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 29, 1991, Administrative Law Judge James W. Hunt (ALJ) issued an Initial Decision and Order assessing a civil penalty of $10,000, and directing respondent 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 holding a valid license. The court held that a suspension order may be issued where violation occurred while respondent was not licensed.
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 29, 1991, Administrative Law Judge James W. Hunt (ALJ) issued an Initial Decision and Order assessing a civil *500 penalty of $10,000, and directing respondent 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 holding a valid license.
On March 25, 1991, complainant, seeking a 2- month suspension order, 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. s 2.35). [FNa] Respondent filed a letter in the nature of a cross-appeal as to the $10,000 civil penalty on March 29, 1991. The case was referred to the Judicial Officer for decision on April 2, 1991.
Based upon a careful consideration of the record, the Initial Decision (with a few minor editorial changes) is adopted as the final decision, except for the omission of one paragraph stating that a suspension order cannot be imposed. I have concluded that a 2-month suspension order can and should be imposed. Additional conclusions by the Judicial Officer follow the ALJ's conclusions.
ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION
(AS MODIFIED)
**2 This disciplinary proceeding brought under the Animal Welfare Act, as amended (7 U.S.C. s 2131 et seq.), was initiated by a complaint filed on January 10, 1990, by the Administrator of the Animal and Plant Health Inspection Service. The complaint alleges that respondent wilfully violated the Act and the regulations issued thereunder by continuing to operate as a dealer after her license had expired.
A hearing was held in Springfield, Missouri, on November 15, 1990. Complainant was represented by Robert A. Ertman, Esq. Respondent did not appear at the hearing.
*501 Discussion
Respondent Mary Bradshaw was first licensed in 1977 under the Animal Welfare Act as a dealer to handle and sell animals. She operates a facility in Birch Tree, Missouri, called Bradshaw Kennel. In December 1987, her license was due for renewal. This could have been accomplished by respondent filing an annual report and paying the license fee. However, respondent failed to file in time. According to her affidavit, her failure to file was an "oversight" on her part. She said she had the paperwork completed but did not mail it because of an illness in the family. Respondent was notified by USDA on February 18, 1988, that her license had been terminated and advised that "[y]ou may no longer continue to operate as a dealer. Any further sales of animals in commerce will be an alleged violation of the Animal Welfare Act." (CX-3 and 4.) Marshall Smith, a USDA investigator, visited respondent's facility in February. He testified that the facility was in poor repair at the time and did not meet USDA's standards for the care of animals. Smith said that, had respondent applied in time, her license would have been renewed despite the condition of her facility and that formal proceedings would have had to be instituted to suspend her license because of the deficiencies in her facility. [FN1] He testified that respondent "may not have been aware of that" and speculated that the reason respondent did not apply to have her license renewed was because of family illness and because "she realized her facility was not up to standard, and she just ignored that until she felt like it would pass inspection. . . . I recall that she was concerned [about losing her license]. She was struggling. It seemed to me like she was severely short of help, and I think she was struggling as best she could under the circumstances." Smith told respondent that she could not operate without a license. He said her reaction was that her family made their living from the facility and that "she had to continue business." In 1987, her gross sales from the sale of animals was over $500,000. (Tr. 30, 36- 39; CX-1.) In June 1988, Dr. Michael Good, a USDA veterinarian, conducted a pre-license inspection of respondent's facility to determine if she qualified for a license. However, he found a number of deficiencies and did not approve a *502 license. Good returned in July and, although he found some improvements, they were not sufficient to pass inspection. Respondent told Good that she was aware that her facility was not as it should be but that "she didn't have enough help and was doing the best she could." Good advised her that she could not "legally" operate the facility without a license. (Tr. 46-47, 50.) Finally, in August, respondent's facility passed inspection. She was re-licensed on August 24, 1988.
