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Lion Raisins, Inc. v. United States Department of Agriculture

August 13, 2008

LION RAISINS, INC., PLAINTIFF,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, DEFENDANT.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION RE DENYING MOTION FOR RELIEF FROM JUDGMENT (DOC. 53)

1. INTRODUCTION

Plaintiff Lion Raisins, Inc. ("Lion") moves the Court pursuant to Rule 60(b)(5) and 60(b)(6) of the Federal Rules of Civil Procedure for relief, due to changed circumstances, from the summary judgment order entered on October 20, 2005 in favor of Defendant United States Department of Agriculture ("USDA"). Lion alleges that the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, requires USDA to provide the Worksheets that Lion requested for the period from January 1995 to December 2000 and now seeks an order for the USDA to release copies of the Worksheets to Lion and allow physical access to inspect the originals. The matter was heard on February 25, 2008.

United States District Judge Robert E. Coyle previously upheld in a summary judgment order the USDA's FOIA Exemption claim, under 5 U.S.C. § 552(b)(7)(A), on the basis that the disclosure of worksheets sought by Plaintiff could reasonably be expected to interfere with the administrative enforcement proceedings. The Ninth Circuit Court of Appeals upheld that Court's decision in Case No. 05-17449. On September 20, 2007 Plaintiff submitted another FOIA request to the USDA to release copies of Worksheets from January 1995 through December 2000. Lion seeks relief in this motion from the Court's summary judgment order of October 20, 2005.

2. PROCEDURAL BACKGROUND

In January 2001, USDA issued an administrative complaint (Complaint 1) alleging that Lion and its principals, officers, agents and affiliates had falsified and misrepresented USDA Certificates of Quality and Condition in violation of the Agricultural Marketing Act ("AMA") and the USDA's inspection and certification regulations. USDA later issued two additional administrative complaints against Lion (Complaint 2 and 3). USDA asserted that Lion established a procedure whereby Lion's shipping department employees would falsify or fabricate USDA Certificates to conform to customer specifications.

By letter dated May 13, 2004, Lion submitted a FOIA request seeking all USDA Certificate of Quality and Condition for Raisins Worksheets issued or prepared by the USDA for product inspected at Lion during the period January 1995 to December 2000. By letter dated June 23, 2004, the FOIA Officer responded to the request and withheld the requested documents. Lion's administrative appeal was denied on January 3, 2005.

On January 11, 2005, Lion filed this action in federal court seeking declaratory and injunctive relief under FOIA. (Doc. 1, Complaint) The parties filed cross-motions for summary judgment. (Doc. 18 USDA MSJ and Doc. 23 Lion MSJ) On October 19, 2005, the Court entered its Order denying Lion's motion for summary judgment and granting USDA's motion for summary judgment. (Doc. 46, Order) Judgment was entered in accordance with the Order on October 20, 2005. (Doc. 47, Judgment) Lion appealed, and on April 30, 2007, the Court of Appeals entered its order affirming the judgment of the District Court.

Lion then filed the present motion for relief from judgment under Rule 60(b)(5) and (6) on September 24, 2007. (Doc. 53, Motion) UDSA filed an opposition to Lion's Motion on November 20, 2007, (Doc. 60, Opposition), and Lion filed it reply to USDA's Opposition on December 3, 2007. (Doc. 61, Reply)

3. FACTUAL HISTORY

This case concerns FOIA requests by Lion that the USDA denied, citing ongoing administrative proceedings against Lion. A summary judgment order was entered in favor of USDA on the basis of FOIA Exemption 7A, due to concerns that disclosure could reasonably be expected to interfere with the administrative enforcement proceedings. The Ninth Circuit Court of Appeals affirmed the District Court decision on appeal.

Lion and USDA have been involved in administrative proceedings since 1998, when the Agricultural Marketing Service (hereinafter referred to as "AMS") initiated an investigation of Lion after receiving an anonymous complaint regarding Lion. The proceedings stem from USDA's allegations that representatives of Lion forged signatures of USDA inspectors or recorded false moisture readings on inspection certificates for Lion's fruit.

