This is a disciplinary proceeding under the Animal Welfare Act, as amended (7 U.S.C. s 2131 et seq.), and the regulations issued thereunder (9 C.F.R. s 1.1 et seq.). On January 23, 1992, Administrative Law Judge Paul Kane (ALJ) issued an Initial Decision and Order assessing a civil penalty of $10,000, and directing Respondents to cease and desist from violating the Act, regulations and standards, and, in particular, to cease and desist from engaging in any activity for which a license is required without being licensed as required.
On February 25, 1992, Complainant, seeking an Order disqualifying Respondents from being licensed for a period of 1 year, appealed to the Judicial Officer, to whom final administrative authority has been delegated to decide the Department's cases subject to 5 U.S.C. ss 556 and 557 ( 7 C.F.R. s2.35). [FN1] The case was referred to the Judicial Officer for decision on *210 April 23, 1992.
Based upon a careful consideration of the record, the Initial Decision and Order (with a few minor editorial changes) is adopted as the final decision, except that I have concluded that a 1 year disqualification Order can and should be imposed. Additional Conclusions by the Judicial Officer follow the ALJ's conclusions. The ALJ's note 5 and accompanying text, which express his view that there is no authority to issue a 1 year disqualification Order, are included herein, for convenience, but the Judicial Officer's contrary views are set forth in the Additional Conclusions.
ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION
This decision is promulgated pursuant to the Administrative Procedure Act, Pub. L. 89-554, September 6, 1966, 80 Stat. 384, as amended, Pub. L. 95- 251, March 27, 1978, 92 Stat. 183, [FN2] the Rules of Practice Governing Proceedings Under the Animal Welfare Act, 9 C.F.R. s 4.1 (1991) and the Rules of Practice of the Department of Agriculture Governing Formal Adjudicatory Administrative Proceedings, 7 C.F.R. ss 1.130-1.151 (1991). This is a disciplinary proceeding under the Animal Welfare Act of 1970, and amendments of 1976, Pub. L. 91-579, December 24, 1970, 84 Stat. 1560, renumbered and amended, Pub. L. 94 279, April 22, 1976, 90 Stat. 417, [FN3] hereinafter referred to as the Act, instituted by a complaint filed on January 3, 1991, by the Administrator of the Animal and Plant Health Inspection Service, United States Department of Agriculture.
**2 The complaint alleges that Jerome A. Johnson and Laura Johnson, hereinafter respondents, willfully violated the Act at 7 U.S.C.A. s 2134 and a regulation issued thereunder, 9 C.F.R. s 2.1. Specifically, the complaint alleges that between December 1, 1988, and May 16, 1990, respondents *211 operated as an unlicensed dealer in pet animals. This complaint advised the respondents of an opportunity to answer these allegations. The complaint further advised the respondents that the Department of Agriculture proposed an impairment to licensing, the imposition of civil penalties and a cease and desist order.
By letter filed February 20, 1991, which is taken as the answer to the complaint filed January 3, 1991, respondents entered affirmations as to certain allegations, denials as to others and further, failed to answer the remaining allegations.
On October 25, 1991, counsel to the Department of Agriculture, Sharlene A. Deskins, Esq., moved for the adoption of a decision and order pursuant to the Rules of Practice expressed at 7 C.F.R. s 1.139 (1991). Counsel's proposed order would disqualify respondents as prospective licensees pursuant to the Act for one year, require a civil penalty of $10,000 and impose a cease and desist order. Service of counsel's motion was attempted on respondents at 10260 225th Avenue, N.E., New London, Minnesota 56273, but was not perfected. Respondents did not reply or otherwise object, within the time designated by the rules, to the entry to the order requested by complaint counsel. Counsel's motion is granted to the extent indicated herein. Counsel's motion to permit the utilization of proposed exhibits to support the allegations of the complaint at paragraphs II D and F is denied and the order entered herein is not based in any aspect on those documents.
