United States Department of Agriculture (U.S.D.A.)
In re: JULIAN J. TONEY AND ANITA L. TONEY
54 Agric. Dec. 923 (1995)
Civil penalty of $200,000.00 (largest civil penalty ever imposed under Act) was appropriate, where degree of willfulness and flagrancy of respondents' violations was astonishing, and even after hearing was pending on initial complaint, respondents continued to violate Act. (The ALJ found that Respondents willfully maintained false and incomplete records with respect to the source and date of acquisition of dogs; acquired random source dogs in willful violation of the regulations; sold live random source dogs to research facilities by means of forged documents purporting to be certifications from municipal pounds; willfully failed to hold animals for the required period of time after acquisition; willfully failed to maintain individual identity of dogs; and willfully failed to provide appropriate animal care and facilities, as required. )
Initial decision issued by Dorothea A. Baker, Administrative Law Judge. Decision and Order issued by Donald A. Campbell, Judicial Officer.
delivered the opinion of the court.
Opinion of the Court:
This is a disciplinary proceeding under the Animal Welfare Act, as amended (7 U.S.C. § 2131 et seq.), and the regulations issued thereunder (9 C.F.R. § 1.1 et seq.). On April 20, 1995, Administrative Law Judge Dorothea A. Baker (ALJ) issued an Initial Decision and Order permanently revoking Respondents' license, assessing a civil penalty of $200,000, and directing Respondents to cease and desist from various practices. The ALJ found that Respondents willfully maintained false and incomplete records with respect to the source and date of acquisition of dogs; acquired random source dogs in willful violation of the regulations; sold live random source dogs to research facilities by means of forged documents purporting to be certifications from municipal pounds; willfully failed to hold animals for the required period of time after acquisition; willfully failed to maintain individual identity of dogs; and willfully failed to provide appropriate animal care and facilities, as required.
*2 On May 26, 1995, Respondents appealed to the Judicial Officer, to whom final administrative authority has been delegated to decide the Department's cases subject to 5 U.S.C. §§ 556 and 557 (7 C.F.R. § 2.35). [FN1] On the same date, Respondents filed a Request to Reopen the Record to Allow Additional Exhibits. The case was referred to the Judicial Officer for decision on July 25, 1995.
Based upon a careful consideration of the record, the Request to Reopen the Record is denied, and the Initial Decision and Order is adopted as the Final Decision and Order, with omissions shown by dots, changes or additions shown by brackets, and minor editorial changes not specified. The effective date of the Order is changed in view of the appeal. Additional conclusions by the Judicial Officer follow the ALJ's conclusions.
ADMINISTRATIVE LAW JUDGE'S INITIAL DECISION (AS MODIFIED)
This is a disciplinary proceeding brought pursuant to the provisions of the Animal Welfare Act, as amended (7 U.S.C. § 2131 et seq.), hereinafter sometimes referred to as the "Act," and the regulations and standards (9 C.F.R. § 1.1 et seq.) issued pursuant to the Act and instituted by Complaints filed on September 30, 1992, and May 11, 1994, by the Administrator of the Animal and Plant Health Inspection Service, sometimes hereinafter referred to as "APHIS," United States Department of Agriculture, sometimes hereinafter referred to as "USDA." On May 20, 1994, the Complaints were consolidated for hearing.
The Complaints allege that the Respondents willfully violated the Act, and the regulations and standards issued under the Act (9 C.F.R. § 1.1 et seq.), by willfully maintaining false and incomplete records with respect to the acquisition source of 1,600 dogs and cats; by providing live random source dogs to research facilities which were accompanied by forged documents; by failing to hold animals for the required period of time after acquisition; by not maintaining individual identity of the dogs; and by willfully failing to provide appropriate animal care and facilities as required by the Act.
The Respondents timely filed Answers to the Complaints in which they denied all material allegations of the Complaints.
An oral hearing was held herein on June 21, 22, and 23, 1994, in Kansas City, Kansas, before Administrative Law Judge Dorothea A. Baker. The Complainant was represented by Robert Ertman, Esquire, Office of the General Counsel, United States Department of Agriculture, Washington, D.C. 20250. The Respondents were represented by Curtis J. Krull, Esquire, Des Moines, Iowa 50309. In due course, the parties filed briefs, the last brief having been filed February 27, 1995.
At the oral hearing, the Complainant declined to set forth the specific civil penalty which it was seeking, but instead, chose to indicate that it was seeking in excess of $100,000.00 and a permanent revocation of the Respondents' license. On brief, the Complainant has indicated that it seeks a permanent revocation of Respondents' license and a $200,000.00 civil penalty.
Statute and Regulations
[7 U.S.C. § 2131. Congressional statement of policy
*3 The Congress finds that animals and activities which are regulated under this chapter are either in interstate or foreign commerce or substantially affect such commerce or the free flow thereof, and that regulation of animals and activities as provided in this chapter is necessary to prevent and eliminate burdens upon such commerce and to effectively regulate such commerce, in order--
(1) to insure that animals intended for use in research facilities or for exhibition purposes or for use as pets are provided humane care and treatment;
(2) to assure the humane treatment of animals during transportation in commerce; and
(3) to protect the owners of animals from the theft of their animals by preventing the sale or use of animals which have been stolen.]
[7 U.S.C. § 2135. Time period for disposal of dogs or cats by dealers or exhibitors
No dealer or exhibitor shall sell or otherwise dispose of any dog or cat within a period of five business days after the acquisition of such animal or within such other period as may be specified by the Secretary: Provided, That operators of auction sales subject to section 2142 of this title shall not be required to comply with the provisions of this section.]
7 U.S.C. § 2140. Recordkeeping by dealers, exhibitors, research facilities, intermediate handlers, and carriers
Dealers and exhibitors shall make and retain for such reasonable period of time as the Secretary may prescribe, such records with respect to the purchase, sale, transportation, identification, and previous ownership of animals as the Secretary may prescribe. . . . Such records shall be made available at all reasonable times for inspection and copying by the Secretary.
7 U.S.C. § 2141. Marking and identification of animals
All animals delivered for transportation, transported, purchased, or sold, in commerce, by a dealer or exhibitor shall be marked or identified at such time and in such humane manner as the Secretary may prescribe: Provided, That only live dogs and cats need be so marked or identified by a research facility.
[7 U.S.C. § 2149. Violations by licensees
(a) Temporary license suspension; notice and hearing; revocation
If the Secretary has reason to believe that any person licensed as a dealer, exhibitor, or operator of an auction sale subject to section 2142 of this title, has violated or is violating any provision of this chapter, or any of the rules or regulations or standards promulgated by the Secretary hereunder, he may suspend such person's license temporarily, but not to exceed 21 days, and after notice and opportunity for hearing, may suspend for such additional period as he may specify, or revoke such license, if such violation is determined to have occurred.
(b) Civil penalties for violation of any section, etc.; separate offenses; notice and hearing; appeal; considerations in assessing penalty; compromise of penalty; civil action by Attorney General for failure to pay penalty; district court jurisdiction; failure to obey cease and desist order
*4 Any dealer, exhibitor, research facility, intermediate handler, carrier, or operator of an auction sale subject to section 2142 of this title, that violates any provision of this chapter, or any rule, regulation, or standard promulgated by the Secretary thereunder, may be assessed a civil penalty by the Secretary of not more than $2,500 for each such violation, and the Secretary may also make an order that such person shall cease and desist from continuing such violation. Each violation and each day during which a violation continues shall be a separate offense. No penalty shall be assessed or cease and desist order issued unless such person is given notice and opportunity for a hearing with respect to the alleged violation, and the order of the Secretary assessing a penalty and making a cease and desist order shall be final and conclusive unless the affected person files an appeal from the Secretary's order with the appropriate United States Court of Appeals. The Secretary shall give due consideration to the appropriateness of the penalty with respect to the size of the business of the person involved, the gravity of the violation, the person's good faith, and the history of previous violations. Any such civil penalty may be compromised by the Secretary. Upon any failure to pay the penalty assessed by a final order under this section, the Secretary shall request the Attorney General to institute a civil action in a district court of the United States or other United States court for any district in which such person is found or resides or transacts business, to collect the penalty, and such court shall have jurisdiction to hear and decide any such action. Any person who knowingly fails to obey a cease and desist order made by the Secretary under this section shall be subject to a civil penalty of $1,500 for each offense, and each day during which such failure continues shall be deemed a separate offense.]
[7 U.S.C. § 2158. Protection of pets
(a) Holding period
In the case of each dog or cat acquired by an entity described in paragraph (2), such entity shall hold and care for such dog or cat for a period of not less than five days to enable such dog or cat to be recovered by its original owner or adopted by other individuals before such entity sells such dog or cat to a dealer.
(2) Entities described
An entity subject to paragraph (1) is--
(A) each State, county, or city owned and operated pound or shelter;
(B) each private entity established for the purpose of caring for animals, such as a humane society, or other organization that is under contract with a State, county, or city that operates as a pound or shelter and that releases animals on a voluntary basis; and
(C) each research facility licensed by the Department of Agriculture.
(1) In general
A dealer may not sell, provide, or make available to any individual or entity a random source dog or cat unless such dealer provides the recipient with a valid certification that meets the requirements of paragraph (2) and indicates compliance with subsection (a) of this section.
*5 (2) Requirements
A valid certification shall contain--
(A) the name, address, and Department of Agriculture license or registration number (if such number exists) of the dealer;
(B) the name, address, Department of Agriculture license or registration number (if such number exists), and the signature of the recipient of the dog or cat;
(C) a description of the dog or cat being provided that shall include--
(i) the species and breed or type of such;
(ii) the sex of such;
(iii) the date of birth (if known) of such;
(iv) the color and any distinctive marking of such; and
(v) any other information that the Secretary by regulation shall determine to be appropriate;
(D) the name and address of the person, pound, or shelter from which the dog or cat was purchased or otherwise acquired by the dealer, and an assurance that such person, pound, or shelter was notified that such dog or cat may be used for research or educational purposes;
(E) the date of the purchase or acquisition referred to in subparagraph (D);
(F) a statement by the pound or shelter (if the dealer acquired the dog or cat from such) that it satisfied the requirements of subsection (a) of this section; and
(G) any other information that the Secretary of Agriculture by regulation shall determine appropriate.
The original certification required under paragraph (1) shall accompany the shipment of a dog or cat to be sold, provided, or otherwise made available by the dealer, and shall be kept and maintained by the research facility for a period of at least one year for enforcement purposes. The dealer shall retain one copy of the certification provided under this paragraph for a period of at least one year for enforcement purposes.
In instances where one research facility transfers animals to another research facility a copy of the certificate must accompany such transfer.
Certification requirements may be modified to reflect technological advances in identification techniques, such as microchip technology, if the Secretary determines that adequate information such as described in this section, will be collected, transferred, and maintained through such technology.
(1) In general
Dealers who fail to act according to the requirements of this section or who include false information in the certification required under subsection (b) of this section, shall be subject to the penalties provided for under section 2149 of this title.
(2) Subsequent violations
Any dealer who violates this section more than one time shall be subject to a fine of $5,000 per dog or cat acquired or sold in violation of this section.
(3) Permanent revocations
Any dealer who violates this section three or more times shall have such dealers license permanently revoked.
Not later than 180 days after November 28, 1990, the Secretary shall promulgate regulations to carry out this section.]
[§ 1.1 Definitions.
*6 . . . .
Random source means dogs and cats obtained from animal pounds or shelters, auction sales, or from any person who did not breed and raise them on his or her premises.]
§ 2.133 Certification for random source dogs and cats.
. . . .
(b) A dealer shall not sell, provide, or make available to any person a live random source dog or cat unless the dealer provides the recipient of the dog or cat with certification that contains the following information:
(1) The name, address, USDA license number, and signature of the dealer;
(2) The name, address, USDA license or registration number, if such number exists, and signature of the recipient of the dog or cat;
(3) A description of each dog or cat being sold, provided, or made available that shall include:
(i) The species and breed or type (for mixed breeds, estimate the two dominant breeds or types);
(ii) The sex;
(iii) The date of birth or, if unknown, then the approximate age;
(iv) The color and any distinctive markings; and
(v) The Official USDA-approved identification number of the animal. However, if the certification is attached to a certificate provided by a prior dealer which contains the required description, then only the official identification numbers are required;
(4) The name and address of the person, pound, or shelter from which the dog or cat was acquired by the dealer, and an assurance that the person, pound, or shelter was notified that the cat or dog might be used for research or educational purposes;
(5) The date the dealer acquired the dog or cat from the person, pound, or shelter referred to in paragraph (b)(4) of this section; and
(6) If the dealer acquired the dog or cat from a pound or shelter, a signed statement by the pound or shelter that it met the requirements of paragraph (a) of this section. This statement must at least describe the animals by their official USDA identification numbers. It may be incorporated within the certification if the dealer makes the certification at the time that the animals are acquired from the pound or shelter or it may be made separately and attached to the certification later. If made separately, it must include the same information describing each animal as is required in the certification. A photocopy of the statement will be regarded as a duplicate original.
(c) The original certification required under paragraph (b) of this section shall accompany the shipment of a live dog or cat to be sold, provided, or otherwise made available by the dealer.
. . . .
Subpart E--Identification of Animals
§ 2.50 Time and method of identification.
(a) A class "A" dealer (breeder) shall identify all live dogs and cats on the premises as follows:
(1) All live dogs and cats held on the premises, purchased, or otherwise acquired, sold or otherwise disposed of, or removed from the premises for delivery to a research facility or exhibitor or to another dealer, or for sale, through an auction sale or to any person for use as a pet, shall be identified by an official tag of the type described in § 2.51 affixed to the animal's neck by means of a collar made of material generally considered acceptable to pet owners as a means of identifying their pet dogs or cats [FN2], or shall be identified by a distinctive and legible tattoo marking acceptable to and approved by the Administrator.
FN2 (Footnote omitted).
*7 (2) Live puppies or kittens, less than 16 weeks of age, shall be identified by:
(i) An official tag as described in § 2.51;
(ii) A distinctive and legible tattoo marking approved by the Administrator; or
(iii) A plastic-type collar acceptable to the Administrator which has legibly placed thereon the information required for an official tag pursuant to § 2.51.
(b) A class "B" dealer shall identify all live dogs and cats under his or her control or on his or her premises as follows:
(1) When live dogs or cats are held, purchased, or otherwise acquired, they shall be immediately identified:
(i) By affixing to the animal's neck an official tag as set forth in § 2.51 by means of a collar made of material generally acceptable to pet owners as a means of identifying their pet dogs or cats [FN3]; or
FN3 See footnote 2 in § 2.50(a)(1).
(ii) By a distinctive and legible tattoo marking approved by the Administrator.
(2) If any live dog or cat is already identified by an official tag or tattoo which has been applied by another dealer or exhibitor, the dealer or exhibitor who purchases or otherwise acquires the animal may continue identifying the dog or cat by the previous identification number, or may replace the previous tag with his own official tag or approved tattoo. In either case, the class B dealer or class C exhibitor shall correctly list all old and new official tag numbers or tattoos in his or her records of purchase which shall be maintained in accordance with §§ 2.75 and 2.77. Any new official tag or tattoo number shall be used on all records of any subsequent sales by the dealer or exhibitor, of any dog or cat.
(3) Live puppies or kittens less than 16 weeks of age, shall be identified by:
(i) An official tag as described in § 2.51;
(ii) A distinctive and legible tattoo marking approved by the Administrator; or
(iii) A plastic-type collar acceptable to the Administrator which has legibly placed thereon the information required for an official tag pursuant to § 2.51.
(4) When any dealer has made a reasonable effort to affix an official tag to a cat, as set forth in paragraphs (a) and (b) of this section, and has been unable to do so, or when the cat exhibits serious distress from the attachment of a collar and tag, the dealer shall attach the collar and tag to the door of the primary enclosure containing the cat and take measures adequate to maintain the identity of the cat in relation to the tag. Each primary enclosure shall contain no more than one weaned cat without an affixed collar and official tag, unless the cats are identified by a distinctive and legible tattoo or plastic-type collar approved by the Administrator.
. . . .
§ 2.53 Use of tags.
Official tags obtained by a dealer, exhibitor, or research facility, shall be applied to dogs or cats in the manner set forth in § 2.50 and in as close to consecutive numerical order as possible. No tag number shall be used to identify more than one animal. No number shall be repeated within a 5-year period.
§ 2.132 Procurement of random source dogs and cats, dealers.
*8 (a) A class "B" dealer may obtain live random source dogs and cats only from:
(1) Other dealers who are licensed under the Act and in accordance with the regulations in part 2;
(2) State, county, or city owned and operated animal pounds or shelters; and
(3) A legal entity organized and operated under the laws of the State in which it is located as an animal pound or shelter, such as a humane shelter or contract pound.
(b) A class "B" dealer shall not obtain live random source dogs and cats from individuals who have not bred and raised the dogs and cats on their own premises.
(c) Live nonrandom source dogs and cats may be obtained from persons who have bred and raised the dogs and cats on their own premises, such as hobby breeders.
(d) No person shall obtain live random source dogs or cats by use of false pretenses, misrepresentation, or deception.
(e) Any dealer, exhibitor, research facility, carrier, or intermediate handler who also operates a private or contract animal pound or shelter shall comply with the following:
(1) The animal pound or shelter shall be located on premises that are physically separated from the licensed or registered facility. The animal housing facility of the pound or shelter shall not be adjacent to the licensed or registered facility.
(2) Accurate and complete records shall be separately maintained by the licensee or registrant and by the pound or shelter. The records shall be in accordance with §§ 2.75 and 2.76, unless the animals are lost or stray. If the animals are lost or stray, the pound or shelter records shall provide:
(i) An accurate description of the animal;
(ii) How, where, from whom, and when the dog or cat was obtained;
(iii) How long the dog or cat was held by the pound or shelter before being transferred to the dealer; and
(iv) The date the dog or cat was transferred to the dealer.
