United States District Court, D. New Hampshire
JOSEPH DICLERICO, JR. UNITED STATES DISTRICT JUDGE
After Savera Super Store, LLC (“Savera”) was permanently disqualified from the Supplemental Nutrition Assistance Program (“SNAP”) by the United States Department of Agriculture, Savera sought review under 7 U.S.C. § 2023 and 7 C.F.R. § 279.7. The United States moves for summary judgment, asserting that the undisputed facts show that Savera trafficked in SNAP benefits. Savera objects, arguing that the circumstances cited by the United States as evidence of trafficking in SNAP benefits are ordinary shopping activities at the store.
Standard of Review
After a final disqualification decision, the aggrieved party can file a complaint seeking judicial review. 7 U.S.C. § 2023(a)(13). The review is “a trial de novo by the court in which the court shall determine the validity of the questioned administrative action in issue.” § 2023(a)(15). The store owner who seeks review bears the burden of showing, by a preponderance of the evidence, that the agency’s decision was invalid. Fells v. United States, 627 F.3d 1250, 1253 (7th Cir. 2010); A Touch of Merengue, LLC - The Atom v. United States, 2014 WL 6609478, at *2 (D.R.I. Nov. 20, 2014); Rockland Convenience Store v. United States, 2011 WL 5120410, at *3 (D.N.H. Oct. 27, 2011).
Summary judgment is an appropriate procedure in cases brought under § 2023(a)(13). Nadia Int’l Market v. United States, 2015 WL 7854290, at *5 (D. Vt. Dec. 2, 2015). Summary judgment may be granted when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A genuine dispute is one that a reasonable fact-finder could resolve in favor of either party and a material fact is one that could affect the outcome of the case.” Flood v. Bank of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015). Reasonable inferences are taken in the light most favorable to the nonmoving party, but unsupported speculation and evidence that “is less than significantly probative” are not sufficient to avoid summary judgment. Planadeball
v. Wyndham Vacation Resorts, Inc., 793 F.3d 169, 174 (1st Cir. 2015) (internal quotation marks omitted).
In the context of review under § 2023, courts recognize that the agency decision of disqualification may be based on the investigation, redemption data, and transaction reports from the store. Nadia Int’l Mkt., 2015 WL 7854290, at *5. For that reason, summary judgment may be appropriate based on that record evidence even in the absence of “red handed” evidence of trafficking. Id.; 109 Merrick Deli Corp. v. United States, 2014 WL 6891944, at 4 (E.D.N.Y. Sept. 30, 2014).
The Food and Nutrition Service (“FNS”) operates SNAP on behalf of the Department of Agriculture to provide a means for low income persons to buy food at retail food stores. 7 U.S.C. § 2013(a); 7 C.F.R. § 271.3(a). SNAP provides benefits through electronic benefit (“EBT”) cards, and a recipient can then buy eligible food at an authorized store with the EBT card. See 109 Merrick Deli Corp, 2014 WL 6891944, at *1. Stores may not sell ineligible items through an EBT transaction or exchange EBT benefits for cash, which is trafficking in SNAP benefits. Id.
Authorized stores have EBT terminals to swipe the SNAP recipient’s EBT card for a SNAP purchase, and the recipient enters a personal identification number for the transaction. The purchase amount is deducted from the recipient’s account and credited to the store. The terminal makes a receipt for each transaction, which shows the balance in the recipient’s account.
SNAP benefit transactions are monitored by the FNS. Each EBT card transaction is electronically recorded, showing the date and time of the purchase, the amount of the purchase, and the card number. The FNS uses a program called “ALERT” to detect and then begin an investigation when irregular activity is recorded from an EBT card. FNS has determined that irregular activity includes rapid and repetitive EBT debits of low dollar amounts, an unusually high number of transactions where the amount ends in “00”, and debits of large amounts in small stores that do not have shopping baskets and have limited inventory of eligible SNAP items.
Muhammed I. Toor owns Savera Super Store, which is a convenience store that sells some inexpensive food items along with other items on Laurel Street in Manchester, New Hampshire. Toor applied for SNAP authorization in October of 2012. In the application, Toor stated that only 5% of the sales at the store would be SNAP eligible. The application was granted in January of 2013.
The store primarily sells tobacco products, does not have shopping baskets or carts, and has only one small check-out location with one register. The store is open from 7:00 am to 12:00 am, every day. Food sales are a small part of the business at the store. Within a mile of the Savera Super Store, there are forty-five SNAP authorized stores, including many convenience stores, three small grocery stores, six medium grocery stores, and one large grocery store.
Transactions at Savera Super Store triggered the ALERT program in late 2013. As a result, transactions at the store were analyzed from November of 2013 through January of 2014. An investigator visited the store on February 22, 2014, with notice to and consent from the store. Through his on-site visit, the investigator confirmed that the Savera Super Store primarily stocked products that were not eligible for SNAP, did not have shopping carts or baskets, had one cash register with limited space, and did not stock any expensive eligible food or ethnic items that were not available at other locations. On March 10, 2014, a fire occurred at the Savera Super Store.
The FNS concluded that Savera Super Store was engaging in trafficking of SNAP benefits based on the investigation. The FNS notified Savera Super Store on July 7, 2014, that it was charged with trafficking. The activities identified as showing trafficking were rapid and repetitive transactions for the same household, an excessive number of high dollar amount transactions, and an unusual number of transactions ending in the same cents amount. Toor denied the charges made by FNS and provided explanations for the cited transactional patterns. Toor also ...