UNITED
STATES DEPARTMENT OF AGRICULTURE
BEFORE
THE SECRETARY OF AGRICULTURE
In re: |
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Fabrizius
Livestock, a Colorado
corporation, |
AHPA/CTESA
Docket No. 21-J-0062 |
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Respondent. |
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OPINION
ASSESSING CIVIL PENALTY AGAINST RESPONDENT
Appearances:
Danielle
Park, Esq., with the Office of the
General Counsel, United States Department of Agriculture, Washington, DC, for
the Complainant, Administrator, Animal and Plant Health Inspection Service
(“APHIS”)
Thomas
D. Grant, Esq., of Grant & Hoffman Law Firm, P.C., Greeley, Colorado, for
the Respondent, Fabrizius Livestock
Before
Tierney M. Carlos, Administrative Law Judge
I.
Introduction
This is a proceeding under the Animal
Health Protection Act, as amended (7 U.S.C. §§ 8301 et seq.)
(“AHPA”); the Commercial Transportation of Equine for Slaughter Act
(7 U.S.C. § 1901 note) (“CTESA”); and the Rules of Practice
Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under
Various Statutes (“Rules of Practice”) (7 C.F.R. §§ 1.130
et seq.). The matter initiated with a complaint filed on August 24, 2021 by the Administrator of the Animal and Plant Health
Inspection Service, United States Department of Agriculture, alleging that
Jason Fabrizius, doing business as Fabrizius Livestock, violated the AHPA and
its regulations (9 C.F.R. Parts 71, 75, and 86) and the CTESA and its
regulations (9 C.F.R. Part 88).[1]
II. Procedural
History
On August 24, 2021, the Administrator
(“Complainant”) filed with the USDA Hearing Clerk a complaint
against Jason Fabrizius, doing business as Fabrizius Livestock
(“Respondent” or “Fabrizius”).[2] The
Complaint alleged that Respondent was engaged in the business of buying and
selling equine, including the transport of equines intended for slaughter, and
was an owner/shipper as defined in 9 C.F.R. § 88.1. The Complaint alleged
that on July 18, 2018, Respondent purchased fourteen horses intended for
slaughter from an auction company in Nebraska, failed to prepare and sign
owner/shipper certificates for the fourteen horses, and then commercially
transported the fourteen horses to Respondent’s facility in Colorado
without owner/shipper certificates in violation of 9 C.F.R. § 88.4(a)(3).
The Complaint further alleged that between June and October 2018, Respondent
moved fifty horses in nineteen separate incidents without the required
interstate certificates of veterinary inspections in violation of 9 §§
C.F.R. 86.5(a) and (f). In addition, the Complaint alleged that on August 20,
2018, Respondent failed to exercise reasonable diligence to ascertain whether a
horse was affected with any contagious, infectious, or communicable disease
before offering the horse for interstate transportation and Respondent moved that
horse, affected with equine infectious anemia (“EIA”), from
Colorado to Wyoming in violation of 9 C.F.R. § 71.3(f).
On
November 1, 2021, Respondent filed an answer and request for oral hearing with
the USDA Hearing Clerk. The Answer admitted the jurisdictional allegations of
the Complaint. Respondent admitted the allegations that he had purchased fourteen
horses intended for slaughter in Nebraska, failed to prepare owner/shipper
certificates for any of the horses, and commercially transported the horses to
his facility in Colorado without the required owner/shipper certificates. With respect to the alleged violations
of 9 C.F.R. §§ 86.5(a) and (f), Respondent stated he had sold the
horses to various buyers and that the buyers were responsible for the movement
of the horses. He also stated that he was not the shipper/owner and was not
responsible for the movement of the horses. Regarding the alleged violation of 9
C.F.R. § 71.3(f), Respondent denied that he had failed to exercise
reasonable diligence. Finally, the Answer requested an oral hearing.
On November 4, 2021, I issued an
order (“Exchange Order”) setting deadlines for submissions by the
parties. The Exchange Order gave Complainant until December 6, 2021 to file with the Hearing Clerk a list of exhibits and
witnesses and to send copies of its exhibits and list to Respondent. Respondent
was given until January 20, 2022 to do the same.
On January 20, 2022, Respondent filed
an unopposed motion for extension of time requesting an additional fourteen
days to comply with the Exchange Order. In support thereof, Respondent stated
that “the parties discussed [that day] the desire to work toward a
resolution of this matter.”[3]
By early February the parties
indicated they were unable to reach an agreement to resolve the matter, and on
February 10, 2022 I scheduled a hearing for April 5 to
7, 2022.
On February 25, 2022, I was informed
by Complainant that
[t]he parties [were] largely in agreement to the facts
of the case and believe[d] that the legal arguments [could] be resolved via
motions or briefing, and thus save the need to conduct a zoom hearing at all or
at least shorten the amount of time required for the hearing.[4]
During a telephone conference on March 2, 2022, I was
informed that the parties agreed on most of the facts of the case but disagreed
on the legal issue of whether Respondent was a “persons
responsible” under 9 C.F.R. §
86.5(a).
On March 2, 2022, I issued an order setting
a briefing schedule for the parties. The Order directed, inter alia, the
parties to jointly file a written stipulation of facts and Complainant to file
a motion for determination of legal issue(s) and supporting brief by April 5,
2022.[5] On
that same date I cancelled the virtual hearing scheduled for April 5 to 7,
2022.
The Complainant filed two unopposed
requests for extension of time to file the parties’ joint stipulation of
facts and Complainant’s motion for determination of legal issue(s) and
supporting brief.
On April 21, 2022, Complainant filed
a motion for leave to file an amended complaint (“Motion to Amend
Complaint”).[6] Complainant sought leave
to amend the Complaint by substituting Fabrizius Livestock, a Colorado
corporation, as the named Respondent.[7]
On April 26, 2022, Complainant filed
a motion requesting a stay of submission deadlines (“Motion for
Stay”).
On April 27, 2022, I held a telephone
conference with the parties to address Complainant’s Motion to Amend
Complaint and second request for extension of time to file its brief on the
legal issue of whether Respondent was a “persons responsible.”
Following the telephone conference, I denied Complainant’s Motion for
Stay and issued an order amending the briefing schedule.[8]
On May 10, 2022, the parties filed
their Stipulations as to Facts (“Stipulations”).[9]
On May 11, 2022, Respondent filed
objections to Complainant’s Motion to Amend Complaint.[10]
On May 11, 2022, Complainant filed a
motion for Summary Judgment. The Motion for Summary Judgment included a legal
argument of why Respondent was a “persons responsible” under 9
C.F.R. § 86.5(a).
On May 24, 2022, I granted
Complainant’s Motion to Amend Complaint. On the same date, Complainant
filed its Amended Complaint.
On May 25, 2022, Respondent filed an
unopposed motion for extension of time to file a response to
Complainant’s Motion for Summary Judgment. On the same date, I issued an
order granting Respondent’s Motion and extending the deadlines set forth
in the amended briefing schedule.[11]
On
June 3, 2022, Respondent filed his Response to Complainant’s Motion for
Summary Judgment and Respondent’s Opening Brief Regarding Determination
of Legal Issues.
On
June 9, 2022, Complainant filed its Response to Respondent’s Response to
Complainant’s Motion for Summary Judgment.
On
June 10, 2022, Respondent filed his Answer to the Amended Complaint.
On
June 16, 2022, Respondent filed his Sur-Reply to Complainant’s Motion for
Summary Judgment.
On July 5, 2022, I issued an opinion
finding Respondent a “persons responsible” within the meaning of 9
C.F.R § 86.5(a)
and denying Complainant’s Motion for Summary Judgment.
On
July 15, 2022, I held a telephone conference to obtain a status of the case.
