Nephew Mini Market, LLC. v. United States

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

NEPHEW MINI MARKET, LLC, et

al.,

Plaintiffs,

Civil Action No. ELH-21-2318

v.

UNITED STATES OF AMERICA,

Defendant.

MEMORANDUM OPINION

This case arises under the Supplemental Nutrition Assistance Program (“SNAP” or the

“Program”). It concerns the penalty of permanent disqualification imposed on plaintiff Nephew

Mini Market, LLC (“Mini Market” or the “Store”), a SNAP retailer, because of two “trafficking”

violations.

SNAP was established pursuant to the Food Stamp Act of 1964, as amended, 7 U.S.C.

§ 2011 et seq. (the “Act”). It is administered by the Food and Nutrition Service (“FNS” or the

“Agency”), which is part of the U.S. Department of Agriculture (“USDA”). See 7 C.F.R.

§ 271.3.1 FNS determined that the Store engaged in the trafficking of SNAP benefits when

Nadeem Asghar, the owner of the Store, exchanged benefits for cash on two occasions in one

day. See ECF 17-2 at 89-107. Although plaintiffs sought a civil money penalty (“CMP”), FNS

determined to permanently disqualify the Store from participation in the Program. See 7 U.S.C.

§ 2021(a); 7 C.F.R. § 278.6; see also ECF 17-2 at 192-94 (Determination Letter). Plaintiffs

sought administrative review of that decision. ECF 17-2 at 197-98. However, in a Final Agency

1 The Program was originally referred to as the “Food Stamp Program.” See the Food

Stamp Act of 1964, H.R. 10222, 88th Cong. § 3(k) (1964). In 2008, Congress replaced the

“Food Stamp Program” with the “Supplemental Nutrition Assistance Program.” See Food,

Conservation, and Energy Act of 2008, H.R. 6124, 110th Cong. § 4001 (2008).

Decision (“FAD”) issued on January 29, 2021, the Agency upheld the disqualification. See id. at

201.

Thereafter, Mini Market and Asghar filed suit against the United States (the

“Government”) in the Circuit Court for Baltimore City, seeking judicial review of the FAD.

ECF 4 (the “Complaint”); ECF 1-5 (same). Specifically, plaintiffs challenged whether “a

trafficking offense occurred” as well as the appropriateness of the “penalty issued by the USDA”

regarding the Store’s “eligibility for and amount of any CMP.” ECF 4, ⁋⁋ 14-16. The

Complaint was accompanied by five exhibits. ECF 1-6 through ECF 1-10.

The Government removed the case to this Court, pursuant to 28 U.S.C. §§ 1441, 1442,

and 1446. ECF 1 (the “Notice”). Thereafter, defendant moved to dismiss the Complaint for lack

of subject matter jurisdiction, under Fed. R. Civ. P. 12(b)(1), and for failure to state a claim

pursuant to Fed. R. Civ. P. 12(b)(6) or, in the alternative, for summary judgment. ECF 15. The

motion is supported by a memorandum. ECF 15-1 (collectively with ECF 15, the “Motion”).

The Government has submitted a copy of “the administrative appeal record.” See ECF 17-2 (the

“Record”); see also ECF 17-1 (Declaration of Vicky Robinson, Chief, Administrative Review

Branch).2

Plaintiffs oppose the Motion (ECF 20), supported by a memorandum. ECF 20-1

(collectively, the “Opposition”), and one exhibit. ECF 20-2. And, the Government has replied

(ECF 25, the “Reply”), accompanied by two exhibits. ECF 25-1; ECF 25-2.

No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons

that follow, I shall dismiss the suit for lack of subject matter jurisdiction. To the extent the Court

2 The Record is labeled “Redacted Administrative Record.”

has jurisdiction, however, I shall construe the Motion as one for summary judgment and I shall

grant it.

I. Factual Background

A. SNAP

SNAP was enacted “to promote the general welfare, 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. To achieve that mission, SNAP provides qualifying individuals

and families with supplemental funds to purchase eligible items from approved retailers. Id. §§

2013, 2018; 7 C.F.R. § 278.1.

Beneficiaries of SNAP are provided with benefits by way of an Electronic Benefits

Transfer (“EBT”) card. See 7 U.S.C. § 2016(j)(1)(A). The EBT card operates like a debit card.

But, it may only be used to buy designated food items from authorized SNAP retailers. Id. §

2013(a); see also 7 C.F.R. § 271.2 (defining “eligible foods” as, in pertinent part, “[a]ny food or

food product intended for human consumption except alcoholic beverages, tobacco, and hot

foods and hot food products prepared for immediate consumption”); 7 U.S.C. § 2018 (“Approval

of Retail Food Stores and Wholesale Food Concerns”); 7 C.F.R. § 278.1 (same).

Notably, “trafficking” in SNAP benefits is prohibited. See 7 U.S.C. § 2021(b)(3)(B); 7

C.F.R. § 278.6(e)(1)(i). “Trafficking” is defined, in pertinent part, as “buying, selling, stealing

or otherwise effecting an exchange of SNAP benefits issued and accessed” via EBT cards “for

cash or consideration other than eligible food, either directly, indirectly, in complicity or

collusion with others, or acting alone.” 7 C.F.R. § 271.2.

Periodically, FNS reviews authorized retailers and may disqualify an approved retail

store that violates the Act or its implementing regulations. In particular, 7 U.S.C. § 2021(a)

provides (bold in original):

(a) Disqualification

(1) In general

An approved retail food store or wholesale food concern that violates a

provision of this chapter or a regulation under this chapter may be –

(A) disqualified for a specified period of time from further participation in

the supplemental nutrition assistance program;

(B) assessed a civil penalty of up to $100,000 for each violation; or

(C) both.

(2) Regulations

Regulations promulgated under this chapter shall provide criteria for the

finding of a violation of, the suspension or disqualification of and the

assessment of a civil penalty against a retail food store or wholesale food

concern on the basis of evidence that may include facts established

through on-site investigations, inconsistent redemption data, or evidence

obtained through a transaction report under an electronic benefit transfer

system.

SNAP regulations require FNS to consider three factors in making a disqualification or

penalty determination: “(1) The nature and scope of the violations committed by personnel of the

firm, (2) Any prior action taken by FNS to warn the firm about the possibility that violations are

occurring, and (3) Any other evidence that shows the firm’s intent to violate the regulations.” 7

C.F.R. § 278.6(d). However, when it comes to trafficking, the Agency’s discretion, and its

consideration of these factors, is sharply circumscribed.

Originally, the Food Stamp Act of 1964 left the issue of disqualification for trafficking

violations to the discretion of the Secretary of USDA (the “Secretary”). See Corder v. United

States, 107 F.3d 595 (8th Cir. 1997) (discussing statutory history of Food Stamp Program);

Ghattas v. United States, 40 F.3d 281, 283-84 (8th Cir. 1994) (same); Ahmed v. United States, 47

F. Supp. 2d 389, 393 (W.D.N.Y. 1999) (same). From 1982 to 1988 the Act precluded the

exercise of any discretion and mandated permanent disqualification for trafficking violations.

See Castillo v. United States, 989 F. Supp. 413, 417 (D. Conn. 1997). In 1988 Congress

amended the statute, conferring discretion on the Secretary to impose a monetary penalty in lieu

of permanent disqualification, but only under certain circumstances. See Hunger Prevention Act

of 1988, S. 2560, 100th Cong. § 344, 102 Stat. 1645, 1664 (1988); Ahmed, 47 F. Supp. 2d at

391.3

Section 2021(b)(3)(B) of 7 U.S.C. provides:

[D]isqualification . . . shall be . . . (3) permanent upon . . . (B) the first occasion or

any subsequent occasion of a disqualification based on the purchase of coupons or

trafficking in coupons . . . except that the Secretary shall have the discretion to

impose a civil penalty of up to $20,000 for each violation . . . in lieu of

disqualification under this subparagraph, . . . if the Secretary determines that there

is substantial evidence that such store or food concern had an effective policy and

program in effect to prevent violations of the chapter and the regulations,

including evidence that—

(i) the ownership of the store or food concern was not aware of, did not

approve of, did not benefit from, and was not involved in the conduct of the

violation; and

(ii)(I) the management of the store or food concern was not aware of, did

not approve of, did not benefit from, and was not involved in the conduct of

the violation; or

(II) the management was aware of, approved of, benefited from, or was

involved in the conduct of no more than 1 previous violation by the store or

food concern[.]

3 The Secretary’s functions have been delegated to FNS. See 7 C.F.R. § 271.3.

The legislative history pertinent to § 2021(b) addressed the reasons for the inclusion of

the civil money penalty as a possible sanction. H.R. Rep. No. 100-828, pt. 1, at 27–28 (1988)

states (emphasis added):

The permanent disqualification of retail food stores upon the first trafficking

offense—without any evaluation of preventive measures taken or complicity in the

trafficking—seems excessively harsh. The Committee substitute gives the

Secretary of Agriculture the discretion to impose a fine of up to $20,000 on a

retail or wholesale food store instead of disqualification. The Secretary may

exercise that discretion—if it is determined that there is substantial evidence that

the store had an effective policy and program to prevent these violations of the

Food Stamp Act.

Examples of an effective policy and program to prevent violations of the Act or

regulations by a store or concern might include the following: (i) effective written

policies and procedures to be followed by store personnel that are consistently

applied by management; (ii) initial training of store managers and employees in

the proper handling of food stamps; (iii) periodic oversight and continuing

education of store personnel in the proper handling of food stamps; and (iv) other

reasonable and good faith efforts that demonstrate the existence of an effective

policy and program by the store or concern to prevent violations of the act or

regulations.

A retail food store or wholesale food concern which has an effective policy and

program to prevent trafficking should not be presumptively disqualified from

participation in the Food Stamp Program due to the unauthorized or expressly

prohibited acts of store personnel . . . .

However, innocent persons should not be subject to the harsh penalty of

disqualification where a store or concern has undertaken and implemented an

effective program and policy to prevent violations. The Secretary of Agriculture

is directed to promulgate regulations consistent with the described amendment

. . . .

This provision provides [the Secretary with discretion]. The Act will retain strict

penalties—fines can be imposed as well as disqualification from participation in

the food stamp program. With Secretarial discretion, we can be assured that the

punishment will more closely fit the crime.

The regulations implementing the Program are also pertinent. As a general matter, the

SNAP regulations provide that FNS may elect to send a warning letter “if violations are too

limited to warrant a disqualification.” 7 C.F.R. § 287.6(e)(7). Nevertheless, such an option does

not apply in the context of trafficking. See 7 U.S.C. § 2023(b)(3)(B); 7 C.F.R. § 278.6(e)(1)(i);

Idias, 359 F.3d at 697 (“[A] store that is caught trafficking in food stamps even one time must be

permanently disqualified from the Food Stamp Program, unless the Secretary of Agriculture

determines that the store had in place an effective anti-trafficking policy.”).

The SNAP regulations provide that FNS “shall . . . [d]isqualify a firm permanently if: (i)

Personnel of the firm have trafficked as defined in [7 C.F.R.] § 271.2 . . . .” 7 C.F.R. §

278.6(e)(1)(i). A disqualification “shall result from a finding of a violation on the basis of

evidence that may include facts established through on-site investigations, inconsistent

redemption data, [or] evidence obtained through a transaction report under an electronic benefit

transfer system . . . .” 7 C.F.R. § 278.6(a); see 7 U.S.C. § 2021(a)(2); AJS Petroleum, Inc. v.

United States, L-11-1085, 2012 WL 683538, at *1 (D. Md. Mar. 1, 2011). But, of relevance

here, even if an authorized retailer is found to have trafficked in benefits, disqualification is not

the only sanction. In lieu of permanent disqualification, the FNS may impose a civil money

penalty, so long as it acts “in accordance with the provisions of § 278.6(i) and § 278.6(j).” 7

C.F.R. § 278.6(a).

To qualify for a CMP, however, the retailer must request this alternative penalty within

ten days of receipt of the charge letter from FNS. See 7 C.F.R. § 278.6(b)(2)(iii). In addition,

the retailer must submit “substantial evidence” showing that the retailer meets multiple criteria.

See Idias v. United States, 359 F.3d 695, 697 (4th Cir. 2004).

