P June 22, 1988

Mr. Perry L.Adkisson Chancellor Opinion NO. JM-920

Texas A &MUniversity System Re: Construction ofTexas 319 System Building Commercial Fertilizer ConCollege Station, Texas 77843 trolAct, chapter 63 of theAgriculture Code (RQ-1240)

DearMr.Adkisson:

You ask two questions about the procedures to be followed by the Director of the Texas Agriculture Experiment Station inenforcing the Texas Commercial Fertilizer Control Act, chapter 63 of the Agriculture Code. These are as follows:

1. Whether a fertilizer manufacturer has

a legal right to notification of violative analytical findings by the Texas Feed and Fertilizer Control Service and to exhaustion of legal remedies prior to the service notifying purchasers of these findings; and

2. Whether the Director of the Texas Agricultural Experiment Station is togive equal weight to analytical compelled findings of commercial laboratories when a manufacturer contests the results of the state chemist.
Chapter 63 of the Agriculture Code provides for regulation of themanufacture anddistribution of commercial fertilizer. Agric. Code §§ 63.031, 63.051, 63.091, 63.121; see alsoAgric. Code 55 63.001, 63.002 (defining "commercial fertilizer" and other terms). 63of the Agriculture Code The duties set out inchapter
are the responsibility of the Director of the Texas Agricultural Experiment Station, tobe performed by the Texas Feed and Fertilizer Control Service under his direction. The Agriculture Code prohibits the manufacture and distribution of commercial fertilizer without a permit issued by the service and requires

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containers of fertilizer to be labeled with certain information, including the grade of the fertilizer and the guaranteed analysis ofplant nutrients in it. Agric. Code 93 63.031, 63.051.
Subchapter Gof chapter 63provides remedies forviolations of the chapter, including a stop-sale order, condemnation, warnings, and a suit to enjoin aviolation or threatened violation., Agric. Code 55 63.121, 63.122, 63.124. Subchapter Ii sets~ out criminal penalties for violation of chapter 63 and forother specific offenses which include distribution of misbranded, adulterated, unregistered, orunlabeled fertilizer.

The service has authority to take samples of fertilizer for analysis under section 63.091 of the code:

f,63.091. Inspection and Sampling: Entry Power

Inorder to determine ifcommercial fertilizer is incompliance with this chapter, the service isentitled to:

(1) enter during regular business hours and inspect anvDlace ofbusiness, mill, plant. buildina. orvehicle, and to 013811
anv bin,vat. orDarcel. that isused in the manufacture. transDortation. imDortation. sale. or storaae of a commercial fertilizer or iS SUSDeCted ofcontainina a commercial fertilizer: and
(2) take samples from fertilizer found during that inspection. (Emphasis added.)
Agric. Code 5 63.091. Each sample is sent to the service, with a report providing the following information:

(1) the name or brand of commercial fertilizer sampled;
(2) the serial number of the sample:

(3) themanufacturer orcruarantorof the samDle. ifknown; -,

(4) the name of theDerson in Dossession of the lot samDles [sic];

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(5) thedate and place of taking the sample: and
(6) the name of the person who took the sample. (Emphasis added.)
Agric. Code 5 63.093(b).

The service thus is authorized to take fertilizer samples from persons or entities other than the manufacturer. Section 63.093(b)(3) of the code indicates that the name of themanufacturer may be unknown, while section 63.093(b)(4) indicates that the person inpossession of the lot sampled1 may be different fromthe manufacturer. The service is mill, entitled to enter "any place of business,

plant, container building or vehicle," and may open

"that is used in any the manufacture, transportation, importation, sale, or commercial fertilizer" or that is storage of

fertilizer.
. . .I1 "suspected of containing a commercial Agric. Code §63.093(b). Thus, the sample may have been taken from themanufacturer, transporter, seller, orpurchaser ofthe fertilizer. your letter states that the service routinely acquires samples of manufactured fertilizers as they appear inthemarketplace.