Both parties agreed that based upon my decision finding Respondent a “persons
responsible,” there were no disputed facts that required a hearing. However, the parties were unable to
reach an agreement as to a civil penalty. I set a hearing date of August 30, 2022 to give both parties an opportunity to present evidence
for me to consider to determine an appropriate civil penalty.
The
hearing took place virtually, as scheduled, on August 30, 2022. Evidence was
presented by Complainant and Respondent; however, additional time was needed to
conclude Respondent’s evidence. Therefore, the hearing was continued
until September 14, 2022.
The
hearing resumed on September 14, 2022, during which Respondent concluded its
evidence. Both parties gave closing arguments and confirmed they would not file
any post-hearing briefs. The hearing concluded, and the record is now closed.
III. Statutory and
Regulatory Authority
A.
Animal
Health Protection Act
Congress
enacted the Animal Health Protection Act (7 U.S.C. §§ 8301-8316)
(“AHPA”) to protect animal health and “the agriculture,
environment, economy, and health and welfare of the people of the United
States.”[12] To that end, the AHPA authorizes
the Secretary of Agriculture to prohibit or restrict “the movement in
interstate commerce of any animal . . . if the Secretary determines that the
prohibition or restriction is necessary to prevent the introduction or
dissemination of any pest or disease of livestock.”[13] Pursuant
to this authority, the Secretary has promulgated regulations to detect,
control, and eradicate diseases[14]
such as equine infectious anemia (“EIA”), a viral disease affecting
members of the Equidae family (horses, ponies, zebras, mules, and donkeys) for which
no vaccine or treatment is available.[15]
In
accordance with the AHPA, the Secretary promulgated 9 C.F.R. Part 86, which
sets forth requirements for the interstate movement of livestock in a manner
that prevents the transmission of various animal diseases—including EIA.[16] Section
86.5, in particular, states:
§ 86.5 Documentation requirements for interstate movement of covered
livestock.
(a) The persons responsible for animals
leaving a premises for interstate movement must ensure that the animals are
accompanied by an interstate certificate of veterinary inspection (ICVI) or other document required by this part for the interstate
movement of animals.
. . . .
(f) Horses and other equines. Horses and
other equines moved interstate must be accompanied by an ICVI unless:
(1)
They
are used as the mode of transportation (horseback, horse
and buggy) for travel to another location and then return direct to the
original location.
(2)
They
are moved from the farm or stable for veterinary medical examination or
treatment and returned to the same location without change in ownership.
(3)
They
are moved directly from a location in one State through another State to a
second location in the original State.
(4)
Additionally,
equines may be moved between shipping and receiving States or Tribes with
documentation other than an ICVI, e.g., an equine infectious anemia test chart,
as agreed to by the shipping and receiving States or Tribes involved in the
movement.
(5)
Equines
moving commercially to slaughter must be accompanied by documentation in
accordance with part 88 of this chapter. Equine infectious anemia reactors
moving interstate must be accompanied by documentation as required by part 75
of this chapter.
9 C.F.R. § 86.5. The
Secretary also promulgated 9 C.F.R. Part 71, which generally prohibits the
interstate movement of diseased animals and poultry. Relevant to this case,
section 71.3(f) provides:
Before offering cattle or other livestock
or poultry for interstate transportation . . . all persons, companies, or
corporations are required to exercise reasonable diligence to ascertain whether
such animals or poultry are affected with any contagious, infectious, or
communicable disease, or have been exposed to the contagion or infection of any
such disease by contact with other animals or poultry so diseased or by
location in pens, cars, or other vehicles, or upon premises that have contained
animals or poultry so diseased.
9 C.F.R. § 71.3(f).
The
sanctions that are available for violations of the regulations in 9 C.F.R. Parts
86 and 71 are governed by section 10414(b) of the Act (7 U.S.C. §
8313(b)). Section 10414(b)) sets civil penalties for violations of the AHPA and
its accompanying regulations and states in pertinent part:
[A]ny person that violates
this chapter . . . may, after notice and opportunity for a hearing on the
record, be assessed a civil penalty by the Secretary that does not exceed the
greater of--
(A)(i) $50,000 in the case of any individual, except that
the civil penalty may not exceed $1,000 in the case of an initial violation of
this chapter by an individual moving regulated articles not for monetary gain;
(ii) $250,000 in the case of any other person for each
violation; and
(iii) for all violations adjudicated in a single proceeding--
(I)
$500,000 if
the violations do not include a willful violation; or
(II)
$1,000,000 if
the violations include 1 or more willful violations.
7 U.S.C. § 8313(b)(1).[17] When
determining the civil-penalty amount, the Secretary is required to consider “the
nature, circumstance, extent, and gravity of the violation or violations”
but “may consider, with respect to the violator-- (A) the ability
to pay; (B) the effect on ability to continue to do business; (C) any history
of prior violations; (D) the degree of culpability; and (E) such other factors
as the Secretary considers to be appropriate.”[18]
B.
Commercial Transportation of Equine for Slaughter Act
The Commercial Transportation of Equine for Slaughter
Act (7 U.S.C. § 1901 note) (“CTESA”), included as part of the
1996 Farm Bill, was designed to assure that horses being transported for
slaughter are not subjected to unsafe and inhumane conditions.[19] Congress
directed the Secretary of Agriculture to issue guidelines to accomplish this
purpose, and the Secretary delegated this rulemaking authority to the Animal
and Plant Health Inspection Service (“APHIS”). With this
authorization, APHIS promulgated the CTESA regulations set forth at 9 C.F.R.
Part 88.
Section 88.4 of the regulations sets forth
requirements for transport. Pertinent to this case, section 88.4(a)(3) requires
that prior to the commercial transportation of horses for slaughter, the
owner/shipper must:
Complete and sign an owner-shipper certificate for each equine being
transported. The owner-shipper certificate for each equine must accompany the
equine throughout transit to slaughter and must include the following
information, which must be typed or legibly completed in ink:
(i)
The
owner/shipper’s name, address, and telephone number;
(ii)
The
receiver’s (destination) name, address, and telephone number;
(iii)
The name of the
auction/market, if applicable;
(iv)
A description of
the conveyance, including the license plate number;
(v)
A description of
the equine’s physical characteristics, including such information as sex,
breed, coloring, distinguishing markings, permanent brands, tattoos, and
electronic devices that could be used to identify the equine;
(vi)
The number of the
USDA backtag applied to the equine in accordance with paragraph (a)(2) of this
subsection;
(vii)
A statement of
fitness to travel at the time of loading, which will indicate that the equine
is able to bear weight on all four limbs, able to walk unassisted, not blind in
both eyes, older than 6 months of age, and not likely to give birth during the
trip;
(viii)
A description of
any preexisting injuries or other unusual condition of the equine, such as a
wound or blindness in one eye, that may cause the equine to have special
handling needs;
(ix)
The date, time,
and place the equine was loaded on the conveyance; and
(x)
A statement that
the equine was provided access to food, water, and rest prior to transport[.]
9 C.F.R. § 88.4(a)(3). The Secretary may assess civil
penalties of up to $5,000 per violation of the CTESA and regulations,[20]
and “[e]ach equine transported in violation of the regulations . . . will
be considered a separate violation.”[21]
IV. Discussion
A.
Respondent is guilty of all the violations alleged in
the Complaint.
In his Answer Respondent admitted to
one violation of 9 C.F.R § 88.4(a)(3) as alleged in paragraph 5 of the Complaint.
