TX JM-920 June 22, 1988

Could Texas fertilizer regulators send a failed state-lab report to the purchaser before the manufacturer completed independent testing?

Short answer: In 1988, the Attorney General concluded that the Texas Feed and Fertilizer Control Service had implied statutory authority to send the state chemist's noncompliance report to the fertilizer's purchaser or possessor before independent review was complete, and that doing so did not deprive the manufacturer of property without due process. The director also did not have to give equal weight to the state and commercial laboratory analyses.

Apply this to your situation

This page answers the general question as of 1988. Ezel answers yours: what it means for your facts, under current Texas law, with citations.

Currency note: this opinion is from 1988
Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Disclaimer: This is an official Texas Attorney General opinion. AG opinions are persuasive authority in Texas but are not binding precedent like a court ruling. This 1988 opinion interpreted fertilizer-control statutes and due-process doctrine that may have changed or been recodified. Verify current law before relying on any testing, notice, enforcement, or evidentiary rule discussed here. This summary is for informational purposes only and is not legal advice.
About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked on this page as a PDF) is the authoritative source for any reliance.
View original AG opinion (PDF)

TX AG Opinion JM-920: Could regulators send the lab report?

Plain-English summary

The Texas Feed and Fertilizer Control Service sampled commercial fertilizer in the marketplace and sent the manufacturer a state chemist's report stating that the product failed its label guarantees. Three days later, it sent the same report to the purchaser or possessor. The manufacturer argued that the agency lacked authority to notify the customer before independent review ended and that early disclosure denied due process.

The Attorney General found implied authority in Agriculture Code §§63.091, 63.093, and 63.094. Those provisions authorized inspection, sampling, analysis, notice to the manufacturer, and independent testing. Sending the report to the person whose fertilizer had been sampled was a reasonable incident of those duties and served the statute's consumer-protection purpose.

The report itself disclosed that the manufacturer could request independent analyses and that a corrected report would issue if the product's status changed. The opinion treated that context as reducing the risk that the customer would mistake the first analysis for an irreversible final judgment.

The manufacturer was a corporation and could not claim the personal liberty interest protected by the due-process clauses. Reputation alone also did not establish a protected property interest. Although Texas law recognized business goodwill as property in some settings, the opinion concluded that goodwill did not include customer patronage resting on ignorance of possible product deficiencies discovered through an authorized regulatory program.

Because sending the report did not affect a protected property interest, the opinion did not decide whether the independent-analysis procedure in §63.094 would otherwise supply constitutionally sufficient process.

On the second question, §63.094(d) said the three chemical analyses "may be considered" when deciding whether a violation occurred. The opinion read that language as permitting consideration without assigning equal weight or making any one analysis controlling.

Currency note

This opinion was issued in 1988. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion said for affected groups in 1988

Fertilizer manufacturers and distributors

The regulator could notify the purchaser or possessor of the first state-lab result before the manufacturer completed independent testing. The notice also had to be understood alongside the manufacturer's statutory right to request additional analyses.

Purchasers, possessors, and farmers

The opinion treated prompt access to the test result as part of the statute's consumer-protection purpose. The information allowed the recipient to respond before applying a mislabeled product or to consider corrective measures after application.

State regulators

The service did not need an express sentence authorizing ordinary correspondence with interested parties. The opinion derived the notification power by implication from the inspection, sampling, reporting, and review duties.

Commercial laboratories

Their analyses could be considered in the enforcement decision, but the statute did not require the director or a reviewing court to weigh all three analyses equally.

Administrative-law counsel

The due-process analysis stopped at the protected-interest question. The opinion did not approve or disapprove the adequacy of the review procedure because it found no property deprivation in sending the report.

Common questions

Did the statute expressly say the agency could send the report to the purchaser?
No. The opinion found implied authority because notifying the purchaser or possessor was reasonably connected to the agency's express sampling, testing, and consumer-protection duties.

Did the manufacturer have to finish independent testing before the customer was notified?
No. The opinion allowed the service to send the original analysis before the §63.094 review process ended.

Was the first state-lab report treated as final?
Not necessarily. The notice explained that independent testing could be requested and that a corrected report could issue if the product's status changed.

