United States Court of Appeals For the First Circuit
No. 23-1990
ALAM & SARKER, LLC, a Massachusetts Limited Liability Company, d/b/a Star Market; MOHAMMAD MAHBUB ALAM, an individual; and MD MASHUM BILLAH SARKER, an individual,
Plaintiffs, Appellants,
v.
UNITED STATES,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Mark L. Wolf, U.S. District Judge] [Hon. Jennifer C. Boal, U.S. Magistrate Judge]
Before
Kayatta, Selya, and Gelpí, Circuit Judges.
Andrew Z. Tapp and Metropolitan Law Group, PLLC on brief for appellants. Joshua S. Levy, Acting United States Attorney, and Michael L. Fitzgerald, Assistant United States Attorney, on brief for appellee.
August 27, 2024 SELYA, Circuit Judge. We are called upon today to
consider the participation of plaintiff-appellant Alam & Sarker,
LLC d/b/a Star Market (the Market) in the federal supplemental
nutrition assistance program (SNAP). The case comes to us after
the United States Department of Agriculture's Food and Nutrition
Service (FNS) sought to bar the Market from participating in SNAP.
The Market challenged the agency's determination but made no
headway. When the dispute reached the district court, that court
granted summary judgment in favor of the agency.1 The Market
appeals, advancing a gallimaufry of grievances. Concluding, as we
do, that these grievances are wide off the mark, we affirm the
judgment of the district court.
I
We briefly rehearse the relevant facts and travel of the
case. "Because this appeal follows the district court's entry of
summary judgment, we array those facts in the light most favorable
to the nonmoving party." AJ Mini Mkt., Inc. v. United States, 73
F.4th 1, 4 (1st Cir. 2023).
A
SNAP aims "to safeguard the health and well-being of the
Nation's population by raising levels of nutrition among
1 The named defendant in the district court proceedings is the United States. We use the term "the agency" as a shorthand to encompass the federal government, the United States Department of Agriculture (USDA), and the FNS, collectively.
- 2 - low-income households." 7 U.S.C. § 2011; see 7 C.F.R. § 271.1.
Approved retailers may accept SNAP benefits (commonly known as
food stamps) in exchange for "food items that are suitable for
'home consumption.'" Irobe v. U.S. Dep't of Agric., 890 F.3d 371,
375 (1st Cir. 2018) (quoting 7 U.S.C. § 2012(k)); see 7 U.S.C.
§ 2013(a). These retailers may not dispense cash, hot foods, or
non-food items in exchange for SNAP benefits. See Irobe, 890 F.3d
at 375; 7 U.S.C. § 2012(k). When a shopper pays with SNAP
benefits, he uses an electronic benefit transfer card — which
functions like a debit card — through a point-of-sale device to
transfer the funds from the household's SNAP account to the store's
bank account. See Irobe, 890 F.3d at 375.
The FNS oversees the administration of SNAP benefits.
As part of this oversight, the FNS collects data on every SNAP
transaction to screen for illicit trafficking in benefits.2 See
id. When the FNS spies irregular transaction data, it customarily
assigns the matter to a program specialist, who enlists a
contractor to investigate the store in person. See id. If the
resulting internal process concludes with a recommendation for
further action, the FNS issues a charge letter that explains the
allegations against the store and offers the store an opportunity
2Trafficking in SNAP benefits occurs when a store "accept[s] SNAP benefits in exchange for cash or other proscribed items." Irobe, 890 F.3d at 375; see 7 C.F.R. § 271.2.
- 3 - to respond. See id. at 376; see also 7 C.F.R. § 278.6(b). After
the FNS makes an initial determination and reviews any response on
behalf of the store, it issues a final agency decision. See Irobe,
890 F.3d at 376; see also 7 U.S.C. § 2023(a)(3), (5); 7 C.F.R.
§§ 279.1(a)(2), 279.5.
The Market is a convenience store located in New Bedford,
Massachusetts. See Alam & Sarker, LLC v. United States, No.