As
noted above, Respondent’s Answer admitted to the facts alleged in
paragraphs 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23,
and 24 of the Complaint; however, he raised the legal argument that he was the
seller of the horses and therefore was not a “persons responsible” under
9 C.F.R. § 86.5(a). Having found Respondent a “persons responsible”
under 9 C.F.R. § 86.5(a)[22]
and based upon the Stipulations signed by both parties, I have determined that
Respondent moved or caused the movement of the equines as alleged in paragraphs
4, 6, 7, 8, 9,10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23, and 24 of the
Complaint.
Paragraph 19 of the Complaint alleged
that Respondent violated 9 C.F.R. § 71.3(f) in that prior to offering an
equine for interstate transportation, he failed to exercise reasonable
diligence to ascertain whether the equine was affected with or exposed to any
contagious, infectious, or communicable disease. In the Stipulations,
Respondent admitted to selling a horse on August 20, 2018 and admitted that on
August 27, 2018 the horse tested positive for EIA.[23] Based
upon this admission, along with evidence contained in RX-13 and CX-103, I find
that: 1) Respondent was aware of
the possibility of exposure to
contagious, infectious, or communicable disease;[24] 2)
Respondent had blood drawn from the horse for a Coggins test on August 20, 2018;[25] and
3) Respondent did not await the results of the Coggins test prior to letting
the horse leave his facility for interstate transport.[26]
Therefore, I find that Respondent violated 9 C.F.R. §
71.3(f).
In sum, I find Respondent is guilty
of nineteen violations of 9 C.F.R. § 86.5 (a) and (f), as alleged in
paragraphs 4, 6, 7,8, 9,10, 11, 12, 13, 14, 15, 16, 17, 18, 20, 21, 22, 23, and
24 of the Complaint; one violation of 9 C.F.R. § 71.3(f), as alleged in paragraph
19 of the Complaint; and one violation of 9 C.F.R § 88.4(a)(3), as alleged
in paragraph 5 of the Complaint.
B.
Civil Penalty
Section
10414(b)(1)(A) of the Act (7 U.S.C. 8313(b)(1)(A)), as modified by 7 C.F.R. §
3.91(b)(2)(vi) in 2010, permitted the Secretary to impose a civil penalty of up
to $250,000 per violation.[27]
However, the Inflation Adjustment Act raised the amount per violation to $381,
394 per violation of AHPA.[28]
The maximum penalty for CTESA is $5,000 per violation.[29]
Applying the maximum penalty
limitations of section 10414(b), the Secretary may impose a maximum civil
penalty of total of $1,138, 937 for violations of the AHPA and $70,000 for
violations of the CTESA. In imposing a civil penalty under the AHPA the
Secretary should consider the statutory factors set forth in section 10414(b)(2)
(7 U.S.C. § 8313(b)(2)). As previously noted, this section obligates the
Secretary to consider the nature, circumstance, extent, and gravity of the
Respondent’s violations and gives him the discretion to consider the
Respondent’s ability to pay the civil penalty, the penalty’s effect
on Respondent’s ability to continue to do business, any history of prior
violations, and the Respondent’s degree of culpability, as well as any
other factors that the Secretary deems appropriate.[30]
The nature, circumstances, and
gravity of the violations are significant. On or about July 18, 2018,
Respondent purchased fourteen horses intended for slaughter in Nebraska. He
then transported those fourteen horses without the owner/shipper certificates
required by 9 C.F.R § 88.4(a)(3).[31]
He comingled those horses with other horses at his facility and then sold fifty
horses from his facility to individual buyers, who transported those fifty horses
in nineteen separate interstate movements without the required ICVIs.
The consequences of Respondent’s
actions were monumental. One of the fourteen horses that was purchased on July
18, 2018 and transported to Respondent’s facility in Colorado was later sold
to an individual buyer and transported to Wyoming prior to testing positive for
equine infectious anemia (“EIA”).[32]
However, the testing was not done until over a month after the horse arrived at
Respondent’s facility.[33]
Respondent’s actions of co-mingling and reselling of those horses
resulted in state and federal officials in twelve states investing hundreds of
hours of time and energy to investigate and attempt to trace the 293 horses
that were potentially exposed to EIA.[34]
Out of the 293 horses that were potentially exposed to EIA, sixty-seven were
never successfully traced. Thus, sixty-seven potentially exposed horses may continue
to spread the disease.[35] Respondent’s
violations also required the tracking, retesting and the quarantine of forty-seven
horses sold by Respondent.[36]
These violations pose a grave threat
to the health and economic vitality of the U.S. equine industry.[37]
EIA is a contagious, incurable, potentially fatal disease that affects equines.[38] While
it can cause the death of an infected horse, horses that survive the initial
acute state of the disease become chronically infected and serve as a source of
transmission of the virus to other horses for the remainder of their natural
lives.[39]
There is no vaccine, cure, or treatment for EIA.[40] The
incubation period for EIA virus is thirty-five to forty-five days.[41]
In the early 1970s Leroy Coggins
developed an EIA test (Coggins test).[42]
When the United States first started testing using the Coggins test, EIA was
widespread in the United States with approximately 50,000 cases per year.[43] There
are now over 400 EIA laboratories conducting over 1.3 million tests per year at
a cost of over $50 million.[44]
There is no federal EIA program, and the USDA relies on state programs
developed in the 1970’s.[45]
Once notified of a positive EIA test, the state issues a quarantine on the
premises where the horse is located.[46] Positive horses are isolated at least
200 yards away from other horses and re-tested is done sixty days post
–exposure.[47] Trace-back epidemiological investigations
are conducted to identify all horses that have been exposed to a EIA.[48]
As a result of EIA testing and control programs, the current national
prevalence is estimated to be .004 percent, or fewer than 100, cases per year.[49] However,
individual cases are now much more important, as the consequences of potential
exposure are greater than in the past.[50] Every positive EIA test requires trace-back
finding of the source and eradication of that source of infection.[51]
Interstate Certificates of Veterinary Inspection (“ICVIs”) are very
important documents because they are an official trace movement of horse from
one location to another and also document the disease or clinical statues of
the horse noted on the certificate.[52] A
negative Coggins test is required to obtain an ICVI; thus, the test is an
essential tool in preventing the spread of EIA.[53]
The United States export of equines amounts
to between $300- and $500-million dollars a year.[54] APHIS
communicates regularly with other ministries of agriculture across the
world for trade negotiations and
trade pacts.[55] These trade agreements
are based upon trust, and other countries assess the U.S. infrastructure and
ability to trace back disease.[56]
Anything that undermines the United States’ ability to regulate, manage,
and respond to animal diseases impacts trade with other countries.[57] Thus, Respondent’s violations impacted
the U.S. equine industry and could have impacted the international equine
market.
Respondent
is highly culpable for his violations of the regulations because, as the
evidence demonstrates, Respondent was fully aware of the regulatory
requirements for interstate movement of horses but attempted to pass sole
responsibility on the buyers of those horses.[58] Although
the buyers were also responsible, Respondent, as a buyer/seller of equines for
over six years,[59] was aware of the dangers
of EIA and the requirement to obtain ICVIs prior to interstate transport.[60]
This is even more egregious since Respondent’s own Facebook page stated
the horses he was selling had been in kill pens with potential exposure to
diseases.[61] Thus, Respondent was fully aware of the
high risk that the horses he was selling had been exposed to disease and
allowed the horses to leave his facility without ICVIs. Moreover, blood had
been drawn and Coggins tests ordered for forty-one of the fifty sales.[62] Respondent’s
attempt to mitigate his culpability by showing he ordered Coggins tests for forty-one
of the horses does not mitigate his actions in this case because it proves he
was aware of the Coggins-test requirement and, after drawing blood and ordering
the tests, let at least twenty-two horses leave his facility without the Coggins
test results and let all the horses leave his facility without ICVIs.[63] Moreover,
Respondent’s veterinarian testified that he was the one who had drawn the
blood for the Coggins tests and had visually inspected the horses during the
drawing of the blood.[64] Thus,
the issuance of the ICVIs could have been completed upon obtaining the negative
Coggins test results.
