orders or regulations

made in pursuance thereof, shall be guilty of a misdemeanor,

and on conviction shall be punished by a fine of not less than

$100.00 nor more than $5,000.00, or by imprisonment not

more than 1 year, or by both such fine and imprisonment.

Any person, company, or corporation violating such

provisions, orders, or regulations may be assessed a civil

penalty by the Secretary of Agriculture of not more than

$1,000.00. The Secretary may issue an order assessing such

civil penalty only after notice and an opportunity for an

agency hearing on the record. Such orders shall be treated as

a final order reviewable under Chapter 158 of Title 28. The

validity of such order may not be reviewed in an action to

collect such civil penalty.

TATEMENT OF THE E

The Petitioners request that the Court issue its writ to

the 8th Circuit Court of Appeals. Petitioners seek relief from

a decision of the United States Department of Agriculture

(USDA) which ordered a suspension of the specifically

approved stockyard status (SASS) of the Petitioners. The 8th

Circuit upheld part of the USDA decision and failed to grant

Petitioners the relief requested. Federal court jurisdiction

was based on 5 U.S.C. 702-704, 28 U.S.C. 1331, 28 U.S.C.

2201 and 28 U.S.C. 1361.

PROCEDURAL HISTORY

Jackie Moore and family purchased the stockyards at

Joplin, Missouri, in late 1986. His family owns the

corporation referred to as Joplin Regional Stockyards, Inc.

There had been a stockyard operated by others on the

grounds prior to this. After Petitioners began their

operation, four livestock commission companies thereafter

handled livestock transactions at the stockyards. One of

those commission companies is owned by Petitioners. The

other three commission companies are independent third

parties who lease space from the Petitioners.

For many years the USDA has been engaged in a

brucellosis program in cooperation with the states. At the

time at issue the incidence of brucellosis in cattle in Missouri

was less than 1/4 of 1 percent. The USDA contends that the

Petitioners must have a license (SASS) granted by the USDA

to handle "test eligible" livestock in interstate commerce.

"Test eligible" cattle are those that are capable of breeding,

with exceptions based on age.

The USDA requires that a "stockyard operator"

execute an agreement with the USDA. Moore executed the

agreement on forms provided to him by the USDA in

February 1987.

Improvements were made in sanitation and in the

identification of livestock after Petitioncrs purchased the

facility. On October 13, 1988, in a periodic report (the 1988

report), a government inspector indicated that the stockyards

did not have a satisfactory overall evaluation, but wrote that

improvements had been made and noted that the "old facility

(was) being rebuilt." The USDA contends that there were

two types of problems at the yards: 1.) sanitation, and 2.)

maintenance of identity of cattle. The USDA contends that

in May 1989 a USDA inspector (who did not testify at the

USDA hearing) found that the stockyard was not in

compliance.

The USDA had promulgated a regulation in 1986

which stated that stockyard operators must sign an agreement

to have SASS status and that if the USDA sought to revoke

the SASS of a stockyard operator it would have a hearing "in

accordance with rules of practice which shall be adopted for

the proceeding." 9 C.F.R. 78.44. In September 1989, the

USDA determined to seek revocation of the Moore’s SASS.

On about September 15, 1989, the USDA adopted "rules of

practice" to be applied in this particular hearing. The USDA

did not follow the notice and comment requirement set out

in 5 U.S.C. 553. The USDA did not publish these new rules.

There was no opportunity for comment. On about

September 15, 1988, the USDA simply prepared rules of

practice for this proceeding against Moore. (For brevity,

these rules will hereafter be referred to as the unpublished

rules.)

On about September 15, 1989, the USDA sent to

Jackie Moore 1.) a letter of charges and 2.) a copy of these

unpublished rules of practice.

Jackie Moore obtained counsel and contested the

charges. Moore’s counsel determined that the USDA had

"uniform" rules of practice which had been published which

counsel believed should apply to the suspension proceeding

instead of the unpublished rules. Those "uniform" rules of

practice were found at 7 C.F.R. 1.130 et seg. Among other

things, the uniform rules of practice of the USDA provide

that the accused is entitled to a hearing in front of an

Administrative Law Judge, sets out requirements for the use

of agency reports, sets out a process for appeal, and makes

provisions for subpoenas and discovery.

MOORE RAISED THE ISSUE. Moore first raised

the issue of use of the unpublished rules during a pre-hearing

conference held with hearing officer Frank Tang on or about

May 29, 1990. The hearing officer was an attorney employed

by the Animal and Plant Health Inspection Service (APHIS)

of the USDA, which was the same branch of the USDA

which was prosecuting the charges. The USDA had picked

Mr. Tang to be the hearing officer. Tang was not an ALJ.

After the pretrial conference the hearing officer wrote

as follows in a pretrial memo:

In reviewing the rules of practice that have

been adopted for the hearing, it has been

determined that the hearing officer does

not have subpoena power.

Prior to the USDA hearing, Moore filed written

objections which stated in pertinent part:

Respondent (Moore) is confronted with

what apparently has been styled as some

kind of "informal" hearing in which

(USDA) would seek to withdraw the

“approved stockyard status”... (Moore) has

heretofore, by telephone conference,

inquired as to the type of proceeding.

Among other things, (Moore) has been

advised that the hearing officer does not

have the power to issue subpoenas. By this

written objection (Moore) would elaborate

on the concerns that it (sic) has expressed

with the hearing officer and counsel for

APHIS (The Animal and Plant Health

Inspection Service of the USDA).

The first question asks for the source of

authority of APHIS to act and the source of

the authority of the type of hearing being

held. (Moore) has reviewed Title 21 of the

U.S. Code and can find no authority for the

action being taken or the type of hearing

being held...

There is also no authority for the type of

hearing being used by the USDA in the

present case. The USDA must comply with

its own regulations. The regulations found

at 7 C.F.R. 1.130 are entitled "Rules of

Practice Governing Formal Adjudicatory

Proceedings Instituted by the Secretary

under Various Statutes." Section 1.131

states that the rules of practice in this sub-

eternal

part shall be applicable to all adjudicatory

proceedings under the following statutory

sections, among others: The Animal

Industry Act, 21 U.S.C. 117, the Cattle

Contagious Diseases Act, 21 U.S.C. 122,

the Statutory Provisions found at 21 U.S.C.

§ 127, and other adjudicatory proceedings...

The importance of determining whether the

rules of practice apply is, inter alia, that an

Administrative Law Judge must be assigned

to hear the case and the Jencks Act is

applied by virtue of the regulations.

If this action is an adjudicatory proceeding

this action should be dismissed for failure to

follow the published rules of practice or at

least stayed until the USDA complies with

the rules of practice. If this action is not an

adjudicatory proceeding then (Moore)

requests that he be informed of the

authority under which this action is

brought.

Additionally, if this is an adjudicatory

action the provisions of the Administrative

Procedure Act governing adjudications

must be applied.

***

Section 558 of 5 U.S.C. states that "a

sanction may not be imposed or a

substantive rule or order issued except

within jurisdiction delegated to the agency

and as authorized by law."*** It is

submitted that the USDA does not have the

authority to take the present action.

WHEREFORE, 1.) (Moore) objects to the

assertion of jurisdiction, 2.) (Moore)

objects to the type of hearing employed,

and 3.) (Moore) objects to the failure of the

USDA to apply the rules of practice.

(Appellants’ appendix before the 8th

Circuit, pages 17-20.)

This matter was argued on the record prior to the

agency hearing (Tr. 5). Moore argued that the Uniform Rules

of Practice published at 7 C.F.R. 1.131 should be applied

instead of the unpublished rules. The USDA argued that they

were proceeding under 21 U.S.C. § 111 and that it was broad

enough for the USDA to proceed in this manner. The USDA

also stated on the record that its employee, the hearing officer,

should not decide this matter, but rather that the matter should

be left for the federal courts to decide.’ Counsel for the

USDA made the following statement to the hearing examiner:

A Deputy Administrator has appointed you,

believed anything regarding jurisdiction or

your authority would be an appellate review

in a district court, and I don’t believe you

should get to that issue at this point in time

(sic). (Appellants’ Appendix before the 8th

Circuit, pages 22-24.)

’ Both the District Court and the Appeals Court also

declined to address the issue by claiming that the matter

should have been raised before the agency. They failed to note

that the issue was raised before the agency.

The hearing examiner then off the record indicated that

he would not rule on the objection, and he began the hearing.

After the hearing, during briefing before the hearing

examiner, Moore filed a further statement regarding these

objections, stating:

At the hearing (Moore) filed a written

objection to the jurisdiction of the USDA

to take the proposed action and an

objection as to the type of hearing being

held...By not following the published rules

of practice and instead using informal rules,

the USDA has violated the Administrative

Procedure Act. (Appellants’ Appendix

before the 8th Circuit, at pages 65-66.)

The hearing examiner paid no heed to these objections

and thereafter issued recommended findings of fact and

conclusions of law adverse to Petitioners, which were adopted

by the USDA on December 10, 1990 along with an order for

a five year suspension. Petitioner Moore then filed suit with

the District Court. The corporation, Joplin Regional

Stockyards, Inc., joined in this action. Petitioners again argued

that the USDA should not be allowed to use these unpublished

rules of practice and instead should have been required to

comply with the Uniform Rules of Practice which had been

properly promulgated through notice and comment (7 C.F.R.

1.130). The District Court ruled against the Petitioners. The

Court declared that the Petitioners should have raised the

issues below, failing to note that Petitioners had raised the

issues before the USDA hearing.

The matter was then appealed by Petitioners to the 8th

Circuit Court of Appeals. The 8th Circuit ruled against

Petitioners, and declined to rule on this issue by stating

(incorrectly, we believe) that Petitioners failed to raise the

argument regarding the rules of practice prior to the time the

USDA reached a final decision.

OTHER FACTS

Government inspectors allegedly found incidents of

non-compliance. Two inspection reports were presented at the

USDA hearing. The first one was dated October 1988. It was

signed by Dr. Charles Dake. Dake testified in person. The

individual that allegedly issued the second report did not testify

in person; his report was apparently accepted by the hearing

officer under section 7 (h)(iv) of the unpublished rules of

practice. Dr. Dake provided an affidavit after the USDA

hearing which was presented to the District Court by the

USDA. In the affidavit Dake stated that he rechecked the

stockyards two weeks after the October 1988 report and found

that all "deficiencies" were brought into compliance.

At the USDA hearing Dake testified that he had been

present at the stockyards numerous times during the period at

issue and he saw no violations of the brucellosis laws by the

Petitioners; he did not think the stockyards were unfit for

brucellosis testing in 1988; and that it was the duty of the State

Deputy Veterinarian (Dr. Short) to identify animals coming

into the market. (This was important because the USDA

disregarded Dake and concluded that it was the duty of Moore

to identify animals coming into the stockyards, even when

independent third parties were handling the transactions.)

Walter Jones, who was employed by the USDA at all

times relevant for the purpose of supervising the identification

of animals at the stockyards, stated in an affidavit that was

obtained after the USDA hearing that the condition of the

stockyards at the relevant times was average for stockyards in

Missouri; that Petitioners had made great improvements to the

facilities; that improvements were made in the identification of

livestock and in sanitation; and that whenever he brought

something to the attention of Moore, Petitioners took action

to remedy the situation.

