Williamson v. Butz, 75-0017-Civ-3.

• Decision Date: 01 September 1977
• Docket Number: No. 75-0017-Civ-3.,75-0017-Civ-3.
• Citation: 438 F. Supp. 126
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: Noel T. WILLIAMSON, d/b/a Noel's Bake Shop, Plaintiff v. Earl BUTZ, Secretary of Agriculture, et al., Defendants.

438 F. Supp. 126

Noel T. WILLIAMSON, d/b/a Noel's Bake Shop, Plaintiff v. Earl BUTZ, Secretary of Agriculture, et al., Defendants.

No. 75-0017-Civ-3.

United States District Court, E. D. North Carolina, Fayetteville Division.

September 1, 1977.

Joseph B. Chambliss, Chambliss, Paderick, Warrick & Johnson, Clinton, N. C., for plaintiff.

Christine W. Dean, Asst. U. S. Atty., Raleigh, N. C., for defendants.

ORDER

DUPREE, District Judge.

This action is a challenge to a determination of the Secretary of Agriculture to withdraw authorization of plaintiff, Noel's Bake Shop, to participate as a retail store in the Food Stamp Program, 7 U.S.C. § 2011, et seq. It comes before the court on cross motions for summary judgment.¹ Plaintiff's motion for summary judgment will be denied, defendant Secretary of Agriculture's motion will be granted and the action will be dismissed.

Plaintiff, Noel T. Williamson, d/b/a Noel's Bake Shop, is the owner of a small bakery located in Clinton, North Carolina, which specializes in fancy baked goods such as pies, cakes, cookies and pastries. Plaintiff's store was originally certified on February 6, 1973 as an authorized participant in the Food Stamp Program. On December 11, 1974, plaintiff was notified that his authorization was being withdrawn because the store's participation did not effectuate the purposes of the Program. Administrative review of the proposed withdrawal of certification was requested and provided.² On March 26, 1975 the Food Stamp Review Officer issued his final decision that the action of the Food and Nutrition Service (FNS) in withdrawing authorization was appropriate. Judicial review of this administrative decision was sought and is appropriate. 7 U.S.C. § 2022.

The sole issue presented for determination is whether the Secretary acted beyond the scope of his authority in withdrawing plaintiff's authorization to participate as a "retail food store" in the Food Stamp Program. It is not disputed that the bakery items sold in Noel's Bake Shop fall within the Act's definition of "food", 7 U.S.C. § 2012(b); that the bakery falls within the Act's definition of "retail food store", 7 U.S.C. § 2012(f); or that its clients fall within the Act's definition of "household", 7 U.S.C. § 2012(e). However, it is not sufficient for program participation merely to be a "retail food store" selling "food" to "households". This court is in agreement with the opinion expressed by the Fifth Circuit in Kentucky Fried Chicken v. United States, 449 F.2d 255 (5th Cir. 1971), that the "Act makes it plain that all such definitionally qualified stores are not ipso facto admitted to the program." Id. at 257. Instead, the Secretary is authorized to formulate and administer a food stamp program and to issue regulations appropriate for the effective and efficient administration of the program. 7 U.S.C. § 2013(a) and (c). Retail food stores which desire to be authorized to accept and redeem food stamps submit applications pursuant to the Secretary's regulations and approval is to be granted to those applicants "whose participation will effectuate the purposes of the food stamp program." 7 U.S.C. § 2017(a).

Congress charged the Secretary of Agriculture to formulate a food stamp program "under which . . . eligible households . . . shall be provided with an opportunity to obtain a nutritionally adequate diet . . .." 7 U.S.C. § 2013(a). He was to issue regulations appropriate for the effective and efficient administration of the program and such regulations were to provide for submission of applications for approval by retail food stores. 7 U.S.C. § 2013(c) and § 2017(a). In determining the qualifications of applicants, he was to consider among other factors: (1) the nature and extent of the retail or wholesale food business conducted by applicant; (2) the volume of coupon business which may reasonably be expected to be conducted by applicant; and (3) the business reputation and integrity of the applicant. 7 U.S.C. § 2017(a). See also, 7 C.F.R. § 272.1(b). Finally, he was to make "all practicable efforts . . . in the administration of the food stamp program to insure that participants use their increased food purchasing power to obtain those staple foods most needed in their diets . . ." 7 U.S.C. § 2019(a).

Pursuant to the above-mentioned guidelines regulations were adopted, including 7 C.F.R. § 272.1(f) which provides in pertinent part as follows:

". . . FNS shall deny the application of any firm if it determines that such firm's participation will not effectuate the purposes of the program. FNS will not consider the participation of a retail food store as effectuating the purposes of the program unless its food sales include staple foods for home preparation which are most needed in the diets of eligible households." (Emphasis added.)

It is Regulation 272.1(f) and the revocation of certification of plaintiff's store pursuant to this regulation that is attacked by plaintiff as being arbitrary and capricious.

As noted in Kentucky Fried Chicken, supra at 256-57, the legislative history of the Act discloses that Congress dismissed as impractical the idea of designating which foods could be purchased by stamps. However, the legislative scheme as set out in 7 U.S.C. § 2013 and § 2017 gave the Secretary discretion to designate which stores could be authorized to accept food stamps. Plaintiff argues that Regulation 272.1(f) is an arbitrary exercise of regulatory power since small specialty retail stores cannot qualify under the program whereas larger retail stores can qualify. Plaintiff finds the regulation especially egregious since the very foods plaintiff sells may be purchased with food stamps in these larger retail facilities. The problem is simply that so-called "luxury" foods are not intended to be excluded from the program. Thus, although the...