The nature, extent, and gravity of
Respondent’s violations, coupled with his degree of culpability, warrant
a severe penalty to deter Respondent and others from committing the same or
similar violations in the future. “It is the policy of this Department to
impose severe sanctions for violations of any of the regulatory programs administered
by the Department that are repeated or are regarded by the Department and the
Judicial Officer as serious, in order to serve as an effective deterrent not
only to the Respondents, but also to other potential violators.”[65]
Dr. Donald Beckett works for APHIS and
is the area veterinarian-in-charge for Colorado and Wyoming.[66] Dr.
Beckett recommended a fine of
$193,500.[67] Dr. Beckett recommended a
penalty of $250 per horse transported for a total of penalty of $3,500 for the violation of 9
C.F.R. § 88.4(a)(3).[68]
Dr. Beckett testified that the maximum penalty for the 9 C.F.R. §§
86.5 (a) and (f) violations and one violation of 9 C.F.R. § 71.3(f) could
have been $250,000 for each violation (without taking into consideration of the
Inflation Adjustment Act).[69] However, he was recommending a penalty
of $9,500 per transaction for a total of $190,000.[70] Thus, Dr. Beckett was recommending a
total penalty of $193,500.[71] Dr. Beckett acknowledged that in August
2020, USDA had offered to settled the case for $51,000.[72]
Dr. Beckett testified that was a pre-litigation settlement offer.[73]
Dr.
Beckett testified that, in arriving at his recommended penalty, he had
considered the effect the penalty would have on Respondent’s ability to
continue business.[74] I
also have considered it and find the evidence presented by Respondent and the
testimony of Respondent’s accountant regarding the financial status of
Fabrizius Livestock to be confusing and ambiguous, at best.[75]
In an attempt to prove his inability to pay even a
modest penalty, Respondent submitted corporate income tax returns for the years
2015 through 2021.[76]
Although the corporate income tax returns produced by Respondent show a negative
taxable income of over $50,000 for the years 2015 through 2021, I find that the
returns do not reflect an accurate picture of the financial viability of
Fabrizius Livestock. The returns show that since 2018 Respondent has invested
over $340,000 of corporate income into the purchase of equipment, for which
Respondent was able to deduct the full 100%.[77]
While the deduction of allowed expenses is legal, the attempt to portray this
as a money losing business is not simply accurate. It stretches the imagination
and credibility to imagine that Respondent has been operating this business at
a loss for over seven years without any compensation or profit. Explaining
this, Mr. Fabrizius testified that he does not take a salary from the business
but, instead, all of his living expenses, including
food, clothes, housing, gas, etc. for him and his family is taken out of the
business and deducted as business expenses.[78]
The co-mingling of business and personal expenses is highly problematic and
makes it difficult to accurately assess the financial viability of
Respondent’s business. Therefore, I am unpersuaded by Respondent’s
evidence that his business would be unable to survive a substantial penalty. In
fact, the evidence submitted by Respondent indicates that he will be able to
absorb the financial penalty awarded by this Court.
Dr. Beckett also testified that he considered Respondent’s lack of
prior violations in his penalty recommendation but did not provide further
explanation.[79] Under the regulations, I
have the discretion, but am not obliged, to take into consideration the fact
that Respondent has no prior history of adjudicated violations of the
regulations.[80] I have decided that based
upon the nature and circumstances of Respondent’s violations— including
his experience buying and selling and transporting horses, his knowledge and
awareness that the horses he was selling were exposed to “ all kind of sickness,”[81]
his drawing blood for Coggins tests and allowing at least twenty-two of the horses
leave his premises for interstate transport prior to obtaining the test results, [82]
and the repeated violations over a two-month period— no reduction in
civil penalty due to lack of prior history of adjudicated violations is
warranted.
Respondent argues that the purpose of
penalty assessment should be not only punishment but also compliance and that
Respondent has shown compliance.[83]
While I agree that the assessed penalty should take in account both punishment
and compliance, Respondent has earned a severe punitive penalty in this case.
Respondent has been in the horse business for years and aware of EIA and the
regulations regarding interstate transportation of equines. Knowing the
regulations and knowing that the horses he was selling were potentially exposed
to “all kinds of sickness,”[84] he
repeatedly let horses leave his premises for interstate transportation without
ICVIs. Amanda XXXXX testified that
the procedures for selling horse to individual buyers changed about two years
ago, two years after the disastrous transactions of the present case and two
years after the state shut down Respondent’s operation and quarantined all of his horses for sixty days.[85]
Voluntary compliance is commendable, but Respondent’s compliance is not
voluntary.
Respondent also argues that I should
not penalize him for exercising his right to retain counsel and litigate his
responsibility under the regulations and the final penalty awarded.[86] In this regard he argues that any
penalty over the initial settlement offer of $51,000 would penalize him for
exercising his rights.[87] I disagree. Initial settlement offers are low offers
intended to induce a quick resolution of the issues and avoid prolong
litigation. The higher penalty assessed by this Court is not a penalty for Respondent
exercising his rights, but an award based upon a full presentation of the facts—including
the degree of Respondent’s culpability and the testimony of Dr. Pelzel-McCluskey and Dr. Beckett, which provided evidence
of the severe consequences of Respondent’s actions (including the
contagious nature of EIA, the potential exposure of 293 horses to EIA, the
potential impact on the United States equine industry, and the hundreds of
hours expended by state and federal officials from twelve states as a result of
Respondent’s actions). Lastly, the evidence presented by Respondent
indicates that Fabrizius Livestock will be able to absorb the penalty awarded
by this Court.
After due consideration of the
factors referenced above and the Department’s severe sanctions policy, I
have determined that the facts and circumstances of this case warrant a penalty of ten -thousand dollars
($10,000) for Respondent’s violations of 9 C.F.R § 88.4(a)(3); a
penalty of ten-thousand dollars ($10,000) for Respondent’s violation of 9
C.F.R. § 71.3(f); and a penalty of one-hundred-ninety thousand dollars ($190,000)
for Respondent’s nineteen violations of 9 C.F.R. §§ 86.5(a) and
(f), for a total civil penalty of two-hundred, ten-thousand dollars ($210,000)
for all of the violations adjudicated in this proceeding.
I believe that this civil penalty is
sufficiently severe to deter Respondent and like-minded others from committing
violations of the regulations in the future while striking an appropriate
balance between the nature, gravity, and extent of Respondent’s violations,
his culpability for the same, and his ability to continue in business.
VII. Findings of Fact and Conclusions of Law
In accordance with the evidence of
record in this docket, the following findings of fact and conclusions of law
are hereby adopted:
1.
(a)
Respondent Fabrizius Livestock is a Colorado corporation, whose registered
address is in XXXXX.
(b) At all times material herein,
Respondent engaged in the business of buying and selling equine, including the
transport of equines intended for slaughter.
(c)
At
all times material herein, Respondent was an “owner/shipper,” as
defined in 9 C.F.R. § 88.1.
2.
On
or about July 18, 2018, Respondent purchased fourteen horses intended for
slaughter in Nebraska and transported them to Colorado without owner/shipper
certificates in violation of 9 C.F.R. § 88.4(a)(3).
3.
On
or about August 20, 2018, Respondent failed to exercise reasonable diligence to
ascertain whether a horse was affected with any contagious, infectious, or
communicable disease before offering the horses for interstate transportation
when he sold and let one horse affected with equine infectious anemia (“EIA”)
leave his facility in Colorado and be transported to Wyoming in violation of 9
C.F.R. § 71.3(f).
4.
