ALSSALQIUVE SPT.Z Technology and Science Detroit Pubiic Library AGRICULTURE DECISIONS Volume 53 January - June 1994 Part Two (P&S) Pages 639-685 UNITED STATES DEPARTMENT OF AGRICULTURE DETROIT PUBLIC LIBRARY VELENN AO AT 3 5674 02519909 3 AGRICULTURE DECISIONS AGRICULTURE DECISIONS is an official publication by the Secretary of Agriculture consisting of decisions and orders issued in formal adjudicatory administrative proceedings conducted for the Department under various statutes and regulations pursuant to the Administrative Procedure Act. For the convenience of the public, rulings issued by the Department’s administrative law judges on the appeal of nonprocurement debarments and suspensions and selected court decisions concerning the Department’s regulatory programs are also included. The Department is required to publish its rules and regulations in the Federal Register and, therefore, they are not included in AGRICULTURE DECISIONS. Consent Decisions entered subsequent to December 31, 1986, are no longer published. However, a list of the decisions is included. (53 Fed. Reg. 6999, March 4, 1988.) The decisions are on file and may be inspected upon request made to the Hearing Clerk, Office of Administrative Law Judges. Beginning in 1989, AGRICULTURE DECISIONS is comprised of three Parts, each of which is published every six months. Part One is organized by statute, and contains all decisions and orders other than those pertaining to the Packers and Stockyards Act and the Perishable Agricultural Commodities Act, which are contained in Parts Two and Three, respectively. The published decisions and orders may be cited by giving the volume number, page number and year, e.g., 1 Agric. Dec. 472 (1942). It is unnecessary to cite a decision’s docket or decision numbers, e.g., D-578; S. 1150, and the use of such references generally indicates that the decision has not been published in AGRICULTURE DECISIONS. Direct all inquiries regarding this publication to: Editors, Agriculture Decisions, Hearing Clerk Unit, Office of Administrative Law Judges, U.S. Department of Agriculture, Room 1081 South Building, Washington, D.C. 20250-9200, Telephone: (202) 720-4443. DETROIT PUBLIC LIBRARY NOV 15 1994 DEPOSITORY DOCUMENT REGULATORY AGENCIES Regulatory Agencies are the Departmental parties in adjudicatory proceedings before the Secretary of Agriculture. Adjudications under the following statutes involve the Animal and Plant Health Inspection Service (APHIS): Animal Quarantine Act, 21 U.S.C. § 104 (AQ Docket) (including Veterinary Accreditation Cases (VA Docket)) Animal Welfare Act, 21 U.S.C. § 2149 (AWA Docket) Cattle Contagious Diseases Act, 21 U.S.C. §§ 111, 120, 122 (AQ Docket) Horse Protection Act, 15 U.S.C. § 1821 et seg. (HPA Docket) Plant Quarantine Act, 7 U.S.C. § 163 (PQ Docket) Plant Variety Protection Act, 7 U.S.C. § 2321 et seg. (PVPA Docket) Swine Health Protection Act, 7 U.S.C. § 3804(b), 3805(a)) (AQ Docket) Adjudications under the following statutes involve the Agricultural Marketing Service (AMS): Agricultural Marketing Agreement Act, 7 U.S.C. §§ 608c(15)(A) 14(B) (AMA F&V, AMA M, and AMAA Dockets) Beef Protection Research Act, 7 U.S.C. § 2901 er seq. (BPRA Docket) Egg Research & Consumer Information Act, 7 U.S.C. § 2701 (ERCIA Docket) Egg Products Inspection Act, 21 U.S.C. § 1047 (I&G Docket) Honey Research Promotion Consumer Information Act, 7 U.S.C. §§ 4601-4612 (HRPCIA Docket) Perishable Agricultural Commodities Act, 7 U.S.C. § 499a et seq. (PACA Dockets) Potato Research & Promotion Act, 7 U.S.C. § 2611-2617 (PRPA Docket) Adjudications under the following statutes involve the Food Safety and Inspection Service (FSIS): Federal Meat Inspection Act, 21 U.S.C. §§ 604, 606, 607(e), 608, 671(a) (FMIA Docket) Poultry Products Inspection Act, 21 U.S.C. §§ 455, 456, 457(d), 467(a) (PPIA Docket) Adjudications under the following statute involve the Packers and Stockyards Administration (P&S): Packers and Stockyards Act, 7 U.S.C. § 181 et seg. (P&S Docket) LIST OF DECISIONS REPORTED JANUARY - JUNE 1994 PACKERS AND STOCKYARDS ACT DISCIPLINARY DECISIONS MIDDLEBURY PACKING CO., INC., ET AL. P&S Docket No. er 639 HARDIN COUNTY STOCKYARDS, INC., ET AL. P&S Docket No. D-93-73. Decision and Order as to Hardin County Stockyards, Inc. and Rex Lineberry HARDIN COUNTY STOCKYARDS, INC., ET AL. P&S Docket ee eee 659 REPARATION DECISION DEWEL LAWRENCE, D/B/A J & L LIVESTOCK Co. V. KATHY B. JONES, D/B/A CIRCLE K FARMS. P&S Docket Wi, T-SHI gw i ccceee c ence 660 MISCELLANEOUS ORDERS SYRACUSE SALES CoO., INC., ET AL. P&S Docket Nos. DO2-32 & D9 E-Oe. Cntier TCM