Did sending the report violate due process?
The opinion concluded no. It found no protected property interest in customer goodwill based on keeping the possible deficiency from the purchaser.

Did the opinion decide whether §63.094's review procedure was constitutionally adequate?
No. Because it found no protected property deprivation, it did not reach that question.

Did the director have to average or equally weigh all three laboratory results?
No. The statute allowed the analyses to be considered but did not prescribe their relative weight.

Background and legal framework

Chapter 63 of the Agriculture Code regulated commercial fertilizer manufacturing and distribution. Sections 63.091 and 63.093 authorized inspections, sampling, and reports identifying the product, manufacturer or guarantor, possessor, date, place, and sampler.

Section 63.094 required notice to the manufacturer or distributor when the service found a violation. The recipient could request analysis by two qualified independent chemists and could receive a portion of the sample. Subsection (d) allowed the three analyses to be considered in deciding whether a violation occurred.

The implied-power analysis relied on the rule that an express statutory power carries authority reasonably necessary to carry it out. The opinion connected notice to the purchaser with the Legislature's stated purpose of protecting fertilizer consumers and ensuring accurate labels and ingredient quality.

The due-process discussion applied the Fifth and Fourteenth Amendments and article I, section 19, of the Texas Constitution. The opinion relied on Paul v. Davis for the rule that reputational injury alone did not create a protected liberty or property interest. It described protected property as arising from an independent source of law rather than from the Constitution itself.

Citations and references

Statutes:

  • Agric. Code § 63.091, inspection and sampling
  • Agric. Code § 63.093(b), information accompanying a sample
  • Agric. Code § 63.094(a), notice of a violation
  • Agric. Code § 63.094(b), independent chemical analyses
  • Agric. Code § 63.094(d), consideration of the three analyses
  • article I, section 19, of the Texas Constitution, due course of law

Cases:

  • Bullock v. Calvert, 480 S.W.2d 367 (Tex. 1972), implied authority of public officers
  • Wisconsin v. Constantineau, 400 U.S. 433 (1971), reputation and liberty interests
  • Paul v. Davis, 424 U.S. 693 (1976), reputation alone under procedural due process
  • Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), state-law source of a property interest
  • Board of Regents v. Roth, 408 U.S. 564 (1972), creation and definition of property interests

Source

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

June 22, 1988

Mr. Perry L. Adkisson             Opinion No. JM-920
Chancellor
Texas A & M University System     Re: Construction of Texas
319 System Building               Commercial Fertilizer Con-
College Station, Texas   77843    trol Act, chapter    63 of
                                  the Agriculture Code
                                  (RQ-1240)

Dear Mr. Adkisson:

     You ask two questions    about the procedures    to be
followed by the Director of the Texas Agriculture Experiment
Station in enforcing 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 compelled
        to give equal weight to analytical   findings
        of commercial   laboratories  when a    manu-
        facturer contests the results of the state
        chemist.

     Chapter  63 of the Agriculture     Code provides    for
regulation of the manufacture and distribution of commercial
fertilizer.  Agric. Code §§ 63.031, 63.051, 63.091,  63.121;
see also Agric. Code §§ 63.001, 63.002 (defining "commercial
fertilizer" and other terms). The duties set out in chapter
63 of the Agriculture Code are the responsibility of the
Director of the Texas Agricultural Experiment Station, to be
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

Mr. Perry L. Adkisson - Page 2 (JM-920)

containers of fertilizer to be labeled with certain
information, including the grade of the fertilizer and the
guaranteed analysis of plant nutrients in it. Agric. Code
93 63.031, 63.051.

  Subchapter G of chapter 63 provides remedies for viola-

tions of the chapter, including a stop-sale order, con-
demnation, warnings, and a suit to enjoin a violation or
threatened violation., Agric. Code 55 63.121, 63.122,
63.124. Subchapter H sets~ out criminal penalties for
violation of chapter 63 and for other specific offenses
which include distribution of misbranded, adulterated,
unregistered, or unlabeled 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

      In order to determine if commercial  ferti-
   lizer is in compliance with this chapter,  the
   service is entitled to:

          (1) enter during regular business hours              -,
      and inspect anv Dlace of business, mill,
      plant. buildina.  or vehicle,   and to 013811
      anv bin, vat. or Darcel. that is used in
      the manufacture.  transDortation.   imDorta-
      tion. sale. or storaae of a commercial
      fertilizer or iS SUSDeCted of containina   a
      commercial fertilizer: and

          (2) take samples from fertilizer  found
      during that inspection.  (Emphasis added.)