USDA alleges that Bruce Lion, an officer and director of Lion Raisins, instituted a procedure for falsifying or fabricating USDA certificates to conform to customer specifications. The fabricated certificates, USDA alleges, were then sent to foreign customers. After completing its investigative report on May 26, 1999, the USDA filed three separate administrative complaints against Lion.

On January 12, 2001, USDA suspended Lion's eligibility for government contracts and filed an administrative complaint (I&G Docket Number 01-0001) (Complaint 1) that sought to "debar" future inspections of Lion's facilities. Two additional administrative complaints (I&G Docket Numbers 03-0001 (Complaint 2) and 04-0001 (Complaint 3) were also issued against Lion. Lion is the largest independent handler of raisins produced in California. It handles and packs raisins produced by outside growers and by Lion and its affiliates. Lion is governed by the Agricultural Marketing Act of 1937 (7 U.S.C. §§ 601-627) and a "marketing order" promulgated thereunder that governs raisins produced from grapes grown in California (7 C.F.R. §§ 989.1-989.801). The marketing order calls for an inspection process under which a handler must have USDA inspect its products once when they are received from the producer and again before they are sold to the producer. 7 C.F.R. §§ 989.58-989.59. The AMS is charged with the administration of the inspection regulations and provides inspection and grading services to applicants. The inspections entail USDA inspectors periodically taking samples from handlers' processing lines to assess the quality of the raisins in various categories, such as weight, color, size, sugar content, and moisture.

The inspection process generates a variety of paperwork. A USDA inspector completes a "Line Check Sheet" based on his or her observations and assigns grades to the raisins. The inspector then prepares a Certificate of Quality and Condition for Raisins Worksheet ("Worksheet") that serves as a draft for the official Certificate of Quality and Condition ("Official Certificate"), also known as form FV-146, and gives the Worksheet to an employee of the packer. At Lion the Worksheet is given to a shipping department employee. The employee's task is to type the Official Certificate based on the information on the Worksheet. The employee next returns the Official Certificate and Worksheet to the USDA grader. If the grader reviewing the Official Certificate determines that it has been correctly prepared, it is signed and the original, as well as up to four carbon copies of the Official Certificate are returned to Lion. USDA did not return the Worksheets to Lion. From time to time, USDA officials inspecting Lion's raisins, voided an Official Certificate and had a new one typed. USDA then provided a copy of the new Official Certificate to Lion. USDA retained the voided Official Certificate ("Voided Certificate") and did not at that time provide a copy to Lion.

In a letter dated May 13, 2004, Lion requested, under FOIA, any and all USDA Certificate of Quality and Condition for Raisins Worksheets, issued or prepared by USDA for product inspected at Lion, during the period of January 1995 to December 2000. USDA responded by withholding the requested documents pursuant to 5 U.S.C. § 552(b)(7)(A). Lion appealed in a July 12, 2004 letter.

The decision was upheld in a letter dated January 3, 2005. On January 11, 2005, Lion filed its Complaint in this case for declaratory and injunctive relief of USDA's decision to withhold the Worksheets. On October 20, 2005, United States District Judge Robert E. Coyle determined disclosure could reasonably interfere with the administrative enforcement proceedings and granted summary judgment in favor of the USDA. Lion appealed the decision and on April 30, 2007 the Ninth Circuit Court of Appeals affirmed the District Court decision.

Plaintiff now contends the taking of evidence closed on March 31, 2006, in the administrative hearings of Complaint 1 and on February 28, 2006 on Complaint 3. USDA however contends that each of the three enforcement actions against Lion continue as pending proceedings.

On September 20, 2007 Lion submitted another FOIA request for the USDA to release copies of Worksheets from January 1995 through December 2000 and provide access to the originals. Neither party has provided any information on the status of this September 20, 2007 FOIA request.

On September 24, 2007 Lion filed its motion for relief from judgment of the October 20, 2005 Summary Judgment Order issued by Judge Coyle and affirmed by the Ninth Circuit on April 30, 2007.

4. STANDARD OF REVIEW

A. Motion for Relief from ...


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