Knapp v. U.S. Dep't of Agric., No. 14–60002.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtSTEPHEN A. HIGGINSON, Circuit Judge
Citation796 F.3d 445
PartiesBodie S. KNAPP, doing business as The Wild Side, Petitioner v. UNITED STATES DEPARTMENT OF AGRICULTURE, Respondent.
Decision Date31 July 2015
Docket NumberNo. 14–60002.

796 F.3d 445

Bodie S. KNAPP, doing business as The Wild Side, Petitioner
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, Respondent.

No. 14–60002.

United States Court of Appeals, Fifth Circuit.

July 31, 2015.


796 F.3d 452

Phillip Westergren, Corpus Christi, TX.

Charles Edward Spicknall, Colleen A. Carroll, Eric H. Holder, Jr., William G. Jenson, James Michael Kelly, Leslie Karen Lagomarcino, Esq., Senior Counsel, Loretta Lynch, Margaret Reinholt, U.S. Department of Agriculture, Washington, DC.

Petition for Review of an Order of the Department of Agriculture.

Before HIGGINBOTHAM, CLEMENT, and HIGGINSON, Circuit Judges.

Opinion

STEPHEN A. HIGGINSON, Circuit Judge:

The United States Secretary of Agriculture (“Secretary”) fined Bodie Knapp $395,900 after finding that he bought and sold regulated animals without a license, in violation of the Animal Welfare Act (“AWA”) and implementing regulations. In his petition for review, Knapp argues that his activities were lawful, and that the Secretary abused its discretion in its choice of sanction. We GRANT in part and DENY in part the petition for review.

FACTS AND PROCEEDINGS

Bodie Knapp formerly operated a business in Mathis, Texas, that exhibited wild and exotic animals to the public. See In re Knapp, 64 Agric. Dec. 756, 757 (U.S.D.A. Jan. 4, 2005). Knapp possessed a license to exhibit these animals under the Animal Welfare Act. Id. In 2004, the Administrator of the Animal and Plant Health Inspection Service (“Administrator”), an agency within the U.S. Department of Agriculture (“Department”), filed two complaints against Knapp alleging that he had mishandled animals, failed to provide them with adequate veterinary care, and failed to keep required records relating to, but not limited to, the deaths of two tigers and two lions. In re Coastal Bend Zoological Ass'n, 65 Agric. Dec. 993, 994 (U.S.D.A.2006) ; In re Knapp, 64 Agric. Dec. at 757. In January 2005, after Knapp failed to timely respond to the allegations in one of the complaints, the Administrative Law Judge (“ALJ”) entered a default decision revoking Knapp's license and ordering him to cease and desist from future violations of the AWA or the “[r]egulations and [s]tandards.” In re Knapp, 64 Agric. Dec. at 773. The decision was affirmed by the Judicial Officer, who has final authority to issue decisions on behalf of the Secretary in formal adjudicatory proceedings. See 7 C.F.R. § 2.35(a) ; In re Knapp, AWA Docket No. 04–0029, 2005 WL 1283510, at *29 (U.S.D.A. May 31, 2005). The revocation of Knapp's license became effective on September 10, 2005, after the denial of Knapp's motion for reconsideration. In re Knapp, AWA Docket No. 09–0175, 2013 WL 8213607, at *4 (U.S.D.A. June 3, 2013). In August 2006, pursuant to the second complaint, another ALJ assessed a $5,000 penalty against Knapp and ordered him to cease and desist from further violations of the AWA or the “[r]egulations and [s]tandards.” In re Coastal Bend Zoological Ass'n, 65 Agric. Dec. at 1019.

In 2009, the Administrator initiated the instant action against Knapp, alleging that after losing his AWA license, he continued to buy, sell, and transport hundreds of animals in violation of the AWA and regulations. The complaint alleges that Knapp “offered for sale, delivered for transportation, transported, sold, or negotiated the purchase or sale” of 429 animals in thirty separate transactions between November 2005 and September 25, 2010.1 The ALJ held a hearing, at which Knapp was represented by counsel and called three witnesses and introduced evidence.

