597 F.Supp.3d 537
D.R.I.2022Background
- AJ Mini Market, a convenience store in Woonsocket, RI, was placed on USDA FNS's ALERT watch list for suspicious EBT/SNAP activity based on three patterns: rapid repeat household transactions, depletion of household benefits in few transactions, and many high-dollar transactions.
- FNS conducted a site visit, reviewed transaction data for sampled households, and found 384 trafficking violations; it charged AJ Mini Market with trafficking and sought permanent disqualification.
- Owner Mr. El Hosri denied trafficking, submitted a blanket denial and a few receipts, and argued customers make large infrequent purchases and walk to the store; FNS found the receipts inconclusive and rebutted the defenses with statistical analysis.
- An Administrative Review Officer (ARO) affirmed FNS's trafficking determination after finding AJ Mini Market's explanations not credible given the transaction data, store inventory, photos, and comparisons to nearby larger stores.
- AJ Mini Market sued in federal court; the Court conducted a de novo review of the USDA's trafficking finding and reviewed the sanction for arbitrariness.
- The Court held AJ Mini Market failed to rebut the statistical evidence, found the trafficking determination valid, and upheld the mandatory permanent disqualification under applicable regulations; summary judgment for the United States was granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of USDA trafficking finding | Transactions reflect legitimate bulk shopping patterns (infrequent large purchases; walking customers); receipts show legitimate sales | ALERT statistical patterns, case analysis, store visit, inventory and nearby stores support inference of trafficking; receipts inconclusive | Court (de novo): USDA finding valid; AJ failed to submit competent evidence to rebut the data; summary judgment for government |
| Appropriateness of sanction (permanent disqualification) | Disqualification is disproportionate and vague; should be reviewed | Regulation 7 C.F.R. § 278.6(e)(1) mandates permanent disqualification for trafficking | Court: sanction not arbitrary or capricious because regulation requires permanent disqualification; sanction upheld |
Key Cases Cited
- Wilson v. Moulison N. Corp., 639 F.3d 1 (1st Cir. 2011) (summary judgment standard; view evidence favorably to nonmovant)
- Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, 637 F.3d 53 (1st Cir. 2011) (nonmovant must point to competent evidence to avoid summary judgment)
- McCarthy v. Nw. Airlines, Inc., 56 F.3d 313 (1st Cir. 1995) (same standard on opposing summary judgment)
- Ahern v. Shinseki, 629 F.3d 49 (1st Cir. 2010) (conclusory allegations and speculation insufficient to defeat summary judgment)
- Broad St. Food Mkt., Inc. v. United States, 720 F.2d 217 (1st Cir. 1983) (court reviews USDA trafficking determination de novo; sanction review for arbitrariness)
- Hajifarah v. United States, 779 F. Supp. 2d 191 (D. Me. 2011) (store bears burden to prove USDA decision invalid)
- Irobe v. U.S. Dep't of Agric., 890 F.3d 371 (1st Cir. 2018) (EBT transaction data can support a strong inference of trafficking)
- Kahin v. United States, 101 F. Supp. 2d 1299 (S.D. Cal. 2000) (retailer explanations may be insufficient to counter suspicious EBT data)