The regulatory criteria are as follows, 7 C.F.R. § 278.6(i):

Criterion 1. The firm shall have developed an effective compliance policy as

specified in § 278.6(i)(1); and

Criterion 2. The firm shall establish that both its compliance policy and program

were in operation at the location where the violation(s) occurred prior to the

occurrence of violations cited in the charge letter sent to the firm; and

Criterion 3. The firm had developed and instituted an effective personnel training

program as specified in § 278.6(i)(2); and

Criterion 4. Firm ownership was not aware of, did not approve, did not benefit

from, or was not in any way involved in the conduct or approval of trafficking

violations; or it is only the first occasion in which a member of firm management

was aware of, approved, benefited from, or was involved in the conduct of any

trafficking violations by the firm.

“All four of these criteria must be satisfied [by substantial evidence] in order to impose a

[CMP].” Castillo, 989 F. Supp. at 418. Moreover, 7 C.F.R. § 278.6(i) provides additional detail

as to Criterion 1 and Criterion 3. Regarding Criterion 1, 7 C.F.R. § 278.6(i)(1) states:

(1) Compliance policy standards. As specified in Criterion 1 above, in determining

whether a firm has established an effective policy to prevent violations, FNS shall

consider written and dated statements of firm policy which reflect a commitment

to ensure that the firm is operated in a manner consistent with this part 278 of

current FSP regulations and current FSP policy on the proper acceptance and

handling of food coupons. As required by Criterion 2, such policy statements

shall be considered only if documentation is supplied which establishes that the

policy statements were provided to the violating employee(s) prior to the

commission of the violation. In addition, in evaluating the effectiveness of the

firm's policy and program to ensure FSP compliance and to prevent FSP

violations, FNS may consider the following:

(i) Documentation reflecting the development and/or operation of a

policy to terminate the employment of any firm employee found

violating FSP regulations;

(ii) Documentation of the development and/or continued operation of

firm policy and procedures resulting in appropriate corrective action

following complaints of FSP violations or irregularities committed by

firm personnel;

(iii) Documentation of the development and/or continued operation of

procedures for internal review of firm employees' compliance with

FSP regulations;

(iv) The nature and scope of the violations charged against the firm;

(v) Any record of previous firm violations under the same ownership;

and

(vi) Any other information the firm may present to FNS for consideration.

As for Criterion 3, 7 C.F.R. § 278.6(i)(2) provides:

(2) Compliance training program standards. As prescribed in Criterion 3 above, the

firm shall have developed and implemented an effective training program for all

managers and employees on the acceptance and handling of food coupons in

accordance with this part 278. A firm which seeks a civil money penalty in lieu

of a permanent disqualification shall document its training activity by submitting

to FNS its dated training curricula and records of dates training sessions were

conducted; a record of dates of employment of firm personnel; and

contemporaneous documentation of the participation of the violating employee(s)

in initial and any follow-up training held prior to the violation(s). FNS shall

consider a training program effective if it meets or is otherwise equivalent to the

following standards:

(i) Training for all managers and employees whose work brings them into

contact with SNAP benefits or who are assigned to a location where

SNAP benefits are accepted, handled or processed shall be conducted

within one month of the institution of the compliance policy under

Criterion 1 above. Employees hired subsequent to the institution of the

compliance policy shall be trained within one month of employment. All

employees shall be trained periodically thereafter;

(ii) Training shall be designed to establish a level of competence that assures

compliance with Program requirements as included in this part 278;

(iii) Written materials, which may include FNS publications and program

regulations that are available to all authorized firms, are used in the

training program. Training materials shall clearly state that the following

acts are prohibited and are in violation of the Food and Nutrition Act of

2008 and regulations: the exchange of food coupons, ATP cards or other

program access devices for cash; and, in exchange for coupons, the sale of

firearms, ammunition, explosives or controlled substances, as the term is

defined in section 802 of title 21, United States Code.

The SNAP regulations also contemplate a “hardship waiver,” under which “FNS may

impose a civil money penalty as a sanction in lieu of disqualification when the firm subject to a

disqualification is selling a substantial variety of staple food items, and the firm’s

disqualification would cause hardship to SNAP households because there is no other authorized

retail food store in the area selling as large a variety of staple food items at comparable prices.”

7 C.F.R. § 278.6(f). However, such a CMP “may not be imposed in lieu of a permanent

disqualification.” Id.

Of relevance here, the regulations provide for administrative and judicial review of a

decision by FNS to disqualify a SNAP retailer. See 7 U.S.C. § 2023(a); 7 C.F.R. § 279. First,

FNS must provide the retailer with written notice of its initial decision. 7 U.S.C. § 2023(a)(1).

Within ten days of receipt of the notice, the retailer may ask FNS to review the decision. Id. §

2023(a)(3); 7 C.F.R. § 279.1. FNS must then review its initial decision and render a Final

Agency Decision, which takes effect thirty days after notice of the decision has been delivered to

the retailer. 7 C.F.R. § 279.5. Upon receipt of a Final Agency Decision, a retailer may seek

judicial review. 7 U.S.C. § 2023(a)(13); 7 C.F.R. § 279.7.

B. Factual Summary4

The Store is a limited liability corporation that operates a retail convenience store located

on McElderry Street in Baltimore City. See ECF 4, at 2 ⁋ 1; ECF 17-2 at 1. The Store opened

for business on June 1, 2015. ECF 17-2 at 25. It is owned by Nadeem Asghar. See ECF 4 at 2,

⁋ 2; ECF 17-2 at 6.

Photographs taken of the Store as part of a SNAP site visit on June 26, 2015, indicate a

typical urban convenience store selling an array of products. ECF 17-2 at 43-56; see id. at 40

(stating date on which review was completed); see also id. at 61-88 (photographs of Store taken

during review on December 23, 2019). FNS data reflects that the Store generated $598,741 in

“Actual Retail Sales” for tax year 2018. Id. at 12.

4 The facts are drawn from the Record (ECF 17-2). Throughout the Memorandum

Opinion, I cite to the electronic pagination, which does not always align with the page numbers

cited in the parties’ submissions.

Mini Market applied for SNAP authorization in June 2015. ECF 17-2 at 25-29 (the

“Application”); see id. at 1 (indicating that the Agency received the Store’s application on June

3, 2015). The Application was authorized on July 7, 2015. Id. at 4.

The Application included a certification “confirming [plaintiffs’] understanding of and

agreement with,” inter alia, the following, id. at 29:

• I will receive Supplemental Nutrition Assistance Program training materials upon

authorization. It is my responsibility to ensure that the training materials are

reviewed by all firm’s owners and all employees . . . and that all employees will

follow Supplemental Nutrition Assistance Program regulations. . . . .

• I am aware that violations of program rules can result in administrative action such as

fines, sanctions, withdrawal, or disqualification from the Supplemental Nutrition

Assistance Program . . . .

• I accept responsibility on behalf of the firm for violations of the Supplemental

Nutrition Assistance Program regulations, including those committed by any of the

firm’s employees, paid or unpaid, new, full-time or part-time. These include

violations such as, but not limited to: . . . Trading cash for Supplemental Nutrition

Assistance Program benefits (i.e. trafficking) . . . .

The Record does not reflect any interactions of significance between plaintiffs and the

Agency until March 2020. See id. at 2-4. On March 2, 2020, the FNS opened a case pertaining

to the Store. Id. at 31.5 An undercover investigator visited the Store a total of five times

between June 16, 2020 and June 19, 2020. The investigator’s findings were memorialized in a

“Report of Positive Investigation,” dated July 1, 2020. Id. at 89-102 (the “ROPI” or “Report”).6

According to the Report, the investigator first visited the Store on June 16, 2020. At that

time, a Store employee named Zain Tariq was working as the Store’s clerk. Id. at 131. “The

5 The Government asserts, without specificity, that FNS initiated the review “due to data

abnormalities that warranted further inspection.” ECF 15-1 at 11. Plaintiffs do not appear to

contest the assertion.

6 The name of the investigator was redacted from the Record. See ECF 17-2 at 89. For

the sake of simplicity, I shall sometimes refer to the investigator using male pronouns.

investigator placed all items on the counter, and presented the EBT card to the store clerk for

purchase.” ECF 17-2 at 90. The investigator’s EBT card had a SNAP balance of $837.35. Id.

Then, “[t]he clerk removed the non-food items from the counter and said that the items could not

be purchased using SNAP benefits.” Id. The investigator “asked the clerk to utilize the EBT

card for non-food items[,]” but “the clerk refused.” Id. “The clerk then completed the

transaction for the food items only,” and “deducted $9.50 for items purchased from the

investigative EBT account.” Id. (underlining in original).

On June 18, 2020, the investigator returned to the Store and purchased food items. Id. at

92. On that date, Asghar was working as the Store clerk. Id. at 131. Specifically, the

investigator wrote, id. at 92 (underlining in original): “As the clerk rang up the items, my issued

[EBT] card was where it could be viewed by the clerk. I gave the clerk the EBT card, which had

a total of $753.52 in [SNAP] benefits. The clerk deducted $19.50 for items purchased from the

investigative EBT account.”

And, on the following day, June 19, 2020, the investigator returned to the Store on three

occasions. Asghar was again working as the Store clerk during each of the investigator’s visits.

Id. at 131. According to the ROPI, the investigator “entered the subject store, placed all items on

the counter, and presented the EBT card to the clerk for purchase.” Id. at 94.7 However, the

“clerk removed the non-food items and stated that they could not be purchased using SNAP

benefits.” Id. The investigator then “asked the clerk to utilize the EBT card for the non-food

items,” but “the clerk refused.” Id. Asghar then “completed the transaction for food items only.”

At that juncture, the investigator “spoke with the clerk about purchasing various items for

the store with [his] food stamps in exchange for cash.” Id. Asghar responded by asking if the

7 The investigator did not specify the time at which he first visited the Store on June 19,

2020.

investigator “steal[s] the items.” ECF 17-2 at 94. The investigator replied, id.: “‘No, I buy them

from [redacted] with my EBT card.’” Id. Ashgar then asked the investigator to buy “(1) 24-16

oz case of Monster Energy drink and as much Ensure Nutrition shake with [his] food stamps as

[he] could . . . .” Id. Asghar also said that he would pay the investigator upon his return. Id. The

investigator agreed and told Asghar that he “would go to [redacted] right now to purchase the

Monster and Ensure.” Id.

Thereafter, at approximately 11:52 a.m. on June 19, 2020, the investigator purchased the

“(1) 24-16oz case of Monster Energy drink and (4) 24-8 oz cases of Ensure nutrition shake that

[he] purchased . . . with [his] food stamps as requested by the clerk.” Id. at 96. Upon the

investigator’s return to the Store at an unspecified time thereafter, “the clerk told [him] to put the

cases on the floor.” Id. And, the investigator “told the clerk that [he] paid $132.95 in food

stamps for the Monster Energy drink and the Ensure nutrition shake that he requested.” Id. The

clerk again asked “if [the investigator] stole the product.” Id. The investigator responded, id.:

“No, I told you I got it from [redacted] with my food stamps.” Id. The investigator attempted to

present the receipt to the clerk, but Asghar “refused to acknowledge” the receipt, stating: “‘No, I

don’t need to see it[.]’” Id. Asghar then handed the investigator $20.00 from the register and

asked the investigator to “bring Red Bull today.” Id. The investigator agreed. Id.

At about 12:54 p.m. on June 19, 2020, the investigator purchased six “24-8 oz cases of

Red Bull Energy drink” from another store, “using $209.94 in food stamps from [his] EBT card

as directed by the clerk.” Id. at 98. The investigator subsequently returned to the Mini Market,

after which “[t]he clerk told [the investigator] to put the cases of Red Bull on the counter.” Id.

Asghar then asked the investigator, id.: “‘[Y]ou sure you didn’t steal this?’” Id. The investigator

attempted to show the receipt to the clerk. ECF 17-2 at 98. The investigator also said, id.: “‘I

told you how I get it, why would you think I’m stealing it?’”

According to the ROPI, Asghar “refused to acknowledge the receipt . . . .” Id. Moreover,

the clerk said, id.: “‘[N]o, I believe you man, I saw your balance and you have a lot of money on

there,’ and then handed [the investigator] $60.00 cash (3-$20.00)” from the register. Id. And,

Asghar then told the investigator “to bring more Red Bull” the following day. Id. The

investigator agreed to do so. Id.

