ALJDEC decisions subject to certification as final

08A-080418-25AI-AGR · Department of Agriculture · 2008-09-10

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: August 26, 2008 APPEARANCES: Assistant Attorney General Casey Cullings on behalf of the Arizona Department of Agriculture; Keith Hall on behalf of Fertizona- Casa Grande, LLC ADMINISTRATIVE LAW JUDGE: Lewis D. Kowal _____________________________________________________________________ PROCEDURAL MATTER The parties stipulated to have the caption of this matter amended to reflect that Fertizona be referred to as Fertizona-Casa Grande, LLC. FINDINGS OF FACT

1. Fertizona-Casa Grande, LLC (“Fertizona”) is a manufacturer and seller of fertilizers in Arizona. 2. On February 12, 2008, Deborah Hamilton (“Ms. Hamilton”), an inspector employed by the Arizona Department of Agriculture (“Department”), obtained three samples of liquid fertilizer from Fertizona from bulk tanks at Fertizona in Casa Grande, Arizona, one of which was labeled 10-34-0 (“product/10-34-0”)[1] . Of the three samples taken, the one at issue is the 10-34-0 (The “Sample”). 3. Ms. Hamilton was informed of the contents of the bulk tanks by Fertizona’s manager Dennis Osborn, who received the Notice of inspection issued by Ms. Hamilton. Ms. Hamilton informed Fertizona of its right to have a split sample taken from the tank containing the 10-34-0 and exercised that right. 4. Because it was late in the day, Ms. Hamilton secured the Sample and took it to her home. She secured the Sample in her office until February 15, 2008, when she delivered the Sample to the Arizona State Agriculture Laboratory (“ASAL”) in Phoenix, Arizona. 5. ASAL Director Doug Marsh (“Mr. Marsh”), who was recognized by the Administrative Law Judge as an expert witness, testified that ASAL records show that the Sample was received by the ASAL from Ms. Hamilton in acceptable condition on February 15, 2008, with the seal in tact. 6. Mr. Marsh testified that the method used by the ASAL for the Sample is the approved testing methodology for analyzing available phosphate in liquid fertilizer at the ASAL. 7. The Department presented Sample test results performed by the ASAL which consisted of three tests, one performed on February 29, 2008, and the other two performed on March 19, 2008. The first test result showed 32.68 % available phosphate. The second test result showed 32.57% available phosphate. The third test result showed 32.67% available phosphate. 8. Mr. Marsh testified that, in accordance with the ASAL’s protocol, the ASAL averaged the three test results and arrived at a result of 32.64% available phosphate for the product. 9. Based on these findings by the ASAL, and based on the fact that Fertizona had labeled the tank from which the sample was taken as “10-34- 0”, the Department issued to Fertizona, on April 18, 2008 the following: a. An Order to Cease and Desist from further sale, exposing for sale offering for sale, processing or movement of Liquid Fertilizer 10-34-0.; b. A Notice of Violation of A.R.S. §3-274 and A.R.S. §3-281 based on the misbranded fertilizer; and c. A Notice of Penalty assessing a $9,600.00 penalty. 10. Pursuant to A.R.S. § 41-1092, et. sec., Fertizona timely appealed the Order to Cease and Desist, Notice of Violation and Notice of Penalty. The matter was set for hearing before the Office of Administrative Hearings, an independent state agency. 11. At hearing, the Department represented that the penalty was recalculated on August 18, 2008 and the penalty the Department seeks from Fertizona is $9,072.00. Fertizona did not contest the amount of the penalty or how the penalty was calculated. 12. Fertizona contended that the Notice of Violation and Notice of Penalty were unwarranted because Fertizona’s manufacturing standards ensure that the liquid fertilizer at issue is 10-34-0 and the testing performed at a lab chosen by Fertizona, Motzz Laboratory (“Motzz Lab”) shows that the fertilizer has the required amount of phosphorous as noted in the label of the product. Fertizona asserted that the test results of Motzz Lab meet the minimum percentage requirements of 34% for phosphorus in liquid fertilizer. 13. Fertizona also questioned whether the chain of custody of the Sample was adequate, and whether the ASAL properly tested the sample. 14. The test results of the split sample performed by Motzz Lab showed that the amount of phosphorus in the split sample was 34%. A second test performed by Motzz Lab showed the amount of phosphorous in the split sample to be 36%. The methodology used by Motzz Lab in performing the tests on the split sample was the ICP Method. 15. In contrast to Fertizona’s contention, Mr. Marsh testified that the relevant test result which the Department is looking at is the percentage of available phosphate in the liquid fertilizer. Available phosphate is what the plants can use and is informative as to the effectiveness of the fertilizer. 16. According to Mr. Marsh, the ICP Method used by Motzz Lab to analyze the split sample only shows the total amount phosphorous of the split sample but does not provide any information as to the amount of available phosphate. Mr. Marsh testified that the ICP Method is not the appropriate methodology to use in order to determine available phosphate in liquid fertilizer. 17. Mr. Marsh also testified that the results of the two tests performed by Motzz Lab had a 2% variance, which is greater than the normal acceptable range of variance that the ASAL considers acceptable. Consequently, even if total phosphorous were to be considered, which the Department did not concede, the variation between the two tests performed by Motzz Lab would cause the ASAL to not consider the results. Mr. Marsh testified that the ASAL provides for a minimum analytical variable to pass the available phosphate percentage requirement for a 10-34-0 product is 33.24% available phosphate. The test results of the analysis performed by Motzz Lab, as mentioned above, did not meet the ASAL’s minimum analytical variable and, therefore, was not reliable. 18. Fertizona contended that the Sample was taken on the bottom or side of the tank rather than the top and therefore, excessive moisture or condensation is at the location, which in a small sample affects the outcome of the test result and would dilute and lower the percentage of available phosphate found in the Sample but provided no expert testimony or opinion to support that contention. 19. Ms. Hamilton testified that for taking samples of liquid fertilizer, the Department relies on employees of the manufacturer or distributor to draw the sample. In the instant matter, a Fertizona employee drew the Sample from the tank and provided to Ms. Hamilton. APPLICABLE LAW