Agric. Code § 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) the manufacturer   or cruarantor of   the
    samDle. if known;

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

Mr. Perry L. Adkisson - Page 3 (JM-920)

       (5) the date    and   place   of   taking   the
    sample: and

       (6) the name of the person who took         the
    sample. (Emphasis added.)

Agric. Code § 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 the manufacturer may be unknown, while
section 63.093(b)(4) indicates that the person in possession
of the lot sampled1 may be different from the manufacturer.
The service is entitled to enter "any place of business,
mill, plant, building or vehicle," and may open any
container "that is used in the manufacture, trans-
portation, importation, sale, or storage of commercial
fertilizer" or that is "suspected of containing a commercial
fertilizer. . . .I1 Agric. Code § 63.093(b). Thus, the
sample may have been taken from the manufacturer, trans-
porter, seller, or purchaser of the fertilizer. your letter
states that the service routinely acquires samples of
manufactured fertilizers as they appear in the marketplace.

 The samples collected are analyzed by the office of the

State Chemist. See Agric. Code § 63.003(c) (appointment of
a state chemist). If the service finds that a commercial
fertilizer is in violation of a provision of chapter 63 of
the Agriculture Code, it is required 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 the person in possession of the lot sampled. . . .I1
The prior version of section 63.093(b)(4) referred to the
"lot sampled.01 Acts 1961, 57th Leg., ch. 27, § 8(b), Cd),
at 54, 58. Chapter 141 of the Agricultural Code, which
regulates commercial feed, includes section 141.103 on
identification of feed samples. Section 141.103, which is
virtually identical to section 63.093 of the code, provides
that the report to the service should contain "the name of
the person in possession of the lot SamDled. . . .I' Agric.
Code § 141.103(b)(4). (Emphasis added.) Chapters 63 and
141 of the Agricultural 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 to have resulted from a typographical error.
Mr. Perry L. Adkisson - Page 4 (JM-920)

fertilizer to be distributed." Agric. Code g 63.094(a). The
manufacturer or distributor of the fertilizer then has an
opportunity to have an independent analysis of the sample
collected by the service. Agric. Code § 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 is an 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 issue has been resolved and (2) notifica-
tion prior to resolution is a denial of the manufacturer's
due process rights. We will first consider the authority of
the service to inform the purchaser 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

the manufacturer and then to the purchaser. The cover
letter states that, on the basis of an enclosed laboratory
analysis report, the fertilizer is in violation of the Texas
Commercial Fertilizer Control Act. It requests the manu-
facturer to review all factors which might have resulted in
this deficiency, invites it to supply additional information
which will justify changing the conclusions of the report,
and informs it that it may request an independent analysis.

 The laboratory analysis  report accompanying the cover

letter states the percentages of chemical components
guaranteed for the fertilizer and the percentages shown by
analysis 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 OF THE 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 TO ALLOW THE MANUFACTURER TO REQUEST A
      PORTION FOR HIS OWN USE. WITHIN THIS TIME,

Mr. Perry L. Adkisson - Page 5 (JM-920)

    THE MANUFACTURER IS FURTHERMORE PROVIDED THE
    OPPORTUNITY OF. REQUESTING ANALYSIS   BY TWO
    INDEPENDENT   LABORATORIES SELECTED BY    THE
    STATE CHEMIST. THE RESULTS OF SUCH INDEPEN-
    DENT ANALYSES WILL BE TAKEN INTO CONSIDERA-
    TION IN MAKING A FINAL DETERMINATION OF THE
    LEGAL STATUS OF THE SAMPLE.      A CORRECTED
    REPORT WOULD BE ISSUED IF THE STATUS CHANGED.
    UNLESS CHANGED, THIS ANALYSIS WILL APPEAR AS
    A VIOLATIVE LISTING IN THE ANNUAL PUBLICATION
    OF THE OFFICE OF THE TEXAS STATE CHEMIST.