Based on the findings set forth in the Report, Fredrick Conn, the Section Chief of the

FNS Retailer Operations Division, issued a “Charge Letter” to Asghar on August 12, 2020. Id.

at 113-15 (Charge Letter). The Charge Letter included a copy of the investigator’s ROPI, which

recounted the events set forth above. See id. at 116-26. Further, the Charge Letter informed

Asghar that the Report “contains evidence that violations of the Supplemental Nutrition

Assistance Program (SNAP) regulations have occurred in your firm,” namely “trafficking,” for

which the sanction is permanent disqualification. Id. at 113.

The Charge Letter advised Asghar that he could provide “any information, explanation,

or evidence . . . regarding these charges” within ten calendar days, and that a final decision

would be made soon thereafter. Id. at 114. In addition, the Charge Letter explained that, “under

certain conditions, FNS may impose a civil money penalty (CMP) of up to $59,000 in lieu of

permanent disqualification of a firm for trafficking.” Id. at 113. Further, Asghar was informed

that in order to receive a CMP, the Store would have to meet each of the four criteria listed in 7

C.F.R. § 287.6(i), and “provide the documentation as specified,” due within ten calendar days.

Id. And, the Charge Letter indicated that if Mini Market qualified for a CMP, the amount of the

penalty would be $38,340.00. Id.

Through counsel, plaintiffs timely contested the Charge Letter, via a letter of August 22,

2020. ECF 17-2 at 130-33 (the “Response”).8 The Response was accompanied by SNAP

“Retailer Training Materials.” Id. at 136; see id. at 137-88 (“Training Materials”).

At the outset, plaintiffs noted that the Store had participated in the Program since 2015,

and, in that time, there had “not been any . . . actions taken by FNS to warn Respondents about”

possible violations. ECF 17-2 at 131. Further, plaintiffs observed that there had not been any

prior “charges brought against Respondents for any SNAP violations.” Id.

Moreover, plaintiffs pointed out that when the investigator first visited the Store on June

16, 2019, and asked Tariq, the Store clerk, “to charge his [EBT] card for both food and non-food

items,” the clerk “refused to do so and completed the transaction for the food items only.” Id.

However, when the investigator returned to the Store on June 18, 2020 and June 19, 2020, he

“encountered a different clerk, Mr. Asghar.” Id. As mentioned, Mr. Asghar is the owner of the

Store. Id. at 6.

In the Response, plaintiffs claimed that “[t]he investigator did not include all relevant

information in his or her report” with respect to the investigator’s interactions with Asghar. Id.

at 131. For instance, plaintiffs explained that “Mr. Asghar’s primary language is not English and

he has severe difficulties in communicating with native English speakers.” Id. Thus, they

maintained that Asghar was “confused by the conversation with the investigator and did not fully

appreciate what he was doing.” Id.

Further, plaintiffs argued that “this language barrier was compounded by the

investigator’s statements to Mr. Asghar.” Id. Specifically, the Response stated that the

“investigator repeatedly pleaded with Mr. Asghar to provide the investigator with money,

8 The Response refers to Asghar and the Store collectively as the “Respondents.” ECF

17-2 at 130.

representing that the investigator had children to feed and that the investigator’s need for money

was heightened due to the ongoing COVID-19 pandemic.” ECF 17-2 at 131. Plaintiffs

maintained that Asghar’s actions should be understood as “an effort help someone that he

understood to be in a desperate and needy position.” Id.

And, the Response stated: “Mr. Asghar did not specifically request that the investigator

purchase either the Monster energy drinks or the Ensure nutrition shakes.” Id. Rather, according

to the Response, Asghar only made a specific request after being supplied with the other drinks

by the investigator. Id. at 131-32.

Critically, the Response indicated that Asghar “admits that he did request the Red Bull

and did so in violation of SNAP regulations.” Id. at 132. Nevertheless, plaintiffs maintained

that, in light of the totality of the circumstances, “no punishments should be levied against

Respondents.” Id. But, plaintiffs stated that, in the event that punishment was determined to be

appropriate, FNS should decline to disqualify the Store from participation in SNAP and instead

impose a CMP. Id. at 132-34. In support of this contention, the Response stated that the Store

had satisfied each of the four criteria enumerated in 7 C.F.R. § 278.6(j).

Regarding Criterion 1 (effective compliance policy) and Criterion 2 (compliance policy

and program in effect prior to the violation), the Response posited that the Store had an

“effective compliance policy at the time of the alleged violations, as evidenced by the fact that

[Store officials] twice refused to violate SNAP when invited to [do so] by the investigator.” Id.

at 133. Further, plaintiffs maintained: “This policy was based on Respondents’ knowledge of the

SNAP program and information they received from FNS when they first entered the program.”

Id.

Concerning Criterion 3 (effective personnel training program), the Response indicated

that Store employees were “trained in this policy effectively, again as evidenced by Mr. Tariq’s

refusal to violate SNAP regulations when invited to [do so] by the investigator and by

Respondents’ clean record for five years before this incident.” ECF 17-2 at 133. Further, the

Response highlighted that Store personnel were trained “by Mr. Asghar personally based on his

experience and in accordance with the SNAP training guide.” Id. And, with respect to Criterion

4 (no knowledge or involvement by firm ownership), the Response indicated that although

Asghar was “aware of and directly involved in the alleged violations at issue here, this was the

first such violation for Respondents.” Id.

The Response also maintained that the amount of the CMP specified in the Charge Letter,

$38,340.00, was detached from the underlying offense. Id. at 133-34. In support, the Response

noted that under 7 C.F.R. § 278.6(j), the amount of a CMP is calculated by multiplying the

“average monthly redemption figure by ten percent” and then “doubl[ing] the product obtained . .

. when, as here, ‘the fact value of coupons, ATP cards or other benefit instruments involved in

the largest single trafficking transaction was $100 or more.’” Id. at 133 (citation omitted).

Plaintiffs asserted that based on “average monthly SNAP redemptions” in the amount of

approximately $9,125.00, the resulting CMP should total $1,825.00. Id. Thus, plaintiffs

asserted: “The extraordinary fine of $38,340.00 . . . is arbitrary and capricious, as applied to

them, a small business . . . operating in a neighborhood in need of businesses accepting SNAP

benefits.” Id. at 134.

FNS analyzed the information submitted to it by plaintiffs in an internal “Retailer Reply

and Case Sanction Recommendation.” Id. at 189-191 (the “Recommendation”). After

recounting the relevant factual background, the Recommendation concluded that Asghar

admitted that “violations occurred,” and thus “a sanction is required.” ECF 17-2 at 190. Further,

after analyzing the four criteria set forth above, the FNS determined that the Store was ineligible

for a CMP. Id. at 190-91.

Regarding Criterion 1, the Recommendation found that plaintiffs had not offered

sufficient evidence showing that the Store had an effective compliance policy. Id. at 191.

Specifically, the FNS highlighted that although Store personnel twice refused to violate SNAP

regulations, “[t]he refusals [were] followed by two trafficking violations.” Id. And, the

Recommendation found that no other “information ha[d] been provided to support the store

satisfying this requirement.” Id. Because plaintiffs failed to satisfy Criterion 1, the FNS

determined that plaintiffs necessarily failed to satisfy Criterion 2. Id.

As to Criterion 3, the Recommendation stated that “no information provided confirms”

that an effective personnel training program was “developed and instituted,” as the Response

failed to include any documentation to confirm that Store personnel had received training. Id.

Further, the Recommendation determined that Criterion 4 was not satisfied, as Asghar was the

owner of the Store and thus “he did benefit and was aware” of the trafficking violation. Id.

The Agency’s determination was conveyed in a letter authored by Mr. Conn to plaintiffs’

counsel on October 5, 2020. Id. at 192-94. (the “Determination Letter”). It explained that

violations had occurred and that the Store was not eligible for a CMP. Id. at 192. The FNS

stated, id.: “Consideration has been given to the information available to us relating to our letter

of charges dated August 12, 2020, and to your reply of August 22, 2020. We find that the

violations cited in our charge letter occurred at your firm.” The Determination Letter continued,

id.: “We considered your eligibility for a trafficking civil money penalty (CMP) . . . . We have

determined that you are not eligible for the CMP because you failed to submit sufficient

evidence to demonstrate that your firm had established and implemented an effective compliance

policy and program to prevent violations of [SNAP].”

In addition, the Determination Letter advised plaintiffs that, within ten days, the Store

had the right to seek review of the Agency’s decision by the FNS Administrative Review

Branch. Id. at 193. The Agency also stated: “[A] careful review of the program file revealed

that the illegal acceptance of SNAP benefits outlined in our letter resulted in a $262.89 loss to

the Government.” Id. at 192. Accordingly, the Agency presented a bill for collection, requesting

payment in the amount of $262.89, due within 30 calendar days of plaintiffs’ receipt of the

Determination Letter. See id. at 195 (Bill For Collection).

Plaintiffs lodged an appeal via letter of October 13, 2020, seeking “administrative review

of the October 5, 2020 decision letter . . . .”. Id. at 197 (the “Appeal”). Specifically, plaintiffs

contested “the decisions made by Mr. Conn, . . . including but not necessarily limited to

eligibility for a Civil Money Penalty . . . and the disposition of permanent disqualification from

SNAP.” Id. And, plaintiffs advised that “supporting information will be filed in writing at a

later date . . . .” Id.

In response to the Appeal, Administrative Review Officer Ronald Gwinn of the FNS

Administrative Review Branch issued a letter to plaintiffs’ counsel, dated November 3, 2020. Id.

at 200. Of import here, Gwinn invited plaintiffs’ counsel to “submit additional information or

evidence to support your request,” due by November 24, 2020. Id.

By letter of January 29, 2021, Gwinn wrote to plaintiffs’ counsel, advising of the

Agency’s decision to uphold its initial determination. Id. at 201 (the “Final Agency Decision” or

“FAD”). The Agency noted that “no supporting information of any kind ha[d] been provided to

[Gwinn] on this administrative review,” notwithstanding that plaintiffs had represented that they

would provide “information to support an administrative review.” ECF 17-2 at 201. The

Agency concluded that, “in the absence of any information or contentions to support the request

for review, no review can be conducted and this administrative review is now closed as ‘moot.’”

Id.

Plaintiffs received notice of the FDA via email on February 2, 2021. See ECF 17-2 at

202. This litigation followed. ECF 4.

Additional facts are included in the Discussion.

II. Standards of Review

A. Rule 12(b)(1)

Pursuant to Fed. R. Civ. P. 12(b)(1), the Government moves to dismiss, claiming lack of

subject matter jurisdiction. According to the Government, because the suit was untimely filed,

the suit is barred by sovereign immunity. ECF 15-1 at 23-25.

Federal district courts are courts of limited jurisdiction; they possess “‘only that power

authorized by Constitution and statute.’” Gunn v. Minton, 586 U.S. 251, 256 (2013)

(quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); see Home Depot

U.S.A., Inc. v. Jackson, ___U.S.____, 139 S. Ct. 1743, 1746 (2019); Exxon Mobil Corp. v.

Allapattah Servs., Inc., 545 U.S. 546, 552 (2005). Simply put, “if Congress has not empowered

the federal judiciary to hear a matter, then the case must be dismissed.” Home Buyers Warranty

Corp. v. Hanna, 750 F.3d 427, 432 (4th Cir. 2014); see also Steel Co. v. Citizens for a Better

Env't, 523 U.S. 83, 94 (1998) (“‘Jurisdiction is power to declare the law, and when it ceases to

exist, the only function remaining to the court is that of announcing the fact and dismissing the

cause.’”) (citation omitted). “Because jurisdictional limits define the very foundation of judicial

authority, subject matter jurisdiction must, when questioned, be decided before any other

matter.” United States v. Wilson, 699 F.3d 789, 793 (4th Cir. 2012).