21-11727, 2023 WL 6444379, at *3 (D. Mass. Sept. 29, 2023). The
Market occupies 1,930 square feet, has a solitary checkout counter
(which two clerks operate without the assistance of an optical
scanner for processing transactions), and has only two or three
shopping baskets (but no carts). See id. The Market sells some
foods that are eligible for purchase using SNAP benefits (such as
cereal, eggs, and rice). See id. It also sells items that are
ineligible for purchase using SNAP benefits (such as cosmetics,
cleaning products, and lottery tickets). See id.
When data submitted to the FNS indicated a series of
irregular transactions at the Market, the FNS initiated an
investigation into the Market's processing of SNAP benefits. See
id. We sample some of the investigation's findings. From January
to June of 2017, the Market processed thirty-three sets of
back-to-back transactions — sets of transactions that were charged
to the same SNAP account. See id. The FNS refers to rapid and
repetitive transactions conducted for the same SNAP household
- 4 - account in a short period of time (e.g., two minutes) as Scan B2
transactions. For example, on one morning the Market processed a
$76.84 transaction at 10:28 a.m. followed by a $25.93 transaction
by the same account at 10:30 a.m.
The flurry of purchases stood out because the Market had
not processed any Scan B2 transactions in the corresponding
six-month period of the preceding year. See id. Moreover, it had
processed only one Scan B2 transaction during the period from
August through December of 2017. See id. Casting a further shadow
on the flurry of Scan B2 transactions, the investigation revealed
that two competing convenience stores located less than a mile
away processed a combined total of only two Scan B2 transactions
during the first six months of 2017. See id. Indeed, the Market
— which is located in Bristol County — processed approximately
sixty percent more transactions than the county average. See id.
at *4.
There was more. From January to June of 2017, the Market
processed over 100 transactions that involved unusually high
dollar amounts. See id. The FNS referred to such purchases as
Scan F transactions. See id. Although the average SNAP
transaction in the county during this period totaled $7.57, the
Market's average SNAP transaction totaled $8.96 — which is roughly
eighteen percent higher than the county average. See id. What is
more, the Market recorded 158 transactions over $29 (which included
- 5 - ninety-two transactions over $50). See id. at *7. In sum, the
aggregate dollar amount for SNAP transactions at the Market during
this period was about ninety percent higher than the county
average. See id. at *4.
These splurges raised some eyebrows at the FNS because
the Market had processed only fourteen Scan F transactions in the
same six-month period of the preceding year. See id. at *8. By
way of comparison, two competitors located less than a mile away
processed twenty-eight and fifty-nine Scan F transactions,
respectively, during the first six months of 2017. See id. at *4.
B
After reviewing these data, the FNS retained a
contractor to conduct an in-person investigation. See id. The
contractor found that the Market offered goods typical of a
convenience store in the area, had only one register, and did not
use an optical scanner. See id. As a result of its further
investigation, the FNS charged the Market with trafficking. See
id.; see also 7 C.F.R. § 278.6(b). The charge letter explained
that, "[i]n a series of [SNAP] transactions, multiple transactions
were made from individual benefit accounts in unusually short time
frames." The letter included a list of those transactions. It
also pointed out that "excessively large purchase transactions
were made from recipient accounts" and included a list of those
transactions. In addition, the letter warned that the Market could
- 6 - be permanently disqualified from the SNAP program if these
allegations were substantiated and advised the Market of its right
to respond. See 7 U.S.C. § 2021(a)(1)(A), (b)(3)(B); 7 C.F.R.
§ 278.6.
The Market denied the allegations contained in the
charge letter and gathered its own evidence to rebut the charges.
See Alam & Sarker, 2023 WL 6444379, at *4. It produced an
assortment of paperwork, including customer statements,
photographs, inventory invoices, receipts, and bank statements.
See id. Following an administrative review, see id., the FNS
issued a final agency decision finding "sufficient
evidence . . . to conclude that the questionable transactions and
patterns listed in the charge letter were more likely than not the
result of trafficking violations." As a sanction, the FNS
permanently disqualified the Market from participating in SNAP.
See id. Because the Market had failed to make a timely plea that
the FNS consider imposing a monetary penalty in lieu of permanent
disqualification, the Market forfeited its right to argue for that
alternative sanction. See 7 C.F.R. § 278.6(b)(1).