From
on or about July 2018 through August 2018, Respondent was a responsible party
for animals leaving a premises for interstate movement under 9 C.F.R. § 86.5(a)
and committed nineteen violations of 9 C.F.R. § 86.5(a) and (f) when on nineteen
separate incidents he sold and allowed fifty horses to leave his facility
without ensuring the horses were accompanied by an interstate certificate of
veterinary inspection (“ICVI”).
ORDER
In accordance with section 10414(b) of
the Act (7 U.S.C. § 8312(b)), Respondent Fabrizius Livestock, a Colorado
corporation, is assessed a civil penalty in the amount of two-hundred-ten thousand
dollars ($210,000). Respondent
shall send a certified check or money order for two-hundred ten thousand
dollars ($210,000), payable to the U.S. Department of Agriculture, to USDA APHIS,
P.O. Box 979043, St. Louis, Missouri 63179-9000 within thirty (30) days
from the effective date of this Order.
Respondent shall indicate on the certified check or money order that
payment is in reference to AHPA/CTESA Docket No. 21-J-0062.
Pursuant
to the Rules of Practice governing procedures under the Act, this Decision and
Order will become final without further proceedings 35 days after service
hereof unless appealed to the Secretary by a party to the proceeding within 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 parties.
Done
at Washington, D.C.,
this
1st day of November 2022
Tierney
M. Carlos /S/ |
Tierney
M. Carlos |
Administrative
Law Judge |
Appendix
1
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
--
APPENDIX 1
UNITED STATES DEPARTMENT OF
AGRICULTURE
BEFORE THE SECRETARY OF
AGRICULTURE
In re: |
|
|
|
|
|
|
Fabrizius
Livestock, a Colorado
corporation, |
AHPA/CTESA
Docket No. 21-J-0062 |
|
|
|
|
Respondent. |
|
OPINION
FINDING RESPONDENT A “PERSONS RESPONSIBLE” UNDER 9 C.F.R. § 86.5(a)
AND
ORDER
DENYING COMPLAINANT’S MOTION FOR SUMMARY JUDGMENT
Appearances:
Danielle
Park, Esq., with the Office of the
General Counsel, United States Department of Agriculture, Washington, DC, for
the Complainant, Administrator, Animal and Plant Health Inspection Service
(“APHIS”)
Thomas
D. Grant, Esq., of Grant & Hoffman Law Firm, P.C., Greeley, Colorado, for
the Respondent, Fabrizius Livestock
Before
Tierney M. Carlos, Administrative Law Judge
This is a proceeding under the Animal Health
Protection Act, as amended (7 U.S.C. §§ 8301 et seq.)
(“AHPA”); the Commercial Transportation of Equine for Slaughter Act
(7 U.S.C. § 1901 note) (“CTESA”); and the Rules of Practice
Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under
Various Statutes (7 C.F.R. §§ 1.130 et seq.) (“Rules of
Practice”). The matter initiated with a complaint filed on August 24, 2021 by the Administrator of the Animal and Plant Health
Inspection Service, United States Department of Agriculture
(“Complainant”), alleging that Jason Fabrizius, doing business as
Fabrizius Livestock (“Respondent”), violated the AHPA and its
regulations (9 C.F.R. Parts 71, 75, and 86) and the CTESA and its regulations
(9 C.F.R. Part 88).[88]
On November 4, 2021, I issued an order
(“Exchange Order”) setting deadlines for submissions by the parties.
The Exchange Order gave Complainant until December 6, 2021
to file with the Hearing Clerk a list of exhibits and witnesses and to send
copies of its exhibits and list to Respondent. Respondent was given until
January 20, 2022 to do the same.
On January 20, 2022, Respondent filed an unopposed motion
for extension of time requesting an additional fourteen days to comply with the
Exchange Order. In support thereof, Respondent stated that “the parties
discussed [that day] the desire to work toward a resolution of this
matter.”[89]
By early February the parties indicated they had been
unable to reach an agreement to resolve the matter, and on February 10, 2022 I scheduled a hearing for April 5 to 7, 2022.
On February 25, 2022, I was informed by Complainant
that “[t]he parties [were] largely in agreement to the facts of the case
and believe[d] that the legal arguments [could] be resolved via motions or
briefing, and thus save the need to conduct a zoom hearing at all or at least
shorten the amount of time required for the hearing.”[90]
During a telephone conference on March 2, 2022, I was informed that the parties
agreed on the majority of the facts of the case but disagreed on the legal
issue of whether Respondent was a “persons responsible” under 9
C.F.R. § 86.5(a).
On March 2, 2022, I issued an order setting a briefing
schedule for the parties. The Order directed, inter alia, the parties to
jointly file a written stipulation of facts and Complainant to file a motion
for determination of legal issue(s) and supporting brief by April 5, 2022.[91] On the same date I cancelled the virtual
hearing scheduled for April 5 to 7, 2022.
On April 5, 2022, Complainant filed an unopposed motion
for extension of time to file the parties’ joint stipulation of facts and
Complainant’s motion for determination of legal issue(s) and supporting
brief. On the same date, I issued an order granting Complainant’s Motion
and extended the deadline to April 12, 2022.[92]
On April 12, 2022, Complainant filed a second request
for extension of time to file Complainant’s motion for determination of
legal issue and the parties’ joint stipulation of facts. Complainant requested
“that the time for filing . . . be extended up to and including April 26,
2022.”[93]
On April 21, 2022, Complainant filed a motion for leave
to file an amended complaint (“Motion to Amend Complaint”).[94] Complainant sought leave to
amend the Complaint by substituting Fabrizius Livestock, a Colorado
corporation, as the named Respondent.[95]
On April 26, 2022, Complainant filed a motion
requesting a stay of submission deadlines (“Motion for Stay”).
On April 27, 2022, I held a telephone conference with
the parties to address Complainant’s Motion to Amend Complaint and second
request for extension of time to file its brief on the legal issue of whether
Respondent was a “persons responsible.” Following the telephone
conference, I denied Complainant’s Motion for Stay and issued an order
amending the briefing schedule.[96]
On May 10, 2022, the parties filed their Stipulations
as to Facts (“Stipulations”).[97]
On May 11, 2022, Respondent filed objections to
Complainant’s Motion to Amend Complaint.[98]
On May 11, 2022, Complainant filed a Motion for Summary
Judgment. The Motion for Summary Judgment included a legal argument of why
Respondent was a “persons responsible” under 9 C.F.R. § 86.5(a).
On May 24, 2022, I granted Complainant’s Motion
to Amend Complaint. On the same date, Complainant filed its Amended Complaint.
On May 25, 2022, Respondent filed an unopposed motion
for extension of time to file a response to Complainant’s Motion for
Summary Judgment. On the same date, I issued an order granting
Respondent’s Motion and extending the deadlines set forth in the amended
briefing schedule.[99]
On
June 3, 2022, Respondent filed his Response to Complainant’s Motion for Summary
Judgment and Respondent’s Opening Brief Regarding Determination of Legal Issues.
On
June 9, 2022, Complainant filed its Response to Respondent’s Response to
Complainant’s Motion for Summary Judgment.
On
June 10, 2022, Respondent filed his Answer to the Amended Complaint.
On June 16, 2022,
Respondent filed his Sur-Reply to Complainant’s Motion for Summary
Judgment.
RESPONDENT IS A
“PERSONS RESPONSIBLE” WITHIN THE MEANING OF
9 C.F.R § 86.5(a)
Section
86.5(a) of the AHPA regulations (9 C.F.R. § 86.5(a)) provides that
“persons responsible for animals leaving a premises for interstate
movement must ensure that the animals are accompanied by an interstate
certificate of veterinary inspection (ICVI) or other
documents required by this part for the interstate movement of animals.”[100] The term
“persons responsible” is not defined in the AHPA or applicable
regulations.
