David L. HAWKINS, Petitioner, v. AGRICULTURAL MARKETING SERVICE, DEPARTMENT OF AGRICULTURE, U.S.A., Respondent.
No. 92-5147.
United States Court of Appeals, Fifth Circuit.
Dec. 21, 1993.
1125
KING, Circuit Judge
We reject the government‘s contention that appellant‘s appellate attorney should be deemed the functional equivalent of appellant‘s trial attorney based upon appellate attorney‘s participation in the trial proceedings below. As earlier outlined, that participation was limited to pre-trial matters involving the appellant‘s competency to stand trial and to matters of sentencing. Appellant‘s current counsel was not present when the instruction in issue was given to the jury. Thus, appellant‘s appellate counsel, unlike appellant‘s trial counsel, cannot articulate here what prejudice has befallen upon appellant resulting from the missing portion of the record. Nor can the court expect appellate counsel “to be aware of any errors or improprieties which may have occurred during the portions of the proceedings not recorded.” United States v. Selva, 559 F.2d 1303, 1306 (5th Cir. 1977). Hence, we hold that on appeal the appellant is being represented by counsel other than his attorney at trial.
We also hold that the jury charge in issue is a “substantial and significant” portion of the trial record. A trial court‘s jury instructions designed to educate the jury on the applicable law of the case and to prescribe the contours of deliberations by a jury sworn to obey are certainly a “substantial and significant” portion of the trial record.
We hold here that the record reconstructed at the evidentiary hearing on remand was a substantially verbatim account of the lost jury charge. The court reporter testified that the trial court gave the jury the modified Allen charge which she identified at the evidentiary hearing. Neither the court reporter, the appellant‘s trial attorney, nor the jury foreman indicated that the trial judge may have deviated from the written modified Allen charge instruction, taken from the Pattern Jury Instructions (Criminal Cases), United States Fifth Circuit District Judges Association (1990).
Further, we find no error in the trial court‘s decision to give this charge. On many occasions, we have upheld the language of the charge. United States v. Gordon, 780 F.2d 1165, 1177 (5th Cir. 1986). And, we have stated that the trial court has broad discretion to give the Allen charge when the jury is deadlocked. Id.
Our holding here on the record reconstruction is not in conflict with the rule announced in Selva II. There, the missing trial record was trial counsel‘s closing arguments, an omission which was almost impossible to reconstruct in a substantially verbatim manner. A similar problem plagued the omissions in those cases upon which Selva II relied. Id. at 1306 n. 6.18 However, unlike the missing part of the record in Selva II and in those cases upon which Selva II relies, the record of the loss of a pattern jury instruction, faithfully read, is simply easier to reconstruct as a substantially verbatim account.
Accordingly, the judgment of the district court is AFFIRMED.
Raymond W. Fullerton, Asst. Gen. Counsel, Dept. of Agriculture, Washington, DC, for respondent.
Before REYNALDO G. GARZA, KING and DeMOSS, Circuit Judges.
KING, Circuit Judge:
David L. Hawkins seeks review, pursuant to
I. BACKGROUND
Fruit Jobbers was incorporated in Mississippi and licensed as a dealer of perishable agricultural commodities by the United States Department of Agriculture (USDA), pursuant to the Perishable Agricultural Commodities Act (PACA),
In August 1988, members of the Harrison family purchased approximately 78 percent of Fruit Jobbers’ stock. At that time, Hawkins held approximately 22 percent of the stock. Following their purchase of the stock, the Harrison family removed Hawkins as an officer and a member of the board of directors. They also offered to purchase Hawkins’ shares for the same price as they had purchased shares from other shareholders if Hawkins would sign a non-competition agreement, effective for five years and within a 150-mile radius of Jackson, Mississippi. Hawkins refused to sell his stock on those terms and resigned all positions and offices that he held with Fruit Jobbers on August 3, 1988. He received no salary or stock dividends from Fruit Jobbers after that date. He did, however, maintain his stock holdings. Hawkins subsequently went to work at D & D Produce, Hawkins’ own produce business licensed under the PACA, and at Capitol City Produce as a buyer.
On July 7, 1989, Hawkins filed suit in the Chancery Court of Hinds County, Mississippi, against Fruit Jobbers and the Harrison family to force them to provide documentation of Fruit Jobbers’ financial affairs. In the alternative, Hawkins petitioned the court to compel the Harrison family to buy his stock, or for the court to close the business and distribute the assets.
