Capitol Packing Company v. United States

• Decision Date: 22 July 1965
• Docket Number: No. 7603,7611.,7603
• Parties: CAPITOL PACKING COMPANY, a corporation, and Meyer Averch, Appellants, v. UNITED STATES of America, Appellee. Sol FELSEN et al., Appellants, v. UNITED STATES of America, and Orville E. Freeman, Secretary of Agriculture, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

350 F.2d 67 (1965)

CAPITOL PACKING COMPANY, a corporation, and Meyer Averch, Appellants, v. UNITED STATES of America, Appellee.

Sol FELSEN et al., Appellants, v. UNITED STATES of America, and Orville E. Freeman, Secretary of Agriculture, Appellees.

Nos. 7603, 7611.

United States Court of Appeals Tenth Circuit.

July 22, 1965.

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V. G. Seavy, Jr., Denver, Colo. (Anthony F. Zarlengo, Denver, Colo., with him on the brief), for appellants Capitol Packing Co. and Meyer Averch.

William R. Koger and Robert E. Shelton, Oklahoma City, Okl. (David I. Shedroff, Denver, Colo., with them on the brief), for appellants Sol Felsen and others.

Neil Brooks, Asst. Gen. Counsel, and Robert E. Duncan, Atty., Dept. of Agriculture, Washington, D. C. (John W. Douglas, Asst. Atty. Gen., Alan S. Rosenthal, Atty., Dept. of Justice, and Robert E. Duncan, Atty., Dept. of Agriculture, Washington, D. C., with them on the brief), for appellee.

Before MURRAH, Chief Judge, and PICKETT and SETH, Circuit Judges.

SETH, Circuit Judge.

These are actions to review the decision of the Judicial Officer of the Department of Agriculture in adjudicatory proceedings brought under the Packers and Stockyards Act. These two cases were considered during the administrative proceedings as one, and the record, findings, and order here under review do not distinguish between them. The petitioners will be referred to as "appellants." The appellants were charged in the proceedings under different sections of the Packers and Stockyards Act of 1921 7 U.S.C.A. §§ 181-231. Capitol Packing Company is a "packer" under the Act. The individual, Meyer Averch, is a "registered dealer," and the individuals, Sol Felsen, Al Cooper, and Morey M. Miller (doing business as Farmers Livestock Commission Company) are "market agencies" under the Act.

The Judicial Officer found and concluded that appellants had engaged in practices which violated the Act and regulations adopted under it. The Officer issued cease and desist orders and suspended the individual appellants.

This opinion is separated in accordance with the issues presented in the two appeals from the same proceedings.

As to the appeal in Case No. 7603, a separate procedural issue was presented in the Government's motion to dismiss the appeal of Capitol Packing Company for failure to file it within thirty days after service of the order of the Judicial Officer. The Packers and Stockyards Act of 1921 7 U.S.C.A. § 194(a) provides that the order shall be final unless an appeal is filed within thirty days of its service on the packer. The Government contends this provision is applicable while the appellant urges that the Judicial Review Act of 1950, the Hobbs Act 5 U.S. C.A. § 1031 et seq. provides that a party shall have 60 days in which to file an appeal. The question thus presented is which statute applies as both on their face purport to cover the packers' appeal.

The Government argues that by reason of certain amendments made in 1958 to § 204 of the Packers and Stockyards Act, the entire section including subsection (a) with which we are here concerned was still operative. This they argue makes the Hobbs Act ambiguous and subject to construction by use of its legislative history. We cannot agree with this argument. The Hobbs Act is the last Act of Congress on the subject, by its wording it clearly applies to the appeal in question, and there is no basis for resorting to its legislative history. The Hobbs Act governs the time for the packer to appeal, and under that Act the appeal here was timely.

Under the Packers and Stockyards Act, the responsibility for efficient regulation of market agencies and packers lies with the Secretary of Agriculture and the Judicial Officer acting in his stead. The proper scope of judicial review is limited to the correction of errors of law and to examination of the sufficiency of the evidence supporting the factual conclusions. Aikins v. United States, 282 F.2d 53 (10th Cir.); Hyatt v. United States, 276 F.2d 308 (10th Cir.). The findings and orders of the Judicial Officers must be sustained if not contrary to law and if supported by substantial evidence. The court is not to substitute its judgment for that of the Judicial Officer, as to which of various rational but opposed inferences should be drawn from the evidence. Aikins v. United States, supra; Hyatt v. United States, supra.

Case No. 7611 — Sol Felsen et al. v. United States.

