62 Agric. Dec. 302

§ 46.4 Application for license.

(f) If the Director has reason to believe that the application contains inaccurate information, he may afford the applicant an opportunity to submit a corrected application or verify or explain information contained in the application. If the applicant submits a corrected application, the original application shall be considered withdrawn. If the applicant, in response to the Director's request, submits additional or corrected information for consideration in connection with his original application, the original application plus such information shall be considered as constituting a new application.

7 C.F.R. § 46.4(f).

Specifically, the Chief ALJ tentatively found Respondent's October 29, 2002, submission, together with Respondent's original PACA license application of October 10, 2002, constitutes a new and complete application, as provided in section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § 46.4(f)).10

Section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § 46.4(f)) applies to circumstances in which the Director has reason to believe a PACA license application contains inaccurate information. Based on the limited record before me, I do not find that the Director had reason to believe Respondent's October 10, 2002, PACA license application contained inaccurate information. Therefore, section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § 46.4(f)) is not applicable to this proceeding, and Respondent's October 10, 2002, PACA license application plus the information Respondent provided on October 29, 2002, cannot "be considered as constituting a new application" filed on October 29, 2002, in accordance with section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § 46.4(f)).11

10See Certification of Question to the Judicial Officer at 2.

"Complainant contends Respondent's PACA license "application was incomplete and inaccurate in that it did not contain the required information relative to previous bankruptcy filings by one of the principals" and section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § 46.4(f)) is applicable to this proceeding (Complainant's Brief at 3). I reject Complainant's contention that Respondent's PACA license application was "inaccurate" because the PACA license application "did not contain the required information relative to previous bankruptcy filings by one of the principals" and that section 46.4(f) of the regulations issued under the PACA (7 C.F.R. § (continued...)

Instead, the record indicates John A. Koller, an employee of the PACA Branch, Agricultural Marketing Service, United States Department of Agriculture, returned Respondent's October 10, 2002, PACA license application to Respondent because it was incomplete.12 On October 18, 2002, John A. Koller returned Respondent's incomplete application to Respondent's counsel requesting that Respondent provide the bankruptcy petition, schedules, disclosure statements, and other documents relevant to Respondent's bankruptcy petition, as required by Respondent's affirmative response to question 9 on the PACA license application, and the information identified in David N. Studer's September 26, 2002, letter.13 I conclude Mr. Koller returned Respondent's PACA license application pursuant to section 46.4(e) of the Regulations (7 C.F.R. § 46.4(e)), which provides, if a PACA license application is incomplete, it may be returned to the applicant with a request that the applicant complete the application.

On October 29, 2002, Respondent submitted the additional information requested in John A. Koller's October 18, 2002, letter. 14 However, Respondent failed to resubmit the PACA license application form with his October 29, 2002, submission. Instead, the United States Department of Agriculture did not receive Respondent's resubmitted PACA license application form until

(...continued)

46.4(f)) is applicable to this proceeding. An inaccurate application is an application that contains erroneous information. See Huntington Securities Corp. v. Busey, 112 F.2d 368, 370 (6th Cir. 1940) (stating in its ordinary use accurately means precisely, exactly, correctly, without error or defect); Globe Indemnity Co. v. Cohen, 106 F.2d 687, 690 (3d Cir. 1939) (stating the word accuracy signifies merely the state or quality of being accurate, freedom from mistake or error), cert. denied, 309 U.S. 660 (1940); Cedar Rapids Engineering Co. v. United States, 86 F. Supp. 577, 582 (N.D. Iowa 1949) (stating in its ordinary use accurately means precisely, exactly, correctly, without error or defect); Marshall v. City of Cambridge, 38 N.E.2d 59 (Mass. 1941) (distinguishing between an omission and an inaccuracy). Based on the limited record before me, I find Respondent's October 10, 2002, and October 29, 2002, PACA license applications were incomplete, not inaccurate.

12See Reply to Matter Concerning Date of Respondent's Application for PACA License (Attach. 4 and Attach. 6 ¶ 3).

13See Reply to Matter Concerning Date of Respondent's Application for PACA License (Attach. 4).

14See Reply to Matter Concerning Date of Respondent's Application for PACA License (Attach. 5).

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November 5, 2002.15 I conclude Respondent did not file a complete PACA license application until November 5, 2002, when the United States Department of Agriculture had in its possession: (1) Respondent's completed PACA license application form; (2) the bankruptcy petition, schedules, disclosure statements, and other documents relevant to Respondent's bankruptcy petition, as required by Respondent's affirmative response to question 9 on the PACA license application; and (3) the information identified in David N. Studer's September 26, 2002, letter.

In re: FRESH VALLEY PRODUCE, INC.

PACA-APP Docket No. 01-0001.

Decision and Order.

Filed March 20, 2003.

PACA-APP - Actively involved - Failure to pay reparation award - Responsibly connected - Agency, scope of authority - Evidence, determination by AMS, admissible.