On February 1, 1990, before the chancery court litigation was completed, Fruit Jobbers filed a bankruptcy petition in federal district
The Director of the Fruit and Vegetable Division of the Agricultural Marketing Service (AMS) of the USDA filed an administrative complaint against Fruit Jobbers on August 31, 1990, alleging that during the period from July 1989 through February 1990, Fruit Jobbers purchased, received, and accepted—in interstate commerce—117 lots of perishable agricultural commodities but failed to make full payment promptly of the agreed purchase prices, which totaled $324,246.87. Thus, Fruit Jobbers was alleged to have violated
Shortly thereafter, the AMS notified Hawkins that because he owned approximately 22 percent of Fruit Jobbers’ stock when the corporation allegedly violated PACA provisions, he was determined to be “responsibly connected” with the corporation pursuant to
An administrative law judge issued a default order against Fruit Jobbers on January 11, 1991, finding that Fruit Jobbers had committed willful, flagrant, and repeated violations of
A hearing concerning Hawkins’ “responsible connection” to Fruit Jobbers was held in Jackson, Mississippi, on July 16, 1991, before the presiding officer. The presiding officer issued his decision on May 11, 1992, in which he found Hawkins “responsibly connected” with Fruit Jobbers when Fruit Jobbers committed PACA violations because Hawkins was a holder of more than ten percent of Fruit Jobbers’ stock during that time. Hawkins thus became subject to the PACA‘s employment restrictions,2 which mandate that Hawkins is barred from employment by any PACA licensee for a minimum period of one year. The administrator of the AMS affirmed the presiding officer‘s decision on November 9, 1992. Hawkins now seeks review of the administrator‘s final order.
II. STANDARD OF REVIEW
This court upholds an agency‘s decision unless we determine it to be arbitrary, capricious, or an abuse of discretion.
Legal issues, however, are “‘for the courts to resolve, although even in considering such issues the courts are to give some deference to the [agency‘s] informed judgment.‘” Faour, 985 F.2d at 219 (quoting Federal Trade Comm‘n, 476 U.S. at 454). Our review of an agency‘s construction of a statute must give effect to the unambiguously expressed intent of Congress. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).
III. DISCUSSION
Hawkins first asserts that the presiding officer erred in applying a per se standard in determining whether Hawkins was “responsibly connected” with Fruit Jobbers and not considering evidence which demonstrated that Hawkins was not in fact responsible for any of Fruit Jobbers’ PACA violations. Hawkins further asserts that the per se analysis used by the presiding officer violates Hawkins’ right to equal protection under the law, as guaranteed by the Fifth Amendment, and that any employment sanctions imposed upon him as a result of the presiding officer‘s decision violate his Fifth Amendment due process rights. He also contends that the presiding officer‘s decision reflecting Fruit Jobbers’ flagrant or repeated PACA violations is not supported in the record by substantial evidence. We address each of Hawkins’ contentions in turn.
A. “Responsibly Connected”
Hawkins first contends that the presiding officer erred in applying a per se analysis to
Hawkins argues, in essence, for an interpretation under which a person would be presumed “responsibly connected” if he fits into any of the three categories listed in
affiliated or connected with a commission merchant, dealer, or broker as (A) partner in a partnership, or (B) officer, director, or holder of more than 10 per centum of the outstanding stock of a corporation or association.
In Faour, 985 F.2d at 219-21, a panel of this court was presented with the precise issue Hawkins now raises. In determining whether
Faour, 985 F.2d at 220 (emphasis added). We thus disagreed with the District of Columbia Circuit‘s interpretation ofWe find the plain meaning of this statute unambiguous. If a person is an officer or director of, or holds over ten percent of the outstanding stock of, a corporation that has been found to have committed any flagrant or repeated violation of section 499b, that person is considered “responsibly connected” and subject to sanctions under PACA. The statute is explicit: If a person falls within one of the three enumerated categories, he is responsibly connected. The statute does not contemplate a defense that allows a person to show that even though he fits into one of the three categories, he never had enough actual
authority to be considered truly responsibly connected.
