UNITED STATES DEPARTMENT OF AGRICULTURE (U.S.D.A.)
LEE ROACH AND ROACH LABORATORIES, INC.
51 Agric. Dec. 252 (1992)
Company which produces antiserum for medical diagnostic tests by injecting rabbits and other live animals with antigens and then extracting their blood is research facility within meaning of Act.
Decision and order issued by Victor W . Palmer, Chief Administrative Law Judge.
delivered the opinion of the court.
Opinion of the Court:
This is a proceeding under the Animal Welfare Act(U.S.C. ss 2131-2156) initiated by a complaint filed by the Administrator of the Animal and Plant Health Inspection Service (APHIS), United States Department of Agriculture. The complaint alleges that respondents Lee Roach and Roach Laboratories, Inc. (hereinafter"Roach"), violated the Act and the regulations issued under it. 9 C.F.R. ss 1.1-3.142.
Specifically, the complaint alleges t hat Roach operated as a dealer without being licensed, operated as a research facility without being registered, and refused to allow APHIS investigator s to inspect the records and facilities of Roach Laboratories. Roach timely filed an answer that denied the material allegations of the complaint and requested an oral hearing.
*253 I held a hearing in Atlanta, Georgia, on September 19 and 20, 1991, at which Roach was represented by Harold R. Russell and Robert Preston Brown, attorneys, Atlanta, Georgia. Complainant was represented by Sharlene A. Deskins, attorney, Office of the General Counsel, Department of Agriculture. Briefing was completed by the parties on January 3, 1992.
Upon consideration of the record evidence, the proposed findings and conclusions, and the briefs filed by the parties, I conclude that Lee Roach and Roach Laboratories violated the Act and regulations by acting as a dealer without being licensed and by operating as a research facility without being registered. I further conclude that an order should be issued requiring them to cease and desist from all activities requiring a license or registration until such appropriate license and registration are secured. The order shall also include a civil penalty of $5,000.
Any proposed finding or conclusion not incorporated below has been denied as irrelevant or not in accordance with the credible, relevant, and substantial evidence of record.
Statutory and Regulatory Provisions
7 U.S.C. s 2132(e) [FN1] [in part]
**2 The term "research facility" means any school(except an elementary or secondary school),institution, organization, or person that uses or intends to use li ve animals in research, tests, or experiments, and that (1) purchases or transports live animals in commerce, or (2) receives funds under a grant, award , loan, or contract from a department,agency, or instrumentality of the United States for the purpose of carrying out research, tests, or experiments.
7 U.S.C. s 2132(f)
The term "dealer" means any person who , in commerce, for compensation or profit, delivers for transportation, or transports, except as a carrier,buys, or sells, or negotiates the purchase o r sale of,(1) any dog or other animal whether alive or dead for research, teaching, exhibition, or use as a pet, or (2)any dog for hunting, security, or *254 breeding purposes,except that this term does not include-
(i) a retail pet store except such store which sells any animals to a research facility, an exhibitor,or a dealer; or
(ii) any person who does not sell, or negotiate the purchase or sale of any wild animal, dog, or cat, and who derives no more than $500 gross income from the sale of other animals during any calendar year;
9 C.F.R. s 1.1 [in part]
Dealer means any person who, in commerce, for compensation or profit, delivers for transportation, or transports, except as a carrier, buys, or sells, or negotiates the purchase or sale of: Any dog or other animal whether alive or dead (including unborn animals,organs, limbs, blood, serum, or other parts) for research, teaching, testing, experimentation, exhibition, or for use as a pet; or any dog for hunting, security, or breeding purposes.
