C.A. Nos. 83-0922, 83-1228, 83-1833, 84-0330, 84-0982
Before: ADAMS, Acting Chief Judge, GIBBONS and STAPLETON, Circuit Judges
ADAMS, Acting Chief Judge
The Food Stamp Program is designed to serve beneficial purposes, improving the nutrition and diet of less advantaged Americans and promoting the distribution and growth of this nation's agricultural products. 7 U.S.C. § 2011 (1982). It is financed and administered by the federal government, but participating states share considerable responsibility for managing the program.
These appeals present two important questions concerning this shared responsibility: the extent of state liability to the federal government for certain erroneous issuances of food stamp benefits, and state liability for interest on debts owed to the federal government pursuant to billings for program mistakes. We conclude that the Secretary of Agriculture, the federal official charged with administering the program, acted within his discretion in holding the Commonwealth of Pennsylvania strictly liable for the program errors at issue here. We further decide that absent specific authorization in the Food Stamp Act the Secretary may not assess interest on amounts owed by the Commonwealth for these mistakes.
As the district court reached the same conclusions, its judgment will be affirmed.
The primary state responsibilities in the administration of the Food Stamp Program are to certify the eligibility of individual households and to issue food stamp coupons. 7 U.S.C. § 2020(a) (1982). These coupons are then redeemed at face value by approved retail food stores. Id. at § 2013(a). Pennsylvania, instead of issuing the coupons directly to recipients, distributes Authorization to Purchase (ATP) cards. Individuals take these cards to participating banks, which disburse the amount of coupons authorized on the card. This distribution method, permitted by the federal government, is designed to enhance the security of food stamp disbursements.
The present appeals arise from the improper redemption of ATPs at various Pennsylvania banks. Although the ATP cards bear an expiration date, the name of the state of the recipient household, and other indicia of authenticity, banks occasionally issue coupons in return for expired ATPs, out-of-state ATPs, and duplicate ATPs that should never have been issued.*fn1 The Food and Nutrition Service (FNS) of the United States Department of Agriculture, the agency that operates the program, holds states strictly liable for the amount of such improper coupon issuances. It also charges interest on such debts beginning on the 31st day after the initial billing. Here the FNS billed the Commonwealth approximately $565,387 plus interest pursuant to these policies.
Pennsylvania objected to the legal basis of these assessments, and appealed to the State Food Stamp Appeals Board (SFSAB), an impartial tribunal within the Department of Agriculture.*fn2 The board upheld FNS' imposition of liability, and refused to consider the interest issue. The state then filed actions for review de novo in the district court. That court granted summary judgment to the federal defendants on the liability issue, held that FNS could not collect prejudgment interest, and issued a permanent injunction against assessment of such interest against the Commonwealth. Both parties filed appeals.
The appeals and cross-appeals originated in five separate district court cases that were consolidated for purposes of disposition. This procedural history is further complicated by an amended judgment issued by the district court. It is therefore necessary, as a preliminary matter, to clarify our jurisdiction over these appeals.
The Commonwealth's first suit challenged an FNS billing for erroneous redemptions of ATPs. Later, the state received a bill for interest due on the amount at issue in the suit and, instead of amending its complaint, it filed a second civil action to contest the interest claim. Plaintiffs' third, fourth, and fifth suits were filed after later billings, and these complaints referred to any interest that would be charged on the amounts at issue.
In its order of January 10, 1985, the district court entered summary judgment for defendants in the first case; dismissed the second case for lack of subject matter jurisdiction; and in the third, fourth and fifth actions ruled for the defendants on the liability issue, and against it on the interest issue. The Commonwealth appealed in all five cases, and the defendants cross-appealed in the latter three.
Inadvertently, the district court's January 10 order entered judgment only in the first two cases. Notified of this defect, on March 14, 1985 the district court amended its order to enter the appropriate judgments in the other three cases. Again, the parties filed five appeals and three cross-appeals relating to all cases.
The initial filings adequately conferred jurisdiction on this Court in all cases, as a notice of appeal filed after the announcement of a decision or order but before entry of the judgment is not defective as premature, but rather will be treated as filed after such entry and on the date thereof. Fed. R. App. P. § 4(b). The later appeals ...