736 COURT DECISIONS AVOCADOS PLUS INCORPORATED, ET AL. v. USDA. Filed July 10, 2003. (Cite as: 2003 WL 21658679 (D.C.Cir.)). PACA- Injunctive relief pending appeal. Petitioners were denied an expedited appeal and injunctive relief from administrative penalties, including suspension of license, pending appeal of an adverse ruling in the case below because the stringent standards for these extraordinary judicial actions were not met. United States Court of Appeals, BEFORE: TATEL and GARLAND, Circuit Judges. ORDER PER CURIAM. Consolidated with 03-5101 Upon consideration of the motion for an injunction pending appeal or to escrow assessments, the responses thereto, and the reply; the motion to file out of time the motion to expedite consideration of the appeal and the response thereto; and the lodged motion to expedite consideration of the appeal and the lodged response thereto, it is ORDERED that the motion for an injunction or to escrow assessments be denied. Appellants have not satisfied the stringent standards required for an injunction pending appeal. See Washington Metropolitan Area Transit Commission v. Holiday Tours, Inc., 559 F.2d 841, 843 (D.C.Cir. 1977); D.C. Circuit Handbook of Practice and Internal Procedures 32 (2002). Nor have appellants demonstrated the escrowing of assessments is required to protect their interests pending the resolution of the appeal. It is FURTHER ORDERED that the motion for leave to file out of time the 62 Agric. Dec. 737 motion to expedite be denied. Appellants have not shown good cause for their failure to file the motion by the date set out in the initial scheduling order. See Fed. R.App. P. 26(b); D.C. Circuit Handbook of Practice and Internal Procedures 28 (2002). H.C. MACCLAREN, INC. v. USDA. No. 02-3006. Filed September 4, 2003. (Cite as: 342 F.3d 584). PACA - Constructive knowledge of employee's actions -Negligence, gross, failure to properly supervise - Penalties, license revocation - Scope of review – Arbitrary and capricious, when not. Wholesale produce broker's commissioned employees admitted to alteration of 53 USDA inspection certificates and to issuing eight false accounts of sale for a fraudulent purpose. After the discovery of the discrepancies, Petitioner conducted an internal audit and reimbursed underpaid producers and cooperated fully with USDA investigators. The Petitioner had no prior violations over a long history as a PACA licensee. The JO modified the ALJ's decision by concluding that the Petitioner did not know but should have known of the PACA violations by its employees and further that Petitioner's constructive knowledge warranted revocation of their PACA license. The JO determined that the failure to review even a portion of the employee's sales transactions constituted gross negligence warranting the severe sanction of license revocation. Unless the agency's determination was arbitrary and capricious, the court will not set aside the agency's action. United States Court of Appeals, Affirmed. Before MOORE and GIBBONS, Circuit Judges; SCHWARZER, Senior District Judge. GIBBONS, Circuit Judge. OPINION Petitioner H.C. MacClaren, Inc. (MacClaren), a wholesale produce broker, The Honorable William W Schwarzer, Senior United States District Judge for the Northern District of California, sitting by designation. appeals a final order of the Secretary of Agriculture revoking its license pursuant to the Perishable Agricultural Commodities Act (PACA), 7 U.S.C. §§ 499a-499s. The Secretary determined that the sanction of license revocation was appropriate after concluding that MacClaren had committed sixty-one violations of PACA. Specifically, MacClaren employees admitted to altering fifty-three United States Department of Agriculture (USDA or "the agency") inspection certificates and issuing eight false accounts of sale for a fraudulent purpose. MacClaren contends that in imposing the sanction of license revocation, the Secretary erred in failing to consider the remedial purpose of PACA and all relevant circumstances and imposed a sanction that is without justification in fact. For the reasons set forth below, we affirm the decision of the Secretary. I. MacClaren began doing business in the 1920s and was issued a PACA license in 1974. Since 1974, MacClaren's license has been renewed annually. MacClaren operates out of Detroit, Michigan, and is owned and managed by Gregory MacClaren, president, director and fifty-one percent stockholder, and Darrell Moccia, vice-president, director, and forty-nine percent stockholder. In addition to Gregory MacClaren and Darrell Moccia, during the relevant time period MacClaren employed four salespersons, Norman Olds, Alan Johnston, Frederick Gottlob and Daniel Schmidlin, who were paid on commission. All six individuals purchased fruits and vegetables (perishable commodities) from shippers throughout the country and resold the produce to local jobbers and wholesalers. They worked in the same area with raised dividers separating their desks and together handled about 400 transactions per month. Prior to the violations at issue, MacClaren had no record of violations of PACA. During 1994 through 1996, however, three MacClaren employees committed sixty-one violations of PACA. Olds, Johnston and Gottlob admitted to altering fifty-three inspection certificates resulting in underpayments totaling $130,903.00 to twenty-two suppliers. In addition, Olds and Gottlob admitted to issuing eight false accounts of sale to seven suppliers resulting in underpayments of $6,599.15. The admissions by MacClaren employees resulted from the investigation of another company suspected of altering inspection certificates. In December 1996, USDA investigators visited MacClaren to examine MacClaren's file a 62 Agric. Dec. 737 relating to a transaction with the company under investigation. Upon examining the file, the investigators discovered two copies of the same USDA inspection certificate containing conflicting entries. Neither Gregory MacClaren nor Darrell Moccia could explain the discrepancy. The investigators then reviewed thirty-six files and found discrepancies in eleven of the files handled by Olds, Gottlob and Johnston. Gregory MacClaren and Darrell Moccia denied knowledge of the alterations and told investigators that they wanted to cooperate and investigate the matter internally. They initiated an internal review and had their employees review all past files for altered inspection certificates. The internal investigation uncovered numerous additional altered inspection certificates which Gregory MacClaren and Darrell Moccia turned over to investigators. Olds, Gottlob and Johnston voluntarily gave statements to the investigators admitting that they had altered USDA inspection certificates and denying that Gregory MacClaren or Darrell Moccia were aware of their actions. Gottlob also admitted to issuing seven false accounts of sale, and Olds admitted to issuing one such false account. Gregory MacClaren personally contacted the suppliers affected by the altered inspection certificates and false accounts to express MacClaren's intent to make restitution. According to MacClaren, the company returned almost one hundred percent of the amounts it underpaid shippers as a result of the alterations and false accountings. 1 Despite their admissions of improper conduct, MacClaren continued to employ Olds and Gottlob on the condition that they reimburse MacClaren for the restitution that it intended to pay the shippers. In addition, Olds and Gottlob were directed to call each shipper affected by the altered inspection certificates, explain their actions and advise the shipper that MacClaren intended to make restitution for any losses the shipper suffered. Olds continued working for MacClaren, and through paycheck deductions he reimbursed MacClaren for the restitution on the inspection certificates he altered. Gottlob, however, only continued working for MacClaren for about a month and a half until he was terminated for poor work performance. Gottlob did not repay MacClaren any of the restitution amount. 'The USDA concedes that MacClaren repaid "most but not all of the underpayments." |