Nova Grocery Inc. v. United States of America

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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NOVA GROCERY, INC.,

MEMORANDUM & ORDER

Plaintiff, 20-CV-2150 (KAM) (MMH)

- against -

UNITED STATES OF AMERICA AND TOM VILSACK1,

SECRETARY OF THE UNITED STATES DEPARTMENT

OF AGRICULTURE,

Defendants.

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KIYO A. MATSUMOTO, United States District Judge:

Nova Grocery is a small grocery store – measuring

approximately 600 square feet – that was authorized to participate

in the Supplemental Nutrition Assistance Program (“SNAP”)

administered by the United States Department of Agriculture

(“USDA” or the “Agency”). In 2020, the USDA permanently

disqualified Nova Grocery from participating in SNAP after

concluding that it had trafficked in SNAP benefits. Nova Grocery

filed this action challenging the disqualification pursuant to 7

U.S.C. § 2023(a)(13), and Defendants now move for summary judgment

pursuant to Federal Rule of Civil Procedure 56. For the reasons

set forth below, Defendants’ motion is GRANTED.

1 Pursuant to Federal Rule of Civil Procedure 25(d), Tom Vilsack is substituted

for Sonny Perdue as a Defendant in this action.

BACKGROUND

Nova Grocery is located at 1089 Rutland Road in Brooklyn,

New York. (ECF No. 28-2 (“Defs.’ 56.1”) ¶ 1; ECF No. 25 (“Pl.’s

56.1”) ¶ 1.) The store measures approximately 600 square feet and

was open daily from 7:00 AM to 10:00 PM. (Defs.’ 56.1 ¶¶ 21, 31;

Administrative Record (“A.R.”)2 at 11-12, 25, 28, 289.)3 During

the period at issue, the store – which largely carried “low dollar”

items such as canned and packaged goods, single-serving meals, and

individual beverages – had one cash register, no shopping baskets

or carts, and no optical scanners for use at checkout. (Defs.’

56.1 ¶¶ 32-34; Pl.’s 56.1 ¶¶ 14-16; A.R. at 404.) On March 5,

2019, the USDA’s Food and Nutrition Service (“FNS”) approved Nova

Grocery’s application to participate in SNAP as a small grocery

store. (A.R. at 288.)

On October 21, 2019, FNS sent Nova Grocery a letter

charging the store with trafficking in SNAP benefits – i.e.,

exchanging SNAP benefits for cash or other ineligible items –

between March 2019 and August 2019. (Id. at 301-16.) In

2 The court collectively refers to ECF Nos. 30-1, 31-1, and 32-1 as the

Administrative Record and uses the pagination provided on the bottom right-hand

corner of the page.

3 Plaintiff asserts that Nova Grocery “actually measures closer to 1,000 square

feet.” (Pl.’s 56.1 ¶ 13 (citing A.R. at 28).) The page cited by Plaintiff,

however, states that Nova Grocery is approximately 600 square feet. (A.R. at

28.) Similarly, although Plaintiff asserts that Nova Grocery “stayed open 24

hours a day” during the summer (Pl.’s 56.1 ¶ 8 (citing A.R. at 289)), the page

cited by Plaintiff provides no support for that assertion. (A.R. at 289 (stating

that Nova Grocery was open “7 days a week 7:00 am – 10:00 pm”).)

determining whether a participating store has engaged in

trafficking, FNS may rely on “evidence obtained through a

transaction report under an electronic benefit transfer system.”

7 U.S.C. § 2021(a)(2); 7 C.F.R. § 278.6(a). The FNS charge

letter’s allegations were based on over 300 suspicious

transactions from review of electronic benefit transfer (“EBT”)

records that fell into two general categories: (1) the same SNAP

household conducted multiple transactions at Nova Grocery within

a short time period, and (2) Nova Grocery processed multiple

transactions that were considered to be large, based on the store’s

observed characteristics and food stock. (Id. at 301.) With

respect to the first category, FNS flagged 133 violative

transactions with a total dollar value of $9,065.17. (Id. at 304-

10.) On August 1, 2019, for example, a single SNAP household made

one purchase for $70.99 at 3:05 AM – more than five hours after

the store closed – and made a second purchase for $70.99 less than

a minute later. (Id. at 304.) With respect to the second category,

FNS flagged 287 transactions with a total dollar value of

$23,421.19. (Id. at 311-16.) All of the transactions in this

second category exceeded $43.00, with more than sixty exceeding

$100.00 and one exceeding $200.00. (Id.)