(3) Any dealer who obtains or acquires a live random source dog or cat from a private or contract pound or shelter, including a pound or shelter he or she operates, shall hold the dog or cat for a period of at least 10 full days, not including the day of acquisition, excluding time in transit, after acquiring the animal, and otherwise in accordance with § 2.101.
§ 2.101 Holding period.
(a) Any live dog or cat acquired by a dealer [FN5] or exhibitor shall be held by him or her, under his or her supervision and control, for a period of not less than 5 full days, not including the day of acquisition, after acquiring the animal, excluding time in transit: Provided, however:
FN5 An operator of an auction sale is not considered to have acquired a dog or cat which is sold through the auction sale.
(1) That any live dog or cat acquired by a dealer or exhibitor from any private or contract animal pound or shelter shall be held by that dealer or exhibitor under his or her supervision and control for a period of not less than 10 full days, not including the day of acquisition, after acquiring the animal, excluding time in transit;
*9 (2) Live dogs or cats which have completed a 5-day holding period with another dealer or exhibitor, or a 10-day holding period with another dealer or exhibitor if obtained from a private or contract shelter or pound, may be sold or otherwise disposed of by subsequent dealers or exhibitors after a minimum holding period of 24 hours by each subsequent dealer or exhibitor excluding time in transit;
. . . .
(4) Any live dog or cat, 120 days of age or less, that was obtained from the person that bred and raised such dog or cat, may be exempted from the 5-day holding requirement and may be disposed of by dealers or exhibitors after a minimum holding period of 24 hours, excluding time in transit. Each subsequent dealer or exhibitor must also hold each such dog or cat for a 24-hour period excluding time in transit.
. . . .
§ 2.75 Records: Dealers and exhibitors.
(a)(1) Each dealer, other than operators of auction sales and brokers to whom animals are consigned, and each exhibitor shall make, keep, and maintain records or forms which fully and correctly disclose the following information concerning each dog or cat purchased or otherwise acquired, owned, held, or otherwise in his or her possession or under his or her control, or which is transported, euthanized, sold, or otherwise disposed of by that dealer or exhibitor. The records shall include any offspring born of any animal while in his or her possession or under his or her control.
(i) The name and address of the person from whom a dog or cat was purchased or otherwise acquired whether or not the person is required to be licensed or registered under the Act;
(ii) The USDA license or registration number of the person if he or she is licensed or registered under the Act;
(iii) The vehicle license number and state, and the driver's license number and state of the person, if he or she is not licensed or registered under the Act;
(iv) The name and address of the person to whom a dog or cat was sold or given and that person's license or registration number if he or she is licensed or registered under the Act;
(v) The date a dog or cat was acquired or disposed of, including by euthanasia;
(vi) The official USDA tag number or tattoo assigned to a dog or cat under §§ 2.50 and 2.54;
(vii) A description of each dog or cat which shall include:
(A) The species and breed or type;
(B) The sex;
(C) The date of birth or approximate age; and
(D) The color and any distinctive markings;
(viii) The method of transportation including the name of the initial carrier or intermediate handler or, if a privately owned vehicle is used to transport a dog or cat, the name of the owner of the privately owned vehicle;
(ix) The date and method of disposition of a dog or cat, e.g., sale, death, euthanasia, or donation.
The Respondents maintain that they were operating under pre-1990 regulations which differed from the 1985 regulations, in certain respects, including the required holding period.
9 C.F.R. § 2.101 in the 1985 regulations states:
*10 (a) Any dog or cat acquired by a dealer [FN4] or exhibitor shall be held by him, under his supervision and control, for a period of not less than 5 business days after acquisition of such animal: Provided, however, That (1) dogs or cats which have completed a 5-day holding period may be disposed of by subsequent dealers or exhibitors after a minimum holding period of 1 calendar day by each such subsequent dealer or exhibitor, excluding time in transit; . . . .
FN4 An operator of an auction sale is not considered to have acquired a dog or cat which is sold through the auction sale.
Premised upon a consideration of the evidence received at the oral hearing and the entire record, the following Findings of Fact are made. To the extent other proposed findings have not been adopted, they are rejected as immaterial, not supported by the evidence, or not legally sustainable.
Findings of Fact
1. Respondents are fairly large Class B dealers, dealing in research dogs and hunting dogs. These were obtained from various sources such as individuals who bought the dogs and sold them to Respondents, dog auctions, home-raised dogs and pounds. They came from places in Iowa, Missouri and Nebraska. Respondents have been in business 8 or 9 years without a formal complaint being filed. (Tr. 57). They sold dogs to the University of Iowa and the University of Minnesota.
Although the license as a Class B dealer is held in the name of Respondent Julian Toney, and not in the name of both Respondents, it is evident from the evidence of record that both Toneys participated in the conduct of the business and both are liable for the violations which occurred.
2. Briefly summarized as to what occurred, as related by the various witnesses herein, was that the Respondents dealt with several individuals who allegedly acquired dogs from various dog pounds, or city shelters for animals. Thereafter, these various individuals would take the dogs so acquired and sell them to the Respondents. The Respondents, at times, recorded in their records the name and other identification of the individual who brought the dogs to them, but, in the vast majority of the violations herein, the Respondents recorded the source of the dogs as related by the person selling the dogs and no attempt was made to verify the accuracy thereof. A substantial number of the transactions involved a Mr. Cliff Waterbury, an employee of the Respondents, and Respondents recorded on their books and records the source of the dogs as related to them by Mr. Waterbury. Such information as recorded by Respondents was erroneous in many instances. Although Mrs. Toney attempted to acquire the signature of individuals, as well as other data pertaining to their identity, her procedures did not consistently reveal the source of the dogs.
3. The Respondents falsely claimed in their records to have acquired dogs from various pounds when, in fact, they did not. Suffice it to say that the Complainant has detailed numerous instances where Respondents falsely claimed that dogs had been acquired from the following pounds when they had not: Macon, Missouri, pound; Marceline, Missouri, pound; Keytesville, Missouri, pound; Brookfield, Missouri, pound; Cameron, Missouri, pound; Trenton, Missouri, pound; Moberly, Missouri, pound.
*11 4. As to many of the dogs falsely shown as acquired from various pounds, the Respondents acquired them from their employee or agent, Mr. Waterbury, who did not acquire them from the pounds. The acts, omissions and failures of Mr. Waterbury, as their employee, are their own acts, omissions and failures. Mr. Waterbury did not have any records that he kept himself concerning the transactions or deliveries.
5. No particular form was required by USDA for the initial recordation of data and Respondents put all their business in spiral notebooks (Tr. 584), which they subsequently transferred to VS Forms 18-5, "Record of Dogs and Cats on Hand." The spiral notebooks were easy to carry in the pickups, to transport, and to move around. (Tr. 584). Respondents were never told spiral notebooks could not be used to record information for their records. Respondents testified they always tried to get the signatures and addresses of the sellers. When the requirements changed, they had to record a license plate or social security number. (Tr. 584-585). The practice of using the form, "Record of Dogs and Cats on Hand," on an intermittent basis renders the information inaccessible even when all of the required information is present. Moreover, the VS Forms 18-5 were not complete when the investigation took place. Inaccessible information is not fully disclosed information.
6. Respondents maintain that the Agency officials did not look at the right records. Respondent Julian Toney testified: (Tr. 585)
Q. At the time that Gunderson and Carter left with the records, whatever records there were, how complete were those records?
A. I would have to say they was not very complete.
Q. And what did you use-- What did you use to later complete those records? What documents?
A. The spiral notebooks.
Q. Did you ever go through those spiral notebooks with Mr. Gunderson?
A. He refused to look in our spiral notebooks.
Q. At any time from the time this whole thing began until the time you're sitting here today, did Mr. Gunderson or Mr. Carter or any other U. S. D. A. official ever ask to sit down with you and Anita and clarify or explain any of your records?
A. No, sir.
It was Respondents' obligation to keep and maintain complete and accurate records in such a manner that the data revealed thereon were capable of verification. Incomplete and/or erroneous records thwart the purposes of the Act and applicable regulations. The regulations contemplate clear, concise and accurate records, not bits of a puzzle.
7. Respondents further maintain that the investigating officials were not diligent in trying to verify the source of the dogs as reflected in the Respondents' records:
Q. Would have that been helpful in tracking down people?
A. Yes. If they'd have come to me and asked me where these individuals were, I'm sure I could have found them. I mean last night you sent me out to find a guy I'd never seen before.
Q. Did you find him?
*12 A. Yeah, I found him. He's here today.
Q. Is he a man that has been listed as someone that couldn't be found by the U. S. D. A.?
A. That's right. . . . (Tr. [585-]586).
8. Notwithstanding these protestations of Respondents, and even assuming that the Agency officials were not as diligent as might be desired in finding people or in reviewing the "completed" records, which were not completed until November of 1992, that still does not account for the inaccuracies revealed by Complainant. Although USDA does not require any particular forms, certain information is specified, and the records must completely and fully disclose the required information. It is not enough that the Respondents "know" a person's address or other information, such data must be in the records.
In addition to false entries relating to dogs allegedly coming from pounds or individuals when they had not, other examples of incorrectness in the Respondents' records are:
(1) The Respondents' records do not disclose the correct address and driver's license number of Kenneth Hughes, a person shown in the Respondents' records as providing dogs or cats to them. Mr. Hughes does not reside in Macon, Missouri (as shown in CX-1[, p. 211,] at tag numbers, e.g., 5649, 5650, and 561), but in Brimson, Missouri, near Gillman City. (Tr. 106, 661). His social security number is not as shown in the Respondents' records. (CX-1[, p. 209,] at, e.g., 5664 and 5667; Tr. 666).[ [FN2]] Mr. Hughes' address is not shown in relevant context in the Respondents' notebook records. (RX-UU, p. 25). The records are inaccurate for 48 dogs. (RX-UU, pp. 32, 38, and 121).
(2) The Respondents acquired an undeterminable number of random source dogs from Mr. Hughes who could not recall how many dogs he sold to Respondents. Mr. Hughes testified that he sold them "a couple dogs" which he was given by Dr. Alambaugh of the Crestview Veterinary Clinic. (Tr. 664). He also recalled that:
A. . . . like one time up to Gillman a lady had some and she wanted rid of them and she give them to me and I took them down and they was--I think there was three that time and then I had two with them, so there was five. (Tr. 665).
Although Mr. Hughes testified that "most" of the dogs he sold to Mr. Waterbury were "home raised," when asked, "what do you mean by or what would you call home raised dogs?," he answered, "Dogs that's raised at my place or my neighbors." (Tr. 663).
Mr. Hughes testified that he thought the largest number of dogs he sold to Mr. Waterbury at any one time was "[p]robably, the five, maybe, you know. Maybe, six." (Tr. 665). The Respondents' records show 20 dogs as received from him on either February 16 or 17, 1990 (RX-UU, p. 121), 26 or 28 on either February 6, or 11, 1990 (RX-UU, p. 32), and 2 dogs on February 10, 1990 (RX-UU, p. 3). Mr. Hughes' lack of records and his hazy memory are not sufficient to overcome Complainant's evidence.
(3) The Respondents' records did not disclose the correct address and driver's license number of "Buck Dyke," a person shown in the Respondents' records as providing dogs to them. APHIS Investigator Marshall Smith searched for "Buck Dyke" but could not find him. (Tr. 323). Mr. Smith conducted a reasonable search:
*13 Q. How did you go about looking for individuals, to find them first, and then to see if they sold them dogs?
A. I had copies of records.
I used the information in the records. And I wold [sic] go to the city listed in the records.
I would look in the phone book for an address, a name and address.
Then I would go to the post office for directions.
Q. All right. And what did you do if you didn't find them then?
A. Uh, I would use the information in the records.
And I had some social security numbers. And I contacted the Missouri Highway Patrol, and had them run the numbers through their computer system.
Q. Okay. And what did that show?
A. Uh, no record was found for --
There was no match for the names and social security numbers that I had furnished to them. (Tr. 322).
(4) The Respondents' records (RX-UU, p. 75) indicate that the dogs shown as acquired from "Buck Dyke" were brought to their premises by Mr. Waterbury. Anita Toney testified that his initials or name at the bottom of the page indicate this. (Tr. 701-702). Mr. Waterbury testified that he did not know "Buck Dyke":
Q. Who is Buck Dyke?
Q. Buck Dyke.
A. Buck Dyke?
A. Probably somebody I bought dogs off of, but I don't, I don't recall the name. (Tr. 106).
Mr. Waterbury also described the way he obtained names and other identifying information:
A. . . . Cause, you see, a lot of them guys that I didn't know their -- I didn't know 'em. They just gave me a name and I wrote it down and their Social Security numbers. And that's the way I got that.
Q. Did you ask them for their Social Security number?
Q. Did they show you anything?
A. Well, they, most all of 'em had it on a piece of paper wrote down, you know, and they give it to me.
. . . .
A. . . . I started in and I didn't know .em. All I could do is ask them for their information and whatever they give me, I put down, you see. (Tr. 107- 108).
(5) Based upon the facts that (a) a "Buck Dyke" could not be located in the area shown in the Respondents' records, (b) the social security or driver's license number shown in the Respondents' records did not check out, (c) "Buck Dyke" is not known to Mr. Waterbury, who personally received the dogs, and (d) that Mr. Waterbury accepted without question whatever names and numbers were given to him by strangers, it is concluded that the Respondents did not "make, keep, and maintain records . . . which fully and correctly disclose" [(9 C.F.R. § 2.75(a)(1))] the identity of the person from whom the six dogs were acquired which are shown in their records as acquired from "Buck Dyke." Respondents concede, on brief that [(Respondents' Brief filed Dec. 13, 1994, at 37)]:
It is possible that the information received by the Respondents concerning not only Mr. Dyke, but also many other individuals who sold dogs to Mr. Waterbury, were in fact wrong or in error.
*14 (6) Mr. Waterbury did not know other individuals from whom he is shown as personally receiving dogs in the Respondents' records:
Q. Do you know Bert Cray?
A. Bert who?
Q. Bert Cray.
Q. Cray, C-R-A-Y.
A. I don't, I don't recall that name.
Q. Do you know a Tom Smith in Moberly?
A. No. I don't believe I know Tom Smith.
Q. Jim Trimble, do you recall buying dogs from Jim Trimble?
A. That was probably some dogs that I bought at Rutledge. Cause, you see, a lot of them guys that I didn't know their -- I didn't know .em. . . .
. . . .
Q. Mike Maloney, do you know Mike Maloney?
A. Yeah. He's probably another one of them Rutledge guys, you know. (Tr. 107- 108).
For the same reasons the Respondents' records [do not fully and correctly] show the [required information as to the] acquisition of 4 dogs from "Bert Cray," 5 dogs from "Tom Smith," 3 dogs from "Jim Trimble," and 6 dogs from "Mike Maloney."
(7) The Respondents' records do not correctly disclose the address of Ray Dean Burdess, from whom the records show the acquisition of six dogs. He does not live in Ridgeway, Missouri, as shown in CX-1[, pp. 184, 186,] at tag numbers 5889 and 5874, but in Weldon, Iowa. (Tr. 424).
(8) On December 1, 1992, Mr. Waterbury signed a sworn affidavit before APHIS Senior Investigator Richard A. Gunderson, which included the following statement:
"During 1990 I may have sold 12 or 15 dogs in my name to Julian Tony [sic]. These would have been dogs that I purchased and tried as Coon dogs and later resold to Toney. I am sure I never sold him 64 dogs." (CX-180).
Mr. Waterbury, through his testimony at the oral hearing, attempted to discount his affidavit. [Respondents' record of dogs and cats on hand (CX 1, pp. 2, 12, 35, 48, 56, 78, 82-83, 89-91, 109, 119, 124, 128, 133-34, 146, 149, 152-53, 160, 167, 173, 175, 189, 191-93, 196, 199, 204, 206-07, 212, 214-19, 221-22, 225-29, 231, 233-35, 237, 239) shows the acquisition of 54 dogs from Cliff Waterbury during 1990.] The more reliable evidence shows that the Respondents acquired at least 12 random source dogs from Mr. Waterbury, and that they falsified their records as to at least 45 dogs by failing to make records which would disclose the identity and other required information concerning the person from whom they acquired the dogs through Mr. Waterbury.
9. The Respondents did not obtain or acquire these dogs directly themselves, but purchased them from others, none of whom had records at the time of the hearing, nor did the "source" beyond them keep and/or maintain records. The oral hearing was held almost 4 years after the events in question and memories of the witnesses were hazy. Some witnesses had earlier given affidavits which later they attempted to disavow in whole or part. Nevertheless, the Complainant has carried its burden of proof of showing the falsity of Respondents' records and of alterations thereto to conceal violations of the holding period.
*15 10. Respondents attempted to use [and used] false and forged certificates from the Vinton, Missouri, dog shelter. Mr. Knaack signed one of the certification documents and then there were copies of his signature made by Mr. Scherbring. Elmer B. Scherbring, a licensed "B" dealer under the Act, induced Jim Knaack, City of Vinton, Iowa, Animal Control Officer, to sign blank copies of certification forms used to show that a dog or cat had been acquired from a pound and that the required holding period had been met. (Testimony of Mr. Scherbring, Tr. 38; Mr. Scherbring's affidavit, CX-120; Testimony of Mr. Knaack, Tr. 26; Mr. Knaack's affidavit, CX-124; Samples of forms signed in blank, CX-121-122). [A copy of one of the blank Vinton dog shelter certificates, signed by Animal Control Officer Jim Knaack, is reproduced on the following page (CX 121).]
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
11. Mr. Scherbring also obtained a statement from someone affiliated with the City of Vinton (or fabricated a purported statement) to the effect that dogs from the shelter at Vinton are donated to him, that they have been kept for the required time, that each owner is informed that dogs are used for research purposes, and that "Elmer Scherbring is doing a very good job for us and don't want him to go our [sic] of business." The signature is illegible. Copies of this statement were made and identification tag numbers, descriptions of dogs, and dates were added to make the statement appear to be a certification from the pound for a particular dog. (CX-126, 149-151). Mr. Scherbring testified that he did not place the initials "JK" on the certification forms. (Tr. 41; CX-. . . 127-129) Mr. Knaack also testified that he "absolutely didn't put that there." (Tr. 34).
