62 Argic. Dec. 385 annual renewal fee, the appropriate sanction is a finding that Respondent committed willful, flagrant and repeated violations of section 2(4) of the PACA, and publication of that finding. Respondent has put forward several defenses in its answer, none of which have any merit. In Respondent's First Defense, it claims that this disciplinary proceeding is barred by the automatic stay (11 U.S.C. § 362(a)(1)), which took effect at the time Respondent filed for bankruptcy. However, PACA disciplinary proceedings come within the exception to the automatic stay provisions as an exercise of "police and regulatory power" (11 U.S.C. § 362(b)(4)). In re Fresh Approach, Inc., 49 B.R. 494 (N.D. Tex. 1985). It has repeatedly been held that there is no conflict between the maintenance of PACA disciplinary proceedings and a bankruptcy action. Marvin Tragash Co. v. United States Dep't of Agric., 524 F.2d 1255 (5th Cir. 1975); Zwick v. Freeman, 373 F.2d 110 (2d Cir. 1967), cert. denied, 389 U.S. 835 (1967); In re Fresh Approach, Inc., supra at 496. Further, Congress, in 1978, specifically amended section 525 of the Bankruptcy Code (11 U.S.C. § 525) in order to authorize continuation of the Secretary's license suspension or revocation authority under the PACA even where, as here, the violations involve debts that are discharged in bankruptcy. Melvin Beene Produce Co. v. Agricultural Marketing Service, 728 F.2d 347, 351 (6th Cir. 1984); In re Fresh Approach, Inc., supra at 496-98. In Respondent's Second Defense, it claims that the disciplinary action should name the trustee for Respondent as representative of Respondent's bankruptcy estate. Respondent provides no grounds for such a claim and it is rejected. Complainant is not alleging that the trustee committed any PACA violations, so there is no basis for including the trustee as a party Respondent herein. In Respondent's Third Defense, it argues that the Department has brought the disciplinary complaint against it not for the sanction requested in the complaint, but to collect the amount Respondent allegedly owes Quality Fruit from Fleming Companies, Inc. (Fleming), Lewisville, Texas, a 35.4% stockholder of Respondent during the period in which the alleged payment violations occurred. Respondent has not provided any evidence to support this allegation. Respondent attached to its answer (as Exhibit II) a September 20, 2002, letter written by Complainant to Fleming in which Fleming is informed that it has been determined to be "responsibly connected" with Respondent under the PACA and thus subject to possible licensing and employment restrictions, as provided by the PACA. The letter invites Fleming to respond to this determination and advises that Fleming has a right to request a formal hearing before an Department Administrative Law Judge to contest this determination. The proceeding referred to in the September 20, 2002, letter deals only with the issue of whether Fleming meets the statutory criteria making it "responsibly connected" under the PACA (7 U.S.C. § 499a(b)(9)) and does not address the issue of the payment violations alleged to have been committed by Respondent. The responsibly connected proceeding involving Fleming is entirely separate from the disciplinary proceeding against Respondent. Respondent also argues in its Third Defense that its failures to pay Quality Fruit were not willful, flagrant and repeated violations of the PACA. However, failures to make full payment promptly for produce, such as those admittedly engaged in by Respondent, always constitute willful, flagrant and repeated violations of the PACA. In re Caito Produce Co., 48 Agric. Dec. 602 (1989). As stated in In re Hogan Distributing, Inc., 55 Agric. Dec. 622, 633 (1996): The overriding doctrine set forth in Caito is that, because of the peculiar nature of the perishable agricultural commodities industry, and the Congressional purpose that only financially responsible persons should be engaged in the perishable agricultural commodities industry, excuses for nonpayment in a particular case are not sufficient to prevent a license revocation where there have been repeated failures to pay a substantial amount of money over an extended period of time. As Respondent has admitted all the material allegations of fact contained in the complaint, a the issuance of a Decision Without Hearing Based on Admissions is appropriate, without further procedure or hearing, pursuant to section 1.139 of the Rules of Practice (7 C.F.R. § 1.139). Findings of Fact 1. Respondent, Furrs Supermarkets, Inc. (hereinafter, "Respondent"), is a corporation organized and existing under the laws of the State of Delaware. Respondent's business address is 4411 The 25 Way N.E., Albuquerque, New Mexico 87109. Respondent's mailing address is P.O. Box 102677, Albuquerque, New Mexico 87184. 