The Fourth Circuit has reiterated that the defense of sovereign immunity is a

jurisdictional bar, explaining that “‘sovereign immunity deprives federal courts of jurisdiction to

hear claims, and a court finding that a party is entitled to sovereign immunity must dismiss the

action for lack of subject-matter jurisdiction.’” Cunningham v. Gen. Dynamics Info. Tech., Inc.,

888 F.3d 640, 649 (4th Cir. 2018) (citation omitted), cert. denied, ___U.S.___, 139 S. Ct. 417

(2018); see also Cunningham v. Lester, 990 F.3d 361, 365 (4th Cir. 2021) (recognizing sovereign

immunity as a jurisdictional limitation and describing it as “a weighty principle, foundational to

our constitutional system”).

Under Rule 12(b)(1), a plaintiff bears the burden of proving, by a preponderance of

evidence, the existence of subject matter jurisdiction. See Demetres v. E. W. Const., Inc., 776

F.3d 271, 272 (4th Cir. 2015); see also Williams v. Big Picture Loans, LLC, 929 F.3d 170, 176

(4th Cir. 2019); Hutto v. S.C. Ret. Sys., 773 F.3d 536, 543 (4th Cir. 2014); The Piney Run

Preservation Ass'n v. Cty. Comm'rs of Carroll Cty., 523 F.3d 453, 459 (4th Cir. 2008); Evans v.

B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). However, a court should grant a motion to

dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) “‘only if the material

jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of

law.’” B.F. Perkins, 166 F.3d at 647 (citation omitted).

A challenge to subject matter jurisdiction under Rule 12(b)(1) may proceed “in one of

two ways”: either a facial challenge or a factual challenge. Kerns v. United States, 585 F.3d 187,

192 (4th Cir. 2009); accord Hutton v. Nat'l Bd. of Exam'rs Inc., 892 F.3d 613, 620-21 (4th Cir.

2018). In a facial challenge, “the facts alleged in the complaint are taken as true, and the motion

must be denied if the complaint alleges sufficient facts to invoke subject matter

jurisdiction.” Kerns, 585 F.3d at 192; accord Clear Channel Outdoor, Inc. v. Mayor and City

Council of Baltimore, 22 F. Supp. 3d 519, 524 (D. Md. 2014).

In a factual challenge, on the other hand, “the district court is entitled to decide disputed

issues of fact with respect to subject matter jurisdiction,” Kerns, 585 F.3d at 192, “[u]nless ‘the

jurisdictional facts are intertwined with the facts central to the merits of the dispute.’” United

States ex rel. Vuyyuru v. Jadhav, 555 F.3d 337, 348 (4th Cir. 2009), cert. denied, 558 U.S. 875

(2009). In a factual challenge, the court “may regard the pleadings as mere evidence on the issue

and may consider evidence outside the pleadings without converting the proceeding to one for

summary judgment.” Velasco v. Gov't of Indonesia, 370 F.3d 392, 398 (4th Cir. 2004); see

also Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th

Cir. 1991). In particular, “the district court may . . . resolve the jurisdictional facts in dispute by

considering evidence . . . such as affidavits.” Vuyyuru, 555 F.3d at 348. When appropriate, the

court may also “hold an evidentiary hearing to determine whether the facts support the

jurisdictional allegations.” United States v. North Carolina, 180 F.3d 574, 580 (4th Cir.

1999); see also Schneider v. Donaldson Funeral Home, P.A., 733 F. App'x 641, 644 (4th Cir.

2018); Kerns, 585 F.3d at 192.

In this case, the challenge is a factual one, as the parties dispute the circumstances

surrounding the filing of this suit. See ECF 15-1 at 18-20, 23-25-; ECF 20-1 at 4-5; ECF 25 at 3-

11. Therefore, I may consider the relevant exhibits in resolving the parties’ dispute.

B. Rule 12(d) and Rule 56

The Motion is styled as a “Motion To Dismiss Or, In The Alternative, For Summary

Judgment.” ECF 15-1 at 4. A motion styled in the alternative implicates the court’s discretion

under Rule 12(d) of the Federal Rules of Civil Procedure. See Kensington Vol. Fire Dep’t, Inc.

v. Montgomery Cty., 788 F. Supp. 2d 431, 436-37 (D. Md. 2011).

Ordinarily, a court “is not to consider matters outside the pleadings or resolve factual

disputes when ruling on a motion to dismiss.” Bosiger v. U.S. Airways, 510 F.3d 442, 450

(4th Cir. 2007). However, under Rule 12(b)(6), a court, in its discretion, may consider matters

outside of the pleadings, pursuant to Rule 12(d). If the court does so, “the motion must be

treated as one for summary judgment under Rule 56,” and “[a]ll parties must be given a

reasonable opportunity to present all the material that is pertinent to the motion.” Fed. R. Civ. P.

12(d). But, when the movant expressly captions its motion “in the alternative” as one for

summary judgment, and submits matters outside the pleadings for the court’s consideration, the

parties are deemed to be on notice that conversion under Rule 12(d) may occur; the court “does

not have an obligation to notify parties of the obvious.” Laughlin v. Metro. Wash. Airports

Auth., 149 F.3d 253, 261 (4th Cir. 1998).9

A district judge has “complete discretion to determine whether or not to accept the

submission of any material beyond the pleadings that is offered in conjunction with a Rule

12(b)(6) motion and rely on it, thereby converting the motion, or to reject it or simply not

consider it.” 5C WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE § 1366 (3d ed. 2018).

This discretion “should be exercised with great caution and attention to the parties’ procedural

rights.” Id. In general, courts are guided by whether consideration of extraneous material “is

9 In contrast, a court may not convert a motion to dismiss to one for summary judgment

sua sponte, unless it gives notice to the parties that it will do so. See Laughlin, 149 F.3d at 261

(stating that a district court “clearly has an obligation to notify parties regarding any court-

instituted changes” in the posture of a motion, including conversion under Rule 12(d)); Finley

Lines Joint Protective Bd. Unit 200 v. Norfolk So. Corp., 109 F.3d 993, 997 (4th Cir. 1997)

(“[A] Rule 12(b)(6) motion to dismiss supported by extraneous materials cannot be regarded as

one for summary judgment until the district court acts to convert the motion by indicating that it

will not exclude from its consideration of the motion the supporting extraneous materials.”).

likely to facilitate the disposition of the action,” and “whether discovery prior to the utilization of

the summary judgment procedure” is necessary. Id.

Summary judgment is usually inappropriate “where the parties have not had an

opportunity for reasonable discovery.” E.I. de Pont de Nemours and Co. v. Kolon Indus., Inc.,

637 F.3d 435, 448-49 (4th Cir. 2011). As the Fourth Circuit has said, when a district judge rules

on a summary judgment motion prior to discovery, it is akin to “for[cing] the non-moving party

into a fencing match without a sword or mask.” McCray v. Md. Dep’t of Transp., Md. Transit

Admin., 741 F.3d 480, 483 (4th Cir. 2014)); accord Putney v. Likin, 656 F. App’x 632, 639 (4th

Cir. 2016) (per curiam).

However, “the party opposing summary judgment ‘cannot complain that summary

judgment was granted without discovery unless that party has made an attempt to oppose the

motion on the grounds that more time was needed for discovery.’” Harrods Ltd. v. Sixty Internet

Domain Names, 302 F.3d 214, 244 (4th Cir. 2002) (quoting Evans v. Techs. Applications & Serv.

Co., 80 F.3d 954, 961 (4th Cir. 1996)). To raise adequately the issue that discovery is needed,

the nonmovant typically must file an affidavit or declaration pursuant to Rule 56(d) (formerly

Rule 56(f)), explaining why, “for specified reasons, it cannot present facts essential to justify its

opposition,” without needed discovery. Fed. R. Civ. P. 56(d); see Harrods, 302 F.3d at 244-45

(discussing affidavit requirement of former Rule 56(f)).

“[T]o justify a denial of summary judgment on the grounds that additional discovery is

necessary, the facts identified in a Rule 56 affidavit must be ‘essential to the [the] opposition.’”

Scott v. Nuvell Fin. Servs., LLC, 789 F. Supp. 2d 637, 641 (D. Md. 2011) (alteration in original)

(citation omitted). A nonmoving party’s Rule 56(d) request for additional discovery is properly

denied “where the additional evidence sought for discovery would not have by itself created a

genuine issue of material fact sufficient to defeat summary judgment.” Strag v. Bd. of Trs.,

Craven Cmty. Coll., 55 F.3d 943, 954 (4th Cir. 1995); see McClure v. Ports, 914 F.3d 866, 874

(4th Cir. 2019); Pisano v. Strach, 743 F.3d 927, 931 (4th Cir. 2014); Amirmokri v. Abraham, 437

F. Supp. 2d 414, 420 (D. Md. 2006), aff’d, 266 F. App’x 274 (4th Cir. 2008) (per curiam), cert.

denied, 555 U.S. 885 (2008).

If a nonmoving party believes that further discovery is necessary before consideration of

summary judgment, the party who fails to file a Rule 56(d) affidavit does so at his peril, because

“‘the failure to file an affidavit . . . is itself sufficient grounds to reject a claim that the

opportunity for discovery was inadequate.’” Harrods, 302 F.3d at 244 (citations omitted). But,

the non-moving party’s failure to file a Rule 56(d) affidavit cannot obligate a court to issue a

summary judgment ruling that is obviously premature.

Although the Fourth Circuit has placed “‘great weight’” on the Rule 56(d) affidavit, and

has said that a mere “‘reference to Rule 56(f) [now Rule 56(d)] and the need for additional

discovery in a memorandum of law in opposition to a motion for summary judgment is not an

adequate substitute for [an] affidavit,’” the appellate court has “not always insisted” on a Rule

56(d) affidavit. Id. (internal citations omitted). According to the Fourth Circuit, failure to file an

affidavit may be excused “if the nonmoving party has adequately informed the district court that

the motion is premature and that more discovery is necessary” and the “nonmoving party’s

objections before the district court ‘served as the functional equivalent of an affidavit.’” Id. at

244-45 (internal citations omitted).

Plaintiffs have not filed a Rule 56(d) affidavit. Nor does the Opposition contain a request

for discovery. Indeed, the Opposition does not identify any material that might be sought via

discovery. Further, the Government has submitted the Record, which plaintiffs do not challenge.

To the extent that the Court considers the merits, it is appropriate to construe the Motion

as one for summary judgment, rather than as a motion to dismiss. This approach aligns with

numerous cases in this District and elsewhere regarding review of SNAP retailer violations, and

would facilitate resolution of the case. See, e.g., Brother Convenience Store, Inc. v. U.S. Dep’t of

Agric., GLR-20-1346, 2021 WL 3911594, at *8 (D. Md. Sept. 1, 2021); Green Apple Grocery

and Deli v. United States Dep’t of Agriculture, RDB-19-1408, 2021 WL 533730, at *6 (D. Md.

Feb. 12, 2021); Negash v. United States, RDB-17-1954, 2018 WL 722481, at *4 (D. Md. Feb. 5,

2018), aff’d, 772 F. App’x 34, 35-36 (4th Cir. 2019) (per curiam); 7-Eleven, Inc. v. United

States, GLR-15-543, 2016 WL 5107129, at *2 (D. Md. Jan. 29, 2016) Mahmood v. United

States, WMN-12-0228, 2012 WL 3038638, at *2 (D. Md. July 24, 2012); AJS Petroleum, 2012

WL 683538, at *5.

Under Fed. R. Civ. P. 56(a), summary judgment is appropriate only “if the movant shows

that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a

matter of law.” See Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986); see also Cybernet,

LLC v. David, 954 F.3d 162, 168 (4th Cir. 2020); Variety Stores, Inc. v. Wal-Mart Stores, Inc.,

888 F.3d 651, 659 (4th Cir. 2018); Iraq Middle Mkt. Dev. Found v. Harmoosh, 848 F.3d 235,

238 (4th Cir. 2017). To avoid summary judgment, the nonmoving party must demonstrate that

there is a genuine dispute of material fact so as to preclude the award of summary judgment as a

matter of law. Ricci v. DeStefano, 557 U.S. 557, 585-86 (2009); Matsushita Elec. Indus. Co.,

Ltd. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986); see also Gordon v. CIGNA Corp., 890

F.3d 463, 470 (4th Cir. 2018).