**3 However, from February 1988, when her license was terminated, until August, when she was re- licensed, respondent continued to sell animals to retail outlets. Complainant's "Summary of Exhibits" shows that respondent bought and sold a substantial number of animals in commerce (at least 500 dogs and cats), even though she was specifically notified on three occasions that she could not engage in such activities without a license. The sales volume for these animals was in excess of $50,000. (CX612.) The complaint alleges that respondent's conduct in acting as a dealer while unlicensed constitutes a violation of section 4 of the Animal Welfare Act (7 U.S.C. s 2134) and section 2.1 of USDA regulations (9 C.F.R. s 2.1).
Section 2134 provides:
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.
Section 2.1 of the regulations provides:
(a)(1) Any person operating or desiring to operate as a dealer, exhibitor, or operator of an auction sale, except persons who are exempted from the licensing requirements under paragraph (a)(3) of this section, must have a valid license.
The record shows without question that respondent knowingly acted as an animal dealer by selling animals in commerce after her license had terminated. She therefore wilfully violated the foregoing provisions of the Animal Welfare Act and the regulations.
*503 Section 2149 of the Act provides for penalties for violations of the Act. Section 2149(a) provides that "any person licensed as a dealer" who violates the Act may have his or her license suspended. Section 2149(b) provides that "any dealer" who violates the Act may be assessed a penalty of not more than $2,500 for each violation. In assessing a penalty under 2149(b), consideration must be given to the size of the business, the gravity of the violation, a person's good faith, and any history of previous violations. Section 2149(b) also provides for the issuance of cease and desist orders.
Complainant recommends as a penalty that respondent's license be suspended for six months and that she be fined $10,000.
Complainant presented no Administration officials as witnesses to support its proposed sanctions. Marshall Smith, the USDA investigator, and Dr. Good, the USDA veterinarian, thought that a $10,000 fine and a 60-day suspension were appropriate. (Tr. 43, 55.) In the circumstances here, the reason for respondent's unlawful conduct was her failure to renew her license due to the distraction of a family illness, which, together with the lack of help, also apparently accounts for the deficiencies at this time in her facility. Personal misfortune may be a mitigating circumstance, but it is not an excuse for respondent's violation which was a serious offense made more serious because she was warned that the law prohibited her from selling animals in commerce without a license. As a dealer, respondent was required, as a condition of engaging in the business of animal dealer, to have a license and to provide proper care for her animals as the law requires regardless of distracting circumstances or lack of help. Nevertheless, respondent continued to sell animals in substantial numbers after she was no longer licensed.
**4 Considering all the circumstances, including the volume of respondent's sales, I find that complainant's proposed penalty of $10,000 is an appropriate sanction under section 2149(b) of the Act for respondent's violation of the Act by selling animals while unlicensed. Since each sale of animals constitutes a separate violation, respondent's fine could have been over $50,000. However, it is reduced because of the mitigating circumstances.
With respect to the proposed suspension, I would, if a suspension were to be imposed, accept the recommendations of Smith and Good, who are the ones most familiar with the circumstances of this case, that a two-month suspension would be appropriate.
. . . .
*504 Findings of Fact
1. Respondent Mary Bradshaw is an individual doing business as Bradshaw Kennel and whose address is Route 1, Box 113, Birch Tree, Missouri 65438.
2. Respondent, at all times material herein, was operating as a dealer as defined in the Act and the regulations.
3. Respondent held a license as a dealer under the Act and regulations until her license was terminated on February 17, 1988, because she did not submit an application for renewal. Respondent was re- licensed on August 24, 1988.
4. Between February 18, 1988, and August 23, 1988, while she did not hold a valid license under the Act, respondent sold at least 500 dogs and cats in commerce.
Conclusions of Law
Respondent's sale of at least 500 animals in commerce between February 18, 1988, and August 23, 1988, when she was not a licensed dealer under the Animal Welfare Act constitutes wilful 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). The sale of each animal constitutes a separate violation.
ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER
The ALJ held that a suspension order cannot be issued where the violation occurred while respondent was not licensed, stating (Initial Decision at 5):
However, I find that a suspension cannot be imposed in this case. The complaint alleges only that respondent violated the Act by acting as a dealer without a license. Unlike section 2149(b) which imposes penalties on dealers whether licensed or not, section 2149(a) provides for a suspension penalty for violations of the Act only by licensed dealers. Respondent's license, therefore, cannot be suspended because she did not violate the law while licensed.
I disagree with the ALJ's conclusion, in this respect. The Act provides (7 U.S.C. s 2149):
*505 s 2149. Violations by licensees
(a) Temporary license suspension; notice and hearing; revocation
If the Secretary has reason to believe that any person licensed as a dealer, exhibitor, or operator of an auction sale subject to section 2142 of this title, has violated or is violating any provision of this chapter, or any of the rules or regulations or standards promulgated by the Secretary hereunder, he may suspend such person's license temporarily, but not to exceed 21 days, and after notice and opportunity for hearing, may suspend for such additional period as he may specify, or revoke such license, if such violation is determined to have occurred.
**5 (b) Civil penalties for violation of any section, etc.; separate offenses; notice and hearing; appeal; considerations in assessing penalty; compromise of penalty; civil action by Attorney General for failure to pay 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 provision of this chapter, or any rule, regulation, or standard promulgated by the Secretary thereunder, may be assessed a civil penalty by the Secretary of 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 the size of the business of the person involved, the gravity of the violation, the person's good faith, and the history of previous violations.
*506 Under the Act, the Secretary may suspend or revoke the license of a person "licensed as a dealer" if the person "has violated or is violating" the Act, regulations, or standards. The Act does not say that the Secretary may suspend or revoke only where such person has violated while the license is in effect. The Act is silent as to whether the past violation must have occurred after the person became licensed, and I have found nothing in the legislative history of the Act to indicate that Congress intended to authorize the Secretary to assess a civil penalty against a person who commits a violation before becoming licensed, but that Congress did not intend for the Secretary to have the power to suspend or revoke where the violation occurred before the license was issued.
The ALJ relied on the fact that the civil penalty provisions are applicable to any "dealer, exhibitor, . . . or operator of an auction sale" (7 U.S.C. s 2149(b)), while the suspension provisions are applicable to "any person licensed as a dealer, exhibitor, or operator of an auction sale" (7 U.S.C. s 2149(a)). This distinction was required because, obviously, the Secretary can only suspend or revoke the license of a person under the Act if the person at some time becomes "licensed as a dealer, exhibitor, or operator of an auction sale. . . ." But that does not serve as any indication that Congress intended for suspension or revocation orders to be issued only if the violation occurred while the license was in effect.
**6 The legislative history of the Act shows that Congress had great concern as to the welfare of animals, and sought to protect the owners of animals from theft by preventing the sale or use of animals which have been stolen. See also the legislative purpose expressed in 7 U.S.C. s 2131. It would be inconsistent to enact broad and comprehensive remedial measures to protect animals and their owners, and, at the same time, cripple the Secretary's enforcement effort where a violation occurred before the license was issued. Accordingly, I read the Act as written, viz., that any person licensed as a dealer who has violated the Act (without any limitation on when that violation occurred) may have the license suspended or revoked for such violation.
I recognize that my views as to this issue are contrary to Midwest Farmers, Inc. v. United States, 64 F. Supp. 91, 99101 (D. Minn. 1945) (3judge ct.), in which the court held, under similar provisions of the Packers and Stockyards Act, that a suspension order cannot be issued against a person who was not registered when the violation occurred, but who registered before the order was issued. That holding is not followed by this Department. The Packers and Stockyards Administration registers persons believed to have violated the *507 Act before the registration becomes effective, and the agency then institutes an action to suspend the registration.