The samples collected are analyzed by the office of the State Chemist. SeeAgric.
a state chemist). Code 5 63.003(c) (appointment of If the service finds that a commercial fertilizer is inviolation of theAgriculture Code, aprovision ofchapter 63 of it isrequired by section 63.094 to "notify the manufacturer or other person who caused the

1. Section 63.093(b)(4) should read as follows: "the
name of theperson inpossession of the lot The prior version of section 63.093(b)(4) sampled. . . .I1 referred to the "lot sampled.01 Acts 1961, 57th Leg., ch. 27, § 8(b), at 54, 58. Cd),

Chapter 141 of theAgricultural commercial Code, which regulates feed, includes section 141.103 on identification of feed samples. Section 141.103, which is virtually identical to section 63.093 of the code, that the report to the service provides should contain "the name of theperson inpossession ofthe lot SamDled. . . .I' Code §141.103(b)(4). Agric. (Emphasis added.) Chapters 63 and 141of theAgricultural Code were amended by a single bill adopted by the 68th Legislature. Acts 1983, 68th Leg., ch. 349, at 1851. The small change in section 63.093(b)(4) appears tohave resulted fromatypographical error.

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fertilizer tobe distributed." Agric. Code g 63.094(a). The manufacturer ordistributor of the fertilizer then has an opportunity tohave an independent analysis of the sample collected by the service. Agric. Code 5 63.094(b).

Your first question arises from the service's practice of sending purchasers of fertilizer a copy of the state chemist's analysis three days after sending it to the manufacturer. YOU state that a fertilizer manufacturer maintains that this isan improper procedure because (1)the state has no statutory authority to inform the purchaser until remedies specified in section 63.094 have been exhausted and the issuehas been resolved and (2) notification prior to resolution is adenial of the manufacturer's dueprocess rights. Wewill first consider the authority of the service to inform thepurchaser of the chemical analysis prior to exhaustion of the remedies set out in section 63.094.

You have submitted copies of the notification sent to themanufacturer and then to the purchaser. The cover letter states that, on the analysis report, basis of an enclosed laboratory the fertilizer is inviolation of the Texas Commercial Fertilizer Control Act. It requests the manufacturer to review all factors which might have resulted in this deficiency, invites itto supply additional information which will justify changing the conclusions of the report, and informs itthat itmay request an independent analysis.

The laboratory analysis report accompanying the cover letter states the percentages of chemical components guaranteed for the fertilizer analysis and thepercentages shown by

of the sample. It includes the following statement:

LABORATORY ANALYSIS DEMONSTRATES THIS

PRODUCT TO BE EITHER DEFICIENT OR EXCESSIVE IN ONE OR MORE OF THE LABEL GUARANTEES HIGHLIGHTED ABOVE.

THE SAMPLE RESULTS FALL OUTSIDE THE RANGE OF SAMPLING AND ANALYTICAL ERROR. THE MT OF PRODUCT IS THUS CONSIDERED TO BE IN VIOLATION OFTHE ECONOMIC PROVISIONS OF THE TEXAS COMMERCIAL FERTILIZER CONTROL ACT.

THE SAMPLE WILL BE RETAINED FOR FIFTEEN (15)CALENDAR DAYS FOLLOWING THE DATE OF THIS REPORT TOALLOW THEMANUFACTURER TOREQUEST A PORTION FORHIS OWN USE. WITHIN THIS TIME,

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THEMANUFACTURER ISFURTHERMORE PROVIDED THE OPPORTUNITY OF. REQUESTING ANALYSIS BY TWO INDEPENDENT LABORATORIES SELECTED BY THE STATE CHEMIST. THERESULTS **OF**SUCH INDEPENDENTANALYSES WILL BETAKEN INTO CONSIDERATION INMAKING A FINAL DETERMINATION OF THE LEGAL STATUS OF THE SAMPLE. A CORRECTED REPORT WOULD BE ISSUED IFTHE STATUS CHANGED. UNLESS CHANGED, THISANALYSIS WILL APPEAR AS AVIOLATIVE LISTING INTHEANNUAL PUBLICATION OF THE OFFICE OFTHE TEXAS STATE CHEMIST.