The Market subsequently sued the United States in the
district court.3 See 7 U.S.C. § 2023(a)(13), (15); see also 7
3The Market's owner and its previous owner (who sold his share in 2021) are also plaintiffs and appellants here. For ease in exposition, we refer to the plaintiffs, collectively, as "the Market."
- 7 - C.F.R. § 279.7. The case was subsequently referred to a magistrate
judge. See 28 U.S.C. § 636(b)(1)(B); Fed. R. Civ. P. 72(b)(1).
Following the close of discovery, the FNS moved for summary
judgment. The Market opposed the motion. The magistrate judge
was not impressed with the Market's opposition and issued a report
and recommendation (the R&R), in which she determined that the
transaction data were indicative of trafficking and that the Market
had failed to rebut this inference. Accordingly, the magistrate
judge counseled the district court to grant summary judgment in
favor of the FNS.
The Market objected to this recommendation, see Fed. R.
Civ. P. 72(b)(2), but the district court — on de novo review —
adopted the R&R and entered summary judgment in favor of the FNS.
See Alam & Sarker, 2023 WL 6444379, at *1. The court determined
that the magistrate judge had "properly found that [the] FNS ha[d]
provided the required sufficient evidence for a reasonable
factfinder to conclude that trafficking [had] occurred." Id. In
the court's view, the Market had "fail[ed] to identify
'significantly probative' evidence favoring [its] position." Id.
(first alteration in original) (quoting Irobe, 890 F.3d at 377).
Because the Market had not carried its burden of proof in
challenging the agency's decision, the court ruled that the agency
was entitled to summary judgment. See id.; see also Irobe, 890
F.3d at 378 (concluding "that[,] when a store challenges the USDA's
- 8 - determination that the store trafficked in SNAP benefits, the store
bears the burden of proving by a preponderance of the evidence
that its conduct was lawful").
This timely appeal ensued.
II
We start by rehearsing the standards of review for
summary judgment orders generally and for challenges to SNAP
disqualifications specifically.
Our review of an order granting summary judgment is de
novo. See Burt v. Bd. of Trs. of Univ. of R.I., 84 F.4th 42, 54
(1st Cir. 2023). Summary judgment is appropriate if the moving
party shows that no genuine issue of material fact exists and that
it is entitled to judgment as a matter of law. See Fed R. Civ. P.
56(a); see also Burt, 84 F.4th at 54. Under this standard, "[a]
fact is 'material' if it 'has the capacity to change the outcome
of the [factfinder's] determination.'" Irobe, 890 F.3d at 377
(second alteration in original) (quoting Perez v. Lorraine
Enters., 769 F.3d 23, 29 (1st Cir. 2014)). Relatedly, "[a]n issue
is 'genuine' if the evidence would enable a reasonable factfinder
to decide the issue in favor of either party." Id. (quoting
Lorraine Enters., 769 F.3d at 29).
It is the moving party's responsibility to spell out
"the basis for [its] motion and identif[y] the portions of the
- 9 - pleadings, depositions, answers to interrogatories, admissions,
and affidavits, if any, that demonstrate the absence of any genuine
issue of material fact." Id. (alterations in original) (quoting
Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir.
2010)). If the moving party fulfills this responsibility, the
nonmovant must then, "with respect to each issue on which [it]
would bear the burden of proof at trial, demonstrate that a trier
of fact could reasonably resolve that issue in [its] favor." Id.
(alterations in original) (quoting Borges, 605 F.3d at 5). To
make this showing, "[t]he nonmovant must point to materials of
evidentiary quality . . . and such materials must frame an issue
of fact that is 'more than "merely colorable."'" Id. (quoting
Flovac, Inc. v. Airvac, Inc., 817 F.3d 849, 853 (1st Cir. 2016)).
Where, as here, "a store challenges the [FNS's]
determination that the store trafficked in SNAP benefits, the store
bears the burden of proving by a preponderance of the evidence
that its conduct was lawful." Id. at 378. Unlike most
administrative challengers, though, the store is entitled to "a
trial de novo . . . in which the court shall determine the validity
of the questioned administrative action in issue." 7 U.S.C.
