Stambaugh v. Butler – 8/9/2016

September 19, 2016

Arizona Court of Appeals Division One holds that the Director of the Arizona Department of Agriculture has discretion to approve two similar brands for livestock as long as the new brand can identify livestock ownership and prevent theft.

An Arizona company registered for and uses the “bar seven brand” to brand its cattle.  A California company uses the “bar seven brand” in California, and applied to use the same brand in Arizona.  Because the two companies applied the brand on different parts of the cattle—the Arizona company branded its cattle on the left hip, and the California company applied to brand its cattle on the left rib—the Arizona Department of Agriculture granted the California company’s application.

A.R.S. § 3-1261(B) provides: “No two brands of the same design or figure shall be adopted or recorded, but the associate director may, in his discretion, reject and refuse to record a brand or mark similar to or conflicting with a previously adopted and recorded brand or mark.”  Section 3-1261(G) states: “It is unlawful to apply a recorded brand in any location on an animal except as specified on the brand registration certificate. The application of a brand in any other location is the equivalent of the use of an unrecorded brand.”

The Court of Appeals concluded that § 3-1261 is ambiguous based on its plain text, and the court therefore looked to related statutory provisions, the purpose of the statute, and the agency’s prior application of the statutory scheme to ascertain its meaning.  The court determined that the purpose of the statute is to identify ownership of livestock and thereby help prevent their theft. The court therefore concluded that it is within the discretion of the director of the Arizona Department of Agriculture to accept and record a brand that is similar to another already approved brand as long as the new brand can identify livestock ownership and prevent theft.

The dissent, however, concluded that the text of § 3-1261 was unambiguous, and based on the plain text of § 3-1261(B), the Arizona Department of Agriculture could not accept and record identical brands simply because they are to be placed in different parts of the cattle.

Judge Orozco delivered the opinion of the court in which Judge Johnsen joined.  Judge Jones dissented.