In addition to the authority in 7 U.S.C. s 2149(a), discussed above, the suspension order issued here may be based on the authority granted by s 21 of the Act "to promulgate such rules, regulations, and orders as he may deem necessary in order to effectuate the purposes of this chapter" (7 U.S.C. s 2151 (emphasis added)). The power to require and issue licenses under the Animal Welfare Act includes power to deny a license, to suspend or revoke a license, to disqualify a person from becoming licensed, and to withdraw a license.
Section 21 (7 U.S.C. s 2151) authorizes an order disqualifying a person from becoming licensed on account of violations committed while unlicensed. In re S.S Farms Linn County, Inc. (Decision as to James Joseph Hickey and Shannon Hansen, 50 Agric. Dec. 476, slip op. at 25-28 (Feb. 8, 1991), appeal docketed, No. 9170169 (9th Cir. Mar. 8, 1991) (hereafter cited as Hickey II). This holding was based on a regulation issued under s 21 of the Act (9 C.F.R. s 2.11 (1975)). However, the choice between rulemaking and adjudication rests in the discretion of the agency. NLRB v. Bell Aerospace Div. of Textron, Inc., 416 U.S. 267 (1974); SEC v. Chenery Corp., 332 U.S. 194, 199- 203 (1947); In re Corona Livestock Auction, Inc., 36 Agric. Dec. 1285, 1312 (1977), rev'd on other grounds, 607 F.2d 811 (9th Cir. 1979). "To make the administrative process effective, an agency must have the discretion to proceed either by general rule or by ad hoc litigation" (Trans-Pacific Freight Conference v. FMC, 650 F.2d 1235, 1244 (D.C. Cir. 1980)).
Similarly, s 21 of the Act (7 U.S.C. s 2151) authorizes an order suspending or withdrawing a license which has been issued because of violations which occurred prior to the issuance of the license. The contrary holding of the ALJ would seriously damage the ability of the agency to effectuate the purposes of the Animal Welfare Act. If a license were issued to a person later discovered to have committed serious violations of the Act and regulations (such as those charged in Hickey II), the holding would bar APHIS from taking any suspension or revocation action, even though the person was thoroughly unfit to hold a license.
**7 Flexibility is also important in cases such as this. APHIS could have denied the respondent's application for a license because she had violated the Act and regulations by operating as a dealer without being licensed. Under the circumstances, it was reasonable for the agency to conclude that such a denial would not be likely to result in the respondent's compliance, but, rather, would result in a premature and unnecessary escalation to judicial proceedings. The decision to issue a license to the respondent and to let the *508 administrative disciplinary proceeding take its course was reasonable and appropriate. The suspension of the respondent's license is authorized under s 21 as an order necessary to effectuate the purposes of the Act.
The ALJ imposed a civil penalty of $10,000 and stated (Initial Decision at 5):
With respect to the proposed suspension, I would, if a suspension were to be imposed, accept the recommendations of [the APHIS investigator and veterinarian], who are the ones most familiar with the circumstances of this case, that a two month suspension would be appropriate.
The complainant had sought a suspension of 6 months, and continuing thereafter until she demonstrates to APHIS that she is in full compliance with the Act, the regulations and standards issued thereunder, and the order issued in this case, and a supplemental order is issued terminating the suspension.
The sanction in this case should be "determined by examining the nature of the violations in relation to the remedial purposes of the [Act], along with all relevant circumstances, always giving appropriate weight to the recommendations of the administrative officials charged with the responsibility for achieving the congressional purpose." Hickey II, supra, slip op. at 29. Although the complainant did not present testimony regarding the ultimate sanctions which should be imposed (Initial Decision at 4), such testimony is not required. The complainant did present evidence that the alleged violations were serious and the ALJ found that they were serious (Initial Decision at 4). The views of the APHIS inspector and the veterinarian as to the precise sanctions which would be appropriate were elicited by questions of the ALJ, over the objections of complainant (Tr. 42). Although they were acquainted with the circumstances of the respondent, they are not "the administrative officials charged with the responsibility for achieving the congressional purpose." Undue reliance upon the individual views of field personnel in such matters hinders the important goal of uniformity regarding sanctions. More importantly, it hinders the crafting of sanctions which will dissuade not only the respondent but others from committing the same or similar violations. The individual views of APHIS personnel regarding appropriate sanctions should never outweigh the recommendations of the responsible agency officials, even when the agency's recommendations are presented through briefs rather than through testimony.