At the USDA hearing an inspection report from Dr.

Gerald McKee was presented. This report indicated that when

he inspected the stockyards in October 1989 the facility was in

an "excellent" state of cleanliness and sanitation. The evidence

tended to show that the condition of the stockyards went from

average to excellent during the first few years that Petitioners

owned the facilities.

No evidence was presented of any incidence of the

disease of brucellosis being present in, or spread by, cattle that

went through the stockyards. Former State Epidemiologist Dr.

James Badger testified that the infection rate in that area of

Missouri was minimal.

The hearing examiner, the District Court Judge, and the

8th Circuit all stated that there were improvements on the part

of the Petitioners.

After commending Petitioners, the USDA issued a 5

year suspension. The courts ruled that any suspension over 6

months could not be supportable.

While obviously finding at least part of the USDA

decision arbitrary, the courts declined Petitioners’ request that

the decision be set aside or reopened.

One of the questions in this case was whether the

Petitioners were responsible for the alleged violations. The

"identity" violations were cases where a seller delivered

livestock to the stockyards and the seller’s address was written

down as being in Missouri, when the USDA iater concluded by

tracing the serial numbers on ear tags that the animals had

been reported as being ir: another state at certain times not too

long before the sale. Only two "identity" violations occurred

after the October 1988 report, and they were both transactions

handled by an independent third party.

The evidence presented by the USDA was that the

Petitioners were involved in no identification violations after

the first report. Petitioners contended that after they were

given such warning they brought themselves into compliance,

and this is shown by an absence of transactions thereafter. The

Petitioners also contend that it was Dr. Short who was

responsible for identification, and he, instead of Petitioners,

should have policed the third parties. The 8th Circuit decision

held that the USDA did not err in holding Petitioners

responsible for the two post-warning violations which were |

committed by someone else. The 8th Circuit concluded that

Petitioners had the authority to stop misidentification by those |

who rented space at the stockyards and that Petitioners failed

to correct the actions taken by independent third parties. The

actions taken by Petitioners to try to stop such activities was

rejected by the 8th Circuit as being insufficient.

Petitioners contended that they did what they could, but

had not been told they were supposed to police third parties

and had little control. The lack of control was demonstrated

by the conduct of the State Deputy Veterinarian, Dr. Steven

Short. Short was Deputy State Veterinarian in charge of the

identification and testing program at the stockyards until

March 1989. Short was not an employee of Petitioners. Short

was the government agent who was stationed at the stockyards

ee nT ee Te |

who had the job of blood-testing and identifying the animals

that were being sold by the commission companies. His tenure

at the stockyards covered the time span that included all of the

alleged identification violations that were presented by the

USDA at the hearing. Short had a troubled history. He

admitted he had been regularly impaired on cocaine while he

was supposed to be performing his duties as a state deputy.

Jackie Moore had contacted Missouri and tried to get the State

to replace Short, but the Missouri State Veterinarian refused.

Finally, after Dr. Short became a resident at a drug

rehabilitation center, the State of Missouri listened to the

Petitioners’ pleas and replaced him. The USDA could not

show any incidents of identification violations occurring after

Dr. Short was replaced.

Petitioners presented evidence of their good faith.

They had previously told State employees that if there was ever

a problem to bring it to their attention and it would be

rectified. Petitioners placed signs at the stockyards which told

sellers that the stockyards must absolutely have the complete

and accurate address of the owner who sells livestock.

Petitioners expended time and money to improve the facility.

Dr. Short in a sworn statement told state and government

investigators that Moore was trying to do everything on the "up

and up." After Dr. Short became aware that the Petitioners

were trying to get the state to fire him he stated to investigators

that if he were fired he would guarantee that the stockyards

would have many "illegalities.". The evidence showed

improvements on the part of Petitioners while the government

was hindering Petitioners’ efforts.

REASONS FOR GRANTING THE WRIT

CERTIORARI SHOULD BE GRANTED BECAUSE IN

ALLOWING THE USDA TO USE THE INFORMAL

RULES OF PRACTICE THAT WERE ADOPTED

WITHOUT NOTICE AND OPPORTUNITY FOR

COMMENT THE 8TH CIRCUIT FAILED TO FOLLOW

THE LAW AND THE DECISION OF THE 8TH CIRCUIT

RESULTS IN CONFLICTS IN PRINCIPLE AMONG THE

LOWER COURTS.

The present case involves questions that the Supreme

Court should decide. Can an agency adopt rules of practice

that govern actions against individuals without adherence to

the notice and comment procedures of 5 U.S.C. 553? Some

courts have held that rules of practice governing adjudications

or procedural rules that affect rights of individuals must

comply with the notice and comment procedure of 5 U.S.C.

553. Other courts have indicated that notice and comment is

needed when the rules of practice deviate from previous rules.

The 8th Circuit has not followed those courts. The 8th

Circuit by the present decision allows federal agencies to adopt

new rules of practice without notice and comment, even when

the new rules deviate from the norm. As a result of this

decision there is conflict among the circuits.

The Supreme Court should decide this issue because

the conflict among the courts leads to confusion and because

the issue is important. As more authority is turned over to

federal agencies, isn’t notice and comment one of the few

safeguards that we have? (After all, as now-Justice Scalia

noted in 1978, procedure can be used by agencies to expand

power. See 1978 Supreme Court Review [University of

Chicago] 345, at 405.) Should rules of practice that affect the

rights of individuals in adjudications always be subject to notice

and comment? Should there be a bright-line test under which

rules of practice never have to comply with notice and

comment? Should there be a test under which rules of

practice sometimes are and sometimes are not subject to notice

and comment?

Congress seemed to take the view that rules of practice

utilized by administrative agencies in adjudications are

important. In 1946 the House Committee on the Judiciary

explained that the Administrative Procedure Act was an

outline of "minimum essential rights and procedures" to be

followed by the federal administrative agencies. Congress said

the agencies could thereafter fill in the details, so long as they

publish them. USCCS, 79th Congress (1946) at pages 1195,

1205.

The APA requires in section 552 that:

Each agency shall make available to the public

information as follows...

It seems Congress wanted rules of procedure to be

published so that everyone could determine what the rules are.

In the present case the first that anyone knew of the

unpublished rules was when Jackie Moore opened the

envelope that contained notice of the charges, and saw a copy

of the unpublished rules which had specifically been "adopted"

for him.

An agency does not "publish" its rules by merely sending

a copy to the accused. In order to publish rules, there must be

notice that is calculated to be available to the public. In the

present case the USDA failed in its obligation to publish the

rules.

Even if the USDA had published the rules, that would

not be enough. Congress also required the opportunity for

public participation when 5 U.S.C. 553 applies.

Section 553 of the APA provides that notice and

commentrule making procedures shall be followed when rules

are promulgated by the agency. There are exemptions. While

"rules of agency organization, procedure, or practice” are

exempt, rules of practice governing adjudications should not be

exempt, according to cases such as Air Transport Association

f America v, D nt of Tr ion, 900 F.2d 369

(D.C. Cir. 1990), vacated 111 S.Ct. 944, remand, 933 F.2d

1043.

Even if the USDA could argue that the "rules of

practice” in the present case are exempt, the USDA has

indicated that notice and comment should be the norm for

rules of practice, that rules of practice should be uniform, and

that the USDA should apply the exemptions of 5 U.S.C. 553

narrowly. ns

In 1971 the USDA announced that it was adopting a

recommendation of the Administrative Conference of the

United States, which eliminated the exemption provided by

section 553(a)(2). While the elimination of that exemption will

only directly apply in the present case if the court determines

that the case involves benefits or contracts, the same

pronouncement went on to say that the USDA would use the

"good cause" exemption of 5 U.S.C. 553 sparingly. F.R.,

Volume 36, number 143, July 24, 1971, at page 13801.

The USDA in the past has followed the notice and

comment procedure for other rules of practice. The USDA

announced a proposal to adopt Uniform Rules of Practice

Governing Formal Adjudicatory Administrative Proceedings

on June 16, 1976, at F.R. Volume 41, number 117, at page

24385. These rules were adopted. The USDA stated that

these Uniform Rules were to replace separate rules governing

proceedings under the various statutes and regulations

administered by the USDA. The USDA implied that the

uniform rules were to be uniformly applied. F.R. volume 42,

number 2, January 4, 1977, at page 743. In 1983 the USDA

amended the Uniform Rules Of Practice so that they

specifically applied to actions brought under Section 3 of the

Cattle Contagious Diseases Act of 1903 (21 U.S.C. § 122).

Referring to the Uniform Rules of Practice, the Judicial

Officer of the USDA stated as follows:

These Uniform Rules of Practice, which are

applicable to all of the departments’

adjudicatory proceedings subject to the

Administrative Procedure Act, were, in fact,

issued after notice and comment public rule

making... (In re David Harris, P.Q. Docket No.:

91-27, decided on May 1, 1991.)

While the Judicial Officer of the USDA was

proclaiming that the Uniform Rules were uniformly applicable

to all adjudications, his department failed to tell him that it had

opted out of the Uniform Rules and used unpublished rules in

the present action.

It certainly appears by the foregoing that the Uniform

Rules of Practice should have been applied to the present

action. When Moore objected prior to the USDA hearing, he

stated that the USDA was required to use the published

Uniform Rules rather than the unpublished rules. The USDA

responded by stating that they were acting under the authority

of 21 U.S.C. § 111 in promulgating the rules. The USDA’s

argument is that it can make up whatever rules of practice it

wants without notice and comment for this proceeding. The

USDA’s argument is that while it is required to apply the

Uniform Rules if it brings an action under section 3 of the

Cattle Contagious Diseases Act (21 U.S.C. § 122), it decided

to bring this action instead under section 2 of that Act (21

U.S.C. § 111). The USDA fails to note that the section it

alludes to (21 U.S.C. § 111) does not refer to any actions

against persons for violations of the regulations. It is section

3 of the Act (21 U.S.C. § 122) which authorizes the USDA to

take action against individuals for violations of the Act.

Accordingly, it appears that the Uniform Rules of Practice

should have been applied due to the requirement in 21 U.S.C.

§ 122 that an accused was entitled to a hearing on the record,

and the language of 7 C.F.R. 1.131, which states that the

Uniform Rules shall be applicable in such actions under the

Cattle Contagious Diseases Act.

A review of the Cattle Contagious Diseases Act and its

amendments makes it clear that it was the intent of Congress

that an accused would be entitled to a hearing on the record.

Such a hearing on the record certainly entitles the accused to

use of the Uniform Rules of Practice, even if there were not a

specific requirement of such in 7 C.F.R. 1.131. Review of 21

U.S.C. 117(b), 122, 127, 134e, and 135(b) shows that every

time Congress gave the USDA the authority to penalize

someone under the Cattle Contagious Diseases Act or related

animal health acts, Congress made it clear that the accused

would be entitled to a hearing on the record.

The USDA’s argument is that there is nothing that

specifically says it cannot do what it did.

The USDA is clearly required to apply the Uniform

Rules and give the Petitioners an ALJ if the USDA seeks even

a $25 fine from Petitioners for violations of the animal health

regulations. See 21 U.S.C. 122 and 7 C.F.R. 1.131. Likewise,

if the USDA under sections 117(b), 127, 134e, or 135 of 21

U.S.C. seeks a penalty from the Petitioners for violations of the

animal health laws, the Petitioners must be given an ALJ and

the Uniform Rules must apply. However, the USDA argues

that its power in the present case comes not from the sections

which authorize it to punish people but from section 111,

which authorizes it to prevent the spread of disease.

