United States District Court, D. Massachusetts
DOAA S. MADI and HMA, INC. Plaintiffs
UNITED STATES OF AMERICA, Defendant
MEMORANDUM OF DECISION AND ORDER REGARDING
DEFENDANT'S MOTION TO AFFIRM THE DECISION OF THE USDA
(Dkt. No. 47)
KATHERINE A. ROBERTSON UNITED STATES MAGISTRATE JUDGE.
Doaa S. Madi (“Ms. Madi) and HMA, Inc.
(“HMA”) (“Plaintiffs”), owned and
operated a grocery store conducting business as El Safi at
532 Main Street in West Springfield, Massachusetts.
Plaintiffs commenced this action, pursuant to 7 U.S.C. §
2023(a)(13) and the Administrative Procedures Act, 5 U.S.C.
§ 702, seeking judicial review of the denial of the
store's application to participate in the Supplemental
Nutrition Program (“SNAP”). The Food and
Nutrition Service (“FNS”) of the United States
Department of Agriculture (“USDA”)
(“Defendant” or “the government”)
denied Plaintiffs' application to participate in SNAP
based on its determination that Plaintiffs' application
was an attempt to circumvent El Safi's permanent
disqualification from SNAP participation when it was owned
and operated by Ms. Madi's husband, Ashraf M. Galal
(“Mr. Galal”). Plaintiffs claim that (1) denial
of the application was unsupported by a preponderance of the
evidence and should be set aside pursuant to 7 U.S.C. §
2023(a)(13), and (2) the imposition of a three-year bar from
applying to participate in SNAP was arbitrary and capricious.
The government moves for summary judgment dismissing the
complaint in its entirety (Dkt. No. 47). Plaintiffs object
(Dkt. No. 52). The parties have consented to this court's
jurisdiction. See 28 U.S.C. § 636(c) and
Fed.R.Civ.P. 73. For the reasons that follow, the court
grants Defendant's motion for summary judgment.
Statutes and Regulations
overview of the applicable statutory and regulatory scheme
provides a framework for the court's decision. SNAP was
established under the Food Stamp Act of 1964, 7 U.S.C.
§§ 2011-2036, and is operated by the FNS. See
Rockland Convenience Store v. United States, Civil No.
10-260-LM, 2011 WL 5120410, at *1 (D.N.H. Oct. 27, 2011).
“Congress established SNAP ‘to safeguard the
health and well-being of the Nation's population by
raising levels of nutrition among low-income
households.'” Irobe v. U.S. Dep't of
Agric., 890 F.3d 371, 375 (1st Cir. 2018) (quoting 7
U.S.C. § 2011). “SNAP benefits are provided to
eligible households by means of electronic benefit transfer
(‘EBT') cards.” Rockland Convenience
Store, 2011 WL 5120410, at *1; see also 7
U.S.C. §§ 2012(i), 2016(a). SNAP “utilizes
plastic cards which are ‘swiped' at the cash
register like a credit [or debit] card.”
McClain's Mkt. v. United States, 411 F.Supp.2d
772, 773 n.2 (N.D. Ohio 2005). After a SNAP participant
purchases eligible food at an authorized store by using his
or her EBT card, funds are electronically transferred from
the purchaser's account to the store's bank account.
See Irobe, 890 F.3d at 375.
in SNAP benefits is unlawful.” Id. (citing 7
C.F.R. § 278.2(a)). See 7 U.S.C. §
2021(a)(1), (b)(3)(B). “[A] store engages in
trafficking by accepting SNAP benefits in exchange for cash
or other proscribed items.” Irobe, 890 F.3d at
375 (citing 7 C.F.R. § 271.2). “For instance, a
store traffics when it ‘accept[s] food stamps for sales
that never took place,' allowing its customers to receive
‘cash rather than merchandise'” Id.
