IN SUK PAK v. US DEPT. OF AGRICULTURE

• Citation: 690 F. Supp. 322
• Decision Date: 30 November 1987
• Docket Number: Civ. A. No. 87-0342.
• Parties: IN SUK PAK t/d/b/a Penny's Food Market, Plaintiff, v. UNITED STATES of America DEPARTMENT OF AGRICULTURE, Defendant.
• Court: U.S. District Court — Middle District of Pennsylvania

690 F. Supp. 322

IN SUK PAK t/d/b/a Penny's Food Market, Plaintiff, v. UNITED STATES of America DEPARTMENT OF AGRICULTURE, Defendant.

Civ. A. No. 87-0342.

United States District Court, M.D. Pennsylvania.

November 30, 1987.

Katherene E. Holtzinger Conner, York, Pa., for plaintiff.

Robert J. DeSousa, Scranton, Pa., for defendant.

MEMORANDUM

RAMBO, District Judge.

Before the court is defendant's motion for summary judgment. The motion has been fully briefed and is ripe for disposition.

Background

In Suk Pak is an individual who owns and operates Penny's Food Market in York, Pennsylvania. Plaintiff was approved for participation in the food stamp program which is administered by the defendant United States Department of Agriculture. On January 14, 1985 a representative of defendant wrote to plaintiff, warning plaintiff about possible violations of the food stamp program's regulations. The letter indicates that another representative of defendant had visited plaintiff's store on January 9, 1985 and discussed with plaintiff the comparatively high rate of food stamp redemption that was occurring at plaintiff's store. During that visit, according to the letter, defendant's agent warned plaintiff that any further violations could result in plaintiff's disqualification from the food stamp program. The agent also reviewed with plaintiff applicable food stamp regulations.

In July, 1985 defendant received an anonymous complaint to the effect that nonfood items were being sold for food stamps in plaintiff's store. A representative of defendant visited the store on July 11, 1985 and discussed food stamp regulations with plaintiff and his wife. The record of the July 11, 1985 visit shows that the rate of food stamp redemption per the amount of food sales was higher than the average redemption rate of other stores in the area.

Between January 16, 1986 and February 8, 1986 an investigator on behalf of defendant visited plaintiff's store four times and purchased a total of thirty-three items. On the first visit the investigator purchased three nonfood items with food stamps. On the second visit he purchased three nonfood items with food stamps. Three nonfood items were purchased with food stamps on the third visit, and four nonfood items were purchased with stamps on the fourth visit. Records were kept by the investigator of each of these visits. Those records indicate that the nonfood items purchased by the investigator with food stamps included disinfectant spray, plastic spoons, bar soap, toothpaste, tissue, and coffee filters.

On July 3, 1986 defendant wrote to plaintiff and his wife and informed them of the four visits that defendant's investigator had made in January and February of that year. The letter advised plaintiff that the sale of nonfood items to the investigator in exchange for food stamps was in violation of food stamp regulations. Plaintiff was given the opportunity to respond to the charges contained in the letter.

Availing himself of that opportunity plaintiff informed defendant that the clerks who took food stamps from defendant's investigator were plaintiff's brother-in-law and sister-in-law. Plaintiff explained that the clerks had recently arrived from Korea and did not understand how to speak English. According to plaintiff his relatives were "helping out" in the store, and the problem had been "taken care of." Defendant's Exhibit 3 at 3.26.

Following plaintiff's reply to the letter charging him with regulation violations, defendant's officer in charge of the investigation of plaintiff's store prepared a case summary for defendant's regional director. The summary discussed the compliance visit of January 9, 1985 and the confirmation letter written two days later. Also noted in the summary was the excessive rate of redemption occurring at plaintiff's store and the four shopping visits made by defendant's investigator in January and February, 1986. Upon consideration of these factors and plaintiff's explanation for the improper food stamp redemptions, the officer-in-charge reached the following conclusion: "Based on FNS Handbook 318, Section 1220(F), a six-month disqualification is being recommended rather than a one-year period. It appears that the violations were due to carelessness or poor supervision." Defendant's Exhibit 3 at 3.25 (emphasis in original).

