Derickson v. U.S. Dept. of Agriculture

• Decision Date: 10 November 2008
• Docket Number: No. 07-4158.,07-4158.
• Citation: 546 F.3d 335
• Parties: Herbert DERICKSON and Jill Derickson, Petitioners, v. UNITED STATES DEPARTMENT OF AGRICULTURE et al., Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

546 F.3d 335

Herbert DERICKSON and Jill Derickson, Petitioners, v. UNITED STATES DEPARTMENT OF AGRICULTURE et al., Respondents.

No. 07-4158.

United States Court of Appeals, Sixth Circuit.

Argued: September 18, 2008.

Decided and Filed: November 10, 2008.

ARGUED: Mike R. Wall, Oxford, Mississippi, for Petitioners. Andrew R. Varcoe, United States Department of Agriculture, Washington, D.C., for Respondents. ON BRIEF: Mike R. Wall, Oxford, Mississippi, for Petitioners. Andrew R. Varcoe, United States Department of Agriculture, Washington, D.C., for Respondents.

Before: MOORE and COOK, Circuit Judges; HOOD, District Judge.^*

OPINION

KAREN NELSON MOORE, Circuit Judge.

Petitioners Herbert Derickson ("H. Derickson") and Jill Derickson ("J. Derickson") (referred to jointly as "the Dericksons") petition this court for review of the decision of the Secretary of Agriculture that they violated 15 U.S.C. §§ 1824(1) and 1824(2)(B), the Horse Protection Act of 1970 ("Act"), by transporting and entering in a horse show a sore¹ horse, Just American Magic. The Dericksons make three arguments: (1) the Judicial Officer ("JO") did not have substantial evidence to find that the Dericksons transported Just American Magic in violation of the Act; (2) the JO did not have substantial evidence to find that J. Derickson entered Just American Magic in a horse show in violation of the Act; and (3) H. Derickson cannot be sanctioned by respondents, the Animal and Plant Health Inspection Service of the United States Department of Agriculture ("APHIS"), because H. Derickson has already served an "appropriate" penalty for his violations of the Act issued by the National Horse Show Commission ("NHSC") pursuant to the APHIS Horse Protection Operating Plan ("Operating Plan").

For the reasons discussed below, we DENY the Dericksons' petition for review.

I. FACTS AND PROCEDURE

On March 21, 2002, H. Derickson presented a horse, Just American Magic,² for preshow inspection at the Thirty-Fourth Annual National Walking Horse Trainers Show ("Trainers Show"). Upon inspection, two Designated Qualified Persons ("DQPs") determined that Just American Magic was sore because he had bilateral scarring and did not comply with the Scar Rule.³ The DQPs disqualified Just American Magic from showing. Two veterinary medical officers employed by the Department of Agriculture later confirmed the DQPs' finding.

J. Derickson admits that she signed a check to pay Just American Magic's entry fee for the show, drawn on the Herbert Derickson Training Facility account. Dericksons Br. at 6, 22. The Dericksons also assert that, prior to March 21, 2002, APHIS and NHSC executed a written agreement, the Operating Plan, which was in effect during the Trainers Show. Id. at 24-25. The Operating Plan outlined penalties for violations of the Act that a private organization could impose on violators. It is undisputed that NHSC issued a two-year suspension (effective dates December 16, 2002 to December 15, 2004) and a $700 fine to H. Derickson for the bilateral soring violation, H. Derickson's second such violation.⁴ This sanction was consistent with those authorized for such violations in the Operating Plan.

On August 19, 2004, Kevin Shea, Administrator of APHIS, filed a complaint against the Dericksons, alleging that the Dericksons violated §§ 1824(1) and 1824(2)(B) of the Act by: (1) "transporting `Just American Magic' to the ... Trainers Show in Shelbyville, Tennessee, while the horse was sore, ... with reason to believe that the horse, while sore, may be entered for the purpose of its being shown in that horse show" and (2) entering Just American Magic in said show while sore. Joint Appendix ("J.A.") at 72-73 (APHIS Compl. ¶¶ 11-12). Several others, including Robert Raymond Black, II ("Black"), were named in the complaint.⁵

In their answer, both H. Derickson and J. Derickson admitted that they were "at all material times herein," individuals "doing business as Herbert Derickson Training Facility, aka Herbert Derickson Stables, aka Herbert Derickson Breeding and Training Facility." J.A. at 75-76 (Ans. ¶¶ 5-6). Both denied all other allegations.

The administrative law judge ("ALJ") held a hearing on June 26 and 27, 2006, at which time Steven Fuller ("Fuller"), senior investigator with the Department of Agriculture, testified that he completed several portions of APHIS Form 7077 ("Form 7077"), the disqualification form for Just American Magic from the Trainers Show. Two such portions were items 11 and 27. Fuller further testified that he obtained the information to fill out Form 7077 from Black. Item 27 asks "NAME AND ADDRESS OF PERSON(S) RESPONSIBLE FOR TRANSPORTATION" and is answered "same as # 11." J.A. at 167 (Form 7077). Item 11 is answered in pertinent part "Robert Raymond Black, II." Id.