Nova Grocery’s counsel objected to the charge of

trafficking by letter dated October 30, 2019. (Id. at 319-22.)

Counsel argued that “[t]he mere submission of analytical numbers

should not be sufficient to establish trafficking.” (Id. at 321.)

Counsel also offered various explanations for the transaction data

highlighted by FNS, including that (1) Nova Grocery is situated in

a low-income area of Brooklyn with many SNAP-eligible households;

(2) “it is not unusual for customers to complete one transaction

and later (which often equates to the following day) make another

transaction”; and (3) Nova Grocery had a credit system whereby

customers would pay off their bill when their SNAP benefits became

available. (Id. at 320-21.) Finally, although counsel did not

specifically request a civil monetary penalty in lieu of permanent

disqualification, his letter argued that Nova Grocery had

established an “effective compliance program which promoted full

compliance with all SNAP regulations.” (Id. at 320.)

In support of these claims, Nova Grocery’s counsel

attached pictures from the store and affidavits from owner Jinnat

Ara Begum and employee Mohammed Uddin. In the affidavits, Begum

and Uddin declared that they had never exchanged a customer’s SNAP

benefits for cash or other ineligible items. (Id. at 324, 330.)

Beggum and Uddin also attested to the existence of a credit system

whereby customers would pay down their balance when their SNAP

benefits became available. (Id. at 324-25, 330-31.) In addition

to the affidavits, Nova Grocery’s counsel attached four scanned

pages that purported to reflect “a log of the credit owed by

various customers as part of this SNAP/EBT credit system.” (Id.

at 321, 326-29.) Three of the four pages appear to refer to the

same individual, and two of the four pages appear to be markings

on a brown paper bag. (Id. at 326-29.) Finally, Nova Grocery’s

counsel included an undated document entitled “Nova Grocery, Inc.

Supplemental Nutrition Assistance Program Policy & Procedures,” as

well as a signed acknowledgement – dated October 1, 2017 –

regarding Nova Grocery’s policies and procedures for SNAP. (Id.

at 332-35.)4

By letter dated December 17, 2019, FNS affirmed its

finding of trafficking and concluded that Nova Grocery was not

entitled to a civil monetary penalty in lieu of permanent

disqualification. (Id. at 365-66.) On December 24, 2019, Nova

Grocery requested review of FNS’s decision before the USDA’s

Administrative Review Branch. (Id. at 371-74.) On April 6, 2020,

the USDA issued a final decision affirming the finding of

trafficking as well as the sanction of permanent disqualification.

(Id. at 399-409.)

Nova Grocery commenced this action on May 12, 2020,

seeking reversal of the USDA’s final decision and asserting

violations of the Administrative Procedure Act (“APA”) and the Due

Process Clause of the Fifth Amendment. (ECF No. 1 (“Compl.”).)

4 On October 31, 2019, FNS requested additional documentation to support

counsel’s claim that Nova Grocery extended credit to its SNAP customers. (Id.

at 351-52.) The record does not reflect a response by Nova Grocery to the

October 31, 2019 request. (See id. at 361.)

With the consent of Defendants, the court granted Plaintiff’s

motion to stay the disqualification pending the disposition of

this action. (7/15/20 Minute Order.) On March 16, 2021, the court

held a pre-motion conference regarding Defendants’ proposed motion

for summary judgment, which is now fully briefed and ripe for

decision. (3/16/21 Minute Entry.)

LEGAL STANDARD

Summary judgment shall be granted to a movant who

demonstrates “that there is no genuine dispute as to any material

fact and the movant is entitled to judgment as a matter of law.”

