945 F.2d 398 (4th Cir. 1991), 90-2209, Sid Goodman & Co., Inc. v. U.S.

Docket Nº:90-2209.
Citation:945 F.2d 398
Party Name:SID GOODMAN & COMPANY, INCORPORATED, Petitioner, v. UNITED STATES Of America, United States Department of Agriculture, Agricultural Marketing Service, Clayton Yeutter, Secretary, U.S. Department of Agriculture, Respondents.
Case Date:October 01, 1991
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 398

945 F.2d 398 (4th Cir. 1991)

SID GOODMAN & COMPANY, INCORPORATED, Petitioner,

v.

UNITED STATES Of America, United States Department of Agriculture, Agricultural Marketing Service, Clayton Yeutter, Secretary, U.S. Department of Agriculture, Respondents.

No. 90-2209.

United States Court of Appeals, Fourth Circuit

October 1, 1991

Editorial Note:

This opinion appears in the Federal reporter in a table titled "Table of Decisions Without Reported Opinions". (See FI CTA4 Rule 36 regarding use of unpublished opinions)

Argued May 6, 1991.

1992-1 Trade Cases P 69,719

On Petition for Review of an Order of the United States Department of Agriculture (89-523-D)

Argued: Geoffrey Richard W. Smith, McDermott, Will & Emery, Washington, D.C., for petitioner; Leslie Karen Lagomarcino, Office of the General Counsel, United States Department of Agriculture, Washington, D.C., for respondents.

On Brief: Edward M. Ruckert, Matthew C. Rosser, McDermott, Will & Emery, Washington, D.C., for petitioner; James Michael Kelly, Associate General Counsel, Raymond W. Fullerton, Assistant General Counsel, Margaret M. Breinholt, Deputy Assistant General Counsel, Office of the General Counsel, United States Department of Agriculture, Washington, D.C., for respondents.

Dept. of Agr.

AFFIRMED.

Before WIDENER, and NIEMEYER, Circuit Judges and JOSEPH H. YOUNG, Senior United States District Court Judge for the District of Maryland, sitting by designation.

OPINION

PER CURIAM:

Goodman & Sons, Co. Inc. ("Goodman") is a Maryland corporation and a wholesale distributor of agricultural produce, located at the Maryland Wholesale Produce Market in Jessup, Maryland. Goodman is a licensed perishable agricultural commodities dealer, pursuant to the licensing requirements of the Perishable Agricultural Commodities Act ("PACA"). It purchases produce in wholesale lots from outof-state shippers and sells the produce in wholesale quantities to customers in the District of Columbia and Baltimore areas. Goodman also accepts produce on consignment from out-of-state shippers and sells it on consignment in the District of Columbia and Baltimore areas. Magruder, Inc. ("Magruder") and Fresh Value, Inc. ("Fresh Value") are among Goodman's customers.

M. Offutt Co., Inc., a Texas produce shipper, requested that the Agricultural Marketing Service ("AMS") of the United States Department of Agriculture ("USDA") investigate Goodman's business, seeking reparation from Goodman for five lots of produce that Goodman handled for it on consignment.

The investigation uncovered accounting and reporting deficiencies that led to the discovery that Goodman "surreptitiously" made 25 cents per-package payments to the employees of Magruder and Fresh Value, in order to induce those employees to purchase produce from Goodman rather than from a competitor. 1

From January 1987 through September 1988, these payments to Bill Crandall, Assistant Vice President and Produce Buyer for Magruder, totalled more than $66,000 for the produce Crandall purchased from Goodman on behalf of Magruder's fourteen retail grocery stores. From April 1987 through September 1988, Goodman issued checks totalling $41,000 to the wife of Henry Hernandes, the produce buyer for Fresh Value's four retail supermarkets.

The supervisors at Fresh Value and Magruder were unaware of the payments. The invoices and accountings did not reflect the payments and Goodman clearly did not tell them. In addition, neither Crandall nor Hernandes reported to their superiors the payments received for purchasing the products. As a result of the investigation, AMS determined that Goodman had failed to make full and prompt payment to M. Offutt Co. of over $5000. 2

Although both stores have policies forbidding employees from taking gifts or gratuities of any kind, there was evidence that employees of both stores received promotional gifts offered publicly by suppliers on an incentive basis to the retail food industry. These gifts included sports tickets, pens, bottles of wine, hats, and jackets.

On April 18, 1989, AMS issued a complaint against Goodman alleging that Goodman willfully, flagrantly, and repeatedly violated section 2(4) of the Act, 7 U.S.C. § 499b(4) by regularly and surreptitiously giving employees of two wholesale customers a total of more than $107,000 to induce those employees to buy perishable agricultural commodities from Goodman. On May, 10, 1989, Goodman filed an answer denying violation of PACA and a motion for a more definite statement of the violations alleged. Goodman also asserted that Magruder and Fresh Value extorted the kickback payments by threatening not to purchase perishable agricultural commodities from Goodman if it did not make the per-package payments to their buyers.

[3 The complaint thus alleged that Goodman made fraudulent, false, or misleading statements in connection with transactions involving perishable agricultural commodities; failed or refused truly and correctly to account and make full payment promptly in respect of any transaction in any such commodity; and failed to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction.

Following a hearing, the Administrative Law Judge ("ALJ") concluded that Goodman willfully violated section 2(4) of the...

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