UNITED STATES DEPARTMENT OF AGRICULTURE

BEFORE THE SECRETARY OF AGRICULTURE

 

In re:

 

 

 

 

 

 

Austin Lambrich,

P&S Docket No. 24-J-0034

 

 

Respondent.

 

DECISION AND ORDER WITHOUT HEARING BY REASON OF DEFAULT

Appearance:

Charles L. Kendall, Esq., Office of the General Counsel, United States Department of Agriculture, Washington, DC, for the Complainant, Deputy Administrator, Packers and Stockyards Program, Agricultural Marketing Service (“AMS”)

This is a proceeding under the Packers and Stockyards Act, 1921, as amended and supplemented (7 U.S.C. §§ 181 et seq.) (“Act”); the regulations promulgated thereunder (9 C.F.R. §§ 201.1 et seq.); and the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes (7 C.F.R. §§ 1.130 through 1.151) (“Rules of Practice”).

The Deputy Administrator, Fair Trade Practices Program, Agricultural Marketing Service (“AMS”), United States Department of Agriculture (“Complainant”), initiated this proceeding by filing a complaint against XXXXX (“Respondent”) on February 5, 2024. The Complaint alleged that Respondent willfully violated sections 312(a) (7 U.S.C. § 213(a)) and 409 (7 U.S.C. § 228b) of the Act on multiple occasions by failing to pay for livestock purchases when due and by issuing a check payment for livestock without sufficient funds in the account upon which the check was drawn to pay when presented.[1] Further, the Complaint requested:

1.      That unless Respondent fails to file an answer in the time allowed, or files an answer admitting all the material allegations of this Complaint, this proceeding be set for oral hearing in accordance with the Rules of Practice governing proceedings under the Act.

 

2.      That an order or orders be issued, including an order requiring Respondent to cease and desist from the violations found to exist, suspending Respondent’s registration under the Act, and assessing such civil penalties as are authorized by the Act and warranted in the premises.

 

Complaint at 3 (emphasis added).

Respondent was duly served with a copy of the Complaint and did not file an answer within the twenty-day period as prescribed by section 1.136 of the Rules of Practice (7 C.F.R. § 1.136), nor has Respondent filed such an answer since that deadline.[2]

On April 9, 2024, I issued an order directing the parties to show cause (“Show Cause Order”), not later than 20 days after that date, why default should not be entered against Respondent.[3]

On April 29, 2024, Complainant filed a Response to Show Cause Order and Motion for Decision Without Hearing (“Motion for Default”), as well as a Proposed Decision and Order (“Proposed Decision”), pursuant to section 1.139 of the Rules of Practice (7 C.F.R. § 1.139).[4]

Complainant now requests that Respondent be assessed a $4,000 civil penalty and ordered to cease and desist from violations of the Act;[5] however, Complainant no longer requests an order suspending Respondent’s registration under the Act.[6] Complainant’s Motion provides a detailed explanation for the requested sanctions[7] and support for those sanctions in the declaration of XXXXX, which is further described infra.

Respondent did not respond to my Show Cause Order and has not filed any objections to Complainant’s Motion for Default or Proposed Decision. [8]

Failure to file a timely answer or failure to deny or otherwise respond to allegations in the Complaint shall be deemed, for purposes of this proceeding, an admission of the allegations in the Complaint, unless the parties have agreed to a consent decision.[9] Other than a consent decision, the Rules of Practice do not provide for exceptions to the regulatory consequences of an untimely answer where, as in the present case, no meritorious objections have been filed.[10]

Sanctions

As previously noted, Complainant requests an order assessing Respondent a $4,000 civil penalty and ordering Respondent to cease and desist from violations of the Act.[11] The Act authorizes the Secretary to assess a civil penalty of up to $11,000 per violation,[12] or $29,270 per violation when adjusted for inflation.[13] When determining civil penalties, the Secretary is required to “consider the gravity of the offense, the size of the business involved, and the effect of the penalty on the person’s ability to continue in business.”[14]

In support of its sanction recommendation, Complainant provides a declaration by XXXXX, Marketing Specialist for the AMS Enforcement Branch.[15] XXXXX personally reviewed and approved Complainant’s requested civil penalty, and “it is [XXXXX’s] sanctions approval that forms the basis of the . . . Complaint.”[16] XXXXX’s declaration analyzes the statutory factors listed above.

XXXXX considers Respondent’s violations to be serious; he states that “the risk of loss to livestock producers and livestock markets [w]as high.”[17] XXXXX states he “judged the gravity of the violations found in the investigation,” which he describes as follows:

XXXXX in fourteen (14) transactions consisting of 244 total head of livestock failed to pay when due for a total of $150,758.57. Payment for eight (8) purchase transactions were 1 to 7 days late and six (6) livestock purchase transactions exceeded seven (7) days. XXXXX issued one check returned unpaid for insufficient funds (NSF). This check was from a purchase made on June 22, 2020, that consisted of four head of livestock purchased for $6,587.40. The violations found [are] considered serious violation[s] of the Act.