1. A.R.S. §3-273(A) (labeling) provides, in pertinent part: Any commercial fertilizer offered for sale, sold or distributed in this state in bags, barrels or other containers shall have placed on or affixed to the container in printed form either on tags affixed to the end of the package on the sewed end or directly on the package the following information: . . . 4. Guaranteed analysis.

2. A.R.S. § 3-274 (label as warranty) provides, in pertinent part:

Any label or descriptive tag attached to a lot, parcel or package of commercial fertilizer, agricultural mineral or other fertilizer material carrying a chemical analysis or claims for other values shall be deemed a warranty as to the things stated thereon by the person attaching the label or tag in favor of the buyer and of each successive buyer purchasing the goods relying thereon.

3. A.R.S. §3-275(A) (guaranteed analysis required in licensing and labeling) provides: The guaranteed analysis of a commercial fertilizer shall state the represented percentages of nitrogen, phosphate, available phosphate and soluble potash if claimed. The percentage of phosphate pentoxide shall be expressed in terms of phosphorus and the percentage of potash in terms of potassium oxide.

4. A.R.S. § 3-276(B) (deficiencies in guaranteed analysis; penalties) provides, in pertinent part: B. If the analysis of any commercial fertilizer shows a deficiency in the guaranteed analysis in any one primary plant nutrient, a penalty shall be assessed in accordance with the following provisions: * * * 2. Available phosphate: A penalty of three times the value of the deficiency, if the deficiency exceeds the investigational allowances.

5. A.R.S. § 3-279(A) (cease and desist order) provides:

If the director has reasonable cause to believe from investigation that any fertilizer material is being offered or exposed for sale in violation of any of the provisions of this article, the director may serve the person a cease and desist order requiring such person, on receiving the notice, to immediately cease and desist from such act. The order shall be served by any method of service authorized by the Arizona rules of civil procedure.