Fed. R. Civ. P. 56(a). “A fact is ‘material’ for these purposes

when it ‘might affect the outcome of the suit under the governing

law.’” Rojas v. Roman Catholic Diocese of Rochester, 660 F.3d 98,

104 (2d Cir. 2011) (quoting Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986)). No genuine issue of material fact exists

“unless there is sufficient evidence favoring the nonmoving party

for a jury to return a verdict for that party.” Anderson, 477

U.S. at 249. “If the evidence is merely colorable, or is not

significantly probative, summary judgment may be granted.” Id. at

249-50 (citations omitted).

When bringing a motion for summary judgment, the movant

carries the burden of demonstrating the absence of any disputed

issues of material fact and entitlement to judgment as a matter of

law. Rojas, 660 F.3d at 104. In deciding a summary judgment

motion, the court must resolve all ambiguities and draw all

reasonable inferences against the moving party. Flanigan v. Gen.

Elec. Co., 242 F.3d 78, 83 (2d Cir. 2001) (citing Matsushita Elec.

Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

A moving party may indicate the absence of a factual dispute by

“showing . . . that an adverse party cannot produce admissible

evidence to support the fact.” Fed. R. Civ. P. 56(c)(1)(B). Once

the moving party has met its burden, the nonmoving party “must

come forward with admissible evidence sufficient to raise a genuine

issue of fact for trial in order to avoid summary judgment.”

Jaramillo v. Weyerhaeuser Co., 536 F.3d 140, 145 (2d Cir. 2008)

(citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)).

The Food and Nutrition Act provides for “a trial de novo

by the court in which the court shall determine the validity of

the questioned administrative action in issue . . . .” 7 U.S.C.

§ 2023(a)(15). The court “must reach its own factual and legal

conclusions based on the preponderance of the evidence, and should

not limit its consideration to matters previously appraised in the

administrative proceedings.” Nadia Int’l Mkt. v. United States,

689 F. App’x 30, 33 (2d Cir. 2017) (quoting Ibrahim v. United

States, 834 F.2d 52, 53-54 (2d Cir. 1987)); see also, e.g., Timsina

v. United States, 835 F. App’x 633, 635 (2d Cir. 2020) (explaining

that the court “reexamine[s] the agency’s decision on a fresh

record, rather than determining whether the administrative

decision was supported by substantial evidence” (quoting Ibrahim,

834 F.2d at 53)). When reviewing the sanction imposed by the

agency, the court assesses “whether the Secretary’s action was

arbitrary or capricious, i.e., whether it was unwarranted in law

or without justification in fact.” Nadia Int’l Mkt., 689 F. App’x

at 33 (quotations and citation omitted).

DISCUSSION

Trafficking is defined to include “buying, selling,

stealing, or otherwise effecting an exchange of SNAP benefits . .

. for cash or consideration other than eligible food . . . .” 7

C.F.R. § 271.2. A finding of trafficking may be based on “on-site

investigations, inconsistent redemption data, or evidence obtained

through a transaction report under an electronic benefit transfer

system.” 7 U.S.C. § 2021(a)(2). The agency “may permanently

disqualify a store ‘upon . . . the first occasion’ of SNAP benefits

trafficking.” Timsina, 835 F. App’x at 636 (alteration original)

(quoting 7 U.S.C. § 2021(b)(3)(B)).

I. Burden of Proof

The Second Circuit “has not yet decided which party bears

the burden of proof at a trial under § 2023(a)(15) – i.e., whether

the [store] must prove by a preponderance of the evidence that the

disqualification decision ‘is invalid,’ or the government must

prove ‘the validity of the questioned administrative action.’”

Timsina, 835 F. App’x at 635 n.2 (citations omitted). “[A]ll of

the courts of appeals that have addressed the burden-of-proof issue

under Section 2023,” however, “have placed the burden of proof on

the party challenging the USDA’s finding of liability.” Irobe v.

