57 Agric. Dec. 426 the assessments for the 174 cattle in question.* Second, Complainant contends that with respect to the purchase of 228 cattle which Respondent purchased from Mr. Clements in Nebraska on February 22, 1992, Respondent, and not the brand inspector, was the collecting person and was responsible for collecting an assessment from Mr. Clements and remitting the assessment to the Cattlemen's Beef Promotion and Research Board or a qualified State beef council (Complainant's Petition for Reconsideration at 5-8). I disagree with Complainant's contention that Respondent was the collecting person with respect to 228 cattle which Respondent purchased from Mr. Clements on February 22, 1992. Section 1260.172(a)(1) of the Beef Promotion Order provides that the person making payment to a producer for cattle shall be a collecting person, as follows: § 1260.172 Assessments. (a) Domestic assessments. (1) Except as prescribed by regulations approved by the Secretary, each person making payment to a producer for cattle purchased from such producer shall be a collecting person and shall collect an assessment from the producer, and each producer shall pay such assessment to the collecting person, at the rate of one dollar ($1) per head of cattle purchased and such collecting person shall remit the assessment *I found in the Decision and Order that Respondent committed 21,516 violations of the Beef Promotion Order and the Beef Promotion Regulations. Based on Complainant's recommendation, I assessed Respondent a civil penalty of $3.2182798 per violation for a total civil penalty of $69,244.51. In re Jerry Goetz, supra, slip op. at 71-73. For the reasons set forth in this Order Denying Respondent's Petition for Reconsideration and Denying in Part and Granting in Part Complainant's Petition for Reconsideration, I now find that Respondent committed 21,690 violations of the Beef Promotion Order and the Beef Promotion Regulations. Based on Complainant's recommendation of $3.2182798 per violation, I am increasing the civil penalty assessed against Respondent from $69,244.51 to $69,804.49. Moreover, in the Decision and Order, I ordered Respondent to pay past-due assessments and late payment charges of $66,577 to the Kansas Beef Council. In re Jerry Goetz, supra, slip op. at 73. The order to pay past-due assessments and late payment charges of $66,577 was based, in part, on a finding that for the period January 1, 1990, through June 30, 1994, Respondent owes $12,441 for 12,441 cattle for which he failed to remit assessments and late payment charges of $11,553, using an average per head of cattle based on the late payment charges determined by the auditor. In re Jerry Goetz, supra, slip op. at 27. For the reasons set forth in this Order Denying Respondent's Petition for Reconsideration and Denying in Part and Granting in Part Complainant's Petition for Reconsideration, I now find that for the period January 1, 1990, through June 30, 1994, Respondent owes $12,615 for 12,615 cattle for which he failed to remit assessments and late payment charges of $11,715, using an average per head of cattle based on the late payment charges determined by the auditor. Therefore, I am increasing the amount Respondent must pay in past-due assessments and late payment charges to the Kansas Beef Council from $66,577 to $66,913. to the Board or to a qualified State beef council pursuant to § 1260.172(a)(5). 7 C.F.R. § 1260.172(a)(1). The final rulemaking document relating to the Beef Promotion Order, which was published on July 18, 1986, states that section 1260.172 of the Beef Promotion Order authorizes the issuance of regulations which would permit collection of assessments by brand inspectors and would release the person making payment to the producer of the responsibility of collecting assessments, as follows: It was suggested by one State beef council that the order allow those States which use brand inspectors to collect State assessments to continue to use brand inspectors as collecting persons. The Act contemplates that the collecting person will ordinarily be the person making payment to a cattle producer, but it also contemplates that existing collection mechanisms will be utilized by the Board to the extent possible. This final rule authorizes the issuance of regulations which would permit the collection of assessments by brand inspectors in certain states, and also release the person making payment to the producer of the responsibility of collecting assessments in those States. 51 Fed. Reg. 26,132, 26,136 (1986). On October 1, 1986, the Agricultural Marketing Service issued an interim final rule with a request for comments which states that the interim rule identifies those states in which State brand inspectors are to serve as the collecting person, as follows: The order defines a collecting person as the person making payment to a producer for cattle, or any other person who is responsible for collecting and remitting an assessment pursuant to the Act, the order and regulations prescribed by the Board and approved by the Secretary. There are marketing situations in which the collection and remittance process would be facilitated if a person other than the person making payment to the producer were deemed the collecting person. Therefore, the Board has determined that the use of brand inspectors in those States and parts of States where brand inspectors are authorizes [sic] by State law to collect assessments under existing State beef promotion and research programs would be an appropriate and expeditious means of collecting and remitting assessments. These regulations authorize the brand inspectors in the States 57 Agric. Dec. 426 listed herein to serve as the collecting person in those transactions where assessments are due under the order. 51 Fed. Reg. 35,196, 35,196 (1986). On February 26, 1988, the Agricultural Marketing Service published a final rulemaking document adopting, with modifications not relevant to this proceeding, the October 1, 1986, interim final rule. The final rule addresses the brand inspectors as collecting persons, as follows: The order provides that the collecting person shall be the person making payment to a producer for cattle, or any other person who is responsible for collecting and remitting assessments by regulations prescribed by the Board and approved by the Secretary. There are marketing situations in which the collection and remittance process would be facilitated by using the collection mechanism of existing State programs. Accordingly, it has been determined that the use of brand inspectors in those States and parts of States where brand inspectors are authorized by State law to collect assessments under existing State beef promotion and research programs would be an appropriate and expeditious means of collecting and remitting assessments. These regulations authorize the brand inspectors in the States listed herein to serve as the collecting person for assessments due under the order. 