United States District Court, D. Massachusetts
RIFAT M. CHEEMA d/b/a/ CHEEMA'S SUPERMARKET Plaintiff,
UNITED STATES, Defendant.
MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT
GAIL DEIN, UNITED STATES MAGISTRATE JUDGE
matter is before the court on the defendant the United States
Department of Agriculture's (“USDA”) Motion
for Summary Judgment. (Docket No. 52). The plaintiff Rifat M.
Cheema d/b/a/ Cheema's Supermarket
(“Cheema's”) has filed this action against
the USDA in order to contest an agency ruling which found
that Cheema's likely trafficked in Supplemental Nutrition
Assistance Program benefits, and which disqualified
Cheema's from participating in that program. Cheema's
bears the burden of proving by a preponderance of the
evidence at trial that the agency's ruling was incorrect.
To survive summary judgment, Cheema's must present
credible evidence at this stage of the case on which a jury
could reasonably find for Cheema's at trial. For the
reasons herein, the court rules that Cheema's fails to
make that showing. This court, therefore, ALLOWS the
USDA's Motion and grants summary judgment in its favor.
STATEMENT OF FACTS
following facts are undisputed unless otherwise
Supplemental Nutrition Assistance Program
(“SNAP”), established through the Food Stamp Act,
7 U.S.C. § 2011, et seq., is intended “to
promote the general welfare, [and] to safeguard the health
and well-being of the Nation's population by raising the
levels of nutrition among low-income households.” 7
U.S.C. § 2011. (DF ¶ 1). SNAP is operated by the
Food and Nutrition Service (“FNS” or the
“Agency”). (Id. ¶ 2). Through SNAP,
eligible participants are allotted funds to spend on certain
food items. SNAP funds are used by beneficiaries through
electronic benefit transfer or “EBT” cards, which
are loaded monthly and operate in a similar fashion to debit
cards. (Id. ¶¶ 3-5).
cards can be used at approved stores on approved items.
(Id. ¶ 6). For example, SNAP regulations
provide that certified retail stores cannot accept EBT
benefits for particular goods including alcohol, cigarettes,
tobacco, lottery tickets, pet foods, soaps, paper products,
household supplies, vitamins, medicines, and hot prepared
foods. (Id. ¶ 15). FNS certifies stores to
participate in the program and classifies each store based on
its size and the types of goods sold. (See id.
retail store that violates SNAP regulations may be subject to
civil penalties or disqualification from the program.
(Id. ¶ 17). One such regulation is the
prohibition on retail stores from exchanging EBT benefits for
cash, which is considered trafficking. (Id.
¶¶ 18-19). Regulators monitor EBT transactions in
order to detect suspicious behavior. All EBT transactions are
recorded in a database maintained by the USDA. (Id.
¶ 21). The database records the date, time, and amount
of each transaction, and the store and household
identification numbers related to each. (Id.
¶23). The balance remaining in each beneficiary's
account is also recorded after each transaction.
(Id. ¶ 24). The database has the capacity to
produce certain reports of suspicious activity known as
“Anti-Fraud Locator using EBT Retailer Transactions,
” or “ALERT” reports. (Id. ¶
25). FNS, and its Investigative Analysis Branch, is
responsible for monitoring stores and investigating
suspicious activity. (Id. ¶¶ 31-32).
investigation results in disciplinary action by FNS,
administrative and judicial review is conducted pursuant to 7
C.F.R. §§ 278, 279. Where, as here, FNS permanently
disqualifies a store for trafficking benefits, the
disqualification is effective from the date the retailer
receives notice of the decision. 7 U.S.C. § 2023(a)(18).
A retailer may request review of a penalty from an
Administrative Review Officer (“ARO”). 7 U.S.C.
§ 2023(a)(3); 7 C.F.R. § 279.2. The ARO is then
charged with making a final agency determination. 7 U.S.C.
§ 2023(a)(5); 7 C.F.R. 279.5. Once that final
determination has been made, a retailer can seek review in
federal court. 7 U.S.C. § 2023(a)(13).
is a grocery store located in Allston, Massachusetts. (DF
¶ 39). Brothers Farhat, Nusrat, and Rifat Cheema own the
store. (Id. ¶ 41). In March of 1997,
Cheema's became authorized to accept SNAP benefits.
