United States District Court, M.D. Pennsylvania
MY TOWN SUPERMARKET #1, and LUIS M. PAYANO, Plaintiffs
UNITED STATES OF AMERICA, Defendant
MALACHY E. MANNION UNITED STATES DISTRICT JUDGE
My Town Supermarket #1 (the “store”) and its
owner, Luis M. Payano, filed this action against the United
States seeking the court's de novo review,
pursuant to 7 U.S.C. §2023, of the permanent
disqualification of the West Hazleton grocery store from
participating in Supplemental Nutrition Assistance Program
(“SNAP”) after it was found to have engaged in
trafficking SNAP benefits. Pending before the court is the report
and recommendation of Magistrate Judge Schwab filed on May
17, 2019, (Doc. 46), which recommends that the United
States's motion for summary judgment be
granted. Plaintiffs filed objections to the report,
(Doc. 49), along with a brief in support thereof, (Doc.
49-1). The government filed a response to plaintiffs'
objections. (Doc. 50). Upon review, the report will be
ADOPTED and the United States's summary judgment motion
will be GRANTED. Plaintiffs' objections will be
STANDARD OF REVIEW
objections are timely filed to the report and recommendation
of a magistrate judge, the district court must review de
novo those portions of the report to which objections
are made. 28 U.S.C. §636(b)(1); Brown v.
Astrue, 649 F.3d 193, 195 (3d Cir. 2011). Although the
standard is de novo, the extent of review is
committed to the sound discretion of the district judge, and
the court may rely on the recommendations of the magistrate
judge to the extent it deems proper. Rieder v.
Apfel, 115 F.Supp.2d 496, 499 (M.D.Pa. 2000) (citing
United States v. Raddatz, 447 U.S. 667, 676 (1980)).
those sections of the report and recommendation to which no
objection is made, the court should, as a matter of good
practice, “satisfy itself that there is no clear error
on the face of the record in order to accept the
recommendation.” Fed.R.Civ.P. 72(b), advisory committee
notes; see also Univac Dental Co. v. Dentsply
Intern., Inc., 702 F.Supp.2d 465, 469 (2010) (citing
Henderson v. Carlson, 812 F.2d 874, 878 (3d Cir.
1987) (explaining judges should give some review to every
Report and Recommendation)). Nevertheless, whether timely
objections are made or not, the district court may accept,
not accept or modify, in whole or in part, the findings or
recommendations made by the magistrate judge. 28 U.S.C.
§636(b)(1); Local Rule 72.31.
burden is placed upon the store owner to prove by a
preponderance of the evidence that the violations did not
occur.” Shreegi Enterprises, 2018 WL 1919576,
*2 (citations omitted); see also Famous Int'l Market
v. United States, 2018 WL 3015249, at *9 (E.D.Pa. June
15, 2018) (“At trial, the Market bears the burden to
prove by a preponderance of the evidence SNAP trafficking did
not occur”). “[E]ven a single incident of
trafficking is enough to justify permanent
disqualification.” Shreegi Enterprises, 2018
WL 1919576, *2 (citations omitted). “The de
novo standard of review applies to determine if a
violation occurred”, and the standard of review to
determine if the sanction was appropriate “is whether
the sanction was ‘unwarranted in law or without
justification in fact,' or was ‘arbitrary or
capricious.'” Id. (citations omitted).
However, “[a] sanction ‘is not arbitrary or
capricious if it complies with FNS's own
policy.'” Id. (citation omitted).
“The plaintiff has the burden of proof on the sanction
issue as well.” Id. (citation omitted). The
court “must reach its own factual and legal
conclusions”, id. (citation omitted),
“[it] is not limited to matters considered in the
administrative proceedings”, id. (quoting
Freedman v. Dep't of Agric., 926 F.2d 252, 261
(3d Cir. 1991), and “the plaintiff may offer any
relevant evidence available to support his case.”
Id. (citations omitted). “To survive summary
judgment, a plaintiff in a Food Stamp Program
disqualification case must raise material issues of fact as
to each alleged violation.” Id. (quoting
Ganesh v. United States, 658 Fed.Appx. 217, 219
(6th Cir. 2016)).
store's permanent disqualification from SNAP for
trafficking SNAP benefits, based on “transactions that
establish clear and repetitive patterns of unusual,
irregular, and inexplicable activity”, was upheld by
the USDA on May 17, 2017. In the plaintiffs' present
action, they seek the court's de novo review of
the store's disqualification pursuant to 7 U.S.C. §
2023 and 7 C.F.R. § 279.7.
doubt that “[i]t is illegal to traffic in SNAP
benefits.” Shreegi Enterprises, 2018
WL 1919576, *3 (citations omitted). “In relevant part,
‘trafficking' is defined as ‘buying, selling
... or otherwise effecting an exchange of SNAP benefits ...
for cash or consideration other than eligible
food....'” Id. (citing 7 C.F.R.
§271.2). “Eligible foods means: (1) Any food or
food product intended for human consumption except alcoholic
beverages, tobacco, and hot foods and hot food products
prepared for immediate consumption....” Id.
(citing 7 C.F.R. §271.2).
store was permanently disqualified by FNS when it found that
the store engaged in trafficking SNAP benefits. FNS examined
four categories of suspicious patterns of EBT transactions at
the store. After separately analyzing the four
categories of the violations charged against the store, Judge
Schwab finds that the store failed to meet its burden to
prove that the violations did not occur and that it did not
traffic SNAP benefits. As such, she recommends that the
government's motion for summary judgment be granted since
the record supports FNS's finding that the store
trafficked SNAP benefits and that the store should be
permanently disqualified from SNAP.
first category of violations is rapid and repetitive
transactions made in a short period of time by various
households, and the report finds there are no issues of
material fact that these violations occurred. The report
details the government's evidence with respect to the
first category, (Doc. 46 at 20-21), and concludes:
Given the physical characteristics of My Town's store-as
noted above, the store only used one of its two cash
registers during the relevant time period, did not use an
optical scanner, and did not have a working conveyor belt-the
government argues, and we agree, that it is implausible that
My Town's cashiers could process two transactions back to
back as quickly as they did in the thirty-three sets that the
government has compiled. See doc. 35 at 19.
did not dispute that the transactions occurred, rather they
contend that the government failed to show that the
transactions amounted to trafficking. The report finds that
plaintiffs failed to meet their burden of showing that a
violation did not occur. The report also states that
“generalized or conclusory arguments are not sufficient
to create a genuine issue of material fact, Famous
Int'l Mkt., 2018 WL 3015249, at *10, and My Town may
not simply rely on general statements about its
customers' practices to defeat the government's
summary judgment motion. Shreegi, 2018 WL 1919576,
at *20.” (Id. at 23).
their objections pertaining to all four categories of
transactions at issue, plaintiffs contend that “the
court should reject the precedent in this District that
general shopping behavior and business explanations are
insufficient to survive summary judgment ....” The
court declines to do so, and it concurs with the well
reasoned decision in Shreegi, id. at *20,
as well as the decisions in the other districts cited in
Shreegi, which have held that stores “may not
rely on generalized or conclusory arguments to create genuine
issues of material fact.” Famous Int'l
Market, 2018 WL 3015249, at *10. Seealso
Cheema, 365 F.Supp.3d at 182 (“Even when asserting
blanket rebuttals to proffered evidence of trafficking,