Much of the of theAgricultureinformation set out in section 63.093(b) Code appears on the analysis report, including the name of themanufacturer orguarantor and the
name of the possessor. submitted, copies Inboth of the sample notices you of the **cover** letter and analysis report were laboratory sent to the entity identified as the possessor of the fertilizer lot from which the sample was taken. Thus, inthese cases, the service took samples from the purchaser of the fertilizer, and then sent him the results of its analysis of those samples.

No provision ofchapter 63 states that the service may ormust send acopy of the report to thepossessor or to the purchaser. We do not, however, believe express statutory authority isnecessary forthe service to send the purchaser
orpossessor of fertilizer itschemical analysis of that product.

InTerre11 v. Soarks, 135 S.W. 519 (Tex. 1911), the Supreme Court ofTexas stated as follows:

The grant of an express power carries with it bynecessary implication every other power necessary andproper to the execution of the power granted. When the lawcommands anything tobe done, itauthorizes the performance of whatever may be necessary for executing its commands.

Terrell' v. SDarkS, 135 S.W. 521 (Tex. 1911) (quoting Sutherland on Statutory Construction, 5 341). See Stauffer
v. c of San Antonio, service 344 S.W.2d 158 (Tex.1961) (civil

commission does not have implied authority to resolve fact questions of fireman's fitness for reinstatement). InBullock v. Calvert, 480 S.W.2d 367 (Tex. 1972) the court stated that

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every specific, permissible act of a public officerneed notbe expressed ina statute: we imply the authority todo those acts necessary to achieve the power or object expressly granted, because the Legislature must have intended to grant the constituent details within the larger commission.

Bullock v. Calvert 480 S.W.2d 372 (Tex. 1972) (dicta, no statute authorized'secretary of state to spend state funds to conduct party primary elections).

In SeXtOn v.Mount Olivet Cemetarv Association, 720 S.W.2d 129 (Tex.App. -Austin 1986,writ ref'd n.r.e.), the court stated that the legislature generally intends that an agency should have by implication such authority as is necessary to carry out specific powers and duties, so that the statutory purpose might be achieved.

Wewould not expect a state agency to have express authority to engage incorrespondence relevant to itsduties
or to send copies of its correspondence to interested persons. See aenerallv V.T.C.S. art. 6252-17a, 5 6(15) (informationavailable to public by agency policy as of the effective date of the Texas Open Records Act). In our opinion, the service has implied authority based on sections 63.091, 63.093, and 63.094 of theAgriculture Code to send a copy of the laboratory report to thepurchaser or possessor of the fertilizer. Theperson fromwhom the service has obtained the fertilizer andwho is identified inthe accompanying the sample as report thepossessor of the fertilizer sampled has a special interest in learning the result of the analysis. The purchaser, if is similarly interested in different fromthe possessor, that information. No provision of chapter 63 requires the service to keep the fertilizer analysis a secret from everyone but the manufacturer. Comoare Agric. Code g63.094with Agric. Code § 63.095 person may initiate submission of sample for analy:E' results may not identify manufacturer and may not b;! published). See alsoAgric. Code § 63.005(a)(2) (at least annually, director shallmake public results of analysis of fertilizer samples). In sending the purchaser or possessor a copy of the analysis report, the service information generated by its provides inspection and testing powers toparties who were involved inthe exercise of those powers andwho have a significant interest in the results of the testing.

This practice of the service helps carry out the purposes of chapter 63. When the Texas Fertilizer Control -

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Actwas adopted in 1961, it included the following emergency clause:

The fact that present laws are not adequate

to regulate the manufacture and distribution of commercial fertilizers inTexas: the fact that consumers need uniform guarantees and labeling of fertilizers which are offered to them: and the further fact that itwould be of greatmaterial advantage to have the laws of Texas conform insofar aspracticable with the present day practices 

### of consumers, manufacturers and distributors of commercial fertilizer, and to afford maximum orotection to consumers ofcommercial fertilizers, create
anemergency.
. . . (Emphasis added.)

