Cole v. U.S. Dept. of Agriculture, A.S.C.S.

• Decision Date: 21 January 1998
• Docket Number: No. 96-9069,96-9069
• Citation: 133 F.3d 803
• Parties: 11 Fla. L. Weekly Fed. C 987 Graham L. COLE, Plaintiff-Counter-Defendant-Appellee, v. UNITED STATES DEPARTMENT OF AGRICULTURE, A.S.C.S., Defendants-Counter-Claimants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 803

133 F.3d 803

11 Fla. L. Weekly Fed. C 987

Graham L. COLE, Plaintiff-Counter-Defendant-Appellee, v. UNITED STATES DEPARTMENT OF AGRICULTURE, A.S.C.S. Defendants-Counter-Claimants-Appellants.

No. 96-9069.

United States Court of Appeals Eleventh Circuit.

Jan. 21, 1998.

James L. Wiggins, U.S. Atty., H. Randolph Aderhold, Jr., Asst. U.S. Atty., Macon, GA, Barbara C. Biddle, Edward R. Cohen, Dept. of Justice, Washington, DC, for Defendants-Counter-Claimants-Appellants.

David R. Tyndall, Moultrie, GA, for Plaintiff-Counter-Defendant-Appellee.

Appeal from the United States District Court for the Middle District of Georgia.

Before ANDERSON and BLACK, Circuit Judges, and MOORE ^*, Senior District Judge.

PER CURIAM:

Defendants-Appellants United States Department of Agriculture and Agricultural Stabilization and Conservation Service ("USDA") appeal from a grant of summary judgment. The district court granted Plaintiff-Appellee Graham L. Cole summary judgment on his claims that a civil penalty assessed against him violates both the Double Jeopardy Clause and the Excessive Fines Clause.

I. Facts and Procedural History

Cole is a tobacco dealer. He instituted this action to challenge an administrative penalty for marketing tobacco in excess of marketing quotas established by the Secretary of Agriculture. Between 1985 and 1987-88, Cole sold 315,612 more pounds of tobacco than he reported purchasing. Cole was prosecuted and acquitted of criminal charges in connection with this discrepancy, including conspiracy to defraud the government, fraud, and mail fraud. After he was acquitted of the criminal charges, the USDA assessed civil penalties of almost $400,000 against Cole pursuant to 7 U.S.C. § 1314(a), which imposes a penalty of 75% on the marketing of tobacco in excess of a farm's marketing quota.

The district court found that this assessment violated both the Double Jeopardy Clause and the Excessive Fines Clause of the United States Constitution and granted summary judgment for Cole on both issues. We reverse. We discuss first the Double Jeopardy issue and then the Excessive Fines issue.

II. Standard of Review

This Court applies a de novo standard of review to a district court's grant of summary judgment. See, e.g., Scala v. City of Winter Park, 116 F.3d 1396, 1398 (11th Cir.1997).

III. Discussion

A. Double Jeopardy Claim

The Double Jeopardy Clause provides that no "person [shall] be subject for the same offense to be twice put in jeopardy of life or limb." U.S. Const., amend. V. It "protects against three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense." United States v. Halper, 490 U.S. 435, 440, 109 S.Ct. 1892, 1897, 104 L.Ed.2d 487 (1989). Cole alleges the first type of violation. He argues that he has already been acquitted of criminal charges in connection with marketing over-quota tobacco and the civil penalties are a second attempt at punishment for the same conduct. ¹ We disagree.

There are two relevant questions to determine whether a civil penalty imposed after acquittal in a criminal proceeding implicates the Double Jeopardy Clause. The first is whether the second sanction (the civil penalty) deals with the same offense. The second question is whether the second sanction is in fact a punishment. If the answer to either of these questions is negative, the penalty does not violate the Double Jeopardy Clause.

1. Does the civil penalty constitute a second prosecution for the same offense after acquittal?

The Double Jeopardy Clause is violated only if the defendant is put in jeopardy twice for the same offense. Under the "same elements" test, two offenses are different for the purposes of double jeopardy analysis if each "requires proof of an additional fact which the other does not." Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct. 180, 182, 76 L.Ed. 306 (1932). See also United States v. Dixon, 509 U.S. 688, 696, 113 S.Ct. 2849, 2855-56, 125 L.Ed.2d 556 (1993). Here, the criminal offenses and the civil offense clearly require proof of different elements. In the criminal case, Cole was charged with conspiracy to defraud the government, fraud, and mail fraud. Each of these crimes requires proof of intent and misrepresentation. 18 U.S.C. §§ 371, 1001, 1341. In this civil proceeding, the USDA has assessed an over-quota marketing penalty against Cole, which requires the USDA to prove that Cole failed to remit a penalty to the government. 7 U.S.C. § 1314(a). The criminal action requires proof of intent, an element not required to prove the civil offense. The civil suit requires proof of the failure to remit the penalty, an element not required for the criminal offense. Because the criminal and civil offenses each require proof of an element which the other does not, the over-quota marketing penalty is not a second prosecution for the same offense. Therefore, it does not violate the Double Jeopardy Clause.