53 Fed. Reg. 5752, 5753 (1988). Section 1260.311(c) of the Beef Promotion Regulations (7 C.F.R. § 1260.311(c)) provides that, with respect to Nebraska country sales (country sales include any sale which is not conducted at an auction or livestock market and which is not a sale to a slaughter/packer, feedlot, or an order buyer or dealer), the brand inspector has responsibility to collect; however, when there has not been a physical brand inspection, the person paying the producer shall be the collecting person and has the responsibility to collect and remit assessments due. The record establishes that Respondent's February 22, 1992, purchase of cattle from Mr. Clements at Imperial, Nebraska, was a Nebraska country sale and that a brand inspector was present at the sale. Section 54-101(6) of the Nebraska Revised Statutes defines a brand inspector as a person employed to, among other things, identify brands, as follows: 54-101. Terms, defined. For purposes of sections 54-101 to 54-169, 54-415, and 54-1183 to 54-1186, unless the context otherwise requires: (6) Brand inspector shall mean a person employed by the brand committee, or some other brand inspection agency, within or without the State of Nebraska, for the purpose of identifying brands, marks, or other identifying characteristics of livestock to determine the existence of such brands, marks, or other identifying characteristics and from such determinations attempt to establish correct and true ownership of such livestock, and generally carry out the provisions and enforcement of all laws pertaining to brands, brand inspection, and associated livestock laws. At any time a brand inspection is required by law, any duly authorized Nebraska brand inspector or brand investigator may transfer evidence of ownership of such cattle from a seller to a buyer by issuing a certificate of inspection[.] Neb. Rev. Stat. § 54-101(6) (1996). Imperial is located in Chase County which is part of the area designated as the Nebraska brand inspection area. In accordance with section 54-101(25) of the Nebraska Revised Statutes, cattle sold within the brand inspection area must be brand inspected, as follows: 54-101. Terms, defined. For purposes of sections 54-101 to 54-169, 54-415, and 54-1183 to 54-1186, unless the context otherwise requires: (25) Brand inspection area shall mean that portion of the State of Nebraska designated by the Legislature as set forth in section 54-134, where brand inspection shall be mandatory and performed on all cattle sold at auction markets, packing plants, slaughterhouses, or farm or ranch sales within such area and all other cattle prior to leaving such brand inspection 'Section 54-134 of the Nebraska Revised Statutes provides, as follows: 54-134. Nebraska brand inspection area; territory included. There is hereby created the Nebraska brand inspection area which shall consist of all that part of the State of Nebraska lying within the following counties: ... Chase. . . . Neb. Rev. Stat. § 54-134 (1996). 57 Agric. Dec. 426 area unless destined for an open market[.] Neb. Rev. Stat. § 54-101(25) (1996). Further, section 1260.311(c) of the Beef Promotion Regulations (7 C.F.R. § 1260.311(c)) provides that in Nebraska "there exists a requirement that cattle be brand inspected by State authorized inspectors prior to sale" and sections 54-143 and 54-169 of the Nebraska Revised Statutes appear to require a brand inspection under the circumstances relevant to the February 22, 1992, cattle sale by Mr. Clements to Respondent. Given the presence of the brand inspector during the February 22, 1992, sale of cattle by Mr. Clements to Respondent, the duties of the brand inspector, the location of the sale in a Nebraska brand inspection area, section 1260.311(c) of the Beef Promotion Regulations which provides that there is a requirement in Nebraska that cattle must be brand inspected by State authorized inspectors prior to sale, and sections 54-143 and 54-169 of the Nebraska Revised Statutes which appear to require a brand inspection of the 228 cattle in question, I infer that a physical brand inspection was made by the brand inspector. Therefore, in accordance with section 1260.311(c) of the Beef Promotion Regulations, the brand inspector, not Respondent, was the collecting person and responsible for collecting the assessment from the producer and remitting the assessment to the Cattlemen's Beef Promotion and Research Board or a qualified State beef council.' I agree with Complainant that Respondent has enriched himself by collecting the assessment in the amount of $228 for the 228 cattle he purchased from Mr. Clements on February 22, 1992, and failing to remit the assessment to the Cattlemen's Beef Promotion and Research Board or a qualified State beef council. However, while Mr. Clements may have a cause of action against Respondent, ❝Section 54-101(12) of the Nebraska Revised Statutes defines an open market as "a sales barn, market agency, stockyard, packing plant, or terminal market located out of the Nebraska brand inspection area created in section 54-134 or out of the confines and boundaries of the State of Nebraska, declared as such by the brand committee under section 54-142, where brand inspection is maintained either by employees of the brand committee or by some other state under a reciprocal agreement as allowed under the Packers and Stockyards Act, 1921, as amended[.]" 'Should the Agricultural Marketing Service institute an action against the brand inspector for failing to collect and remit the assessment with respect to the February 22, 1992, cattle sale, my inference in this proceeding that the brand inspector was the collecting person is not prejudicial because the brand inspector may show that no physical brand inspection was made and that, therefore, he or she was not the collecting person. In re Jerry Goetz, 56 Agric. Dec. slip op. at 51-58 (Nov. 3, 1997). |