Mr. Scherbring stated the following in his affidavit:
Mr. Carter [APHIS Senior Investigator] asked me if I had ever gave any of these forms, with or without any signature. I told Mr. Carter that I sell a lot of small dogs to Julian Toney, Lamoni, Iowa who is also a USDA licensed Class "B" dealer (No. 42-B-067) and that Mr. Toney had requested a copy of each form (two different forms). These forms had the Vinton Dog Pound name and address on them and the ACO-Jim Knaack's signature. I do not remember if I signed my name on them or not. (CX-120).
12. At the hearing, Mr. Scherbring testified that he filled out the certifications which had been signed in blank, inserting the information for each individual dog. (Tr. 38). Mr. Scherbring denied that he gave the Respondents certification forms signed in blank and not filled out. (Tr. 47- 48).
13. The intrinsic evidence of the certification forms demonstrates that the Respondents completed the top portion of the certification forms for each individual dog. The forms have a box at the far left labeled "Assigned USDA tag no.," followed by boxes for sex, date of birth or approximate age, breed type, color and distinctive markings, then a box labeled "ID Tattoo or Previous USDA Number," followed by a box for disposition. In every instance, the "Assigned USDA tag no." is the Respondents' tag number, while the Previous USDA Number is Mr. Scherbring's tag number.[ [FN3]] If the form had been completed by Mr. Scherbring, his tag number would have been the assigned (and only) number. (CX-125, 127-14, 152[-154], -169). [Jim Knaack, the Animal Control Officer for the Vinton dog shelter, testified that his signature on all of the forms he looked at in the packet shown by Respondents' counsel (CX 125, 127-148, 152- 154, 156-160) were copies reproduced on a copying machine (Tr. 24-29). All of these forged certification forms were used by Respondents to sell dogs to Universities or a Veterans Administration Hospital (Tr 18-20, 63-65, 68). Mr. Knaack testified (Tr. 28-30) (emphasis added):]
*16 [BY MR. KRULL:
Q. Mr. Knaack, Mr. Ertman asked you some questions about, I think it was Exhibit 120 or 121. It's a blank form, isn't it? Are you on Exhibit 121?
A. Uh huh.
Q. And it just has your signature, is that correct?
Q. Now, I don't know if this packet includes all of these, but I am going to ask you to take a couple of minutes, Mr. Knaack, and I would like you to look at Exhibits 125 through 160. Okay?
A. (Reviews documents.)
Q. Just very quickly. And what I want you to do is look for your signature on each of those exhibits. Okay, Mr. Knaack?
A. (Reviews documents.)
A. I don't believe this.
Q. What I am looking for is whether or not your signature is on these type of forms, Mr. Knaack, the ones that were similar to 120.
Have you had a chance to look at all those forms?
A. Pretty well. They just keep coming and coming and coming. These are all copies.
Q. Okay. Now, that's basically my question, Mr. Knaack. After you have reviewed all of those forms that have your signature on them, can you tell, Mr. Knaack, which is your signature and which might be a forged signature?
A. Huh uh.
Q. Do any of those look like a forged signature to you?
A. Well, I went too fast. But, no, these here look to me like they come off of a -- Elmer, he got himself a copy machine. So --
Q. Let me ask you this. Do you trust Elmer? How long have you been doing business with him?
A. Oh, about a year.
A. I actually trust him, but I didn't know he done this to me.
Q. Do, do what to you? Tell me.
A. Well, I probably signed all these papers for him and he, he took them home and he made up a lots of copies.
Q. Right. And you didn't do that again, did you?
A. No. No.]
[The "copied" signature of Mr. Knaack was used by Respondents to sell the 4 dogs in CX 125, and 127-129 to the Veterans Administration Hospital in Minneapolis, Minnesota (see CX 172), the 18 dogs in CX 130-147 to the University of Iowa (Tr. 18-20), and the 18 dogs in CX 148, 152-154, and 156-169 to the University of Minnesota (Tr. 63-65, 68). A copy of one of the certification forms (CX 137) completed by Respondents in order to sell the dog to the University of Iowa (Tr. 18-21), that had previously been signed in blank by Animal Control Officer Jim Knaack, is reproduced on the following page, showing the "Assigned USDA tag no." as "13549" (which is Respondents' number), and the "Tatoo or Previous USDA Number" as "81" (which is Mr. Scherbring's number). (The arrows to the numbers "13549" and "81" drawn on the exhibit were drawn by the Judicial Officer, and do not appear on the original exhibit.) On the next page, the record of the previous sale of that dog from Mr. Scherbring to Julian Toney is reproduced (CX 171, p. 5), showing Mr. Scherbring's number as "81," and Julian Toney's number as "13549," the same two numbers shown on the certification form (reproduced on the immediately preceding page) used by Respondents to sell the dog for research to the University of Iowa (Tr. 18- 21). (Again, the arrows were drawn by the Judicial Officer, and do not appear on the original exhibit.)]
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
*17 14. Although 9 C.F.R. § 1.1 defines "random source" as meaning dogs obtained from animal pounds or shelters, auction sales, or from any person who did not breed and raise them on his premises, the Respondents may not claim that the dogs in question were acquired from a permissible source inasmuch as the dogs were acquired from persons who allegedly said they got the dogs from pounds (when they had not), or the source of the dogs was otherwise misstated. The Respondents violated the procedures for the transfer and certification of random source dogs.
15. During the year 1990, Respondents failed to hold at least 190 dogs[ [FN4]] and cats for a period of not less than 5 [full] days after acquisition in willful violation of section 5 of the Act (7 U.S.C. § 2135) and section 2.101 of the regulations (9 C.F.R. § 2.101 (1992)). The overwhelming weight of evidence shows that the Respondents were aware of and knew what the regulations required in 1990.
16. By reason of the forged documents mentioned above [in Findings 10-13, supra], the Respondents sold or provided at least 4 live random source dogs to research facilities which were accompanied by false documents purporting to be certifications from a municipal pound, including 4 dogs to the Veterans Administration Hospital, Minneapolis, Minnesota [(CX-125, 127-129; see CX-172)]; 1 dogs to the University of Iowa [(CX-130-147; Tr. 18-19)]; and  dogs to the University of Minnesota [(CX-148, 152-154, 156-169; Tr. 57-58, 65, 67-68)].
17. Respondents failed to individually identify dogs as required. In March 1994, there were 60 dogs on the premises with no official identification [(CX 106; Tr. 165, 197)]. At least seven additional dogs had not been identified upon separation from their dams [(CX 106; Tr. 166-76)].
18. Respondents failed to apply official identification tags to dogs in as close to consecutive numerical order as possible [(CX 106)].
19. The 60 dogs which were not individually identified were represented as home raised but were not shown in the records. The 60 unidentified dogs covered a wide age range, from 3 months to fully adult [(Tr. 166, 197-98)]. Records of dogs born on the premises were also incomplete in that 13 dogs which were listed in the records as home raised had no date of entry into the records and had no age recorded. (CX-106).
20. An undeterminable number of the 60 unidentified dogs represented as home raised were in fact acquired from other sources. Also, an undeterminable number, but at least four of the identified dogs shown in the Respondents' records, were in fact acquired from other sources. The "undeterminable number" consists of the dogs born before the February 11, 1993, inspection.
21. Housing facilities and primary enclosures for dogs were found [on March 16 and 17, 1994,] to be not structurally sound and maintained in good repair so as to protect the animals from injury, contain the animals securely, and restrict other animals from entering [(CX 106, 107A-E, 108A-E; Tr. 146-53)].
*18 A. Dr. Wease described these conditions as follows:
I found a number of dog enclosures with broken wire on floors and the walls, a number of enclosures were deteriorating and wooden roofs deteriorating, wooden boards and surfaces, which allowed dog appendages and heads to protrude to the outside portions of the pen.
In addition, there was some other enclosures that had deteriorating sheet metal siding with some rusting which also allowed the extremities of the dogs to project outside of the enclosure. (Tr. 146).
[B.] Senior Investigator Daniel Hutchings described each of the photographic exhibits and the significance of the conditions depicted:
107(a) shows a wire pen at Mr. Toney's that is off the ground about two foot. It shows -- you can see the foreleg of a dog in the pen and broken vent and rusted wire and some fecal matter laying on top of it.
107(b) is a wooden enclosure at Mr. Toney's facility that I took a photograph of. And it shows the plywood that is in various stages of decomposition from, from rain and the elements.
107(c) is a pen that was housing dogs at Mr. Toney's facility. It's the west side of a pen that rusted, metal and straw coming out of the pen that could allow a dog's leg to go through the side of the pen there.
107(d) is the back of a pen, you can see holding a dog's head, which allowed the dog to stick his head out of there and possibly get his head caught in there.
107(e) is another pen holding -- at Mr. Toney's holding a dog. And as you can see, the dog has chewed his way through rotten wood there to stick his head out the back of that pen also.
108(a) is another shot of the same pen as 107(d) without the dog's head out. And I took that picture just to show structural damage there to that pen without the dog's head in there.
108(b) is essentially the same pen as 107(e). And this position shows that dog able to stick his head extreme out to one side there.
So that shows that basically the size of that hole, that he could get himself wedged in there or one leg through that hole with his head out that far. It would have been very easy for him to stick a leg out that hole also and get hinged.
108(c) is another one of the pens at Mr. Toney's with rusted and broken wiring. And you can also see another dog's foot there in the foreground of that.
108(d) is another pen of Mr. Toney's with rusted tin siding with the straw bedding coming out the side of the tin building. The tin, the primary enclosure there for those dogs.
108(e) shows a pen at Mr. Toney's dog pen with wood that is rotten and is not structurally sound. (Tr. 191-193).
These conditions are a violation of 9 C.F.R. §§ 3.1(a) and 3.6(a)(1).
22. Surfaces of outdoor housing facilities for dogs were not maintained on a regular basis and surfaces that cannot be readily cleaned and sanitized were not replaced when worn or soiled [(CX 106, 107A; Tr. 154-58)]. Dr. Wease testified that "there was a number of dog enclosures that were not being maintained on a regular basis and were not being readily cleaned and sanitized to include surfaces which had accumulated feces and hair and dirt and debris on the wood surfaces, as well as on the wire flooring." (Tr. 154). Dr. Wease also testified that the enclosures "were not being maintained on a regular basis, showing deteriorating wooden surfaces which were chewed, broken, deteriorating, not being impervious to moisture." (Tr. 158). These conditions are a violation of 9 C.F.R. §§ 3.1(c) and 3.4(c).
*19 23. Provisions were not made for the regular and frequent collection, removal, and disposal of animal and food wastes, bedding, debris, and dead animals, in a manner that minimizes contamination and disease risks [(CX 106, 109A-C; Tr. 154-56)].
A. Dr. Wease described the conditions as follows:
We found an entire deteriorating cow carcass of several days' duration with evidence of loose dogs that were eating various parts of the carcass.
Also, there was various parts of the cow, or not of that particular cow, but evidence that other cows had been there on the premises. And there was parts strewn throughout the animal area. Bones, there was cowhide, there was a head in various stages of deterioration, which was littered among the dogs', dogs' facility.
And there was also underneath one of the dog enclosures, there was two immature dogs, believed to be puppies, by their dentition, it looked like they were puppies, which were found under the dog enclosure in advanced stages of decomposition.
. . . .
A. 109(a) is a photograph which demonstrates in the foreground is a, was a calf head. And in just, in back of the cow head is several cow bones strewn among the ground.
. . . .
And also with dogs that were loose, eating the deteriorating cow carcass. The food they receive is supposed to be wholesome and palatable. And disease potential was there with a deteriorating cow carcass in various parts.
. . . 109(b) is a photograph of the two markedly deteriorating puppies that were found underneath one of the dog enclosures. . . .
Again, these two puppies were in advance[d] stages of decomposition. They had been there for some extended amount of time.
Again, this is a housekeeping problem and a waste disposal problem. The potential for disease and harboring of rodents, insects, or attracting rodents and insects.
. . . 109(c) is a photograph in the foreground of the whole carcass of the cow that I described previously. The deteriorating cow carcass had been there also, it would appear to be several days' duration.
During the inspection, we -- I witnessed several dogs that came up and were eating off this carcass. (Tr. 154-156).
B. Mr. Hutchings also described the photograph of the "mummified puppy" (CX-109A):
Well, it would, it would tell me a lot of things in regards to the regulations. It would be that inadequate compliance with disposal of dead animals, cleaning and sanitation in that you have the flies and other things that could get into this and come up above right -- cause right up above this was the live dogs two foot above this dead animal.
And it shows lack of some veterinary care there and a veterinary care program to me in that you are allowing dead animals to lie around in the facility. (Tr. 193-194).
These conditions are a violation of 9 C.F.R. § 3.1(f).
24. Food for dogs was not uncontaminated and wholesome [(CX 106, 109A, C)]. Dr. Wease testified that the premises were not only littered with dead animals and parts but that dogs were feeding on them. (See above). Mr. Hutchings described the conditions as follows:
*20 109(a) is a skull and the head of a calf that was laying with some bones there next to some dogs at Mr. Toney's facility when we did this inspection.
. . . .
. . . [W]here that animal is positioned, I would say that those animals -- the dogs have been feeding off that calf, the calf head there.
So it was in the various stages of decomposition. It was rotten flesh. (Tr. 193).
. . . .
109(c) is a picture of a dead cow that was at Mr. Toney's facility. . . .
And I -- at one time I saw some loose dogs eating parts of this cow and actually going up and carrying off insides of flesh off the back of this cow. The back of this cow was a -- as you can see, there is a hole there underneath where its tail is.
And I saw several dogs that were loose run up and bite pieces of rotten flesh out of there and run off with it.
. . . The hole was approximately, I would say 16 inches long, 16, 17 inches long and about a foot to 14 inches wide near the rectum of the cow. (Tr. 194).
These conditions are a violation of 9 C.F.R. § 3.9(a).
25. Dogs in outdoor housing facilities were not provided with adequate protection from the elements [(CX 106, 110A-H; Tr. 156-58, 194-96)]. Dr. Wease testified that:
I found a number of dogs which, in my opinion, had an inadequate outdoor shelter due to the fact that the interior barrel height was 22 inches and the dogs that I noted were greater than 22 inches in height.
It states in the regulations that the dog must be able to sit, stand, turn, make normal postural movements while in their outdoor shelter.
There was a number of dogs that did not meet this requirement in my opinion, 27 dogs is what I have noted. (Tr. 156-157).
Both Dr. Wease and Mr. Hutchings described the photographs (CX-110A-H) and how they demonstrated that the barrel shelters were not large enough for the dogs. (Tr. 156-158, 194-196). These conditions are a violation of 9 C.F.R. § 3.4(b).
26. Primary enclosures for dogs were not constructed so that they provided sufficient space to allow each animal to turn about freely, to stand, sit, and lie in a comfortable, normal position, and to walk in a normal manner [(CX 106; Tr. 160)]. Dr. Wease testified that there were "a few dog enclosures [.hutches'] that had less than 6 inches head clearance when they were in the normal standing position." (Tr. 160). These conditions are a violation of 9 C.F.R. § 3.6(a)(2)(xi).
27. Dog housing areas where dogs were on tethers were not enclosed by a perimeter fence of sufficient height to keep unwanted animals out. (Testimony of Dr. Wease, Tr. 160-161; Testimony of Mr. Toney, Tr. 553). Dr. Wease testified a fence "is necessary to make sure that other pests do not get in with the dogs, mostly for safety reasons as well as potential for disease potentiation with raccoons and skunks." [(Tr. 160-61)] The problem was the absence of a perimeter fence, not the inadequacy of an existing fence. These conditions are a violation of 9 C.F.R. § 3.6(c)(2).
*21 28. Primary enclosures for dogs were not kept clean and sanitized as required and excreta and food waste were not removed from primary enclosures daily, and from under primary enclosures as often as necessary, to prevent an excessive accumulation of feces and food waste, to prevent soiling of the dogs and to reduce disease hazards, insects, pests and odors. Dr. Wease described the lack of cleanliness and sanitation at the facility (Tr. 161-162):
. . . I found a number of dog enclosures that had an accumulation of feces and hair on the wire flooring and under primary enclosures as well.
The regulations state that the kennels inside the primary enclosure should be cleaned on a daily basis and under the kennels as often as needed to prevent an excessive accumulation of manure and waste material.
In addition, there was several enclosures which had wet matted down straw which had fecal material that had been trampled into the bedding material, which indicates improper sanitation and possible problems with disease potentiation, not being cleaned on a regular basis.
. . . .
. . . 111(a) is a photograph which was taken on the underneath side of one of the raised enclosures. This indicates an excessive accumulation of fecal material which had been there for an extended period of time.
It [the regulation] states that this must be cleaned as frequently as needed to prevent an excessive accumulation of manure and waste and also to facilitate husbandry, to decrease disease potential and to also minimize the potential for pests and rodents and insects into the kennel facility.
. . . .
. . . Exhibit 111(b) is a photograph which demonstrates the, the wet matted down straw that was in the posterior of the dog houses with accumulated fecal debris which was matted down into the straw.
Again, a sanitation problem, potential to attract pests and the possibility of disease potential within this enclosure.
These conditions are a violation of 9 C.F.R. § 3.1(a)(b).
29. The premises, including buildings and surrounding grounds, were not kept in good repair, and clean and free of trash, junk, waste, and discarded matter, in order to protect the animals from injury and facilitate the required husbandry practices. ([CX 112A-C;] Testimony of Dr. Wease, Tr. 162-164; Testimony of Mr. Hutchings, Tr. 196-197). Dr. Wease gave this description of the housekeeping problems at the Respondents' premises (Tr. 162-164):
. . . Housekeeping, I found that there was accumulated debris scattered over the premises which included old kennels, dog houses, metal pipes, sheet metal, wood scrap, cow bones, a cow, woven wire, a 55 gallon drum which was full of trash.