U.S. Dep’t of Agric., 890 F.3d 371, 378 (1st Cir. 2018) (collecting

cases). Similarly, a “multitude of other courts in this Circuit

. . . have held that the burden rests with the ‘[p]laintiffs, as

the parties challenging their permanent disqualification from

SNAP.’” Loma Deli Grocery Corp. v. United States, 2021 WL 4135216,

at *6 (S.D.N.Y. Sept. 10, 2021) (collecting cases) (citation

omitted; second alteration original). Although the court has no

basis to disturb this consensus, the court ultimately need not

resolve the question of which party bears the burden of proof

because, “even assuming the Secretary bears the burden of proof,

a reasonable factfinder could conclude only that [Nova Grocery]

had engaged in the trafficking of SNAP benefits.” Nadia Int’l

Mkt., 689 F. App’x at 33 n.1.

II. Nova Grocery Engaged in Trafficking

The Food and Nutrition Act provides express statutory

authority for the USDA to base a finding of trafficking on

“evidence obtained through a transaction report under an

electronic benefit transfer system.” 7 U.S.C. § 2021(a)(2). As

a result, the Second Circuit has held that it is “entirely proper”

for the Agency “to rely on transaction data alone in making its

trafficking determination.” Nadia Int’l Mkt., 689 F. App’x at 33

(emphasis added); see also, e.g., Capellan v. United States, 2020

WL 1047907, at *4 (S.D.N.Y. Mar. 4, 2020) (“[A] pattern of

suspicious transactions can be sufficient evidence for [the

Agency’s] disqualification determination to be valid.”); Duchimaza

v. United States, 211 F. Supp. 3d 421, 432 (D. Conn. 2016) (“[T]he

Government may permanently disqualify a retailer on the basis of

EBT data.”); 109 Merrick Deli Corp. v. United States, 2014 WL

6891944, at *4 (E.D.N.Y. Sept. 30, 2014) (finding “no legal basis

for [the store’s] assertion that electronic EBT transaction data,

alone, cannot sustain a trafficking violation”). Here, the

transaction data identified by the Agency – in conjunction with

its observations regarding Nova Grocery and nearby stores – provide

overwhelming circumstantial evidence of trafficking that is

unrebutted on summary judgment.

As discussed above, the Agency identified 57 sets of

transactions – 133 transactions total – that were completed by the

same household within a short period of time. (A.R. at 304-10.)

To take just a few examples: on June 26, 2019, a household

completed a transaction for $56.18 before completing a transaction

for $68.56 less than two minutes later; on July 1, 2019, a

household completed a transaction for $80.00 before completing a

transaction for $100.00 approximately an hour-and-a-half later; on

July 10, 2019, a household completed a transaction for $99.86

before completing a transaction for $58.65 less than an hour-and-

a-half later; on August 1, 2019, a household completed two

transactions for $70.99 in less than a minute; and on August 17,

2019, a household completed transactions for $75.99, $75.99, and

$22.22 within a span of five minutes. (Id.) As courts in this

circuit have recognized, “large, successive transactions made by

a single household in a short period of time” represent “compelling

evidence of trafficking.” Brothers Grocery & Deli Corp. v. United

States, 2021 WL 4443723, at *10 (S.D.N.Y. Sept. 28, 2021); see

also, e.g., Loma Deli Grocery Corp., 2021 WL 4135216, at *7

(collecting cases).

The Agency also identified 287 transactions that were

excessively large based on the store’s observed characteristics

and food stock. (A.R. at 311-16.) For example, customers

completed more than sixty transactions in excess of $100 and one

transaction in excess of $200. (Id. at 311-12.) As outlined

above, however, Nova Grocery was a small store that carried limited

SNAP-eligible items such as staple foods, snacks, and beverages,

with its most expensive item being baby formula priced at $39.99.

(See, e.g., id. at 290-92, 404-05.) The store had one cash

register, no shopping baskets or carts, and no optical scanner for

use at checkout. (Id. at 289, 404.)