TERY... nw cc ccc cccees 674 SYRACUSE SALES Co., INC., ET AL. P&S Docket Nos. D-92-52 & D-92-89. Order on Reconsideration of re hn fan 5 oo has Wind oa a Caw ei Aw wei 675 CAL-MAR MEAT DISTRIBUTORS, INC., ET AL. P&S Docket No. 91-39. Order of Dismissal as to Respondent Calco UTI ce enel enh el teha h i le “tess GoS arai 5 676 iil Louis BoTT. P&S Docket No. D-94-11. Order Dismissing EE oer deal ee ak 6d PUN ERE VERE Ke CeO WW Wee @ 676 DEFAULT DECISIONS PAUL FRANKLIN Cox. P&S Docket No. D-93-78. Decision RENIN co ss veo SRE AEoAo wh ve eo 677 VAL GENE PALMER. P&S Docket No. D-93-72. Decision and NR te Ss Fe Bd oy 0 TGR A LS Be re et ak 679 STEVEN TRUMAN DEWEES. P&S Docket No. D-94-18. Decision EOE Saycs dnirees pei) eettate bdo Bere weber Ane secnedS 08 T Sees 681 a I MEET cog ga Shy here wie Ride an © Peal Vitae Rete ah aes 684 MIDDLEBURY PACKING CO., INC., et al. 639 53 Agric. Dec. 639 PACKERS AND STOCKYARDS ACT DISCIPLINARY DECISIONS In re: MIDDLEBURY PACKING CO., INC., BERNARD QUESNEL and LOUIS QUESNEL. P&S Docket No. D-92-46. Decision and Order filed December 16, 1993. Failure to make full prompt payment for livestock - Unfair and deceptive trade practice - Potential far-reaching effect on livestock industry - Agreements for delayed payment - Alter ego - Adverse inference - Cease and desist order - Civil penalty. A corporate respondent, under the direction, management and control of individual respondents violated the Act by failing to make full prompt payment for livestock. Judge Baker assessed a civil penalty jointly and severally against respondents and ordered them to cease and desist from violating the Act. Late receipt of payment adversely affects the seller of livestock who must reimburse the custodial account so that consignors can be paid. Purchasers who fail to pay promptly pose a threat of far-reaching disruption in the livestock industry. Oral agreements for delayed payment which are entered into after a sale do not serve to extend the period for prompt payment under the Act. The corporate entity is disregarded where necessary to prevent circumvention of a statute. John P. Vos, for Complainant. Respondent, Pro se. Decision and Order issued by Dorothea A. Baker, Administrative Law Judge. Preliminary Statement This is a disciplinary proceeding under the Packers and Stockyards Act, 1921, as amended and supplemented (7 U.S.C. § 181 et seq.), hereinafter referred to as the Act. A Complaint and Notice of Hearing were filed on March 12, 1992, alleging that the corporate Respondent, under the direction, management and control of the individual Respondents, Bernard and Louis Quesnel, willfully violated sections 202(a) and 409 of the Act (7 U.S.C. §§ 192(a), 228b) by purchasing livestock and failing to pay, when due, the full purchase price for such livestock on six occasions in April and May of 1991. An oral hearing was held on May 5 and 6, 1993, in Rutland, Vermont, before Administrative Law Judge Dorothea A. Baker. Complainant was represented by John P. Vos, Esquire, Office of the General Counsel, United 640 PACKERS AND STOCKYARDS ACT States Department of Agriculture, Washington, D.C. Respondents appeared pro se. Pertinent Statutory Provisions Sec. 202. It shall be unlawful for any packer with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to: (a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or .... (7 U.S.C. § 192). Sec. 409. (a) Full amount of purchase price required; methods of payment Each packer, market agency, or dealer purchasing livestock shall, before the close of the next business day following the purchase of livestock and transfer of possession thereof, deliver to the seller or his duly authorized representative the full amount of the purchase price: Provided, That each packer, market agency, or dealer purchasing livestock for slaughter shall, before the close of the next business day following purchase of livestock and transfer of possession thereof, actually deliver at the point of transfer of possession to the seller or his duly authorized representative a check or shall wire transfer funds to the seller’s account for the full amount of the purchase price; or, in the case of a purchase on a carcass or "grade and yield" basis, the purchaser shall make payment by check at the point of transfer of possession or shall wire transfer funds to the seller’s account for the full amount of the purchase price not later than the close of the first business day following determination of the purchase price: Provided further, That if the seller or his duly authorized representative is not present to receive payment at