Accordingly, says the USDA, it can ignore the punishment

sections and proceed to make up new rules of practice under

authority of section 111.

The USDA’s view should not be accepted. From

reading the APA, the animal health acts and the regulations as

a whole the Court should conclude that the Uniform Rules of

Practice should have been applied instead of the unpublished

rules.

Even if the court adopts the USDA’s reasoning that it

can do what is not specifically prohibited, the court should

conclude that the use of the rules of practice chosen by the

USDA was improper because these rules of practice were

adopted by the USDA without notice and comment.

In explaining how it came up with these rules, the

USDA explains that in 1986 it adopted via notice and comment

a regulation which stated that thereafter in an action to

suspend SASS the USDA could adopt whatever rules of

practice it may choose without going through the notice and

comment route. In other words, the agency’s explanation is

that it announced that in the future it would not comply with

notice and comment.

The regulation that the USDA refers to states:

[T]he operator of the stockyard will be informed

in writing of the reasons for the proposed

withdrawal of approval and, upon request, shall

be afforded an opportunity for a hearing with

respects to the merits or validity of the action to

withdraw approval if there is a dispute regarding

any material fact, in accordance with rules of

practice which shall be adopted for the

proceeding. (9 C.F.R. § 78.44(b)(2).)

While a plain reading of the above leads one to believe

that the "uniform" rules would be the rules adopted for the

action, the USDA argues that it can adopt whatever rules it

wants to make up, under authority of this regulation.

The rules of practice do affect the rights of the

Petitioners. Petitioners were damaged by use of the

unpublished rules. The Uniform Rules guarantee an

Administrative Law Judge. ALJs have more independence

than employees of the USDA. Moore had to present to the

USDA employee his argument that another governmental

agent was not acting up to standard and that the government’s

allegations were false. The pressure brought to bear by the

JSDA on the USDA employee is shown by the fact that when

Moore objected to the rules used in the hearing, the USDA

attorney all but demanded that the USDA employee not rule

on the objection. The USDA employee then accepted the

unprecedented theory of the USDA that Moore was

responsible for the actions of independent third parties. As

the findings of the USDA employee have been accepted by the

courts (except for the magnitude of the penalty) on the theory

that the findings were not arbitrary, this shows the importance

of having an impartial fact finder in the first instance.

Petitioners were deprived of the use of subpoenas, which are

provided by the Uniform Rules of Practice, and the testimony

that they were unable to present at the USDA hearing would

have been favorable to the Petitioners. This is shown by the

later affidavit of Walt Jones, which was important testimony

for Petitioners which they could not present at trial without

subpoena power and discovery.

The 8th Circuit apparently takes the position that the

Petitioners were required to show that they were prejudiced by

the use of the unpublished rules and concludes Petitioners did

not make this showing. This is contrary to prior decisions

which have taken the position that if the agency does not

follow its rules the action must be set aside, without requiring

a showing of prejudice. Oglala Sioux v. Andrus, 603 F.2d 707

(8th Cir. 1979); Esch v. Yeutter, 876 F.2d 976 (D.C. Cir. 1989);

Gulf States v. NLRB, 579 F. 2d 1298 (Sth Cir. 1978). After all,

because they had no discovery and subpoena power,

Petitioners are not able to prove what testimony they could

have presented if they had been able to compel testimony.

Unfortunately, the 8th Circuit has approved the action

of the USDA. As a result, we should expect to see federal

agencies announcing that whenever they want to bring an

adjudicatory administrative action they will adopt whatever

rules of practice they want to apply to that particular

proceeding at the time they decide to bring the action, without

adhering to the notice and comment requirement of the APA.

The decision of the 8th Circuit should not be allowed to stand.

The 8th Circuit decision is not only contrary to the

statutes and regulations, it is in conflict with other circuits.

The leading case to discuss this matter is Air Transport

F.2d 369 (D.C. Cir. 1990), vacated 111 S.Ct. 944, remand, 933

F.2d 1043. That case dealt with rules of practice governing

adjudicatory actions. The DOT promulgated the rules without

notice and comment. The rules established a comprehensive

adjudicatory scheme providing for notice, settlement

procedures, discovery, a hearing before an ALJ, and

administrative appeal. The D.C. Circuit stated that these rules

were not exempt under 5 U.S.C. 553 because "they

substantially affect a civil penalty defendant’s right to an

administrative adjudication." Supra, at p. 376. The D.C.

Circuit defined the exemption for agency procedure as

applying to internal agency procedure, that is, procedures that

dealt with housekeeping matters and matters within the agency

about which the public should not be too concerned. The

court concluded that agency rules of practice that affect rights

of individuals or the right of persons to avail themselves of

adjudication were different than rules of agency procedure,

and the public did have an interest in participating in rule-

making in the former situation because it affected their rights.

The court cited Chrysler Corp, v, Brown, 441 U.S. 281, 310, 99

S.Ct. 1705, 1721, 60 L.Ed.2d 208 (1979).

Other decisions also appear to be in conflict with the

8th Circuit and would support a conclusion that the USDA’s

rules of practice were not exempt from 5 U.S.C. 553. In

National Motor Freight Traffic Association v. U,S., 268 F.

Supp. 90 (D.C. Cir. 1967), the ICC promulgated new

procedures without notice and comment. The ICC stated that

it intended to restore procedures which were formerly

available to shippers before a particular court decision.

Among other things, the procedures would permit a shipper to

begin an action by sending a letter to the commission. This

appears to be a "procedural" matter. When challenged, the

ICC said that the new regulation merely provided a procedure

for individuals to use. The ICC argued that it was exempt

under 5 U.S.C. § 553. The D.C. Circuit stated that the

characterizations "substantive" and "procedural" do not guide

inexorably to the right result, nor do they advance the inquiry

very far. Regardless of the label, said the court, the

commission took a significant step in the implementation of a

remedy when it instituted the procedure in question. The

court concluded that the exemption under 553 was not

applicable, and notice and comment was required. The

regulation of the ICC was thereby set aside.

The United States Supreme Court appeared to touch

on this issue in U.S, ex rel Accardi v. Shaughnessy, 74 S.Ct. 499

(1954). The Petitioner attacked the denial of his application

for suspension of deportation. The Petitioner argued that the

board had not complied with the requirements of the

regulations. If a continuum lies between the labels of

substantive and procedural, the regulation at issue in Accardi

was close to procedural. The Supreme Court held that the

failure of the board to follow its regulations was a denial of due

process.

In Brown Express Inc, v. U.S., 607 F.2d 695 (Sth Cir.

1979), the ICC promulgated without notice and comment a

regulation which would eliminate the procedure whereby the

ICC would notify competing carriers that an application has

been filed for an area. It had been the practice for several

years for the ICC to notify existing carriers that someone else

was seeking a permit. The ICC argued that it did not have to

comply with section 553 because it fit the exemption provided

by section 553(b)(A) for agency procedure. The Sth Circuit

disagreed, stating that the exemption did not extend to those

procedural rules that depart from existing practice and have a

substantial impact on those regulated. The present decision of

the 8th Circuit is in conflict with the principles stated by the

5th Circuit in Brown Express.

Brown Express, National Motor Freight and Air

Transport show that procedural rules are not exempt per se

from 5 U.S.C. 553 and thereby are in conflict with the

principles espoused in the 8th Circuit decision. Brown Express

also raises another point in which there is a conflict with the

8th Circuit decision. In the present case, the USDA appeared

to depart from the existing practice (Uniform Rules of

Practice). In Brown Express, such deviation was set aside for

failure to follow notice and comment. In the present case, the

8th Circuit upheld the action of the USDA.

There also is conflict with Ingram Barge Company v.

US., 691 F. Supp. 474 (D.C. 1988), 884 F.2d 1400 (D.C. Cir.

1989), in which the court stated that the federal agency may

not change the rules as the game progresses. This is in effect

what the USDA did in the present case, as it adopted the rules

of practice for this particular case simultaneously with drawing

up the charges against Moore in September 1989. This was

after the facts alleged in the charges had occurred.

The danger of allowing the agency to draw up ad hoc

rules of practice without notice and comment is clear. If the

agency does not want the ALJs, or any particular ALJ, to

decide the case, it could simply draw up rules sending the case

to a particular agency attorney, as the USDA did here. If an

agency knows it cannot get a particular agent to the hearing, it

could simply draw up rules that say the reports of that agent

are admitted into evidence without authentication, as the

USDA appeared to have done in this case. If the agency does

not want the accused to be able to subpoena witnesses, it

could just eliminate that in the rules.

In Committee for Fairness v. Kemp, 791 F. Supp. 888

(D.C. 1992), HUD promulgated a new method for calculating

operating subsidies. The District Court held that HUD

improperly failed to follow notice and comment procedures as

required by the APA. The Court stated that exceptions to

notice and commentare to be recognized omily reluctantly, and

that the exceptions do not extend to procedural rules that

depart from existing practice and had a substantial impact on

those regulated.

In National Association of Home Health Agencies v,

Schweiker, 690 F.2d 932 (D.C. Cir. 1982), cert. denied, 103

S.Ct. 1193, the agency issued a regulation which directed that

free standing home health agencies shall begin using certain

intermediaries for all medicare reimbursement determinations

and payments. The regulation was issued without notice and

comment. The government argued that the regulation was

exempt as a rule of agency procedure. The court disagreed,

Stating that the exceptions provided in section 553 do not

extend to those procedural rules that depart from existing

practice and have a substantial impact on those regulated. The

court also stated that the exemption cannot apply where the

agency action trenches on substantive rights and interests. The

court held that the agency must comply with notice and

comment.

Federal agencies through regulations tend to expand

their power over people’s livelihoods. That makes it all the

more important that agencies comply with the statutory

restrictions on that power, such as found in 5 U.S.C. 553.

Il. CERTIORARI SHOULD BE GRANTED

BECAUSE IN ALLOWING THE USDA TO SUSPEND

MOORE THE 8TH CIRCUIT FAILED TO FOLLOW THE

LAW AND THE DECISION OF THE 8TH CIRCUIT

RESULTS IN CONFLICTS IN PRINCIPLE AMONG THE

LOWER COURTS.

In accepting the USDA’s conclusion which held

Petitioners liable for the actions of others, the 8th Circuit had

no support in the law. The resolution of this issue is important

enough that the Supreme Court should address it.

The USDA was not authorized to penalize Petitioners

for actions of others. A federal agency’s power is no greater

than that delegated by Congress. Lyng v. Payne, 106 S.Ct.

2333, 2341 (1986). Under 5 U.S.C. 558(b) the power of the

agency to issue a sanction is limited to what has been

authorized by law.

Congress did not authorize the USDA to suspend

stockyards under the relevant statutes. Further, Congress did

not authorize the USDA to suspend Petitioners for actions

performed by independent third parties.

The Court of Appeals accepted the faulty reasoning of

the USDA by rationalizing that Petitioners had signed the

agreement that the USDA had demanded that Moore sign,

which stated that Moore was legally responsible as operator.

