Opinion ID: 1361168
Heading Depth: 3
Heading Rank: 2

Heading: Liability for Transporting Just American Magic

Text: A person violates the Act if she transports a horse while sore, with reason to believe that such horse while it is sore may be shown, exhibited, [or] entered for the purpose of being shown or exhibited ... in any horse show, horse exhibition, or horse sale or auction. 15 U.S.C. § 1824(1); see also 15 U.S.C. § 1825(b)(1) (stating that any person who violates section 1824 of this title shall be liable to the United States for a civil penalty). Person is not defined in the Act, but 1 U.S.C. § 1 states that, [i]n determining the meaning of any Act of Congress, unless the context indicates otherwise[,] ... the words `person' and `whoever' include ... partnerships. 1 U.S.C. § 1. The Dericksons do not dispute that Just American Magic was sore when transported, but contend only that they are not liable for the transportation. Dericksons Br. at 14-17. In concluding that the Dericksons were liable, the JO found: (1) the Dericksons were operating a partnership that went by several names, including Herbert Derickson Stables, and that they were liable for the actions taken by that partnership; and (2) Herbert Derickson Stables transported Just American Magic to the Trainers Show. We hold that both of these findings of the JO are supported by substantial evidence.
Under Tennessee law, [10] a partnership can be implied where it appears that the individuals involved have entered into a business relationship for profit, combining their property, labor, skill, experience, or money, regardless of whether the parties intended to create a partnership. Bass v. Bass, 814 S.W.2d 38, 41 & n. 3 (Tenn.1991). All partners are liable for the obligations of the partnership. TENN. CODE § 61-1-306(a). [11] Applying Bass, the JO found that the Dericksons were operating a partnership which went by several names, including Herbert Derickson Stables. The JO supported this finding with two pieces of evidence. First, he looked to the Dericksons' unequivocal admission that each was an individual doing business as Herbert Derickson Training Facility, aka Herbert Derickson Stables, aka Herbert Derickson Breeding and Training Facility. J.A. at 52 (JO Dec. at 25); see also J.A. at 75 (Ans. at 1). This admission alone would have been substantial evidence to support a finding of implied partnership under Tennessee law. Though the Dericksons did not use the word partnership, two individuals admitting that they are running the same business under the same name is such evidence that a reasonable mind might accept as adequate to support a conclusion, Gray, 39 F.3d at 675, that the Dericksons entered into a business relationship for profit, combining their property, labor, skill, experience, or money, Bass, 814 S.W.2d at 41. However, the JO further supported his finding with several invoices that include the statements Thank you, we appreciate your business! and Thanks, Herbert and Jill Derickson. J.A. at 52-53 (JO Dec. at 25-26); see also J.A. at 283-286 (Invoices). Looking at the record as a whole, we conclude that it is clear that there is substantial evidence that the Dericksons were operating a partnership. The Dericksons argue that H. Derickson operates as a sole proprietor and that the JO ignored evidence to that effect, specifically: (1) Black's testimony that he understood the owner of the business to be H. Derickson, not J. Derickson; (2) APHIS's stipulation that Black was an employee of H. Derickson; and (3) the lack of any testimony or documentation, including tax returns, that indicated that a partnership existed. The Dericksons' argument fails. The evidence to which the Dericksons refer does not render insubstantial the evidence on which the JO relied. First, Black testified only that he understood H. Derickson to be the owner of the business that employed him. J.A. at 360 (Hr'g Tr. at 469). Just as the parties' understanding of the legal effect of their relationship is not determinative regarding whether an implied partnership exists, Bass, 814 S.W.2d at 41, Black's understanding of the ownership of the business that employed him is not substantial evidence of the legal effect of the Dericksons' relationship. Second, the Dericksons mischaracterize APHIS's stipulation that Black was employed by Herbert Derickson. J.A. at 359 (Hr'g Tr. at 468). The questions being posed to Black at the time the stipulation was made concerned his status as an employee in general. Prior to the stipulation, the nature of the business relationship between the Dericksons had not been discussed. [12] In this context, stipulating that Black was an employee of H. Derickson does not equate to stipulating that H. Derickson was operating a sole proprietorship. Third, the statement that no documentary evidence was introduced to support a finding of partnership is inaccurate. As outlined above, several invoices and the Dericksons' own answer to the complaint were used to support the JO's finding. Moreover, the fact that no tax returns or other financial documents were introduced into evidence does not diminish the evidence that is in the record. The Dericksons do not dispute the accuracy of the invoices or the admissions in the answer; instead, they simply argue that we should hold that there cannot be substantial evidence of a partnership without some evidence that directly states that the parties are running a partnership. Tennessee law does not require that specific evidence. See Bass, 814 S.W.2d at 41 (holding that a partnership can be implied from the surrounding circumstances). Therefore, we hold that the JO relied on substantial evidence to find that the Dericksons were operating an implied partnership that went by several names, including Herbert Derickson Stables.
The Dericksons further argue that the JO lacked substantial evidence to find that they transported Just American Magic in violation of the Act. The Dericksons contend that the JO admitted in his decision that the sole evidence on this issue is APHIS Form 7077, which states that Black was responsible for transporting Just American Magic. Because this was the sole evidence, the Dericksons assert that Black alone can be held liable for transportation. This argument mischaracterizes the opinion below and the evidence. The JO referenced Form 7077 with regard to only Black's liability for transportation. J.A. at 45 (JO Dec. at 18). The JO did not state that Form 7077 was the sole evidence against the Dericksons; to the contrary, the JO found invoice # 945 and its statement of no charge for Hauling/Show Prep/Stall to be evidence of the Dericksons' liability. J.A. at 52-53 (JO Dec. at 25-26). Clearly, the JO did have substantial evidence to support his finding. The Dericksons contend, however, that the line marked no charge should have indicated to the JO that neither the Dericksons nor Herbert Derickson Stables were responsible for transporting Just American Magic. Essentially, the Dericksons argue that the JO incorrectly interpreted the evidence. This argument must fail. Typically, we will defer to a JO's reasonable interpretations. Rowland, 43 F.3d at 1114. Furthermore, the JO's interpretation in this case is supported by substantial evidence. As APHIS points out, [i]t is a common commercial practice for sellers of goods and services to give buyers certain items without charge as an add-on to more expensive items. APHIS Br. at 45. We note that our review of the record supports the JO's interpretation of the evidence. See J.A. at 283-286, 290-304 (Invoices). Thus, the JO's inference from the invoice entry, made in light of his experience and familiarity with horse-industry practices, is sufficient evidence that a reasonable mind might accept as adequate to support [the] conclusion that Herbert Derickson Stables transported Just American Magic. Gray, 39 F.3d at 675. Therefore, we hold that substantial evidence supports the JO's decision that Herbert Derickson Stables transported Just American Magic in violation of the Act and that the Dericksons, as partners of Herbert Derickson Stables, are liable for this violation.