. . . .
. . . 112(a) is a photograph demonstrating the two deteriorating puppies in advanced stages of decomposition. Also included in there are some cowhide and some cow bones indicating to me the lack of housekeeping, the potential for disease potentiation, attracts insects, attracts rodents.
*22 It needs to be cleaned up and discarded in a timely manner. And it's evident from these photographs that these puppies have been there for some extended period of time.
. . . .
. . . 112(b) is a photograph demonstrating what was notated under line 37, housekeeping. The accumulated debris over the kennel facility, in the foreground is a decomposing cow head. In the background is various cow bones.
. . . .
My concern with the various cow parts was potential for disease, potential to attract other types of rodents, insects, and also it states that the animals need to be provided a wholesome and palatable diet, of which the deteriorating cow parts, in my opinion, do not meet that requirement.
112(c) is a photograph demonstrating inadequate housekeeping. It shows in the foreground a dog house, dog feeder. In the background is another dog house. Various sheet metal fragments, pipes, some wood, scrap wood.
This needs to be collected and disposed of in a timely manner to facilitate proper husbandry practices, not to harbor insects, not to harbor rodents, protect the animals from injury. (Tr. 162-164).
These conditions are a violation of 9 C.F.R. § 3.11(c).
Discussion and Conclusions
Succinctly stated, Respondents argue that their records were kept in accordance with the regulations; that no particular form of recordation of pertinent data was prescribed; that Respondents kept the data in spiral notebooks; that the investigation was flawed in several respects--the initial audit of their records, leading to the violations herein, was unexpected; that the investigators were told that the records were incomplete at the time of the audit; that the investigators never returned to view the completed records (which were subsequently brought to Washington, D.C., and made available to Complainant[, i.e., CX 1]); that the source of the dogs was correctly recorded as relayed to the Toneys by Mr. Waterbury, their employee and agent, as well as by others who sold dogs to them; that the investigators erroneously indicated that some of the sources of the dogs could not be found when, in fact, several were easily found; that Mr. Waterbury did not keep records himself and Respondents relied on the information he gave them; and that the individuals associated with the pounds were asked if they sold to Respondents when in fact they had sold to Mr. Waterbury or others, and thus, such individuals were confused.
The Complainant admits, on brief [(Complainant's Reply Brief at 2)]:
Early in the investigation, the investigators were under the impression that respondent Julian Toney personally made trips to acquire dogs and they framed their questions accordingly. Later they learned that the respondents' employee, Mr. Waterbury, was acquiring dogs for them in Missouri. It is not at all unusual for investigators to learn things during an investigation which cause the revision of working assumptions made at the beginning. The respondents mischaracterize the circumstances in asserting that "the investigators didn't bother asking these individuals the right question, whether Cliff Waterbury picked up dogs from these pounds." (Respondents' Brief, pp. 4-5).
*23 However, the Complainant has not contended in this proceeding that the records were false because the Respondents did not personally acquire the dogs from the pounds as opposed to acquiring them through their employee. The Respondents' records are false because they did not acquire the dogs from the pounds. They are also erroneous and misleading in other aspects.
The very essence of the applicable regulations is to be able to identify the source of the dogs and to maintain individual identity thereof. This point was addressed in In re: Rudolph Vrana, d/b/a Vrana Research Animals, 43 Agric. Dec. 1758, 1762-1763, AWA [Docket No.] 244, November 6, 1984:
The Animal Welfare Act was enacted in 1966 to achieve three objectives:
"The purposes of this bill, as amended, are (1) to protect the owners of dogs and cats from theft of such pets, (2) to prevent the use or sale of stolen dogs or cats for purposes of research or experimentation, and (3) to establish humane standards for the treatment of dogs, cats, and certain other animals . . . by animal dealers and medical research facilities." (Senate Report No. 1281, June 15, 1966; 2 U.S. Cong. & Admin. News 66, at 2635).
The Act seeks to foster the first two of these purposes by slowing down the speed with which stolen pets come into the possession of medical laboratories:
'. . . [S]hocking testimony was received concerning the existence of pet stealing operations which supply some animals eventually used by many research institutions. Stolen pets are quickly transported across State lines, changing hands rapidly, and often passing through animal auctions." Ibid. at 2636.
To discourage the theft of pets and increase the chances of their recovery by their rightful owners, section 5 of the Act [footnote omitted] requires dealers to hold dogs and cats five business days from the date of their acquisition before their sale or disposition.
It is because there is a "despicable trafficking in family pets" that it is "the duty of the Secretary of Agriculture to strictly enforce these requirements under the Act, and severely sanction those who repeatedly violate them." In re: Vrana[, supra], 43 Agric. Dec. at 1764.
When Complainant's investigators queried individuals as to whom they sold or gave dogs and the number thereof, it appears the investigators did not refer the persons involved to Respondents' records, or, possibly to any records. Whether a computer list was shown to some individuals is problematic. Mr. Waterbury and Mr. Silkwood and others did not keep records and Respondents knew they were acquiring the dogs from such individuals and not the pounds. [(Mr. Waterbury acquired some dogs for Respondents as their employee, but he also sold some dogs to them in his individual capacity.)]
Dealers and exhibitors are required by section 2.75(a)(1) of the regulations (9 C.F.R. § 2.75(a)(1)) to "make, keep, and maintain records or forms which fully and correctly disclose" the specified information. Completely apart from falsified entries and incidental errors, the Respondents' system fails to fully disclose the specified information such as addresses, license plate numbers, driver's license numbers, the name and address of the person from whom a dog or cat is acquired, their vehicle plate and state, and driver's license number and state. It should also be noted that a city is not an address and a social security number is not a driver's license number (except in those states where it is used as such by the state). Moreover, the Respondents' records fail to correctly disclose dates of acquisition and disposition.
*24 It is quite clear from the evidence of record that the Respondents did not make and maintain records which complied with the regulations and standards. Even belated attempts to alter the records were not successful.
Although there are some discrepancies which might be explained by occasional error or misunderstanding, these are too numerous to be less than conscious attempts to alter documents to meet the regulatory requirements. The Respondents failed to maintain complete and accurate records showing the acquisition of dogs and cats, in willful violation of section 10 of the Act (7 U.S.C. § 2140) and section 2.75(a)(1) of the regulations (9 C.F.R. § 2.75(a)(1) (1992)), by making false entries as to the identity of the person (or animal shelter) from whom the animals were acquired. The Complainant has set forth, on brief [(Complainant's Brief filed Oct. 7, 1994, at 1-9, Findings 1-7)], at least 100 instances or more of false and incorrect entries as to the source of the dogs.
The Respondents maintained false records relating to acquisition of dogs from pounds, inasmuch as the animals were not acquired from a pound or shelter (as represented), nor born and raised on the premises of the persons from whom acquired. They were random source dogs as defined in the regulations and were acquired [and held] by the Respondents in willful violation of the regulations, including those relating to the holding period.
The Respondents maintain that the Complainant has failed to show violations of the holding-period requirements. In furtherance of this position, the Respondents maintain, firstly, that their records, as subsequently completed, do not reflect holding-period violations; secondly, that during this period there was a change in the regulations of which they were unaware; and thirdly, that the Complainant has failed to carry its burden with respect to the dates of acquisition and disposition of the dogs in question. None of these contentions is meritorious.
The Complainant's evidence demonstrates that the Respondents' system does not fully disclose the required information. The information kept in the notebooks [(e.g., RX UU)] concerning a particular animal cannot be accessed except by examining each separate entry. The system is useless both to the Respondents and to the Agency. It does not, as a practical matter, provide the Respondents with the information they need to avoid holding-period violations. It is also useless to the Agency in attempting to determine, during a routine inspection, for example, whether the records are in order.
That the Respondents' records failed to fully disclose the required information is also illustrated by their difficulties in assembling the information for Mr. Carter and Mr. Gunderson. Dealers and exhibitors may comply with the regulations by using the forms provided by APHIS ("Record of Dogs and Cats on Hand") [(CX 1)] and by regularly transferring information to the forms from daybooks or other intermediate records. Dealers and exhibitors are free to use any system so long as it fully and correctly discloses the required information. The practice of using the form "Record of Dogs and Cats on Hand" intermittently renders the information inaccessible even when all of the required information is present. Inaccessible information is not fully disclosed. Nor is information, within someone's personal knowledge, and not reflected in the records, considered compliance with the record keeping requirements.
*25 As explained by Complainant, the "Specifications for the Humane Handling, Care, Treatment, and Transportation of Marine Mammals" were amended in 1984, leading to a printing of a new edition of the booklet containing the regulations issued under the Animal Welfare Act (9 C.F.R. Parts 1-4), revised as of January 1, 1985. The annual edition of Title 9, Code of Federal Regulations, is issued revised as of January 1 of each year. There were no changes in 1985 (except for a correction), 1986, 1987 or 1988, and thus the January 1, 1985, edition remained current until the amendments in 1989. The 1989 amendments to the regulations are not applicable to the holding-period violations of this matter. To the extent that the requirements were increased by the amendments, by imposing a lengthened holding period of 10 days for dogs and cats acquired from pounds, they are not pertinent in this case because the animals involved were not acquired by the Respondents from pounds. The requirements were also increased by a change in the exception allowing a shortened holding period for dogs and cats which had undergone a 5-day holding period with a prior dealer, adding that the animals must have undergone a 10- day holding period where that was required because the prior dealer acquired them from a pound. This too was not implicated in this matter. Thus, the holding-period requirements were eased (1) by the creation of an exception for dogs and cats 120 days of age or less acquired from the person who bred and raised them, in which case the animals are only required to be held 24 hours, and (2) by the further reduction of the already reduced holding period in the exception for dogs and cats which have completed a 5-day holding period by another dealer, so that they must be held for 24 hours. The Respondents are subject only to the regulations in effect at the time of their actions whether or not they had knowledge or notice of the eased requirements.
Prior to the amendments published in the Federal Register at 54 Fed. Reg. 36,123 on August 31, 1989, and effective on October 30, 1989, there were no restrictions on the acquisition of random source dogs from individuals. It was irrelevant whether dogs or cats were sold to a dealer by a "person who did not breed and raise them on his or her premises."
Other contentions raised by the Respondents with respect to the Complainant's allegations of holding-period violations include the contention that they were unaware of the requirements as they existed in 1990. However, this is disputed by the fact that Respondents' notebook records of acquisitions (RX-UU) are replete with statements such as, "I understand that the dogs and cats that I sold to Julian Tony [sic] 1-29-90 are used for research purposes and are home raised." (RX-UU, p. 37). There are many such statements. The presence of the "home raised" statements and driver's license numbers (or social security numbers) shows that the Respondents knew of the new requirement. Also, there is compelling evidence that the Respondents knew the prohibition against obtaining random source dogs and cats from individuals by reason of the fact that their records falsely showed dogs as having been acquired from municipal pounds when the dogs in fact were acquired from individuals. Furthermore, the Respondents' regular inspector, animal care inspector Ronda Carlon Harrison, made a special visit to explain the new regulations to the Respondents in January 1990. (Tr. 95[-96]).
*26 The Respondents assert that the Complainant must prove the age of the dog or cat and that it was over 120 days old. There is an exception in the 5- day holding-period requirement for dogs and cats 120 days old or less, acquired from a person that bred or raised the dog or cat. (9 C.F.R. § 2.101(a)(4)).
It is not necessary for the Complainant to prove that the animals in question were over 120 days old. It was incumbent, however, upon the Respondents to show that the animals fell into an exception to the holding-period requirements. In other words, the Respondents had the burden of claiming the applicability of the exception allowing a 24-hour holding period.[ [FN5]]
Section 2.101(a)(1) specifically states that an operator of an auction is not considered to have acquired a dog or cat which is sold through the auction sale. However, the Complainant's interpretation of this regulation appears to be the correct one. Namely, that the exception specifically applies to the operator of an auction sale for dogs or cats sold through the auction sale. It is pointed out that the clarity of the provision in the regulations ([and] in section 5 of the Act [(7 U.S.C. § 2135)]) is that the operator of an auction sale does not have to have dogs and cats brought to the sale 5 days before or to hold them for 5 days before releasing them to the purchaser. However, this provision cannot be applied to a Class B dealer who operates an auction sale and who purchases dogs and cats at his own sale.
Also with respect to other aspects of the Respondents' arguments, it is noted that it is established precedent of the Department of Agriculture that the shortened holding- period exception applies only to dogs and cats acquired by a dealer from a licensed dealer. In re: Vrana[, supra], 43 Agric. Dec. at 1758. The holding-period requirement is an essential part of the Animal Welfare Act and the effort to preclude trafficking in family pets. The purposes of the holding-period requirements would be frustrated if the shortened holding period were applied to dogs and cats acquired from unlicensed dealers, no matter how long the unlicensed dealer had them.
Careful consideration has been given to the contentions of the Respondents that the reason for the altered dates on their records was because the information was either initially misunderstood or given in error; that the actual sale or transfer of money could have taken place on one date and the acquisition, for holding periods, . . . may have taken place on another date; and that obliteration or illegibility of original dates which cannot be read make it impossible to determine if there was a violation. The Respondents' contentions center on a derogation of the Complainant's evidence by arguing that other possibilities existed which preclude the validity for Complainant's assertion.
The Respondents' assertions that there is no evidence that the dogs involved are random source dogs ignores the definition of "random source." The Respondents' contention that all of the dogs came from the Vinton, Missouri, pound through Elmer Scherbring concedes that the dogs were not bred and raised on the premises of the person from whom the Respondents acquired them and that they were therefore random source dogs.
*27 There is substantial evidence to indicate that the Respondents altered their records to conceal violation of the holding periods. It appears that there are transactions where the dates are altered in the notebooks but the entry of their "Record of Dogs and Cats on Hand" (CX-1) shows the later date where there would be no violation of the holding period and the earlier date where it avoids a violation.
The Act and regulations prohibit a dealer from selling or providing a random source dog or cat to anyone unless it is accompanied by the required certification. If the dog or cat was acquired from a pound, the certification must include a signed statement by the pound that it was held for the required period. This statement may be incorporated in the dealer's certification if made at the same time or it may be made separately and attached later when the dealer makes the certification. If made separately, the statement by the pound must fully describe the dog or cat in the manner required for the certification. The regulations also prohibit a dealer from acquiring a live dog or cat from a dealer without receiving the required certification. All of the certificates must be attached (unless of course they are made on the same document) and [provided to the recipient, so that any dog or cat in the hands of a dealer or research facility may] be traced back either to a pound from which the first dealer obtained it or to the person on whose premises it was bred and raised.
The requirement that the dealer must receive a signed statement from a representative of the pound that the dog or cat was held for the required period and that the statement must include a full description of the animal is not an empty formality. The requirement is necessary to assure research facilities, other dealers, the public, and this Department that dogs and cats represented as coming from pounds in fact came from a pound, that they were not stolen (either outright or through a fraudulent response to a "free to good home" advertisement), [and] that they did not come from a "buncher" or unlicensed dealer who acquired them from wherever they could be obtained.
Mr. Knaack of the Vinton pound let himself be misled by Mr. Scherbring into signing blank forms. None of the certification forms provided to the Respondents by Mr. Scherbring contained a statement by Mr. Knaack which included a description of each dog and the official identification number of each dog. It may be that most or all of the dogs were acquired by Mr. Scherbring from the Vinton pound; there is no evidence to the contrary. But neither is there the assurance that this is so, as the law requires.
Using and completing a certification form which has been signed in blank is an intentional, willful, and misleading thing to do. The Respondents knowingly and willfully participated in this conduct. Their response ignores the evidence that the description and identification number of each dog was written on each form by Respondent Anita Toney and that each form was then signed by Respondent Julian Toney with his wife's writing clearly on it (unless he signed the forms when blank). The Respondents do state that Mr. Scherbring denied giving blank forms to them, but they ignore his sworn affidavit to the contrary, they ignore the intrinsic evidence of the use of their identification numbers as the original numbers, they ignore the initials "JK" (for Jim Knaack) which both Mr. Knaack and Mr. Scherbring deny writing on the certificates, and they ignore the overwhelming evidence of Anita Toney's handwriting on the forms. These certifications were forged: The copies of Mr. Knaack's signature were used for ulterior motives and an unlawful purpose, they falsely represented the authenticity of the required statement by the pound and misled both the research facilities which purchased the dogs and this Department. [These violations were committed by Respondents while a Complaint was pending against them for making false entries in their records as to the identity of the persons from whom animals were acquired.]
*28 An overall view of the extensive evidence herein shows that the Respondents failed to maintain complete records showing the acquisition of dogs and cats, in willful violation of section 10 of the Act (7 U.S.C. § 2140) and section 2.75(a)(1) of the regulations (9 C.F.R. § 2.75(a)(1) (1992)), by making false entries as to the identity of the person from whom the animals were acquired, the person's address, and driver's license in numerous instances.
The Respondents failed throughout the year 1990 to "make, keep, and maintain records or forms which fully and correctly disclose" the specified information, in willful violation of section 2.75(a) of the regulations (9 C.F.R. § 2.75(a)). The importance of all records, particularly those showing the source of all animals and their disposition, being made immediately available at the time of an unannounced inspection cannot be overstated. To allow the records to be furnished at a later date is to permit an opportunity for those records to be changed to conceal activities in violation of the Act.
The Respondents sold or provided live random source dogs to research facilities which were accompanied by forged documents purporting to be certifications from a municipal pound, in willful violation of section 28(b) of the Act (7 U.S.C. § 2158(b)) and section 2.133(b) and (c) and of the regulations (9 C.F.R. § 2.133(b), (c)).
