Kazi A. Rashid v. United States, No. 2:2018cv05110 - Document 33 (C.D. Cal. 2019)
Court Description: ORDER GRANTING MOTION FOR SUMMARY JUDGMENT 19 by Judge Otis D. Wright, II. For the foregoing reasons, Defendants' Motion for Summary Judgment is GRANTED. (ECF No. 19 .) The parties shall submit a joint [Proposed] Judgment by TUESDAY, July 23, 2019. (lom)
Download PDF
<![CDATA[
Kazi A. Rashid v. United States Doc. 33 O 1 2 3 4 5 6 7 8 United States District Court Central District of California 9 10 11 KAZI A. RASHID, 12 Plaintiff, 13 14 Case No. 2:18-cv-05110-ODW (KSx) ORDER GRANTING MOTION FOR SUMMARY JUDGMENT [19] v. UNITED STATES OF AMERICA, 15 Defendant. 16 17 I. 18 INTRODUCTION 19 Plaintiff Kazi A. Rashid (“Plaintiff”) brings this action pro se, seeking review 20 of an administrative decision permanently disqualifying him from accepting SNAP 21 benefits at his store, Harry’s Market. Presently before the Court is Defendant’s 22 Motion for Summary Judgment, in which it argues that Plaintiff fails to present a 23 genuine issue of material fact, and that it is entitled to judgment as a matter of law. 24 For the following reasons, the Court GRANTS Defendant’s Motion.1 (Mot. for 25 Summ. J. (“Mot.”), ECF No. 19.) 26 27 28 After considering the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78(b); C.D. Cal. L.R. 7-15. 1 Dockets.Justia.com II. 1 Plaintiff is the owner and operator of Harry’s Market, located at 8751 Compton 2 3 BACKGROUND Avenue, Los Angeles, California, 90002. (Compl. 2, ECF No. 1.) 4 On June 8, 2018, Plaintiff filed a Complaint seeking review of an administrative 5 decision of the United States Department of Agriculture (“USDA”), which 6 permanently disqualified Plaintiff’s store from the Supplemental Nutrition Assistance 7 Program (“SNAP”) for trafficking in food stamps. (See Compl.) 8 SNAP is intended “to safeguard the health and well-being of the Nation’s 9 population by raising levels of nutrition among low-income households.” 7 U.S.C. § 10 2011. SNAP benefits may only be used at authorized stores for eligible food 11 items, i.e. “[a]ny food or food product for home consumption except alcoholic 12 beverages, tobacco, hot foods or hot food products ready for immediate 13 consumption.” 7 U.S.C. § 2012(k); see 7 C.F.R. § 271.2 (similar); see also 7 U.S.C. § 14 2013(a). In Los Angeles, SNAP utilizes electronic benefit transfer (“EBT”) systems 15 rather than food coupons or stamps. (Statement of Uncontroverted Facts (“SUF”) 9, 16 ECF No. 19-2; Decl. of Luz Pena (“Pena Decl.”) ¶ 6, ECF No. 19-3.) Benefit 17 recipients are issued plastic cards, similar to credit cards, which have magnetic strips 18 encoded with a card number that is linked to the recipient’s personal information. 19 (SUF 10.) Authorized stores run the EBT cards through a Point of Sale (“POS”) 20 device, which is connected to a personal identifying number (“PIN”) entry pad, and a 21 printer for producing receipts. (Id.) The POS interacts with a host computer that 22 processes and stores information and communicates with other computers as 23 necessary. (Id.) This system allows the USDA’s Food and Nutrition Service (“FNS”) 24 to track benefits from the recipient to the retailer. (SUF 11.) Every transaction at an 25 authorized retail store is recorded electronically to identify the recipient card number, 26 the amount of the EBT purchase, and the exact date and time of the transaction. (Id.) 27 Thus, FNS can identify transactions consistent with food stamp trafficking from the 28 electronic data. (See id.) 2 1 Trafficking in food stamps is defined to include the “buying, selling, stealing, or 2 otherwise effecting an exchange of SNAP benefits . . . for cash or consideration other 3 than eligible food.” 7 C.F.R. § 271.2. If FNS determines that a store has engaged in 4 trafficking, it may permanently disqualify the store from SNAP. See 7 U.S.C. 5 § 2021(b)(3); 7 C.F.R. § 278.6. 