Acts 1961, 57th Leg., ch. 37, 519, at 54, 61-62. An emergency clause may be considered if it will aid the court inascertaining the legislative intent. Trawalter v.,Schaefer, 179 S.W.Zd 765 (Tex. 1944); Gov't Code 5 311.023(l). A related purpose isstated in the bill analysis forHouse BillNo. 1510 of the 68th Legislature, thebillwhich adopted thepresent version of chapter 63 of the Agriculture Code. The bill analysis -states the following asbackground information:

The guaranteed quality ofcommercial feeds and fertilizers are essential for the successful operation of the agricultural and livestock industries ofTexas. Texas A &M University, through the Agricultural Experiment Station, ischarged with the regulatory responsibility ofguaranteeing of the labeling accuracy and ingredient quality of these products as well
aspet foods andhomeowner products.

House Committee onAgriculture and Livestock, Bill Analysis to H.B. No. 1510, 68th Leg. (1983). See Gov't Code § 311.023(3) (inconstruing a statute, courtmay consider legislative history).
Informing the purchaser or possessor of fertilizer of the laboratory analysis report will help carry out the legislative purpose ofprotecting consumers. The purchaser
orpossessor can refrain fromapplying the fertilizer to the soil if ithas not yetbeen applied. If ithas been, hehas
anopportunity to determine whether supplemental applications should be made to correct the balance of plant nutrients inthe soil.

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Your letter states that original findings aremailed to the purchaser three days after the mailout to the manufacturer so that the manufacturer will have an opportunity to initiate a monetary settlement with thepurchaser. By informing the purchaser of the original findings, the service encourages manufacturers to be responsible for the quality of their products and to,be accountable to consumers. Inthis way, the consumer protection purposes of chapter 63are carried out. construing a statute, &.g Gov't Code 5 311.021(5) (in
apublic interest is favored over a private interest).

We note that the predecessor to section 63.094(a) provided that, incase the fertilizer was found inviolation of chapter 63,

the director shall notify themanufacturersor other person who caused the fertilizer to be distributed and the consianee. (Emphasis added.)

Acts 1981, 67th Leg., ch. 388, at 1012, Agriculture Code). The "consignee" 1147 (adopting isnot the purchaser or consumer, but the person towhom theproduct is delivered fortransportation or sale. Webster'.s Third New International Dictionary; m Charles M. Stieff, Inc.v. Citv of San Antonio, V*consignment*'and111 S.W.2d 1086 (Tex. 1938) (defining "consigned"). The deletion of the mandatory requirement that the consignee be notified does not demonstrate any legislative intention to restrict the service's implied authority to send purchasers of fertilizer andpossessors of the lots sampled copies of the analysis report. We conclude that the service has implied authority to send copies statutory of laboratory analysis reports to the purchaser of the fertilizer that was tested.

We next consider whether thedue process clauses of theUnited States and Texas Constitutions entitle the fertilizer manufacturer to notice and a hearing before the laboratory report is sent to the purchaser of the fertilizer. The .Fifth and Fourteenth Amendments to the United States Constitution and article I, section 19, of the Texas Constitution prevent the state fromdepriving persons ofproperty or liberty without due process of law. The manufacturer isa corporation and thus cannot claim due not anatural person and process protection for the liberty guaranteed by the Fourteenth Amendment orby article I, section 19,of the Texas Constitution. Pierce v. Societv of Sisters, 268U.S. 510 (1925);Western Turf Association v. Greenberq, 204U.S. 359 (1901);Northwestern National Life -.

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C Mr. Perry L.Adkisson -Page 9 (JM-920)