Respondents contend that there is an absence of willfulness in their conduct and that they made good faith efforts to comply with the Act and the regulations. The violations herein were clearly willful as that term is used in the Administrative Procedure Act (5 U.S.C. § 558(c)). In re: Henry S. Shatkin, 34 Agric. Dec. 296, 297-314 (1975). An "action is willful if a prohibited act is done intentionally, irrespective of evil intent, or done with careless disregard of statutory requirements." American Fruit Purveyors, Inc. v. United States, 630 F.2d 370, 374 (5th Cir. 1980) (per curiam), cert. denied, 450 U.S. 997 (1981).
An evaluation of the record as a whole shows that the Complainant has carried its burden of proof by a preponderance of the evidence, which is all that is required. See Herman & MacLean v. Huddleston, 459 U.S. 375, 387-392 (1983); Steadman v. SEC, 450 U.S. 91, 92-104 (1981); In re: Albert Lee Rowland, 40 Agric. Dec. 1934, 1941 n.5 [(1981)], aff'd, 713 F.2d 179 (6th Cir. 1983); In re: Gold Bell-I&S Jersey Farms, Inc., 37 Agric. Dec. 1336, 1346 [(1978)], aff'd, No. 78-3134 (D.N.J. May 25, 1979), aff'd mem., 614 F.2d 770 (3d Cir. 1980).
The administrative officials seek permanent revocation of Respondents' license. At the oral hearing the Government declined to specify the extent of the monetary sanction sought, except to indicate it would be "[v]ery large, . . . in excess of $100,000, . . . [as] large a civil penalty as we are permitted." (Tr. 16). On brief, the Government indicated it was seeking a civil penalty of $200,000. The Agency offered no sanction witness, nor is there any explanation as to the hugh amount of civil penalty sought herein. There was no specific recommended sanction until Complainant's briefs.
*29 At the oral hearing, the Judge specifically requested of Government counsel:
[JUDGE BAKER]: With respect to the sanction sought, the Complainant indicated at the initiation of the hearing that it was seeking a substantial sanction of permanent revocation, plus a penalty in excess of $100,000.00. It has offered no sanction witness, nor has it further explained the sanction which is being sought in this regard. I understand Mr. Ertman's situation that his client is, apparently, not going to proceed with the matter of recommended sanction.
The reason the recommended sanction becomes of importance in these proceedings is that the Judicial Officer has indicated that he believes the Agency officials who are charged with the enforcement of the Act are those who are most likely to be able to determine what sanction should be applied in particular cases and he has indicated that he gives great deference and consideration to those recommendations made by the Agency officials.
In this particular case, the Agency officials have made no specific and definite recommendation. However, I would like to state that in my initial decision I do have to arrive at some recommended situation [sanction] and conclusion which may or may not be adopted by the Judicial Officer. Therefore, I'm going to ask Mr. Ertman to see[k] to prevail upon his clients, the Agency, namely, to issue and to indicate--apparently, the earliest time would be in your brief--to indicate at the earliest possible time varying sanctions, one of which would be the sanction recommended in the event that it were to be found that the government has discharged its burden of proof with respect to all allegations of the complaint. That would be one recommended sanction. The second recommended sanction by the Agency would be its recommended sanction in the event the government proved all of its allegations except for those pertaining to the stolen dogs and that there should be a basis for that recommendation. Thirdly, an indication of the recommended sanction in the event that the government proved that there did exist deficiencies with respect to the Respondent's premises, which deficiencies were set out in the various inspection reports and were corrected as indicated on the record. In other words, there should be a separate recommended sanction for that and the reason for it.
Would you have any other requests, Mr. Krull?
MR. KRULL: No. Frankly, I think that Your Honor has described the potential different conclusions that could be made from this case. I guess, without having a sanction witness here, I would like to have an opportunity to, at least, respond to any suggested sanction by the Complainant and I think I could do that by way of a responsive brief, if that's all right with the court. I guess I would like to know and be able to respond to the court what sort of sanctions are being requested and, since it's not being proposed here at this hearing, somehow or another I'm assuming I'll be able to do that in a responsive brief. I don't know.
*30 JUDGE BAKER: Well, yes. We will get to briefing. You will get the Complainant's brief prior to your filing yours and I know that my suggestion with respect to breaking the sanction down may not be followed because I don't know whether Mr. Ertman can prevail upon the Agency people to do that because they may not want to do it, but, anyway, that, I think, would be rather a helpful thing to do. (Tr. 709-712).
This was not done.
On brief, the USDA addressed the extent of sanction as follows [(Complainant's Brief filed Oct. 7, 1994, at 45-46)]:
Part XI SANCTIONS.
Giving due consideration to the four factors set forth in the Act (7 U.S.C. § 2149), extremely severe sanctions should be imposed upon the respondents. The four factors to be considered are the size of respondents' business, gravity of the violations, good faith, and history of previous violations. The size of the respondents' business is relatively large. The gravity of most of the violations is extreme. The respondents acquired random source dogs from prohibited sources and falsified their records to conceal their violations. They failed to hold dogs for the required period before selling them. Although there are no prior adjudicated violations by the respondents, this case involves two separate complaints which were consolidated for hearing. After the first complaint was filed and while a hearing was pending, the respondents falsified certificates which the Act and regulations require not only for the sale of dogs but to acquire them. They also misrepresented dogs obtained from other, unknown sources as "home raised." These violations are the antithesis of good faith. Further, while the first complaint was pending, the respondents allowed the physical condition of their facility to deteriorate so that the violations were flagrant. They let dead dogs lay and they let dogs feed on a rotting carcass and on rotting animal parts.
The Complain[ant] has cited no precedent case for the enormity of the sanction which it seeks and my research reveals that the most civil penalty ever imposed has been a $140,000 penalty, $80,000 of which was held in abeyance pending certain conditions. (In re: Delta Air Lines, Inc., [53 Agric. 1076, 1086 (1994)]).
The record, as a whole, supports Complainant's allegations as to numerous violations of the Act and the applicable regulations. These have been repeated, flagrant and willful. Such disregard by Respondents reflects a situation where the purposes of the Act are thwarted and render its objectives a nullity. The Animal Welfare Act seeks to ensure the humane treatment of various species of animals used for research or experimental purposes. (H.R. Rep. No. 1651, 91st Cong., 2d Sess. 9 (1970), 7 U.S.C. 2131; Haviland v. Butz, 543 F.2d 169 (D.C. Cir. 1976).)
That sanctions are appropriate and necessary in order to achieve the remedial purposes of the Act is evident herein. On one hand it could be said Complainant has not shown a consistency with sanctions imposed in previous cases and on the other, that the violations exhibited by Respondents are so numerous that Complainant could have sought a sanction twice the amount of $200,000.
*31 As a mitigating circumstance, and one which the Judicial Officer may want to consider, is that there is no evidence that the dogs have suffered due to inhumane treatment. There is no evidence that the dogs located on Respondents' facility at the time of the inspection in March were in any way suffering from malnutrition, exposure, or disease. Dr. Wease admitted on cross-examination that he is not aware of any dogs at Respondents' facility that were infected or were of such poor quality that the USDA research facilities had to reject them. (Tr. 171). He further admitted that the facilities were not the cause of any dogs being sick, broken legs or anything of that nature that the USDA could not accept them. (Tr. 172). Also, Dr. Gillette, of the University of Minnesota, testified that they are very particular about the dealers they contract with and have certain standards that they use. One of those standards is that the dogs be healthy and free of clinical illness or defects. (Tr. 60). She stated that they have had no problems with the dogs supplied by the Respondents. (Tr. 62). Mr. Toney described his normal routine in caring for the animals once they reach his facility so that the dogs are healthy, which is a key to the success of his business. (Tr. 523-524). His primary concern was keeping his dogs "good, fat, slick [and] healthy." (Tr. 519).
The Judicial Officer's policy of deferring to the requested sanction of the administrative officials is acknowledged by the Administrative Law Judge and the following Order is believed to be in accord therewith.
ADDITIONAL CONCLUSIONS BY THE JUDICIAL OFFICER
Respondents' defense, before the ALJ and on appeal, is, in large part, misdirected. Respondents defend against the charge that they were handling stolen dogs (Tr. 22, 31-32, 50-51, 62, 98, 123-27, 130, 250, 282, 298-99, 316- 17, 378-79, 386, 391, 401, 410, 414, 423, 427, 435, 588, 590-92, 596-97, 664, 704; Appeal Brief at 5, 6, 7, 8, 18). However, that charge was not made by Complainant. It was made by individuals and police departments. Respondents' first witness, James D. Durell, Chief Deputy Sheriff, Decatur County, Iowa, testified that he investigated charges from various people and, on two or three occasions, from other police departments, that Respondents were handling stolen dogs, but he found no evidence that associated Respondents with a dog theft organization. Specifically, he testified (Tr. 378-79):
[BY MR. KRULL:]
Q. Okay. And at various times in the last couple of years, it's been stated that the Toney's have somehow or another been associated with about 1600 dogs that were either falsely claimed, or someone might interpret that as being stolen.
Have you ever heard of Mr. Toney or Ms. Toney, stealing dogs?
A. Yes. We've had reports come in. But they were unfounded.
A. We could not prove that they were true.
Q. All right. And did you ever find that Mr. or Mrs. Toney stole dogs?
*32 A. No. We never proved anything.
Q. Okay. Now, I want to ask you about those.
Who reported that?
A. Uh, various people. I can't give you names. I don't know the names. I don't remember them.
Q. All right.
A. But two or three different times, we would get a call, even from other police departments.
And we would go down to Julian's place of business there, the Rendezvous, and check with Julian and go through the place.
And he always said, "Look all you want to."
Q. All right. And have you ever found any stolen dogs on Julian Toney's property?
Q. And have you ever found any evidence whatsoever that Julian Toney is associated with a dog theft ring, or a dog theft organization?
Near the outset of his testimony, Respondent Julian J. Toney testified (Tr. 505):
We got some ladies back here in the back [of the hearing room] that think that we're stealing pets.
We're not out there stealing pets.
However, Complainant did not charge Respondents with handling stolen dogs but, rather, with violating laws and regulations designed to prevent or deter the use or sale of stolen dogs or cats for purposes of research or experimentation. Although Respondents contend that the evidence does not adequately support the ALJ's findings as to those violations, the evidence is so overwhelming that no discussion other than the lengthy analysis set forth above by the ALJ is necessary. The ALJ included numerous record references in support of her findings, and I have had added others in brackets. Additional citations appear in Complainant's briefs, with which I agree, and these will undoubtedly be supplied by Complainant on judicial review. Nonetheless, a brief summary of Respondents' violations is appropriate, particularly to respond to Respondents' argument that the sanction is too severe.
First, Respondents violated the regulations as to the procurement of random source dogs. Respondents are Class B dealers, and the regulations provide (9 C.F.R. § 2.132(a)(1)-(3)):
(a) A class "B" dealer may obtain live random source dogs and cats only from:
(1) Other dealers who are licensed under the Act and in accordance with the regulations in part 2;
(2) State, county, or city owned and operated animal pounds or shelters; and
(3) A legal entity organized and operated under the laws of the State in which it is located as an animal pound or shelter, such as a humane shelter or contract pound.
In addition to the foregoing provisions stating where a Class B dealer may obtain live random source dogs, the regulations expressly state where such dogs cannot be obtained, viz. (9 C.F.R. § 2.132(b)):
(b) A class "B" dealer shall not obtain live random source dogs and cats from individuals who have not bred and raised the dogs and cats on their own premises.
Despite these clear, express provisions, which were explained to Respondents by APHIS animal care inspector Ronda Harrison in January 1990 (Tr. 96), Respondents and their employee, Cliff Waterbury, obtained live random source dogs on a massive scale from individuals who had not bred and raised the dogs. Although there is evidence that some of the dogs supplied to Respondents or their employee by such individuals had previously been obtained by such individuals from municipal pounds, that is not a defense or even a mitigating circumstance. The regulations do not permit Respondents to trust individuals' statements that they obtained dogs from municipal pounds. The regulations require that Respondents or their employee obtain the random source dogs from the municipal pounds. Respondents have no way of knowing whether individuals who said they obtained dogs from municipal pounds actually did so, or if so, whether they then augmented their load by stealing a dog or two en route to Respondents' facility.
*33 Moreover, many of the random source dogs obtained by Respondents were obtained from individuals who admittedly obtained them from other individuals. In that case, Respondents were relying on the veracity not only of the individuals they obtained the dogs from but, also, on the veracity of the individuals who supplied them to Respondents' source. For example, William (Sam) Grimsley, Jr., who lives in Keytesville, Missouri (Tr. 416), testified that during 1990 he gave or sold dogs to Cliff Waterbury for Julian Toney (Tr. 418-23), and that (Tr. 422-23) (emphasis added):
Q. I want to ask you a question about these individuals that would give you or sell you dogs, dogs that didn't necessarily come from the pound, but from individuals.
Q. Did you generally know these people, Sam?
A. Oh, yeah. Yeah.
Q. And would you take a dog --
Or did you ever take a dog in 1990, from somebody that you didn't know?
Q. All right. And how can you be sure --
Can you be sure, Mr. Grimsley, that the dogs that you gave to Cliff Waterbury were not stolen dogs?
A. Well, they -- the people that give them to me owned them, I guess, or were supposed to have owned them.
Q. Okay. And you didn't --
A. I wouldn't have no ideas that they were stolen.
Q. And do you hold those dogs for awhile?
A. Yeah, I did.
A regulatory program designed to prevent or deter trafficking in stolen dogs would be highly ineffectual if dealers were permitted to obtain dogs from individuals who, in turn, received them from another individual who said, "the people that give them to me owned them, I guess, or were supposed to have owned them" (Tr. 423).
The testimony of Respondents' employee, Cliff Waterbury, also gives little assurance that Respondents were not receiving stolen dogs. The ALJ has quoted some of his testimony showing that he did not know many of the individuals from whom he obtained dogs (Finding 8(4)-(6)). In addition, Mr. Waterbury testified (Tr. 123-24) (emphasis added):
Q. Mr. Waterbury, can you tell the Judge how you tried to make sure that no dog that you picked up were stolen dogs, what you did to make sure of that?
A. Well, most of them dogs that I picked up at the pounds was kept ten days at the pounds, you see. And you were pretty sure, pretty sure you wasn't going to get no stolen dogs out of there.
And you never knowed what you was going to get when you bought 'em from somebody like Rutledge or places like that. You just had to take their word for it.
But I don't think you'll find that them dog dealers steals any dogs, steals them dogs anyway cause there ain't enough money in it for them to steal 'em.
As Mr. Waterbury testified, "you never knowed what you was going to get when you bought 'em from somebody like Rutledge or places like that. You just had to take their word for it" (Tr. 124).
To be sure, Respondent Julian Toney testified (Tr. 589-90) (emphasis added):
*34 Q. Did you explain to him [Cliff Waterbury] at any point in time what to do to avoid picking up any potential stolen dogs?
A. Yes, sir.
Q. What did you tell him? Explain to the court how that worked.
A. I told him, you know, that, absolutely, when he dealt with individuals, you know, to make sure that they was cool, calm and collected and that they had some history on their dogs. You know, when they was raised, where they come from. You know, that they appeared to be the rightful owner of the dog.
However, even if the individual from whom Cliff Waterbury obtained the dogs "appeared to be the rightful owner" (Tr. 590), that is not good enough. The regulations require that Respondents and their employee not obtain random source dogs from individuals who had not bred and raised the dogs on their own premises. Respondents violated those regulations on a massive scale.
The purpose of the regulations dealing with the procurement of random source dogs is stated in the Notice of Proposed Rulemaking as follows (54 Fed. Reg. 10,835, 10,880 (1989)):
Section 2.132 Procurement of random source dogs and cats, dealers
In order to carry out the intent of Congress and to "protect the owners of animals from the theft of their animals by preventing the sale or use of animals which have been stolen" (7 U.S.C. 2131(b)(3)), we proposed to limit the sources from which class "B" dealers can acquire live random source dogs and cats. We proposed to limit those sources to State, county, or city owned and operated pounds or shelters. Under the proposed regulation, class "B" dealers would not be able to obtain random source dogs and cats from nongovernment pounds or shelters or from individuals who did not breed and raise the dogs and cats on their own premises. Nonrandom source dogs and cats could be obtained from persons who bred and raised the dogs and cats on their own premises.
. . . .
We received 2,865 comments from members of the general public supporting the proposed limitation of sources from which class "B" dealers can obtain random source dogs and cats. We also received 21 comments from members of the research community and 3 comments from dealers expressing support for proposed § 2.132.
The safeguard provided for by the regulations was completely thwarted by Respondents' violations.
In addition, Respondents kept false records as to their acquisitions, as explained by the ALJ, which, again, thwarted the purposes of the statute and regulations designed to prevent trafficking in stolen dogs (7 U.S.C. § 2140; 9 C.F.R. § 2.75(a)(1)).
Furthermore, Respondents failed to hold dogs for 5 full days after their acquisition, as required (7 U.S.C. § 2135; 9 C.F.R. § 2.101), and falsified their records in order to conceal holding-period violations. This, again, thwarts the purposes of regulations designed to prevent or deter trafficking in stolen dogs. A few examples illustrate the nature of Respondents' fraud in some of the holding-period violations.
*35 As a word of explanation as to the following examples, all of the pages from the spiral notebooks reproduced herein are from RX UU. That exhibit consists of 194 pages selected by Respondents from about 10 to 15 spiral notebooks relating to 1990, in which Anita Toney kept a daily log of dogs and cats purchased by Respondents (Tr. 584-85, 675-76). The numbers appearing at the top right-hand corner of the copies of the spiral notebooks were not in the original records, but, rather, were added to RX UU by Respondents' attorney before RX UU was introduced into evidence (Tr. 103). (As will be shown in the second example below, Respondents' attorney made a mistake in numbering pages 27 and 28 of RX UU.) The other exhibits that are reproduced in these examples are from CX 1, Respondents' "RECORD OF DOGS AND CATS ON HAND," which was also kept by Anita Toney. CX 1 is the Respondents' completed record submitted long after APHIS investigators first copied Respondents' records (Tr. 76-77). Here, again, the numbers appearing at the top right-hand corner of the copies of CX 1 are not on Respondents' original records, but, rather, were added by my legal technician to the original file copy of CX 1, to facilitate citation to pages of CX 1. All of the arrows drawn on the exhibits reproduced in this decision were drawn by the Judicial Officer on the copies in this decision only, and do not appear on the original exhibits.