6 trafficking violation. See Lee v. United States, 623 F. App’x 886, 887 (9th Cir. 7 2015); Kahin v. United States, 101 F. Supp. 2d 1299, 1303 (S.D. Cal. 2000); 7 U.S.C. 8 § 2021(b)(3)(B) (disqualification shall be “permanent” upon the “first occasion” of a 9 disqualification based on “trafficking.”) (emphasis added); 7 C.F.R. § 278.6(e) (“The 10 FNS regional office shall . . . [d]isqualify a firm permanently if . . . [p]ersonnel of the 11 firm have trafficked as defined in § 271.2.”). Such a penalty is warranted for even a single 12 The FNS has discretion to impose a civil monetary penalty (“CMP”) in lieu of 13 permanent disqualification if the store had “an effective compliance policy and 14 program to prevent violations.” 7 C.F.R. § 278.6(i). To be eligible for a CMP, a store 15 must “timely submit[] to FNS substantial evidence” that: (1) it had developed an 16 effective compliance policy; (2) the policy and program were in place prior to the 17 violation(s); (3) the store had developed and instituted an effective training program; 18 and (4) the store owner was unaware of, did not approve, did not benefit from, or was 19 in no way involved in the violation. Id. 20 FNS investigated EBT transactions at Harry’s Market from June 2017 to 21 November 2017. (Compl. 2; SUF 12.) On October 16, 2017, FNS conducted a store 22 visit, where it took photographs and wrote a summary describing the interior of the 23 store, as well as the state of cash registers and the number of shopping carts. (SUF 3– 24 8.) 25 On December 18, 2017, FNS sent a charge letter to Plaintiff explaining why it 26 believed he had trafficked in food stamps. (SUF 13.) In the letter, FNS addressed two 27 categories of suspicious transactions: (1) 215 transactions totaling $19,895.89 in what 28 3 1 it called “excessively large purchase transactions”; and (2) 104 transactions totaling 2 $6,393.93 that were made in “unusually short time frames.” (SUF 14–15.) 3 The letter also advised Plaintiff of the investigation and notified him that the 4 Market had been charged with trafficking, and that the “sanction for the trafficking 5 violation(s) . . . is permanent disqualification.” (Decl. of Grace Park (“Park Decl.”), 6 Ex. 2, Part 1, at 36, ECF No. 19-6). The charge letter further advised Plaintiff that the 7 SNAP regulations also provide that under certain conditions, FNS may instead impose 8 a CMP. (Id.) Finally, the letter explained the requirements to be considered for a 9 CMP: 10 The SNAP regulations, Section 278.6(1), list the criteria that you must meet in order to be considered for a CMP. If you request a CMP, you must meet each of the four criteria listed and provide the documentation as specified within 10 calendar days of your receipt of this letter. No extension of time can be granted for making a request for a CMP or for providing the required documentation. If your request and the required documentation are not submitted on time, you will lose your right for any further consideration for a CMP. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Id. On December 27, 2017 Plaintiff responded to the charge letter, denying all allegations. (Park Decl., Ex. 2, part 2, at 6-8, ECF No. 19-7.) In his response, Plaintiff explained that in his fifty years of business, no such allegation has ever been proven against him. (Id. at 9.) Moreover, he argued that he cannot control the frequency in which customers make purchases; that his store carries expensive items; that he provides free rides to customers; and that his store is the only store in the neighborhood that accepts SNAP. (Id. at 10-12.) It is worth noting with respect to Plaintiff’s ride policy and status as the only SNAP-accepting grocer in his neighborhood, the record indicates Plaintiff’s ride program did not exist during FNS initial inspection, and there are approximately thirty-nine other grocers who accept SNAP in a two-mile radius from Harry’s Market. (Id.at 11). 