U.S. v. 2,116 Boxes of Boned Beef, Weighing Approximately 154,121 Pounds

• Citation: 726 F.2d 1481
• Decision Date: 23 January 1984
• Docket Number: No. 82-1537,82-1537
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. 2,116 BOXES OF BONED BEEF, WEIGHING APPROXIMATELY 154,121 POUNDS, and 541 Boxes of Offal Weighing Approximately 17,732 Pounds, Defendants-Appellants, Jarboe Lackey Feedlots, Inc., Claimant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1481

726 F.2d 1481

UNITED STATES of America, Plaintiff-Appellee, v. 2,116 BOXES OF BONED BEEF, WEIGHING APPROXIMATELY 154,121 POUNDS, and 541 Boxes of Offal Weighing Approximately 17,732 Pounds, Defendants-Appellants Jarboe Lackey Feedlots, Inc., Claimant-Appellant.

No. 82-1537.

United States Court of Appeals Tenth Circuit.

Jan. 23, 1984.

Rehearing Denied Feb. 23, 1984.

Charles D. McAtee, Topeka, Kan. (Anne L. Baker, Topeka, Kan., with him on the brief), of Eidson, Lewis, Porter & Haynes and Wilbur G. Leonard, Topeka, Kan., with him on the brief, for claimant-appellant Jarboe-Lackey Feedlots, Inc.

Edward T. Hand, Atty., Dept. of Justice, Washington, D.C. (William F. Baxter, Abbott B. Lipsky, Jr., Deputy Asst. Atty. Gen., Robert B. Nicholson and Mark C. Del Bianco, Dept. of Justice, Washington, D.C., Robert M. Spiller, Jr., Associate Chief Counsel for Enforcement, Food & Drug Admin., Rockville, Md., Robert R. Donlan, Dept. of Justice, Anthony J. Buccitelli, Dept. of Agriculture, Washington, D.C., of counsel, with him on the brief), for plaintiff-appellee U.S.

Before HOLLOWAY and LOGAN, Circuit Judges, and ARRAJ, District Judge ^*.

ARRAJ, District Judge.

This is an appeal from a condemnation action brought by the United States pursuant to the Meat Inspection Act, 21 U.S.C. Secs. 601-695, alleging adulteration of certain beef and offal owned by Jarboe-Lackey Feedlots, Inc.. Following an extensive trial, the district court concluded that the government had failed to meet its burden of proving adulteration, 21 U.S.C. Sec. 601(m)(1), (m)(2)(A), and (m)(3), and dismissed the libel action. The trial court later denied Jarboe-Lackey's petition for attorneys' fees under the Equal Access to Justice Act (EAJA), 28 U.S.C. Sec. 2412 (Supp.1983), finding that the government's position was "substantially justified" and that the United States had acted in good faith.

Appellant raises numerous issues on appeal. Foremost among them is claimant's request for attorneys' fees under the EAJA. First, however, we must determine whether the district court had jurisdiction over the seizure action. The remaining portion of the discussion will address appellant's contentions that the trial court erred when it: 1) found that claimant had illegally implanted steers; and 2) denied claimant's motion for recoupment and counterclaim for recoupment. We reject appellant's arguments and affirm the trial court's rulings and findings.

I

Based upon new scientific evidence that the use of diethylstilbestrol (DES) as a growth promotant in animals leaves potentially carcinogenic residues in edible portions of meat, the Food and Drug Administration (FDA) withdrew its approval of New Animal Drug Applications (NADA's) for use of DES in feed and implants in 1979. 44 Fed.Reg. 54852 (Corrected copy of Commissioner's order, September 21, 1979). See Rhone-Poulenc, Inc., Hess & Clark Div. v. FDA, 636 F.2d 750 (D.C.Cir.1980) (Affirming the Commissioner's order). As a result, the marketing of meat and byproducts from animals treated with DES on or after November 1, 1979, was prohibited. ¹ 44 Fed.Reg. 42679, 45618, 45764 (Deadline prohibiting use of DES implants was postponed from July 20, 1979, until November 1, 1979).

On April 17, 1980, the United States Department of Agriculture (USDA) seized 273 beef carcasses and offal belonging to Jarboe-Lackey, after observing recently implanted DES pellets in the ears of appellant's cattle. Seven ears were randomly removed and subjected to laboratory testing; the results confirmed that the DES content of the pellets was high enough to leave residue in the meat.

On May 14, 1980, the United States filed a seizure action against the meat, charging that it was adulterated within the meaning of the Federal Meat Inspection Act, 21 U.S.C. Sec. 601(m). ² A complicated trial to the court culminated in an opinion and order dated May 7, 1981. 516 F.Supp. 321 (D.Kan.1981). The district court found that Jarboe-Lackey had implanted animals with DES on or after November 1, 1979, Id. at 322-23, and that DES is harmful and deleterious within the meaning of Section 601(m). Id. at 325, 335. But the government failed to prove that the beef was adulterated as defined by Sections 601(m)(1), (m)(2)(A) and (m)(3). Specifically, the United States failed to establish that there was a reasonable possibility that the amount of DES in the beef would be harmful. 21 U.S.C. Sec. 601(m)(1). And as the district court caustically pointed out, "there were no regulations of the Department of Agriculture in force ... through which the Secretary (had) exercised his discretion and determined that DES was a harmful or deleterious substance within the meaning of [Section] 601(m)(2)(A)." 516 F.Supp. at 344. Lastly, the court found no violation of Section 601(m)(3). Id. at 350.