 

XXXXX Declaration ¶ 11.

XXXXX calculated the total civil penalty for Respondent’s failure-to-pay-when-due violations to be $3,000, which can be broken down as follows: $150 for each instance where payment was made seven or fewer days late (eight), which amounts to $1,200; and $300 for each instance where payment was made eight or more days late (six), which amounts to $1,800.[18] For the violation of issuing a check in payment for livestock that was returned unpaid by the bank for insufficient funds, XXXXX determined $1,000 to be an appropriate penalty.[19] Together, these penalties add up to $4,000.[20] Considering that the Act specifies a maximum civil penalty of up to $29,270 for each violation[21] and Respondent committed 15 serious violations, I find the recommended $4,000 total penalty warranted.  

When formulating his civil-penalty recommendation, XXXXX “considered the size of the business and the financial circumstances documented in [Respondent’s] annual report along with the bond coverage he maintains.”[22] Although XXXXX identifies Respondent as “a small livestock dealer,” he states that the recommended $4,000 penalty will not “cause irreparable harm to keep [Respondent] from operating as a registered livestock dealer.”[23] As Respondent presented no evidence or argument to the contrary, he is presumed capable of paying the $4,000 civil penalty and continuing to conduct business.[24]

Further, the Act authorizes the Secretary to issue an order requiring a registrant to “cease and deist from continuing such violation[s].”[25] For the same reasons outlined above, I find a cease-and-desist order to be appropriate and necessary to deter future and/or repeated violations of the Act.[26]

Having considered the required statutory factors, and in accordance with the Department’s sanction policy,[27] I find Complainant’s sanction recommendations to be reasonable and appropriate under the facts and circumstances of this case.

            As Respondent failed to file an answer to the Complaint, and upon Complainant’s motion for the issuance of a decision without hearing, this Decision and Order is issued without further procedure or hearing pursuant to section 1.139 of the Rules of Practice (7 C.F.R. § 1.139).

Findings of Fact

1.      Respondent XXXXX is an individual. To protect Respondent’s privacy, Respondent’s mailing address was not stated in the Complaint but was provided to the Hearing Clerk’s Office for service purposes.

2.      Respondent is, and at all times material herein, was:

a.       Engaged in the business of a dealer buying and selling livestock in commerce for his own account; and

b.      Registered with the Secretary of Agriculture as a dealer to buy and sell livestock in commerce.

3.      Respondent, during the period from on or about June 15, 2020 through August 26, 2020, as set forth in Appendix A to the Complaint and attached hereto, purchased livestock and failed to pay when due for such livestock purchases.

4.      In one of those transactions, Respondent, on or about June 22, 2020, as set forth in Appendix B to the Complaint and attached hereto, issued a check in payment for a livestock purchase that was returned unpaid by the bank upon which it was drawn because Respondent did not have and maintain sufficient funds on deposit and available in the account upon which the check was drawn to pay it when presented.

Conclusions

1.      The Secretary of Agriculture has jurisdiction in this matter.

2.      By reason of the facts above, Respondent XXXXX has willfully violated sections 307 and 312(a) of the Packers and Stockyards Act (7 US.C. §§ 208, 213(a)).

ORDER

1.      Complainant’s Motion for Default is GRANTED.

2.      Respondent XXXXX and Respondent’s agents, employees, successors, and assigns, directly or indirectly through any corporate or other device, in connection with Respondent’s activities subject to the Packers and Stockyards Act, shall cease and desist from:

a.       Issuing checks in payment for the livestock purchases which checks are returned unpaid by the bank upon which they are drawn because Respondent does not have and maintain sufficient funds on deposit and available in the account upon which such checks are drawn to pay such checks when presented; and

b.      Failing to pay, when due, the full purchase price of livestock.

3.      Respondent shall pay a civil penalty of four-thousand dollars ($4,000). Respondent shall send a certified check or money order with the docket number (P&S Docket No. 24-J-0034) to US BANK, ATTN: GOVERNMENT LOCKBOX (XXXXX), XXXXX, XXXXX, XXXXX.

            This Decision and Order shall be final and effective without further proceedings thirty-five (35) days after service, unless an appeal to the Judicial Officer is filed with the Hearing Clerk within thirty (30) days after service as provided in sections 1.139 and 1.145 of the Rules of Practice (7 C.F.R. §§ 1.139 and 1.145).

Copies of this Decision and Order shall be served upon the parties and counsel by the Hearing Clerk.

Done at Washington, D.C.

this 5th day of June 2024

 

 

______________________________________

Channing D. Strother

Chief Administrative Law Judge

                                   

Hearing Clerk’s Office

United States Department of Agriculture

Stop 9203, South Building, Room 1031

1400 Independence Avenue, SW

Washington, DC 20250-9203

Tel:      202-720-4443

Fax:     844-325-6940

SM.OHA.HearingClerks@USDA.GOV

 

 

 



[1] Complaint at 1-2.