4 1 In a letter dated January 25, 2018, FNS informed Plaintiff that it had considered 2 his response and the available evidence and determined that the “violations cited in 3 [the] charge letter occurred.” (Id. at 13). FNS had also considered plaintiff’s eligibility 4 for a CMP but determined that he was not eligible because he “failed to submit 5 sufficient evidence to demonstrate that [Harry’s Market] had established and 6 implemented an effective compliance policy and program to prevent violations of 7 [SNAP].” (Id.) Accordingly, Harry’s Market was permanently disqualified from the 8 SNAP program. (Id.) 9 Plaintiff timely sought administrative review of FNS’s decision, with the 10 benefit of counsel. (Id. at 15-18.) Plaintiff challenged the finding that trafficking 11 violations occurred, arguing for the first time that: 1) patrons often return to the 12 market multiple times throughout the day; 2) that because EBT does not contain photo 13 identification, multiple individuals can use the same card; and 3) disqualifying Harry’s 14 Market from accepting SNAP will have an adverse impact on the community. (Id. at 15 16.) 16 On May 9, 2018, the Administrative Review Officer (“ARO”) upheld the 17 permanent disqualification for trafficking. (Id. at 33, 34–45.) The ARO began by 18 setting forth its analysis and findings. Notably, the ARO listed highest priced eligible 19 food items, as follows: “Cereal ($11.99), Coffee ($19.99), Coffee Mate ($10.99), and 20 canned Abalone ($14.99).” (Id. at 38.) In reaching its conclusion, the ARO focused 21 on the multiple transactions in unusually short periods and excessively large 22 purchases. (Id. at 36.) As to the former, the ARO concluded that the layout of the 23 store and cluttered aisles would make navigating the store difficult, and the dated 24 checkout registers make completing rapid transactions difficult. (Id. at 39-40.) The 25 ARO concluded it was “more likely than true that the irregular transactions cited in 26 the charge letter are due to trafficking in SNAP benefits.” (Id. at 40.) As to the latter, 27 the ARO noted that Harry’s Market does not offer food in bulk nor ethnic or specialty 28 foods that sell for a high price. (Id.) Thus, the substantial number of high dollar 5 1 purchases “call[] into question the legitimacy of these transactions” which range from 2 “$57.38 to $400.45.” (Id.) The ARO noted that the site investigation noted rusted, 3 dusty cans with faded expiration dates which indicated a slow turnover rate or stock 4 items that may be expired. (Id. at 41.) The ARO concluded that the state of stock 5 suggested that it was unlikely that households were utilizing Harry’s for all their 6 eligible grocery needs. (Id. at 38.) The ARO also reviewed purchase receipts against 7 Plaintiff’s contention that he purchased large meat orders, but because the only meat- 8 purchase receipt Plaintiff provided lacked a date, it was not considered. (Id. at 41-42.) 9 With respect to a CMP, the ARO found that Plaintiff did not request a CMP or 10 provide substantial evidence that he met the CMP criteria within ten days following 11 receipt of the charge letter as required by SNAP regulations, and therefore FNS’s 12 decision to not assess a CMP in lieu of permanent disqualification was sustained. (Id. 13 at 44.) The ARO upheld the permanent disqualification of the Market from the 14 SNAP. (Id. at 45.) 15 16 17 Plaintiff filed his Complaint on June 8, 2018, (ECF No. 1), and Defendant moved for Summary Judgment on May 6, 2019 (ECF No. 19). III. LEGAL STANDARD 18 An aggrieved store may bring an action for judicial review challenging the 19 agency decision by filing a complaint against the United States in federal district 20 court. Kim v. United States, 121 F.3d 1269, 1271–72 (9th Cir. 1997); 7 U.S.C. § 21 2023(a)(13). District courts conduct de novo review to “determine the validity of the 22 questioned administrative action.” 