 Much of the information set out in section    63.093(b)

of the Agriculture Code appears on the analysis report,
including the name of the manufacturer or guarantor and the
name of the possessor. In both of the sample notices you
submitted, copies of the cover letter and laboratory
analysis report were sent to the entity identified as the
possessor of the fertilizer lot from which the sample was
taken. Thus, in these 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 of chapter 63 states that the service may

or must send a copy of the report to the possessor or to the
purchaser. We do not, however, believe express statutory
authority is necessary for the service to send the purchaser
or possessor of fertilizer its chemical analysis of that
product.

 In Terre11 v. Soarks, 135 S.W. 519     (Tex. 1911),   the

Supreme Court of Texas stated as follows:

    The grant of an express power carries with it
    by necessary   implication every other power
    necessary and proper to the execution of the
    power granted.    When the law commands  any-
    thing to be done, it authorizes the perfor-
    mance 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, 344 S.W.2d 158 (Tex. 1961) (civil
service commission does not have implied authority to
resolve fact questions of fireman's fitness for
reinstatement). In Bullock v. Calvert, 480 S.W.2d 367 (Tex.
1972) the court stated that
Mr. Perry L. Adkisson - Page 6 (JM-920)

   every specific, permissible act of a public
   officerneed  not be expressed in a statute: we
   imply the authority to do 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.

 We would not expect a state agency to have express

authority to engage in correspondence relevant to its duties
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 the Agriculture Code to send a
copy of the laboratory report to the purchaser or possessor
of the fertilizer. The person from whom the service has
obtained the fertilizer and who is identified in the report
accompanying the sample as the possessor of the fertilizer
sampled has a special interest in learning the result of the
analysis. The purchaser, if different from the possessor,
is similarly interested in 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 g 63.094 with Agric. Code § 63.095
person may initiate submission of sample for analy:E'
results may not identify manufacturer and may not b;!
published). See also Agric. Code § 63.005(a)(2) (at least
annually, director shall make public results of analysis of
fertilizer samples). In sending the purchaser or possessor
a copy of the analysis report, the service provides
information generated by its inspection and testing powers
to parties who were involved in the exercise of those powers
and who 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
Mr. Perry L. Adkisson - Page 7 (JM-920)

Act was 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   in Texas: the fact
   that consumers  need uniform guarantees     and
   labeling of fertilizers which are offered    to
   them: and the further fact that it would be of
   great material advantage to have the laws of
   Texas conform insofar as practicable with the
   present day practices     of consumers, manu-
   facturers and    distributors   of   commercial
   fertilizer, and to afford maximum orotection
   to consumers of commercial fertilizers, create
   an emergency. . . . (Emphasis added.)

Acts 1961, 57th Leg., ch. 37, § 19, at 54, 61-62. An
emergency clause may be considered if it will aid the
court in ascertaining the legislative intent. Trawalter
v., Schaefer, 179 S.W.Zd 765 (Tex. 1944) ; Gov't Code
5 311.023(l). A related purpose is stated in the bill
analysis for House Bill No. 1510 of the 68th Legislature,
the bill which adopted the present version of chapter 63 of
the Agriculture Code. The bill analysis -states the
following as background information:

   The guaranteed quality of commercial feeds and
   fertilizers are essential  for the successful
   operation of the agricultural   and livestock
   industries of Texas. Texas A & M University,
   through the Agricultural Experiment   Station,
   is charged with the regulatory  responsibility
   of guaranteeing of the labeling accuracy    and
   ingredient quality of these products as well
   as pet foods and homeowner products.

House Committee on Agriculture and Livestock, Bill Analysis
to H.B. No. 1510, 68th Leg. (1983). See Gov't Code
§ 311.023(3) (in construing a statute, court may consider
legislative history).