As the first example, on the following two pages are reproduced RX UU, p. 36, and CX 1, p. 215.
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
On Anita Toney's spiral notebook page, RX UU, p. 36, the date at the top of the page for dog number 5613 has been written over so that the date is illegible. However, at the bottom of the page, Dan Sleep has signed a statement that, "All above dogs and cats are homeraised that I have sold to Julian Toney on February 9, 1990." Nonetheless, on CX 1, p. 215, "2/6" has been written over "2/9" as the date of acquisition for 5613. Since the animal is shown on CX 1, p. 215, as removed on "2-12-90," the original date of "2/9/90" would have been a violation of the holding-period requirement, but the altered date of "2/6/90" concealed that violation. Instead of being held 5 days, as required, the dog was held only 2 days.
As the second example, on the following 4 pages are reproduced RX UU, pages 27 and 28, and CX 1, pages 141 and 142.
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
On the first page of the example reproduced immediately above, the date "5-1- 90" is written at the top, but on the bottom third of the page, in two places, two different sellers have signed a statement stating that the dog is home raised and used for research. Both statements purport to be dated "5-1-90," but, in each case, it is obvious that the figure "1" has been written over the figure "5," to change "5-5-90" to "5-1-90." This relates to dogs identified as numbers 6361 and 6368. On the third page of this example, CX 1, p. 141, dog number 6368 is shown as received on 5/1 and removed on 5-9-90. The identical dates are shown on the fourth page of this example, CX 1, p. 142, for dog number 6361. However, since the unaltered dates signed by the sellers show that both dogs were acquired on 5/5/90, and removed on 5/9/90, both dogs were held only 3 days, which are violations of the holding-period requirement.
*36 Further evidence that actual acquisition dates for both dogs was 5/5/90, rather than 5/1/90, is revealed by an examination of the inside margins of RX UU, pp. 27 and 28, the first and second pages of this example. (It is important to note that, (i) since the spiral notebooks were unnumbered (Tr. 103), (ii) the numbers on RX UU were added by Respondents' attorney (Tr. 103), and (iii) the pages in RX UU are copies of various pages from 10 to 15 spiral notebooks (Tr. 675-76), pages in RX UU copied from the left-hand side of the notebooks will not necessarily be even-numbered pages, and vice versa, as in a typical book with numbered pages.) It is easy to tell from the margins that the page numbered by Respondents' attorney as "27" actually was on the right-hand of the spiral notebook, and that the page numbered RX UU, p. 28, actually was on the left-hand side of the notebook, which would precede the right-hand page. That is, RX UU, p. 28, should have been numbered RX UU, p. 27, and RX UU, p. 27, should have been numbered RX UU, p. 28. This is seen most clearly by looking at the right-hand side of RX UU, p. 28, where the figure "25" appears, and three lines below that the letters "res" appear, and two lines below that the figure "6" appears. Looking at the left-hand side of what is numbered as RX UU, p. 27, we see the "25" appearing just before where I have drawn the arrow to animal number 6361, three lines below that the letters "res" appear as part of the word "research," and two lines below that the figure "6" appears as part of the number "6368." Without doubt, the page identified by Respondents' attorney as RX UU, p. 28, and which is dated "5-5-90," appeared on the left-hand side of the notebook, which preceded the page on the right-hand side (erroneously numbered as RX UU, p. 27), which was falsely dated "5-1-90."
As the third example, on the following six pages are reproduced RX UU, p. 23, and CX 1, pp. 148, 149, 150, 152, and 153:
TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE
The date on RX UU, p. 23, the first page of this example, has been altered by writing 4/20/90 over 4/23/90 to conceal violations of the holding-period requirement. It is quite obvious on RX UU, p. 23, that a "0" has been drawn over a "3," to change 4/23/90 to 4/20/90. The fraud is demonstrated by an examination of CX 1, which shows 6303 and 6269, two of the dogs included on RX UU, p. 23, as acquired on 4/23/90 (CX 1, pp. 148, 152 (the 2nd and 5th pages of this example)), which was the original date shown on RX UU, p. 23, before the alteration. These two dogs, which are correctly shown on CX 1, pp. 148, 152, as acquired on 4/23/90, do not implicate the holding-period requirement because these dogs were removed on 5/14/90. However, for 6259, which is shown as removed on 4/25/90, the date of acquisition is shown as 4/20 written over 4/23 (CX 1, p. 153 (the last page of this example)). Here, again, it is quite obvious that a "0" has been drawn over a "3," to change 4/23/90 to 4/20/90 (CX 1, p. 153). 6257, 6262, 6267, 6284, 6293, and 6299 are shown as acquired 4/20/90 and are shown as removed on 4/25/90 (CX 1, pp. 149, 150, 152, 153). No date of acquisition is shown on CX 1 for 6283, 6292, and 6294; they are shown as removed on 4/25/90 (CX 1, pp. 149, 150). Similarly, no date of acquisition is shown on CX 1 for 6291, which is shown as removed on 4/23/90 (CX 1, p. 149), presumably a slip-up by Respondents, since the very next line shows that 6292 was removed on 4/25/90, with the "5" drawn over what appears originally to have been a "3" (CX 1, p. 149). Hence, 6291 was removed on the same day it arrived, and the other 10 dogs involved in violations in this example were held, at the most, for 1 day after acquisition, assuming that they were removed on 4/25/90, rather than 4/23/90. Although dogs or cats acquired on 4/20 are required to be held until after 4/25, resulting in a violation of the holding-period requirement whether acquired on 4/20 or 4/23, the pattern of altered and unaltered dates in CX 1 is highly significant and warrants an inference that there is a violation of the holding period in other instances where a date is altered in RX UU such that, if the earlier date were accepted, the holding requirement would be met.
*37 The ALJ found that, during the year 1990, Respondents failed to hold at least 190 dogs and cats for a period of not less than 5 days after acquisition (at least 189 of which were dogs) (Finding 15). (The ALJ also found that Respondents' records were not complete and accurate (Finding 6)). The evidence fully supports her findings. This is a violation of statutory and regulatory provisions designed to enable owners to locate lost or stolen animals before they are sold to research facilities (7 U.S.C. § 2135; 9 C.F.R. § 2.101). The Senate Report as to the holding-period requirement states (S. REP. NO. 1281, 89th Cong., 2d Sess., reprinted in 1966 U.S.C.C.A.N. 2635, 2640 (emphasis added)):
Section 14.--This section prohibits dealers from selling or otherwise disposing of any dog or cat within 5 business days after the acquisition of such animals, or within such other period as the Secretary may specify in regulations issued pursuant to this legislation. The purpose of the waiting period is to give owners, law enforcement officers, and the Secretary a greater opportunity to trace lost or stolen dogs and cats.
The Conference Report as to the holding-period requirement states (H.R. CONF. REP. NO. 1848, 89th Cong., 2d Sess. 2649, 2654 (1966) (emphasis added)):
Section 5.--This section prohibits dealers from selling or otherwise disposing of any dog or cat within 5 business days after the acquisition of such animals or within such other period as the Secretary may specify in regulations issued pursuant to this legislation. The purpose of the waiting period is to give owners, law-enforcement officers, and the Secretary a greater opportunity to trace lost or stolen dogs and cats. It is the intent of the conferees that section 5 be construed with section 21 of the conference substitute as granting the Secretary authority to deal with the problem of dogs and cats in transit. The conferees do not intend the holding period established hereunder to include the time during which the dogs and cats are in transit. Section 5 is identical to section 10 of the House bill. The comparable provision of the Senate amendment is section 14.
The notice of proposed rulemaking explains the holding-period requirements as follows (54 Fed. Reg. 10,835, 10,875-76 (1954) (emphasis added)):
Five days is considered to be the appropriate holding period under most circumstances. We consider that this is a reasonable period of time to allow persons to locate missing animals, and to enable a dealer or exhibitor to determine whether a dog or cat is fit for further transfer. Accordingly, the 5- day holding period remains in the revised rule. We are revising the rule, however, to ensure that animals are held 5 full days. . . .
. . . .
The comments we received expressed concern that lost or stolen animals could be sold to research facilities before their owners are able to locate them. Proposed § 2.101 provides holding periods for dogs and cats that are applicable to dealers and exhibitors. One of the reasons for requiring holding periods is to allow owners of lost or stolen animals a reasonable time to locate their animals before they are sold or otherwise disposed of by the dealer or exhibitor.
*38 Even where there is a holding-period violation in a situation where Respondents have a signed statement that adult dogs are home raised, there is still the same need for a full 5-day holding period. The person who signed the statement could be lying. The dogs could be stolen. Accordingly, to prevent or deter trafficking in stolen dogs, the full 5-day holding period is necessary where the seller claims that the dogs are home raised.
In addition, the ALJ found that Respondents did not accurately record addresses of persons from whom they acquired dogs, and failed to record drivers' licenses and vehicle tag numbers (Finding 8(1), (3), (5), (7)). These, again, are violations of the Act and regulations designed to prevent or deter trafficking in stolen animals (7 U.S.C. § 2140; 9 C.F.R. § 2.75(a)(1)). The original notice of proposed rulemaking as to these recordkeeping requirements states (52 Fed. Reg. 10,298, 10,305 (1987) (emphasis added)):
Section 2.75 deals with records for dealers and exhibitors. This section has been revised in both format and content. In addition to the information presently required to be maintained for all dogs and cats purchased or otherwise acquired, the Department proposes to require that the vehicle license number and State and the driver's license number and State also be recorded in the records. This proposal is being made due to several recent instances where unscrupulous dealers were deliberately obtaining dogs and cats either by fraudulent means or that were known to have been stolen. By requiring a vehicle license number and driver's license number, such individuals can be traced and the source of the animals better determined. Only editorial or format changes were made in the rest of § 2.75.
The supplemental notice of proposed rulemaking as to the recordkeeping requirements states (54 Fed. Reg. 10,835, 10,873 (1989) (emphasis added)):
Dealers and exhibitors
We received 5 comments (1 from the research community, 1 from an exhibitor, and 3 from the general public) noting the need for stricter recordkeeping requirements in general. We believe that the additional recordkeeping requirements proposed in Subpart G will assist the Department by enhancing traceability of the animals, which is one of the prime objectives of the recordkeeping requirements, and will be a valuable tool in combatting the sale of animals obtained unlawfully.
We are clarifying § 2.75 in this revised rule to reflect that it applies to dealers other than operators of auction sales and brokers, and to exhibitors. . . .
Proposed § 2.75 would impose recordkeeping requirements upon dealers and exhibitors that are substantially similar to those required under current § 2.75, except that dealers and exhibitors would also be required to maintain in their records the vehicle license number and state, and the driver's license number and state of anyone not licensed or registered under the Act from whom a dog or cat is acquired. This requirement was not included in proposed § 2.75(b) and we have determined that it is equally appropriate to include it for animals other than dogs and cats. This requirement was proposed to facilitate tracing the seller and the source of the animals, particularly when the source or origin of the animals is in question. Five commenters from the general public stated their approval of this requirement.
*39 The violations referred to up to this point in the Additional Conclusions by the Judicial Officer relate to the original Complaint filed against Respondents on September 30, 1992. While that Complaint was pending, and before the administrative hearing as to that Complaint was held, Respondents committed further serious violations of the Act and regulations designed to prevent or deter trafficking in stolen dogs, discussed below. Under 7 U.S.C. § 2158(b) and 9 C.F.R. § 2.133(b) and (c), Respondents were required to present to the research facilities to whom they sold dogs a certification as to live random source dogs. The ALJ found that Respondents sold or provided at least 44 live random source dogs to research facilities by using false and forged certificates from the Vinton, Missouri, dog shelter (Finding 16, supra, Initial Decision at 20). I lowered the number to 40 dogs when I adopted her Finding 16. The ALJ specifically found that the top portion of the certification forms was completed by Respondents for each individual dog. (Findings 10-13, 16.) In her conclusions, the ALJ states (Initial Decision at 38-39):
Using and completing a certification form which has been signed in blank is an intentional, willful, and misleading thing to do. The Respondents knowingly and willfully participated in this conduct. Their response ignores the evidence that the description and identification number of each dog was written on each form by Respondent Anita Toney and that each form was then signed by Respondent Julian Toney with his wife's writing clearly on it (unless he signed the forms when blank). The Respondents do state that Mr. Scherbring denied giving blank forms to them but they ignore his sworn affidavit to the contrary, they ignore the intrinsic evidence of the use of their identification numbers as the original numbers, they ignore the initials "JK" (for Jim Knaack) which both Mr. Knaack and Mr. Scherbring deny writing on the certificates, and they ignore the overwhelming evidence of Anita Toney's handwriting on the forms. These certifications were forged: The copies of Mr. Knaack's signature were used for ulterior motives and an unlawful purpose, they falsely represented the authenticity of the required statement by the pound and misled both the research facilities which purchased the dogs and this Department.
The evidence supports the ALJ's findings and conclusions. In addition, she had the opportunity to observe the demeanor of the witnesses, and she determined that Mr. Scherbring was not telling the truth when he testified that he did not give Respondents certification forms signed in blank by Jim Knaack (Tr. 47-48), and that he (Mr. Scherbring) inserted the information for each individual dog (Tr. 338), but, rather, that Mr. Scherbring told the truth in his affidavit in which he admits that he gave Julian Toney two blank forms with the Vinton dog pound name and address on them, and Jim Knaack's signature (CX 120). In addition, the ALJ relied on the fact that, in "every instance, the .Assigned USDA tag no.' is the Respondents' tag number, while the Previous USDA Number is Mr. Scherbring's tag number. If the form had been completed by Mr. Scherbring, his tag number would have been the assigned (and only) number" (Finding 13, Initial Decision at 19). Moreover, the ALJ relied on the fact, as do I, that the forged certification forms are clearly in the handwriting of Respondent Anita Toney. Some of the handwriting idiosyncrasies of Anita Toney are set forth in Complainant's Proposed Findings of Fact filed October 7, 1994, at 28- 29, as follows:
*40 FINDING OF FACT 81. It is manifestly evident that the handwriting on the upper portion of the certification forms, providing the tag numbers and descriptive information for each dog, is that of respondent Anita Toney.
A. Anita Toney kept the records for the respondents' dealer business. (Testimony of Mr. Waterbury, TR 123; testimony of Julian Toney (Q. . . . Who did the record keeping, you or -- A. Anita did the record keeping.) TR 519; testimony of Anita Toney (Q. . . . How did you identify those in UU for Mr. Ertman? A. I went through the notebooks and, whatever the number was in on the complaint, I had it wrote in the copy of the notebook. . . .) TR 689)
B. The abbreviation of Labrador Retriever is written as "laB" on the certification forms with copied signatures of Mr. Knaack (and the other Vinton official) in the identical manner as on the respondents' record of dogs and cats on hand (CX-1) and the respondents' notebook records (RX-UU), both of which are known to be the handwriting of Anita Toney. Although names do not appear on the certificates, an idiosyncratic usage of an uppercase cursive final "B" frequently appears in the name "BoB" and an idiosyncratic usage appears in names such as "Wayne BarBer" which is significant in addition to "laB." The word "Black" also reveals distinctive letter formations, with the uppercase cursive "B" formed with a pronounced enlargement of the lower lobe and an unusual final "k" tha[t] is nearly uppercase. The formation of abbreviations such as "Bl-Br," "Br-Bl," "Bl-Br-Wh," etc., is also illustrative. The best way to locate occurrences for comparison [is] by looking first at an occurrence on several of the certificates and then looking down the appropriate column in CX-1 or RX-UU . . . to look up specified numbers and then compare words. [FN4]
FN4 This may be done along with the referral to various tag numbers in other arguments herein. The formation of numerals by Anita Toney is also distinctive and consistent and helps to demonstrate that she completed the certificates.
Respondents contend that the dogs involved in this discussion are not random source dogs because they came from the Vinton pound (Appeal Brief at 17). They argue that the dogs were obtained by Mr. Scherbring from the Vinton pound and then sold to Respondents (Appeal Brief at 17-19). However, by definition, "Random source means dogs and cats obtained from animal pounds or shelters, auction sales, or from any person who did not breed and raise them on his or her premises" (9 C.F.R. § 1.1). Therefore, even if Respondents had obtained the dogs directly from the Vinton pound instead of from Mr. Scherbring, they would still have been random source dogs. When Respondents transferred the dogs to the research facilities, they were required to include a certification as to the dogs (7 U.S.C. § 2158(b); 9 C.F.R. § 2.133(b), (c)). The certifications they provided to the research facilities were forged certifications, purporting to include a certification from Jim Knaack, Animal Control Officer of the Vinton dog shelter. Here, again, Respondents were violating regulatory provisions designed to prevent trafficking in stolen dogs. The notice of proposed rulemaking with respect to the certification regulation states (56 Fed. Reg. 57,991, 57,991-92 (1991) (emphasis added)):
Also included in the 1990 amendments to the Act were requirements for certification to accompany random source dogs and cats that are sold, provided, or otherwise made available by dealers to any individual or entity. (Random source dogs and cats are defined in 9 CFR part 1 as being those obtained from animal pounds or shelters, auction sales, or from any person who did not breed and raise them on his or her premises.) The intent of the 1990 amendments was to prevent stolen animals from being entered in sales channels. In accordance with these amendments to the Act, we are proposing that specific information, discussed below, must accompany the dog or cat in question.