Moore should be responsible as operator for his own

operation, but there is no support for the notion that he was

responsible for the operation of independent third parties. He

was not the operator of the business of the third parties.

The 8th Circuit then reasoned that Petitioners could

have done more to stop third parties from committing

violations. To support this, the Court of Appeals stated that

there was some "agreement" that the independent commission

companies had executed with Moore which authorized Moore

to evict them if they sold class B cattle as class A cattle. The

Court was in error, as there was no such agreement executed

by the independent commission companies.

The alleged transgressions of the independent third

parties involved situations where their customers gave Missouri

addresses to them and the independent third parties recorded

in their records that the address was in Missouri. The state

deputy veterinarian, Dr. Short, then presumably saw an eartag

on the animal and wrote down the number. Sometime later

the USDA was able to trace the eartag number and concluded

that the animal had been in Oklahoma or Arkansas within a

few days prior to the time the third party handled it at the

stockyards at Joplin, but this search took several days. The

USDA had never informed Petitioners that they should go into

the offices of these independent third parties and demand to

review their records to check on this. The USDA never

demanded that Petitioners do something that even the

government agents could not do at the time, that is, conduct an

instantaneous search of the records of the states to see if an

eartag was reported as being in such other state and conclude

that search before the day is over. (Government investigator

Westrich admitted that a computer link would be needed and

no one had such facilities.) The Petitioners were penalized for

not doing what they probably could not have done. Further,

Petitioners were penalized for not doing something although

they had never been told to do it.

The USDA also made the incredible finding in its

decision that Jackie Moore was responsible to police the

actions of independent commission companies at the

stockyards and the USDA was not responsible to do so. (This

is contrary to the testimony of Dr. Dake that it was the

responsibility of the Deputy State Veterinarian to determine

identification of animals, as he had the job of inspecting the

animals and writing down identification numbers.)

Vicarious liability for third parties is contrary to the

norm, and should not be not applicable in the present case,

absent some Congressional directive that deviates from the

norm. Belsinger v. District of Columbia, 295 F.Supp. 159

(D.C. 1969); City of Webster Groves v. Erickson, 789 S.W.2d

824 (Mo.App. 1990); 3 CJS, Agency Section 426. There was

no such directive.

The Court of Appeals decision is contrary to the 10th

Circuit decision in Capitol Packing v. U.S,, 350 F.2d 67 (10th

Cir. 1965), which stated that no penalty should be issued by the

USDA where there is a lack of a clear regulation issued prior

to the time of the violation that the accused could be aware of.

Petitioners were never warned that they should have

demanded to inspect the books and records of third parties.

Petitioners were never told that they were vicariously liable for

actions of independent third parties.

The Court of Appeals decision is also contrary to U.S.

y. Johnson, 35 F.2d 256 (D. Nev. 1929), where the court

concluded that the only power conferred upon the USDA by

Congress was for the making of regulations requiring an

examination before cattle could be moved interstate from a

location where a quarantine had been established or from a

location where the USDA believed there was disease. In the

present case there was no showing that any animals were not

tested or that any animals had the disease of brucellosis.

The 8th Circuit decision appears to also be contrary to

U.S. v. Hoover, 133 F.950 (D. Neb. 1904), where the court held

that the USDA had no jurisdiction over animals that were not

affected with, or exposed to, infectious disease.

The power asserted by the USDA to suspend

operations and deprive people of the use of their property is

not supported by the statutes. Congress addressed the question

of what the USDA could do when people violate the animal

health regulations. Congress said in 21 U.S.C. 122 that any

person violating the regulations may be assessed a civil penalty

of not more than $1,000, after notice and a hearing. This

directive did not authorize a suspension. (A suspension of 6

months for a major stockyard operation such as Petitioners’ is

many times more serious than a $1,000.00 fine.) In 21 U.S.C.

127 Congress specified that for violations of the animal health

laws involving inspection, handling, certification and

movement of animals the USDA could after hearing assess a

civil penalty of not more than $1,000. In 21 U.S.C. 134e

Congress directed that the USDA could assess a civil penalty

of not more than $1,000 after a hearing for knowing violations

of certain animal health regulations. No suspension power was

| included in these grants from Congress.

The USDA contends that if Congress did not bar it

from depriving people of their property, it can do so. The law

is, or should be, that the USDA cannot deprive someone of the

use of their property unless authorized by Congress.

CONCLUSION

Petitioners pray that the Supreme Court issue its writ of

certiorari to the 8th Circuit.

J 1993.

~ Zane hh Nhu Photw

Ernest H. Van Hooser, MO Bar #27130

Counsel of Record

Gerard D. Eftink, MO Bar # 28683

Co-Counsel on the brief

VAN HOOSER, OLSEN & EFTINK, P.C.

5800 East Bannister Road, Suite 250

Kansas City, MO 64134

Phone (816) 767-1500 Fax (816) 767-1504

APPENDIX

Court of Appeals decision........ ....... oon naan l

Listrict Court GOCiIOR ... 20s eecseccessek mene 15

USDA GOCIBION oc cc ccccccccusveccssecesnen 34

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

No. 92-227

JACKIE MOORE, individually

and as the operator of Joplin r

Regional Stockyards; JOPLIN * On Appeal

REGIONAL STOCKYARDS, INC., * from the

a Missouri Corporation, * United States *

* District Court

Plaintiff - Appellants, * for

v. ' * the Western

* District of

EDWARD MADIGAN, Secretary of * Missouri.

the United States Department 7

of Agriculture, and the United c

States, .

Defendants - Appellees. 7

Submitted: January 13, 1993

Filed: April 1, 1993

Before MORRIS SHEPPARD ARNOLD, Circuit Judge,

FLOYD R. GIBSON and REAVLEY,* Senior

Circuit Judges.

REAVLEY, Circuit Judge.

*The HONORABLE THOMAS M. REAV-

LEY, Senior United States Circuit Judge for

the Fifth Circuit, sitting by designation.

The Animal and Plant Health Inspection Service of

the United States Department of Agriculture (USDA)

suspended the "specifically-approved stockyard status"

(SASS) of Joplin Regional Stockyards, Inc. (JRS). USDA

reached its decision after conducting an informal hearing at

which a hearing officer found that various people repeatedly

violated USDA’s brucellosis regulations on JRS’s premises.

JRS and its legally-responsible operator, Jackie Moore, sued

USDA for declaratory and injunctive relief. On cross-

motions for summary judgment, the district court held that

USDA’s governing statute and regulations permitted the

informal hearing procedure that USDA adopted for this case

and that USDA accorded Moore a presanction opportunity

to correct violations. But the court also held that the facts of

this case did not justify the penalty selected by USDA, and

accordingly reduced JRS’s suspension period from five years

to six months. Only Moore appeals. We affirm.

I. BACKGROUND

Moore and his family formed JRS in 1986, and JRS

purchased Missouri real estate that had long been used as a

stockyard (the stockyard). JRS earns money for each animal

traded at the stockyard. Four livestock commission

companies broker sales at the stockyard for additional fees,

but only Joplin Livestock Commission Company (JLCC) is

owned by Moore and his family. The three other companies

lease space from JRS.

JRS can facilitate trade in Missouri cattle without

federal permission. But to attract trade in out-of-state

animals, JRS must secure SASS from USDA. See 9 C.F.R.

§§ 78.5, 78.9-.12. USDA grants SASS to stockyards that

agree to participate in USDA’s program to eradicate

brucellosis. Brucellosis is an infectious disease that inhibits

both procreation and milk production in cattle. USDA

classifies states according to the incidence of brucellosis that

USDA detects in each state. This case concerns activities

during 1988 and 1989, when USDA classified Missouri as an

"A" state and Oklahoma as a "B" state.

To combat brucellosis, USDA requires stockyard

operators to 1) maintain sanitary conditions and 2) identify

and separate cattle according to the brucellosis classification

of the state from which the cattle arrive for sale." USDA

only grants SASS to stockyards that designate an individual

as "operator" to be legally responsible for the fulfillment of

these requirements. See Id. § 78.44. Jackie moore executed

a SASS agreement (the Agreement) with USDA in February

1987.

On October 13, 1988, Dr. Charles Dake, a district

veterinarian for the Missouri Department of Agriculture who

USDA charged with inspecting stockyards for compliance

with USDA regulations, found that the stockyard did not

meet USDA sanitation requirements and that "numerous

Oklahoma [class B] cattle shipments have been run through

this market as class A animals." Dake warned in his report

that "this is a serious problem which is a direct challenge to

Missouri’s class A status," and delivered this report to

Raymond McDowell, a JRS manager. On at least three

occasions before this adverse inspection report, JLUCC sold

‘USDA veterinarian James Massman testified that an

animal’s domicile for purposes of brucellosis classification is

determined by the state where the animal last spent 120 days.

class B Oklahoma cattle as class A Missouri animals. Dr.

Stephen Short, who tested animals for brucellosis at the

stockyards, testified that class A animals usually bring a

higher price than class B animals.

On May 18, 1989, USDA inspector Walter Waddell

toured the stockyards and again found sanitation and

identification violations. In September 1989, USDA sent

Moore a letter alleging the sanitation and identification

infractions as breaches of the Agreement and proposing to

withdraw the stockyard’s SASS. Moore denied the

allegations and requested a hearing. USDA provided an

informal hearing, which Moore challenged as inadequate

under USDA regulations.

After considering testimony and exhibits from Moore

and USDA, a USDA hearing officer found that Moore

breached the Agreement because 1) the stockyards did not

meet USDA’s sanitation standards and 2) on ten occasions

(eight before October 13, 1988 and two more before May 18,

1989), class B cattle were sold as class A animals at the stock-

yard. A USDA deputy administrator recited these findings

and ordered that SASS be removed from JRS and affiliated

individuals and companies for five years. Moore and JRS

exercised their statutory right to sue USDA for declaratory

and injunctive relief from this order, see 5 U.S.C. $§ 702-03,

and USDA stayed its order pending outcome of this

litigation.

On cross-motions for summary judgment, the district

court held, inter alia, that 1) the informal hearing granted

Moore by USDA did not contravene USDA’s governing

statute or regulations and 2) USDA accorded Moore any

required opportunity to correct infractions at the stockyard

before suffering a SASS suspension. Moore v. Madigan, 789

F. Supp. 1479, 1485 (W.D. Mo. 1992). While the court

upheld USDA’s decision that Moore violated the Agreement,

the court found that USDA’s penalty us "unduly harsh" and

reduced the SASS suspension from five years to six months.

Id. at 1488.

II. ANALYSIS

Only Moore appeals, so we do not reach the propriety

of the district court’s penalty reduction. Only some of the

many issues that Moore raises on appeal merit explicit

discussion.

A. FACT-FINDING PROCEDURE

USDA advised Moore in a September 1989 letter that

it planned to withdraw SASS from JRS, and that Moore

could request an informal hearing if he disputed the factual

basis for the withdrawal. With USDA’s letter, Moore

received rules that USDA adopted to govern the informal

hearing procedure. Moore claims that he was entitled to a

formal hearing before an administrative law judge, with a

panoply of discovery and subpoena rights.