The Rules of Practice, 7 C.F.R. s 1.139 (1991), provide that respondents may admit to the material allegations of Department complaints, thereby waiving a hearing on the merits. This Rule also provides that a failure to answer shall obtain the same result. Respondents partially selected these alternatives by the letter filed February 28, 1991. [FN4] Respondents specifically denied the allegations expressed at paragraphs II D, F. Proof of the allegations at those paragraphs is unnecessary to the result reached herein. Accordingly, the following findings of fact, conclusions and order are entered:
Findings of Fact
1. Jerome A. Johnson and Laura Johnson, hereinafter referred to as *212 respondents, are individuals whose address is 10260 225th Avenue, N.E., New London, Minnesota 56273.
2. The respondents, at all times material herein, were operating as dealers as defined in the Act and the regulations.
3. On April 15, 1986, respondent Laura Johnson entered into a stipulation with APHIS and paid a civil penalty to resolve allegations that she had operated as a dealer as defined in the Act and regulations without being licensed.
4. Respondent Laura Johnson became licensed as a dealer on October 4, 1985, and was licensed until December 23, 1986, when she surrendered her license and stated that she was out of business.
**3 5. An application for a license under the Act and copies of the Act and the regulations and standards issued thereunder were sent to respondent Laura Johnson on October 21, 1988, pursuant to her request.
6. Respondent Laura Johnson acknowledged in writing on December 13, 1989, that she had been reminded again that she may not buy, broker, or wholesale dogs until she is licensed.
7. The respondents, at all times material herein, were operating as dealers as defined in the Act and the regulations, without having obtained a license, in willful violation of section 4 of the Act (7 U.S.C. s 2134) and section 2.1 of the regulations (9 C.F.R. s 2.1) (1991). Respondents purchased dogs in commerce for resale for use as pets and sold dogs in commerce for resale for use as pets. The purchase or sale of each animal constitutes a separate violation, as set forth below:
A. On or about January 9, 1989, respondents sold eight dogs to a retail pet store in West Palm Beach, Florida.
B. On or about December 1, 1988, respondents sold four dogs to a retail pet store in Corpus Christi, Texas.
C. On or about January 9, 1989, respondents sold seven dogs to a retail pet store in Corpus Christi, Texas.
D. On or about January 25, 1989, respondents sold eight dogs to a retail pet store in Corpus Christi, Texas.
E. On or about February 9, 1989, respondents sold five dogs to a retail pet store in Corpus Christi, Texas.
F. On or about September 21, 1989, respondents sold 10 dogs to a retail pet store in Fort Lauderdale, Florida.
G. On or about October 17, 1989, respondents sold 10 dogs to a retail pet store in Fort Lauderdale, Florida.
H. On or about November 8, 1989, respondents sold 10 dogs to a *213 retail pet store in Fort Lauderdale, Florida.
I. On or about December 7, 1989, respondents sold four dogs to a retail pet store in Fort Lauderdale, Florida.
J. On or about September 13, 1989, respondents sold 10 dogs to a retail pet store in Los Angeles, California.
K. On or about October 2, 1989, respondents sold eight dogs to a retail pet store in Los Angeles, California.
L. On or about October 11, 1989, respondents sold 30 dogs to a retail pet store in Stockton, California.
M. On or about October 16, 1989, respondents sold 28 dogs to a retail pet store in Stockton, California.
N. On or about November 20, 1989, respondents sold 29 dogs to a retail pet store in Stockton, California.
O. On or about November 28, 1989, respondents sold 24 dogs to a retail pet store in Stockton, California.
P. On or about January 8, 1990, respondents sold 34 dogs to a retail pet store in Stockton, California.
Q. On or about January 8, 1990, respondents sold seven dogs to a retail pet store in San Rafael, California.
R. On or about January 8, 1990, respondents sold 14 dogs to a retail pet store in Fort Lauderdale, Florida.
S. On or about February 6, 1990, respondents sold 26 dogs to a retail pet store in Stockton, California.
**4 T. On or about February 6, 1990, respondents sold four dogs to a retail pet store in San Rafael, California.
U. On or about February 6, 1990, respondents sold nine dogs to a retail pet store in Walnut Creek, California.
V. On or about March 6, 1990, respondents sold two dogs to a retail pet store in St. Louis Park, Minnesota.
W. On or about April 11, 1990, respondents sold two dogs to a retail pet store in St. Louis Park, Minnesota.
X. On or about May 16, 1990, respondents sold four dogs to a retail pet store in St. Louis Park, Minnesota.
Y. On or about February 25, 1990, respondents purchased two dogs from a breeder in Belgrade, Minnesota.
Z. On or about March 26, 1990, respondents purchased one dog from a breeder in Pipestone, Minnesota.
AA. On or about January 5, 1990, respondents purchased five dogs from a dealer in Lismore, Minnesota.