### _InuranceCo. Ri- 203 U.S. L.:d.2d 975, 98?(1975).' 243 (1906); Annot. 47

The reputation ofanatural personal person isanalyzed
as a liberty interest rather than aproperty interest under the dueprocess clause. SeeWisconsin v. Constantineau 400 U.S. 433 (1971). Even ifthe manufacturer **were** a naiural person who could invoke dueprocess protection for a liberty interest, and ifthe transmittal of the fertilizer analysis to his customer could be considered damaging to his reputation, the dueprocess clausewould not afford him the notice andhearing he seeks. Inpaul v. Davis, 424U.S. 693 (1976)rthe Supreme Court considered whether a citizen's charge of defamation stated a claim forrelief under 42 U.S.C. 51983 and the Fourteenth Amendment. The Supreme Court held that city and county police officials did not violate the plaintiff's due process rights when they circulated to local areamerchants acircular that described him as an "active shoplifter." The Supreme Court held that reputation alone, apart from some more tangible interests such as employment, was neither a liberty nor property interest sufficient to invoke the procedural protection of the due process clause. 424 U.S. at 711-712. See Marrero
v. Citv ofHialeah, 625 F.2d 499 (5thCir. 1980) (injuries topersonal and business reputations caused by unlawful search and seizure are compensable under 42U.S.C. §1983 as element ofdamages). The court moreover said that the due process clause does not extend aperson the right tobe free of injury "wherever the Statemay be characterized as the tortfeasor." 424U.S. 701.

We next consider whether the manufacturer has property interest which would invoke the protection of th: dueprocess clause.
Property interests are not created by theUnited States Constitution, but are created and defined by rules or understandings that derive from an independent source such
as state law. Ruckelshaus v. Monsanto Co., 467U.S. 986 (1984) (tradesecrets); Board of Reaents v.Roth, 408 U.S. 564 (1972) (publicemployment). Intangible interests, such
as contracts, liens, and trade secrets, have been recognized
asproperty rights entitled to constitutional protection. Ruckelshaus v.Monsanto Co. suora (information recognized
as trade secrets under Mis&.ourilaw constitutes property protected by FifthAmendment's taking clause).

The manufacturer in this case asserts a property interest ingood will. Texas courts have recognized good will asproperty which consists of the advantage or benefit

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acquired by an establishment beyond the mere value of the capital stock, funds, or property employed therein, in consequence of the patronage ofhabitual customers which it receives

on account of its local position, or common

celebrity, or reputation for skill, influence, or punctuality, or from 0th:: accidental circumstances or necessities, or even fromancient partialities orprejudices.

Taormina v. Culicchia 355 S.W.2d 569, 573 (Tex.Civ.App. - El Paso 1962, writ 'ref#dn.r.e.); Texas 90 S.W.2d 557 (Tex.?36). & Pacific Railwav v.Mercer, The ownermay recover damages for the destruction ofgood will. Texas & Pacific Railwav Co. v.Mercey, m. Good will is not, however, compensable asa separate and independent item of recovery when the state takes land occupied by abusiness in eminent domain proceedings. State v. Za ba 418 S.W.2d 499 (Tex. 1967); Citv **of** Dalla

is the goodswyllPriolo, 2:: S:W.2d 176 (Tex. 1951). Nor of a physician's medical practice considered tobe property subject todivision upon divorce. Wail v. Naib, 486 S.W.2d 761 (Tex. 1972).

Texas courts have moreover held that both liberty interests and property interests areheld subject to the exercise of the state's police power. Citv f Colleae Station v. Turtle Rock Core (alleged taking of property;; 680 S.W.Zd 802 (Gex. 1984) Citvof New Braunfels v. Waldschmit 207 S.W. 303 (Tex.1918);Houston &Texas Cent. Railwav v.'Dallas, 84 S.W. 648 (Tex.1905). State police power isgrounded upon the public need for safety, healthy security, and protection of thegeneral welfare of the community. Jefco. Inc.v. Lewis, 520 S.W.2d 915 (Tex. Civ. APP. -Austin 1975,writ ref'd n.r.e.). Thewisdom of the exercise of the police power is largely for legislative rather than judicial determination. J& at 922.
Sending the fertilizer analysis report to the purchaser inour opinion, areasonable exercise ofpolice power to iF&ect the general welfare by protecting consumers from mislabeled products andby limiting damage to the agriculture of Texas that might result fromdistribution and application ofmislabeled fertilizer. The purchaser isalso informed of themanufacturer's right tohave an independent analysis of the fertilizer and of the possibility that a corrected report might be issued. This information should minimize the effects on the manufacturer's customer relations, ifany, caused by sending the laboratory report to the customer. Webelieve the Texas courts would hold that

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goodwill does not include patronage attributable to the consumer's ignorance of possible product deficiencies discovered by the legislatively authorized testing program set out in chapter 63 of the Agriculture Code. See aenerallv Open Records Decision No. 48 (1974) (sect= 3(a)(4) of the Open Records Act does not protect competitive situation based on public ignorance of content or wholesomeness of foodproducts). a uternational Business Machines Corooration v.United States of $merica, 298 U.S. 131 (1936) (no exception to Clayton Act for trying clause directed atprotecting goodwill).