2. At all times material herein, Respondent was licensed under the provisions of the PACA. License number 920759 was issued to Respondent on March 2, 1992. This license terminated on March 2, 2002, pursuant to section 4(a) of the PACA (7 U.S.C. § 499d(a)) when Respondent filed to pay the required annual renewal fee. 3. As more fully set forth in paragraph 3 of the complaint, Respondent failed to make full payment promptly to one produce seller, Quality Fruit, the amount of $174,105.05 for 910 lots of perishable agricultural commodities 62 Agric. Dec. 389 which Respondent purchased, received and accepted in interstate or foreign commerce during the period September 1998 through February 2001. Conclusions Respondent's failure to make full payment promptly with respect to the transactions referred to in Finding of Fact 3 above, constitutes willful, flagrant and repeated violations of section 2(4) of the PACA (7 U.S.C. § 499b(4)), for which the Order below is issued. Order Respondent, Furrs Supermarkets, Inc., is found to have committed willful, repeated and flagrant violations of section 2(4) of the Perishable Agricultural Commodities Act (7 U.S.C. § 499b(4)), and the facts and circumstances set forth above shall be published. This order shall take effect on the 11th day after this Decision becomes final. Pursuant to the Rules of Practice governing procedures under the PACA, this Decision will become final without further proceedings 35 days after service hereof unless appealed to the Secretary by a party to the proceeding within thirty days after service as provided in sections 1.139 and 1.145 of the Rules of Practice (7 C.F.R. §§ 1.139, 1.145). Copies hereof shall be served upon the parties. [This Decision and Order became final on March 21, 2003. - Editor] In re: MICHIGAN REPACKING & PRODUCE CO., INC. PACA Docket No. D-02-0015. Decision Without Hearing Respondent by Reason of Default. Charles Kendall, for Complainant. Respondent, Pro se. Decision and Order issued by James W. Hunt, Administrative Law Judge. PACA - Default - Payment, failure to make prompt. Preliminary Statement This is a disciplinary proceeding under the Perishable Agriculture Commodities Act, 1930, as amended (7 U.S.C. § 499a et seq.) (hereinafter referred to as the "Act"), instituted by a Complaint filed on July 12, 2002, by the Associate Deputy Administrator, Fruit and Vegetable Programs, Agricultural Marketing Service, United States Department of Agriculture. The Complaint alleged that during the period December 3, 2000, through November 5, 2001, Respondent Michigan Repacking & Produce Co., Inc. (hereinafter "Respondent") failed to make full payment promptly to 25 sellers of the agreed purchase prices in the total amount of $3,181,829.95 for 340 lots of perishable agricultural commodities which it purchased, received, and accepted in interstate commerce. A copy of the Complaint was mailed to Respondent by certified mail at its last known principal place of business on March 29, 2002 by certified mail. The Certified Return Receipt (CRR) was returned to the Office of the Hearing Clerk without a signature or date. On April 22, 2002, the Office of the Hearing Clerk sent a letter to the Postmaster requesting further information. The Office of the Hearing Clerk received a response on August 20, 2002, indicating that Michigan Repacking & Produce Co., Inc. had moved in 2001, and that mail to the company was being "forwarded per written instructions." Finally, the Office of the Hearing Clerk sent the Complaint to the home address of the company's president, Mr. Robert Tringale, on September 12, 2002; the receipt was signed on September 20, 2002. Respondent has not answered the Complaint. The time for filing an Answer having expired, and upon motion of the Complainant for the issuance of a Default Order, the following Decision and Order shall be issued without further procedure pursuant to Section 1.139 of the Rules of Practice. Finding of Fact 1. Respondent is a corporation organized and existing in the state of Michigan. Its business mailing address is 1903 Wilkins Street, Detroit, Michigan 48207. 2. At all times material herein, Respondent was licensed under the PACA. License number 192773 was issued to Respondent on June 30, 1961. This license terminated on June 30, 2002, pursuant to Section 4(a) of the PACA (7 U.S.C. §499d(a)), when Respondent failed to pay the required annual renewal fee. 62 Agric. Dec. 389 3. The Secretary has jurisdiction over Respondent and the subject matter involved herein. 4. As set forth in paragraph III of the Complaint, Respondent, during the period December 3, 2000, through November 5, 2001, failed to make full payment promptly to 25 sellers of the agreed purchase prices in the total amount of $3,181,829.95 for 340 lots of perishable agricultural commodities which it purchased, received, and accepted in interstate commerce. Conclusions Respondent's failure to make full payment promptly with respect to the 340 transactions set forth in Finding of Fact No. 4 above constitutes wilful, repeated and flagrant violations of Section 2(4) of the Act (7 U.S.C. § 499b(4)), for which the Order below is issued. Order Respondent has committed willful, flagrant and repeated violations of Section 2 of the Act (7 U.S.C. 499b), and the facts and circumstances of the violations shall be published. This order shall take effect on the 11th day after this Decision becomes final. Pursuant to the Rules of Practice, this Decision will become final without further proceedings 35 days after service hereof unless appealed to the Secretary by a party to the proceeding within 30 days after service as provided in Sections 1.139 and 1.145 of the Rules of Practice (7 C.F.R. 1.139 and 1.145). Copies hereof shall be served upon parties. [This Decision and Order became final on April 21, 2003 - Editor] |