*214 BB. On or about February 6, 1990, respondents purchased 13 dogs from a dealer in Lismore, Minnesota.
CC. On or about February 27, 1990, respondents purchased nine dogs from a dealer in Doon, Iowa.
DD. On or about March 24, 1990, respondents purchased 14 dogs from a dealer in Tyler, Minnesota.
EE. On or about March 26, 1990, respondents purchased seven dogs from a dealer in Doon, Iowa.
Conclusions
By reason of the facts set forth in the Findings of Fact above, the respondents have willfully violated section 4 of the Act, (7 U.S.C.A. s 2134), and section 2.1 of the regulations issued pursuant to the Act (9 C.F.R. s 2.1 (1991)).
The Order which follows is authorized by the Act and warranted under the circumstances. [FN5] The sanctions are appropriate and necessary in order to achieve the remedial purposes of the Act and are consistent with sanctions imposed in previous cases. Mary Bradshaw, AWA 90-22, 50 Agric. Dec. 499, 509 (May 17, 1991); S.S. Farms Linn County, Inc., et al., AWA 89-03, 50 Agric. Dec. 476, 497 (Feb. 8, 1991), appeal docketed, No. 91-70169 (9th Cir. Mar. 8, 1991).
The sanction which is entered herein, a civil penalty of $10,000 and a cease and desist order, is partially [FN6] that which is requested by complaint counsel. The Act requires that prior to the imposition of this sanction,
The Secretary shall give due consideration to the appropriateness of the penalty with respect to the size of the business of the person involved, the gravity of the violation, the person's good faith, and the history of *215 previous violations. [FN7]
To these four criteria, the Secretary's Judicial Officer has added a fifth, [FN8] i.e., a requirement that consideration be given to respondents' ability to pay civil penalties. The Secretary has also determined that it is the responsibility of those who would ameliorate proposed sanctions to present evidence as permitted and required by the statute. [FN9]
It is noted that appeals have been received by the Department's Judicial Officer concerning the dollar amounts of civil penalties ordered in the enforcement of the Act, [FN10] and that suspensions of the payments of civil penalties, based on financial conditions of respondents, have been ordered. [FN11] It is also noted that the Department's policy of ordering the reduction by half, the amount of civil penalties requested by complaint counsel, in cases not requiring trial, [FN12] has not been applied to cases involving the Animal Welfare Act. [FN13]
ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER
**5 The authority of the Secretary to deny licensing to a dealer for a period of 1 year for violations of the Act is explained in In re S.S. Farms Linn County, Inc. (Decision as to James Joseph Hickey and Shannon Hansen), 50 Agric. Dec. 476, 493 96 (1991), appeal docketed, No. 91 70169 (9th Cir. Mar. 8, *216 1991). See also In re Bradshaw, 50 Agric. Dec. 499, 507 09 (1991). [FN14] Both of these cases were cited in Complainant's Brief to the ALJ. The appropriateness of that sanction in circumstances such as are involved here is also explained in those cases. Accordingly, the requested 1- year disqualification Order is being added to the sanction.
The ALJ notes that the Judicial Officer has "added . . . the requirement that consideration be given to respondents' ability to pay civil penalties," citing In re White, 49 Agric. Dec. 123, 152 (1990) ("Another of the criteria under the Act is the ability of a respondent to pay") (Initial Decision at 8). Although no issue has been raised as to this matter in this case, it should be noted that my holding in White as to consideration of ability to pay was an inadvertent error. Ability to pay is a relevant circumstance under a number of the civil penalty provisions administered by this Department, e.g., 15 U.S.C. s 1825(b)(1); see also 7 U.S.C. ss 193(b), 213(b), but since that statutory factor is not specified in the Animal Welfare Act, it will not be considered in determining future civil penalties under the Animal Welfare Act.