Unless
otherwise defined, words will be interpreted as taking their ordinary,
contemporary, common meaning.[101] The ordinary,
common meaning of “persons responsible” is all persons responsible
for the horses leaving a premises for interstate movement. In the context of a
commercial transaction, such as in the present case, the plain, ordinary
meaning of “persons responsible” means the seller, the buyer, and
the transporter.
Respondent argues
that section 86.5(a) is unconstitutionally vague and does not give adequate
notice regarding who is responsible for obtaining the required certifications.[102] There is
nothing vague about the term “persons responsible”; in fact, it is
just the opposite of vague – it is all encompassing. By using the plural
of “person,” the plain meaning is to include all persons involved
in the process of the horses leaving a premises into interstate movement: the
seller, the buyer, and the transporter. This is especially true in the present
case where Respondent advertised the horse for sale on the Internet and was
aware that the buyers were from out of state. In addition, Respondent, as the
seller, had possession of the horses, was the person responsible for the horses
leaving his premises, and was the person in the best position to obtain the
required certificates prior to arrival of the transport to the buyer’s
location.
Respondent also argues
that persons of ordinary intelligence would not understand what the term “persons
responsible” means. I disagree. The meaning is plain and simple, and a person
of ordinary intelligence would understand that the seller is the reason
for the horses leaving the premises into interstate movement – without
the seller, there would be no movement. Here, the seller advertised the sale on
the Internet via Facebook.[103] The
seller knew the buyers were from out of state based upon the PayPal payment
receipts and that the majority (if not all) the transporters were from out of
state.[104] Under
the present facts a person of ordinary intelligence would understand that
Respondent, as the seller, is one of the persons responsible for the interstate
movement. Indeed, under Respondent’s argument, neither the buyer nor the
seller would be responsible for obtaining the certificates due to the great
confusion caused by language of the statue.[105]
Moreover, it
is well settled that an agency’s interpretation of the statute it is
charged with administering, and especially an agency’s interpretation of
its own regulation, is entitled to great deference unless the interpretation is
clearly erroneous or inconsistent with the language it interprets.[106] APHIS’s interpretation of the
meaning of “persons responsible” and interpretation of 9 C.F.R §
86.5(a) is not clearly erroneous or inconsistent with the language of C.F.R
part 86 and is entitled to controlling weight.[107]
Respondent asks, “Where
does the responsibility begin, and where does it end?”[108] The
answer is as simple as the meaning of words “persons responsible”:
responsibility begins when a seller advertises horses for sale. It continues when
the seller learns the buyer is from another state. It continues when the buyer
or buyer’s transporter arrives to take possession of the horses. Responsibility
ends when the seller obtains the necessary and required certificates or verifies
that the buyer has obtained the required certifications. There is no mystery, no
hidden meanings, and no attempts to snare unknowing sellers or buyers. The regulations
require all persons involved in the animals leaving the premises into interstate
movement to obtain required certificates prior to interstate movement.[109] A seller
who sells to an out-of-state buyer is a “persons responsible” for
interstate movement under 9 C.F.R. § 86.5(a) and as such is responsible
to obtain the required certificates.
Respondent also
argues that the lack of temporal restrictions in the regulation is fatal and
that, under the regulations, a seller who sold the horses “months or
years in the past” would be liable.[110]
Respondent is incorrect. The wording of the regulation is the “persons
responsible for animals leaving a premises for interstate movement.”[111]
Respondent is responsible because the horses left his premises and were transported
directly out of state. If the horses left Respondent’s premises and were transported
to another location in Colorado, stayed there for period of
time (weeks, months, or years), and then were transported out of state, Respondent
would not be a “persons responsible” because under those facts
Respondent would not be responsible for the animals leaving a premises for
interstate movement.
RESPONDENT
MOVED HORSES UNDER AHPA DEFINTION OF “MOVE.”
The Animal
Health Protection Act does not define “movement”; however, the regulations
define the term “move” as “[t]o carry, enter, import, mail,
ship, or transport; to aid, abet, cause, or induce carrying, entering,
importing, mailing, shipping, or transporting; to offer to carry, enter,
import, mail, ship, or transport; to receive in order to carry, enter, import,
mail, ship, or transport; or to allow any of these activities.”[112]
Respondent
argues that he did not move the horses because he was not involved in or
responsible for the physical transportation of the horses.[113]
However, Complainant has provided declarations from the buyers establishing
that Respondent advertised horses for sale on the Internet and sold the horses
to buyers from out of state.[114] The
horses were loaded onto transports and transported from Respondent’s
premises.[115] In at
least some of the cases, Respondent’s employees helped load the horses
onto the transports.[116]
Respondent has not produced any evidence rebutting any of the facts surrounding
the sale or transporting of the horses. Having found that Respondent is a
“persons responsible” under 9 C.F.R. § 86.5(a), I also find that
Respondent, as the seller of the horses,[117]
aided, abetted, caused, and induced the shipping or transporting of the horses interstate.
COMPLAINANT’S
MOTION FOR SUMMARY JUDGMENT IS DENIED.
Having
found Respondent a “persons responsible,” I agree with Respondent that
summary judgment is not appropriate.[118]
At the very least both parties are entitled to present evidence relating to civil
penalties, including Respondent’s ability to pay, the effect on his
ability to continue to do business, any history of prior violations, the degree
of culpability, and others factors the parties wish to argue may be appropriate
for the Court to consider.[119]
CONCLUSION
OF LAW
Respondent
is a “persons responsible” within 9 C.F.R § 86.5(a).
ORDER
1.
Complainant’s Motion for
Summary Judgment is denied.
2.
The parties will be contacted within
seven (7) business days to discuss further scheduling issues.
Copies
of this Summary and Order shall be served upon the parties and counsel by the
Hearing Clerk.
Done
at Washington, D.C.,
this
5th day of July 2022
Tierney
Carlos /S/ |
Tierney
M. Carlos |
Administrative
Law Judge |
Hearing
Clerk’s Office
U.S.
Department of Agriculture
South
Building, Room 1031
1400
Independence Avenue, SW
Washington,
DC 20250-9203
Tel: 202-720-4443
Fax: 1-844-325-6940
SM.OHA.HearingClerks@OHA.USDA.GOV
[1] Complaint at 1.
[2] As will be discussed infra, Respondent’s
name was subsequently changed to Fabrizius Livestock, a Colorado corporation. See
Amended Complaint (filed May 24, 2022).
[3] Unopposed Motion for Extension of Time to File
Witness & Exhibit List at 1.
[4] February 25, 2022 email from
Complainant’s counsel, Danielle Park, to OALJ Administrative Management
Specialist Marilyn “Nita” Kennedy.
[5] Summary of March 2, 2022
Telephone Conference & Order Setting Briefing Schedule at 1.
[6] Attached thereto was Complainant’s proposed
Amended Complaint.
[7] Motion for Leave at 2.
[8] See Summary of March 2, 2022
Telephone Conference & Order Setting Briefing Schedule at 1-2.
[9] In the Stipulations, Respondent admitted that he sold
the horses alleged in the Complaint and that they were moved interstate without
ICVI certificates. See Stipulations at 1.
[10] The filing is titled, “Respondent’s
Response to Complainant’s Motion to Amend Complaint.”
[11] See supra note 8 and accompanying text; Order
Granting Respondent’s Unopposed Motion for Extension of Time to File
Response to [Motion for] Summary Judgment at 2-3.
[12] 7 U.S.C. § 8301(5)(B); see Amazon Servs. LLC,
2022 WL 722724, at *12 (U.S.D.A. Feb. 2, 2022) (“The purpose of
the AHPA is to prevent, detect, control, and eradicate disease and pests of
animals.”).