 Informing the purchaser or possessor of fertilizer   of

the laboratory analysis report will help carry out the
legislative purpose of protecting consumers. The purchaser
or possessor can refrain from applying the fertilizer to the
soil if it has not yet been applied. If it has been, he has
an opportunity to determine whether supplemental applica-
tions should be made to correct the balance of plant
nutrients in the soil.
Mr. Perry L. Adkisson - Page 8 (JM;920)

 Your letter states that original findings are mailed to

the purchaser three days after the mailout to the manu-
facturer so that the manufacturer will have an opportunity
to initiate a monetary settlement with the purchaser. 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. In this way, the consumer protection purposes of
chapter 63 are carried out. &.g Gov't Code § 311.021(5) (in
construing a statute, a public interest is favored over a
private interest).

 We note that the predecessor     to section   63.094(a)

provided that, in case the fertilizer was found in violation
of chapter 63,

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

Acts 1981, 67th Leg., ch. 388, at 1012, 1147 (adopting
Agriculture Code). The "consignee" is not the purchaser or
consumer, but the person to whom the product is delivered -.
for transportation or sale. Webster'.s Third New Inter-
national Dictionary; m Charles M. Stieff, Inc. v. Citv
of San Antonio, 111 S.W.2d 1086 (Tex. 1938) (defining
Vconsignment' and "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
and possessors of the lots sampled copies of the analysis
report. We conclude that the service has implied statutory
authority to send copies of laboratory analysis reports to
the purchaser of the fertilizer that was tested.

 We next consider whether    the due process clauses     of

the United 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 from depriving persons
of property or liberty without due process of law. The
manufacturer is a corporation and not a natural person and
thus cannot claim due process protection for the liberty
guaranteed by the Fourteenth Amendment or by article I,
section 19, of the Texas Constitution. Pierce v. Societv of
Sisters, 268 U.S. 510 (1925); Western Turf Association v.
Greenberq, 204 U.S. 359 (1901); Northwestern National Life

                          P. 4613
 Mr. Perry L. Adkisson - Page 9    (JM-920)




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

      The reputation of a natural personal person is analyzed
 as a liberty interest rather than a property interest under
 the due process clause. See Wisconsin v. Constantineau    400
 U.S. 433 (1971).    Even if the manufacturer were a naiural
 person who could invoke due process protection for a liberty
 interest, and if the transmittal of the fertilizer   analysis
 to his customer could be considered        damaging  to   his
 reputation, the due process clause would not afford him the
 notice and hearing he seeks. In paul v. Davis, 424 U.S. 693
 (1976) r the Supreme Court considered whether    a citizen's
 charge of defamation stated a claim for relief under 42
 U.S.C. 5 1983 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 area merchants a circular 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 of Hialeah, 625 F.2d 499 (5th Cir. 1980) (injuries
to personal and business reputations caused by unlawful
search and seizure are compensable under 42 U.S.C. § 1983 as
element of damages). The court moreover said that the due
process clause does not extend a person the right to be free
of injury "wherever the State may be characterized as the
tortfeasor." 424 U.S. 701.

      We next consider whether    the manufacturer   has
 property interest which would invoke the protection of th:
 due process clause.

      Property interests are not created by the United 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., 467 U.S.    986
 (1984) (trade secrets); Board of Regents v. Roth, 408 U.S.
 564 (1972) (public employment).   Intangible interests,  such
 as contracts, liens, and trade secrets, have been recognized
 as property   rights entitled to constitutional   protection.
 Ruckelshaus v. Monsanto    Co. suora (information recognized
 as trade secrets under Mis&.ouri law constitutes     property
 protected by Fifth Amendment's taking clause).

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




                              P. 4614

Mr. Perry L. Adkisson - Page 10 (JM-920)

acquired by an establishment beyond the mere value of the
capital stock, funds, or property employed therein, in
consequence of the patronage of habitual 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 from ancient partialities or prejudices.

Taormina v. Culicchia 355 S.W.2d 569, 573 (Tex. Civ. App. -
El Paso 1962, writ 'ref#d n.r.e.); Texas & Pacific
Railwav v. Mercer, 90 S.W.2d 557 (Tex.?36). The owner may
recover damages for the destruction of good will. Texas &
Pacific Railwav Co. v. Mercey, m. Good will is not,
however, compensable as a separate and independent item of
recovery when the state takes land occupied by a business in
eminent domain proceedings. State v. Za ba 418 S.W.2d 499
(Tex. 1967); Citv of Dalla Priol o, 2:: S:W.2d 176 (Tex.
1951). Nor is the goodswyll of a physician's medical
practice considered to be property subject to division upon
divorce. Wail v. Naib, 486 S.W.2d 761 (Tex. 1972).