We are proposing to include the requirements for certification in 9 CFR part 2, subpart I, in paragraphs (b) through (d) of new § 2.133. In this new section, we are proposing to include the provision that a dealer shall not sell, provide, or make available to any individual or entity a random source dog or cat unless the dealer provides the recipient of the dog or cat with certification that indicates that the holding period discussed in this Supplementary Information under the heading "Holding Period" has been met.
The proposed certification would also be required to include the name, address, and USDA license number of the dealer making the certification and the USDA license or registration number of the recipient of the dog or cat if such recipient is licensed or registered. The certification must be signed by both the dealer making it and by the recipient. The certification would be required to include a description of each dog or cat being transferred, including the official Department-approved identification number of the animal. It would also be required to include the name and address of the person, pound, or shelter from which each dog or cat was acquired by the dealer, and an assertion that the person, pound, or shelter was notified that the dog or cat might be used for research or educational purposes. Additionally, the certification would be required to include the date the dealer acquired each dog or cat. Including the date of acquisition would facilitate our tracking reports of stolen animals, and would help us determine whether an animal acquired by a dealer might possibly be an animal reported stolen. In case where the dog or cat was acquired from a pound or shelter, the certification would have to include a statement by the pound or shelter that it met the required holding period. The statement by the pound or shelter would be required to at least describe the animals by their official USDA identification tag numbers, as supplied by the dealer. (Dealers are already required to affix the identification tags to the dogs or cats at the time of acquisition.) The statement could be incorporated within the certification if the dealer makes the certification at the time that the animals are acquired or it could be made separately and attached to the certification later. If made separately, it would be required to include the same information describing each animal as is required in the certification. A photocopy of the statement would be regarded as a duplicate original. This is necessary because the dealer might not dispose of all of the animals at the same time or to the same person.
*42 The amendments require that "(t)he original certification . . . shall accompany the shipment of a dog or cat to be sold, provided, or otherwise made available by the dealer, and shall be kept and maintained by the research facility for at least one year for enforcement purposes."
Jim Knaack, whose photocopy signature was on the forged certificates, at first testified that "I think they [the dogs on the forged certificates] all come from our pound" (Tr. 30). But he then admitted (Tr. 33):
BY MR. ERTMAN:
Q. I would like to ask you what you know yourself, and not what you think someone else or wouldn't do. When you looked through these forms, do you personally know that the dog described on each one of these forms, in fact, came from your pound and not from someone else when someone filled in the top of the form that you had signed?
Do you yourself --
A. No. I can't personally tell you they all comes from my pound, huh uh. Cause I can't remember that far back. If I could get the sheets from down at the city hall and compare 'em with these sheets, then I could tell you.
Irrespective, however, of whether the dogs actually came from the Vinton pound and were held for the required amount of time by the Vinton pound, the use of forged certificates to that effect is a very serious violation of the regulations. The Act refers to a "statement by the pound or shelter" (7 U.S.C. § 2158(b)(2)(F)), and the regulations refer to a "signed statement by the pound or shelter" (9 C.F.R. § 2.133(b)(6)). Where such a statement is, in fact, a forgery by Respondents, it is no defense to say that if the pound or shelter operator had filled out the statement, it would have been identical to the forgery, i.e., that the facts stated on the statement are true. Furthermore, Respondents were using Jim Knaack's photocopied signature to certify to a fact about which Respondents had no personal knowledge. In short, it is vital to the success of the regulatory program that certifications purportedly coming from a pound or shelter actually be genuine certificates signed by the pound or shelter operator.
Respondents argue that "Mr. Knaack was aware that copies of his signature were being used by Mr. Scherbring" (Appeal Brief at 19). However, as shown in my additions to Finding 13, when Mr. Knaack was shown the forged documents, he exclaimed, "I don't believe this" (Tr. 28). "They just keep coming and coming and coming. These are all copies" (Tr. 29). Moreover, even if Mr. Knaack had known of Respondents' extensive use of copies of his signature, that would not have mitigated Respondents' violations in the slightest. (It is immaterial whether Mr. Scherbring or Respondents actually photocopied the forms containing Mr. Knaack's signature. The important fact is that Anita Toney filled out the top portion of the forms (Finding 13; Initial Decision at 38-39).)
Respondents argue that, "Mr. Knaack went on to say that it was a USDA inspector who told Mr. Scherbring to do this," i.e., to make copies of the Vinton pound certificates signed in blank by Mr. Knaack (Appeal Brief at 18; Tr. 31). However, it is so absurd to believe that a dealer can lawfully have a dog pound operator sign one blank certificate, and the dealer can then use photocopies of that certificate to fill in the details as to each dog, that I would not regard it as a mitigating circumstance even if some inspector made such an absurd statement to Mr. Scherbring. Furthermore, I am sure that the inspector merely referred to the provision of the regulations which states that "[a] photocopy of the statement will be regarded as a duplicate original" (9 C.F.R. § 2.133(b)(6)). That provision affords no basis whatever for believing that one certificate can be obtained signed in blank by a pound operator and, from then on, a dealer is free to use a photocopy of that certificate in all future transactions.
*43 In addition to the foregoing violations, the ALJ found, and the evidence supports the findings, that, while the first Complaint was pending, Respondents failed to identify dogs as required (Findings 17, 19, 20; 7 U.S.C. § 2141; 9 C.F.R. § 2.50), failed to apply official identification tags to dogs in as close to consecutive numerical order as possible (Finding 18; 7 U.S.C. § 2141; 9 C.F.R. § 2.53), and failed to maintain complete records showing the acquisition, disposition and identification of animals (Findings 17, 19, and 20; 7 U.S.C. § 2140; 9 C.F.R. § 2.75(a)(1)). These, too, violated statutory and regulatory provisions designed, at least in part, to prevent or deter trafficking in stolen dogs. The Senate Report as to the identification requirement states (S. REP. NO. 1281, 89th Cong., 2d Sess., reprinted in 1966 U.S.C.C.A.N. 2635, 2639 (emphasis added)):
Section 9.--This section requires all cats and dogs covered by this bill to be marked or identified in a humane manner. The methods, type, and time of marking or identification are to be prescribed by the Secretary. The purpose of such marking and identification is intended as a means of tracing lost or stolen pets.
The Conference Report as to the identification requirement states (H.R. CONF. REP. NO. 1848, 89th Cong., 2d Sess. 2649, 2655 (1966) (emphasis added)):
Section 11.--This section requires all cats and dogs covered by this bill to be marked or identified in a humane manner. The methods, type, and time of marking or identification are to be prescribed by the Secretary. The purpose of such marking and identification is intended as a means of tracing lost or stolen pets. Except for the inclusion of the words "at such time and," section 11 is identical to section 9 of the Senate amendment. The comparable House provision is section 7 of the House bill.
Finally, as to Respondents' housing-facility violations, etc., committed while the first Complaint was pending, these violations are discussed at length by the ALJ (Findings 21-29). They are summarized by the testimony of Dr. Grant Wease, APHIS Veterinary Medical Officer, that "[t]his was one of the worst facilities [I] have ever seen" (Tr. 180). Nonetheless, the ALJ concluded that, "[a]s a mitigating circumstance, and one which the Judicial Officer may want to consider, is that there is no evidence that the dogs have suffered due to inhumane treatment" (Initial Decision at 43-44). However, we know that at least two of Respondents' puppies did not survive in 1994. As stated by Dr. Wease (Tr. 155-56):
[CX] 109(b) is a photograph of the two markedly deteriorating puppies that were found underneath one of the dog enclosures. They were estimated -- it's difficult to tell, but they appeared to be less than six months old, due to the dentition.
Again, these two puppies were in advances [sic] stages of decomposition. They had been there for some extended amount of time.
Furthermore, Respondents' records for an earlier year (1990) reveal that 19 dogs died at Respondents' facility, [FN6] 4 were euthanized, [FN7] and 10 "ran off." [FN8] (Also, 2 were "turned loose." [FN9]) Although the housing-facility violations were found in 1994, I infer that the 1990 records would be comparable to similar records for 1994, if we had them. In any event, the numerous, flagrant housing-facility violations committed in 1994, while a Complaint was pending for other serious violations, cannot be lightly regarded, and I do not regard as a mitigating circumstance the fact that there is no evidence that Respondents' dogs suffered in 1994 due to inhumane treatment. (Many of the dogs were held by Respondents for such a short period of time that they could not expect to show signs of suffering, even from the abominable conditions at Respondents' facility.)
*44 Respondents challenge on appeal the ALJ's findings and conclusions that Respondents' violations were willful. However, Respondents' violations were willful within the meaning of the Administrative Procedure Act (APA). A violation is willful, within the meaning of the APA (5 U.S.C. § 558(c)), if a person carelessly disregards regulatory requirements. [FN10] Even under the stricter standard followed in some circuits, [FN11] Respondents' conduct would still be willful in view of their disregard of express provisions of the Act and regulations.
Turning to the sanction, the Department's current sanction policy is set forth in In re S.S. Farms Linn County, Inc. (Decision as to James Joseph Hickey and Shannon Hansen), 50 Agric. Dec. 476, 497 (1991), aff'd, 991 F.2d 803 (9th Cir. 1993), 1993 WL 128889 (not to be cited as precedent under 9th Circuit Rule 36-3), as follows:
It is appropriate to state expressly the practice that has been followed by the Judicial Officer in recent cases, viz., that reliance will no longer be placed on the "severe" sanction policy set forth in many prior decisions, e.g., In re Spencer Livestock Comm'n Co., 46 Agric. Dec. 268, 435-62 (1987), aff'd on other grounds, 841 F.2d 1451 (9th Cir. 1988). Rather, the sanction in each case will be determined by examining the nature of the violations in relation to the remedial purposes of the regulatory statute involved, along with all relevant circumstances, always giving appropriate weight to the recommendations of the administrative officials charged with the responsibility for achieving the congressional purpose.
The Administrator of the Animal and Plant Health Inspection Service sets forth his rationale in support of the ALJ's sanction, as follows (Complainant's Response to Respondents' Appeal and Request to Reopen Record at 14-17):
e. THE ADMINISTRATIVE LAW JUDGE CORRECTLY HELD THAT THE RESPONDENTS' VIOLATIONS WERE WILLFUL AND THE SANCTIONS REQUESTED BY THE [COMPLAINANT] AND IMPOSED BY THE ADMINISTRATIVE LAW JUDGE ARE APPROPRIATE.
The Respondents assert that "they did nothing wrong, at least willfully." (p. 21) What did they do wrong?
.They falsified their records to claim that dogs had been acquired from pounds. They willfully falsified these records to conceal their unlawful acquisitions of random source dogs from individuals.
.They falsified their records to conceal their failure to obtain the information which must be included in the records.
.Generously viewed, they acted with careless disregard for the requirements of the regulations by purchasing dogs from "the [Rutledge] guys" without making any effort to verify the names and addresses given by persons unknown to them, causing their records to be false.
.They falsified their records by exaggerating the number of dogs purchased from at least one individual.
.They falsified their records to conceal violations of the holding period requirements.
.They failed to hold dogs (and perhaps one cat) for the required period and they knew what they were doing was prohibited.
*45 .They continued to falsify their records and to unlawfully acquire random source dogs even after a complaint had been filed against them and a hearing was pending.
.They forged documents purporting to be certifications by a municipal pound authenticating the source of certain dogs. ("Using and completing a certification form which has been signed in blank is an intentional, willful, and misleading thing to do." Decision and Order, p. 38)
.They used these forged documents to unlawfully sell random source dogs to research facilities (the Veterans Administration Hospital, the University of Iowa, and the University of Minnesota).
.They falsified their records and claimed that dogs had been born on their premises when in fact they were acquired from other, unknown sources.
.While a hearing was pending on the initial complaint they let their facility deteriorate to a deplorable condition.
.They left dead dogs under cages until the dogs were dried out and mummified.
.They fed their dogs on the "rotten flesh" (TR 193) of deteriorating carcasses.
.They kept their dogs in unsanitary conditions.
.And yes, they housed their dogs in dangerous conditions.
The Administrative Law Judge stated in summary (p. 43):
The record, as a whole, supports Complainant's allegations as to numerous violations of the Act and the applicable regulations. These have been repeated, flagrant and willful. Such disregard by Respondents reflect[s] a situation where the purposes of the Act are thwarted and render its objectives a nullity.
The civil penalty of $200,000, requested by the Complainant and imposed by the Administrative Law Judge, is entirely appropriate and necessary for the effective enforcement of the Animal Welfare Act. Yes it is the largest civil penalty imposed under the Animal Welfare Act and it is necessary that it be so. The degree of the willfulness and flagrancy of the Respondents' violations is astonishing. Even after a hearing was pending on the initial complaint, the Respondents continued to falsify their records. This factor requires a particularly severe civil penalty and distinguishes this case from others. The flagrancy of their violations for the humane handling and care of animals is also appalling and it is also significant that these violations occurred while the initial complaint was pending. It is not truly a mitigating factor that there is no direct evidence that any particular animal suffered from malnutrition, exposure, or disease and that the dogs sold by the Respondents were, as far as is known, healthy. The presence of dead dogs in advanced stages of decomposition suggests that not all was well.
It is also necessary that the Respondents' license be permanently revoked. This part of the sanction is in keeping with other cases where suspensions of 10 or 25 years have been imposed. However, this should be accompanied by a word of caution to other dealers and exhibitors: No one should think that the deliberate falsification of records on a smaller scale should not result in the permanent revocation of their license.
*46 I agree with the Administrator's views. As to the civil penalty, the Act authorizes up to $2,500 per violation per day. "Each violation and each day during which a violation continues shall be a separate offense" (7 U.S.C. § 2149(b) (1988)). As stated in In re James Petersen, 53 Agric. Dec. 80, 94 (1994):
"The sale of each animal constitutes a separate violation." In re Bradshaw, 50 Agric. Dec. 499, 504 (1991). "The purchase or sale of each animal constitutes a separate violation." In re Johnson, 51 Agric. Dec. 209, 212 (1992). See also In re Hickey, 47 Agric. Dec. 840, 848 (1988), aff'd, 878 F.2d 385 (9th Cir. 1989) (Table) (text in WESTLAW) (not to be cited as precedent under 9th Circuit Rule 36-3), printed in 48 Agric. Dec. 107 (1989), in which the false recording of the purchase of each dog was held to be a separate violation and the civil penalty was calculated accordingly.
Considering first the 40 forged certificates used in the sale of 40 live random source dogs to the Veterans Administration Hospital in Minneapolis, Minnesota, the University of Iowa, and the University of Minnesota, these purported to be certifications by the Animal Control Officer for the Vinton dog shelter, but the certifications were actually filled in by Anita Toney (Findings 10-13, 16). The maximum civil penalty of $2,500 for each of these violations is warranted, for a total of $100,000. As explained above, the certification requirements of the Act and regulations (7 U.S.C. § 2158(b); 9 C.F.R. § 2.133(b), (c)) are designed to prevent trafficking in stolen dogs. Furthermore, these 40 forged certificates were prepared and used by Respondents while a Complaint was pending against them alleging numerous other violations of the Act and regulations designed to prevent or deter trafficking in stolen dogs.
Looking at the holding-period violations, the violations in which the Respondents deliberately falsified their records to conceal the violations are particularly flagrant. Three examples are set forth above. In the first example, one dog was held for only 2 days. In the second example, two dogs were held for only 3 days. In the third example, 1 dog was removed the same day it arrived, and 10 dogs were held, at most, for only 1 day. All three examples involve alterations of Respondents' records in order to conceal violations. The maximum civil penalty of $2,500 is warranted for each of the 14 violations involved in these three examples, for a total of $35,000. Other holding-period violations warranting the full $2,500 civil penalty could have been set forth (see Complainant's Proposed Findings and Brief filed October 7, 1994, at 14-19, Findings 45-60). However, since I did not take the time to spell out any additional examples, I will lump together all the holding-period violations other than the 14 set forth above in the three examples. The ALJ found that, during 1990, Respondents failed to hold at least 190 dogs and cats for a period of not less than 5 days after acquisition, in willful violation of 7 U.S.C. § 2135 and 9 C.F.R. § 2.101 (Finding 15). The ALJ also found that the "overwhelming weight of evidence shows that the Respondents were aware of and knew what the regulations required in 1990" (Ibid.). In my footnote 4 to Finding 15, I cite Complainant's Briefs which list each of the 190 violations. Subtracting the 14 holding-period violations included in the three examples referred to above from the total of 190 such violations leaves 176 violations. Since these were all willful violations of statutory and regulatory provisions designed to prevent or deter trafficking in stolen animals, with full knowledge of the requirements (Finding 15), $500 per violation, or a total of $88,000, would be modest for these 176 violations. When added to the $35,000 for the 14 more flagrant holding-period violations, we have a civil penalty of $123,000 for the holding-period violations, in addition to the $100,000 civil penalty for the forged certificates.
*47 There are many other very serious violations warranting very substantial civil penalties, but I will stop putting a specific dollar value on them since we already have a total of $223,000 in civil penalties, and the Administrator recommended only $200,000 in civil penalties, which was adopted by the ALJ. However, I will merely note that the many violations involving buying live random source dogs that were not obtained from the individuals who bred and raised them on their own premises were very serious violations of the regulations designed to prevent or deter trafficking in stolen dogs. Also, the many recordkeeping violations were very serious violations. As stated in In re Harry Klein Produce Corp., 46 Agric. Dec. 134, 170, aff'd, 831 F.2d 403 (2d Cir. 1987), quoting from In re Sol Salins, Inc., 37 Agric. Dec. 1699, 1734 (1978):
Respondent's recordkeeping violations, which are intertwined with respondent's accounting violations, (footnote omitted) are also serious violations of the Act inasmuch as accurate records are essential to effective enforcement of a Federal regulatory program. See, e.g., United States v. Ruzicka 329 U.S. 287, 288-289; United States v. Darby, 312 U.S. 100, 124-125; Electric Bond Co. v. Comm'n., 303 U.S. 419, 439; Interstate Commerce Commission v. Goodrich Transit Co., 224 U.S. 194, 204-216; Baltimore & Ohio RR. v. Interstate Com., 221 U.S. 612, 620- 623; Hyatt v. United States, 276 F.2d 308, 312 (C.A. 10); Panno v. United States, 203 F.2d 504, 510 (C.A. 9); United States v. Turner Dairy Co., 166 F.2d 1 (C.A. 7), certiorari denied, 335 U.S. 813; United States v. Turner Dairy Co., 162 F.2d 425, 425-428 (C.A. 7), certiorari denied, 332 U.S. 836; Bartlett Frazier Co. v. Hyde, 65 F.2d 350 (C.A. 7), certiorari denied, 290 U.S. 654; In re Breckenridge Auction & Sales Co., 36 Agric. Dec. 1522, 1529 (1977).