(Id. ¶ 42). Cheema's was approved to accept
SNAP benefits as a retail store, but not as a wholesaler.
(Id. ¶ 47). Cheema's originally was
classified as a “small grocery store” for SNAP
purposes and was later reclassified as a “combination
store/other” in 2011. (Id. ¶ 43). In
2015, based on the store's inventory and stock,
Cheema's was reclassified as a “medium grocery
store.” (Id. ¶ 53). The store is
approximately 1300 square feet, has a single cash register,
and has no scanning devices. (Id. ¶¶
44-45). Cheema's offers customers small handheld baskets
as opposed to large shopping carts. (Id. ¶ 50).
At all times, one of the Cheema brothers works the cash
register and uses a calculator to tally purchases.
(Id. ¶ 45).
claims that since the store's inception, Cheema's has
attracted loyal customers who travel long distances to shop
at the store. (Owners' Aff. ¶ 4). Cheema's
asserts that the store specializes in unique Halal meats,
much of which is sold at a significant markup. (Id.
¶¶ 4, 10). The store alleges that its customers
often buy Halal meat for an entire month at once, quickly
depleting an individual's SNAP benefits for that given
month. (Id. ¶¶ 11, 14; Customers' Aff.
¶ 6). While the store has no carts for customers,
Cheema's avers that one of the owners carries meat orders
to the checkout counter for customers and that most orders
fit within typical shopping bags. (Owners' Aff. ¶
9). Cheema's alleges that “[m]any of our customers
place orders with us over the phone, and then come in at a
later time to pick up their order. When the customers arrive,
[Cheema's] already [has] the total price of their
purchase calculated.” (Id. ¶ 12). Since
the purchases are pre-tallied, Cheema's asserts that it
is common for customers to “make purchases beyond the
meat. Oftentimes, these customers swipe their cards twice:
once for the items ordered by phone, and a second time for
the items picked up in-person.” (Id.;
Customers' Aff. ¶ 3). In order to keep track of the
large amount of phone orders placed by customers,
Cheema's avers that the brothers use a notebook, replaced
about every three months. (Pl. Mem. at 9-10 (referencing
Cheema's most recent phone book, submitted as Ex. C and
produced to the court at Docket No. 65)).
June of 2015, the USDA's ALERT system discovered suspect
transactions from Cheema's. (DF ¶ 51). Thereafter,
FNS commenced an investigation into potential trafficking.
(Id. ¶ 52). FNS began by analyzing transaction
data for Cheema's in the months of June, July, and August
of 2015. (Id.). On September 28, 2015, an FNS
contractor visited Cheema's, where he observed
Cheema's inventory and stock. (Id. ¶¶
52-53). After the store visit, Program Specialist Richard
O'Toole provided his Section Chief, Gilda Torres, an
analysis weighing Cheema's location, layout, storage
capabilities, inventory, available equipment, the
transactions tracked by the ALERT reports, and a comparison
between Cheema's transactions and those of comparable
stores. (Id. ¶¶ 54, 55).
Specialist O'Toole's report, Section Chief Torres
sent Farhat Cheema and Rifat Cheema a “Charge
Letter” explaining the investigation and charging
Cheema's with SNAP benefit trafficking. (Id.
¶¶ 56, 57). The letter informed the brothers that
the Agency was considering disqualifying Cheema's from
SNAP as a result of the alleged conduct. (Id.). The
Charge Letter detailed the suspicious transactions underlying
the decision, and grouped suspicious activity into four
categories. (Id. ¶ 58). The trafficking charge
was based on: (1) multiple transactions made too rapidly to
be credible; (2) multiple transactions made from individual
accounts in short time frames; (3) transactions where all or
most of an allotment of benefits were used in a short time
frame; and (4) unusually large transactions. (Id.).
The Charge Letter accused Cheema's of 830 individual
violations. (Id. ¶ 70). The Charge Letter
allowed for Cheema's to submit evidence combatting the
allegations. (Id. ¶ 71). Cheema's responded
with two fax submissions. (Id. ¶ 73).
responding to the allegations, Cheema's alleged that: (1)
the store was exceptionally busy during the period they were
under review because of the Muslim holy months of Ramzan and
Haj; (2) Cheema's credit card sales were more than twice
that of EBT transactions; (3) many Somali customers order by
phone and then pick up their orders in the store; (4) many
customers who swipe their EBT cards realize they have a
balance and make another transaction; (5) some of
Cheema's customers travel long distances for Cheema's
goods and buy groceries at once for the entire month; and (6)
customers often shop in groups and swipe the same card for
multiple purchases. (Id. ¶ 74; A.R. 100-101).