§ 2023(a)(13), (15); see 7 C.F.R. § 279.7(c). For the court to
conduct a trial de novo, it must be allowed to peer beyond the
agency record to any additional facts that the parties
- 10 - appropriately present to it. See Irobe, 890 F.3d at 376-77. In
other words, the court must examine "'the entire matter' instead
of simply determining 'whether the administrative findings are
supported by substantial evidence.'" Id. at 376 (quoting Ibrahim
v. United States, 834 F.2d 52, 53 (2d Cir. 1987)).
III
At the outset, the Market takes umbrage with our caselaw
on SNAP disqualifications. It asks that we overrule Irobe to the
extent that Irobe permits an inference of trafficking from
transaction data. See id. at 379-81. In support, the Market
insists that our reliance on irregular transaction patterns —
"without so much as a scintilla of admissible evidence" otherwise
in support of trafficking — is problematic. The reasoning and
holding in Irobe takes center stage in our ensuing discussion.
In Irobe, we affirmed the district court's grant of
summary judgment in favor of the USDA after the USDA had
permanently disqualified a convenience store from participating in
SNAP benefits. See id. at 374, 376. This sanction followed the
agency's determination that the store had engaged in trafficking.
See id. at 376. In reaching this conclusion, the agency "relie[d]
primarily on transaction reports derived from the [SNAP] database,
which analyzed all available statistical information concerning
the [s]tore's handling of SNAP benefits during the [relevant]
- 11 - period." Id. at 379. We accepted the use of these transaction
reports because "Congress has expressly authorized consideration
of both transaction information gleaned from [SNAP] databases and
reports of on-site investigations as tools in the USDA's efforts
to detect fraud." Id.; see 7 U.S.C. § 2021(a)(2); 7 C.F.R.
§ 278.6(a). And we concluded that SNAP transaction data provided
"circumstantial evidence of fraud[] sufficient to prove that a
store is trafficking in SNAP benefits." Irobe, 890 F.3d at 379.
This is a common-sense proposition. When a store
frequently processes SNAP transactions for dollar amounts that are
significantly higher than those of the transactions processed by
similar stores in the same vicinity, the factfinder may reasonably
infer that trafficking has occurred. See id. So, too, when a
small store with limited inventory repeatedly processes
high-dollar-amount SNAP transactions in a rapid-fire manner, the
factfinder may reasonably infer that trafficking has occurred.
See id.
In Irobe, the store's contrary evidence consisted mainly
of the owner's deposition testimony, which featured generalized
statements about customer behavior. See id. at 380. We deemed
that testimony insufficient to ward of the swing of the summary
judgment ax. See id. at 381. Nor did the introduction of a series
of receipts showing food purchases from vendors tip the scales.
See id. "[T]he mere fact that the [s]tore bought some
- 12 - SNAP-eligible foodstuffs and sold them to SNAP-qualified
households does not insulate it from a finding of trafficking."
Id. Based on the stockpile of data that the FNS had collected and
the store's "fail[ure] to challenge in any meaningful way the
agency's data-compilation methodology, the accuracy of the
compiled . . . data concerning SNAP transactions at the [s]tore,
[or] the reliability of the agency's historical data," we held
that summary judgment in the agency's favor was appropriate. Id.
at 380.
Here, the Market's entreaty that we scrap the Irobe
rationale presents a threshold issue. On that issue, the Market
asks too much. After all, "newly constituted panels in a
multi-panel circuit court are bound by prior panel decisions that
are closely on point." San Juan Cable LLC v. P.R. Tel. Co., 612
F.3d 25, 33 (1st Cir. 2010). In service of this principle, "[w]e
have held, time and again, that[,] in a multi-panel circuit, prior
panel decisions are binding upon newly constituted panels in the
absence of supervening authority sufficient to warrant disregard
of established precedent." United States v. Wogan, 938 F.2d 1446,
1449 (1st Cir. 1991).
So it is here. The Market has not identified any such
supervening authority — no overruling caselaw, no superseding
- 13 - statute, and nothing else of consequence.4 See United States v.
Ríos-Rivera, 913 F.3d 38, 43 (1st Cir. 2019) ("Prior panel
decisions generally bind us unless a Supreme Court opinion, en
banc ruling, or statute undermines the panel decision.").
