# Petition for Writ of Certiorari — Moore v. Espy

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1993
- **Citation:** 509 U.S. 919

## Text

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,
v.
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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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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a

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
© SESE SE Sethe 19

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
aa a See ae ar NTO RS le 13
|, ER a RT ix,2,12,14,20-24
ne eieniulbiocieninel X,24

Fh Fa i iicctcesieesinitciniensicsrnnsiteniviialictciiasanig ix,1

iia cenmmnnoanens xi,6,16,17
i i cieinliniateeaniensle 16,17
| A Te xii,15-17,27
es OR ae Rear 16-17,27
I i cc nccmsnscennneieinsiailana 16-17,27
SL ne a eee 16-17
OR OI scesitssnisannennsiiinsitielenypiicigeniaainl ix,1
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

Ce

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,

ix

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.

(c) After notice required by the section, the agency shall
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;
or

(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
x

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.

(c) | When application is made for a license
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
xi

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.
xi

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.

6

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

10

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

li

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 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

12

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...
(C) Rules of Procedure...

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

13

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.

14

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

15
~

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

16

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

17

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

18

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

19

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

20

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.

21

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.

22

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

23

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

a4

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

25

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.

26

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.

27

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.

3

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

6

| ’ )

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

10

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

11

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.

12

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

13

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).

14

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

15

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

16

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.

17

oe

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

18

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.

19

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

20

™

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

21

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.

22

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.

23

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

24

Ee

%

y
:
{
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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.

25

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

26

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.

27

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.

28

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

29

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

30

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.

31

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

32

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

33

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

34

a

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

35

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)).

36

|

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

37

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_0994%3A1. Public record. Not legal advice.