7 U.S.C. § 2023(a)(15). “A trial de novo is a trial 23 which is not limited to the administrative record—the plaintiff may offer any relevant 24 evidence available to support his case, whether or not it has been previously submitted 25 to the agency.” Kim, 121 F.3d at 1272 (internal quotation marks omitted). Plaintiff 26 bears the burden of proving by a preponderance of the evidence that the violations did 27 not occur. See id.; Lee, 623 F. App’x at 887 (same). 28 demonstrate a material dispute of fact as to the existence of a program violation, 6 If the plaintiff fails to 1 summary judgment may be granted in favor of the government. See Kahin, 101 F. 2 Supp. 2d at 1302; see also Redmond v. United States, 507 F.2d 1007, 1011–12 (5th 3 Cir. 1975) (“[T]he agency action stands, unless the plaintiff proves that it should be 4 set aside.”). 5 In its review of the FNS action, the court is to “apply a bifurcated standard of 6 review.” Wong v. United States, 859 F.2d 129, 132 (9th Cir. 1988). Whereas the 7 finding that a store committed a violation “is reviewed de novo, review of the sanction 8 imposed . . . is governed by the arbitrary and capricious standard.” Id. Under that 9 standard, “the court examines the sanction imposed by the FNS in light of the 10 administrative record to judge whether the agency properly applied the regulations 11 [and] to determine whether the sanction is unwarranted in law . . . or without 12 justification in fact.” Id. (internal quotation marks omitted); Kahin, 101 F.Supp.2d at 13 1302 (same). IV. 14 DISCUSSION 15 As an initial matter, the Court notes that Plaintiff failed to file a proposed 16 Statement of Genuine Disputes pursuant to Local Rule 56-2. Although the Court is 17 aware of Plaintiff’s pro se status, his failure to file a Statement of Genuine Disputes, 18 coupled with the fact that he does not dispute the material issues presented herein 19 leaves the Court with no choice but to deem the presented issues and facts as 20 undisputed. 21 “In order to preclude summary judgment, Plaintiff must raise 22 material issues of fact as to each of the violations charged against the 23 [Market]. Since permanent disqualification is warranted on ‘the first 24 occasion’ of . . . trafficking, it is Plaintiff’s burden to raise material issues 25 of fact as to each of the transactions set forth . . . by the FNS.” 26 Kahin, 101 F. Supp. 2d at 1303. 27 Plaintiff’s Opposition contains seven challenges to Defendant’s Motion. (Opp’n 28 1–2, ECF No. 20.) First, Plaintiff maintains that he has never violated FNS 7 1 guidelines; second, he never received clear guidelines from FNS; third, he faced a 2 similar charge in 2006, but the charge was resolved in his favor; fourth, all sales at 3 Harry’s are accounted under FNS guidelines; fifth, he claims that he “appreciates 4 SNAP authorities having them place physical evidences that show any such violations 5 occurred in Harry’s Market”; sixth, he has responded to all inquiries and followed up 6 with the government; and finally, he submitted a settlement offer. Unfortunately, none 7 of Plaintiff’s challenges generate a genuine issue of material fact. (Id.) 8 Accordingly, no genuine issue of material fact exists, and Defendant is entitled 9 to judgment as a matter of law as it is undisputed that violations of the SNAP program 10 occurred at plaintiff’s store and that the imposition of the permanent disqualification 11 sanction was neither arbitrary nor capricious. V. 12 CONCLUSION 13 For the foregoing reasons, Defendants’ Motion for Summary Judgment is 14 GRANTED. (ECF No. 19.) The parties shall submit a joint [Proposed] Judgment by 15 TUESDAY, July 23, 2019. 16 17 IT IS SO ORDERED. 18 19 July 9, 2019 20 21 22 23 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 24 25 26 27 28 8
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