First, Moore argues that congress accorded him a

formal hearing. But when Congress mandates a formal

hearing before an agency in a statute, it either employs the

term of art "on the record" or it indicates its intent to trigger

the formal hearing procedures of the Administrative

Procedure Act (APA), 5 U.S.C. § 551 et. seq. See City of

WwW Vv N

Comm’n, 701 F.2d 632, 641 (7th Cir. 1983); Webster Groves

Trust Co. v. Saxon, 370 F. 2d 381, 384-386 (8th Cir. 1966).

USDA claims authority to establish its brucellosis eradication

program under 21 U.S.C. § 111, which permits USDA to

"make such regulations and take such measures as [the

Secretary of Agriculture] may deem proper to prevent the

introduction or dissemination of the contagion or any ...

communicable disease of animals ....". No statute refers to

SASS or agreements with stockyard operators, let alone

withdrawal proceedings; these are creatures of regulations

that USDA promulgated pursuant to section 111. There

being no evidence of congressional intent to provide a formal

hearing for the withdrawal of SASS, the district court

correctly dismissed this argument. Moore, 789 F. Supp. at

1485.

Next, Moore claims that USDA regulations require a

formal hearing before SASS withdrawal. USDA cited the

following regulation to Moore in advising him his right to an

informal hearing:

Before [USDA] withdraws approval from a

specifically approved stockyard based upon a

failure to maintain or operate the stockyard in

accordance with the standards specified in the

agreement, the operator of the stockyard will

be informed in writing of the reasons for the

proposed withdrawal of approval and, upon

request, shall be afforded an opportunity for a

hearing with respect to the merits or validity of

the action to withdraw approval if there is a

dispute regarding any material fact, in

accordance with rules of practice which shall

be adopted for the proceeding.

9 C.F.R. § 78.44(b)(2) (emphasis added). USDA interprets

this regulation to permit latitude in its selection of hearing

procedure for SASS withdrawal. Moore argues that section

| ’ )

78.44(b)(2) must be read in conjunction with 7 C.F.R. §

1.131, where USDA guarantees a formal hearing under

specific circumstances.’ Proceedings to withdraw SASS are

conspicuously absent from the detailed list in section 1.131.

From this fact, we know that USDA possesses a convenient

means to guarantee a formal hearing, and USDA has not

done so for SASS-withdrawal proceedings. In "an

administrative proceeding as to which Congress has not

explicitly required any given type of procedure [, an agency

may interpret its own regulations] within very broad limits."

City of St. Louis v, Department of Transportation, 936 F.2d

1528, 1534-35 n.1 (8th Cir. 1991). Given our understanding

of section 1.131, USDA’s interpretation of section 78.44 is

logical and reasonable. We thus agree with the district court

that section 78.44 permits the informal hearing accorded

7 C.F.R. § 1.31 states:

(a) The [formal] rules of practice in this

subpart shall be applicable to all adjudicatory

proceedings under the [following] statutory

provisions|:]

Act of February 2, 1903, commonly known as

the Cattle Contagious Diseases Act of 1903,

section 3, as amended (21 U.S.C. 122).

(b)(2) Adjudicatory proceedings under the

regulations promulgated under the Animal

Quarantine and Related Laws (21 U.S.C. 111

et seq.) for the suspension or revocation of

accreditation of veterinarians (9 CFR Parts

160, 161).

aia

Moore.

Finally, Moore cites Air Transport Ass’n of America

v. Department of Transportation, 900 F.2d 369 (D.C. Cir.

1990), vacated on other grounds, -- U.S. --, 111 S. Ct. 944

(1991), in support of his argument that USDA violated 5

U.S.C. § 553 by adopting informal hearing rules for his SASS

withdrawal without first providing notice and an opportunity

for public comment on those rules. But the Air Transport

court took "no position on whether parties whose cases have

reached a final determination under [procedural rules

adopted without notice and comment] may now raise the

procedural invalidity of the [rules as a ground for seeking

review." Id. at 381.

USDA reached a final decision in this case after a

complete hearing and before Moore raised any section 553

argument on the record. Based on our understanding of the

record, we hold that Moore is not entitled to any relief even

if USDA adopted informal hearing rules in contravention of

section 553. As long as we "act within the bounds of the

statute [granting us authority to review an agency decision]

and without intruding upon the administrative province, [we]

may adjust [our] relief to the exigencies of the case in

accordance with the equitable principles governing judicial

action.” Komatz Constr, Inc. v. NLRB, 458 F.2d 317, 325

(8th Cir. 1972) (quoting Ford Motor Co, v. NLRB, 305 U.S.

364, 373, 59 S. Ct. 301, 307 (1939)); see also United States

Steel Corp. v. EPA, 649 F.2d 572, 576 (8th Cir. 1981); Air

Transport, 900 F.2d at 380 (applying Ford Motor Co. outside

NLRB context).

Had Moore made a record objection based on section

553 before the hearing, USDA could have considered the

» ei adc

merits and decided whether to continue with the hearing at

that time. If we now remand for any section 553 violation,

USDA will have wasted its hearing resources for a reason

that USDA had no cause to consider before Moore’s

informal hearing, and Moore will receive a second hearing,

with attendant delays, as a reward for failing to present his

full case to USDA. The futility of a second hearing further

convinces us that the district court properly refused to

consider Moore’s section 553 argument. Even if we consider

the post-hearing affidavits that Moore submitted to the

district court,’ the record contains nothing to refute the

Sanitation and identification violations found by USDA.

Under these circumstances, the district court did not err in

refusing to grant relief based on Moore’s section 553 claim.

B. SECOND CHANCE

_ With exceptions that do not apply here, the APA

requires agencies to provide regulated entities with notice

and an opportunity to achieve compliance with regulations

before withdrawing or suspending any license. 5 U.S.C. §

558(c). Assuming arguendo that SASS and the Agreement

together constitute a license within the scope of section

558(c), we consider whether USDA complied with this law

before instituting proceedings to withdraw SASS from JRS.

Section 558(c) first requires "notice by the agency in

writing of the facts or conduct which may warrant the action.”

On October 13, 1988, Dake signed a report stating that the

stockyard did not meet USDA sanitation standards and the

*Cf. Moore, 789 F. Supp. at 1486 (refusing to consider

additional evidence).

class B cattle were wrongly identified as class A animals. In

Dake’s affidavit, he asserts that he discussed this report with

McDowell, a JRS manager. Nothing in the record

contradicts Dake on this point. Thus, JRS received sufficient

notice of violations under section 558(c)(1) before USDA

conducted its May 1989 inspection.

Moore argues that USDA did not comply with the

second requirement of section 559(c), that agencies provide

an "opportunity to demonstrate or achieve compliance"

before withdrawing or suspending SASS. USDA officials

inspected the stockyard on both October 13, 1988 and May

18, 1989, and on both occasions they found substandard

sanitation and class B cattle identified as class A animals. We

agree with the district court that these undisputed facts are

determinative of USDA’s compliance with section 558 (c)(2).

See Moore, 789 F. Supp at 1485.

Moore contends that affidavits of several individuals

established that Moore continuously improved sanitation at

the stockyard from the time JRS purchased it in 1986 to

October 1989, when a USDA inspector found that the

stockyard complied with USDA sanitation regulations. The

district court so found, and the record supports this finding.

See Id. at 1488. Moore also argues that a Missoun

inspector’s affidavit establishes that the stockyards were

sanitary shortly after that inspector filed the adverse USDA

report of October 13, 1988. But these facts do not abrogate

the significance of findings by both the district court and

USDA that the stockyard did not meet USDA sanitation

requirements on October 13, 1988 or May 18, 1989. That

USDA found the same violation on two consecutive

inspection reports means that USDA complied with the

second-chance requirement of section 558(c), at least as to

Sanitation.

As for the identification violations, Moore argues that

he availed himself of his “opportunity to demonstrate or

achieve compliance" with USDA identification regulations

under section 558 (c)(2), and therefore should suffer no

license suspension. Moore explains that, after receiving the

October 1988 inspection report, his commission company did

not commit further identification violations. _USDA’s

evidence at the informal hearing established that class B

cattle were sold as class A animals at the stockyard on two

occasions between the October 1988 inspection report and

the May 1989. JLCC did not broker the sales on either

occasion, but both the district court and USDA still held

Moor responsible for the post-October 1988 identification

violations.

The Agreement’s language support the decisions of

the district court and USDA. Moore "agree[d] to maintain

and operate [the stockyard] in accordance with each of the

[Agreement’s] provisions ...." One of these provisions is that

[i]dentity of cattle from class B states or areas shall be

maintained ....". Moreover, the Agreement stipulates that

Moore "shall be the individual legally responsible for the day-

to-day operations of the specifically approved stockyard."

See 9 C.F.R. §§ 78.44(a) n.6 & 78.44(c).

Moore implies that he did all he could to control

misidentification after the adverse October 1988 inspection

report by posting a sign that read, "Joplin Regional

Stockyards must absolutely have complete accurate address

of owner."* But, especially after receiving notice in October

1988 that cattle had been misidentified and that this was a

serious problem, Moore could (and should) have done more

than post a sign. Tags on the ears and backs of cattle can

indicate where the animal has been vaccinated or sold, and

Moore could have hired someone at the commission

companies’ expense to compare the states indicated on these

tags with the state-of-origin represented by the cattle sellers.

This employee could ask further questions of the sellers if an

animal’s tags did not match the domicile state claimed by the

seller. Besides instituting its own identification-assurance

program, Moore could have evicted the independent

commission companies or threatened them with disciplinary

action if they sold class B cattle as class A animals. The

agreement that each commission company executed with

Moore gave Moore exactly this authority.

We agree with the district court and USDA that, after

being warned in October 1988 that identification-assurance

procedures were ineffective at the stockyard, Moore failed to

correct the problems before a second adverse inspection

report in May 1989. USDA complied with section 558(c).

tol EVIDENCE OF PENALTY PROPRIETY

Moore argues that USDA failed to advise him of the

penalty that it sought against him and failed to adduce

evidence that supports even the six-month SASS suspension

‘Misidentification can easily occur if cattle owners bring

their animals to the stockyard and either fail to indicate the

state from which they arrive or provide false address

information to the commission companies.

countenanced by the district court. Moore would have

USDA inform stockyard operators before any hearing of the

length of any SASS suspension sought, and present evidence

to justify any suspension. This evidence presumably would

indicate the size of suspect stockyards, the effect of SASS

suspension on communities that use suspect stockyards, and

any aggravating or mitigating circumstances.

But Moore presents no authority that requires

evidence of penalty propriety in this case.’ Section 78.44

*Moore cites Capital Produce Co, v. United States, 930

F.2d 1077, 1080-81 (4th Cir. 1991) (substantial record

evidence did not support a willfulness finding, which was a

necessary element of a violation of the Perishable

Agricultural Commodities Act), Ferguson v. USDA, 911 F.2d

1273, 1277-79 (8th Cir. 1990) (precedent establishes that

willfulness is relevant to sanction severity under 7 U.S.C. $

204), Hutto Stockyard, Inc, v. USDA, 903 F.2d 299, 304-05

(4th Cir. 1990) (suspension disallowed because USDA failed

to comply with either the notice or the willfulness

requirements of 5 U.S.C. § 558(c) before instituting license-

removal proceedings), Western States Cattle Co. v, USDA,

9880 F.2d 88, 91 (8th Cir. 1989) (following Farrow), Farrow

v. USDA, 760 F.2d 211, 216 8th Cir. 1985) (when USDA

requires a showing that a "violation [is] flagrant and serious"

before the imposition of "severe" sanctions, severe sanctions

will not be allowed absent evidence of a flagrant and serious

violation), and Bosma v. USDA, 754 F.2d 804,810 (9th Cir.

