Pitkin Supermarket, Inc. v. U.S. & Hon. Tom Vilsack
| Decision Date | 21 November 2016 |
| Docket Number | 14-CV-1943 (CBA) (JO) |
| Parties | PITKIN SUPERMARKET, INC, Plaintiff, v. UNITED STATES OF AMERICA and HON. TOM VILSACK, Secretary of Agriculture, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
NOT FOR PUBLICATION
Plaintiff Pitkin Supermarket, Inc. ("Pitkin") brings this action against the United States1 pursuant to the Food Stamp Act, 7 U.S.C. § 2023(a)(13),2 and the Fifth and Sixth Amendments to the United States Constitution. Pitkin challenges an administrative decision by the Food and Nutrition Service ("FNS") of the United States Department of Agriculture ("USDA") permanently disqualifying it from accepting benefits from the Supplemental Nutrition Assistance Program ("SNAP" or "the Program"). Pitkin seeks review of the USDA's decision to remove it from SNAP and a declaratory judgment finding that the procedures used to remove it from SNAP are unconstitutional. (D.E. # 1 ("Compl") ¶¶ 10-14, 18.) The United States moves for summary judgment on, or dismissal of, all of the claims. For the reasons stated below, the case is dismissed.
SNAP is a federal program, administered by the FNS under the auspices of the USDA, "designed to promote the general welfare and to safeguard the health and well being of the Nation'spopulation by raising the levels of nutrition among low-income households." (Def. 56.1 ¶¶ 1-2 (quoting 7 C.F.R. § 271.1).) Under the Program, eligible households receive coupons, which they can exchange for certain food items at authorized stores. (See id. ¶ 5.) For their part, "[r]etail and wholesale food stores" must seek "authorization to accept and redeem SNAP benefits." (Id. ¶ 3.)
The failure of an authorized store to comply with SNAP regulations may result in fines or disqualification from the Program. (Id. ¶ 4.) For example, stores whose personnel engage in "trafficking" of Program benefits, as defined in 7 C.F.R. § 271.2, shall be permanently disqualified from accepting and redeeming SNAP coupons. (Id. ¶ 8 (citing 7 C.F.R. § 278.6(e)(1)(i)) Even a single instance of trafficking triggers permanent disqualification, (id. ¶ 9 (citing 7 U.S.C. § 2021)), except in limited cases where the store demonstrates that it should have to pay a civil money penalty instead, (id. ¶ 10). "Trafficking" encompasses "[t]he buying, selling, stealing, or otherwise effecting exchange of SNAP benefits . . . for cash." (Id. 17 (quoting 7 C.F.R. § 271.2) (alterations in original).)4
In October of 2011, Pitkin became an authorized SNAP vender. (Id. ¶ 17.) According to the government, an unidentified agent operating under the supervision of the USDA visited Pitkin several times between August 26, 2013, and September 11, 2013. (Id. ¶ 18). The government claims that the agent recorded multiple transactions that violated SNAP regulations—three or four involving the exchange of SNAP coupons for ineligible, non-food items, and two involving theexchange of SNAP coupons for cash. (Id. ¶¶ 20-26.) The agent provided a description of the clerk who allegedly processed all of the transactions in question, identifying him as a male of 30 to 35 years of age, who is between 5'7" and 5'10", weighing between 175 and 185 pounds. (Id. ¶ 28.)
Pitkin claims that no one fitting that description worked the register at the store during the relevant time. (Pl. 56.1 ¶ 11.) Without pointing to facts in the record, Pitkin also disputes that an agent visited several times during the span identified by the government, (id. ¶ 3), and further disputes the occurrence of most of the allegedly improper transactions, (see id. ¶¶ 5-10). Originally, Pitkin did not dispute the United States' claim that, on September 11, 2013, it "accepted SNAP benefits in exchange for $20.00 in cash." (Def. 56.1 ¶ 26; see also generally Pl. 56.1.) After this omission was pointed out at oral argument, (Jan. 13, 2016, Hr'g Tr. 3:16-5:1), Pitkin appears to have attempted to dispute that transaction in a subsequent affidavit submitted by its president, MD Sohidul Islam, (D.E. # 26 ("Supp. Aff.") ¶ 2).5
On October 30, 2013, Pitkin received a "Charge Letter" from the Retail Operations Division ("Retail Operations") of FNS that notified Pitkin of the problematic transactions. (Def. 56.1 ¶¶ 31-32). The Charge Letter was accompanied by a copy of the USDA's Investigation Report, (id. ¶ 33), and gave Pitkin 10 calendar days (from October 30, 2013, the date of receipt) to supply FNS with the documentation necessary to replace permanent disqualification from SNAP with a monetary penalty. (Id.) On November 4, 2013, Pitkin's counsel scheduled a meeting with Retail Operations for November 7. (Id. ¶ 34.) Pitkin twice postponed that meeting, ultimately delaying it until November 19, 2013. (See id. ¶¶ 35-39.)