In addition, there were serious violations of the Act and regulations designed to prevent or deter trafficking in stolen dogs involving failing to individually identify dogs, and failing to apply identification tags in as close to consecutive numerical order as possible. Finally, there were numerous serious violations involving Respondents' housing facilities.
A number of severe sanctions have been issued under the Animal Welfare Act in recent years. As stated by the ALJ, the highest civil penalty was $140,000 assessed against Delta Air Lines, Inc. That civil penalty was based on $1,000 for each of the 108 animals exposed to an oxygen-deprived environment on a single flight, and an additional $1,000 for each of the 32 puppies which died on the flight, for a total of $140,000. In re Delta Air Lines, Inc., 53 Agric. Dec. 1076 (1994). Although $80,000 of the penalty was held in abeyance for one year, that was conditioned upon APHIS, within one year, "attesting to its receipt of written animal handling guidelines developed by Delta Air Lines in collaboration with recognized veterinarians and other appropriate experts, which APHIS has determined will satisfactorily ensure that animals transported by Delta in the future shall have a sufficient supply of air for normal breathing" (53 Agric. Dec. at 1086). I do not yet know whether Delta has been able to develop such guidelines, but even if it has, the project would undoubtedly require a significant expenditure of funds. Furthermore, the violations in that case were careless, contrasted with many deliberate and fraudulent violations involved here.
*48 In In re Ron Morrow, 53 Agric. Dec. 144 (1994), aff'd per curiam, 65 F.3d 168 (Table), 1995 WL 52336 (6th Cir. 1995), a civil penalty of $50,000 was imposed for numerous violations, including operating as a dealer without being licensed, refusing to allow inspections, failing to construct and maintain suitable housing conditions, failing to provide appropriate food and water, and failing to maintain adequate records.
In In re James Joseph Hickey, Jr. (Decision as to James Joseph Hickey, Jr., d/b/a S & H Supply Co.), 53 Agric. Dec. 1087 (1994), an order was issued prohibiting Respondent from obtaining a license for a period of 10 years, assessing a civil penalty of $10,000, and directing Respondent to cease and desist from various practices involving interfering with inspectors during the course of an inspection, recordkeeping, maintenance of facilities, and failing to maintain programs of disease control, euthanasia, and adequate veterinary care.
In In re James W. Hickey, 47 Agric. Dec. 840 (1988), aff'd, 878 F.2d 385, 1989 WL 71462 (9th Cir. 1989) (not to be cited as precedent under 9th Circuit Rule 36-3), printed in 48 Agric. Dec. 107 (1989), an order was issued suspending Respondents' license for 25 years, assessing a civil penalty of $40,000, and directing Respondents to cease and desist from numerous practices involving the care and housing of dogs and cats, from failing to allow inspection of Respondents' records, from failing to properly identify and tag dogs, and from failing to keep and maintain adequate records as to the acquisition and disposition of dogs and cats. The maximum civil penalty then in effect was $1,000 per violation, compared to the present $2,500 maximum.
Hundreds of thousands of dogs, cats, and other animals are used by research facilities each year. Federal regulation was deemed necessary because State authorities were unable (i) to apprehend and convict the thieves who operate in this field, and (ii) to ensure humane treatment of the animals. As stated in the Senate Report on the bill which became the Animal Welfare Act (S. REP. NO. 1281, 89th Cong., 2d Sess., reprinted in 1966 U.S.C.C.A.N. 2635, 2636):
BACKGROUND AND NEED FOR THE LEGISLATION
This bill recognizes the need for Federal legislation to deal with the abuses that have developed as a result of the Nation's vast program of medical research. Much of this medical research involves experiments and tests with animals. The demand for research animals has risen to such proportions that a system of unregulated dealers is now supplying hundreds of thousands of dogs, cats, and other animals to research facilities each year.
The committee held 3 days of hearings on the subject of regulating those who sell, transport, or handle animals intended for use in medical research. During these hearings, shocking testimony was received concerning the existence of pet stealing operations which supply some animals eventually used by many research institutions. Stolen pets are quickly transported across State lines, changing hands rapidly, and often passing through animal auctions. While in the hands of dealers, these animals are faced with inhumane conditions. Quarters are cramped, uncomfortable, and unsanitary, with inadequate provisions for food and water.
*49 The public has been aroused by exposes of pet theft and the treatment encountered by many of these animals on their way to the medical laboratory. Yet, State laws have proved inadequate both in the apprehending and conviction of the thieves who operate in this interstate operation, and in providing for adequate conditions within dealer premises.
Much of the responsibility for creating this huge demand for medical research animals rests with the Federal Government. Grants to research institutions for biomedical research have multiplied twelve-fold since the early 1950's. H.R. 13881 provides a mechanism that will block the existing interstate trade in stolen pets and at the same time will insure humane treatment of those animals which are destined for use in research facilities.
Respondents' hundreds of violations of statutory and regulatory provisions, designed to deal with the abuses of trafficking in stolen pets and subjecting animals to inhumane conditions, strike at the heart of this Federal program. The sanction recommended by the administrative officials charged with the enforcement of the Animal Welfare Act and adopted by the ALJ, viz., license revocation and civil penalties totalling $200,000, is not too severe for Respondents' hundreds of serious violations. If a substantial civil penalty were not imposed in addition to license revocation in cases of this nature, an unscrupulous person could become a dog dealer, engage in many serious violations, and then merely go into some other business 5 or 6 years later, after a license revocation order finally becomes effective.
Respondents seek to reopen the hearing to receive various exhibits, but there is no basis for the request. Respondents seek to receive exhibits "AAA," "BBB," and "CCC," which are the first page of inspection certificates for inspections dated April 10, 1990, October 3, 1990, and December 7, 1990. All of these inspection certificates check the "YES" box in item 47, "Are records being kept in the manner prescribed in Sections 2.35, 2.75, and 2.76 of the regulations?" [FN12] These inspection reports would have no weight whatever in view of the fact that Respondents' relevant records have been introduced into evidence, and the overwhelming weight of the evidence shows that the records are, in fact, false and incomplete. The fact that an inspector did not detect the recordkeeping violations during routine inspections in 1990 does not detract at all from the massive evidence proving the falseness and incompleteness of the 1990 records.
In addition, Respondents include only the first page of the inspection reports, which do not show the name of the inspector or the fact that the inspection reports were received by Respondents. All of the inspection reports received in evidence show that copies of the inspection reports were received by Julian Toney (CX 104, 105, 106; RX VV). Presumably, one or both Respondents received the proffered additional inspection reports, and presumably that fact is shown on another page of the proffered exhibits. The Rules of Practice provide (7 C.F.R. § 1.146(a)(2)):
*50 (2) Petition to reopen hearing. A petition to reopen a hearing to take further evidence may be filed at any time prior to the issuance of the decision of the Judicial Officer. Every such petition shall state briefly the nature and purpose of the evidence to be adduced, shall show that such evidence is not merely cumulative, and shall set forth a good reason why such evidence was not adduced at the hearing.
This rule of practice is similar to the judicial practice regarding newly discovered evidence. As stated in In re Spencer Livestock Commission Co., 46 Agric. Dec. 268, 336-37 (1987), aff'd, 841 F.2d 1451 (9th Cir. 1988):
Respondents' request to have the proceeding reopened for the purpose of receiving additional evidence is also without merit. Respondents concede that the additional evidence which they would like to adduce could have been introduced at the earlier hearing, if they had recognized its importance. However, that is no basis for reopening a hearing. As stated in In re King Meat Co., 40 Agric. Dec. 1910, 1910-11 (1981) (order denying reopening), aff'd, No. CV 81-6485 (Aug. 11, 1983), aff'd, 742 F.2d 1462 (9th Cir. 1984) (unpublished):
Respondent concedes that the evidence it would adduce was in its possession at the time of the original hearing, but was not considered of importance at that time. The case is identical, in this respect, to In re DeJong Packing Co., 36 Agric. Dec. 1319, 1319-20 (1977), aff'd, 618 F.2d 1329 (9th Cir.) (2-1 decision), cert. denied, 449 U.S. 1061 (1980), in which it is stated:
The rules of practice provide that a "petition to reopen a hearing to take further evidence may be filed at any time prior to the issuance of the final order" (9 CFR 202.21(a)(2)). Since respondent Hygrade's petition was filed after the issuance of the final order, it comes too late and is, therefore, denied.
But even if the petition had been timely filed, it would have been denied. A timely filed petition to reopen the hearing must "set forth a good reason why such evidence was not adduced at the hearing" (9 CFR 202.21(a)(2)). This administrative requirement is similar to the judicial practice regarding newly discovered evidence (see United States v. Bransen, 142 F.2d 232, 235 (C.A. 9)). In that case it was held (ibid.):
Subsequent discovery of the importance of evidence which was in the possession of applicant for new trial, at the time of the trial, does not entitle him to a new trial upon the ground of newly discovered evidence.
"Under this type of procedural rule, a proceeding will not be remanded if a party had full opportunity to present evidence at the original hearing, but failed to do so (National Labor R. Board v. Weirton Steel Co., 135 F.2d 494, 497 (C.A. 3); National Labor R. Board v. Aluminum Products Co., 120 F.2d 567, 573 (C.A. 7)." In re Mountainside Butter & Egg Co., 38 Agric. Dec. 789, 795 (1978) (remand order), final decision, 39 Agric. Dec. 862 (1980), [aff'd, No. 80-3898 (D.N.J. June 23, 1982), aff'd mem., 722 F.2d 733 (3d Cir. 1983), cert. denied, 465 U.S. 1066 (1984)]; accord, In re Winger, 38 Agric. Dec. 182, 188 (1979).
*51 This principle is vital to the efficient handling of the Department's numerous regulatory cases. If a party were free to petition to reopen the hearing to take further evidence whenever it was discovered that additional evidence in the party's possession at the time of the original hearing would be helpful, it would completely disrupt the administrative process.
There is no basis for reopening the hearing to receive these three inspection reports, and, as stated above, if they were received, their weight would be infinitesimal.
Similarly, there is no basis whatever for reopening the record at this late date to receive Respondents' proffered exhibits "DDD" and "EEE," the first of which is a statement by Dr. Dale Alambaugh that Cliff Waterbury "picked up more than the 3 or 4 dogs I actually saw him place in pet carriers," and that he is certain that Cliff Waterbury picked up 37 specific dogs at the Crestview Veterinary Clinic, which was acting as the dog pound for the City of Trenton, Missouri. The second is a statement by Kenny Hughes that, after having time to examine the facts, he has reason to believe that he sold a list of 48 dogs to Cliff Waterbury. However, Dr. Alambaugh (Tr. 388-97) and Mr. Hughes (Tr. 660- 66) testified for Respondents at the hearing in this case. Respondents had every opportunity to question them as to all aspects of this case. There is no basis for permitting additional statements from these witnesses at this late date, or reopening the hearing to allow Complainant an opportunity to cross-examine them, if their statements were to be considered.
In addition, even if Respondents did acquire 48 dogs from Kenny Hughes, a great number of them were random source dogs not bred and raised on Mr. Hughes' premises (Finding 8(2)). Accordingly, it was unlawful for Respondents to obtain them from Mr. Hughes (9 C.F.R. § 2.132). Also, Respondents' records were inaccurate for the 48 dogs because they did not disclose his correct address or driver's license (Finding 8(1)), in violation of 7 U.S.C. § 2140 and 9 C.F.R. § 2.75(a)(1)).
To conclude, even if the proffered exhibits "DDD" and "EEE" were received in evidence, in view of the many hundreds of serious violations by Respondents not involving those exhibits, the admission of those exhibits would not change the sanction in the slightest.
For the foregoing reasons, the following Order should be issued.
1. Respondents, their agents and employees, successors and assigns, directly or through any corporate or other device, shall cease and desist from violating the Act and the regulations and standards issued thereunder, and in particular, shall cease and desist from:
A. Failing to make, keep, and maintain a system of records which fully discloses all required information and presents it in a meaningful and useful form;
B. Failing to hold dogs and cats for the required period;
C. Acquiring animals from prohibited sources or without required certifications and records;
*52 D. Using any altered or otherwise falsified certificate in the acquisition or disposition of any dog or cat;
D. Failing to individually identify dogs and cats as required;
F. Failing to maintain housing facilities for dogs and cats in a structurally sound condition and in good repair;
G. Failing to maintain housing facilities for dogs and cats on a regular basis and to replace surfaces when soiled or worn;
H. Failing to make provisions for the removal and disposal of animal wastes;
I. Failing to provide dogs kept outdoors with adequate shelter; and
J. Failing to keep the premises clean and in good repair and free of accumulations of trash, waste and debris.
2. Respondents are jointly and severally assessed a civil penalty of $200,000, which shall be paid, within 180 days after service of this Order on Respondents, by certified check or money order made payable to the Treasurer of the United States and forwarded to Robert A. Ertman Esq., United States Department of Agriculture, Office of the General Counsel, Marketing Division, 14th and Independence Avenue, S.W., Room 2014, South Building, Washington, D.C. 20250-1417.
3. Respondents' license is permanently revoked.
The revocation provision shall become effective on the 35th day after service of this Order on Respondents. The cease and desist provisions shall become effective on the day after service of this Order on Respondents.
FN1 The position of Judicial Officer was established pursuant to the Act of April 4, 1940 (7 U.S.C. §§ 450c-450g), Reorganization Plan No. 2 of 1953, 18 Fed. Reg. 3219 (1953), reprinted in 5 U.S.C. app. at 1280 (1988), and section 212(a)(1) of the Department of Agriculture Reorganization Act of 1994 (Pub. L. No. 103-354, § 212(a)(1), 108 stat. 3178, 3210 (1994)). The Department's present Judicial Officer was appointed in January 1971, having been involved with the Department's regulatory programs since 1949 (including 3 years' trial litigation; 10 years' appellate litigation relating to appeals from the decisions of the prior Judicial Officer; and 8 years as administrator of the Packers and Stockyards Act regulatory program).
FN2 [However, the number in Respondents' records differs by only one digit from the correct number. Respondents' records show 500-71-1179, whereas the correct number is 500-76-1179 (Tr. 666). No part of the sanction is based on this discrepancy.]
FN3 [In a few instances, the Previous USDA Number was left blank or obliterated (CX-127-129, 147, 164, 169). The exhibits showing which USDA tag numbers were assigned to Respondents, and which ones were assigned to Mr. Scherbring, are CX 170-172.]
FN4 ['The records show that 189 of the animals were dogs. The one animal that could be a dog or a cat is tag no. 6698 (RX-UU, p. 15; CX-1, p. 110). Complainant's trial brief filed October 7, 1994, lists 192 holding-period violations (Brief at 9-19, Findings 9-60). Complainant's trial reply brief filed February 27, 1995, concedes that, after rechecking all tag numbers and dates, two errors were found, reducing the violations to 190 (Reply Brief at 15).]
FN[5 See FTC v. Morton Salt Co., 334 U.S. 37, 44-45 (1948); Schlemmer v. Buffalo, Rochester & Pittsburg Ry., 205 U.S. 1, 10 (1907); In re Harry Klein Produce Corp., 46 Agric. Dec. 134, 162, aff'd, 831 F.2d 403 (2d Cir. 1987).]
FN6 CX 1, p. 2 (7678), p. 17 (7548), p. 19 (7525), p. 44 (7305), p. 48 (7263), p. 50 (7246), p. 56 (7191), p. 58 (7173), p. 63 (7131), p. 87 (6912), p. 92 (6872), p. 94 (6855), p. 102 (6783), p. 103 (6771) p. 111 (6687), p. 128 (6481), p. 145 (6328), p. 212 (5638), p. 237 (5410).
FN7 CX 1, p. 49 (7260), p. 71 (7057), p. 108 (6729), p. 109 (6716).
FN8 CX 1, p. 16 (7556), p. 41 (7331), p. 51 (7242), p. 70 (7068), p. 76 (7017), p. 127 (6492), p. 133 (6434), p. 145 (6331), p. 212 (5640), p. 234 (5442).
FN9 CX 1, p. 16 (7553), p. 47 (7272).
FN10 See Butz v. Glover Livestock Comm'n Co., 411 U.S. 182, 186-88 (1973); Cox v. USDA, 925 F.2d 1102, 1105 (8th Cir.), cert. denied, 112 S.Ct. 178 (1991); American Fruit Purveyors, Inc. v. United States, 630 F.2d 370, 374 (5th Cir. 1980) (per curiam), cert. denied, 450 U.S. 997 (1981); George Steinberg & Son, Inc. v. Butz, 491 F.2d 988, 994 (2d Cir.), cert. denied, 419 U.S. 830 (1974); Goodman v. Benson, 286 F.2d 896, 900 (7th Cir. 1961); Eastern Produce Co. v. Benson, 278 F.2d 606, 609 (3d Cir. 1960).
FN11 Capital Produce Co. v. United States, 930 F.2d 1077, 1079-81 (4th Cir. 1991); Capitol Packing Co. v. United States, 350 F.2d 67, 78-79 (10th Cir. 1965). See also Parchman v. USDA, 852 F.2d 858, 864-65 (6th Cir. 1988).
FN12 Item 47 of the April 10, 1990, report omits section 2.35.