1984) (enforcing 7 U.S.C. § 213(b), which requires

consideration of specific-factors in penalty determination).

The court in each of these cases simply refused to sustain a

sanction when a statute, agency decision, or precedent

required proof of acertain element before the sanction could

simply states that USDA may withdraw SASS upon finding

that a stockyard operator has breached a section 78.44

agreement with USDA. Suspension is a lesser penalty than

withdrawal; only withdrawal can connote permanence. -

USDA advised Moore several times before testimony began

in the informal hearing that it sought to "withdraw" SASS

from JRS. This was notice enough, and under section 78.44

as read in conjunction with section 558(c), USDA could

impose this penalty upon establishing repeated breaches of

the Agreement.

III. CONCLUSION

Having considered all of Moore’s arguments on

appeal, we AFFIRM the district Court’s judgment.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS,

EIGHTH CIRCUIT.

be imposed, and that proof was absent from the record.

Consistent with these cases, USDA may impose the sanction

specified by section 78.44 (withdraw SASS) upon establishing

the elements specified by section 78.44 (breach of the

Agreement).

IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF MISSOURI

WESTERN DIVISION

Jackie Moore, individually and as_)

the operator of Joplin Regional _)

Stockyards, et al., )

)

Plaintiffs, )

)

v. ) No. 91-0029-CV-W-2

)

Edward Madigan, Secretary of the )

United States Department of )

Agriculture, et al.,

Defendants.

MEMORANDUM OPINION AND ORDER

This case is an appeal from an administrative agency

decision before the Animal and Plant Health Inspection

Service of the United States Department of Agriculture

(USDA). Plaintiff seeks to enjoin the USDA decision to

withdraw plaintiffs status as a "specifically approved

stockyard" for a period of five years pursuant to Title 9, Code

of Federal Regulations § 78.44 (1991). Pending before this

Court are cross-motions for summary judgment.'

)

‘Defendant has also filed a motion to suspend Local Rule

Jurisdiction for this case is proper under 28 U.S.C. § 1331.

I. THE FACTS

In 1903, Congress enacted the Cattle Contagious

Diseases Act for the purpose of preventing the introduction

and dissemination of contagious diseases during the

transportation of livestock. The Act was codified in 21

U.S.C. §§ 101-105, 111-113, and 120-128 (1972 & Supp.

1991). Pursuant to 21 U.S.C. § 111, Congress gave the

Secretary of Agriculture authority to make regulations and

take measures which effectuate the purpose of the Act.

Pursuant to this authority, the Secretary promulgated 9

C.F.R. § 78.44 (1991), which designates and controls the

operation of "specifically approved stockyards."

A "specifically approved stockyard" is defined as the

"premises where cattle or bison are assembled for sale or sale

purposes and which meet the standards set forth in 78.44 and

are approved by the Deputy Administrator." 9 C.F.R. §78.1

(1991). In order to obtain the status of as a "specifically

approved stockyard," the operator of the stockyard must

execute an "agreement" set forth in either 9 C.F.R. § 78,44(c)

or (d), and the operator must maintain and operate the

stockyard in accordance with the standards specified in the

agreement. 9 C.F.R. § 78.44(a).? Consequently, if the

15 and a motion to strike. These Motions will be addressed

at the conclusion of this memorandum opinion.

9 C.F.R. § 78.44(a) provides:

To qualify for approval by the Deputy Administrator

as a specifically approved stockyard and to retain such

designation, the operator of the stockyard shall execute one

operator violates the terms of the agreement, the Deputy

Administrator is given the authority to withdraw the status as

a "specifically approved stockyard" upon written notice of the

violations. 9 C.F.R. § 78.44(b)(2).> The regulation further

provides that upon request the operator will be afforded an

“opportunity for a hearing," and that the hearing will be

conducted "in accordance with the rules of practice which

shall be adopted for the proceeding." 9 C.F.R. § 78.44(b)(2).

Plaintiff Jackie Moore is the operator of the Joplin

Regional Stockyards located in Joplin, Mo. The Stockyard

qualified for operation as a "specifically approved stockyard"

on April 13, 1987. On October 13, 1988 and May 18, 1989,

inspections were conducted by the USDA at the Stockyard.

of the agreements set forth in paragraphs (c) or (d) of this

section and the stockyard shall be maintained and operated

in accordance with the standards specified in the agreement.

*9 C.F.R. § 78.44(b)(2) provides:

The Deputy Administrator may withdraw the approval

of any specifically approved stockyard when the Deputy

Administrator determines that the stockyard is not

maintained and operated in accordance with the standards

specified in the agreement. Before the Deputy Administrator

withdraws approval from a specifically approved stockyard .

. . the operator of the stockyard will be informed in writing

of the reasons for the proposed withdrawal of approval and,

upon request, shall be afforded an opportunity for a hearing

with respect to the merits or validity of the action to withdraw

approval if there is a dispute regarding any material fact, in

accordance with rules of practice which shall be adopted for

the proceeding.

In both inspection reports, the Stockyard was found to be in

violation of the terms of the agreement. Specifically, the

reports indicated that plaintiff failed to maintain the identity

of cattle that were sold in the Stockyard, and that the

Stockyard was not maintained in a sanitary condition.

On September 15, 1989, the USDA sent plaintiff a

written notice indicating that the "specifically approved

stockyard" status would be withdrawn. Plaintiff received a

copy of the rules of practice which were adopted for the

proceedings. The adopted rules of practice provided for an

informal hearing. On June 25 and 26, 1990, the informal

hearing was held before Frank Tang, a hearing officer and

employee of the USDA. On November 7, 1990, Mr. Tang

issued Findings of Fact and Conclusions which indicated that

plaintiff was in violation of the terms of the agreement.

Based upon these findings, the Deputy Administrator issued

an order on December 10, 1990 withdrawing plaintiffs

"specifically approved stockyard" status for a period of five

years.

Plaintiff filed the present action seeking to enjoin the

USDA’s decision to withdraw plaintiffs "specifically

approved stockyard" status. Pending before this court is

plaintiffs motion for summary judgment, defendant’s cross-

motion for summary judgment, defendant’s motion to

suspend local rule 15, and defendant’s motion to strike. the

court will address the cross-motions for summary judgment

first.

II. DISCUSSION

According to Rule 56(c), Fed. R. Civ. P., summary

judgment shall be rendered if the "pleadings, depositions,

answers to interrogatories, and admissions on file, together

with the affidavits, if any, show that there is no genuine issue

as to any material fact and that the moving party is entitled to

judgment as a matter of law." The moving party bears this

burden of proof. Aetna Life Insurance Co. v. Great National

Corp., 818 F.2d 19, 20 (8th Cir. 1987). If the moving party

meets the initial burden, then the nonmoving party is

required to go beyond the pleadings, etc. and designate

specific facts showing there is a genuine issue for trial.

Anderson v, Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In

reviewing the motion for summary judgment, the court must

view the facts in the light most favorable to the adverse party

and allow the adverse party the benefit of all reasonable

inferences to be drawn from the evidence. Adickes v. S.H.

Kress & Co., 398 U.S. 144, 157 (1970); U.S. v. Conservation

AIOE TG! tor: } =: tert} * SUUrIES

1. 9 C.F.R. § 78.44 and 7 C.F.R. § 1.131

Plaintiff filed the motion for summary judgment on

the central issue that the USDA erred in adopting informal

hearing procedures under 9 C.F.R. § 78,44, instead of the

uniform rules of practice for formal adjudicatory proceedings

set forth 7 C.F.R. § 1.131 et seg. (1991).* Plaintiff claims

that the USDA was required by 7 C.F.R. § 1.131 to apply the

uniform rules of practice. Plaintiff argues that the USDA’s

‘The Uniform Rules of Practice were promulgated by the

Department of Agriculture for use in formal adjudicatory

proceedings instituted by the Secretary under various

statutory provisions listed in 7 C.F.R. § 1.131(a) and (b). The

uniform rules of practice provide for a formal adjudicatory

hearing.

failure to apply the uniform rules of practice violated case

precedent, and was inconsistent with the USDA’s purpose in

establishing the uniform rules of practice.

By attacking the USDA’s decision to adopt informal

procedures for the hearing, plaintiff questions the USDA’s

interpretation and construction of its own regulations.

Although an agency’s interpretation of its governing statute

is a question of law which is generally subject to de novo

review, an agency’s interpretation of its own regulations

imposes a more stringent standard of judicial review. See

City of St. Louis v. Dept. of Transportation, 936 F.2d 1528,

1534 n.1 (8th Cir. 1991) (greater deference is given to an

agency’s interpretation of its own rules than of an agency’s

interpretation of its governing statutes); Jones v. Federal

Deposit Insurance Corp,, 748 F.2d 1400, 1405 (10th Cir.

1984) (court must give deference to the- construction of a

regulation by the agency that is charged with administering

the regulation). In the Supreme Court decision of Bowles v.

Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945), the

Court stated that:

[w]hen a court is called upon to construe

administrative regulations the ultimate

criterion is the administrative interpretation,

which becomes of controlling weight unless it

is plainly erroneous or inconsistent with the

regulation.

Upon review of the language in 9 C.F.R. § 78.44 and

7 C.F.R. § 1.131, the Court does not find that the USDA’s

construction of these regulations is plainly erroneous or

inconsistent. title 7, C.F.R. § 1.131 states that:

(a) The rules of practice in this subpart shall

™

Pre

be applicable to all adjudicatory proceedings

under the statutory provisions listed below as

those provisions have been or may be

amended from time to time. . .

7” * 7

Act of February 2, 1903, commonly known as

the Cattle Contagious Diseases Act of 1903,

section 3, as amended (21 U.S.C. 122).

oJ . *

(b) Adjudicatory proceedings under the

regulations promulgated under the Animal

Quarantine and Related Laws (21 U.S.C. 111

et seg.) for the suspension or revocation of

accreditation of veterinarians (9 CFR Parts

160, 161).

Plaintiff contends that because this case was brought

under the Cattle Contagious Diseases Act, 21 U.S.C. § 111,

defendant was required by 7 C.F.R. § 1.131 to apply the

uniform rules of practice. Although 7 C.F.R. § 1.131 refers

to two sections of the Cattle Contagious Diseases Act,

neither of these sections were applicable to the present case.

The USDA specifically limited the applicability of the

uniform rules of practice to only those proceedings under the

Cattle Contagious Diseases Act which impose criminal or

civil penalties, or involve veterinarian accreditation. The

proceeding to revoke a stockyard’s "specifically approved

stockyard" status dos not fall within any of those categories.

Furthermore, the USDA’s decision not to apply the

uniform rules of practice in this case is not inconsistent with

the language in 9 C.F.R. § 78.44. Section 78.44 (b) (2)

expressly states that the agency may adopt their own

procedures to be followed in proceedings to withdraw a

"specifically approved stockyard" status. It is clear that this

language does not require the agency to apply the uniform

rules of practice.

