Judges: J. LAWRENCE JOHNSTON
Agency: Department of Citrus
Latest Update: Apr. 04, 1985
Summary: Respondent couldn`t prove orange by-product was for export. Petitioner couldn`t prove Respondent ever finally exported in violation of rule.
84-1488STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF CITRUS, )
)
Petitioner, )
)
vs. ) CASE NO. 84-1488
) LYKES PASCO PACKING COMPANY, )
)
Respondent. )
) DEPARTMENT OF AGRICULTURE )
AND CONSUMER SERVICES, )
)
Petitioner, )
)
vs. ) CASE NO. 84-1676
) LYKES PASCO PACKING COMPANY, )
)
Respondent. )
)
RECOMMENDED ORDER
The final hearing was held in the above captioned consolidated cases in Tampa, Florida, on August 28 and November 16, 1984.
APPEARANCES
For Petitioner J. Hardin Peterson, Esquire Department of Citrus: Lakeland, Florida
Department of Frank A. Graham, Jr., Esquire Agriculture: Tallahassee, Florida
For Respondent: David Kerr, Esquire
Ansley Watson, Jr., Esquire Tampa, Florida
The issue is whether the Department of Citrus (DOC) or the Department of Agriculture and Consumer Services (DACS), or both, should take disciplinary action against respondent Lykes Pasco Packing Company (Lykes Pasco) for allegedly violating Rule 20-64.21, Florida Administrative Code. Specifically, DOC and DACS allege that Lykes Pasco violated the rule by shipping water extracted soluble orange solids (WESOS) without sodium benzoate added as a tracer other than by exporting the WESOS offshore from the United States and Canada, and not securing bills of lading documenting that the WESOS was later exported offshore from the United States and Canada. Lykes Pasco denies having violated the rule and also questions DOC's jurisdiction and the rule's validity. 1/
FINDINGS OF FACT 2/
Respondent Lykes Pasco Packing Company (Lykes Pasco) is and was at all material times a licensed citrus fruit dealer holding license number 419 issued for the 1983-84 shipping season and was an active processor of citrus products.
Water extracted soluble fruit solids or orange solids (WESOS) are the food products for further manufacturing use recovered in the presence of water from the unfermented excess fruit pulp removed during the production of orange, grapefruit or other citrus juice products, commonly known as wash pulp solids.
Lykes Pasco obtained for the Department of Citrus (DOC) a permit for the manufacture or production of WESOS during the citrus shipping season of August 1, 1981, through July 31, 1982, and obtained such a permit for the citrus shipping season from August 1, 1983, through July 31, 1984. Through inadvertence, Lykes Pasco did not obtain such a permit for the citrus shipping season from August 1, 1982, through July 31, 1983.
During the period from August 1, 1982, through June 22, 1984, Lykes Pasco shipped the following amounts of WESOS, without the addition of sodium benzoate tracer, to the following firms in the United States or Canada. 3/
Vita Pakt Citrus Products Company | 4,990 | 55-gallon drums |
Everfresh Juice Company | 3,600 | 55-gallon drums |
Home Juice Company | 1,706 | 55-gallon drums |
Mr. Juicy, Inc. | 2,189 | 55-gallon drums |
Holiday Juice, Inc. (Canada) | 478 | 55-gallon drums |
Of the shipments referred to in the immediately preceding paragraphs, Lykes Pasco produced to DOC bills of ladings showing that the following amounts of WESOS later were exported outside of the United States and Canada:
Mr. Juicy, Inc. (By Ohio Pure |
|
Foods, Inc., a related or sub- |
sidiary company) | 152 | 55-gallon drums |
Vita Pakt Citrus Products Company | 227 | 55-gallon drums |
Other than these bills of lading, there was no evidence, by bills of lading or other documents produced by Lykes Pasco to DOC or by any other proof, that any of the WESOS referred to in paragraph 4 above was exported outside the United States or Canada.
Lykes Pasco received statements from its customers that each of the shipments of WESOS referred to in paragraph 4 above was intended for export outside the United States and Canada.
Lykes Pasco has requested from each of the customers of the shipments referred to in paragraph 4 above, documentation of later export of the WESOS or of the finished product containing such WESOS offshore from the United States and Canada. Except for the bills of lading referred to in paragraph 5 above, Lykes Pasco's customers have uniformly refused to furnish documentary evidence of such export, some on a basis that such documents contain information considered to be proprietary and confidential.
By purchase order dated April 8, 1983, Vita Pakt Citrus Products Company ordered from Lykes Pasco 4,000 55-gallon drums of WESOS, without sodium benzoate tracer. The purchase order stated that the order was intended for use
in manufacturing a product intended for export, but the purchaser stated that it declined "to identify specific products, customers or export shipments." Lykes Pasco partially filled the purchase order by shipping Vita Pakt Citrus Produce Company 232 drums on May 4, 1983, 232 drums on May 23, 1983, 232 drums on June 7, 1983, and 232 drums on June 22, 1983. 4/ (The shipments make up part of the total shipments to Vita Pakt referred to in paragraph 4, above.)