The Judicial Officer (JO) affirmed Judge Baker's (ALJ) decision that Fresh Valley Produce, Inc. (Petitioner) was responsibly connected with Fresh Valley Food Service, LLC when Fresh Valley Food Service, LLC failed to pay a reparation award in violation of the PACA. The JO found Petitioner was the holder of 40 percent of the outstanding stock of Fresh Valley Food Service, LLC. The JO rejected the Petitioner's contention that Petitioner's president did not have authority to establish Fresh Valley Food Service, LLC and to make the Petitioner a member of Fresh Valley Food Service, LLC. The JO also rejected the Petitioner's argument that it was not actively involved in the activities that resulted in the violation of the PACA. The JO held that the violation of the PACA occurred when Fresh Valley Food Service, LLC failed to pay the reparation award by June 16, 2000, and not when Fresh Valley Food Service, LLC initially failed to make prompt payment for produce. Finally, the JO rejected the Petitioner's contention that the ALJ erred when she considered testimony that was not part of the record when the Chief of the PACA Branch made his determination that the Petitioner was responsibly connected with Fresh Valley Food Service, LLC. The JO stated, under 7 C.F.R. § 1.136(a), the record upon which the Chief of the PACA Branch bases his responsibly connected determination is only part of the record in the proceeding to review that determination.

George O. Krauja, for Petitioner.

Ruben D. Rudolph, Jr., for Respondent.

Initial decision issued by Dorothea A. Baker, Administrative Law Judge.

Decision and Order issued by William G. Jenson, Judicial Officer.

15 See Reply to Matter Concerning Date of Respondent's Application for PACA License

(Attach. 6 ¶ 6).

PROCEDURAL HISTORY

On January 31, 2001, James R. Frazier, Chief, PACA Branch, Fruit and Vegetable Programs, Agricultural Marketing Service, United States Department of Agriculture [hereinafter Respondent], issued a determination that Fresh Valley Produce, Inc. [hereinafter Petitioner], was responsibly connected with Fresh Valley Food Service, LLC on June 16, 2000, when Fresh Valley Food Service, LLC violated the Perishable Agricultural Commodities Act, 1930, as amended (7 U.S.C. §§ 499a-499s) [hereinafter the PACA].' On March 1, 2001, Petitioner filed a "Petition for Review of Determination That Fresh Valley Produce, Inc. Was Responsibly Connected" [hereinafter Petition for Review] pursuant to the PACA and the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes (7 C.F.R. §§ 1.130-.151) [hereinafter the Rules of Practice] seeking reversal of Respondent's determination that Petitioner was responsibly connected with Fresh Valley Food Service, LLC, when Fresh Valley Food Service, LLC violated the PACA.

On April 24, 2002, Administrative Law Judge Dorothea A. Baker [hereinafter the ALJ] conducted a hearing in Tucson, Arizona. George O. Krauja, Law Offices of Fennemore Craig, Tucson, Arizona, represented Petitioner. Ruben D. Rudolph, Jr., Office of the General Counsel, United States Department of Agriculture, Washington, DC, represented Respondent.

On May 31, 2002, Petitioner filed a "Post-Hearing Brief," "Proposed Findings of Fact and Conclusions of Law," an "Order," and a "Notice of Lodging Transcript." On June 28, 2002, Respondent filed "Proposed Finding of Fact, Conclusions of Law, and Order." On July 26, 2002, Petitioner filed "Petitioner's Reply in Support of Proposed Findings of Fact and Conclusions of Law" and "Objection to Respondent's Proposed Findings of Fact and Conclusions of Law." On August 14, 2002, Respondent filed "Response to Petitioner's Reply." On September 5, 2002, Petitioner filed "Petitioner's Reply to Response Brief."

On October 18, 2002, the ALJ issued a "Decision and Order" [hereinafter Initial Decision and Order] in which the ALJ affirmed Respondent's January 31, 2001, determination that Petitioner was responsibly connected with Fresh

'On May 17, 2000, I issued a "Default Order" ordering Fresh Valley Food Service, LLC, to pay Denice & Filice Packing Company a reparation award no later than June 16, 2000. Denice & Filice Packing Co. v. Fresh Valley Food Service LLC, PACA Docket No. RD-00-204 (May 17, 2000) (Default Order) (RX 4). Fresh Valley Food Service, LLC, failed to pay the reparation award by June 16, 2000, in violation of section 2(4) of the PACA (7 U.S.C. § 499b(4)).

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Valley Food Service, LLC on June 16, 2000, during the period of time Fresh Valley Food Service, LLC violated the PACA (Initial Decision and Order at 11).

On November 25, 2002, Petitioner appealed to, and requested oral argument before, the Judicial Officer. On December 16, 2002, Respondent filed "Respondent's Response to Petitioner's Appeal Petition." On December 20, 2002, Respondent filed "Respondent's Response to Request for Oral Hearing." On December 23, 2002, the Hearing Clerk transferred the record to the Judicial Officer for consideration and decision.

Petitioner's request for oral argument before the Judicial Officer, which the Judicial Officer may grant, refuse, or limit (7 C.F.R. § 1.145(d)), is refused because Petitioner and Respondent have thoroughly addressed the issues and the issues are not complex. Thus, oral argument would appear to serve no useful purpose.

Based upon a careful consideration of the record, I agree with most of the ALJ's discussion, most of the ALJ's findings of fact, and the ALJ's order affirming Respondent's January 31, 2001, determination that Petitioner was responsibly connected with Fresh Valley Food Service, LLC, on June 16, 2000, during the period of time Fresh Valley Food Service, LLC violated the PACA. Therefore, pursuant to section 1.145(i) of the Rules of Practice (7 C.F.R. §. 1.145(i)), I adopt with minor modifications the ALJ's Initial Decision and Order as the final Decision and Order. Additional conclusions by the Judicial Officer follow the ALJ's findings of fact and conclusions of law, as restated.

Petitioner's exhibits are designated by "PX." Respondent's exhibits are designated by "RX." Transcript references are designated by "Tr."