(quoting Idias v. United States, 359 F.3d 695,
698-99 (4th Cir. 2004)).
retailer operations division of the FNS determines that a
store has engaged in trafficking, the store is permitted to
pursue an appeal to an administrative review officer
(“ARO”). See 7 U.S.C. § 2023(a)(3);
7 C.F.R. §§ 279.1(a)(2), 279.5. An ARO's final
determination that the store engaged in trafficking permits
the USDA to “impose a lifetime program-participation
ban on ‘the first occasion or any subsequent
occasion' of trafficking.” Irobe, 890 F.3d
at 376 (quoting 7 U.S.C. §§ 2021(b)(3)(B),
2023(a)(5); 7 C.F.R. §§ 278.6, 279.5). In certain
circumstances, the agency may impose civil monetary penalties
instead of a ban. See 7 U.S.C. § 2021(b)(3)(B);
7 C.F.R. § 278.6. The store has the right to appeal the
agency's final decision to a federal district court.
See 7 U.S.C. § 2023(a)(13), (15).
order to participate in SNAP, a store is required to submit
an application to the FNS. See 7 C.F.R. §
278.1(a). The FNS has a particular policy for review of
applications from retailers designated as being high risk
“due to any previous permanent
disqualification occurring at [the retailer's] location
or in a nearby location” (Dkt. No. 48-1 at 6). A
designated high risk store's applicant is required to
submit additional information to “ensure there are no
ties to the previously disqualified owner's name, home,
address, phone number, etc.” (id.). The
supplemental information includes personal tax returns for
the most recent filing year and “[a] notarized
affidavit from the new owner(s) stating that they are not
connected with the previously disqualified owner(s)”
(id.). If the FNS determines that there is evidence
that a store is attempting to “circumvent a period of
disqualification, ” it must deny the application on the
grounds that the store “lack[s] the necessary business
integrity and reputation to further the purposes of the
[SNAP].” 7 C.F.R. § 278.1(k)(3)(iii). A retailer
whose application is denied for this reason cannot be
authorized to participate in SNAP for three years from the
effective date of the denial. Id. The store can
request review of the denial of its application by an ARO.
See 7 C.F.R. §§ 279.1(a)(1), 279.5. The
ARO's decision to sustain the denial may be appealed to a
federal district court. See 7 U.S.C. §
Plaintiffs applied to participate in SNAP, Ms. Madi was the
sole owner of HMA, which operated El Safi at 532 Main Street
in West Springfield (Administrative Record “A.R.”
at 3). Previously, Mr. Galal, Ms. Madi's husband, owned
and operated the El Safi Supermarket at the same location
(id. at 818). On April 1, 2014, the FNS determined
that El Safi had trafficked in SNAP benefits (id. at
819, 835-36). Consequently, Mr. Galal and El Safi were
permanently disqualified from participating in the program
(id. at 18). Mr. Galal requested administrative
review of the FNS's decision (id. at 818-36).
After review, the ARO sustained the disqualification and
penalty (id.). Mr. Galal did not appeal the
ARO's decision to a federal district court (id.
at 72, 836).
than one year later, on April 3, 2015, Ms. Madi incorporated
HMA (id. at 1). Plaintiffs continued to operate the
store under the same name, “El Safi”, at the same
location in West Springfield (id. at 22, 72). They
submitted an application to the FNS for authorization for El
Safi to participate in SNAP on April 21, 2015 (id.
at 1-8). The FNS requested additional information because the
store was operating at a location where there had been a SNAP
violation (id. at 15-17). Ms. Madi provided an
affidavit indicating that “[o]ne or more owners or
managers of this firm are related by birth or marriage to an
owner or manager of a firm that is or has been disqualified
from SNAP or WIC” (id. at 17). She reported
that Mr. Galal was her husband (id. at 18). The
joint tax return of Mr. Galal and Ms. Madi for the year of
2014 showed that their only income was derived from the
operation of El Safi (id. at 51, 53).
August 14, 2015, the FNS's operations division notified
Plaintiffs that it was denying their application to
participate as an authorized retail food store in SNAP
because the application constituted an attempt to avoid or
circumvent the permanent disqualification of Ms. Madi's
husband, Mr. Galal (id. ...