Lykes Pasco has no legal or practical control over the further sale, shipments, or use of WESOS (or any other product) after the product has been shipped to its customer. Nor does DOC or DACS have any jurisdiction or control over any of the customers of Lykes Pasco's shipments which are the subject of this case. 5/
The Federal Food and Drug Administration standards of identity for orange juice products specifically permit the use of "in-line" WESOS in the manufacture of frozen concentrated orange juice but do not permit the addition of WESOS after completion of manufacture.
Rule 20-64.21, Florida Administrative Code, was promulgated by DOC in an attempt to prevent adulteration of 100 percent orange juice products with WESOS. Prior to and subsequent to promulgation of the rule, DOC and DACS have obtained samples of products labeled as 100 percent orange juice, some of which, based on the Petrus method of analysis, were determined to contain WESOS without sodium benzoate tracer, in excess of the amounts which would be found in orange juice products manufactured in accordance with federal food and drug administration standards. The adulteration of those products, a federal crime, could have been accomplished by the addition of WESOS, without sodium benzoate tracer, produced in Mexico, Brazil, California, Arizona, Texas and perhaps other places, as well as Florida.
Depending upon the extent to which products labeled as 100 percent orange juice are adulterated with WESOS, the adulteration can affect the quality of the product (and therefore the reputation of 100 percent orange juice) and the cost of producing illegal products labeled 100 percent orange juice (since WESOS is less expensive), placing legal Florida and other legal producers at a competitive disadvantage.
CONCLUSIONS OF LAW
Under Section 120.57(1), Florida Statutes (1983), the Division of Administrative Hearings has jurisdiction of an administrative proceeding such as this one "whenever the proceeding involves a disputed issue of material fact." In this case, the parties stipulated to most, if not all, of the material facts. If there is no disputed issue of material fact, the only questions are legal questions -- whether the facts establish a violation of the pertinent rule and whether the pertinent rule is valid. Nonetheless, it is not necessary to determine whether there is a disputed issue of material fact because Section 120.57(1), Florida Statutes (1983), curiously provides that parties can agree to submit a case without any disputed issue of material fact to a Hearing Officer for entry of a recommended order. The parties have chose to assert their statutory right to such a proceeding. Accordingly, the Division of Administrative Hearings has jurisdiction although the following conclusions of law are analogous to advisory opinions which the respective agencies are free to reject, 6/ and although the Hearing Officer has no authority to determine the validity of a rule in proceedings under Section 120.57(1), Florida Statutes (1983).
Case No. 84-1488
DOC's Administrative Complaint seeks to revoke, suspend, or otherwise discipline Lykes Pasco's permit for the manufacture of WESOS. 7/ But Lykes Pasco's sixth defense to DOC's Administrative Complaint that DOC lacks standing and jurisdiction to prosecute or decide this case has merit. The Florida Legislature has vested only DACS with the power to enforce Rule 20-64.21.
Subsection (1) of Section 601.10, Florida Statutes (1983), confers general rule making authority on DOC and provides that DOC's rules "shall have the force and effect of law when not inconsistent therewith." Subsection (2) gives DOC the power "to act as the general supervisory authority over the administration and enforcement" of Chapter 601. Subsection (5) clarifies that DOC's "general supervisory authority" over the "enforcement" of Chapter 601 is limited to investigating alleged violations and reporting findings of recommendations to DACS. Section 601.27, Florida Statutes (1983), makes it clear that "the enforcement of all provisions of this chapter and rules, regulations, and orders made pursuant to and under authority of this chapter shall be under the direction, supervision, and control of the Department of Agriculture. "
[Emphasis added.]
Section 601.67, Florida Statutes (1983) establishes a statutory framework for DACS to enforce the provisions of Chapter 601 and rules promulgated under it by disciplining licensed citrus fruit dealers. There is no similar statutory scheme provided for DOC. 8/
Case No. 84-1676
As stated, Section 601.27, Florida Statutes (1983), authorizes DACS to enforce Rule 20-64.21, Florida Administrative Code, and Section 601.67(1)(b), Florida Statutes (1983), authorizes DACS to fine or revoke or suspend the license of a licensed citrus fruit dealer who has violated or aided or abetted in the violation of any lawful rules of DOC, including Rule 20-64.21, Florida Administrative Code.
Rule 20-64.21, Florida Administrative Code, provides in pertinent part:
Water extracted soluble fruit solids are the food products for further manufacturing use recovered in the presence of water from the unfermented excess fruit pulp removed during the production of orange, grapefruit or other citrus juice products, commonly known as wash pulp solids.