796 F.3d 453

In re Knapp, AWA Docket No. 09–0175, 2011 WL 4946791, at *1. The ALJ determined that eight of the thirty transactions violated the AWA and regulations, and he assessed Knapp a $15,000 penalty and ordered him to cease and desist from further violations. Id. at *8, 11. The ALJ found that the Administrator “was not substantially justified” in challenging Knapp's other transactions, and that Knapp was therefore entitled to attorney's fees and expenses based on those allegations under the Equal Access to Justice Act. Id. at *8 (citing 5 U.S.C. § 504 ). The parties cross-appealed to the Judicial Officer.

The Judicial Officer found that Knapp violated the Animal Welfare Act, Department regulations, and the terms of his prior cease and desist orders by operating as an animal dealer without a license with respect to many of the animals listed in the complaint. In re Knapp, AWA Docket No. 09–175, 2013 WL 8213607, at *15–18. The Judicial Officer assessed Knapp a $42,800 penalty for buying or selling 214 animals without a license in violation of the AWA, 7 U.S.C. § 2134, and two regulatory provisions, 9 C.F.R. §§ 2.1(a) and 2.10(c). Id. at *8, 10. The Judicial Officer imposed an additional $353,100 penalty on the ground that each of these transactions constituted a knowing violation of the two prior cease and desist orders. Id. at *10. The Judicial Officer also ordered Knapp to “cease and desist from violating the Animal Welfare Act and the Regulations and, in particular, [to] cease and desist from operating as a dealer without an Animal Welfare Act license.” Id. at *19. Finally, the Judicial Officer found that the ALJ's determination regarding attorney's fees was premature. Id. at *12. On November 6, 2013, the Judicial Officer denied Knapp's amended petition for reconsideration. In re Knapp, AWA Docket No. 09–0175, 2013 WL 8208439, at *13 (U.S.D.A. Nov. 6, 2013). Knapp filed a timely petition for review in this court on January 2, 2014. See 7 U.S.C. § 2149(c) (allowing 60 days after a final order to file a petition for review); 7 C.F.R. § 1.146(b).

STANDARD OF REVIEW

We have jurisdiction to review the Judicial Officer's decision under 7 U.S.C. § 2149(c). We may overturn that decision only if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) ; Allred's Produce v. U.S. Dep't of Agric., 178 F.3d 743, 746 (5th Cir.1999). The arbitrary and capricious standard is “highly deferential.” Pension Benefit Guar. Corp. v. Wilson N. Jones Mem'l Hosp., 374 F.3d 362, 366 (5th Cir.2004) (internal quotation marks and citation omitted). “Arbitrary and capricious review focuses on whether an agency articulated a rational connection between the facts found and the decision made, and ‘[i]t is well-established that an agency's action must be upheld if at all, on the basis articulated by the agency itself.’ ” Id. at 366–67 (quoting Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42–43, 50, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ). However, “we may ‘uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned.’ ” Id. at 367 (quoting Bowman Transp., Inc. v. Arkansas–Best Freight Sys., Inc., 419 U.S. 281, 286, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974) ).

The Judicial Officer's factual findings must be upheld as long as they are supported by substantial evidence. 5 U.S.C. § 706(2)(E) ; ZooCats, Inc. v. U.S. Dep't of Agric., 417 Fed.Appx. 378, 381 (5th Cir.2011) (per curiam); Brock v. U.S. Dep't of Agric., 335 Fed.Appx. 436, 437 (5th Cir.2009) (per curiam). “Substantial evidence is more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept

796 F.3d 454

as adequate to support a conclusion.” Ellis v. Liberty Life Assurance Co. of Bos., 394 F.3d 262, 273 (5th Cir.2004) (internal quotation marks and citation omitted). In determining whether an administrative order is based on substantial evidence, we must consider “whatever in the record fairly detracts from [the] weight” of the evidence. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951). The Judicial Officer, in making factual findings, may substitute its judgment for that of the ALJ. See 5 U.S.C. § 557(b) ; Robinson v. United States, 718 F.2d 336, 338 (10th Cir.1983) ; Mattes v. United States, 721 F.2d 1125, 1129 (7th Cir.1983). However, “[i]n cases where the Secretary of an agency does not accept the findings of the ALJ, this court has an obligation to examine the evidence and findings of the [JO] more critically than it would if the [JO] and the ALJ were in agreement.” Young v. U.S. Dep't of Agric., 53 F.3d 728, 732 (5th Cir.1995) (second and third alterations in original) (internal quotation marks and citations omitted); see also In re Knapp, AWA Docket No. 09–0175, 2013 WL 8208439, at *4 (“[T]he consistent practice of the Judicial Officer is to give great weight to the findings by, and particularly the credibility determinations of, administrative law judges ....”).