The Supreme Court has clarified that not every factual dispute will defeat a summary

judgment motion. “By its very terms, this standard provides that the mere existence of some

alleged factual dispute between the parties will not defeat an otherwise properly supported

motion for summary judgment; the requirement is that there be no genuine issue of material

fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). A

fact is “material” if it “might affect the outcome of the suit under the governing law.” Id. at 248.

There is a genuine issue as to material fact “if the evidence is such that a reasonable jury

could return a verdict for the nonmoving party.” Id.; see CTB, Inc. v. Hog Slat, Inc., 954 F.3d

647, 658 (4th Cir. 2020); Variety Stores, Inc., 888 F.3d at 659; Sharif v. United Airlines, Inc.,

841 F.3d 199, 2014 (4th Cir. 2016); Libertarian Party of Va. v. Judd, 718 F.3d 308, 313 (4th Cir.

2013). On the other hand, summary judgment is appropriate if the evidence “is so one-sided that

one party must prevail as a matter of law.” Anderson, 477 U.S. at 252; see McAirlaids, Inc. v.

Kimberly-Clark Corp., 756 F.3d 307, 310 (4th Cir. 2014). But, “the mere existence of a scintilla

of evidence in support of the plaintiff’s position will be insufficient; there must be evidence on

which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. “When

opposing parties tell two different stories, one of which is blatantly contradicted by the record, so

that no reasonable jury could believe it, a court should not adopt that version of the facts for

purposes of ruling on a motion for summary judgment.” Scott v. Harris, 550 U.S. 372, 380

(2007).

Pursuant to Fed. R. Civ. P. 56(c)(1), where the moving party bears the burden of proof on

the issue at trial, he must support his factual assertions by “citing to particular parts of materials

in the record, including depositions, documents, electronically stored information, affidavits or

declarations, stipulations . . ., admissions, interrogatory answers, or other materials . . . .” But,

where the nonmovant bears the burden of proof at trial, the moving party may show that it is

entitled to summary judgment by citing to evidence in the record, or “by ‘showing’—that is,

pointing out to the district court—that there is an absence of evidence to support the nonmoving

party’s case.” Celotex Corp., 477 U.S. at 325; see also Fed. R. Civ. P. 56(c)(1)(B).

“A party opposing a properly supported motion for summary judgment ‘may not rest

upon the mere allegations or denials of [its] pleadings,’ but rather must ‘set forth specific facts

showing that there is a genuine issue for trial.’” Bouchat v. Balt. Ravens Football Club, Inc., 346

F.3d 514, 522 (4th Cir. 2003) (quoting former Fed. R. Civ. P. 56(e)), cert. denied, 541 U.S. 1042

(2004); see Celotex, 477 U.S. at 322-24. And, the court must view all of the facts, including

reasonable inferences to be drawn from them, in the light most favorable to the nonmoving party.

Ricci, 557 U.S. at 585-86; Matsushita Elec. Indus. Co., 475 U.S. at 587; accord Hannah P. v.

Coats, 916 F.3d 327, 336 (4th Cir. 2019); Variety Stores, Inc., 888 F.3d at 659; Gordon, 890

F.3d at 470; Lee v. Town of Seaboard, 863 F.3d 323, 327 (4th Cir. 2017); FDIC v. Cashion, 720

F.3d 169, 173 (4th Cir. 2013). But, the nonmovant “must rely on more than conclusory

allegations, mere speculation, the building of one inference upon another, or the mere existence

of a scintilla of evidence.” Humphreys & Partners Architects, L.P. v. Lessard Design, Inc., 790

F.3d 532, 540 (4th Cir. 2015) (internal quotation marks omitted). Rather, “there must be

evidence on which the jury could reasonably find for the nonmovant.” Thompson v. Virginia,

878 F.3d 89, 97 (4th Cir. 2017) (alteration and internal quotation marks omitted).

The district court’s “function” is not “to weigh the evidence and determine the truth of

the matter but to determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at

249; accord Guessous v. Fairview Prop. Invs., LLC, 828 F.3d 208, 216 (4th Cir. 2016). Thus, in

considering a summary judgment motion, the court may not make credibility determinations.

Kellen v. Lott, No. 21-6928, 2022 WL 2093849, at *1 (4th Cir. June 10, 2022) (per curiam);

Betton v. Belue, 942 F.3d 184, 190 (4th Cir. 2019); Wilson v. Prince George’s Cty., 893 F.3d

213, 218-19 (4th Cir. 2018); Jacobs v. N.C. Administrative Office of the Courts, 780 F.3d 562,

569 (4th Cir. 2015); Mercantile Peninsula Bank v. French, 499 F.3d 345, 352 (4th Cir. 2007).

Therefore, in the face of conflicting evidence, such as competing affidavits, summary judgment

ordinarily is not appropriate, because it is the function of the factfinder to resolve factual

disputes, including matters of witness credibility. See Black & Decker Corp. v. United States,

436 F.3d 431, 442 (4th Cir. 2006); Dennis v. Columbia Colleton Med. Ctr., Inc., 290 F.3d 639,

644-45 (4th Cir. 2002).

That said, “a party’s ‘self-serving opinion . . . cannot, absent objective corroboration,

defeat summary judgment.’” CTB, Inc., 954 F.3d at 658-59 (quoting Williams v. Giant Food

Inc., 370 F.3d 423, 433 (4th Cir. 2004)). But, if testimony is based on personal knowledge or

firsthand experience, it can be evidence of disputed material facts, even if it is uncorroborated

and self-serving. Lovett v. Cracker Barrel Old Country Store, Inc., 700 Fed. App’x 209, 212

(4th Cir. 2017). Indeed, “‘a great deal of perfectly admissible testimony fits’” the “‘description’”

of “‘self-serving.’” Cowgill v. First Data Technologies, Inc., ___ F. 4th ___, 2022 WL 2901043,

at *9 (4th Cir. July 22, 2022) (citing United States v. Skelena, 692 F.3d 725, 733 (7th Cir. 2012)).

On the other hand, “[u]nsupported speculation is not sufficient to defeat a summary

judgment motion.” Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir. 1987); see

also, e.g., Reddy v. Buttar, 38 F.4th 393, 403-04 (4th Cir. 2022); CTB, Inc., 954 F.3d at 659;

Harris v. Home Sales Co., 499 Fed. App’x 285, 294 (4th Cir. 2012). “[T]o avoid summary

judgment, the non-moving party’s evidence must be of sufficient quantity and quality as to

establish a genuine issue of material fact for trial. Fanciful inferences and bald speculations of

the sort no rational trier of fact would draw or engage in at trial need not be drawn or engaged in

at summary judgment.” Local Union 7107 v. Clinchfield Coal Co., 124 F.3d 639, 640 (4th Cir.

1997).

C. Judicial Review of the Agency Decision

Under 7 U.S.C. § 2023(a)(13), a SNAP authorized retailer may obtain judicial review of

the Agency’s decision to disqualify the retailer. To do so, the retailer must file suit in “any court

of record of the State having competent jurisdiction, within thirty days after the date of delivery

or service of the final notice of determination upon it, requesting the court to set aside such

determination.” Id.

Judicial review of an administrative disqualification involves a two-part inquiry. First,

the district court “shall [conduct] a trial de novo” to “determine the validity” of the FNS’s

finding that the retailer violated SNAP regulations. Id. § 2023(a)(15). In the context of SNAP,

de novo review means that the retailer bears the ultimate burden of proving by a preponderance

of the evidence that the alleged violations did not occur. AJS Petroleum, 2012 WL 683538, at

*4. To carry this burden, a plaintiff “may offer any relevant evidence available to support his

case, whether or not it has been previously submitted to the agency.” Redmond v. United States,

507 F.2d 1007, 1012 (5th Cir. 1975). Thus, in reviewing the agency decision, “the court is not

bound by the administrative record . . . .” Green Apple Grocery and Deli, 2021 WL 533730, at

*5; see AJS Petroleum, 2012 WL 683538, at *4 (“In seeking to disprove the violations, [the

retailer] is not limited to the factual record before the agency, but may rely on other evidence as

well.”) (citing Kim v. United States, 121 F.3d 1269, 1272 (9th Cir. 1997)); see also Negash, 2018

WL 722481, at *3; Mahmood, 2012 WL 3038638, at *2.

Second, courts apply the “arbitrary and capricious” standard to assess the validity of the

sanction. Betefsa, Inc. v. United States, 410 F. Supp. 3d 132, 138 (D.D.C. 2019) (“Although the

validity of the underlying violation is reviewed by trial de novo, ‘judicial review of the agency's

choice of penalty is focused on whether the [FNS] abused [its] discretion.’”); see Cross v. United

States, 512 F.2d 1212, 1215 (4th Cir. 1975) (noting that the scope of judicial review extends to

the administrative sanction); see, e.g., Negash, 2018 WL 722481, at *3; Mahmood, 2012 WL

3038638, at *2; AJS Petroleum, 2012 WL 683538, at *4; 2341 E. Fayette St., Inc. v. United

States, JFM-05-974, 2005 WL 2373696, at *1 (D. Md. Sept. 26, 2005) (citing Willy's Grocery v.

United States, 656 F.2d 24, 26 (2nd Cir. 1981)); see also Goldstein v. United States, 9 F.3d 521,

523 (6th Cir. 1993); Bruno’s, Inc. v. United States, 624 F.2d 592, 594 (5th Cir. 1980).

“The arbitrary and capricious standard asks ‘whether the determination is unwarranted in

law or without justification in fact.’” Mahmood, 2012 WL 3038638, at *2 (quoting Ahmed, 47 F.

Supp. 2d at 393); see Affum v. United States, 566 F.3d 1150, 1161 (D.C. Cir. 2009) (“Under the

applicable standard of review, the Secretary abuses his discretion in his choice of a penalty if his

decision is either ‘unwarranted in law’ or ‘without justification in fact . . . .”) (internal citation

omitted). “The plaintiff has the burden of proof on the sanction issue as well.” Shreegi

Enterprises, Inc. v. United States, 1:CV-15-2232, 2018 WL 1919576, at *2 (M.D. Pa. Apr. 24,

2018).

“[O]nly in those instances in which it may be fairly said on the de novo record as a whole

that the Secretary, acting through his designates, has abused his discretion by acting arbitrarily or

capriciously, would the district court be warranted in exercising its authority to modify the

penalty.” Cross, 512 F.2d at 1218. “[T]he views of the Secretary as to the appropriate sanction

in a given case of violation are entitled to very great, if not conclusive, weight.” Id. “A

complaining party is still entitled to a trial de novo to create a factual record on the Secretary’s

determination not to a impose a civil money penalty in lieu of disqualification, and judicial

review of the Secretary’s choice of penalty is based on that de novo record. But the controlling

standard of review is abuse of discretion.” Affum, 566 F.3d at 1161 (emphases in original).

“Thus, in a case such as this, the District Court obviously must consider, inter alia,

whether the Secretary reasonably weighed the statutory factors listed in § 2021(b)(3)(B), (B)(i),

(B)(ii)(I), and (B)(ii)(II) and reasonably applied any lawful regulations adopted pursuant to

§ 2013(c) and § 2021(a)(2) . . . in denying [plaintiff’s] request for a civil money penalty in lieu of

disqualification.” Id. at 1161-62. “Even in those instances in which a district court may find on

de novo review that the Secretary erred in his determination of the fact and gravity of the

violations, it would be incumbent on the district court to prescribe an alternate penalty, not on the

basis of what it, in the exercise of its judgment, would consider reasonable and just, but within

the guidelines set by the Secretary for the enforcement of the Act.” Cross, 512 F.2d at 1218-19.

The trial de novo provision of 7 U.S.C. § 2023(a)(13) does not, however, entitle plaintiffs to a

trial on the merits as to their cause of action. Mahmood, 2012 WL 3038638, at *2.

Indeed, as mentioned, numerous courts have noted that “‘summary judgment is a proper

means of disposing of a request for review under 7 U.S.C. § 2023(a)(13), where there are

presented no genuine issues of material fact.’” Id. (quoting Bon Supermarket & Deli v. United

States, 87 F. Supp. 2d 593, 599 (E.D. Va. 2000)); see also Brother Convenience Store, Inc., 2021

WL 3911594, at *8; J&K Deli, Inc. v. United States, JMC-19-3282, 2021 WL 1102344, at *5 (D.

