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Sharif v. United States

United States District Court, N.D. Mississippi, Greenville Division

January 5, 2017




         This matter is before the court on the Defendant United States of America's Motion for Summary Judgment [17], filed on October 31, 2016. The court has considered the motion and accompanying brief, along with the responses and reply. For the reasons detailed herein, the motion shall be granted.


         In January of 2016, Hayat Food Mart, II, which is located at 635 N Broadway Street in Greenville, Mississippi and owned by Aidrus Ismael Sharif, was permanently disqualified from the Supplemental Nutrition Assistance Program (SNAP). SNAP benefits are administered by the United States Department of Agriculture (USDA), Food and Nutrition Service (FNS). SNAP's mission is “to promote the general welfare, to safeguard the health and well-being of the nation's population by raising the levels of nutrition among low-income households.” 7 U.S.C. § 2011. “The assistance provided is focused on increasing the food purchasing power of eligible households by supplementing the funds families have to spend on food with SNAP benefits, to purchase eligible food items at authorized retail stores.” [17]-3 Declaration of Marchee Briant at ¶ 7.

         The FNS regional office shall disqualify a retail food store permanently if the store has engaged in the trafficking of food stamps. See 7 C.F.R. § 278.6(a), 278.6(e)(1). “Trafficking means the buying, selling, stealing, or otherwise effecting an exchange of SNAP benefits issued and accessed via Electronic Benefit Transfer (EBT) cards, card numbers and personal identification numbers (PINs), or by manual voucher and signature, for cash or consideration other than eligible food, either directly, indirectly, in complicity or collusion with others, or acting alone.” 7 C.F.R. § 271.2. Food stamp trafficking unquestionably undermines the goals of the food stamp program. Huggins v. United States, 858 F.Supp.2d 694, 696 (N.D. Miss. 2012); see H.R. REP. NO. 271, 99th Cong. (1st Sess.), reprinted in 1985 U.S.C.C.A.N. 1103, 1260; S. REP. NO. 504, 97th Cong. (2d Sess.), reprinted in 1982 U.S.C.C.A.N. 1641, 1700-02; see also [17]-3 Declaration of Marchee Briant at ¶ 15 (“Trafficking defrauds the American taxpayer and Congress has repeatedly emphasized the importance of combating fraud in the program. Fraudulent retailers are to be excluded or removed from SNAP to strengthen its integrity.”). The government electronically monitors participating retailers' EBT transactions, conducts periodic reviews of retailers, and initiates investigations of stores when suspicious transactions occur. [17]-3 Declaration of Marchee Briant at ¶ 16.

         A retail food store's disqualification from participation in the program “shall result from a finding of a violation on the basis of evidence that may include facts established through on-site investigations, inconsistent redemption data, evidence obtained through a transaction report under an electronic benefit transfer system, or the disqualification of a firm from the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).” 7 C.F.R. § 278.6(a). “When trafficking is found, unless the retailer food store qualifies for a civil monetary penalty, the penalty is permanent disqualification from SNAP.” [17]-3 Declaration of Marchee Briant at ¶ 17 (citing 7 U.S.C. § 2021(b)(3); 7 C.F.R. § 278.6(e)(1)(i)).

         Aidrus Ismael Sharif owns Hayat Food Mart, II, which is a convenience store-gas station of approximately 1, 000 square feet with 1, 200 square feet storage area. [19] A.R. at 90. On August 28, 2013, and September 7, 2015, FNS contractors visited Hayat Food Mart, II to observe the nature and scope of Hayat's operation, stock, and facilities. [19] A.R. at 9-50. Between May 2015 and October 2015, FNS analyzed the EBT transaction records at Hayat Food Mart, II because Hayat Food Mart, II had appeared on the EBT ALERT system as having met patterns consistent with possible EBT trafficking violations. Id. at 89.