We review the Judicial Officer's legal conclusions de novo, but with the appropriate level of deference to his interpretations of the AWA and of Department regulations. See Theodros v. Gonzales, 490 F.3d 396, 400 (5th Cir.2007) ; see also Perfectly Fresh Farms, Inc. v. U.S. Dep't of Agric., 692 F.3d 960, 966 (9th Cir.2012). We generally grant Auer deference to an agency's interpretation of its own ambiguous regulation, unless that interpretation is “ ‘plainly erroneous or inconsistent with the regulation,’ ” or “there is reason to suspect that...

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28 practice notes
  • Chamber of Commerce of the U.S. v. Hugler, Civil Action No. 3:16–cv–1476–M
    • United States
    • U.S. District Court — Northern District of Texas
    • February 8, 2017
    ...evidence ... [which] is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Knapp v. USDA , 796 F.3d 445, 453–54 (5th Cir. 2015). The DOL's decision to exclude FIAs from PTE 84–24 based on their complexity, risk, and conflicts of interest associate......
  • Markle Interests, L.L.C. v. U.S. Fish & Wildlife Serv., No. 14-31008
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • June 30, 2016
    ...Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ); Knapp v. U.S. Dep't of Agric. , 796 F.3d 445, 454 (5th Cir. 2015) (“[A]dministrative implementation of a particular statutory provision qualifies for Chevron deference when it appears ......
  • In re Wyly, CASE NO. 14-35043-BJH
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas
    • May 10, 2016
    ...(internal quotation marks omitted) (quoting Fisher v. Peters, 249 F.3d 433, 444 (6th Cir.2001)). 1610. Knapp v. U.S. Dept. of Agriculture, 796 F.3d 445, 461 (5th Cir. 2015). Since the party seeking to invoke estoppel must establish these things, the burden of proof is on the party asserting......
  • In re Wyly, CASE NO. 14–35043–BJH JOINTLY ADMINISTERED
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas
    • May 10, 2016
    ...(internal quotation marks omitted) (quoting Fisher v. Peters, 249 F.3d 433, 444 (6th Cir.2001) ).1610 Knapp v. U.S. Dept. of Agriculture, 796 F.3d 445, 461 (5th Cir.2015). Since the party seeking to invoke estoppel must establish these things, the burden of proof is on the party asserting e......
  • Request a trial to view additional results
28 cases
  • Chamber of Commerce of the U.S. v. Hugler, Civil Action No. 3:16–cv–1476–M
    • United States
    • U.S. District Court — Northern District of Texas
    • February 8, 2017
    ...evidence ... [which] is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Knapp v. USDA , 796 F.3d 445, 453–54 (5th Cir. 2015). The DOL's decision to exclude FIAs from PTE 84–24 based on their complexity, risk, and conflicts of interest associate......
  • Markle Interests, L.L.C. v. U.S. Fish & Wildlife Serv., No. 14-31008
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • June 30, 2016
    ...Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 843 n. 9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ); Knapp v. U.S. Dep't of Agric. , 796 F.3d 445, 454 (5th Cir. 2015) (“[A]dministrative implementation of a particular statutory provision qualifies for Chevron deference when it appears ......
  • In re Wyly, CASE NO. 14-35043-BJH
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas
    • May 10, 2016
    ...(internal quotation marks omitted) (quoting Fisher v. Peters, 249 F.3d 433, 444 (6th Cir.2001)). 1610. Knapp v. U.S. Dept. of Agriculture, 796 F.3d 445, 461 (5th Cir. 2015). Since the party seeking to invoke estoppel must establish these things, the burden of proof is on the party asserting......
  • In re Wyly, CASE NO. 14–35043–BJH JOINTLY ADMINISTERED
    • United States
    • United States Bankruptcy Courts. Fifth Circuit. U.S. Bankruptcy Court — Northern District of Texas
    • May 10, 2016
    ...(internal quotation marks omitted) (quoting Fisher v. Peters, 249 F.3d 433, 444 (6th Cir.2001) ).1610 Knapp v. U.S. Dept. of Agriculture, 796 F.3d 445, 461 (5th Cir.2015). Since the party seeking to invoke estoppel must establish these things, the burden of proof is on the party asserting e......
  • Request a trial to view additional results

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