At the meeting on November 19, Pitkin indicated that it would appeal any decision permanently disqualifying it from the Program. (Id. ¶ 40.) Pitkin claimed that there had been no SNAP violations, that no clerk at the store matched the description given in the Investigation Report, and that it was willing to provide photographs of all store clerks. (Id. ¶¶ 40-41.) Pitkin argued it should have the chance to confront the agent to assess his or her credibility. (Id. ¶ 54.) Retail Operations declined the photos once it became clear that Pitkin was not offering video from inside the store on the days of the relevant transactions. (Id. ¶¶ 42-43.) Retail Operations also informed Pitkin that the penalty for trafficking is permanent disqualification. (Id. ¶ 45.)
On November 20, 2013, the day after the meeting, Retail Operations sent Pitkin a "Determination Letter" permanently disqualifying it from SNAP. (Id. ¶ 49.) As of that date, FNS had not received a request from Pitkin for a monetary penalty instead of disqualification. (Id. ¶ 47.) Additionally, as of that date, the United States claims that Pitkin had submitted no evidence that it would have qualified for an alternative penalty, (id. ¶ 48), although Pitkin disputes this particular point, (id. ¶ 48).6
The Determination Letter arrived—and its announcement of Pitkin's permanent disqualification became effective—on November 22, 2013. (Id. ¶ 51.) In the letter, FNS noted its finding that trafficking violations had occurred at Pitkin, and that Pitkin failed to demonstrate that it met the criteria for a monetary penalty in lieu of disqualification. (Id. ¶ 52.) On November 29, 2013, Pitkin requested administrative review of the FNS determination by the USDA Administrative Review Branch of the Benefit Redemption Division ("ARB"). (Id. ¶ 53.) Pitkin argued that the Determination Letter neglected to address Pitkin's request to confront theunidentified agent who documented the violations, and Pitkin asserted constitutional violations as a result. (Id. ¶¶ 54-55.) Pitkin also asked for a stay of the disqualification. (Id. ¶ 56.)
On December 4, 2013, ARB sent a letter to Pitkin's counsel, which arrived on December 5. (Id. ¶¶ 57, 59.) The letter acknowledged receipt of Pitkin's request for an administrative review of the disqualification decision, (id. ¶ 57), and informed Pitkin that it should submit any further information that might be relevant for the review, (id. ¶ 58). The letter also notified Pitkin that it was not entitled to a stay of the disqualification. (Id.) On January 15, 2014, ARB received an email from Pitkin's counsel, noting that Pitkin would not be submitting any additional information and that it sought a "prompt final determination" so that it could move on to seek review of the disqualification decision in court. (Id. ¶¶ 60-61.)
On February 24, 2014, the ARB sent out its Final Agency Decision ("FAD"), "which sustained the permanent disqualification," (id. ¶ 62), and which Pitkin received on February 26, 2014, (id. ¶¶ 68-69). The FAD highlighted "three separate occasions" where Pitkin "sold expensive and conspicuously ineligible items . . . in exchange for SNAP benefits" and "two occasions" where Pitkin "accepted SNAP benefits in exchange for cash." (Id. ¶ 63.) It found the latter two instances to constitute SNAP benefit trafficking. (Id.) The FAD also indicated that transaction data received from Pitkin helped confirm these findings because the dates and amounts listed aligned exactly with the information recorded in the Investigation Report. (Id. ¶ 64.) The FAD did not credit Pitkin's argument that none of its clerks matched the agent's description in the Investigation Report, noting that such a description "is aimed to be general." (Id. ¶ 65.)
Pitkin filed the instant action on March 26, 2014. (Compl. at 1.) A new corporation that was registered with the New York State Department of State on January 28, 2014, now occupies the address where Pitkin operated. (Def. 56.1 ¶¶ 70-72.) That company, Asian Super Market andHalal Meat, Inc., is an authorized SNAP provider.7 (Id. ¶¶ 70, 73.) Pitkin appears to persist as a corporate entity, (D.E. # 16 ("Pl. Opp.") at 2), but without the store at which the violations allegedly took place. Before oral argument, Pitkin expressed no intention to open another store that would seek to accept SNAP benefits, noting only that "if vindicated, plaintiff can consider opening another market." (Id.) The supplemental affidavit submitted by Islam states further that, if he can pay off $70,000 in debt, "[he] desperately want[s] to go back into business and open a similar store." (Supp. Aff. ¶¶ 5-6.) Islam acknowledges, however, that he does not know "whether or not [he] will still be able to use the Pitkin Corporation at that time." (Id. ¶ 6.) Islam also does not specify whether he would seek to enroll a new store in SNAP. (See id.)
On May 18, 2015, the United States filed a motion to dismiss Pitkin's complaint and for summary judgment. (D.E.# 19.) In advance of the oral argument, on December 9, 2015, the Court directed both sides to submit supplemental briefing on redressability by December 11. (D.E. # 22 at 1-2.) Defenda...
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