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Grocery v. United States Department of Agriculture

United States District Court, D. Maine

July 24, 2017

SUUQA BAKARO GROCERY and MAHDI IROBE, Plaintiffs
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, Defendant

          DECISION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          D. BROCK HORNBY UNITED STATES DISTRICT JUDGE.

         Suuqa Bakaro Grocery and Mahdi Irobe seek judicial review of the United States Department of Agriculture (USDA)'s decision to disqualify them from participation in the Supplemental Nutrition Assistance Program (SNAP) due to their alleged trafficking of SNAP benefits. The USDA has moved for summary judgment (ECF No. 18); the Grocery and Irobe oppose it (ECF No. 20). After hearing oral argument on July 20, 2017, I conclude that there is no genuine issue of material fact and therefore Grant the USDA's motion.

         Facts

         Many of the facts are stipulated. Parties' Joint Factual Stipulations (ECF No. 15) (JFS). When they are not, I take the plaintiffs' version when properly supported by the record.

         Mahdi Irobe owns Suuqa Bakaro Grocery, a small grocery store in Lewiston that predominantly serves Somali immigrants. JFS ¶ 12. The store carries several standard items, such as rice, flour, oil, sugar, and pasta, in addition to fresh camel and goat meat, frozen okra and tilapia, and a limited selection of fresh produce. JFS ¶ 12. On May 28, 2015, Irobe applied to become an authorized SNAP retailer, JFS ¶ 13, and the store was subsequently authorized to participate in SNAP as a retailer on June 20, 2015, JFS ¶ 15.

         To combat hunger and malnutrition among low-income households, Congress authorized SNAP as part of the Food Stamp Act, 7 U.S.C. § 2011; JFS ¶ 1. The program allows low-income households “to obtain a more nutritious diet through normal channels of trade by increasing food purchasing power for all eligible households who apply for participation.” 7 U.S.C. § 2011. Households that qualify for SNAP participation receive electronic benefit transfer cards (EBTs), which effectively function as debit cards and allow participants to purchase eligible food items at certain stores. 7 U.S.C. § 2012(k); JFS ¶ 2.

         USDA regulations prohibit trafficking, or the exchange of SNAP benefits for cash.[1] To combat trafficking, the USDA employs a variety of technological and investigatory tools. E.g., Fraud, U.S. Dep't of Agriculture, https://www.fns.usda.gov/fraud/what-snap-fraud. The agency collects electronic records of each EBT transaction in a national database, including the date, time, amount, store, and household identification for the transactions. JFS ¶ 6. This database in turn generates ALERT (Anti-Fraud Locator using EBT Retailer Transactions) reports that monitor and identify suspicious transactions. JFS ¶ 7. The ALERT reports allow the USDA's Field and Nutrition Service (FNS) field officers to identify particular retailers and transactions with statistically unusual patterns indicative of trafficking, such as multiple transactions made sequentially in a short time frame, multiple withdrawals from individual accounts at a rapid pace, transactions that exhaust most of a household's SNAP benefits in a short time, and high-dollar-value sales from small retailers that have limited physical space. JFS ¶¶ 7-8.

         Soon after Suuqa Bakaro Grocery began accepting SNAP benefits, the transaction monitoring program showed patterns consistent with EBT trafficking violations. JFS ¶ 20. To that end, the Field and Nutrition Service initiated an investigation, closely reviewing the transaction history from July through October 2015 and directing contractors to visit the store on November 15 and December 4, 2015. JFS ¶ 20. Following the investigation, the section chief of the Service's Retailer Operations Division for New England sent the plaintiffs a letter advising them of the investigation results and the agency's conclusion to charge the store with tracking violations, namely 509 in total.[2] JFS ¶¶ 21, 23- 26.

         The charge letter flagged four categories of EBT transactions, with four corresponding attachments, suggesting trafficking behavior: (1) numerous consecutive transactions conducted “too rapidly to be credible, ” (2) multiple transactions conducted from individual benefit accounts in “unusually short time frames, ” (3) sets of transactions where individual recipient benefits were “exhausted in unusually short periods of time, ” and (4) “excessively large purchase transactions made from recipient accounts.” JFS ¶¶ 21-22; A.R. 608 (ECF No. 14). In a response letter, the plaintiffs' counsel offered alternative explanations to account for the alleged trafficking conduct, along with receipts for inventory purchased from May to December 2015. JFS ¶ 33. After reviewing the response, the Service maintained its original conclusion from the EBT transaction data and permanently disqualified the plaintiffs from participating in the SNAP program. JFS ¶ 34. The plaintiffs subsequently sought a review of the decision by the Administrative Review Board, JFS ¶ 35, which ultimately affirmed the permanent disqualification, JFS ¶ 37. The plaintiffs then brought suit in this court (ECF No. 1), requesting judicial review of the disqualification decision. 7 U.S.C. § 2023(a)(13).

         Standard of Review

         In reviewing the agency's decision, I conduct a de novo review to determine whether a violation occurred. 7 U.S.C. § 2023(a)(15); Broad St. Food Mkt., Inc. v. United States, 720 F.2d 217, 220 (1st Cir. 1983); Collazo v. United States, 668 F.2d 60, 65 (1st Cir. 1981). This means that I accept new evidence and am not bound by the agency record. Hajifarah v. United States, 779 F.Supp.2d 191, 204 (D. Me. 2011); accord Ibrahim v. United States, 834 F.2d 52, 53-54 (2d Cir. 1987). But the plaintiffs must show by a preponderance of the evidence that a violation did not occur. See 7 U.S.C. § 2023(a)(15); Ganesh v. United States, 658 F. App'x 217, 219 (6th Cir. 2016) (citing Warren v. United States, 932 F.2d 582, 586 (6th Cir. 1991)); Nadia Int'l Mkt. v. United States, No. 16-364-cv, 2017 WL 1493687, at *2 n.1 (2d Cir. Apr. 26, 2017) (citing Fells v. United States, 627 F.3d 1250, 1253 (7th Cir. 2010)); Hajifarah, 779 F.Supp.2d at 204.[3]

         In evaluating the defendant's motion, I note that “Rule 56(c) mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “In such a situation, there can be ‘no genuine issue as to any material fact, ' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.” Id. at 322-23 (quoting Fed.R.Civ.P. 56(c)).

         Analysis

         The Food Stamp Act provides for permanent disqualification upon “the first occasion or any subsequent occasion of a disqualification based on the purchase of coupons or trafficking in coupons or authorization cards by a retail food store.” 7 U.S.C. § 2021(b)(3)(B). In other words, “even a single incident of trafficking is enough to justify permanent disqualification.” RocklandConvenience Store v. United States, No. 10-cv-260-LM, 2011 WL 5120410, at *8 (D.N.H. Oct. 27, 2011). To survive summary judgment, the plaintiffs “must raise material issues of fact as to each alleged violation.” Ganesh, 658 F. App'x at 219 (quoting McClain's Mkt. v. United States, 214 F. App'x 502, 505 (6th Cir. 2006)); see also Eltaweel v. U.S. Dep't of Agric., No. 14-409-M-LDA, 2016 WL 1572880, at *2 (D.R.I. Apr. 18, 2016) (summary judgment is appropriate when the plaintiff “fails to demonstrate a material dispute of fact as to the existence of a violation”). This is a very tall hurdle to ...


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