**8 *509 Notwithstanding the above, the complainant reconsidered the sanction requested in this case, and now recommends that respondent's license be suspended for 2 months, in addition to the civil penalty of $10,000. The imposition of these sanctions is appropriate in the circumstances of this case and gives appropriate weight to the recommendations of the responsible administrative officials, and is consistent with the views of the ALJ. See Hickey II, slip op. at 29.
The ALJ did not address the appropriateness of a continuing suspension, since no suspension was imposed. It is usually appropriate for a suspension to continue until the respondent demonstrates compliance with the Act, the regulations and standards issued thereunder, and the order issued in the case, and until a supplemental order is issued terminating the suspension. A continuing suspension is particularly appropriate in this case because the respondent was unable to regain her license because she was unable to bring her facility into compliance for a considerable period of time (Initial Decision at 23). Such a provision is a reasonable and appropriate precaution against possible lapses in maintenance during the fixed period of suspension.
To conclude, it should be noted that it is not a pleasant task to impose a sanction against an individual, such as respondent Mary Bradshaw, who, the record shows, is faced with grave difficulties, including a seriously ill husband and grandchild. However, Congress has enacted the Animal Welfare Act to protect the welfare of animals. The licensing requirements of the Act are at the center of the remedial legislation. Respondent's violation, continuing to operate without a license, with full knowledge of the licensing requirements, strikes at the heart of the regulatory program.
Respondent's letter, in the nature of an appeal as to the amount of the civil penalty, states that she is unable to pay a $10,000 civil penalty. However, this Act, unlike the Packers and Stockyards Act (see 7 U.S.C. s 213(b)), does not require the Secretary to consider "the effect of the penalty on the person's ability to continue in business." Under this Act, the Secretary shall consider the size of the business, the gravity of the violation, the person's good faith, and the history of previous violations. The record here shows that respondent is a large dealer, that operating without a license strikes at the heart of the regulatory program, that respondent intentionally operated without a license knowing of the statutory requirements, that respondent was told that she could not legally operate without a license, and that respondent's facilities were found on a number of occasions not to meet the requirements of the Act. Considering the relevant circumstances under this Act, the $10,000 civil penalty is entirely appropriate.
*510 For the foregoing reasons, the following Order should be issued.
Order
1. Respondent, her 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 holding a license which is not suspended or revoked.
**9 2. Respondent is 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 respondent, to Robert A. Ertman, Office of the General Counsel, United States Department of Agriculture, Room 2014, South Building, Washington, D.C. 202501400.
3. Respondent's license is suspended for a period of 2 months, and continuing thereafter until she demonstrates to the Animal and Plant Health Inspection Service that she is in full compliance with the Act and the regulations and standards issued thereunder, and this Order. When respondent demonstrates to the Animal and Plant Health Inspection Service that she has satisfied this condition, a supplemental order will be issued in this proceeding, upon the motion of the Animal and Plant Health Inspection Service, terminating the suspension.
The suspension provisions shall become effective on the 60th day after service of this Order upon respondent. The cease and desist provisions shall become effective on the day after service of this Order on respondent.
FNa 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).
FN1 Smith said that any deficiency is technically a violation. The complaint, however, does not allege that any of the deficiencies in respondent's facility when licensed or unlicensed were violations. In the past, respondent had always corrected any problems at her facility found by investigators. Her license had never been suspended because of deficiencies. (Tr. 37.)