Md. Mar. 22, 2021) (Coulson, M.J.); 7-Eleven, Inc., 2016 WL 5107129, at *1-4. Furthermore,

“‘[w]hether the imposition of a penalty by the FNS [is] arbitrary or capricious is a matter of law

appropriately determined on a motion for summary judgment.’” Brother Convenience Store,

Inc., 2021 WL 3911594, at *8 (quoting Duchimaza v. United States, 211 F. Supp. 3d 421, 439

(D. Conn. 2016)) (alteration in Brother Convenience Store, Inc.).

III. Discussion

The Motion lodges two challenges to the Complaint. First, the Government asserts that

the Court lacks jurisdiction to hear this suit because plaintiffs failed to file the Complaint within

the thirty-day window provided for by statute. ECF 15-1 at 23-25. Second, the Government

posits that even if the Complaint had been timely filed, it fails on the merits. Id. at 25-30.

I shall consider each contention, in turn.

A. Timeliness

As noted, the Government contends that the suit was untimely filed and thus it is barred

by sovereign immunity. ECF 15-1 at 23-25; ECF 25 at 7-10. The Government also asserts that

there is no ground on which to toll the relevant deadline. ECF 25 at 3-7, 10-11. Plaintiffs

maintain that they delivered the suit to the Clerk on March 4, 2021, but the Clerk did not process

it at that time. See ECF 20-1 at 3-4. Therefore, they claim that the deadline is subject to

“tolling.” Id. at 5.

1.

As mentioned, under 7 U.S.C. § 2023(a)(13), a SNAP participant, such as the Store, may

seek judicial review of an Agency decision “by filing a complaint against the United States . . .

within thirty days after the date of delivery or service of the final notice of determination upon it,

requesting the court to set aside such determination.” In this case, the FDA was issued on

January 29, 2021 (ECF 17-2 at 201) and it was delivered to plaintiffs on February 2, 2021. Id. at

202. Therefore, in accordance with 7 U.S.C. § 2023(a)(13), plaintiffs were required to file suit

by March 4, 2021. As the Government points out (ECF 15-1 at 24-25; ECF 25 at 4-6), the

Complaint is date-stamped March 8, 2021, i.e., four days after the deadline. See ECF 4 at 1.

As an initial matter, controlling Fourth Circuit precedent would seem to foreclose

plaintiffs’ argument. See ECF 25 at 7, 9. Specifically, in Shoulders v. U.S. Dep’t of Agric., 878

F.2d 141, 143 (4th Cir. 1989), the Fourth Circuit determined that 7 U.S.C. § 2023 provided a

conditional waiver of the federal government’s sovereign immunity, so long as suit was filed

within the time frame prescribed by the statute.

In that case, the proprietor of Shoulders Market (“Shoulders”), a Virginia convenience

store, brought suit in a Virginia court under 7 U.S.C. § 2023(a)(13), seeking to “stay an

administrative order disqualifying Shoulders from participation in the federal food stamp

program . . . .” Id. at 142. Thereafter, the Government removed the case to federal court and

subsequently moved to dismiss. Id. at 143.

Notably, the Government argued that the suit was subject to dismissal, as the plaintiff had

conceded that it was not filed within the time period set forth in 7 U.S.C. § 2023(a)(13). Id. at

143. In response, the plaintiff argued that “her suit was timely under a Virginia statute that

grants a continuance of right to state court litigants whose attorneys are, among other things,

members of the Virginia General Assembly.” Id. (footnote omitted). The district court agreed

with the Government and dismissed the plaintiff’s action as untimely. Id.

On appeal, the Fourth Circuit affirmed. Id. In relevant part, the Fourth Circuit

determined that 7 U.S.C. § 2023(a)(13) constitutes a “conditional waiver of the United States’

sovereign immunity, the condition being that aggrieved parties must commence suit within thirty

days of notice of adverse FNS action.” Id. Citing Block v. North Dakota, 461 U.S. 273, 287

(1983), the Shoulders Court instructed that “courts must strictly construe and enforce such

conditions in favor of the United States.” Shoulders, 878 F.2d at 143. As a result, the Fourth

Circuit concluded that the provision “does not allow extensions of time.” Id. Further, the Fourth

Circuit explained that, to the extent that Virginia law permitted a longer limitations period to file

suit, the limitations period set forth in § 2023(a)(13) “must prevail, under the Supremacy Clause

. . . .” Id. (citing Felder v. Casey, 487 U.S. 131, 138 (1988); Free v. Bland, 369 U.S. 663, 666

(1962)).

Judge Russell of this Court has said that Shoulders commands that where a suit is not

“timely under § 2023(a)(13) . . . the Court lacks jurisdiction over it.” Akpala v. U.S. Dep’t of

Agric., GLR-18-1175, 2019 WL 4127159, at *3 (D. Md. Aug. 29, 2019). Under this principle,

because the Complaint was not docketed until four days after the operative deadline, the

Government would retain sovereign immunity, and thus the Court lacks jurisdiction to hear the

case.

However, Shoulders predates several significant Supreme Court cases. Since Shoulders

was decided, the Supreme Court has clarified that there exists meaningful differences between

jurisdictional requirements and mere claims-processing provisions. See, e.g., Fort Bend Cty.,

Texas v. Davis, ___U.S.___, 139 S. Ct. 1843 (2019) (finding nonjurisdictional the administrative

requirements set forth in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq.);

United States v. Wong, 575 U.S. 402, 412 (2015) (determining that the limitations period set

forth in the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., is not jurisdictional and thus is

subject to equitable tolling); Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157, 163-64 (2010)

(explaining that although the Copyright Act, 17 U.S.C. § 101 et seq., mandates parties to register

their copyrights before commencing an infringement action in federal court, this requirement is a

claim-processing rule, not a jurisdictional prerequisite to suit); Young v. United States, 535 U.S.

43, 47 (2002) (holding that the limitations period established in the 11 U.S.C. § 507(a)(8)(A)(i)

is subject to equitable tolling). Further, the Supreme Court has emphasized the “‘general rule’

that equitable tolling is available in suits against the Government.’” Wong, 575 U.S. at 412

(quoting Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 95 (1990)).

Other district courts outside of the Fourth Circuit have construed the statutory time

provision in 7 U.S.C. § 2023(a)(13) in light of the Supreme Court’s guidance, and have

determined that this provision is a “‘quintessential claim-processing rule[ ]’” that does “‘not

deprive a court of authority to hear a case.’” Joseph v. United States, 505 F. Supp. 3d 977, 980

(N.D. Cal. 2020) (quoting Wong, 575 U.S. at 410) (alterations added); see also Singh v. United

States, 20-cv-1640-DMS-BLM, 2021 WL 37724, at *2 (S.D. Cal. Jan. 4, 2021) (explaining that,

in light of Wong, 575 U.S. 412, “[p]laintiffs’ failure to comply with § 2023(a)(13)’s deadline

does not automatically bar their action”); accord Southard v. Wicomico Cty. Bd. of Educ., 79 F.

Supp. 3d 552, 556 (D. Md. 2015) (noting that “the Supreme Court has clarified the difference

between jurisdictional requirements and mere claims processing provisions,” which led “at least

one court to revise its prior conclusion that the IDEA conditioned federal jurisdiction on a

litigant's exhaustion of administrative remedies”) (citing Payne v. Peninsula Sch. Dist., 653 F.3d

863, 870-71 (9th Cir. 2011) (en banc)).

In particular, the Joseph Court explained, 505 F. Supp. 3d at 980-81:

[T]he government has to “clear a high bar” to show that Congress intended the

30-day deadline in Section 2023(a)(13) to be a jurisdictional limitations period.

[Wong, 575 U.S.] at 410. It has not succeeded. Nothing in the plain language of

the statute manifests a jurisdictional intention. To the contrary, Section

2023(a)(13) “‘reads like an ordinary, run-of-the-mill statute of limitations,’

spelling out a litigant's filing obligations without restricting a court's authority.”

Wong, 575 U.S. at 411 (quoting Holland v. Florida, 560 U.S. 631, 647 (2010))

. . . .

The next question is whether Section 2023(a)(13) manifests a “clear intent

to preclude tolling,” or “leaves room” for flexibility. Nutraceutical Corp. v.

Lambert, U.S. , 139 S. Ct. 710, 714 (2019); see also Young v. United

States, 535 U.S. 43, 49 (2002) (statutory deadline is subject to equitable tolling

unless inconsistent with text). Non-jurisdictional limitations periods are

“normally subject to a ‘rebuttable presumption’ in favor ‘of equitable tolling,’”

Holland, 560 U.S. at 645-46 (2010) (emphasis in original) (quoting Irwin v. Dep't

of Veterans Affairs, 498 U.S. 89, 95-96 (1990)), and the “simple fact that a

deadline is phrased in an unqualified manner does not necessarily establish that

tolling is unavailable,” Nutraceutical, 139 S. Ct. at 715.

Nothing in Section 2023(a) precludes tolling. The plain language

certainly does not say that. See Holland, 560 U.S. at 647 (lack of “unusually

emphatic” language suggests equitable tolling is available). In addition, the 30-

day period for seeking judicial review is “not particularly long,” and is not part of

a detailed scheme providing different deadlines for bringing different kinds of

claims, which are among other factors the Supreme Court has considered in

determining whether a statutory deadline may be equitably tolled. Id. at 646-47.

To be sure, Shoulders, 878 F.2d 141, is a published opinion of the Fourth Circuit and, to

the best of my knowledge, it has not been overruled. Thus, I am bound to abide by it.

See United States ex rel. Palmieri v. Alpharma, Inc., 928 F. Supp. 2d 840, 857 (D. Md.

2013) (“In sum, [United States ex rel Nathan v. Takeda Pharms. N. Am., Inc. 707 F.3d 451 (4th

Cir. 2013)] is binding circuit precedent that is clearly dispositive of the issue. It dictates that the

Amended Complaint must be dismissed for failure to state a claim upon which relief can be

granted.”), rev’d on other grounds, 647 F. App’x 166 (4th Cir. 2016). However, given the age of

the case, and more recent Supreme Court decisions, it may no longer control.

In any event, I need not resolve that issue. This is because, even if the filing deadline set

forth in the statute is subject to equitable tolling, the defense is unavailable to these plaintiffs. I

explain.

2.

Equitable tolling is a rare remedy that “allow[s] for exceptions to the strict enforcement

of deadlines” and “restore[s] a claimant's right to review even though she otherwise would be

time-barred.” Gayle v. United Parcel Serv., Inc., 401 F.3d 222, 226 (4th Cir. 2005). A litigant is

entitled to equitable tolling if: (1) he “‘pursu[ed] his rights diligently,’” and (2) “‘some

extraordinary circumstance stood in his way and prevented timely filing.’” Menominee Indian

Tribe of Wis. v. United States, 577 U.S. 250, 255 (2016) (quoting Holland v. Florida, 560 U.S.

631, 649 (2010)); see Edmonson v. Eagle National Bank, 922 F.3d 535, 548 (4th Cir.

2019); Battle v. Ledford, 912 F.3d 708, 718 (4th Cir. 2019).

But, as the Fourth Circuit has stated, equitable tolling is available only in “those rare

instances where—due to circumstances external to the party's own conduct—it would be

unconscionable to enforce the limitation period against the party and gross injustice would

result.” Rouse v. Lee, 339 F.3d 238, 246 (4th Cir. 2003) (en banc) (quoting Harris v.

Hutchinson, 209 F.3d 325, 330 (4th Cir. 2000)); see Irwin, 498 U.S. at 96 (noting that the

doctrine of equitable tolling is to be applied “sparingly”); Hutchinson, 209 F.3d at 330 (noting

that equitable tolling “must be guarded and infrequent, lest circumstances of individualized

hardship supplant the rules of clearly drafted statutes”).

Courts in this Circuit generally apply equitable tolling in a narrow set of situations,

including: (1) “where the complainant has been induced or tricked by his adversary's misconduct

into allowing the filing deadline to pass,” Gayle, 401 F.3d at 226 (internal quotation marks

omitted); (2) “where the claimant has actively pursued his judicial remedies by filing a defective

pleading during the limitations period,” id. (internal quotation marks omitted); or (3) where

“extraordinary circumstances beyond plaintiffs’ control made it impossible to file the claims on

time.” Hutchinson, 209 F.3d at 330. “In contrast, equitable tolling is not appropriate in cases

where ‘the claimant failed to exercise due diligence in preserving his legal rights.’” Angles, 494

F. App’x at 332 (quoting Irwin, 498 U.S. at 96).

In the Fourth Circuit, the “settled general rule” is that “the burden of proving an

affirmative defense is on the party asserting it.” McNeill v. Polk, 476 F.3d 206, 220 n.3 (4th Cir.