In light of Nova Grocery’s store characteristics and

limited stock of SNAP-eligible items, the large number of high-

dollar transactions is compelling evidence of trafficking. See,

e.g., SS Grocery, Inc. v. U.S. Dep’t of Agric., 340 F. Supp. 3d

172, 182 (E.D.N.Y. 2018) (“Given [the store’s] size, layout, lack

of shopping carts, as well as lack of technology to quickly process

large transactions, it is highly implausible that each and every

one of the excessively large transactions took place.”). That is

particularly true here because several large transactions occurred

within a short period of time. On August 6, 2019, for example,

Nova Grocery processed transactions of $167.86, $149.29, $96.29,

all in less than a half-hour. (A.R. at 311-12.) And just three

days later, Nova Grocery processed transactions of $85.99 and

$99.99 in less than two minutes. (Id. at 312-13.) Having

conducted a de novo review of the record, the court finds that

Nova Grocery “lacked the high-priced inventory or checkout

mechanisms needed to process sales at the speed and total dollar

value indicated on the transaction reports.” Nadia Int’l Mkt.,

689 F. App’x at 33.

The undisputed evidence of Nova Grocery’s trafficking is

even more compelling after considering similar SNAP-eligible

stores. The dollar amounts for transactions at Nova Grocery were

26% higher than other small grocery stores in New York, for

example, and the total amount of EBT SNAP transactions at Nova

Grocery was 33% higher – despite the fact that there were 77

authorized SNAP stores within a half-mile radius of Nova Grocery.

(Defs.’ 56.1 ¶ 37.) Although a store “might have higher than

average SNAP transaction amounts due to the lack of access to other

SNAP authorized stores,” the plethora of nearby stores suggests

that Nova Grocery’s higher-than-average transaction amounts are

indicative of trafficking, particularly in light of the store’s

limited stock. E. Vill. New Deli Corp. v. United States, 2021 WL

5507048, at *8 (S.D.N.Y. Nov. 23, 2021); see also, e.g., Timsina,

835 F. App’x at 636-37 (“[T]he factfinder may reasonably infer

trafficking when the redemption data shows that a store regularly

processes purported SNAP transactions for significantly higher

per-transaction amounts than nearby stores offering similar

wares.” (alteration original) (quoting Irobe, 890 F.3d at 379)).

Further illustrating the point, the Agency identified

Nova Grocery customers who did shop at larger SNAP-eligible stores

nearby, but who transacted much larger amounts at Nova Grocery.

On two days in April 2019, for example, one household transacted

$157.53 at Nova Grocery and just $11.17 at a nearby supermarket.

(A.R. at 361.) On two days in July 2019, the same household

transacted $292.55 at Nova Grocery and $168.34 at a nearby

superstore. (Id.) And on two days in August 2019, the same

household transacted $176.98 at Nova Grocery and $13.66 at a nearby

supermarket. (Id.) As the Agency concluded, this pattern is also

indicative of trafficking in light of Nova Grocery’s comparatively

small size and limited stock. Indeed, in affirming the grant of

summary judgment in Timsina, the Second Circuit found it

“particularly noteworthy” that a particular household spent under

$200 at a nearby Costco before spending more than $400 at the much

smaller subject store, less than an hour later. 835 F. App’x at

633; see also, e.g., E. Vill. New Deli Corp., 2021 WL 5507048, at

*7 (granting summary judgment against store where “[f]urther

circumstantial evidence of violations [was] supplied by the

suspicious shopping patterns of various households that shopped at

both [the subject store] and nearby grocery stores”).

Plaintiff’s five-page opposition to Defendants’ motion

– which cites no caselaw other than a rote recitation of the

summary judgment standard – does not dispute the Agency’s

transaction records or otherwise demonstrate a genuine issue of

material fact. Instead, Plaintiff criticizes the lack of “direct”

evidence of trafficking and argues that summary judgment should be

denied without direct evidence like an “actual individual” who

witnessed the trafficking. (ECF No. 26 (“Pl.’s Opp’n”) at 2, 4-

5.) That is not the law. As the Second Circuit has “emphasized

time and again,” including in this precise context, circumstantial

evidence “is of no lesser probative value than direct evidence.”