Hawkins contends, however, that his situation is different from that of the petitioner in Faour. Gary K. Faour was the manager for institutional sales, a director, and an officer of the Magnolia Fruit & Vegetable Company at the time it violated the PACA—from August through December of 1987. Id. at 218. Although at one time he had owned 27.27 percent of the company‘s stock, in 1986 he owned only 10.5 percent, which he had pledged as collateral for a loan for the company. Id. Whether Faour owned more than 10 percent of the stock at the time of the alleged violations was not a factor in this court‘s determination that Faour was “responsibly connected” because we found that Faour was a vice-president and director of the company when it violated the PACA. Id. at 221-22. Hawkins therefore argues that in Faour we did not apply the per se rule in a case involving only a minority stockholder and that Faour is thus distinguishable from the instant case.
To strengthen his position, Hawkins points out that he tried to sell his stock to the Harrison family but that they refused to buy it unless he would sign a non-competition agreement, effective for five years within a 150-mile radius of Jackson, Mississippi. He also notes that his stock was “valueless” because he was barred by the Harrison family, who controlled the corporation, from ascertaining the value of his stock. He further maintains that because he was unable to readily determine his stock‘s value, his stock did not represent a bona fide stake in the corporation but instead had been rendered useless. Additionally, he explains that his refusal to sell his stock for the price offered by the Harrison family was not unreasonable because the non-competition agreement that was part of the proposed sale would have essentially forced him to give up “his ability to enjoy a livelihood in a field in which he had decades of unblemished experience.”
We are unconvinced by Hawkins’ arguments. First, our decision in Faour primarily focused not on Faour‘s status as a corporate officer, but on the unambiguous language of
Second, the PACA was enacted in 1930 and significantly amended in 1956 and 1962. Any dealer, merchant, broker, or investor in perishable commodities must recognize that the PACA is, as it has been for years, a “tough law.” As Congress explained,
H.R.Rep. No. 1196, 84th Cong., 1st Sess. (1956), reprinted in 1956 U.S.C.C.A.N. 3699, 3701. Thus, any investor in a perishable commodities corporation should know at the beginning of his association with such a corporation that he is “buying into” a corporation which is strictly regulated by the federal government through the PACA. That Hawkins was not given the opportunity to sell his stock to the corporation on more favorable terms is unfortunate, but as a veteran of the perishable commodities business for more than thirty years, Hawkins was aware of the “toughness” of the PACA and the risk he took when he became a shareholder in Fruit Jobbers.[t]he [PACA] ... was enacted in 1930 for the purpose of providing a measure of control and regulation over a branch of industry which is engaged almost exclusively in interstate commerce, which is highly competitive, and in which the opportunities for sharp practices, irresponsible business conduct, and unfair methods are numerous. The law was designed primarily for the protection of producers of perishable agricultural products—most of whom must entrust their products to a buyer or commission merchant who may be thousands of miles away, and depend for their payment upon his business acumen and fair dealing—and for the protection of consumers who frequently have no more than the oral representation of the dealer that the product they buy is of the grade and quality they are paying for.
The law has fostered an admirable degree of dependability and fairness in this industry chiefly through the method of requiring the [licensing] of all those who carry on an interstate business in perishable agricultural commodities and denying this [license] to those whose business tactics disqualify them.
B. Equal Protection and Due Process
Hawkins first contends that because the District of Columbia Circuit has determined that
1. Equal Protection
The basis of Hawkins’ equal protection claim is that the presiding officer‘s and this court‘s rejection of the “rebuttable presumption” approach in interpreting
2. Due Process
a. Arbitrary Governmental Interference
Hawkins also argues that the application of the per se rule to
In Cleveland, the Supreme Court held that mandatory maternity leave provisions set forth by the Cleveland Board of Education violated pregnant teachers’ due process rights because they created “irrebuttable presumptions” that every teacher who was four months pregnant was physically incapable of continuing her duties. Id. at 643-48, 94 S.Ct. at 797-800. These provisions required a pregnant teacher to take maternity leave without pay, beginning five months before the expected birth of her child. Id. at 634, 94 S.Ct. at 793. The Court explained that a pregnant teacher‘s ability to continue teaching past a fixed pregnancy period was an individual matter and that the presumption embodied in the challenged provisions—which did foster administrative convenience—were not “universally true in fact” and that thus the provisions swept too broadly. Id. at 646-48, 94 S.Ct. at 799-800. After recognizing that freedom of personal choice in matters of marriage and family life had been long recognized as being one of the fundamental liberties protected by the Due Process Clause, id. at 639, 94 S.Ct. at 796, the Court concluded that “neither the necessity for continuity of instruction nor the [governmental] interest in keeping physically unfit teachers out of the classroom can justify the sweeping mandatory leave regulations that the ... School Board[] ha[s] adopted,” id. at 647-48, 94 S.Ct. at 799-800. The Court therefore invalidated the challenged provisions because “they employ irrebuttable presumptions that unduly penalize a female teacher for deciding to bear a child.” Id. at 648, 94 S.Ct. at 800.