7 U.S.C. s 2132(g) [FN2]
The term "animal" means any live or dead dog,cat, monkey (nonhuman primate mammal), guinea pig, hamster, rabbit, or such other warm-blooded animal, as the Secretary may determine is being used, or is intended for use, for research, testing, experimentation, or exhibition purposes, or as a pet;but such term excludes horses not used for research purposes and other farm animals, such as, but not limited to livestock or poultry, used or intended for use for improving animal nutrition, breeding,management, or production efficiency, or for improving the quality of food or fiber. With respect to a dog,the term means all dogs including those used for hunting, security, or breeding *255 purposes;
7 U.S.C. s 2133. Licensing of dealers and exhibitors [in part]
The Secretary shall issue licenses to dealers and exhibitors upon application therefore in such form and manner as he may prescribe and upon payment of such fee established pursuant to 2153 of this title:Provided, That no such license shall be issued until the dealer or exhibitor shall have demonstrated that his facilities comply with the standards promulgated by the Secretary pursuant to section 2143 of this title:
7 U.S.C. s 2134. Valid license for dealers and exhibitors required
**3 No dealer or exhibitor shall sell or offer to sell or transport or offer for transportation, in commerce, to any research facility or for exhibition or for use as a pet any animal, or buy, sell, offer to buy or sell, transport or offer for transportation, in commerce, to or from another dealer or exhibitor under this chapter any animal, unless and until such dealer or exhibitor shall have obtained a license from the Secretary and such license shall not have been suspended or revoked.
7 U.S.C. s 2136. Registration of research facilities, handlers, carriers and unlicensed exhibitors
Every research facility, every intermediate handler, every carrier, and every exhibitor not licensed under section 2133 of this title shall register with the Secretary in accordance with such rules and regulations as he may prescribe.
7 U.S.C. s 2149 (b). Civil penalties for violation of any section, etc.; separate offenses;notice and hearing; appeal ; considerations in assessing penalty; compromise of penalty; district court jurisdiction; failure to obey cease and desist order.
Any dealer, exhibitor, research facility,intermediate handler, carrier, or operator of an auction sale subject to section 2142 of this title,that violates any pro vision of this chapter, or any rule, regulation, or standard promulgated by the Secretary thereunder, may be assessed a *256 civil penalty by the Secretary o f not more than $2,500 for each such violation, and the Secretary may also make an order that such person shall cease and desist from continuing such violation. Each violation and each day during which a violation continues shall be a separate offense. No penalty shall be assessed or cease and desist order issued unless such person is given notice and opportunity for a hearing with respect to the alleged violation, and the order of the Secretary assessing a penalty and making a cease and desist order shall be final and conclusive unless the affected person files an appeal from the Secretary's order with the appropriate United States Court of Appeals. The Secretary shall give due consideration to the appropriateness of the penalty with respect to t he size of the business of the person involved, the gravity of the violation , the person's good faith, and the history of previous violations. Any such civil penalty may be compromised by the Secretary. Upon any failure to pay the penalty assessed by a final order under this section, the Secretary shall request the Attorney General to institute a civil action in a district court of the United States or other United States court for any district in which such person is found or resides or or transacts business, to collect the penalty, and such court shall have jurisdiction to hear and decide any such action. Any person who knowingly fails to obey a cease and desist order made by the Secretary under this section shall be subject to a civil penalty of $1,500for each offense, and each day during which such failure continues shall be deemed a separate offense.
7 U.S.C. s 2151. Rules and regulations
**4 The Secretary is authorized to promulgate such rules, regulations, and orders as he may deem necessary in order to effectuate the purposes of this chapter.
Findings of Fact
1. Respondent Lee Roach is an individual whose address is 4984 Donald Drive, Loganville, Georgia 30249.
2. Respondent Roach Laboratories is a Georgia corporation controlled by Lee Roach. Roach Laboratories' address is 4984 Donald Drive, Loganville, Georgia 30249. Roach Laboratories maintains an animal facility which is approximately ten miles from the 498 4Donald Drive address.
*257 3. Respondents produce antiserum from the blood of animals, including rabbits, goats, and sheep.