Timsina, 835 F. App’x at 637 (citation omitted). That is

especially true “when, as here, it is the only proof likely to be

available.” Id.; see also, e.g., Loma Deli Grocery Corp., 2021 WL

4135216, at *8 (“[The Agency] does not need to provide evidence

that a store was caught ‘red-handed’ engaging in a food stamp

violation [at] the summary judgment stage.” (citation omitted)).

Other than its misapprehension of the law, Nova Grocery

offers precious little to rebut the Agency’s overwhelming

circumstantial evidence of trafficking. For example, Nova Grocery

obtained affidavits from four customers who stated that they

purchased items on credit and paid for the balance, “in just one

transaction,” when their SNAP benefits became available. (ECF No.

28-3 at 6-16.) One of those customers, however, did not make any

of the transactions on which the disqualification was based. (Id.

at 2-3.) The other three customers collectively completed only

six of the more than 300 transactions on which the disqualification

was based. (Id. at 3-4.)

Thus, “even if [Nova Grocery’s] proffered explanations

could account for some of the suspicious transactions, there still

remained ample circumstantial evidence to support the inference

that [Nova Grocery] had trafficked in SNAP benefits.” Timsina,

835 F. App’x at 637; see also Nadia Int’l Mkt., 689 F. App’x at 33

(affirming grant of summary judgment where store’s accountant

identified only three transactions to support the claim “that the

suspect transactions were the result of customers buying goods on

credit”); Loma Grocery Deli Corp., 2021 WL 4135216, at *10 (finding

that affidavits from eight customers “d[id] not call into question

the inference of trafficking arising from the 328 suspicious

transactions”). Although it may be “unfortunate[]” for Nova

Grocery that other customers were unwilling to sign similar

affidavits (Pl.’s Opp’n at 4), the affidavits before the court are

insufficient to demonstrate a genuine dispute of material fact.

The same is true for the purported credit ledger submitted by Nova

Grocery, which appears to relate to a handful of transactions by

a single customer and which Nova Grocery failed to connect to any

of the transactions identified by the Agency. (A.R. at 326-29.)

Finally, an owner (Jinnat Ara Begum) and employee

(Mohammed Uddin) of Nova Grocery submitted affidavits stating that

they never exchanged SNAP benefits for cash or other ineligible

items. (A.R. at 324, 330.) The affidavits, however, do not state

that Begum and Uddin were the only individuals who processed SNAP

transactions at Nova Grocery. Although Begum declares that she is

“the” owner of Nova Grocery and that Uddin was her only “employee”

(id. at 324), the record reflects that Begum had a co-owner named

Md Monirul Hoq Chowdhury. (See, e.g., id. at 6, 23, 175, 288,

301, 369, 397.) Indeed, the Agency specifically noted that

although it received affidavits from Begum and Uddin, “there are

two owner[s] listed” for Nova Grocery. (Id. at 364.) Thus, the

two affidavits in the record are insufficient to raise a genuine

issue as to whether Chowdhury – or any other person who may have

processed transactions for Nova Grocery – engaged in trafficking.

Moreover, “it is well-settled that ‘a party cannot create a triable

issue of fact merely by stating in an affidavit the very

proposition they are trying to prove.’” Loma Deli Grocery Corp.,

2021 WL 4135216, at *9 (quoting Hicks v. Baines, 593 F.3d 159, 167

(2d Cir. 2010)); see also, e.g., Sky Grocery, LLC v. U.S. Dep’t of

Agric., 2017 WL 1054484, at *9 (D. Conn. Mar. 20, 2017) (granting

summary judgment and rejecting “the unsubstantiated affidavit of

[the store’s] owner stating that trafficking did not occur”); E.

Vill. New Deli Corp., 2021 WL 5507048, at *8 (same). Accordingly,

even if the Begum and Uddin affidavits had accounted for Chowdhury

or other individuals who may have processed transactions for Nova

Grocery, the court would still conclude that the affidavits are

insufficient to demonstrate a genuine issue of material fact.