2007). Thus, a “plaintiff bears the burden of establishing the timeliness of the filing of her

complaint whe[n] it is contested by the defendant.” Cepada v. Board of Education of Baltimore

County, WDQ-10-0537, 2010 WL 3824221, at *3 (D. Md. Kinfolk. 27, 2010); see also Darden

v. Cardinal Travel Center, 493 F. Supp. 2d 773, 776 (W.D. Va. 2007).

In this case, plaintiffs assert that tolling should apply because the Complaint was

submitted timely but then untimely docketed, for reasons outside of their control. Specifically,

plaintiffs maintain that “the Complaint was presented to the Circuit Court for Baltimore City on

March 4, 2021,” but the “Civil Clerk’s office . . . was closed to the public” on that date. ECF 20-

1 at 4. As a result, they contend that “a drop box was the sole means for filing papers with that

Court.” Id. Plaintiffs seem to assert that the suit was placed in the drop box on March 4, 2021,

but, based on what they concede is “speculation and conjecture,” items deposited in the “drop

box were not stamped as received by the court on Thursday, March 4, 2021, nor Friday, March 5,

2021, nor Saturday March 6, 2021 nor Sunday March 7, 2021 . . . .” Id.

Further, plaintiffs posit, id. at 4-5: “As the pandemic was ongoing, staffing levels at the

courthouses across the State of Maryland were reduced.” Thus, in plaintiffs’ view, the “lag of

time from depositing to docketing was likely attributable to the COVID-19 pandemic,” which

“warrant[s] tolling of the filing deadline in 7 U.S.C. § 2023(a)(13).” Id. at 5.

To corroborate their claims, plaintiffs offer the Court the sworn Affidavit of Coriolanus

A.J. Ferrusi, an attorney who works for plaintiffs’ counsel at the firm of Freeman Rauch, LLC.

ECF 20-2 (the “Affidavit”). In the Affidavit, Mr. Ferrusi asserts that he “reviewed the internal

records and internal computerized system for Freeman Rauch, for the file materials” pertaining

to this suit. Id. at 1, ⁋ 2.

Based on Mr. Ferrusi’s review, he avers that on March 4, 2021, the “Complaint for

Judicial Review (Dkt. 1-5) was hand delivered to the Circuit Court for Baltimore City” by

Patrick J.L. Dillon, Esquire, who represented plaintiff in earlier stages of this case. ECF 20-2 at

1, ⁋ 3; see ECF 4 at 7 (indicating that Mr. Dillon filed the Complaint on behalf of plaintiffs).10

Specifically, Mr. Ferrusi maintains that “the letter, the Complaint for Judicial Review and a

check for $185.00 were deposited by hand” by Mr. Dillon to the Circuit Court’s drop box on

March 4, 2021. ECF 20-2 at 1, ¶ 3.

In support of these assertions, Mr. Ferrusi directs the Court’s attention to a letter authored

by Mr. Dillon, which is dated March 4, 2021. ECF 20-2 at 3 (the “Dillon Letter”). It is on firm

letterhead, and has a subject line that reflects the name of the instant suit. Id. Further, the Dillon

Letter states, in relevant part, id.:

Enclosed for filing in the above-referenced matter, please find the original

and two (2) copies of the Complaint and related papers. Also enclosed is this

firm’s check, number _____, in the amount of $185.00 to cover the filing fee in

this matter. Please date-stamp one of the copies and return in the self-addressed,

stamped envelope.

The Dillon Letter does not reflect the manner of delivery to the Circuit Court for

Baltimore City. For example, there is no indication of “Hand Delivery.” And, the check number

is not included, which suggests that this may not have been the final version of the letter.

Mr. Ferrusi also attests, ECF 20-2 at 2, ⁋ 4: “The clerk’s office for the Circuit Court for

Baltimore City, civil division, was closed to visitors on March 4, 2021 due to the ongoing

COVID-19 pandemic.” He adds that “the clerk’s office did not re-open for visitors until March

15, 2021.” Id.

10 Mr. Dillon has not entered his appearance in this case in this Court.

Mr. Ferrusi has submitted a press release issued by the Government Relations and Public

Affairs Office of the Maryland Judiciary (“Public Affairs”), which is dated March 8, 2021. Id. at

4-7 (the “2021 Press Release”). It states, id. at 4: “Beginning March 15, the clerks’ offices in the

circuit courts and District Court locations will be open to the public for all matters, though the

number of people may be limited to achieve COVID-19 social distancing requirement.” It also

states, ECF 20-2 at 7: “Individuals who have business with the courts should check the

Judiciary’s website . . . or call the clerk’s office for information before arriving at a local

courthouse location.”

The Government points to an earlier press release, also issued by Public Affairs, that

undermines plaintiffs’ contentions. ECF 25-1 (the “2020 Press Release”). It is dated December

22, 2020, approximately three months prior to the date on which plaintiffs’ counsel purportedly

attempted to file the Complaint with the Circuit Court for Baltimore City. Id. at 1. The 2020

Press Release provides, in part, id. at 2: “Clerks’ offices in the District Court of Maryland and

circuit courts throughout the state will remain open to the public for emergency purposes and by

appointment for other matters.”

Plaintiffs analogize the circumstances in this case to those in Joseph, 505 F. Supp. 3d at

979. See ECF 20-1 at 4-5. In Joseph, 505 F. Supp. 3d at 979, the plaintiffs received a notice of

a final decision of the FNS, which permanently disqualified them from the SNAP program, on

February 18, 2020. However, they did not file a suit seeking judicial review of that decision

until 36 days after the operative deadline had expired. Id. The plaintiffs argued that the district

should excuse their delay “in light of the extraordinary circumstances caused by the COVID-19

pandemic and stay-at-home orders, which impeded their ability to find and retain an attorney to

prepare the lawsuit.” Id. (internal quotation marks omitted).

The district court first found that § 2023(a)(13) was subject to equitable tolling, as

discussed, supra. Id. at 980-81. The Joseph Court then found that the plaintiffs were “entitled to

tolling.” Id. at 981. It explained, id.: “It should go without saying that the current public health

crisis and resulting restrictions on civil and personal life are extraordinary circumstances by any

measure. That was all the more true in the early part of 2020 when the pandemic initially struck,

and when plaintiffs’ time to file a lawsuit was running.” Further, the district court determined

that plaintiffs had “exercised reasonable diligence in looking to hire a lawyer, and the delay in

filing the complaint was of minimal duration.” Id.

In contrast, plaintiffs’ deadline to file the Complaint expired on March 4, 2021,

approximately one year into the COVID-19 pandemic. Certainly, the pandemic has continued to

impact the day-to-day machinations of public life. But, plaintiffs can hardly say that they were

subjected to restrictions of the kind that were imposed on the Joseph plaintiffs in March 2020, at

the very outset of the pandemic. See Joseph, 505 F. Supp. 3d at 979. Indeed, plaintiffs have not

presented any evidence to that effect. To the contrary, the evidence before the Court suggests

that the clerks’ offices of the Maryland courts were open on March 4, 2021, at least by

appointment. See ECF 25-1.

In my view, the evidence does not warrant tolling the relevant deadline in this case, even

assuming the Court has the authority to do so. Notably, other filings in this suit directly

contradict plaintiffs’ assertion that the suit was “presented” to the Circuit Court for Baltimore

City on March 4, 2021. ECF 20-1 at 4. Specifically, while the suit was still pending in the

Circuit Court for Baltimore City, plaintiffs filed an “Affidavit of Service” authored by Mr.

Dillon. See ECF 1-10 at 7-8.11 Under the penalty of perjury, Mr. Dillon stated, id. at 7, ⁋ 3: “On

or about March 8, 2021, my office filed the Complaint for Judicial Review in the above-

captioned matter.”

Moreover, there is no evidence to suggest that the Clerk’s Office for the Circuit Court for

Baltimore City was inaccessible to plaintiffs’ counsel on March 4, 2021. Indeed, far and away

from establishing that the Circuit Court was closed to the public until March 15, 2021, the 2021

Press Release expressly provides for the manner in which parties “who have business with the

courts” should communicate with the relevant court, to wit “call[ing] the clerk’s office for

information before arriving at a local courthouse location.” ECF 20-2 at 6.

Further, to the extent that the operations of the Circuit Court for Baltimore City were

curtailed, this was not a surprise. Thus, it is puzzling that plaintiffs’ counsel waited to file the

suit until March 4, 2021, the operative deadline to do so. See Kellum v. Comm'r of Social

Security, 295 F. App’x 47, 50 (6th Cir. 2008) (rejecting the application of equitable tolling when

plaintiff's failure to timely file was due, in part, to “his decision to wait until the last possible day

to file his complaint,” and describing the case as “yet another ‘classic reminder of the risks that

applicants take for no apparent reason by waiting until the very end of a filing period to initiate

their lawsuits”) (internal citation omitted). Indeed, the delay is all the more striking because, in

contrast to Joseph, plaintiffs’ counsel had represented plaintiff in the earlier stages of their

dispute with FNS. See ECF 17-2 at 197-98.

11 Remarkably, neither party directed the Court’s attention to this Affidavit. However, in

accordance with Fed. R. Evid. 201, the Court may “properly take judicial notice of its own

records.” Anderson v. Fed. Deposit Ins. Corp., 918 F.2d 1139, 1141 n.1 (4th Cir. 1990); see

also Schultz v. Braga, 290 F. Supp. 2d 637, 651 n. 8 (D. Md. 2003) (taking judicial notice of

dockets in state proceedings).

In sum, plaintiffs did not submit the Complaint in a timely manner. But, even assuming

that plaintiffs’ failure to do so does not divest this Court of subject matter jurisdiction, plaintiffs

have not presented any ground to toll the relevant deadline. Simply put, plaintiffs have not

established that their failure to file the Complaint within the time specified by the statute is

attributable to the inaccessibility of the Clerk’s Office for the Circuit Court for Baltimore City in

March 2021. Thus, plaintiffs’ suit is subject to dismissal.

Assuming, arguendo, that this Court has jurisdiction, I turn to review the arguments

pertaining to the merits of plaintiffs’ suit.

B. Trafficking Violation

The district court must first “determine the validity” of the FNS’s finding that the retailer

violated SNAP regulations. 7 U.S.C. § 2023(a)(15). In the context of SNAP, the retailer bears

the ultimate burden of proving by a preponderance of the evidence that the alleged violations did

not occur. AJS Petroleum, 2012 WL 683538, at *4. The Government, as the moving party, may

show it is entitled to summary judgment by relying on evidence in the Record or an absence of

evidence to support plaintiffs’ case. See Fed. R. Civ. P. 56(c)(1); Celotex Corp., 477 U.S. at 325.

Although the Court may go beyond the administrative record on de novo review, plaintiffs have

not supplemented the Record with respect to the merits.

The Motion asserts that “[p]laintiffs simply cannot meet their burden of proof that

trafficking did not occur in this case,” as “there were two separate instances of trafficking, and an

unconsummated request by the Owner to continue the illicit activity into the future, all occurring

on a single day.” ECF 15-1 at 27. Notably, plaintiffs failed to advance any argument to the

contrary in the Opposition. And, plaintiffs who fail to respond to an argument for dismissal are

deemed to have abandoned the claim. See Ferdinand-Davenport v. Children's Guild, 742 F.

Supp. 2d 772, 783 (D. Md. 2010). Therefore, to the extent that the Complaint lodges a challenge

to the Agency’s determination that a trafficking violation occurred, plaintiffs have abandoned the

claim.