We find Hawkins’ reliance on Cleveland and cases cited within Cleveland as misplaced for several reasons. First, Cleveland was the last of a line of cases in which the Supreme Court “ventured into ‘irrebuttable presumptions’ analysis, purportedly an aspect of procedural due process but in substance similar to very intensive scrutiny of legislative generalizations.” GERALD GUNTHER, CONSTITUTIONAL LAW 876 (12th ed. 1991). Shortly after its decision in Cleveland, the Court made it clear that a type of heightened scrutiny of a statute or regulation could not be triggered by merely asserting a claim that the challenged statute or regulation contained an “irrebuttable presumption.” See Weinberger v. Salfi, 422 U.S. 749, 777 (1975). In Salfi, which involved a challenge to a duration-of-relationship requirement for Social Security eligibility for surviving wives and stepchildren of deceased wage earners, the Court explained that
Salfi, 422 U.S. at 777, 95 S.Ct. at 2472 (emphasis added). The Court then distinguished Cleveland and other cases in the “irrebuttable presumption” line—e.g., Vlandis v. Kline, 412 U.S. 441, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973), in which a residency requirement for in-state tuition was being challenged and which arguably involved a student‘s right to engage in interstate travel, and Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971), in which the Court found the state‘s making a driver‘s liability for an auto accident an important factor for denying his driver‘s license incompatible with the application of the challenged statute, which required a driver to post bond to cover damages allegedly arising from an auto accident or face suspension of his driver‘s license, without an opportunity to rebut his alleged liability. Id. at 772, 95 S.Ct. at 2470. The Court saw this line of cases as either involving interests which had “constitutionally protected status,” id. at 771-72, 95 S.Ct. at 2469-70, or involving an only purported governmental interest in the statute or regulation at issue, id. at 772, 95 S.Ct. at 2470.the question ... is not whether a statutory provision precisely filters out those, and only those, who are in the factual position which generated the congressional concern reflected in the statute.... Nor is the question whether the provision filters out a substantial part of the class which caused congressional concern, or whether it filters out more members of the class than non-members. The question is whether Congress, its concern having been reasonably aroused by the possibility of an abuse which it legitimately desired to avoid, could rationally have concluded both that a particular limitation or qualification would protect against its occurrence, and that the expense and other difficulties of
individual determinations justified the inherent imprecision of a prophylactic rule.
Most commentators view the Salfi decision as definitively having repudiated the “irrebuttable presumption” analysis as a generally acceptable mode of analysis in a constitutional challenge to a statute or regulation. See, e.g., GUNTHER, at 877 (noting that the Salfi decision was a “death blow” to the “irrebuttable presumption” line of cases); LAURENCE H. TRIBE, CONSTITUTIONAL LAW § 16-34, at 1622-24 (2d ed. 1988) (discussing that with Salfi the Court severely limited the situations in which the irrebuttable presumption analysis might apply to those in which “intermediate or strict scrutiny was independently warranted either by the involvement of a sensitive classification or by the presence of an important liberty or benefit“); D. Michael Risinger, “Substance” and “Procedure” Revisited with Some Afterthoughts on the Constitutional Problems of “Irrebuttable Presumptions“, 30 UCLA L.REV. 189, 215 (1982) (explaining that the Salfi decision expressly returned the standard of review to “rational basis“). Thus, Hawkins’ promotion of an “irrebuttable presumption” analysis as the type of analysis necessary in the instant case is misguided.
Second, we emphasize that the Constitution does not guarantee an unrestricted privilege to engage in a particular profession or a privilege to conduct a business as one pleases. Nebbia v. People of State of New York, 291 U.S. 502, 527-28, 54 S.Ct. 505, 511-12, 78 L.Ed. 940 (1934). Moreover, the perishable commodities industry, as an instrument of interstate commerce, is certainly an industry which for more than fifty years has been subject to reasonable congressional regulation. Courts have thus reviewed the constitutionality of various sections of the PACA using a “rational basis” analysis.