[13] 7 U.S.C. § 8305.
[14] See 7 U.S.C. § 8301(1).
[15] Animal & Plant
Health Inspection Service, U.S. Dep’t of Agric., Equine Infectious Anemia (EIA)
(Mar. 1, 2022),
https://www.aphis.usda.gov/aphis/ourfocus/animalhealth/animal-disease-information/equine/eia/equine-infectious-anemia.
It is estimated that EIA testing alone cost the equine industry approximately
$37 million in 2015. U.S. Dep’t of Agric., Equine Infectious Anemia (EIA)
– Concept for Federal Regulations, https://www.aphis.usda.gov/animal_health/animal_diseases/eia/downloads/eia-proposedrule-conceptpaper.pdf
(last visited Sept. 30, 2022).
[16] See 9 C.F.R. §§ 86.1 – 86.8.
[17] The Federal Civil Penalties Inflation Adjustment Act
of 1990 (28 U.S.C. § 2461 note, Pub. L. No. 101-410), as amended by the
Debt Collection Improvement Act of 1996 (31 U.S.C. § 3701 note, section
31001 of Pub. L. No. 104-134, 110 Stat. 1321), requires the Secretary to adjust
for inflation the civil penalties that are available under the various statutes
that he enforces at least once every four years. The Secretary’s adjustments of the
civil penalties for violations of the AHPA are promulgated in 7 C.F.R. §
3.91(b)(2)(vi). In 2018, section
3.91(b)(2)(vi) was amended to increase the civil penalties for violations of
the AHPA as follows: “Civil penalty for any person . . . that violates
the Animal Health Protection Act . . . has a maximum of the greater of: $68,027
in the case of any individual, except that the civil penalty may not exceed $1,360
in the case of an initial violation of the AHPA by an individual moving
regulated articles not for monetary gain, $340,131 in the case of any
other person for each violation,
$569,468 for all violations adjudicated in a single proceeding if the violations
do not include a willful violation, and $1,138,937 for all violations adjudicated
in a single proceeding if the violations include a willful violation[.]” 7
C.F.R. § 3.91(b)(2)(vi) (2018). This increase applied to violations
occurring between March 14, 2018, and June 16, 2020. See 83 Fed. Reg. 11130 (Mar. 14,
2018).
[18] 7 U.S.C. § 8313(2) (emphasis added).
[19] See, e.g., Richardson, 66 Agric. Dec.
69, 87 (U.S.D.A. 2007); Simon, 2009 WL 330544, at *1 (U.S.D.A. Aug. 5,
2009) (Initial Decision). The Secretary is not required to consider the
respondent’s ability to pay when determining the amount of civil penalty
to be assessed for CTESA violations. Stanley, 2011 WL 5263577, at *4 (U.S.D.A. Oct. 4, 2011).
[20] 9 C.F.R. § 88.6(a).
[21] 9 C.F.R. § 88.6(b); see 7 C.F.R. §
3.91(b)(2)(xiv) (2018) (“Civil penalty for a violation of the Commercial
Transportation of Equine for Slaughter Act, 7 U.S.C. 1901 note, and its
implementing regulations in 9 CFR part 88, as set forth in 9 C.F.R. 88.6, has a
maximum of $5000. Each horse transported in violation of Part 88 is a separate
violation.”).
[22] See Opinion Finding Respondent a “Persons
Responsible” Under 9 C.F.R. §
86.5(a) & Order Denying Complainant’s Motion for Summary Judgment
(filed July 5, 2022), attached hereto as “Appendix 1.”
[23] In paragraph S of the Stipulations Respondent
admitted to moving a horse which later tested positive for EIA virus. I find that this was a typographical
error, since in all the other paragraphs in the Stipulation regarding selling
of horses Respondent admitted to selling the horses and not moving them. In
addition, the wording of the sentence, “Respondent moved (1) one horse to
an individual in Wyoming and the horse was moved for Colorado to Wyoming”
does not make sense. Finally,
Respondent’s position during the entire proceedings was that except for
the allegation in Complaint paragraph 5 where he was the buyer, in all other
transactions, he was the seller and not the mover.
[24] RX-13.
[25] CX-103.
[26] CX-103.
[27] 7 U.S.C. § 8313(b)(1)(A)(ii).
[28] Tr. at 88 (Dr. Beckett); see supra note 17.
[29] Tr. at 89, 340 (Dr. Beckett); 9 C.F.R. §
88.6(a).
[30] The factors set forth in section 10414(b)(2) (7
U.S.C. § 8313(b)(2)) apply only to the AHPA, not the CTESA.
[31] The USDA considered the movement of the horses from
Nebraska to Colorado as moving to an assembly point for equines in commercial
transport to Mexico for purposes of slaughter. (Joint X-1 at 6). However,
instead of transporting them for slaughter, Respondent co-mingled those fourteen
horses with other horses at his facility and offered them for sale to
individual buyers in the United States.
[32] Tr. at 130 (Dr. Beckett); Stipulations ¶ S.
[33] CX-103.
[34] Tr. at 95 (Dr. Beckett).
[35] Tr. at 95 (Dr. Beckett).
[36] Two of the horses died during transport or shortly
after being sold by Respondent (CX-23; CX-27). The horse that tested positive
for EIA was euthanized. Tr. at 258 (Fabrizius).
[37] CX-153 through CX-155.
[38] Tr. at 30 (Dr. Pelzel-McCluskey);
CX-153.
[39] Tr. at 30 (Dr. Pelzel-McCluskey);
CX-153.
[40] Tr. at 48 (Dr. Pelzel
McCluskey).
[41] Tr. at 40 (Dr. Pelzel-McCluskey);
CX-154.
[42] Tr. at 48 (Dr. Pelzel-McCluskey).
[43] Tr. at 48 (Dr. Pelzel-
McCluskey).
[44] Tr. at 49 (Dr. Pelzel-McCluskey).
[45] Tr. at 46 (Dr. Pelzel-McCluskey).
[46] CX-154; Tr. at 41 (Dr. Pelzel-McCluskey).
[47] CX-154.
[48] Tr. at 41 (Dr. Pelzel-McCluskey);
CX-154.
[49] Tr. at 48-49 (Dr. Pelzel-McCluskey).
[50] Tr. at 49 (Dr. Pelzel-McCluskey).
[51] Tr. at 48-49 (Dr. Pelzel-McCluskey):
CX-42.
[52] Tr. at 50-51 (Dr. Pelzel-McCluskey).
[53] Tr. at 64 (Dr. Pelzel-McCluskey).
[54] Tr. at 54 (Dr. Pelzel-McCluskey).
[55] Tr. at 53 (Dr. Pelzel-McCluskey).
[56] Tr. at 54 (Dr. Pelzel-McCluskey).
[57] Tr. at 54 (Dr. Pelzel-McCluskey).
[58] RX-13.
[59] Tr. at 251 (Fabrizius). Mr. Fabrizius testified he
started Fabrizius Livestock in 2016, but he had been in the horse business his
whole life.
[60] Tr. at 256-57 (Fabrizius); RX-13.
[61] RX-13; Tr. at 202 (McMillan), 261 (Fabrizius).
[62] RX-2; Tr. at 214-16 (McMillan). Not all of the horses sold by Respondent had blood drawn for
Coggins tests as some had Coggins tests that were still valid.
[63] The exact number of pending Coggins test results
could not be determined from the evidence submitted by the parties since some
of the affidavits submitted by the buyers did not include the exact date the
horses were picked up from Respondent’s facility. However, Respondent
stipulated that in all nineteen of the incidents alleged in the Complaint ICVIs
were not obtained prior to the interstate movement of the horses.