For the foregoing reasons, the following Order should be issued.
Order
1. Respondents, their agents and employees, successors and assigns, directly or through any corporate or other device, shall cease and desist from violating the Act and the regulations and standards issued thereunder, and in particular, shall cease and desist from engaging in any activity for which a license is required under the Act and regulations without being licensed as required.
2. Respondents are jointly and severally assessed a civil penalty of $10,000, which shall be paid by a certified check or money order, made payable to the Treasurer of the United States, and shall be sent, within 60 days after service of this Order on Respondents, to Sharlene A. Deskins, *217 Office of the General Counsel, United States Department of Agriculture, Room 2014-South Building, Washington, D.C. 20250 1400.
3. Respondents are disqualified for a period of 1 year from becoming licensed under the Act and regulations.
The provisions of this Order shall become effective on the day after service of this Order on Respondents.
FN1 The position of Judicial Officer was established pursuant to the Act of April 4, 1940, 7 U.S.C. ss 450c-450g, and Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219 (1953), reprinted in 5 U.S.C. app. at 1280 (1988). The Department's present Judicial Officer was appointed in January 1971, having been involved with the Department's regulatory programs since 1949 (including 3 years' trial litigation; 10 years' appellate litigation relating to appeals from the decisions of the prior Judicial Officer; and 8 years as administrator of the Packers and Stockyards Act regulatory program).
FN2 5 U.S.C.A. ss 554, 557 (West 1977 and Supp. 1991) [hereinafter cited as unofficially codified] [brackets in original].
FN3 7 U.S.C.A. ss 2131-2147, 2149, 2151-2155 (West 1988 and Supp. 1991) [hereinafter cited as unofficially codified] [brackets in original].
FN4 It is also noted this answer was filed more than 20 days subsequent to the receipt of the complaint.
FN5 The entry of orders based upon 7 C.F.R. s 1.139 (1991) continues to enjoy approbation. ALR Fresh Food Systems, Inc., PACA 90-531, 51 Agric. Dec. ____ (Jan. 16, 1992); Ted Balcom, et al., AWA 91-26, 51 Agric. Dec. ____ (Jan. 8, 1992); A.P. Holt, et al., HPA 91-77, 50 Agric. Dec. [1612] (Dec. 13, 1991) (Decision as to respondent A.P. Holt).
FN6 Counsel's motion does not cite any portion of the Act which might permit the prospective suspension of any license granted to respondents.
FN7 7 U.S.C.A. s 2149(b).
FN8 Gus White, et al., AWA 425, 49 Agric. Dec. 123, 152, 154 (Feb. 8, 1990).
FN9 Terry Lee Harrison, et al., AWA 90-35, 51 Agric. Dec. ____ (Jan. 9, 1992).
FN10 Mary Bradshaw, AWA 90-22, 50 Agric. Dec. 499, 509 (May 17, 1991).
FN11 Gus White, III, et al., AWA 425, 49 Agric. Dec. 123, 154 (Feb. 8, 1990).
FN12 Shulamis Kaplinsky, P.Q. 191, 47 Agric. Dec. 613, 637 (March 30, 1988).
FN13 Ricky Bobo, et al., A.Q. 89-48, 49 Agric. Dec. 849 (Oct. 31, 1990), at 852, reveals: "The Kaplinsky policy applies only to A.Q. and P.Q. cases. It does not apply to veterinary accreditation cases."
FN14 The Animal Welfare Act regulations, including the license-denial provisions in 9 C.F.R. s 2.11, which are referred to in S.S. Farms and Bradshaw, were amended in 1989. However, the amended regulations similarly provide (9 C.F.R. s 2.1(f) (1991)):
(f) The failure of any person to comply with any provision of the Act, or any of the provisions of the regulations or standards in this subchapter, shall constitute grounds for denial of a license; or for its suspension or revocation by the Secretary, as provided in the Act.