Plaintiff attempts to uncover an inconsistent practice

by the USDA by citing several different USDA

administrative adjudications which were brought under 21

U.S.C. § 111, and which apparently applied the uniform rules

of practice in 7 C.F.R. § 1.131.° However, these cases do not

offer proof of irregularity in the USDA’s decision-making.

None of the cases cited specifically involve the regulation at

issue in this case, 9 C.F.R. § 78.44. More importantly, the

USDA imposed civil penalties in those cases presumably

under 21 U.S.C. § 122, which requires the application of the

uniform rules of practice under 7 C.F.R. § 1.131.

This court does not find that the USDA violated case

precedent or acted incongruently with its own purpose and

intent in establishing uniform rules of practice. To impose

plaintiffs interpretation on the regulations would be

inconsistent with the plain language of 9 C.F.R. § 78.44 and

7 C.F.R. § 1.131. Therefore,the Court finds that the USDA’s

adoption of informal rules of practice in this case is neither

*Plaintiff also cites the decision In Re Harris, No. 91-27

(May 1, 1991), where the Judicial Officer of the USDA stated

that the uniform rules of practice were applicable to all

USDA adjudicatory proceedings subject to the APA.

However, the Harris decision does not mandate the use of

the uniform rules of practice in this case because this

adjudicatory proceeding is not governed by the formal

- hearing procedures under the APA.

Os aoe

plainly erroneous or inconsistent with the USDA’s

regulations.

2. Administrative Procedure Act, 5 U.S.C. § 554(a)

Plaintiff also argues that the USDA action was

inconsistent with congressional intent to provide formal

adjudicatory procedures in proceedings where a penalty is

assessed by an agency. Plaintiff cites several sections of the

United States Code where Congress required formal hearing

"on the record" for different administrative actions involving

the imposition of sanctions.°

Generally, in order to be entitled to a formal hearing

under the Administrative Procedure Act, 5 U.S.C. § 554(a),

the relevant statute or regulation must provide for a hearing

"on the record.” Webster Groves Trust Co. v, Saxon, 370

F.2d 381, 385 (8th Cir. 1966). In this case, it is clear that

Congress did not require a formal hearing under the

governing statute in this case. There is no language in 21

U.S.C. § 111 which states that there must be a hearing "on the

record." Additionally, there is no evidence in the legislative

history of 21 U.S.C. § 111 that Congress intended to provide

a formal adjudicatory hearing under these circumstances.

City of West Chicago, Ill. v. U.S. Nuclear Regulatory

Commissioner, 701 F.2d 632 (7th Cir. 1983). Although

congress requires formal proceedings when criminal or civil

monetary penalties are assessed under 21 U.S.C. § 122, this

Statute is not applicable because neither criminal or civil

monetary penalties were instituted by the USDA in this case.

’See, e.g. 21 U.S.C. § 104, 21 U.S.C. § 117(b), 21 U.S.C.

§ 122, 21 U.S.C. § 134e and 21 U.S.C. § 135a.

3. Administrative Procedure Act, 5 U.S.C. § 558(c)

In the cross motion for summary judgment, the

defendant points out that plaintiff is not entitled to a formal

adjudicatory hearing under the Administrative Procedure

Act, 5 U.S.C. § 558(c). Section 558(c) provides that the

withdrawal of a license is lawful only upon notice to the

licensee, and an "opportunity to demonstrate or achieve

compliance with all lawful requirements." Defendant claims

that this section does not provide an independent right to a

full adjudicatory hearing before a license is revoked. See

Gallagher & Ascher Co, v. Simon, 687 F.2d 1067 (7th Cir.

1982). Defendant states that § 558(c) only requires that

plaintiff be given the opportunity to achieve compliance with

the regulations.

In response, plaintiff contends that "inherent" in §

558(c) is the idea that a license cannot be suspended once the

licensee brings itself into compliance with the regulations.

Plaintiff has cited no authority for this proposition. The

question is not whether plaintiff eventually complied with the

regulations, but whether plaintiff was given the "opportunity"

to comply with the regulations. In this case, plaintiff received

notice on October 13, 1988 and May 18, 1989 that the

Stockyard was not in compliance with the USDA regulations.

From the time of the initial notice on October 13, 1988,

plaintiff was given approximately seven months to cure the

stated violations. The court finds that this was sufficient

"opportunity" under § 558(c).

B. Notice and Comment Under the APA, 5 U.S.C. § 553

In addition to the above arguments,plaintiff also

contends that the USDA violated the Administrative

Procedure Act, 5 U.S.C. § 553 by adopting the informal rules

{

;

of practice without notice and comment. Although plaintiff

— a —— — based _— the decision in

Teanmedetien, 900 F.2d 369 (D.C. Cir), uated on other

grounds, U.S. __, 111 S.CT. 944 (1991), the Court will not

review this issue because plaintiff did not raise it during the

administrative proceedings.

850 F.2d 466,

467 (8th Cir. 1988), the Eighth Circuit flatly rejected review

of a procedural due process claim which "grew out" of a

similar claim raised before the administrative agency). As in

the Arp decision, plaintiff raises an issue which could have

been presented to the agency and addressed during the

administrative proceedings. As a consequence, this Court will

not review this claim.

C. Authority to Suspend Operations

Plaintiffs only challenge to the USDA’s authority to

suspend the "specifically approved stockyard" status is that

the suspension is contrary to the language in regulation 9

C.F.R. § 71.4(a) (1991).’ Section 71.4(a) provides that

Yards,pens, chutes, alleys and other facilities

and premises which are used in connection

with the interstate movement of livestock or

poultry shall be maintained by the person in

possession of the facilities and premises in a

’Plaintiff does not challenge the USDA’s authority under

21 U.S.C. § 111 to create and/or suspend the "specifically

approved stockyard" status. Consequently, the court will not

address this issue in the present order.

clean and sanitary condition . . . When [the

State inspector] determines that such facilities

or premises are not in such clean and sanitary

condition and gives written notice of his

determination to such person, the facilities and

premises shall be cleaned and disinfected. . .

before such premises are again used for

livestock or poultry.

Plaintiff claims that this regulation only allows the USDA to

suspend the operations of the stockyard until the premises

are cleaned. Once the stockyard is clean and sanitary,

plaintiff argues that the stockyard must be able to resume its

operations.

The court disagrees with plaintiffs assertion. The

--USDA’s decision to suspend plaintiffs "specifically approved

stockyard" status under 9 C.F.R. § 78.44 was neither plainly

erroneous or inconsistent with regulation 9 C.F.R. § 71.4(a).

See Bowles v. Seminole Rock Co,, 325 U.S. 410, 414 (1945).

Section 71.4(a) does not require that a stockyard be reopened

after the premises is cleaned and sanitized. The regulation

only states that the stockyard must be clean "before" it can be

used for livestock or poultry.

D. Th ini Vv

Plaintiff claims that summary judgment in favor of

defendant is improper in this case because there remains

genuine issues of material fact. Specifically, plaintiff states

that the affidavit of Dr. Dake,one of the stockyard inspectors,

reveals that he disagreed with some of the findings in the

inspecting report.

The court will not consider this affidavit because it

was not submitted during the agency proceedings, and is not

properly part of the administrative record on appeal. On

review, the district court is not permitted to consider

evidence which was not part of the administrative record

unless plaintiff can show bad faith or improper behavior.

Maxey v. Kadrovach, 890 F.2d 73 (8th Cir. 1989), cert.

denied, 495 U.S. 933 (1990). Supplementation of the

administrative record is not permissible in this case because

plaintiff has made no showing that the USDA acted

improperly or in bad faith.

E,_ Review of the USDA Decision

Plaintiff requests that this Court conduct a de novo

review of the USDA decision because the decision was

unwarranted by the facts, and because the USDA fact-finding

procedures were inadequate. See 5 U.S.C. § 706(2)(F).*

Defendant disagrees with plaintiff's assertion and argues that

the agency decision can only be set aside if it is arbitrary or

capricious or an abuse of discretion under 5 U.S.C. §

706(2)(A).

Generally, de novo review of an agency decision is

appropriate under the Administrative Procedure Act when

_ the action is adjudicatory in nature and the agency’s fact-

finding procedures were inadequate, or new issues are raised

®In reviewing this claim the Court notes that plaintiff

merely lists the alleged procedural deficiencies, and fails to

provide any legal argument why it was entitled to more or

different procedure. Interestingly, plaintiff dos not raise the

issue of whether the procedure provided by the USDA was

sufficient under the 5th Amendment guarantee of procedural

due process. Since plaintiff did not present the argument in

this case, the Court will not review the law on this issue.

in a proceeding to enforce nonadjudicatory agency actions.

Camp c, Pitts, 411 U.S. 138, 142 (1973); Friends of

Endangered Species, Inc. v. Jantzen, 760 F.2d 976,982 n.5

(9th Cir. 1985). Additionally, before the agency decision can

be set aside, the Court must take account of whether the

agency action resulted in prejudicial error. See Panhandle

Co-op. Ass’n, Bridgeport, Neb. v. E.P.A., 771 F.2d 1149 (8th

Cir. 1985). Plaintiff claims that the USDA utilized

inadequate fact-finding procedures because, inter alia, the

case was assigned to a hearing officer instead of an

administrative law judge, there was no right to use subpoenas,

and defendant did not submit evidence on the impact of the

sanction.’

Upon review of the record, the Court does not believe

that the fact-finding procedures were so inadequate as to

require a de novo review of the USDA decision. Plaintiff

implies that the hearing officer was not an impartial decision-

maker because he was employee of the USDA. Generally,

there is a presumption of honesty and integrity by an agency

decision-maker, and the party claiming otherwise has the

burden of proof. Hadges v Corbisiero, 760 F. Supp. 388, 391

(S.D.N.Y. 1991) In this case, plaintiff offers nothing more

than mere speculation that the hearing officer was biased in

*Plaintiff also cited several other instances of inadequate

procedure claiming that he did not have possession of his

own records at the time of the hearing, and that inadequate

copies of documents were admitted into evidence. The court

will not consider these claims because plaintiff does not

provide sufficient evidence to show that these incidents

affected the fact-finding procedure.

favor of the USDA.

Second, plaintiff fails to prove that the denial of

subpoena power prejudiced it’s right to adequate hearing

procedures in this case. Plaintiff indicates that the lack of

subpoena power hindered the right to conduct full discovery

and tocross-examine the stockyard inspectors who completed

the inspection reports. As evidence of prejudice, however,

plaintiff points only to the inability to subpoena Dr. James

Badger, and admits that Dr. Badger’s testimony was gained

through discovery in a pending state proceeding. Plaintiff's

complaint that he was unable to cross-examine the stockyard

inspectors is discounted by the fact that there is no absolute

right to cross-examination in administrative proceedings.

- Beauchamp v. De Abadia, 779 F.2d 773 (ist Cir. 1985).

Finally, plaintiffs concern that defendant did not

submit evidence on the impact of the penalty is not

inadequate procedure. The assessment of a sanction is not

required to be a fact-finding procedure, and the ultimate

decision is within the discretion of the agency. Beall

Construction Co. v. Occupational Safety and Health Review

Commission, 507 F.2d 1041, 1046 (8th Cir. 1974). Plaintiff

cites the case of Bosma v. USDA, 754 F.2d 804 (9th Cir.

1984) for the proposition that defendant was required to

submit evidence on the proposed sanction. However, in

Bosma the controlling statute specifically required the

defendant to produce evidence on the impact of the penalty.