4. Antiserum produced by respondents is offered for sale and is sold in interstate commerce. The antiserum is sold, in part, for diagnostic testing and research pur poses. (Tr. 131, 221-234).
5. The production of antiserum involves the injection of an antigen into a live animal, followed by extraction of blood from the animal. The extracted blood is then tested to determine the level of antibodies. The testing is conducted in some instances on pools of blood combined from a number of animals and in some instances on blood drawn from a single animal.
6. Shelton's Bunny Barn sold 198 rabbits to respondents from March 27, 1990, to April 25, 1991. Shelton's Bunny Barn is a licensed dealer under the Act.
7. At no time has Roach Laboratories or Lee Roach registered with the Department of Agriculture as are search facility or been licensed by the Department as a dealer under the Act.
8. On June 7, 1990, Dr. Richard Overton and Dr.Hugh Hendricks, both A PHIS veterinarians, visited Mr.Roach at Roach Laboratories. They gave Mr. Roach a copy of the applicable regulations and an application for registration.
9. Dr. Hendricks again visited Mr. Roach at Roach Laboratories on August 21, 1990, and discussed the regulations and registration requirements with Mr.Roach. When advised by Mr. Roach that he should discuss these matters with Mr. Roach's attorney, Dr. Hendricks made no further request and simply left. Dr. Hendricks did not specifically request to inspect the animal facilities or records at Roach Laboratories.
1. Respondents Lee Roach and Roach Laboratories violated the Animal Welfare Act from approximately March 1990, until April 1991, by operating a regulated facility without being registered as a research facility and without being licensed as a dealer as required by 7 U.S.C. ss 2134 and 2136.
2. There is insufficient evidence to support the allegation that the respondents refused to allow inspection of their facility on August 21, 1991.
3. Respondents' proven violation s require the issuance of a cease and desist order and warrant the assessment of a civil penalty of $5,000 under the standards set forth in 7 U.S.C. s 2 149(b).
1. Registration of a Research Facility
Roach asserts that it is not a "research facility"as defined by the Act and the regulations. However,the Act defines "research facility" to be
**5 . . . any. . . person that uses . . . live animals in research, tests, or experiments, and that(1) purchases or transports live animals in commerce .. . .
Roach produces antiserum for medical diagnostic tests. The antiserum is produced by injecting rabbits and other live animals with antigens and then extracting their blood. Roach argues that the statutory definition looks to the testing of live animals whereas it tests animal products. In support of this proposed distinction, Roach stresses that its tests are made after the blood is extracted from the animals and that the blood is pooled before being tested.
Roach's arguments are based on a too-narrow reading of the statute. The Act applies to those who use animals in research, tests, or experiments. Research, tests, and experiments, therefore, need not be performed on live animals; it is enough that live animals; are being dedicated to such a process.
In the instant case, Roach used animals to produce antiserum for medical diagnostic testing of humans. The final step in a typical diagnostic test involves analyzing the interaction between one of Roach's products and a sample of human tissue or blood. Complainant has, like respondents , concentrated on activities at Roach Laboratories and emphasized theinjections, extractions, and tests that Roach admittedly performed on animals. These necessary preparatory procedures are, however, only one way in which "tests" are performed within the statutory definition. Another "test" occurs when the antiserum produced from animal blood is combined with human blood or tissue.
The stated purpose of the Act reinforces the conclusion th at Roach's reading of the definition of research facility is too cramped. In enacting the Animal Welfare Act, Congress specifically found, at 7 U.S.C. s 2131:
The Congress further finds that it is essential to regulate , as provided in this chapter, the transportation, purchase, sale, housing, care,handling, and treatment of animals by carriers or by persons or *259 organizations engaged in using them for research or experimental purposes or for exhibition purposes or holding them for sale as pets or for any such purpose.