* * *
(5)(a) Effective November 1, 1981, all water extracted soluble orange solids shall have added thereto as a tracer, at the time of initial manufacture, the direct food additive sodium benzoate, as provided by Section 184.1733 of the regulations of the U.S. FDA (21 CRD 184.1733) so such product contains an amount not less than 50ppm or more than 100ppm, when calculated at a reconstituted Brix of 11.8 degrees.
Each lot or container of water extracted
soluble orange solids shall, immediately upon manufacture, be labeled "water extracted soluble orange solids with sodium benzoate added as tracer." Such labeling shall be upon the container in an appropriate manner reasonably designed to insure proper identification of the product at all times.
* * *
Subsection 20-64.21(5) shall not apply to product packed and certified, at the time of manufacture, for shipment outside the United States and Canada. Product so certified shall be appropriately identified for offshore export only, and may not subsequently be shipped or used domestically. To qualify for this exemption all product must be handled and accounted for in accordance with DOC rule.
Water extracted soluble orange solids may only be manufactured by licensed citrus fruit dealers after issuance of a permit by the Department of Citrus for each citrus shipping season. Such permit shall be in effect from the date of issuance through July
31 of the shipping season applied for. Permits shall be issued administratively without formal Florida Citrus Commission approval unless the citrus fruit dealer has been found to have violated any provisions of this section.
* * *
(10) Tracer exempt offshore export water extracted soluble orange solids shall be handled and accounted for as follows:
* * *
The Florida Department of Agriculture, Division of Fruit and Vegetable Inspection shall audit the inventory of exempt product of each licensed citrus fruit dealer at the end of each citrus season.
The licensed citrus fruit dealer shall provide documentation of offshore shipment of all such product manufactured and not physically in inventory at the time of the audit. Acceptable documentation of offshore export shipment must be via actual on-board bill of lading issued by the master or agent of the vessel reflecting identification numbers of drums received on board. Any product sold or consigned to another must be documented by a certificate from the consignee or purchaser stating that all of the water extracted soluble orange solids product received from the licensed citrus fruit dealer will be exported offshore or will be used in manufacturing a product for offshore export. The certified statement
must include also, the product, drum numbers and the product destination. When such product is finally exported, the licensed citrus fruit dealer shall be responsible for providing documentation by bill of lading reflecting, via drum number, export of water extracted soluble orange solids, or volume and description of exported product manufactured from such water extracted soluble orange solids. 9/
The crux of the administrative complaints of both DOC and DACS is that Lykes Pasco was not able to provide documentation by bill of lading establishing the export of WESOS sold or consigned to another in violation of Rule 20- 64.21(10)(d), Florida Administrative Code. But Lykes Pasco's responsibility for providing such documentation only arises when the WESOS "is finally exported," by the terms of the rule. Neither DOC nor DACS proved that any of the WESOS involved in this case ever was exported. (Indeed, the parties stipulated that none of them knew what happened to the WESOS after it was delivered to Lykes Pasco's customers.) Therefore, no violation of Rule 20-64.21, Florida Administrative Code, was proved.
The burden placed on DOC and DACS by the terms of Rule 20-64.21(10)(d) to prove export of the WESOS certainly is difficult to meet. But the burden of proof is actually no more difficult than the burden which the agencies seek to impose on Lykes Pasco to obtain bills of lading from uncooperative customers over whom neither Lykes Pasco, DOC or DACS have any control or authority. 10/
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that both the Department of Citrus and the Department of
Agriculture and Consumer Services, in Case No. 84-1488 and Case No. 84-1676,
respectively, enter a final order DISMISSING the Administrative Complaint against Lykes Pasco Packing Company.
DONE AND ENTERED this 16th day of January 1985 in Tallahassee, Florida.
J. LAWRENCE JOHNSTON Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 16th day of January 1985.
ENDNOTES
1/ The Division of Administrative Hearings does not have jurisdiction to determine the validity of a rule in proceedings under Section 120.57, Florida Statutes (1983). However, the Division is not precluded from including in a recommended order a recommendation that an agency's final order not interpret or apply an agency rule so as to raise serious questions as to the rule's validity, as applied.
2/ All parties submitted proposed findings of fact. The proposed findings of fact were reviewed, and the following Findings of Fact attempt to rule, either directly or indirectly, on each proposed finding of fact. Proposed findings of fact which were approved and adopted are reflected in the following Findings of Fact. Where proposed findings of fact are not reflected and no direct ruling rejecting them is apparent, the proposed findings of fact have been rejected as being subordinate, cumulative, immaterial or unnecessary.
3/ In order, these shipments are the subject of Counts IV, I, V, VI, and III of the administrative complaints filed by DOC and DACS. Regarding Count II of their administrative complaints, see endnote 5 below.
