Spurs v. United States, Civ. A. No. 751021.
| Decision Date | 12 January 1977 |
| Docket Number | Civ. A. No. 751021. |
| Citation | 424 F. Supp. 977 |
| Parties | James SPURS, d/b/a James Spurs Grocery v. UNITED STATES of America and United States Department of Agriculture. |
| Court | U.S. District Court — Western District of Louisiana |
Claudius E. Whitmeyer, Shreveport, La., for plaintiff.
Donald E. Walter, U. S. Atty., Lawrence L. Jones, Asst. U. S. Atty., Shreveport, La., for defendants.
Plaintiff, James Spurs, is seeking review of several administrative determinations made by the Food and Nutrition Service (FNS) which revoked licensed approval for his small, convenience type grocery to participate in the food stamp program because of several recent convictions obtained against him for selling hard liquor without a license, as well as selling it on Sundays, all in violation of State law.
Action first was commenced against plaintiff in the West Central Regional Office of FNS. Larry Rose, a food stamp review officer of the United States Department of Agriculture, approved the Regional Office's determination that rescission was proper under these circumstances. Plaintiff then brought suit here to challenge these administrative rulings.
On October 29, 1975, a stay-order was issued, temporarily staying implementation and execution of the administrative rulings until a trial on the merits could take place.
All parties filed a pre-trial stipulation on July 20, 1976. The facts are uncontested. Between November of 1971 and September of 1974, plaintiff was arrested and convicted on five occasions for selling alcoholic beverages on Sunday and for selling alcoholic beverages in his store and adjoining apartment without a license, all in violation of local laws. He has been incarcerated as well as fined as the result of these convictions.
Plaintiff argues that withdrawing his approval to participate in the food stamp program will serve as an inconvenience to his customers and ruin his business. Regarding the first argument: there are two other grocery stores within four blocks of plaintiff's establishment which are approved and do accept food stamps; they stay open twelve hours a day (slightly less convenient than plaintiff's store staying open from 6:00 A.M. to 9:00 P.M. seven days a week); most of plaintiff's food stamp customers obtain their food stamps in downtown Shreveport; and in traveling to acquire the stamps, they must pass several other grocery stores nearby, which accept food stamps.
The case came on for trial on August 13, 1976, primarily to argue the law. In the Government's effort to withdraw Spurs' approval to participate in the food stamp program, two important issues of law must be decided. First, are Spurs' convictions for violating local laws governing the sale of liquor grounds for withdrawing approval by FNS? Second, whether convictions for the liquor violations damaged his business integrity and reputation to the extent that the withdrawal was justified?
Title 7 U.S.C. § 20171 and its implementing regulation2 show that the business integrity and reputation of a retail food store owner are important in considering whether to approve him for the food stamp program; and a memorandum issued within FNS3 shows clearly that any convictions having a bearing on the business integrity or reputation of grocers are to be considered in the applicant's effort to be, or to remain, approved.
Plaintiff was entitled to a trial de novo in this Court under the terms of 7 U.S.C. § 20224 subsequent to the administrative hearings. Spurs, the allegedly aggrieved grocer, bears the burden here of proving by a clear preponderance of the evidence, that the administrative rulings should be reversed. Even if he could adduce substantial evidence that the administrative rulings were incorrect, they must stand unless he meets his burden.5
As noted, plaintiff argues that withdrawing his approval to participate in the program will ruin his business. He should have considered this risk more thoroughly before violating liquor laws. His five convictions in a period of less than three years—an average of one each seven months—convince us that plaintiff does not possess a good reputation or portray adequate business integrity to participate in the food stamp program at this time. Indeed, we are convinced from his testimony that, if permitted to continue in the food stamp program, he would continue to violate the laws, ordinances, and regulations.
Plaintiff argues that his convictions do not make him unfit to participate. He points to the fact that he has had no further convictions since 1974; but, in doing so, he overlooks the seriousness of each conviction and the pattern of behavior these successive convictions portray. Moreover, the convictions stemmed from his grocery business, the same endeavor in which plaintiff would be handling food stamps. From all we can glean, he probably accepted food stamps in payment for his illicit liquor sales. He admitted he had been "bootlegging" for years.
Plaintiff further argues that he had one conviction before he was approved for the program, there was no place on the application requiring him to reveal his conviction, and there should be a duty explicitly to warn grocery owners against doing something which would jeopardize their approval to participate in the program. FNS was justified in not having a blank on the application to show plaintiff's prior conviction. The officials may assume an applicant has no previous criminal record and then revoke approval if it later is discovered that the applicant had a criminal business record. Spurs had no right to ignore a conviction merely because he was not required to reveal it earlier.
Plaintiff also has no right to be warned that his approval to participate in the program is affected by his convictions. He is responsible for his actions, and he should have realized that his business and personal reputation might be questioned by convictions. In short, the fate of his approval rests in his own hands; we will not burden FNS officials with expressly warning him before taking action.
We commend FNS for acting here to strengthen the food stamp program. Public confidence in the program will dwindle, even disintegrate, if the existing laws and regulations are not enforced. Accordingly, although this is a matter of first impression —the first action in which FNS seeks to revoke a grocer's approval due to convictions unrelated to the transfer of food stamps—we hold that FNS acted squarely within the clear congressional import and intent of valid statutes and regulations governing food stamp program standards. Therefore, we are firmly of the view that approval justifiably was withdrawn by alert FNS officials.
FNS did not seek to disqualify Spurs under 7 CFR § 272.6.6 Instead, it withdrew approval under 7 CFR § 272.1, supra. A disqualification is limited to a maximum of three years, but it is designed to punish grocers who fail to keep adequate records, who accept stamps for non-food items, and other similar infractions. Neither the statute7 nor the regulation8 dealing with disqualifications mentions or implies anything concerning reputation or general business integrity. Instead, disqualification deals with infractions unrelated to the approval requirements. On the other hand, both the statute9 and the regulation10 dealing with approval expressly mention "business integrity" and "reputation" of the grocer.
To make the distinction, then, one can be disapproved when he lacks such things as business integrity and reputation, while he can be disqualified when, though earlier approved, he commits an infraction such as selling non-food items for stamps. Approval is not a single, final determination made at the outset of the grocer's participation, rather, it is a continuing requirement—one which the law permits to be withdrawn at any time for good cause, which here clearly has been proven to the hilt.
Consequently, we affirm the administrative withdrawal of Spurs' approval, and he must henceforth reapply and be reapproved in order to participate in the food stamp program. He can be reapproved after meeting the other requirements of 7 U.S.C. § 2017, if, but only if, he can show convincingly the negative reflection on his business integrity and reputation caused by his convictions no longer exists. Of course, this must be done administratively, not in a Court action.
Consequently, our stay-order issued herein on October 29, 1975, hereby is recalled and rescinded. Government counsel should submit a decree in accordance herewith for our signature within five days of this ruling.
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Bush v. United States, Civ. A. No. 79-1636.
...authorization on the basis of a factual finding that he no longer qualifies for participation in the Program. See Spurs v. United States, 424 F.Supp. 977 (W.D.La. 1977); see also Webb v. Berglund, C.A.No. 79-637 (E.D.Pa., May 30, 1979); Williamson v. Butz, 438 F.Supp. 126 (E.D.N.C.1977); Ca......