[2] United States Postal Service records reflect that the Complaint was sent to Respondent via certified mail and delivered on February 15, 2024. Respondent had twenty days from the date of service to file a response. 7 C.F.R. § 1.136(a). Weekends and federal holidays shall be included in the count; however, if the due date falls on a Saturday, Sunday, or federal holiday, the last day for timely filing shall be the following workday. 7 C.F.R. § 1.147(h). In this case, Respondent’s answer was due on or before March 6, 2024. Respondent has not filed an answer.

[3] The Show Cause Order also directed: “Unless the parties have agreed to a consent decision, Complainant’s response shall be accompanied by: (1) a proposed decision and order and (2) a motion for adoption of that proposed decision and order in accordance with the provisions of 7 C.F.R. § 1.139.” Show Cause Order at 2.

[4] Complainant’s Motion also included an attachment: “Declaration of Bryice Wilke,” dated April 25, 2024.

[5] Motion for Default at 5.

[6] Id.

[7] Id. at 4-5.

[8] United States Postal Service records reflect that Complainant’s Motion for Default and Proposed Decision were sent to Respondent via certified mail and delivered on May 11, 2024. Respondent had 20 days from the date of service to file objections thereto. 7 C.F.R. § 1.139. Weekends and federal holidays shall be included in the count; however, if the due date falls on a Saturday, Sunday, or federal holiday, the last day for timely filing shall be the following workday. 7 C.F.R. § 1.147(h). In this case, Respondent’s objections were due on or before May 31, 2024. Respondent has not filed any objections. 

[9] 7 C.F.R. § 1.136(c).

[10] See supra note 8 and accompanying text.

[11] Motion for Default at 5.

[12] 7 U.S.C. § 213(b).

[13] In this case, one violation occurred on June 15, 2020; all other violations occurred during the period June 22, 2020 through August 26, 2020. See Complaint Appendix A and Appendix B. From March 14, 2018 through June 16, 2020, the maximum civil penalty was $28,061 per violation. 7 C.F.R. § 3.91(b)(1)(lvi) (March 14, 2018). From June 17, 2020 to May 9, 2021, the maximum civil penalty was $29,270 per violation. 7 C.F.R. § 3.91(b)(1)(lvi) (June 17, 2020).

[14] 7 U.S.C. § 213(b).

[15] Declaration of XXXXX (“XXXXX Declaration”). XXXXX has been an employee of AMS since 1990 and has worked as a marketing specialist, senior agriculture economist, senior agriculture marketing specialist, supervisor of the Business Practice Unit, “and now as a Marketing Specialist for the Enforcement Branch/Scales and Weighing Program Manager (2014-current).” XXXXX Declaration ¶ 3. In his current role, XXXXX “has final review and approval authority for all civil monetary penalties assessed in enforcement of non-compliance with and violations of the Packers and Stockyards Act[.]” Id. ¶ 4.

[16] XXXXX Declaration ¶ 6.

[17] Id. ¶ 8.

[18] Id. ¶ 17.

[19] Id. ¶ 17.

[20] Mr. Wilke states that he “used Packers and Stockyards Sanction Table and Guidelines to determine an appropriate sanction,” but Complainant has not provided a copy of said table or guidelines. XXXXX Declaration ¶ 14. Considering how nominal the requested penalties are in light of the maximum amount permitted by the Act, however, I need not examine those sources.

[21] See supra notes 12, 13, and accompanying text.

[22] XXXXX Declaration ¶ 13.

[23] Id. ¶ 18.

[24] See Stepp, 57 Agric. Dec. 297, 318 (U.S.D.A. 1998).

[25] 7 U.S.C. § 213(b).

[26] See Butz v. Glover Livestock Comm’n Co., 411 U.S. 182, 187 (1973); Syverson, 69 Agric. Dec. 1500, 1509 (U.S.D.A. 2010) (Decision on Remand) (“The purpose of an administrative sanction is to accomplish the remedial purposes of the Packers and Stockyards Act by deterring future violations of the Packers and Stockyards Act by the violator and others.”).

[27] See S.S. Farms Linn Cnty., Inc., 50 Agric. Dec. 476, 497 (U.S.D.A. 1991) (Decision as to James Joseph Hickey & Shannon Hansen), aff'd, 991 F.2d 803, 1993 WL 128889 (9th Cir. 1993) (not to be cited as precedent under the 9th Circuit Rule 36-3)) (“[T]he sanction in each case will be determined by examining the nature of the violations in relation to the remedial purposes of the regulatory statute involved, along with all relevant circumstances, always giving appropriate weight to the recommendations of administrative officials charged with the responsibility for achieving the congressional purpose.”).