There is no similar requirement imposed by statute or

regulation in this case.

Since plaintiff has failed to prove any procedural

deficiencies, a de novo review of the USDA decision is

improper in this case. Alternatively, the court will review the

USDA decision under the standard of review for informal

adjudicatory hearings, which is whether the agency action was

arbitrary or capricious under 5 U.S.C. § 706(2)(A). Duke

Power Co. v. U.S. Nuclear Regulatory Commission, 770 F.2d

386, 389 (4th Cir. 1985). This scope of review is narrow and

the court may not substitute its judgment for that of the

agency. Brotherhood of Railway and Airline Clerks _v.

Burlington Northern, Inc., 772 F.2d 380 (8th Cir. 1983). An

agency’s decision is arbitrary and capricious "only where it is

not supportable on any rational basis." Id. at 381.

Based upon the record and the findings in this case,

the court believes that the USDA’s decision to suspend the

"specifically approved stockyard" status is supported by a

rational basis. The Stockyard was inspected twice by the

USDA. The inspection reports revealed sanitation problems,

and several incidents of failure to properly maintain the

identification of livestock handled in the Stockyard. After

being put on notice of the violations, the USDA found that

plaintiff failed to properly and expeditiously cure the

problems at the Stockyard.

Plaintiff attacks the USDA’s finding that plaintiff was

responsible for the violations committed by the individual

livestock commission companies that operated in the

Stockyard. The USDA found that plaintiff signed an

agreement which states that the market operator is

responsible for the day-to-day operations of the stockyard.

From this agreement, the USDA found that plaintiff assumed

an affirmative duty to maintain the stockyard in accordance

with the provisions in the agreement. Based upon the terms

of the agreement signed by plaintiff, the court agrees that the

USDA had an adequate basis for finding that plaintiff was

responsible for the actions of the independent livestock

commission companies.

In view of the USDA’s findings in this case, the court

believes that the USDA did not act arbitrarily or capriciously

in suspending plaintiff's "specifically approved stockyard"

Status.

F, Five-year Suspension

Plaintiff argues that the USDA’s decision to suspend

plaintiff's "specifically approved stockyard" status for a period

of five years should be set aside.’° Plaintiff claims that it was

not notified of the sanction that the USDA intended to

impose, and that neither party submitted evidence on the

impact of the sanction imposed.

Judicial review of an agency’s decision to impose a

sanction or penalty is limited to whether the agency made an

allowable judgment given the facts of the case and the

applicable statutes. Cox v. United States Department of

Agriculture, 925 F.2d 1102 (8th Cir.), cert. denied, 112 S.Ct.

178 (1991). Generally, an agency’s decision as to the sanction

should not be reversed unless it is unwarranted by the law or

without justification in light of the facts. Panhandle Coop

Ass’n. v. EPA, 771 F.2d 1149, 1152 (8th Cir. 1985).

Although the Court agrees that plaintiff was in

violation of the terms of the agreement with the USDA, the

Defendant has indicated that the action taken by the

USDA was not a penalty or sanction. However, under 5

U.S.C. § 551(10(G), a sanction is defined as "taking other

compulsory or restrictive action." Clearly, the effect of the

USDA’s decision to suspend the federally approved status

was to restrict plaintiff's ability to operate the Stockyard.

Court believes that the USDA decision to impose a five-year

suspension was not an allowable judgment given the facts of

this case. Even though the Court acknowledges that there

were various sanitation violations and problems maintaining

the identity of the cattle, the Court finds it significant that

plaintiff made marked improvements at the Stockyard

between the first and second inspection. A comparison of the

inspection reports reveals that the sanitation conditions

improved after the first inspection. (Vol. III, Tr. 879-82).

Importantly, the hearing officer noted that plaintiff achieved

"satisfactory sanitation" by the time the Notice of withdrawal

of approval was sent to plaintiff. (Vol. I, Tr. 60-61).

Furthermore, the findings of fact in this case show that of the

ten incidents of plaintiffs failure to maintain the identity of

cattle, only two of them occurred after the date of the first

inspection. (Vol. I, Tr. 12-13).

In issuing the order to withdraw the "specifically

approved stockyard" status for five years, the Deputy

Administrator did not provide any reason for choosing a five-

year suspension. The Deputy Administrator did not note that

plaintiff had improved the conditions between the first and

second inspection, and that plaintiff offered evidence of

compliance after the second inspection. The Court believes

that these facts are relevant in assessing the penalty, and that

the decision of the Deputy Administrator was unduly harsh

given the facts of this case. Therefore, the Court finds that

the five-year suspension of plaintiff's "specifically approved

stockyard" status should be reduced to a period of six months.

G. Remaining Moti

Before disposing of this case, the Court must rule on

two other motions filed by defendant. Defendant filed a

shies biiiaitiai is tiated

motion to suspend Local Rule 15 requiring discovery

schedules. This motion will be withdrawn as moot.

Defendant also filed a motion to strike portions of plaintiff

reply brief which exceeded the point originally raised by

plaintiff in its motion for summary judgment. Although the

Court would discourage plaintiff's approach to raising issues

in this manner, defendant was given the opportunity to fully

respond to plaintiffs arguments. Defendant’s motion is

denied.

Ill. CONCLUSION

Based on the arguments presented by both parties and

for the reasons set forth in this order, it is hereby:

ORDERED that plaintiffs motion for summary

judgment be denied in part and granted in part. It is further

ORDERED that defendant’s cross-motion for

summary judgment be granted in part and denied in part. It

is further

ORDERED that the Deputy Administrator’s order

withdrawing plaintiffs "specifically approved stockyard"

Status be reduced from a period of five years to a period of six

months. It is further

ORDERED that defendant’s motion tosuspend Local

Rule 15 be withdrawn as moot. It is further

ORDERED that defendant’s motion to strike be

denied. It is further

ORDERED that the above-styled case be dismissed

with prejudice.

Fernando J. Gaitan, Jr.

United Sates District Judge

Dated: _ 3-30-92

Kansas City, Missouri

UNITED STATES DEPARTMENT OF

AGRICULTURE

BEFORE THE DEPUTY ADMINISTRATOR

ANIMAL AND PLANT HEALTH

INSPECTION SERVICE

In re:

Joplin Missouri Regional

Stockyard

)

Respondent ) Decision and Order

This is an administrative proceeding for the

withdrawal of approval of respondent’s stockyard status for

violations of the regulations governing the interstate

movement of cattle and the failure to maintain the stockyard

in good repair, and cleaned and disinfected as required (9

C.F.R. §§ 71.1 et seg. and 78.1 et seq.,) hereinafter referred

to as the regulations, in accordance with the Rules of Practice

which were adopted for the purpose of the hearing.

This matter arose as a result of a Notice of Proposed

Withdrawal of Approval (Notice) dated September 21, 1989,

which was issued to respondent, Joplin Missouri Regional

Stockyards, by Warren J. Ward, Jr., Area Veterinarian in

Charge, Joplin, Missouri. The Notice of September 21, 1989,

stated the basis for making the withdrawal of approval of

respondent’s stockyard and offered the respondent an

opportunity to request a hearing with respect to the merits of

validity of the withdrawal of approval of the Joplin Missouri

Regional Stockyards in accordance with the Rules of Practice

which were adopted for the purpose of the hearing. In

accordance with the Rules of Practice adopted for these

proceedings, a hearing was requested by the respondent on

October 5, 1989.

A hearing was granted by the Deputy Administrator

for Veterinary Services, Animal and Plant Health Inspection

Service, U.S. Department of Agriculture for June 25-27, 1990

in Joplin, Missouri, because it appeared on the face of the

pleadings that material allegations of fact in the Notice were

in dispute.

The hearing was held before hearing Officer Frank Y.

Tang, Esq., in Room 305, U.S. Court House, 302 Joplin

Street, Joplin, Missouri, 64801 on June 25 and 26, 1990.

Complainant was represented by Joseph P. Pembroke, Esq.,

Office of the General Counsel, U.S. Department of

Agriculture, Washington, D.C. 20250. Respondent was

represented by Robert M. Cook, Esq., 2910 E. Camelback

Road, Suite 150, Phoenix, Arizona, 85016 and Gerard D.

Eftink, Esq., 9233 Ward Parkway, Suite 375, Kansas City,

Missouri, 64114.

On November 7, 1990, complainant received Mr.

Tang’s recommendations and conclusions. In that filing, Mr.

Tang Found: |

Findings of F

1. Joplin Regional Stockyards is a stockyard located at

Newman Avenue and Rangeline, Joplin, Missouri,

65682.

ys Respondent, at all times relevant herein, was a

recipient of Federal Stockyards Approved Status (9

C.F.R. Part 78.44).

3. On 2/26/87, Mr. Jackie Moore signed an agreement

acknowledging that he received, was informed and

understood failure to abide by the provisions of the

agreement and Parts 71 and 78 of Title 9, Code of

Federal Regulations, constituted a basis for

withdrawal of respondent’s Federal Stockyards

Approved Status.

4. In the above signed agreement, Mr. Jackie Moore as

operator of respondent, assumed individual legal

responsibility for the day-to-day operation of the

respondent (9 C.F.R. Part 78.44(c)(21)).

5. Livestock Market Inspection Reports dated October

13, 1988, and May 18, 1989, provided notice that

Joplin Regional Stockyards were in violation of the 9

C.F.R. Parts 78.44(10) and (19); that the stockyard

failed to maintain the identity of cattle ard that the

stockyard was not maintained in a sanitary condition

(see Mr. Tang’s report pp. 9-11. .

6. That on or about:

a. 4/11/88

b. 5/12/88

c. 8/15/88

d. 8/25/88

e. 9/1/88

f. 12/22/88

g. 6/2/88, 6/9/88, 6/16/88, 12/1/88

Class "B" Oklahoma cattle were sold as Missouri

Class "A" animals through the Joplin, Missouri

Regional Stockyards (9 C.F.R. Part 78.44(c)(10)).

7. That respondent failed to maintain the stockyards

in good repair, in sanitary condition, and clean and

disinfected as required (9 C.F.R. 78.44(c)(19)).

8. That 12 inches of maggot-infested manure had

accumulated.

9. That spraying equipment was not maintained at the

stockyard and disinfection cans indicated non-use

(9 C.F.R. Part 78.44(c)(18)).

10. That the stockyard failed to supply the market

veterinarian with a suitable building including a

bathroom, hot and cold running water and air

conditioning (9 C.F.R. Part 78.44(c)(17)).

CONCLUSION

By reason of the facts contained in the Finding of

Fact above, the respondent has violated the specifically

approved stockyard agreement 9 C.F.R. § 78.44 and Parts

71 and 78 of Title 9, Code of Federal Regulations.

Therefore, the following Order is issued.

ORDER

It is hereby ordered that Federal specifically

approved stockyard status under 9 C.F.R. 78.44 be

withdrawn and denied to the respondent, the owners,

officers, directors, partners, successors, affiliates and

assigns, directly or through any corporate device for a

period of five years from the effective date of this order.

This order will become effective on the _15th_ day of

January 1990.

Done at Washington, D.C.

this 10th day of December _, 1990

Lonnie King, D.V.M.

Deputy Administrator

Veterinary Services

Animal & Plant Health Inspection

Service

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.