 Texas courts have moreover     held that both liberty

interests and property interests are held subject to the
exercise of the state's police power. Citv f Colleae
Station v. Turtle Rock Core 680 S.W.Zd 802 (Gex. 1984)
(alleged taking of property;; Ci tv of 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 is grounded upon the public need for safety, healthy
security, and protection of the general welfare of the
community. Jefco. Inc. v. Lewis, 520 S.W.2d 915 (Tex. Civ.
APP. - Austin 1975, writ ref'd n.r.e.). The wisdom 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
in our opinion, a reasonable exercise of police power to

iF&ect the general welfare by protecting consumers from
mislabeled products and by limiting damage to the agri-
culture of Texas that might result from distribution and
application of mislabeled fertilizer. The purchaser is also
informed of the manufacturer's right to have 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 rela-
tions, if any, caused by sending the laboratory report to
the customer. We believe the Texas courts would hold that
Mr. Perry L. Adkisson - Page 11 (JM-920)

 good will 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 food products). a     uternational   Business
 Machines Corooration v. United States of $merica, 298 U.S.
 131 (1936) (no exception to Clayton Act for trying clause
 directed at protecting good will).

      Since we conclude that no property interest is affected
 by governmental   action in this case, we need not decide
 whether the review procedures    set out in section    63.094
 would accord due process. See, u,        Ewina v. Mvtinaer   &
 Casselberrv. Inc., 339 U.S. 5' 94 (1950) (due process  clause
 not violated   Iny federal statute authorizing    seizure of
 misbranded   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 and damage of consumer):   Buttfield
  . Strmnah an , 192 U.S. 470     (1904) (no deprivation     of

.- property without due process in tea examiner's summary
seizure of imported tea based on his judgment that its
quality did not meet federal standards for wholesomeness);
Annot. 69 L.Ed.2d 1044 (1981) (application of due process
guarantees to summary administrative deprivation of property
interest).

         Your second question is:

               Whether the Director of the Texas Agri-
            cultural Experiment Station is compelled   to
            give equal weight to analytical findings of
            commercial laboratories  when a manufacturer
            contests the results of the state chemist.

         Section 63.094   of   the Agriculture   Code   provides   in
 part:

               (b) After receiving a notice under Sub-
           section (a) of this section, the manufacturer
           or other person who caused the fertilizer   to
           be distributed may request that the service
           submit portions  of the sample analyzed     to
           other chemists   for independent    analysis.
           After receiving a request, the service shall
           submit two portions of the sample analyzed to
           two qualified   chemists   selected by    the




                                  P. 4616
                                                                .

Mr.. Perry L. Adkisson - Page 12 (JM-920)

                                                                -,

    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 on which notice is given.

       (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 be prepared 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 § 63.094. Section 63.094(d) does not dictate
the weight to be accorded any of the three analyses in
determining whether a violation of chapter 63 has occurred.
Nor does it state that the analysis results will be
dispositive of any question as to violation. It merely
authorizes the use of the three chemical analyses in
proceedings to determine whether a violation of chapter 63
has occurred. See Webster's Ninth New Collegiate Dictionary
(1983) (wmay" used nearly interchangeably with "can*@). See
w Agric. Code subch. G, H (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 the Agricultural Code to give
equal weight to analytical findings of commercial
laboratories when a manufacturer has requested independent
analysis of fertilizer 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    demon-
   strates it to be out of compliance with the
   requirements of chapter 63 of the Agriculture
   Code. By sending this notification     to the
   purchaser or possessor,  the service does not

Mr. Perry L. Adkisson - Page 13 (JM-920)

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

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General

Get today's answer for your situation

You just read a 1988 opinion on this question. Ezel checks the current Texas statutes and case law and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the law it relies on.