In any event, the undisputed facts make clear that plaintiffs could not have met their

burden to show that no trafficking violation occurred. As earlier indicated, “[t]rafficking” is

defined in pertinent part as “buying, selling, stealing or otherwise effecting an exchange of

SNAP benefits issued and accessed via Electronic Benefit Transfer (EBT) cards . . . for cash or

consideration other than eligible food, either directly, indirectly, in complicity or collusion with

others, or acting alone.” 7 C.F.R. § 271.2. And, it is undisputed that Asghar, the owner of the

Store, did precisely that on June 19, 2020, by exchanging SNAP benefits for $80 in cash. See

ECF 17-2 at 96-99. Indeed, in the Response, plaintiffs’ counsel advised that Asghar admitted to

“request[ing] the Red Bull and did so in violation of SNAP regulations.” Id. at 132.

Thus, the Government is entitled to summary judgment with respect to the issue of a

violation of the SNAP regulations by plaintiffs.

C. Penalty

Having determined that the FNS did not err in finding that a trafficking violation

occurred, the Court must next consider whether the sanction of permanent disqualification

imposed by FNS is appropriate. As set forth above, review is premised on the arbitrary and

capricious standard. And,“[w]hether the imposition of a penalty by the FNS [is] arbitrary and

capricious is a matter of law appropriately determined on a motion for summary judgment.”

Brother Convenience Store, Inc., 2021 WL 3911594, at *8 (quoting Duchimaza, 211 F. Supp. 3d

at 439) (alteration in Brother Convenience Store, Inc.).

“The arbitrary and capricious standard asks ‘whether the determination is unwarranted in

law or without justification in fact.’” Mahmood, 2012 WL 3038638, at *2 (quoting Ahmed, 47 F.

Supp. 2d at 393). “[T]he views of the Secretary as to the appropriate sanction in a given case of

violation are entitled to very great, if not conclusive, weight.” Cross, 512 F.2d at 1218.

According to the Government, plaintiffs’ evidence does not come within hailing distance of

establishing that the Agency abused its discretion in declining to grant a trafficking CMP in lieu

of permanent disqualification. ECF 15-1 at 28-30.

Plaintiffs counter that “there is no evidence in said record that the FNS considered the

mitigating information and facts offered by Plaintiffs’ for consideration of a CMP.” ECF 20-1 at

6. In particular, plaintiffs argue that FNS erred because it “failed to weigh the extent of the

trafficking violations, coupled with Plaintiffs long history of compliance in contravention with 7

CFR §§ 278.6(i)(1)(iv) and (v).” ECF 20-1 at 8. Thus, plaintiffs assert that “the disqualification

was ‘unduly harsh.’” Id. (quoting 7-Eleven #22360 v. United States, 560 F. Supp. 3d 892, 916

(D. Md. 2021)).

Further, plaintiffs complain that when they “requested consideration of a different

amount for a CMP than the FNS’s calculation of $38,340.00,” it was to no avail. ECF 20-1 at 6.

And, plaintiffs claim that “the administrative record is absent any findings that the

disqualification will not cause undue hardship to SNAP households.” Id. at 7.

To review, permanent disqualification is the default penalty for a trafficking violation,

unless the Agency determines the retailer had in place an effective anti-trafficking policy, in

which case it may impose a CMP. See 7 U.S.C. § 2021(b)(3)(B); 7 C.F.R.

§ 278.6(e)(1)(i); Idias, 359 F.3d at 697. Moreover, to qualify for a CMP, the retailer must

submit “substantial evidence” showing that the retailer meets multiple criteria. See Idias, 359

F.3d at 697.

As noted, the criteria are as follows, 7 C.F.R. § 278.6(i):

Criterion 1. The firm shall have developed an effective compliance policy as

specified in § 278.6(i)(1); and

Criterion 2. The firm shall establish that both its compliance policy and program

were in operation at the location where the violation(s) occurred prior to the

occurrence of violations cited in the charge letter sent to the firm; and

Criterion 3. The firm had developed and instituted an effective personnel training

program as specified in § 278.6(i)(2); and

Criterion 4. Firm ownership was not aware of, did not approve, did not benefit

from, or was not in any way involved in the conduct or approval of trafficking

violations . . . .

As discussed earlier, 7 C.F.R. § 278.6(i) provides additional detail as to the criteria. And,

“[a]ll four of these criteria must be satisfied [by substantial evidence] in order to impose a

[CMP].” Castillo, 989 F. Supp. at 418; see also, e.g., Traficanti v. United States, 227 F.3d 170,

174 (4th Cir. 2000) (“The Agriculture Department promulgated four criteria to determine

whether a store qualifies for the fine.”); 7-Eleven, Inc., 2016 WL 5107129, at *3-4 (noting that

“[t]he CMP criteria require a firm to provide substantial evidence that establishes its fulfillment

of each of the [criteria],” and upholding permanent disqualification even when plaintiff

“provided evidence . . . that firm ownership was not aware and did not approve of the trafficking

violations.”).

As the regulations reflect, there is an expectation of written and contemporaneous

documentation to establish substantial evidence. “SNAP regulations require that, in the absence

of documentary evidence showing certain facts, the FNS must permanently disqualify a firm that

has trafficked in SNAP benefits . . . . To avoid disqualification, a firm must submit documentary

evidence establishing the criteria set forth in 7 C.F.R. § 278.6(i).” Muazeb v. United States, No.

17-cv-6754, 2019 WL 1613433, at *11 (S.D.N.Y. Mar. 28, 2019).

The Fourth Circuit's holding in Traficanti, 227 F.3d 170, is informative. There, the

retailer “had the opportunity to present evidence that he conducted an effective training program

to combat food stamp fraud.” Id. at 175. But, “[h]e submitted no documentation to show that he

met the four criteria mandated by the regulations.” Id. The Court said: “Store owners cannot

simply attest to having effective antifraud programs; rather, they must prove it.” Id. In its view,

“Traficanti fell well short of meeting the standards of the statute or the regulations. The FNS

decision not to convert the permanent disqualification into a fine was mandated by statute.” Id.

Likewise, in a case similar to this one, Judge Russell granted the defendant’s motion for

summary judgment, upholding the penalty of permanent disqualification. 7-Eleven, Inc., 2016

WL 5107129, at *2 n.1, 4. Judge Russell noted that the plaintiff retailer had provided evidence

of a compliance policy, that ownership was not aware of the violation, and that it was the

retailer’s first violation. Id. at *3. But, the plaintiff had not established that it had instituted an

effective personnel training program, and in fact documentation reflected that its employees had

not completed SNAP training. Id.

Other cases around the country are to like effect. See, e.g., Nova Grocery, Inc. v. United

States, 20-CV-2150 (KAM) (MMH), 2022 WL 2657119, at *8 (E.D.N.Y. July 8, 2022); Al

Ghadeer Meat Mkt. Inc. v. United States Dep't of Agric., Food & Nutrition Serv., No. 2:19-CV-

12131, 2022 WL 805864, at *6 (E.D. Mich. Mar. 15, 2022); Nakhle v. United States, No. 1:19

CV 01470, 2020 WL 6826367, at *9 (N.D. Ohio Nov. 20, 2020); Rosario v. United States, No.

3:14-CV-00907, 2017 WL 4316093, at *4 (D. Conn. Sept. 27, 2017); Kashif v. United States,

No. 14-cv-30180, 2016 WL 3886164, at *7-8 (D. Mass. May 12, 2016).

In my view, plaintiffs have engaged in a blinkered reading of the Agency’s decision. The

FNS expressly considered the arguments presented by the Response; it found that they were not

sufficient to warrant imposing a CMP in lieu of disqualifying the Store. See ECF 17-2 at 189-

191. More to the point, however, the Agency did not err in disqualifying the Store from the

SNAP program. Indeed, even putting aside the fact that the owner of the Store, rather than a

Store employee, committed a trafficking violation, the Record is devoid of any evidence showing

that the Store had developed antifraud policies and that it had trained its employees with respect

to that policy. These failures alone required the Agency to disqualify the Store.

To be sure, plaintiffs assert that they had “submitted proof of a program that contained

the Retailer Training Materials . . . and Plaintiffs had no prior record of violations with FNS

. . . .” ECF 20-1 at 8.12 Indeed, the Response stated that the Store “had an effective compliance

policy . . . based on Respondents’ knowledge of the SNAP program and information they

received from the FNS when they first entered the program.” ECF 17-2 at 133; see id. at 136-88

(SNAP Training Manual). Further, the Response provided that the Store’s employees “were

trained by Mr. Asghar personally based on his experience and in accordance with the SNAP

training guide.” Id. at 133.13

But, the Training Materials appear to be no more than the materials that FNS provided to

plaintiffs when the Store was approved to participate in the SNAP program. See id. at 136-88.

Plaintiffs have adduced no evidence showing that they developed antifraud policies, in

compliance with the regulations earlier described. For instance, the Training Materials do not

12 In support of this assertion, plaintiffs cite to “administrative record Asghar 001-053.”

ECF 20-1 at 8. The citation appears to pertain to ECF 17-2 at 136-88.

13 Indeed, it is apparent that on June 16, 2020, the Store clerk, Zain Tariq, complied with

the SNAP rules, which leads to the inference that the clerk was versed in the rules.

include any “[d]ocumentation reflecting the development and/or operation of a policy to

terminate the employment of any firm employee found violating FSP regulations” or

“[d]ocumentation of the development and/or continued operation of firm policy and procedures

resulting in appropriate corrective action following complaints of FSP violations or irregularities

committed by firm personnel.” 7 C.F.R. § 278.6(i)(1).

Nor does the Record contain any evidence showing how or when plaintiffs trained the

Store’s employees. Indeed, plaintiffs have not provided any evidence showing that Store

employees were trained on the details of the Store’s antifraud policies. However, the

requirement is not satisfied merely because the clerk complied with the Program rules on June

16, 2020.

As set forth above, federal regulations require that where a firm seeks a CMP as opposed

to a permanent disqualification, it must provide documentation pertaining to its policies and

training activities. See Traficanti, 227 F.3d at 175. Among other things, this information must

include “its dated training curricula and records of dates training sessions were conducted; a

record of dates of employment of firm personnel; and contemporaneous documentation of the

participation of the violating employee(s) in initial and any follow-up training held prior to the

violation(s).” Given these deficiencies, it is readily apparent that the Agency did not err in

disqualifying plaintiffs from SNAP.

And, as the Government points out, the Agency was not required to address plaintiff’s

argument regarding the amount of the proposed CMP, “because Plaintiffs were not eligible to

receive a CMP as a matter of law.” ECF 25 at 6. Common sense provides that the Agency was

not required to determine the appropriate amount of a CMP to which it had found plaintiffs were

not entitled. See also ECF 17-2 at 113 (“If it is determined that [Plaintiffs] qualify for a CMP,

the amount of that penalty will be $38,340 . . . The amount of the CMP was calculated in

accordance with SNAP regulations . . . .”) (emphasis added).

Plaintiffs also contend that FNS erred because it failed to consider offering Mini Market a

“hardship waiver.” ECF 20-1 at 7. To be sure, SNAP regulations contemplate a “hardship

waiver,” pursuant to which “FNS may impose a civil money penalty as a sanction in lieu of

disqualification when the firm subject to a disqualification is selling a substantial variety of

staple food items, and the firm’s disqualification would cause hardship to SNAP households

because there is no other authorized retail food store in the area selling as large a variety of staple

food items at comparable prices.” 7 C.F.R. § 278.6(f). However, such a CMP “may not be

imposed in lieu of a permanent disqualification,” which would be the case for a trafficking

violation. Id. This is indicative of the seriousness with which Congress has approached such

conduct. See 7 U.S.C. § 2021(b)(3)(B); 7 C.F.R. § 278.6(e)(1)(i).

In any case, there is no factual material in the record reflecting that the hardship criteria

are satisfied as to the Store. Nor have plaintiffs suggested that it might be able to produce such

material.

In sum, I am persuaded that the Agency’s decision to permanently disqualify the Store

from SNAP, rather than impose a CMP, was not arbitrary and capricious. Thus, defendant is

entitled to summary judgment as to the issue of the penalty.

IV. Conclusion

For the foregoing reasons, I shall dismiss the suit under Rule 12(b)(1), for lack of subject

matter jurisdiction. But, to the extent the Court has jurisdiction, I shall grant summary judgment

in favor of the Government.

An Order follows, consistent with this Memorandum Opinion

Date: August 18, 2022 /s/

Ellen Lipton Hollander

United States District Judge