American Fruit Purveyors, Inc. v. U.S., 79-3815
| Decision Date | 13 November 1980 |
| Docket Number | No. 79-3815,79-3815 |
| Citation | 630 F.2d 370 |
| Parties | AMERICAN FRUIT PURVEYORS, INC., Petitioner, v. UNITED STATES of America and Bob Bergland, Secretary of Agriculture, Respondent. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard B. Marx, Miami, Fla., for petitioner.
Raymond W. Fullerton, Director, U. S. Dept. of Agriculture, Washington, D. C., for respondent.
Petition for Review of an Order of the Secretary of Agriculture.
Before HILL, GARZA and THOMAS A. CLARK, Circuit Judges.
The present case is on appeal from a decision of the Secretary of the United States Department of Agriculture, through his Judicial Officer, suspending the license of American Fruit Purveyors (AFP). AFP is a supplier of fresh and frozen fruits and vegetables to hotels, restaurants and steamship lines. The company was licensed in 1958 and has received renewal of that license annually. In 1969, AFP purchased and accepted 17 lots of vegetables, which are considered perishable agricultural commodities, from five sellers and failed to make full payment promptly. On October 29, 1971, following the filing of a complaint by the Department of Agriculture against AFP, the Judicial Officer ordered that AFP's license be suspended for fourteen days. The Judicial Officer suspended this disciplinary action, stating that the penalty would not become effective unless AFP was found to have, within a four-year period knowingly failed to pay for produce within the regulation guidelines' ten days period following receipt. The Judicial Officer also ruled that AFP could avoid the ten-day payment rule only if it entered into an express written agreement which stated a definite time period within which to pay and if AFP paid within such an agreed time. The four-year period began to run on February 7, 1972.
During the 1974 crop year, AFP purchased and accepted six shipments of potatoes from Sunny Farms, Inc., located in Edison, California. All orders were made orally, and no written confirmation of such transactions was made. In its usual course of business, Sunny Farms expects payment within ten days of receipt by the purchaser and would cease shipments if payment was not received within two weeks. Sunny Farms did receive a prompt payment for one shipment, but the remaining payments were not forthcoming. In order to liquidate obligations remaining on AFP's account, Sunny Farms agreed to accept postdated checks. A number of these checks were returned due to insufficient funds. In 1975, Sunny Farms filed a complaint with the Secretary of Agriculture seeking reparations. Pursuant to an order by the Judicial Officer, final payment was made by AFP in 1976.
During the same crop-year of 1974, AFP also purchased and accepted a number of shipments of fruit and vegetables from Vic Mahns, Inc., located in Pompano Beach, Florida. No written agreement of these transactions was ever made. The original terms of the oral agreement required payment within one week of receipt, but this was later altered to a three week period. Harry Sturm, president of the corporation which owns AFP, disputed this arrangement, contending that the agreement was that AFP would pay when it was able. Again, AFP failed to pay promptly and Vic Mahns seized its shipments. Vic Mahns also agreed to accept postdated checks to liquidate AFP's account. Some of these checks were returned due to insufficient funds. Vic Mahns filed a complaint seeking reparations, and following another order of the Judicial Officer, Vic Mahns and AFP entered into a settlement agreement.
A complaint was then filed by the director of the Fruit and Vegetable Division, Agricultural Marketing Service of the USDA against AFP seeking disciplinary action under the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. §§ 499a-499s, for failure to make payments promptly on twenty lots of perishable agricultural commodities. Following an evidentiary hearing, the Administrative Law Judge (ALJ) found that AFP had not made payments in ten days as required by § 499b, that it had not entered into an express agreement for a different pay period and AFP's actions violated the order of the Judicial Officer of October 29, 1971. Based upon his findings of fact, the ALJ reinstated the fourteen day suspension issued on October 29, 1971. Although the USDA recommended an additional penalty of ninety days suspension for the 1974 violations, the ALJ imposed an additional suspension of seven days to run consecutively with the fourteen days.
Both AFP and the Department of Agriculture appealed this decision to the Judicial Officer. The Judicial Officer denied AFP's request for oral argument on the ground that no novel or complex issues were raised, the case was thoroughly briefed and oral argument would serve no useful purpose. The Judicial Officer affirmed the ALJ's decision except that portion regarding the imposition of the seven day additional suspension. The Judicial Officer, finding "a callous disregard for the requirements of the Act and the prior probationary order," increased the seven day suspension to thirty days to run consecutively, making it a total of forty-four days suspended.
A stay was subsequently entered, pending an appeal to this court. Following the grant of the stay, the Judicial Officer denied a Petition to Reconsider filed by AFP. The stay order remained in effect. AFP now raises four issues on appeal: 1) AFP did not knowingly and willfully fail to make prompt payments for twenty lots of perishable agricultural commodities; 2) AFP did satisfy the requirements of the 1971 order regarding written confirmation; 3) the Secretary of Agriculture gave no notice to AFP of the 1974 violations and found AFP guilty of a willful violation without giving it an opportunity to comply; and 4) the suspension in this case is arbitrary and capricious.
In reviewing the findings and order of the Judicial Officer of the Department of Agriculture, an appellate court may not substitute its judgment for that of the Judicial Officer, Lewis v. Butz, 512 F.2d 681, 683 (8th Cir. 1975), and his decision may only be overturned if it is unwarranted in law or without justification in fact. Butz v. Glover Livestock Commission Co., 411 U.S. 182, 185-86, 93 S.Ct. 1455, 1457-58, 36 L.Ed.2d 142 (1973); Noell v. Bensinger, 586 F.2d 554, 558 (5th Cir. 1978).
7 U.S.C. § 499b(4) provides in part that it shall be unlawful in any transaction in...
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