In the face of this broad statement of purpose,Roach has shown no thing in the legislative history or the language of the Act to indicate that Congress intended to differentiate between using live animals for tests con ducted wholly within the animal and using them to obtain their blood to conduct tests. Similarly, there is no legislative intent expressed that would support exempting Roach Laboratories from registration as a research facility because it tests"pooled" blood extracted from animals rather than individual samples taken from the same animals.
Additionally, the Act's prohibition against the Secretary's interfering with the design, conduct, or performance of actual research or experimentation strongly suggests that exact methodology is to be left to the researcher and therefore has no bearing on the Act's jurisdictional requirements. 7 U.S.C. s2143(6)(A).
2. Licensing as a Dealer
**6 Roach argues that it does not come under the statutory definition of dealer and therefore does not require a dealer's license. Roach contends that even under the definition as expanded by 9 C.F.R. s 1.1, which includes the sale of blood and serum as a regulated activity, it cannot be said to be a dealer.
First, Roach again asserts that there is a legal distinction between testing blood from individual animals and testing blood pooled from a group of animals. As previously discussed, Roach has presented no analysis that supports such a deviation from the plain language of the Act.
Roach urges a second distinction; it produces antiserum, not serum. However, the record evidence shows that antiserum is merely serum that has reacted in the presence of an antigen to produce an antibody. Production of antiserum in a laboratory setting requires the introduction of an antigen by injection. Production of antiserum therefore involves a more invasive procedure than does the simple extraction of serum. Given these facts, there is no reason why the regulations should include those who deal in animal serum but not those who sell antiserum, antiserum being simply a specialized type of serum. Roach has provided no rationale which would support this proposed distinction.
*260 Roach next asserts that it did not purchase rabbits from another dealer in commerce. This is not so. Roach stipulated that it bought at least 198 rabbits from Shelton's Bunny Barn during the relevant time. The record indicates that Shelton's Bunny Barn is a licensed dealer under the Animal Welfare Act. Furthermore, 7 U.S.C. s 2131 states that "[t]he Congress finds that animals and activities which are regulated under this chapter are either in interstate or foreign commerce or substantially affect such commerce or the free flow thereof . . . ." In light of this record evidence, and in light of the fact that respondents do not challenge what appears to be a congressional invocation of the full scope of the commerce clause, the assertion that Roach did not purchase animals from another dealer in commerce cannot stand.
Roach further argues that the definition of dealer at 9 C.F.R. s 1.1 is an impermissible expansion of the Act's coverage because it includes the parenthetical"(including unborn animals, organs, limbs, blood, serum, or other parts)." Roach also challenges the regulatory insertion of "testing" into the list of purposes for which animals may not be bought or sold without a license. While Roach recognizes that 7 U.S.C. s 2151 authorizes the Secretary "to promulgate such rules, regulations, and orders as he may deem necessary in order to effectuate the purposes of this chapter," it nevertheless maintains that the cited additions to the statutory language are not supported by any of the stated purposes of the Act. Given the broad remedial purposes of the Act enunciated in 7 U.S.C. s 21 31, including the statement that "Congress further finds that it is essential to regulate . . .the transportation, purchase, sale, housing, care, handling, and treatment of animals by persons . . .using them for research or e perimental purposes . ..," a regulatory interpretation encompassing those animals used commercially for invasive, extractive purposes appears well-founded.
**7 Roach cites two cases where regulations were invalidated because they were found to be unauthorized by statute. Both cases are inapposite . In Bowen v. Georgetown Univ. Hosp., 488 U.S. 204 (1988), the United States Supreme Court overturned a regulation promulgated by the Secretary of Health and Human Services because it was retroactive. Retroactivity is not at issue here. In Forging Industry Assn. v.Secretary of Labor, 748 F.2d 210 (4 th Cir. 1984), the court invalidated an OSHA standard because it regulated activity outside the workplace when OSHA's powers were statutorily limited to activities within the workplace. In contrast, the regulation challenged in the instant case concerns activities well within the scope contemplated by Congress.
