Unpublished Disposition, 878 F.2d 385 (9th Cir. 1985)

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U.S. Court of Appeals for the Ninth Circuit - 878 F.2d 385 (9th Cir. 1985)

No. 88-7281.

United States Court of Appeals, Ninth Circuit.

Before BROWNING and FLETCHER, Circuit Judges, and EUGENE F. LYNCH, District Judge.* 


James W. Hickey ("Hickey") appeals a decision by the Secretary of Agriculture ("Secretary") suspending Hickey's license for 25 years and fining him $40,000 for violations of the Animal Welfare Act ("Act"). We affirm.


Hickey was a licensed Class B dealer under the Act, in the business of selling cats and dogs to be used in research. After sending Hickey a warning letter on December 20, 1983, regarding deficiencies observed during an inspection of Hickey's premises, the Animal and Plant Health Inspection Service ("APHIS") commenced further investigations running from October 3, 1984 to July 23, 1985. These investigations disclosed filthy and inhumane conditions at Hickey's premises, reporting violations and tagging violations. During one of these investigations, Hickey refused access to records concerning a stolen black labrador puppy.

The ALJ found that each of these acts, omissions and conditions violated specific regulations and standards promulgated under the Act. The ALJ itemized Hickey's various violations and imposed specific penalties for each, totalling $40,000. Hickey's license was suspended for 25 years. The Judicial Officer ("JO"), acting on behalf of the Secretary, reviewed the ALJ's preliminary decision and sustained all of the ALJ's rulings. Hickey petitions this Court for review of the Secretary's findings. We have jurisdiction under 7 U.S.C. § 2149(c).


The findings of the Secretary in this adjudicatory administrative proceeding must be upheld if supported by substantial evidence in the record as a whole. See Spencer Livestock Comm'n v. Dept. of Agriculture, 841 F.2d 1451, 1456 (9th Cir. 1988). Hickey challenges five of the Secretary's findings.1  These challenges will be discussed in turn.

Hickey argues that Finding 14, concerning inhumane conditions at his facilities on November 14, 1984, involved the conditions in which Hickey kept one of his personal dogs. However, the testimony of the APHIS inspector indicated that the conditions underlying Finding 14 were found throughout Hickey's facilities. The dog which Hickey alleges belonged to him personally was depicted in an exhibit showing the inadequate drainage at Hickey's facilities. Inadequate drainage was only one of nine violations found on November 14, 1984. There was also evidence that other animals, which Hickey does not claim belonged to him personally, were exposed to inadequate drainage conditions. See R.T. 153 (cat facility contained excess water, cats muddy and wet). The dog which Hickey claims was his was not depicted in exhibits used to prove the other violations in Finding 14. This finding must be affirmed.2 

In Finding 11, the ALJ assessed a $1,000 civil penalty for Hickey's refusal to allow access to records to show the ownership of a black labrador puppy. There was evidence that the puppy had been stolen, that the owner had traced it to Hickey's premises, and that Hickey had returned the puppy to its owner. R.T. 89. Hickey gave the owner a receipt. Id. During an inspection, Hickey was unable or unwilling to produce any records concerning the puppy. The very absence of records is a violation of the Act and regulations sufficient to trigger a $1,000 fine. 7 U.S.C. § 2140; 2149(b); 9 C.F.R. Sec. 2.75.

Hickey alleges that Finding 16(e) was not pled in the Department of Agriculture's complaint, and that it was therefore improper for the ALJ to impose a penalty on him based on this finding. This finding reads, "One overly aggressive dog was housed in an enclosure with many other dogs." Inadequate notice is grounds for reversing an agency's decision. Dept. of Education of California v. Bennett, 864 F.2d 655, 659 (9th Cir. 1988). Notice is adequate for due process purposes if the party proceeded against understood the issue and was afforded a full opportunity to justify his conduct. Id.

This violation was brought to Hickey's attention for the first time in exhibits furnished him prior to the hearing. One of the exhibits states, with respect to an inspection on March 13, 1985:

Deficiency # 39 Classification and Separation--An aggressive dog was removed from other dogs during the inspection.

C.X. 17. At the hearing, APHIS filed a proposed finding identical in all essentials to Finding 16(e). The violation was discussed in APHIS's post-hearing brief. Nevertheless, Hickey never requested a continuance to meet this evidence, nor does Hickey allege that the finding is not supported by the evidence. Hickey had ample opportunity to object to the inclusion of the unpled violation. We conclude that notice was adequate and affirm this finding.

The ALJ concluded that Hickey falsely reported the dollar amount of sales on his annual license report for the year July 22, 1983 to July 22, 1984. Hickey reported total sales of $9,460, with the dollar amount on which his fee was based indicated as $4,230. R.T. 36, C.X. 1, page 4. There was evidence of purchases by three institutions totalling at least $26,740.3  By underreporting his sales, Hickey necessarily underrepresented the amount on which his license fee was to be based. 9 C.F.R. Sec. 2.6(b) (2) (license fee based on gross sales minus the amount paid for the animals).

Hickey also alleges that the Secretary was required to produce evidence of the amount Hickey paid for the animals in order to prove that the license renewal form was false. However, Hickey himself provided this figure on the renewal form. C.X. 1 at page 4.

The Secretary found that Hickey falsely reported the number of dogs purchased from dog shelters. The Secretary cites evidence of a plethora of discrepancies. Respondent's Brief 14-17. Hickey does not attempt to dispute that such discrepancies occurred. He argues only that there was no evidence he stole dogs and no evidence that his record keeping was willfully inaccurate.

7 U.S.C. § 2140 and 9 C.F.R. Sec. 2.75 require dealers to maintain accurate records. 7 U.S.C. § 2149(b) provides for penalties in the case of any violation, willful or not, with "due consideration to ... the person's good faith, and the history of previous violations." Nowhere does the Act require the Secretary to prove that the purpose of inaccurate recordkeeping was to disguise the theft of animals. The ALJ gave proper consideration to circumstances, imposing penalties only for violations which occurred after Hickey received a letter of warning, and increasing the penalties for later violations. PR-15.


The Order of the Department of Agriculture suspending Hickey's license for 25 years and fining him $40,000 is AFFIRMED.


Hon. Eugene F. Lynch, District Judge for the Northern District of California, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3


Hickey also purports to appeal the entire $40,000 penalty and suspension of his license as an abuse of discretion, designating the entire record, without specifying any particular findings as erroneous. We decline this invitation to undertake de novo review of the entire proceedings, limiting ourselves to consideration of Hickey's more specific assignments of error


There is no reason to assume that this finding could be reversed even if it did apply only to Hickey's personal dog. Hickey offers no legal support for his conclusion that the Act does not apply to a dealer's personal pets, at least those kept together with animals to be sold. At Hickey's hearing, an APHIS inspector testified that USDA policy is to require compliance as to all animals found on the premises, even the dealer's pets, because of the possibility that a dealer might determine to sell a pet at some later date


Oregon State University purchased $7,865 worth of dogs and cats. R.T. 264. Thoratec Laboratories purchased $750 worth of dogs. R.T. 321. Oregon Health Sciences University purchased approximately $18,125 worth of dogs. C.X. 27, R.T. 374. Our review of the record does not disclose the basis for the ALJ's conclusion that purchases totalled $37,000. However, the difference between $26,740 and $37,000 is not material, because the underreporting was excessive in any event