the point of transfer of possession, as herein provided, the packer, market agency or dealer shall wire transfer funds or place a check in the United States mail for the full amount of MIDDLEBURY PACKING CO., INC., et al. 641 53 Agric. Dec. 639 the purchase price, properly addressed to the seller, within the time limits specified in this subsection, such action being deemed compliance with the requirement for prompt payment. (b) Waiver of prompt payment by written agreement; disclosure requirements Notwithstanding the provisions of subsection (a) of the section and subject to such terms and conditions as the Secretary may prescribe, the parties to the purchase and sale of livestock may expressly agree in writing, before such purchase or sale, to effect payment in a manner other than that required in subsection (a) of this section. Any such agreement shall be disclosed in the records of any market agency or dealer selling the livestock, and in the purchaser’s records and on the accounts or other documents issued by the purchaser relating to the transaction. (c) Delay in payment or attempt to delay deemed unfair practice Any delay or attempt to delay by a market agency, dealer, or packer purchasing livestock, the collection of funds as herein provided, or otherwise for the purpose of or resulting in extending the normal period of payment for such livestock shall be considered an “unfair practice" in violation of this Act. Nothing in this section shall be deemed to limit the meaning of the term "unfair practice” as used in this chapter. (7 U.S.C. § 228b). Findings of Fact Because the record as a whole supports the Complainant’s requested Findings of Fact, they have been adopted substantially herein. 1. Middlebury Packing Co., doing business as Middlebury Packing Co., Inc., hereinafter referred to as the corporate Respondent, was a corporation organized and existing under the laws of the State of Vermont. Its mailing address is 58 Exchange Street, Middlebury, Vermont 05753. On September 11, 1991, Middlebury Packing Co., doing business as Middlebury Packing Co., Inc., changed its name to Middlebury Meat Packers, Inc. Middlebury Packing Co. was organized as a corporation pursuant to the laws of the State of Vermont. During the period in which it was incorporated it also did business as Middlebury Packing Co., Inc. and held itself out to 642 PACKERS AND STOCKYARDS ACT Packers and Stockyards personnel and to the State of Vermont as Middlebury Packing Co., Inc. (CX 1, p. 9, CX 11). On September 11, 1991, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc. changed its name to Middlebury Meat Packers, Inc. (CX 10, p. 5) and on September 25, 1991, Bernard and Louis Quesnel formed a new corporation called Middlebury Packing Co., Inc. (CX 10, pp. 7-10). 2. The corporate Respondent is and at all times material herein was: (a) Engaged in the business of buying livestock in commerce for purposes of slaughter; and (b) A packer within the meaning and subject to the provisions of the Act. 3. Bernard Quesnel is an individual whose mailing address is RD #1, Middlebury, Vermont 05753. 4. Bernard Quesnel is, and at all times material herein was: (a) President and treasurer of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc.; (b) Co-owner of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc.; and (c) Responsible for the direction, management and control of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc. 5. Louis Quesnel is an individual whose mailing address is RD #1, Middlebury, Vermont 05753. 6. Louis Quesnel is, and at all times material herein was: (a) Vice-president of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc.; (b) Co-owner of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc.; and (c) Responsible for the direction, management and control of corporate Respondent, Middlebury Packing Co., d/b/a Middlebury Packing Co., Inc. 7. On July 27, 1987, the Complainant sent a letter to the Respondents notifying them that an investigation conducted by Packers and Stockyards personnel on July 21, 1987, uncovered instances where the Respondents had failed to comply with section 409 of the Act. (CX 2, pp. 4 and 5). 8. On November 9, 1989, the Complainant again sent a letter to the Respondents notifying them that an investigation conducted by Packers and Stockyards personnel on October 26, 1989, uncovered instances where the Respondents had failed to comply with section 409 of the Act. (CX 2, pp. 1- 3). 9. As part of an investigation, complainant notified several market agencies in Vermont and New York, and asked that they keep the envelopes