There is, however, pertinent case law to be applied. In *261 Haviland v. Butz, 543 F.2d 169 (D.C. Cir.1976), it was held that the Secretary's insertion of the words "animal acts" into the statutory definition of "exhibitor" was a valid exercise of delegated authority. In so holding, the court stated:
Haviland argues that since the Secretary thought it necessary to add "animal acts" to the definition of "exhibitor," he did not regard "animal acts" as synonymous with any of the descriptive words appearing in the statute. We cannot accept the premise of this argument. It seems far more likely that the Secretary was endeavoring to give notice that animal acts would be deemed within the statutory definition,thereby, to the extent possible, keeping operators of animal acts from being taken by surprise.
Id. at 174 n. 29. The court's reasoning applies with equal force in this case and is consistent with the principle that "courts are duty bound to follow .the construction of a statute by those charged with its execution ... unless there are compelling indications that it is wrong."' Id. at 174, quoting Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969).
Because of the close fit of the regulation to the purposes of the Act, the broad statutory delegation of authority to the Secretary, and the applicable caselaw, I find that Roach has not counter-balanced the"considerable weight . . . accorded to an executive department's construction of a statutory scheme it is entrusted to administer." Chevron U.S.A. v . Natural Res. Def. Council, 467 U.S. 837, 844 (1984)(footnoteomitted). Ac cordingly, I reject Roach's argument that its activities do not place it wit hin the definition of dealer.
Because Roach's activities require licensing under the plain language of the properly promulgated [FN3] regulations, it is unnecessary to address whether those activities would be covered by the statutory language without the regulations.
Consistent with the statute and the regulations,the order in this case shall require Mr. Roach and Roach Laboratories to cease and desist from regulated *262 activities until they have complied with the applicable research facility registration an d dealer licensing requirements.
3. Refusal to Permit Inspection of Facilities and Records
**8 In addition to the registration and licensing violations, complainant claims that Roach refused to allow APHIS personnel t o inspect its "animals, facilities and records."
The record evidence, however, does not support this charge. The only evidence offered by complainant is a notation on the inspection report by Dr. Hendricks that reads : "An attempted inspection of this facility was refused." (CX 12). However, Dr. Hendricks' testimony at the hearing nullified the notation:
Q: Okay. And did Mr. Roach -- what did Mr. Roach say when you asked if you could inspect the facilities?
A: I don't know that I asked to look at his animal facilities, but I discussed it with him. And he said if we had any other questions, that we need to see his attorney, an d that we -- he really didn't want to talk to us. If we needed to know anything to see his attorney. (Tr. 67-68).
Q: I notice that on your date of -- on the date of August 21st, or 27th, 1990 -- August 21st, 1990, you say that an attempted inspection of this facility was refused, and then you later say -- said that you do not know that I asked to inspect the animal facility. Do you remember that testimony?
A: Yes, sir.
Q: Is your testimony right, or is this --
A: It's right. Part of the inspection is to look at records, not necessarily animal inspection -- animal holding areas.
*263 A: But he would not allow me to look at records or whatever.
Q: Well, this says an attempted inspection of this facility was refused. You say nothing about records there; is that right?
A : That's right.
Q: And so you were talking about the inspection of the animal facility?
A: That's right.
Q: And you do not know whether you asked to inspect the animal facility?
A: Well, I don't think I specifically asked, but I didn't get that far. (Tr. 74-75).
Dr. Hendricks' testimony corroborated the cross examination testimony of respondent Lee Roach:
Q: Did you allow Dr. Hendricks to inspect Roach Laboratories on August 21st, 1990? Did you allow Dr. Hendricks -- did you provide documents to Dr. Hendrickson the activities of Roach Laboratories on August 21st,1990?
A: He didn't ask.
Q: Did you, on August 21st, 1990, refer all inquiries regarding Roach Laboratories to your attorney, Mr.Russell?
