ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA C.A. No. 79-0637
Before Adams, Van Dusen and Higginbotham, Circuit Judges.
This is an appeal from an order granting summary judgment for the defendants. The district court held that because more than fifty percent of the plaintiffs' food sales consisted of candy and soft drinks, they were not eligible to participate in the United States Department of Agriculture's food stamp program. Inasmuch as we conclude that the district court did not err in applying the pertinent statute, 7 U.S.C. § 2023 (Supp. II 1978), and regulations, 7 C.F.R. §§ 271.2 & 278.1 (1979), we affirm.
Plaintiffs are food wholesalers who at one time were authorized to participate in the food stamp program. On January 30, 1978, they were notified by the Food and Nutrition Services nS of the Department of Agriculture that their authorization was being withdrawn because they did not sell a sufficient percentage of staple food products to authorized retailers. The Administrative Review Staff sustained the withdrawal. Thereafter, plaintiffs sued in the district court to prevent the defendants from withdrawing their authority to accept food stamps. The plaintiffs stipulated, however, that more than fifty percent of their food sales volume consisted of candy and soft drinks. The district court concluded that the plaintiffs did not meet the statutory requirement that at least fifty percent of the sales of a wholesale food store must be of staple foods and accordingly entered summary judgment in favor of the defendants.
On appeal, the plaintiffs contend that the staple foods requirement is not applicable to wholesale food suppliers, and that the Department failed to evaluate the other criteria applicable to food stamp participants.
The regulations issued pursuant to the Food Stamp Act of 1977, Pub.L. 95-113, § 1301, 91 Stat. 974, provide that, in determining whether an applicant's participation will further the purpose of the program, the FNS officer shall consider "(t)he nature and extent of the food business conducted by the applicant." 7 C.F.R. § 278.1(b)(1) (1979). Subsection 278.1(b)(iii) provides:
Wholesale food concerns whose primary business is the sale of eligible food at wholesale, and in which one or more staple food items, as defined in § 271.2, make up more than fifty (50%) percent of eligible food sales, shall normally be considered to have adequate food business for the purposes of the program.
7 C.F.R. § 278.1(b)(1)(iii) (1979). Section 271.2 defines staple foods as
those food items intended for home preparation and consumption, which include meat, poultry, fish, bread & breadstuffs, cereals, vegetable juices and dairy products. Accessory food items, such as coffee, tea, cocoa, carbonated and uncarbonated drinks, candy, condiments and spices are not staple foods for the purpose of qualifying a firm to participate in the program as a retail food store.
Despite this language, the plaintiffs argue that § 271.2 applies only to retail food stores. Although § 271.2 itself does not specifically mention wholesale stores, the reference in § 278.1 to § 271.2 for the definition of staple foods applicable to wholesalers indicates that the definition of staple foods is identical for both types of food purveyors. Any ...