Siegel v. Lyng, 84-1047

• Decision Date: 12 July 1988
• Docket Number: No. 84-1047,84-1047
• Citation: 851 F.2d 412
• Parties: Melvyn SIEGEL, Petitioner, v. Richard E. LYNG, Secretary of Agriculture United States Department of Agriculture, et al. and United States of America.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 412

851 F.2d 412

271 U.S.App.D.C. 157

Melvyn SIEGEL, Petitioner, v. Richard E. LYNG, Secretary of Agriculture United States Department of Agriculture, et al. and United States of America.

No. 84-1047.

United States Court of Appeals District of Columbia Circuit.

Argued April 12, 1988.

Decided July 12, 1988.

John H. Vetne, Washington, D.C., for petitioner.

Harry S. Gold, Atty., Dept. of Agriculture, with whom James Michael Kelly, Associate General Counsel, Raymond W. Fullerton, Asst. General Counsel, Margaret M. Breinholt, Deputy Asst. General Counsel and Aaron B. Kahn, Atty., Dept. of Agriculture, Washington, D.C., were on the brief, for respondents.

Before WALD, Chief Judge, ROBINSON and STARR, Circuit Judges.

Opinion for the Court filed by Chief Judge WALD.

WALD, Chief Judge:

I. INTRODUCTION

Melvyn Siegel, petitioner, was President, Director, and majority shareholder of Finer Foods Sales Company (Finer Foods). Upon citation for flagrant, repeated violations of the Perishable Agricultural Commodities Act, as amended (Act or PACA), 7 U.S.C. Secs. 499a-499s, see Finer Foods Sales Co., Inc. v. Block, 708 F.2d 774 (D.C.Cir.1983) (affirming Secretary of Agriculture's decision that Finer Foods violated Act), Finer Foods sold all its assets to L.M. Sandler & Sons, Inc. (Sandler & Sons). Sandler & Sons also hired Siegel.

The present action involves the subsequent efforts by the Agriculture Department's Agricultural Marketing Service, Fruit and Vegetable Division (AMS) to enforce PACA Section 8(b) employment restrictions against Siegel because of his being "responsibly connected" with Finer Foods. Siegel challenges his one year employment bar on statutory grounds as well as on the ground that the statute violates Due Process and Bill of Attainder proscriptions. Because we hold that neither constitutional argument is valid and that the Department construction of PACA is correct we affirm the employment bar that was issued pursuant to proper procedures.

II. BACKGROUND

A. Legislative Background

PACA was enacted in 1930 as a licensing scheme to regulate transactions in perishable agricultural commodities. The legislation was prompted by unfair dealer practices in the industry, which harmed growers and shippers alike. The statutory mechanism erected to correct these abuses was succinctly described by this Court in Quinn v. Butz, 510 F.2d 743, 746-47 (D.C.Cir.1975), as follows:

In broad outline, the Act regulates the shipment of perishable agricultural commodities in interstate and foreign commerce through a system of licensing and administrative supervision of the conduct of licensees. Commission merchants, dealers and brokers in such commodities must obtain from the Secretary of Agriculture a license as a precondition to doing business. ¹ By Section 2, licensees are forbidden to engage in specified unfair practices, ² which include failure to make full payment promptly for commodities dealt in. ³ An unfair practice subjects the licensee to liability to the injured party for damages, recoverable either in a proceeding before the Secretary or by suit in court. ⁴ The Secretary is authorized to investigate complaints of unfair practices ⁵ and, finding a violation, to issue a reparation order requiring the offending licensee to pay damages. ⁶ Failure to obey the order automatically suspends the license during noncompliance. ⁷

The Secretary is also empowered to suspend or revoke licenses for unfair practices, ⁸ and to limit employment within the industry of those who violate the Act and those who are "responsibly connected" with violators. ⁹ Section 8(b) of the Act, in respects highly relevant to this case, provides that except with the Secretary's approval no licensee may employ any person, or anyone "responsibly connected" with a person, whose license has been revoked or is currently suspended, or who has been found to have committed any flagrant or repeated violation of Section 2, or against whom there is an unpaid reparation order issued within two years. ¹⁰ Section 1(9), another provision bearing importantly on this case, specifies that a person is "responsibly connected" with an offending licensee if he is affiliated with the licensee as officer, director or holder of more than 10% of its outstanding stock. ¹¹

Id. at 746-47.

B. Factual Background

The factual history of the case is set out in Finer Foods Sales Co., Inc. v. Block, 708 F.2d 774 (D.C.Cir.1983). Briefly, petitioner-Siegel was President, Director, and majority shareholder of Finer Foods, a company adjudged to have committed flagrant and repeated violations of PACA. Id.; see also Joint Appendix (J.A.) at 2, 35. Finer Foods' assets were sold to Sandler & Sons in July, 1979, and on August 1, Sandler & Sons hired Siegel as an employee. Sandler & Sons is also a PACA licensee.