         On December 15, 2015, the USDA sent a letter to Plaintiff accusing him of “trafficking” as defined in § 271.2 of the SNAP regulations (the Charge Letter). Id. at 123-25. The USDA also included a copy of the records of the subject EBT transactions. Id. at 123-50, [20] A.R. at 151-59. The Charge Letter informed Plaintiff that FNS charged Hayat Food Mart, II with committing 1, 145 discrete violations of the SNAP regulations between May and October of 2015. [1] Id. In a letter dated December 18, 2015, Plaintiff responded, denying the trafficking charges. [20] A.R. at 162-63. Following a review of Plaintiff's response, the USDA sent Plaintiff a decision letter which included its determination that based upon the evidence available, the violations did occur. Id. at 170-79. As a result, Plaintiff was permanently disqualified from participating in SNAP. Id.

         In a letter dated January 14, 2016, Plaintiff responded through an attorney and requested an administrative review of the permanent disqualification. Id. at 187. On January 19, 2016, FNS granted Plaintiff's request for administrative review. Id. at 194. On March 8, 2016, FNS issued a Final Agency Decision rejecting Plaintiff's arguments and position and affirming the permanent disqualification penalty. Id. at 258-72. Accordingly, Plaintiff has exhausted all administrative remedies and seeks judicial review as authorized by 7 C.F.R. § 2023.

         Standard of Review

         “Cases arising under the Food Stamp Act, 7 U.S.C. §§ 2011 et seq., may be resolved in the district court by summary judgment where there are no genuine issues of material fact.” Huggins, 858 F.Supp.2d at 698 (citing Cullen Drive-In Grocery v. Block, 778 F.2d 1141, 1142 (5th Cir. 1985)). Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Weaver v. CCA Indus., Inc., 529 F.3d 335, 339 (5th Cir. 2008).

         In deciding whether a fact issue has been created, courts must view the evidence in the light most favorable to the non-moving party. See Haverda v. Hays Cnty., 723 F.3d 586, 591 (5th Cir. 2013). The rule “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing 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., 477 U.S. at 322. “‘The mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient' to preclude summary judgment; instead, ‘there must be evidence on which the jury could reasonably find for the plaintiff.'” Huggins, 858 F.Supp.2d at 698 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)). Conclusory allegations, speculation, unsubstantiated assertions, and legalistic arguments are not an adequate substitute for specific facts showing a genuine issue for trial. TIG Ins. Co. v. Sedgwick James of Wash., 276 F.3d 754, 759 (5th Cir. 2002); SEC v. Recile, 10 F.3d 1093, 1097 (5th Cir. 1993); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc). “It is well settled in the Fifth Circuit that ‘the nonmoving party's burden is not affected by the type of case; summary judgment is appropriate in any case where critical evidence is so weak or tenuous on an essential fact that it could not support a judgment in favor of the nonmovant.'” Huggins, 858 F.Supp.2d at 698 (quoting Little, 37 F.3d at 1075).

         A suit brought pursuant to 7 U.S.C. § 2023 “shall be a trial de novo by the court in which the court shall determine the validity of the questioned administrative action in issue.” 7 U.S.C. § 2023(a)(15). De novo review is broader than the review standard under the Administrative Procedure Act. Huggins, 858 F.Supp.2d at 697; Modica v. United States, 518 F.2d 374, 376 (5th Cir. 1975). The Administrative Procedure Act provides that: “To the extent necessary to the decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” 5 U.S.C. § 706. “De novo review of an agency decision encompasses more, ‘requir[ing] the district court to examine the entire range of issues raised, and not merely to determine whether the administrative findings are supported by substantial evidence.'” Huggins, 858 F.Supp.2d at 697; Modica, 518 F.2d at 376. “The court must reach its own factual and legal conclusions based on the preponderance of the evidence, and should not limit its consideration to matters previously dealt with in the administrative proceedings.” Id. (citing Ruhee M., Inc. v. United States, 2006 WL 1291356, at *2 (S.D. Tex. May 5, 2006)).

         “The aggrieved party bears the burden of establishing the invalidity of the administrative action by a preponderance of the evidence.” Id.; Redmond v. United States,507 F.2d 1007, 1012 (5th Cir. 1975). The aggrieved party “may offer any relevant evidence available to support his case, whether or not it has been previously submitted to the agency, and the agency itself may offer any evidence available to support its action, whether or not in the administrative record.” Id. “If the court determines that such administrative ...

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