In short, Defendants have marshalled an overwhelming

array of circumstantial evidence that Nova Grocery engaged in

trafficking, including hundreds of repetitive transactions by

individual households within a short period of time; hundreds of

transactions that were exceedingly large in light of Nova Grocery’s

store characteristics and stock of SNAP-eligible items; an

analysis of Nova Grocery’s SNAP transactions compared to stores of

a similar size in New York; and an analysis of individual

households who shopped at both Nova Grocery and larger stores

nearby. In response, Nova Grocery offers a handful of conclusory

affidavits that, at best, speak to only a fraction of the

transactions on which the disqualification was based. Thus,

regardless of whether it is Nova Grocery’s burden to prove that

each and every transaction was not an instance of trafficking – as

courts have overwhelmingly concluded – or the Agency’s burden to

prove that at least one transaction was an instance of trafficking,

the evidence in the record is “sufficient to establish as a matter

of law that [Nova Grocery] engaged in trafficking of SNAP

benefits.” Nadia Int’l Mkt., 689 F. App’x at 33.

III. The Permanent Disqualification Was Not Arbitrary and

Capricious

As an alternative to permanent disqualification, the

Agency has discretion to impose a civil monetary penalty for SNAP

benefits trafficking “if the Secretary determines that there is

substantial evidence that [the] store or food concern had an

effective policy and program in effect to prevent violations . .

. .” 7 U.S.C. § 2021(b)(3)(B). The Agency determines whether a

civil monetary penalty is warranted based on four criteria: (1)

whether the firm developed an effective compliance policy under

the regulations; (2) whether the firm established that its

compliance policy and program were in operation at the location

where the violations occurred prior to the issuance of the charge

letter; (3) whether the firm developed and instituted an effective

personnel training program under the regulations; and (4), as

relevant here, whether it was only the first occasion in which

firm management was involved in trafficking violations. 7 C.F.R.

§ 278.6(i). With respect to the first criterion, the Agency

considers “written and dated statements of firm policy which

reflect a commitment to ensure that the firm is operated in a

manner consistent with . . . the proper acceptance and handling of

food coupons.” Id. § 278.6(i)(1). With respect to the second

criterion, “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.” Id. With respect to the third

criterion, the Agency requires stores to provide “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).” Id. § 278.6(i)(2).

“A federal court’s determination of whether the

imposition of a penalty is arbitrary or capricious is a matter of

law that is properly decided on a motion for summary judgment.”

SS Grocery, Inc., 340 F. Supp. 3d at 185. “If the penalty imposed

by [the Agency] is in accord with its own guidelines, district

courts may not deem the underlying decision arbitrary and

capricious.” Id.; see also, e.g., Arias v. United States, 2014 WL

5004409, at *11 (S.D.N.Y. Sept. 29, 2014) (“If the penalty imposed

is in accordance with the settled policy of the [Agency], it is

not arbitrary or capricious.” (citation omitted)). The court

concludes that the Agency followed the applicable regulations, and

thus its decision to permanently disqualify Nova Grocery was not

arbitrary and capricious.

To begin, Nova Grocery’s response to the charge letter

did not specifically request a civil monetary penalty in lieu of

permanent disqualification. (A.R. at 319-22; see id. at 362.) In

Nadia International Market, the Second Circuit affirmed a

permanent disqualification from SNAP where the store “never made

. . . a request to the agency” for a civil monetary penalty. 689

F. App’x at 34. In addition, the documentation submitted by Nova

Grocery came nowhere close to satisfying the exacting regulatory

standards.