Because AMS was pursuing charges of PACA violations by Finer Foods, the agency notified Sandler & Sons that Siegel's responsible connection to Finer Foods would disqualify him from industry employment for one year. See id. at 2-4. Once Finer Foods was found to have violated the Act, AMS sent formal notice of Siegel's employment ineligibility. See id. at 27, 35. Siegel did not make timely contest of this responsible connection conclusion. Instead, on January 4, 1984, Siegel filed the present opposition to this employment restriction, claiming that the bar violates statutory and constitutional protections.

III. ANALYSIS

This Court's line of cases involving PACA employment restrictions, culminating in the recent Veg-Mix, Inc. v. United States Department of Agriculture, 832 F.2d 601 (D.C.Cir.1987), is largely dispositive of Siegel's statutory challenge to his bar from any employment with Sandler & Sons and also of his Bill of Attainder attack on the "responsibly connected" classification itself.

A. Employment Bar

Siegel's statutory challenge to PACA--his objection to a sanction that forbids employment by a licensee even in positions unrelated to the PACA regulatory scheme--must fail as contrary to express statutory language. Siegel urges this Court to exempt non-PACA work for diversified PACA licensees from the employment bar against sanctioned persons. See Brief of Petitioner at 20-27. Yet section 499h(b) states that

no licensee shall employ any person, or any person who is or has been responsibly connected with any person--(1) whose license has been revoked or is currently suspended by order of the Secretary; (2) who has been found after notice and opportunity for hearing to have committed any flagrant or repeated violation of section 449b of this title....

7 U.S.C. Sec. 499h(b) (emphasis added). Finer Foods was found by this court to have committed such flagrant and repeated violations. Finer Foods Sales Co., Inc v. Block, 708 F.2d 774 (D.C.Cir.1983). Not only is section 499h(b)'s employment bar phrased as an absolute, but also the Act elsewhere defines employment as "any affiliation of any person with the business operations of a licensee, with or without compensation, including ownership or self-employment." 7 U.S.C. Sec. 499a(10) (emphasis added). This Court in Quinn explicitly remarked that Congress had approved a " 'clear and equitable' rule that denied him [PACA violator] any employment, for the pertinent period, rather than require a new determination of precisely which positions were closed." 510 F.2d at 756 (emphasis added) (footnote omitted).

Indeed, Congress amended the Act in 1963 precisely to clarify this comprehensive bar. Immediately prior to the 1962 amendments, the Secretary was authorized to sanction licensees only when these employers hired a violator (or responsibly connected person) for a "responsible position." Because this determination proved difficult to administer, the qualification was deleted altogether in 1962. Congress explained the deletion with statements that prove an intent to incorporate an expansive employment bar. The House Committee on Agriculture, for example, stated:

At present the act applies only to the employment of a person in a responsible position. This has caused serious difficulties due to the problem of delineating what constitutes a responsible position under all circumstances and the difficulty of ascertaining the true nature of the employee's relationship with the licensee.

H.R.Rep. No. 1546, 87th Cong., 2d Sess. 8 (1962), U.S.Code Cong. & Admin.News 1962, p. 2749. Likewise, an earlier report from the same committee observed:

Experience has demonstrated that it is not possible to obtain satisfactory evidence to prove that a person holds a 'responsible' position if his employer and he want to hide their working arrangement.... It is believed that the limitations on employment should apply to anyone on the payroll of a licensee with the standard debarment periods or bonding requirements dependent on the nature of the violation.

House Committee on Agriculture Hearings on Perishable Agricultural Commodities, 87th Cong., 1st Sess. 15 (1961). This investigatory difficulty, compounded in cases where, as here, the new employer-licensee has acquired all the assets of the violating company, confirms the reasonableness of Congress' amendment barring any employment for the proscribed period.

B. Bill of Attainder

Siegel attacks the PACA employment bar as contrary to the Bill of Attainder Clause, Article I, Sec. 9 of the United States Constitution. ¹² However, the very definition of a Bill of Attainder--a " 'law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial,' " Selective Serv. Sys. v. Minnesota Public Interest Research Group, 468 U.S. 841, 846-47, 104 S.Ct. 3348, 3351-52, 82 L.Ed.2d 632 (1984) (quoting Nixon v. Administrator of General Services, 433 U.S. 425, 468, 97 S.Ct. 2777, 2803, 53 L.Ed.2d 867 (1977))--points to its inapplicability to PACA's employment restrictions. This provision does not infringe the Bill of...