For example, in Zwick v. Freeman, 373 F.2d 110 (2d Cir.), cert. denied, 389 U.S. 835, 88 S.Ct. 43, 19 L.Ed.2d 96 (1967), the court reviewed a petitioner‘s claim that the harsh employment restrictions embodied in
Likewise, the Third Circuit used a rational basis analysis in Birkenfield v. United States, 369 F.2d 491, 494-95 (3d Cir. 1966), to determine that the per se standard which Congress adopted in its 1962 amendment of
Id. at 494-95. The court then upheld the per se exclusionary standard of[t]he automatic exclusion of “responsibly connected” persons is not irrational or arbitrary under the circumstances. Surely, the relationships of director, officer or substantial shareholder form a sufficient nexus for the arbitrary conclusion of responsible connection. Moreover, the formation of such relationships with the sanctioned company is a voluntary act. The fact that an individual has not exercised “real” authority in the sanctioned company is not controlling: certainly the individual could have resigned as an officer and director [or] disposed of his stock. It was his free choice not to do so. Having made that choice, the appellant assumed the burdens imposed by the Act.
We therefore cannot say that the unambiguous language of
b. Scope of Hearing
Hawkins also maintains that his due process rights were violated because he was deprived of a “meaningful hearing” in which to rebut the presumption of fault which
C. Substantial Evidence
Hawkins finally contends that the presiding officer‘s decision reflecting Fruit Jobbers’ flagrant or repeated PACA violations is not supported in the record by substantial evidence. We disagree.
In making his determination, the presiding officer relied on an administrative law judge‘s default order finding Fruit Jobbers to have committed willful, repeated, and flagrant violations of the PACA by failing to make full payment promptly of $324,246.87 to 50 sellers for 117 lots of fruits and vegetables. See In re Fruit Jobbers, 50 Agric. Dec. 1100 (1991). Although served with a com-
IV. CONCLUSION
For the foregoing reasons, we DENY the petition for review and AFFIRM the administrator‘s order.
DeMOSS, Circuit Judge, specially concurring.
I concur in the reasoning and result of Judge King‘s well-crafted opinion. We have simply said that the law is what Congress says is the law. However, on rare occasions, in the words of Mr. Bumble in Charles Dickens’ Oliver Twist, “... the law is a[n] ass,” and this is one of those occasions. To say that a person is “responsibly connected” to an action of a corporation simply by reason of being a minority shareholder of that corporation, flies in the face of both logic and reality. I always thought it was hornbook law that a shareholder, even a majority shareholder, was not responsible for the debts or torts or criminal conduct of a corporation, simply by reason of being such shareholder. If the public policy behind PACA (as indicated by the quotation from the House Report in Judge King‘s opinion) is to require licensing for those who carry on a business in perishable agricultural commodities, and to deny such licenses “to those whose business tactics disqualify them,” should not the law focus on the perpetrators of the unacceptable business tactics? If not, the innocent investor/shareholder is branded with guilt purely on the basis of association, a circumstance which I thought was clearly not acceptable as a basis for fixing responsibility. Consequently, I write this special concurrence with the hope that somewhere in the Department of Agriculture there is an administrator of this Act with the courage to suggest to Congress that the definition of “responsibly connected” should be amended by deleting the words “holder of more than 10 percent of the outstanding stock of a corporation.”
Notes
[f]or any commission merchant, dealer, or broker to make, for a fraudulent purpose, any false or misleading statement in connection with any transaction involving any perishable agricultural commodity which is received in interstate or foreign commerce by such commission merchant, or bought or sold, or contracted to be bought, sold, or consigned, in such commerce by such dealer, or the purchase or sale of which in such commerce is negotiated by such broker; or to fail or refuse truly and correctly to account and make full payment promptly in respect of any transaction in any such commodity to the person with whom such transaction is had; or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction....
[N]o licensee shall employ any person, or any person who is or has been responsibly connected with any person— (1) whose license has been revoked or is currently suspended by order of the Secretary; (2) who has been found after notice and opportunity for hearing to have committed any flagrant or repeated violation of section 499b of this title
The Secretary may approve such employment at any time following nonpayment of a reparation award, or after one year following the revocation of finding of flagrant or repeated violation of section 499b of this title, if the licensee furnishes and maintains surety bond in form and amount satisfactory to the Secretary as assurance that such licensee‘s business will be conducted in accordance with this chapter.... The Secretary may approve employment without a surety bond after the expiration of two years from the effective date of the applicable disciplinary order.