Sincewe conclude that noproperty interest isaffected bygovernmental action in this case, we need not decide whether the review procedures set out in section would accord due process. 63.094 See, u, Ewina v.Mvtinaer & Casselberrv. Inc., 339U.S. 5' 94 (1950) (dueprocess clause notviolated I misbranded ny federal statute authorizing seizure of

articles upon agency finding, made without

.- hearing, of probable cause that misbranded article was

dangerous to health or that labeling was fraudulent or misleading to the injury anddamage ofconsumer): Buttfield

. Strmnah n

a , 192 U.S. 470 (1904) (no deprivation of property without due process in tea examiner's summary seizure of imported teabased on his judgment that its quality did notmeet federal standards for wholesomeness); Annot. 69L.Ed.2d 1044 (1981) (application ofdue process guarantees to summary administrative deprivation ofproperty interest).

Your second question is:

Whether the Director of the Texas Agricultural Experiment Station iscompelled to give equalweight to analytical findings of commercial laboratories when a manufacturer contests the results of the state chemist.

Section 63.094 of theAgriculture Code provides in part:
(b) After receiving a notice under Subsection (a)of this section, themanufacturer
or other person who caused the fertilizer to bedistributed may request that the service submit portions of the sample analyzed to other chemists for independent analysis. After receiving arequest, the service shall submit two portions of the sample analyzed to two qualified chemists selected by the

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-,
**service.** If requested, the service shall also submit one portion of the sample to the person requesting independent analysis. A request under this subsection must be filed with the service before the 16th day following the day onwhich notice isgiven.
(c) Each of the chemists selected by the service under Subsection (b)of this section shall analyze the portion of the sample and certify findings to the service under oath. The findings shall beprepared in duplicate and the service shall forward one copy of each chemist's findings to the person who requested independent analysis.

(d) The three chemical analvses obtained under this section mav be considered in determinina whether a violation of this chaoter has occurred. (Emphasis added.)
Agric. Code 5 63.094. Section 63.094(d) does not dictate theweight tobe accorded anyof the three analyses in determining whether aviolation of chapter 63has occurred. Nor does it state that the analysis results will be dispositive of any question as toviolation. authorizes the use It merely of the three chemical analyses in proceedings todetermine whether aviolation of chapter 63 has occurred. See Webster's Ninth New Collegiate Dictionary (1983) (wmay"used nearly interchangeably with "can*@).
w Agric. Code subch. G, H See (administrative and judicial proceedings for enforcing chapter 63). Neither the director of the Texas Agricultural Experiment Station nor any court that hears a case alleging violation of chapter 63 is compelled by section 63.094 of theAgricultural Code togive equal weight to analytical findings of commercial laboratories when a analysis of manufacturer has requested

fertilizer independent

samples pursuant to section 63.094(b).

SUMMARY

The Texas Feed and Fertilizer Control Service has implied authority to notify the possessor or purchaser of fertilizer that laboratory analysis of the product demonstrates itto be out of compliance with the requirements of chapter 63of the Agriculture Code. By sending this notification to the purchaser orpossessor, the service does not

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deprive the fertilizer manufacturer of property without dueprocess of law. Section 63.094(d) of the Agriculture Code does. not require that equal weight be given to analytical findings ofcommercial laboratories when a manufacturer contests the results of the state chemist's analysis.

Jzyh

MATTOX Attorney General ofTexas

MARY KELLER FirstAssistant Attorney General

LouMCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared by Susan L.Garrison Assistant Attorney General

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