The district court dismissed the complaint and ordered the taxation of court costs against the government, but declined to consider Jarboe-Lackey's request for attorneys' fees. Consequently, when both parties appealed, we dismissed for lack of finality and remanded the case with instructions to decide the attorneys' fees issue. (Slip Opinion, November 3, 1981). Appellants then filed a counterclaim for damages under 21 U.S.C. Sec. 673, 28 U.S.C. Sec. 2465 and the Federal Tort Claims Act, and requested costs and attorneys' fees under the EAJA, 28 U.S.C. Sec. 2412(b), and Sec. 2412(d)(1)(A). After briefing and oral argument, the court ruled on these matters as well as appellant's pending motion for recoupment of the loss in value of the meat. It denied Jarboe-Lackey's petition for fees under the EAJA because the position of the United States was "substantially justified" and there was no evidence of bad faith. Additionally, claimant's counterclaim and motion for recoupment were dismissed as "untimely and irrelevant".

II

Appellant maintains that the district court had no jurisdiction over the seizure action because the government's complaint was filed more than 20 days after the beef was initially detained. According to Jarboe-Lackey, the statute authorizing seizure of adulterated meat, 21 U.S.C. Sec. 673(a) ³ is limited by the statutory provision restricting the allowable detention period for adulterated beef. 21 U.S.C. Sec. 672 ⁴. Appellant reasons that to construe the former statute otherwise would violate the claimant's due process rights.

We do not find this interpretation persuasive. "[W]hile it is true that Sec. 672 limits the right of the government to physically detain beyond the maximum of twenty days, nowhere in the provisions of Sec. 673 is the twenty day period of Sec. 672 mentioned as a time limitation upon the filing of a libel action." United States v. 2623 Pounds, More or Less, of Veal & Beef, 336 F.Supp. 140, 144 (N.D.Cal.1971). Indeed, the express language of Sec. 673 provides that a judicial proceeding may be instituted "at any time" against an adulterated meat food product. Id. This leads us to conclude that the 20 day period of Sec. 672 is not a jurisdictional prerequisite to a libel action under Sec. 673. See, 2623 Pounds, supra at 145.

To be sure, the owner of seized meat is entitled to its return at the end of the 20 day period in the absence of government action. ⁵ 21 U.S.C. Sec. 672. The claimant can accomplish this through a proceeding in the nature of mandamus or replevin. 336 F.Supp. at 145. But the owner's right extends no further. Jarboe-Lackey may not challenge the district court's jurisdiction over the seizure action merely because the United States failed to comply with Sec. 672's 20 day detention period. Accordingly, we affirm the trial court's ruling denying claimant's motion to dismiss for lack of jurisdiction.

III

Jarboe-Lackey seeks an award of attorneys' fees and expenses under the Equal Access to Justice Act. 28 U.S.C. Sec. 2412 (Supp.1983). The EAJA, enacted in 1980, is designed to "diminish the deterrent effect of seeking review or defending against governmental action." H.R.Rep. No. 1418, 96th Cong., 2d Sess. 12 (1980), U.S.Code Cong. & Admin.News 1980, p. 4953. Impecunious parties are often reluctant to challenge unreasonable governmental action because of the cost involved in vindicating their rights. Congress also hoped to relieve victims of abusive governmental conduct and to expose more governmental action to adversarial testing by encouraging private parties to challenge U.S. behavior. Spencer v. NLRB, 712 F.2d 539, 550 (D.C.Cir.1983).

Claimant's petition is based upon two provisions of the EAJA. Section 2412(d)(1)(A) provides that a court shall award an eligible prevailing party attorneys' fees and other litigation expenses unless some other statute specifically provides otherwise or "the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." ⁶ This is an experimental portion of the Act which will be automatically repealed by its "sunset provision" if it is not reenacted before October 1, 1984. ⁷ Meanwhile, however, courts have struggled with its ambiguous phrases and muddled legislative history.

Jarboe-Lackey also claims entitlement to fees under Section 2412(b). It makes the United States liable for attorneys' fees "to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award." ⁸ This section codifies several important exceptions to the general "American Rule" ⁹ and thereby allows recovery of attorneys' fees when a losing party has "acted in bad faith, vexatiously, wantonly or for oppressive reasons." ¹⁰ Fitzgerald v. Hampton, 545 F.Supp. 53, 56 (D.D.C.1982); see also Spencer, supra at 545.

A. Scope of Review

A trial judge's ruling on an EAJA application is to be modified by an appellate court only when there is a showing of abuse of discretion. Matthews v. United States, 713 F.2d 677, 682 (11th Cir.1983); Hoang Ha v. Schweiker, 707 F.2d...