A: Yes. (Tr. 270).
The testimony of the inspector and the respondent agree on the relevant events of August 21st, 1990. Dr. Hendricks visited Roach Laboratories and discussed the requirements of the Animal Welfare Act with Mr. Roach. In the course of the conversation Mr. Roach referred all future inquiries to his attorney. At that point Dr. Hendricks left Roach Laboratories, never having made a direct request to inspect the animal facilities or records of Roach Laboratories. Given the consistency of the testimony of Lee Roach and Dr. Hendricks, I conclude that the notation on Dr. Hendricks' report was made in error. This is the conclusion best supported by the reliable, probative,and substantial evidence. 5 U.S.C. s 556(d).
**9 7 U.S.C. s 2149 (b) authorizes imposition of civil penalties and the issuance of cease and desist orders. In assessing penalties, the Secretary is required to give due consideration to the size of the business involved, the gravity of the violation, the person's good faith, and the history of previous violations.
Although the licensing and registration violations are serious ones, there are factors which weigh heavily against assessing the $20,000 penalty requested by complainant. There is no evidence that Roach mistreated any animal. There are no previous violations of the Act. Roach appears to have acted in the good-faith belief that its operations were not subject to regulation under the Act. Roach's good faith is demonstrated by its repeated attempts to obtain clarification from the Department. In addition,there is credible evidence that Mr. Roach was told by Department personnel in the past that an operation similar to Roach Laboratories was not subject to the Act. As to the size of the business, Roach's counsel stated that 1990 sales exceeded $900,000. Taking all of these factors into consideration, I have concluded that a civil penalty of $5,000 is appropriate.
1. Respondents Roach Laboratories, Inc. , and Lee Roach, their successors and assigns, agents and employees, directly or indirectly or through any corporate or other device, shall cease and desist from violating the Animal Welfare Act and the standards and regulations promulgated thereunder. In particular, respondents shall cease and desist from operating are search facility without being registered and from operating as a dealer without being licensed.
2. Respondents Lee Roach and Roach Laboratories are jointly and severally assessed a civil penalty of$5 ,000, payable to the Treasurer of the United States,and forwarded to Sharlene A. Deskins, attorney, United States Department of Agriculture, Office of the General Counsel, 12th Street and Indepen dence Avenue, S.W.,Washington, D.C. 20250-1400.
This Decision and Order shall become final thirty-five (35) days after service upon the parties, unless appealed to the Judicial Officer within thirty (30)days after service as provided in the Rules of Practice. 7 C.F.R. 1.130 et seq.
Copies hereof shall be served upon the parties.
This Decision and Order became final March 13,1992. - Editor]
FN1 The definition of "research facility" at 9 C.F.R. s1.1 is identical to this statutory definition.
FN2 The definition of "animal" at C.F.R. s 1.1 is essentially identical to that at 7 U.S.C. s 2132 (g), except that the definition in the C.F.R. contains an exemption for certain rats and mice. That exemption has been the subject of recent litigation. On January 8, 1992, Judge Charles R. Richey of the United States District Court for the District of Columbia filed a decision in Animal Legal Defense Fund v. Madigan, Civil No. 90-1872 (CRR), which held the exclusion of rats and mice from the regulation's definition of"animal" to be arbitrary and capricious.
FN3 Mr. Roach makes no challenge to the procedures followed in promulgating the contested regulation. He does challenge the regulatory validity of an internal Department memorandum, written by Dr. Joan Arnoldi, which was received in evidence. Since the violation found is based entirely upon the proscriptions contained in the regulations and the Act, this contention is irrelevant. Equally irrelevant is the charge that the Department's action was barred by a failure of the Office of the General Counsel to issue an advisory opinion to Mr. Roach. 7 C.F.R . s 2.31(n)(1), which describes the internal workings of the Department, does not provide any basis for a defense to an alleged civil violation of the Act.