2. Is the civil penalty a "punishment"?

Even if the underlying elements of both offenses were the same, the government would not be precluded from pursuing both criminal and civil remedies against Cole: "That acquittal on a criminal charge is not a bar to a civil action by the Government, remedial in its nature, arising out of the same facts on which the criminal proceeding was based has long been settled." Helvering v. Mitchell, 303 U.S. 391, 397, 58 S.Ct. 630, 632, 82 L.Ed. 917 (1938).

The Supreme Court has recently clarified ² the test for determining whether a particular sanction is criminal or civil for the purposes of double jeopardy analysis Whether a particular punishment is criminal or civil is, at least initially, a matter of statutory construction. Helvering, supra, at 399 . A court must first ask whether the legislature, "in establishing the penalizing mechanism, indicated either expressly or impliedly a preference for one label or the other." Ward, 448 U.S., at 248 . Even in those cases where the legislature "has indicated an intention to establish a civil penalty, we have inquired further whether the statutory scheme was so punitive either in purpose or effect," id. at 248-49 , as to "transfor[m] what was clearly intended as a civil remedy into a criminal penalty," Rex Trailer Co. v. United States, 350 U.S. 148, 154, 76 S.Ct. 219, 222, 100 L.Ed. 149 (1956).

In making this latter determination, the factors listed in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-169, 83 S.Ct. 554, 567-68, 9 L.Ed.2d 644 (1963), provide useful guideposts, including: (1) "[w]hether the sanction involves an affirmative disability or restraint"; (2) "whether it has historically been regarded as a punishment"; (3) "whether it comes into play only on a finding of scienter"; (4) "whether its operation will promote the traditional aims of punishment--retribution and deterrence"; (5) "whether the behavior to which it applies is already a crime"; (6) "whether an alternative purpose to which it may rationally be connected is assignable for it"; and (7) "whether it appears excessive in relation to the alternative purpose assigned." It is important to note, however, that "these factors must be considered in relation to the statute on its face," id. at 169 , and "only the clearest proof" will suffice to override legislative intent and transform what has been denominated a civil remedy into a criminal penalty, Ward, supra, at 249 (internal quotation marks omitted).

Hudson v. United States, --- U.S. ----, ----, 118 S.Ct. 488, 493, 139 L.Ed.2d 450 (1997). Applying this test to the facts of this case, it is clear that the penalty assessed against Cole does not violate the Double Jeopardy Clause. It is evident that Congress intended the penalty for violations of 7 U.S.C. § 1314(a) to be civil in nature. The authority to issue and collect over-quota marketing penalties is conferred upon the Secretary of the Department of Agriculture. 7 U.S.C. § 1314(b). "That such authority was conferred upon administrative agencies is prima facie evidence that Congress intended to provide for a civil sanction." Hudson, --- U.S. at ----, 118 S.Ct. at 495 (citations omitted). Furthermore, the Supreme Court has interpreted the regulatory scheme as "giv[ing] the United States a civil action for the recovery of unpaid penalties." Mulford v. Smith, 307 U.S. 38, 45, 59 S.Ct. 648, 651, 83 L.Ed. 1092 (1939) (referring to "proceedings" authorized by 7 U.S.C. § 1376) (emphasis added).

Having determined that Congress intended for the over-quota marketing penalty to be civil, we turn to the second part of the test, whether it is "so punitive in form and effect as to render them criminal despite Congress's intent to the contrary." United States v. Ursery, 518 U.S. 267, ----, 116 S.Ct. 2135, 2138, 135 L.Ed.2d 549 (1996). We examine the Kennedy factors. First, the penalty does not involve an "affirmative restraint," such as imprisonment. Second, the Supreme Court has determined that money penalties have not historically been viewed as punishment: "[T]he payment of fixed or variable sums of money [is a] sanction which ha[s] been recognized as enforceable by civil proceedings since the original revenue law of 1789." Hudson, --- U.S. at ----, 118 S.Ct. at 495 (quoting Helvering, 303 U.S. at 400, 58 S.Ct. at 633). Third, the penalties do not require a finding of scienter; they are imposed whenever a producer oversells his quota, regardless of his state of mind. With respect to the fifth Kennedy factor, the behavior which triggers the penalty, overselling a tobacco quota, is not a crime.

While the penalty does promote a traditional goal of punishment--i.e. deterrence--the Supreme Court has recognized that all civil penalties will have some deterrent effect. See Hudson, --- U.S. at ----, 118 S.Ct. at 493. This does not necessarily render them criminal punishments since "deterrence 'may serve civil as...