6. A.R.S. § 3-281 (false and misleading statements) provides, in pertinent part:

It is unlawful to distribute a misbranded fertilizer material. A fertilizer material is misbranded if it carries any false or misleading statement upon or attached to the container, or if false or misleading statements concerning its agricultural value are made on the container or in any advertising matter accompanying or associated with the fertilizer material.

CONCLUSIONS OF LAW 1. The instant matter is disciplinary in nature and the Department is seeking to have the Order to Cease and Desist, Notice of Violation and Notice of Penalty upheld. See A.R.S. § 41-1092.07(G). The required standard of proof is proof by a preponderance of the evidence. See A.A.C. R2-19-119(A). 2. The weight of the evidence of record established: a. The Sample was properly obtained from a bulk tank at Fertizona on February 12, 2008 by Ms. Hamilton. b. The chain of custody of the Sample was properly maintained by Ms. Hamilton and taken to the ASAL. The Sample was received by the ASAL in acceptable condition with the seal intact. c. The ASAL properly tested the available phosphate content of the Sample using appropriate testing methodologies. d. The phosphate content of the Sample was 32.64% Phosphate, which did not meet the minimum requirement of 34% or 33.24% accounting for acceptable variance. e. Fertizona is a manufacturer and seller of fertilizer, is the party who labeled the contents of 10-34-0 and is regulated under A.R.S. §3-273 et. sec. f. Under Arizona law it is Fertizona’s responsibility to ensure that the product is properly labeled. g. Fertizona mislabeled the contents 10-34-0 as 34% available phosphate when, in fact, it consisted of 32.68%, in violation of A.R.S. §3-274 and A.R.S. §3-275. 3. The evidence of record further supports the conclusion that the Department acted reasonably in issuing the Order of Cease and Desist, because the fertilizer was mislabeled. The Administrative Law Judge concludes that restricting the label of a mislabeled product is a necessary and reasonable action taken to protect the consumers who seek to purchase such a product. Therefore, the Department’s Order to Cease and Desist regarding the product was lawful and reasonable. See A.R.S. § 3-279. 4. Fertizona did not contest the manner in which the Department calculated the $9,072.00 penalty but maintained that the Department incorrectly concluded that the product was mislabeled based upon the ASAL’s results rather than the split Sample’s results. The weight of the evidence of record established that Motzz Lab’s results of the split sample are not persuasive or reliable as the ASAL’s test results of the Sample. 5. The weight of the evidence established that while the ASAL utilized an appropriate methodology to analyze available phosphate, Motzz Lab utilized an incorrect methodology and tested for total phosphorous, which is not the equivalent of testing for available phosphate. 6. The imposition of an assessed penalty on a manufacturer and seller of any mislabeled product is reasonable and appropriate. The weight of the evidence of record supports the conclusion that the assessed penalty imposed upon Fertizona by the Department is lawful and reasonable. See A.R.S. §3-276(B)(1). ORDER IT IS ORDERED affirming: (a) the Order to Cease and Desist preventing further sale, exposing for sale, offering for sale, processing or movement of the product until the contents are properly labeled; (b) the violation of A.R.S. §§ 3-274 and 3-281; and (c) a penalty in the amount of $9,072.00 assessed against Fertizona. Done this day, September 11, 2008.

______________________________________ Lewis D. Kowal Administrative Law Judge

Original transmitted by mail this ____ day of ____________, 2008, to:

Department of Agriculture Jack Peterson, Director 1688 West Adams Phoenix, AZ 85007

By ___________________________ ----------------------- [1] Liquid fertilizer consisting of 10% nitrogen, 34% available phosphate, and 0% potassium.

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Office of Administrative Hearings 1400 West Washington, Suite 101 Phoenix, Arizona 85007 (602) 542-9826