First, the undated policy document submitted by Nova

Grocery (A.R. at 333-36) was not a “written and dated statement[],”

and Nova Grocery failed to establish that the policy was provided

to employees “prior to the commission of the violation[s].” 7

C.F.R. § 278.6(i)(1). Second, the Agency rightfully cast doubt on

the acknowledgement of SNAP training because it was dated October

1, 2017 – nearly a year-and-a-half before Nova Grocery was ever

authorized to participate in SNAP. (A.R. at 333; see id. at 363

(“It is questionable why there would be a SNAP training program in

place . . . before the store was authorized, but not have any

documentation showing training was provided following

authorization in 2019.”).) In any event, the training

acknowledgement submitted by Nova Grocery did not include

“training curricula and records of dates training sessions were

conducted.” 7 C.F.R. § 278.6(i)(2); see, e.g., E. Vill. New Deli

Corp., 2021 WL 5507048, at *10 (affirming permanent

disqualification where store failed to provide dated training

curricula or contemporaneous training records). Finally, although

the declarations from Nova Grocery’s co-owner and employee

attested to the existence of regular training (A.R. at 324, 330),

“[s]tore owners cannot simply attest to having effective antifraud

programs; rather, they must prove it.” Rosario v. United States,

2017 WL 4316093, at *4 (S.D.N.Y. Sept. 27, 2017) (quoting

Traficanti v. United States, 227 F.3d 170, 175 (4th Cir. 2000)).

In sum, the decision to permanently disqualify Nova Grocery was

not arbitrary and capricious because the Agency properly followed

its regulations, which demand substantial and contemporaneous

evidence of effective policies and training programs that existed

prior to the violations.

IV. Nova Grocery Abandoned Its Meritless APA and Due Process

Claims

In addition to its claim under the Food and Nutrition

Act, Nova Grocery’s complaint asserted violations of the APA and

the Due Process Clause. (Compl. at 7-9.) Although Defendants

moved for summary judgment on those claims (ECF No. 28-1 (“Defs.’

Mem.”) at 13-17), Nova Grocery’s opposition does not respond to

Defendants’ arguments for dismissal. Accordingly, the court deems

Nova Grocery’s APA and due process claims abandoned. See, e.g.,

Jackson v. Fed. Exp., 766 F.3d 189, 198 (2d Cir. 2014) (“[I]n the

case of a counseled party, a court may, when appropriate, infer

from a party’s partial opposition that relevant claims or defenses

that are not defended have been abandoned.”); Callahan v. County

of Suffolk, 2022 WL 1283610, at *8 (E.D.N.Y. Apr. 29, 2022)

(“Federal courts may deem a claim abandoned when a party moves for

summary judgment on one ground and the party opposing summary

judgment fails to address the argument in any way.” (citation

omitted)).

In any event, the court agrees with Defendants that the

APA and due process claims are meritless. First, “an agency action

is reviewable under the APA only if there are no adequate

alternatives to APA review in court.” U.S. Army Corps of Eng’rs

v. Hawkes Co., Inc., 578 U.S. 590, 600 (2016). The de novo review

provision of 7 U.S.C. § 2023(a)(15) provides such an adequate

alternative. See, e.g., E. Vill. New Deli Corp., 2021 WL 5507048,

at *10 (collecting cases). Second, “[t]he trial de novo provision

clearly afforded full procedural due process.” Ibrahim, 834 F.2d

at 54; see also, e.g., Nadia Int’l Mkt., 689 F. App’x at 34 (finding

“no merit in [the plaintiff’s] arguments that the administrative

process violated its due process rights”). Finally, “prevention

of illegal activity within the [SNAP] program is a legitimate

government purpose,” and therefore any substantive due process

claim also fails. E. Vill. New Deli Corp., 2021 WL 5507048, at

*11 (alteration original; citation omitted); see also, e.g.,

Muazeb v. United States, 2019 WL 1613433, at *12 (S.D.N.Y. Mar.

28, 2019) (collecting cases rejecting substantive due process

claims based on disqualification from SNAP). Accordingly, summary

judgment for Defendants is also warranted on Nova Grocery’s APA

and due process claims.

CONCLUSION

For the foregoing reasons, Defendants’ motion for

summary judgment is GRANTED. The Clerk of Court is respectfully

directed to enter judgment accordingly and close this case.

SO ORDERED.

/s/ Kiyo A. Matsumoto_______

Hon. Kiyo A. Matsumoto

United States District Judge

Eastern District of New York

Dated: Brooklyn, New York

July 8, 2022