Farmers Livestock Commission Company was at the time in question one of the two largest commission sellers of steers at the Denver stockyards. The individual appellants Felsen, Cooper, and Miller were partners doing business as Farmers Livestock Commission Company, a partnership, which was incorporated under the same name during the administrative proceedings. Appellants were charged with violating § 312(a) of the Act 7 U.S.C.A. § 213(a), which makes it unlawful for any market agency "to engage in or use any unfair, unjustly discriminatory, or deceptive practice or device" in connection with the marketing or selling of livestock. The partnership was a "market agency," as defined in the Act, as were the individuals named above as partners.

Upon review of the Hearing Examiner's report and after hearing oral argument, the Judicial Officer concluded that Farmers had engaged in unfair and unjustly discriminatory practices in violation of § 312(a) by reason of the following:

1. Failing or refusing to sell top loads of steers at the stockyards separately and on their merits;

2. "Ordering in" livestock for exclusive sale to Capitol Packing Company, Inc., the largest slaughterer of steers on the Denver market;

3. Lending some $51,000.00 to either Dave or Meyer Averch (the principal managing officers and shareholders of Capitol Packing Company), to Imperial Meat Company, Inc. (fifty per cent of which was owned at that time by the Averchs), or to D M & H Cattle Company (a subsidiary of Capitol, two-thirds of which is owned by the Averchs);

4. Undue and unreasonable preferences and advantages extended to Capitol Packing Company, Inc. in connection with marketing and selling cattle on a commission basis at the stockyard.

Farmers Livestock and the individual appellants were ordered to cease and desist from engaging in such practices, and they were all suspended as registrants under the Act for thirty days. The Original Decision and Order is at 22 Agr. Dec. 651, and the Decision and Order on Reconsideration is at 22 Agr.Dec. 1234.

1. Top Loads.

As stated above the Judicial Officer found a refusal on the part of the market agency to sell its better quality consignments separately from other consignments. The strongest evidence on this point is the affidavit of an official and buyer of Capitol Packing Company, one of the largest purchasers from Farmers Livestock Commission Company, and a party in the companion case, stating in part as follows:

"I attempt to buy in all alleys where there is livestock I can use. Some of the commission firms sell off the top loads to other packers. I won\'t buy in alleys where the top loads have been sold off. If I get first turn in an alley, I usually bid on all the cattle and will buy the whole alley if I can. I buy considerable cattle in Farmers alley because they have the kind of cattle I want, and I can buy the top cattle along with the other cattle."

This evidence is not refuted by appellants. Also Mr. Anton J. Plute, a buyer for another packer, testified he had encountered some trouble purchasing from Farmers, because he had wanted to pick top loads.

The Judicial Officer found this practice of the commission men to be a violation of § 302(a) of the Act and 9 C.F.R. 201.58 (22 Agr.Dec. at p. 678). 9 C.F.R. 201.58 requires sales of each consignment to the highest bidder without intermingling them, and not conditioned on sales of other consignments.¹

The consent of the owner of the cattle consigned provides an exception in the regulation's prohibitions, but there is no evidence that Farmers obtained the owners' consent in refusing to sell off top loads. The practice by appellants is therefore in violation of the regulation and the Act.

The evidence supporting the Judicial Officer's finding that Farmers refused to so sell its top loads of steers separately is clear and uncontradicted.

2. Ordering In.

The complaint also charged Farmers with violating the Act by engaging in the practice of "ordering in" livestock from the country for delivery to packer buyers. This allegation contemplates that cattle were delivered to the stockyards prior to a sale to a packer for its acceptance or rejection and not presented for bidding as consigned cattle. In their answer to the complaint, the appellants admitted the practice of "ordering in," but they denied the existence of any option in the purchaser to reject the cattle "ordered in." This is a denial that the sale was not consummated before the cattle came to the stockyards.

The Judicial Officer found the practice of "ordering in" as described in the complaint and answer a violation of the Act, because the livestock is brought into a public market "with the appearance that it is for sale to the highest bidder under free and open competitive conditions," in violation of the commission firm's duty to get "the highest available price for livestock consigned to it rather than to reserve it for one packer." Farmers could not have breached any duties of a consignee of livestock in the "ordering in" process as described in the record since it shows the sales were complete before delivery to the yards. By definition a "consignment" is instead a delivery of cattle to be offered for sale. Acker v. United States, 12 F.Supp. 776 (N.D.Ill.), aff'd. 298 U.S. 426, 56 S.Ct. 824, 80 L.Ed. 1257. There is also no evidence in the record that the livestock were brought to the stockyards "with the appearance it was for...