[64] Tr. at
300-01, 306-08, 322-26 (Dr. Sina Parsaye).
[65] Hennessey, 48 Agric. Dec. 320, 326 (U.S.D.A.
1989).
[66] Tr. at 82-83 (Dr. Beckett).
[67] Tr. at 88 (Dr. Beckett) (“That’s broken
down into $3,500 for CTESA violations, the 14 charges. And then AHPA charges of
$190,000. So it’s for the 20 instances of
that.”).
[68] Tr. at 88, 119 (Dr. Beckett).
[69] Tr. at 88-89 (Dr. Beckett).
[70] Tr. at 124 (Dr. Beckett).
[71] Tr. at 88 (Dr. Beckett).
[72] Tr. at 123 (Dr. Beckett); see RX-3.
[73] Tr. at 111-12 (Dr. Beckett).
[74] Tr. at 98, 342-43 (Dr. Beckett).
[75] For example, Mr. Sanders testified that he also
prepared Mr. Fabrizius’s personal income tax
and Mr. Fabrizius had income from other sources. Tr. at 177 (Sanders). Mr.
Fabrizius testified that he did not earn any income and any personal income tax
returns would show that he made no income. Tr. at 332 (Fabrizius).
[76] The corporate income tax returns were not complete
and lacked any of the schedules referenced in the returns. RX-9 through RX-11;
RX-4 through RX-7.
[77] RX-4 through RX-8; Tr. at 154-57 (Sanders); see Tr.
at 161-76 (Sanders).
[78] Tr. at 270-72 (Fabrizius).
[79] See Tr. at 90, 97-98 (Dr. Beckett).
[80] See 7 U.S.C. § 8313(b)(2).
[81] Tr. at 202, 261 (McMillan); RX-13.
[82] See RX-2; CX-6; CX-7; CX-9; CX-11; CX-13;
CX-14; CX-23; CX-27; CX-30; CX-34; CX-38; CX-45; CX-55; CX-76; CX-83; CX-86;
CX-90; CX-101; CX-106; CX-115; CX-123; CX-137.
[83] Tr. at 366-67 (Thomas D. Grant, counsel for
Respondent).
[84] Tr. at 202 (McMillan).
[85] Tr. at 219-22, 225-26, 249 (McMillan); see Tr.
at 259 (Fabrizius) (“[A]nd after this hogwash
happened, they tied me up there for 60 days at my house. . .
.”).
[86] Tr. at 365-66 (Grant).
[87] Tr. at 353-55, 366 (Grant).
[88] Complaint at 1.
[89] Motion at 1.
[90] February 25, 2022 email from Complainant’s
counsel, Danielle Park, to OALJ Administrative Management Specialist Marilyn
“Nita” Kennedy.
[91] Summary of March 2, 2022 Telephone Conference &
Order Setting Briefing Schedule at 1.
[92] See Order Granting Complainant’s
Unopposed Motion for Extension of Time at 2-3.
[93] Second Request at 2.
[94] Attached thereto was Complainant’s proposed
Amended Complaint.
[95] Motion for Leave at 2.
[96] See Summary of March 2, 2022 Telephone
Conference & Order Setting Briefing Schedule at 1-2.
[97] In the Stipulations, Respondent admitted that he sold
the horses alleged in the Complaint and that they were moved interstate without
ICVI certificates. See Stipulations at 1.
[98] The filing is titled, “Respondent’s
Response to Complainant’s Motion to Amend Complaint.”
[99] See supra note 9 and accompanying text; Order
Granting Respondent’s Unopposed Motion for Extension of Time to File
Response to [Motion for] Summary Judgment” at 2-3 (“2. By not later
than 4:30 p.m. Eastern on June 2, 2022, Respondent shall file with the
Hearing Clerk a response to Complainant’s Motion for Summary Judgment
and/or countermotion for determination of legal issue(s) and supporting brief; 3.
By not later than 4:30 p.m. Eastern on June 9, 2022, Complainant may
file with the Hearing Clerk a Response to Respondent’s response; 4. By
not later than 4:30 p.m. Eastern on June 16, 2022, Respondent may file
with the Hearing Clerk a sur-reply to Complainant’s reply.”).
[100] 9 C.F.R. § 86.5(a).
[101] See Perrin v. United States, 444 U.S.
37, 42 (1979) (citing Burns v. Acala, 420 U.S. 575, 580-81 (1975)
(“A fundamental canon of statutory construction is that, unless otherwise
defined, words will be interpreted as taking their ordinary, contemporary,
common meaning.”).
[102] Respondent’s Sur-Reply at 1-2, 4-5. See Bauck,
68 Agric. Dec. 853, 865 (U.S.D.A. 2009) (“A regulation is unconstitutionally
vague if the regulation is so unclear that ordinary people cannot understand
what conduct is prohibited or required or that it encourages arbitrary and
discriminatory enforcement.”).
[103] Perhaps it
would be different if the horses were advertised for sale in local newspaper,
or posted piece of paper in the local coffeeshop, or sold to a buyer who is a
neighbor. However, those are not the present facts.
[104] See CX-17. Respondent’s facility is in
Colorado. See Stipulations at 2.
[105] In his Answer to the Amended Complaint, Respondent
stated that the buyer of the horses were the persons responsible for obtaining
the required certificates. See Answer to Amended Complaint at 2-7.
[106] See Chem. Mfrs. Ass’n v. Nat. Resources Defense Council, 470
U.S. 116, 125-26 (1985); Immigr. & Naturalization Serv. v.
Stanisic, 395 U.S. 62, 72
(1969);
see also Chevron, U.S.A., Inc. v. Nat. Res.
Defense Council,
467 U.S. 837, 844 (1984); Bailey v. Fed. Intermediate Credit Bank, 788
F.2d 498, 499-500 (8th Cir. 1986), cert. denied, 479 U.S. 915 (1986).
[107] See Bowles v. Seminole Rock & Sand Co., 325 U.S.
410, 414 (1945); see also Stanisic, 395 U.S. at 72; Udall v. Tallman, 380 U.S. 1, 16-17 (1965).
[108] Respondent’s Response to Complainant’s
Motion for Summary Judgment and Respondent’s Opening Brief Regarding
Determination of Legal Issues at 7.
[109] 9 C.F.R. § 86.5(a).
[110] Respondent’s Sur-Reply to Complainant’s
Motion for Summary Judgment and Respondent’s Opening Brief Regarding
Determination of Legal Issues at 2.
[111] 9 C.F.R. § 86.5(a).
[112] See 9 C.F.R. § 86.1.
[113] See Respondent’s Response to MSJ at
8-11.
[114] See CX-23; CX-25; CX-27; CX-30; CX-34; CX-36; CX-38;
CX-50; CX-70; CX-83; CX-90.
[115] See CX-50; CX-70; CX-83; CX-106.
[116] See CX-27; CX-36; CX-50; CX-83.
[117] Respondent also acted as a buyer and transporter in
one of the transactions listed in the Complaint. See Complaint ¶ 5;
Stipulation of Facts ¶ E. Respondent appears to argue it is unclear whether
the buyer or the seller is responsible for obtaining the required certificates;
however, even as a buyer Respondent failed to obtain the required
certificates.
[118] See Respondent’s Response to MSJ at 14.
I also note that, to the best of my recollection, Complainant never mentioned to
the Court that it intended to file a motion for summary judgment during any of
the telephone conferences held in this case. Instead of briefing the single issue
agreed upon by the parties, Complainant submitted a fifty-seven-page motion for
summary judgment, of which only fourteen pages address the agreed-upon issue of
whether Respondent is a “persons responsible.”
[119] See 7 U.S.C. § 8313(b)(2).