Holiday Food Service, Inc., a Corporation and Nat Rocker, an Individual v. Department of Agriculture

820 F.2d 1103 HOLIDAY FOOD SERVICE, INC., a Corporation; and Nat Rocker, an Individual, Petitioners, v. DEPARTMENT OF AGRICULTURE, Respondent. No. 86-7332. United States Court of Appeals, Ninth Circuit. Argued and Submitted Feb. 6, 1987. Decided June 29, 1987. Harry G. Melkonian, Los Angeles, Cal., for petitioners. Raymond Fullerton, Washington, D.C., for respondent. Appeal from a Decision of the United States Department of Agriculture. Before KENNEDY, SKOPIL and KOZINSKI, Circuit Judges. KENNEDY, Circuit Judge: 1 Petitioners Nat Rocker and Holiday Food Service (HFS) seek review of an order of the Department of Agriculture finding violations of the Packers and Stockyards Act, 7 U.S.C. Secs. 181-229 (the Act), and assessing a $50,000 civil penalty. 2 Until its collapse, HFS sold meat and poultry to restaurants and hotels in Hawaii. Nat Rocker was an officer, director, and fifty percent shareholder of the company, as well as the sole owner of Holiday Meat and Provision, a separate meat packing company doing business in California. At the relevant times, both HFS and Rocker were packers as defined and regulated by the Act. 7 U.S.C. Sec. 191 . 3 The Department of Agriculture charged…

Petitioners Nat Rocker and Holiday Food Service (HFS) seek review of an order of the Department of Agriculture finding violations of the Packers and Stockyards Act, 7 U.S.C. §§ 181-229 (the Act), and assessing a $50,000 civil penalty.

Until its collapse, HFS sold meat and poultry to restaurants and hotels in Hawaii. Nat Rocker was an officer, director, and fifty percent shareholder of the company, as well as the sole owner of Holiday Meat and Provision, a separate meat packing company doing business in California. At the relevant times, both HFS *1105 and Rocker were packers as defined and regulated by the Act. 7 U.S.C. § 191 .

The Department of Agriculture charged Rocker and HFS with violations of section 202 of the Act, 7 U.S.C. § 192 . The Department charged them with paying kickbacks, a deceptive practice prohibited by the Act. See Nat’l Beef Packing Co. v. Secretary of Agric., 605 F.2d 1167 (10th Cir.1979). Rocker and HFS denied the charges, and administrative proceedings ensued.

The administrative law judge found violations of section 202, entered a cease and desist order, and assessed a $25,000 penalty. Unsatisfied, the Department appealed to its judicial officer seeking…

dissenting.

I respectfully dissent from the portion of the opinion reversing the penalty imposed. The Judicial Officer adequately considered the effect of the penalty. Holiday Food was out of business; thus, the penalty could have no impact on it. The Officer deemed the effect on Nat Rocker’s ability to continue in a totally separate business irrelevant. I agree and would affirm on that basis alone.

Moreover, the Judicial Officer did determine that the penalty would not preclude Nat Rocker from continuing in business as a packer. His decision contains an explicit finding that Rocker’s other business, Holiday Meat, “is a successful enterprise, with a current annual volume of business of 18 million dollars.” J.O. Decision at 19. The Judicial Officer concluded from this evidence that the penalty “will not adversely affect respondent Rocker’s ability to remain in business.” Id. To further ameliorate any adverse impact, his order allows Rocker to spread payment of the penalty out over a four year period. The Judicial Officer’s determination that a $12,500 annual payment will not bankrupt an $18 million a year business seems perfectly reasonable to me. I certainly cannot hold, as the…