4/ DOC and DACS contend that Lykes Pasco also shipped WESOS, without sodium benzoate tracer, to Home Juice Co. after being advised by letter dated February 2, 1984, that it would not furnish bills of lading or other documentation of later export. However, there was no evidence that any of the product was shipped to Home Juice Co. after that date.
5/ Initially, DOC and DACS charged Lykes Pasco with selling WESOS, without sodium benzoate tracer, to Pilgrim Marketing, Inc., in violation of Rule 20- 64.21, Florida Administrative Code. That product, however, was shipped directly to Allsun Juices, Inc., a Florida citrus dealer. DOC and DACS do have jurisdiction and control over Allsun Juices, Inc., but neither proposed any findings of fact relating to those shipments (the subject of Count II of the administrative complaints), presumably because of its jurisdiction and control over the company to whom the product was shipped.
6/ If the agencies' conclusion of law are incorrect they can be reversed on appeal. But that would be true with or without a recommended order.
7/ Rule 20-64.21(8), Florida Administrative Code, provides that WESOS may only be manufactured by licensed citrus fruit dealers after issuance of a permit by DOC. It also provides that permits shall be issued administratively without formal Florida Citrus Commission approval unless the citrus fruit dealer has been found to have violated any provisions of Rule 20-64.21. Lykes Pasco's fifth defense to the administrative complaints of both DOC and DACS that the requirement of a permit for the manufacture of WESOS exceeds the authority conferred by Chapter 601, Florida Statutes (1983), appears to have merit.
However, as previously noted, a Hearing Officer cannot invalidate a rule in proceedings under Section 120.57(1), Florida Statutes (1983), and the rule must be presumed to be valid for purposes of this Recommended Order.
8/ Assuming the validity of Rule 20-64.21(8), Florida Administrative Code, DOC, through its agency head, the Florida Citrus Commission, probably can deny
issuance of a permit to manufacture WESOS to a citrus fruit dealer who has been found to have violated any provisions of Rule 20-64.21. But the rule does not confer on DOC any authority to revoke or otherwise discipline the holder of a permit. Prosecution and imposition of discipline for violating Rule 20-64.21, like any other violation, is reserved to DACS under Section 601.67, Florida Statutes (1983).
9/ In its proposed recommended order, Lykes Pasco appears to no longer assert its second defense to the administrative complaints of DOC and DACS that Rule 20-64.21, Florida Administrative Code, violates the commerce clause, Article I, Section 8, Clause 3, of the Constitution of the United States.
10/ In its third defense to each of the administrative complaints, Lykes Pasco asserts that Rule 20-64.21, Florida Administrative Code, violates the due process clauses of the 14th Amendment of the Constitution of the United States and of Article I, Section 9, of the Constitution of the State of Florida in that it seeks to impose sanctions and penalties against Lykes Pasco for actions, inactions or defaults of others over whom none of the parties have any control or authority. As previously noted, a Hearing Officer has no authority to determine the validity of a rule in these proceedings. But it is noted that, if DOC or DACS had proved the export of WESOS other than by bills of lading or if the rule is interpreted not to require proof of export as an element of a legally sufficient administrative complaint, the defense would seem to have merit, especially where the citrus fruit dealer takes all reasonable measures to secure cooperation and compliance by its customers. In this regard, there would not appear to be any constitutional prohibition against disciplining Lykes Pasco for the shipments of WESOS to Vita Pakt Citrus Products Company after the customer's April 8, 1983, purchase order placing Lykes Pasco on notice that the customer would not cooperate or comply with the requirement to provide bills of lading upon export. But otherwise, these constitutional questions are additional reasons why the rule should not be interpreted to require Lykes Pasco to have produced bills of lading in this case.
COPIES FURNISHED:
David Kerr, Esquire
Macfarlane, Ferguson, Allison & Kelly Post Office Box 1531
Tampa, Florida 33601
J. Hardin Peterson, Esquire Post Office Drawer BS Lakeland, Florida 33802
Kristen C. Mander, Esquire Department of Citrus
Post Office Box 148 Lakeland, Florida 33802-0148
Frank A. Graham, Jr., Esquire Department of Agriculture and
Consumer Services Mayo Building
Tallahassee, Florida 32301
Doyle Conner, Commissioner Department of Agriculture and
Consumer Services The Capitol
Tallahassee, Florida 32301
W. Bernard Lester, Executive Director Department of Citrus
Post Office Box 148 Lakeland, Florida 33802-0148
Docket for Case No: 84-001488
Orders for Case No: 84-001488
| Issue Date |
Document |
Summary |
|
Apr. 02, 1985 |
Agency Final Order
|
|
|
Jan. 16, 1985 |
Recommended Order
|
Respondent couldn`t prove orange by-product was for export. Petitioner couldn`t prove Respondent ever finally exported in violation of rule.
|