Cheema's also submitted credit card statements for the
months of the investigation to support their claims. (DF
submitting their objections to the allegations and associated
evidence, Mr. Rifat Cheema spoke with Specialist O'Toole
who requested copies of meat invoices and records of
telephone orders. (Id. ¶¶ 76-78).
Cheema's provided the meat invoices and, after a
subsequent request from Specialist O'Toole, also
submitted non-meat invoices for review. (Id.
¶¶ 79-81). It does not appear from the record that
Cheema's ever submitted the requested phone evidence for
review. (Id. ¶ 84). Cheema's now submits a
more recent notebook of phone orders as an example of how
Cheema's tracks phone orders and the type of volume the
store experiences. (Docket No. 65).
Agency reviewed Cheema's submitted responses and
evidence, and ultimately concluded that the
rendered explanations failed to explain the suspicious
transactions. (DF ¶ 83). Specifically, the Agency found
that the evidence did not support the proffered statement
that Cheema's received 15-20 phone orders each day, and
did not refute the Agency's conclusions that the
store's small checkout counter and lack of carts for
customers did not support the contention that large purchases
were frequently made, that the store's lack of scanners
did not support the idea that multiple large purchases could
be completed in quick succession, that the holy months did
not explain the high sales in August of 2015, that the
store's EBT transaction amounts during the holy months
matched those of other months during the year, that
Cheema's assertion that many customers traveled long
distances to pick up groceries was not credible, that the
physical storage space and observed inventory did not support
the assertion that most of Cheema's sales were of fresh
meat, and finally that Cheema's reported inventory did
not account for Cheema's actual reported sales.
(Id. ¶¶ 84-104). The Agency concluded that
it was more likely than not that Cheema's had engaged in
trafficking. (Id. ¶ 105).
April 27, 2016, FNS sent Cheema's a letter including its
decision and disqualifying Cheema's from SNAP.
(Id. ¶ 109). The plaintiff requested review of
the decision by FNS' Administrative Review Branch
(“ARB”) on May 3, 2016. (Id. ¶
113). ARO Ronald Gwinn was assigned to the case and asked the
plaintiff for information in support of Cheema's
position. (Id. ¶ 115). He informed Cheema's
that if such documentation was not provided within a
three-week period, no review would occur. (Id.).
Cheema's did not submit the requested information.
(Id. ¶ 116). ARO Gwinn reviewed the case
nonetheless and determined that it was more likely true than
not that Cheema's had engaged in trafficking.
(Id. ¶ 117). The final Agency decision affirmed
the disqualification of Cheema's from SNAP. (Id.
filed their Second Amended Complaint in federal court on
September 11, 2017. (Docket No. 23). Therein, Cheema's
sought “de novo review of the USDA's Final
Agency Determination and request[ed] that the Court reverse
the determination barring [Cheema's] from the SNAP
program as an authorized retailer.” (Id. at
3). The USDA filed the Motion for Summary Judgment on August
22, 2018. (Docket No. 52). After briefing from the parties,
the court held a hearing on the motion on December 13, 2018.
facts will be provided herein where appropriate.
Summary Judgment Standard of Review
role of summary judgment is ‘to pierce the pleadings
and to assess the proof in order to see whether there is a
genuine need for trial.'” PC Interiors, Ltd. v.
J. Tucci Constr. Co., 794 F.Supp.2d 274, 275 (D. Mass.
2011) (quoting Mesnick v. Gen. Elec. Co., 950 F.2d
816, 822 (1st Cir. 1991)) (additional citation omitted). The
burden is upon the moving party to show, based upon the
discovery and disclosed materials on file, and any
affidavits, “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a). Material facts are
those that “possess the capacity to sway the outcome
of the litigation under the applicable law[, ]” and
there is a genuine dispute where an issue “may
reasonably be resolved in favor of either party.”
Vineberg v. Bissonnette, 548 F.3d 50, 56 (1st Cir.
2008) (internal quotation and citation omitted). The court