For reasons which are not apparent on the record before the court, the recommendation of the officer-in-charge was disregarded. Defendant notified plaintiff on August 26, 1986 that it was disqualifying him from participation in the food stamp program for a period of three years as a result of plaintiff's or plaintiff's employees' violations of the regulations governing the food stamp program. Plaintiff's request for a review of this decision was granted, but the decision was affirmed by way of a letter to plaintiff and his wife on December 17, 1986. The final decision to disqualify plaintiff for three years was again based on a finding by defendant that plaintiff had been adequately warned of possible violations and that plaintiff's employees had improperly accepted food stamps for nonfood items on four occasions in January and February, 1986. See Defendant's Exhibit 3 at 3.5.

As a result of defendant's December 17, 1986 decision, plaintiff brought suit against defendant in the Common Pleas Court of York County, Pennsylvania. The York County Court entered an order staying the disqualification pending the resolution of plaintiff's lawsuit. Defendant then removed the action to this court and has now moved the court for summary judgment pursuant to Fed.R.Civ.P. 56. Plaintiff asks that the court deny defendant's motion and to order that the record be supplemented so that the appropriate penalty can be determined. In the alternative plaintiff requests the court to impose a less severe sanction on plaintiff on the basis of the record as it stands. The issue which the court must address in disposing of defendant's motion is whether the disqualification of plaintiff for three years was arbitrary and capricious.

Discussion

Summary judgment will be rendered by the court if the materials of record show that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Inferences to be drawn from the facts must be viewed in the light most favorable to the opponent of the motion. Board of Education v. Pico, 457 U.S. 853, 863, 102 S.Ct. 2799, 2806, 73 L.Ed.2d 435 (1982). In the context of reviewing an administrative decision the court may consider a certified copy of the administrative record in determining whether summary judgment is appropriate. Langston v. Johnson, 478 F.2d 915, 917 (D.C.Cir.1973). In the case at bar both parties rely on the administrative record on which the defendant based its decision and which has been submitted to the court, and the veracity of the record is properly certified. Fed.R.Civ.P. 44(a). The court finds that there is no genuine issue of material fact; thus, the court must only decide whether defendant is entitled to judgment as a matter of law.

The Act of Congress which created the food stamp program is found in its amended form at 7 U.S.C. §§ 2011-2029. Regulations promulgated by defendant pursuant to authority granted for that purpose in the Food Stamp Act are contained in 7 C.F.R. Parts 271-285. The purpose of Congress in creating the food stamp program was "to safeguard the health and well-being of the Nations' population by raising the levels of nutrition among low-income households." 7 U.S.C. § 2011; 7 C.F.R. § 271.1(a). The program enables eligible households to receive coupons, or food stamps, which they may use only to purchase food from stores participating in the program. The coupons are then redeemed from the stores by defendant. 7 U.S.C. § 2013(a). "Food" is generally defined to be food or food products for home consumption, excluding alcoholic beverages and tobacco. 7 U.S.C. § 2012(g).

Participating stores which violate provisions of the Food Stamp Act or the regulations promulgated thereunder may be penalized in two ways. Defendant may disqualify the store from participation in the program or subject the store to a civil money penalty. 7 U.S.C. § 2021(a). A civil money penalty is appropriate only when disqualification of the store would cause hardship to food stamp households. Id.; 7 C.F.R. § 278.6(f). The first disqualification of a store may be imposed "... for a reasonable period of time, of no less than six months nor more than five years, ..." 7 U.S.C. § 2021(b)(1).

More specific guidelines for the disqualification of stores are provided in the regulations promulgated pursuant to the Food Stamp Act. A first-time disqualification for three years is warranted, in part, if "it is the firm's practice to commit violations such as the sale of common nonfood items in amounts normally found in a shopping basket and the firm was previously advised of the possibility that violations were occurring and of the possible consequences of violating the regulations...." 7 C.F.R. § 278.6(e)(3)(i). Shorter first-time disqualifications may be imposed in the following situations:

(4) Disqualify the firm for 1 year if it is to be the first sanction for the firm and the ownership or management personnel of the firm have committed violations such as the sale of common nonfood items in amounts normally found in a shopping basket, and FNS had not previously advised the firm of the possibility that violations were occurring and of the possible consequences of violating the regulations.

(5) Disqualify the firm for 6 months if it is to be the first sanction for the firm and the evidence shows that personnel of the firm have committed violations such as but not limited to the sale of common nonfood items due to carelessness or poor supervision by the firm's ownership or management.

7 C.F.R. § 278.6(e)(4), (5).

Congress has mandated that...