Black and his wife were the only witnesses for the Dericksons. During Black's testimony, APHIS stipulated that Black "was employed by Herbert Derickson." J.A. at 359 (Hr'g Tr. at 468). When asked who he understood was the owner of the business that employed him, Black testified, "I understood it to be Herbert Derickson." J.A. at 360 (Hr'g Tr. at 469).

On October 3, 2006, the ALJ found that H. Derickson violated the Act by entering a sore horse. For the entering violation, the ALJ issued a $2,200 fine and a two-year disqualification from "showing, exhibiting, or entering any horse, directly or indirectly," J.A. at 26 (ALJ Dec. at 15), but then suspended one year of the disqualification, giving H. Derickson "partial credit for the suspension imposed by" NHSC. Id. The ALJ dismissed all allegations against J. Derickson and the transportation allegation against all respondents, finding that the evidence regarding transportation was "scant, with the entry in item 27 of APHIS Form 7077 being the primary evidence introduced in support of the allegations." J.A. at 17 (ALJ Dec. at 6) (internal reference omitted).

H. Derickson and APHIS cross-appealed to the JO designated as the final decision maker by the Secretary of the Department of Agriculture. The JO found that the Dericksons violated the Act by entering and transporting Just American Magic while sore. First, the JO rejected H. Derickson's argument that the Operating Plan limited the ability of APHIS to impose legal sanctions against H. Derickson, stating that: (1) no signature page was attached to the copy of the plan entered into evidence that would show that the Operating Plan applied to the Trainers Show and (2) even if the Operating Plan applied, the terms of the Operating Plan do not limit the authority of APHIS to enforce the Act. To support the latter finding, the JO highlighted five specific passages in the Operating Plan:

Nothing in this Operating Plan is intended to indicate that APHIS has relinquished any of its authority under the Act or Regulations.

It is not the purpose or intent of this Operating Plan to limit in any way the Secretary's authority. It should be clearly understood that the Secretary has the ultimate administrative authority in the interpretation and enforcement of the Act and the Regulations. This authority can only be curtailed or removed by an act of Congress, and not by this Plan.

The Department retains the authority to initiate enforcement proceedings against any violator when it feels such action is necessary to fulfill the purposes of the [Act].

Nothing in this section is intended to limit APHIS's disciplinary authority under the Act and the Regulations.

APHIS has the inherent authority to pursue a federal case whenever it determines the purposes of the [Act] have not been fulfilled.

J.A. at 37 (JO Dec. at 10) (internal references omitted).

The JO next concluded—based upon admissions made in the Dericksons' initial answer and several business invoices on Herbert Derickson Training Facility letterhead signed "Thank you, we appreciate your business!" and "Thanks, Herbert and Jill Derickson," J.A. at 298-99 (Business Invoices)—that the Dericksons were running a partnership known as Herbert Derickson Training Facility, aka Herbert Derickson Stables, aka Herbert Derickson Breeding and Training Facilities.

Then, the JO found that Herbert Derickson Stables was responsible for transporting Just American Magic to the Trainers Show. He based this finding on invoice # 945, sent from Herbert Derickson Stables to the owners of Just American Magic, noting "no charge" for the "Hauling/Show Prep/Stall" item. J.A. at 303 (Invoice # 945). The JO "interpret[ed the invoice] to indicate that Herbert Derickson Stables transported Just American Magic to the ... Trainers Show." J.A. at 53 (JO Dec. at 26). The JO concluded that the Dericksons, as partners of the business, were liable for transporting Just American Magic.⁶

The JO also found that the Dericksons entered Just American Magic in violation of the Act. In regards to J. Derickson, the JO found that she paid the entry fee and filled out the entry form. To support his entry-form finding, the JO stated:

[a]lthough the signature block on the entry blank states "Herbert Derickson," the writing is similar in style to Jill Derickson's signature on the entry payment check, an entry payment check for the 2003 National Walking Horse Trainers Show, and an entry blank for the 2003 National Walking Horse Trainers Show. The signature on the entry blank for the 2002 National Walking Horse Trainers Show is very different from Mr. Derickson's signature as seen on other documents in the record....

J.A. at 34 (JO Dec. at 7 n. 1) (internal references omitted).

Pertinent to this appeal, the JO also found that there was insufficient evidence to hold Black liable for transporting Just American Magic. While addressing Black's liability, the JO noted that Fuller's testimony regarding Form 7077, coupled with testimony from Black and his wife, caused him to "agree with the ALJ that there are inconsistencies that raise questions about the accuracy of some information" contained...