In the case at hand, the Market's arguments mirror those
of the store in Irobe. See 890 F.3d at 379-81. It relies on a
handful of receipts and purchase orders along with its owner's
anecdotal account of shoppers' habits. Our holding in Irobe
squarely addresses such a challenge. See id. There, we determined
that the agency could rely on SNAP transaction data as evidence of
trafficking. See id. At the same time, we examined the store's
countervailing evidence, which comprised the store owner's
deposition testimony along with receipts showing purchases of
foodstuffs. See id. at 380-81. Viewed objectively, Irobe is
4 To be sure, there may be instances in which the weight of authority has shifted so dramatically that overruling a precedential opinion may be within the realm of available courses of action. See, e.g., United States v. Chhien, 266 F.3d 1, 11 (1st Cir. 2007) (recognizing "rare circumstances[] where non- controlling but persuasive case law suggests" deviating from binding circuit precedent); Williams v. Ashland Eng'g Co., 45 F.3d 588, 592 (1st Cir. 1995) abrogated on other grounds by Carpenters Loc. Union No. 26 v. U.S. Fid. & Guar. Co., 215 F.3d 136 (1st Cir. 2000) (acknowledging "relatively rare instances in which authority that postdates the original decision, although not directly controlling, nevertheless offers a sound reason for believing that the former panel, in light of fresh developments, would change its collective mind"). The case at hand does not fit within the narrow confines of this exception.
- 14 - directly on point, and we must treat it as binding precedent. See
San Juan Cable, 612 F.3d at 33.
The Market's principal rejoinder is a belated request
for a hearing en banc so as to reconsider Irobe. In this regard,
Federal Rule of Appellate Procedure 35 requires that a petition
for "an appeal [to] be heard initially en banc must be filed by
the date when the appellee's brief is due." Fed. R. App. P. 35(c).
But the Market failed to file a petition for an initial hearing en
banc before the date prescribed by Rule 35(c): it requested such
review for the first time in its reply brief. Consequently, we
must decline the Market's invitation that we sit en banc initially
in order to reconsider Irobe.
C
The Market has another blade in its scabbard. It strives
to persuade us that — in Irobe — we did not consider whether
transaction data are admissible under prevailing evidentiary
rules. We are not convinced.
The Market concedes that, if SNAP transaction data could
connect the underlying transactions to trafficking, such data
would be admissible. But in its view, these data are not probative
of trafficking and, thus, are categorically inadmissible. As the
Market tells it, any evidentiary value derives solely from an
analysis of the SNAP transaction data.
- 15 - We do not agree. In the case at hand, the FNS performed
the key analysis (which the district court confirmed in its de
novo review). The FNS defined the Scan B2 and Scan F categories
and determined when a store processed enough of these suspicious
transactions such that the factfinder could infer that trafficking
had occurred.
The Market argues that this kind of lay analysis is
insufficient evidence to support an inference of trafficking.
Instead — it theorizes — an expert witness would need to conduct
a statistical analysis in order to provide meaningful conclusions
about the SNAP transaction data. And unlike in Irobe, 890 F.3d at
380, the Market challenges the FNS's methodology. In particular,
it disputes the FNS's use of the Scan B2 and Scan F categories and
the agency's selection of other stores in the area as comparators.
Given these concerns, the Market argues that the analysis in Irobe
is not dispositive of its challenge.
In one important respect, the Market reads Irobe
correctly. That case did not hold that raw numerical transactional
data without expert review is always competent to generate an
inference that will carry the day if not rebutted by competent
evidence. Rather, it held that the data compiled there were
sufficient. Those data included:
• On fifty-one separate occasions, households used
up at least ninety percent of their monthly SNAP
- 16 - benefits in fewer than nine hours. Historical
data indicates that it is markedly inconsistent
with the normal shopping behavior of SNAP-
qualified households to deplete all or most of a
household's allotment in one fell swoop.
According to an unchallenged government analysis
of SNAP-related shopping patterns, it usually
takes a minimum of two weeks for a SNAP-qualified
household to deplete eighty percent of its
monthly allotment and three weeks to deplete
ninety percent of that allotment.
• During the relevant period, the store engaged in
205 high-dollar SNAP transactions, that is,
transactions ranging from $174 to $1,050. Yet,
historical data indicates that, during 2015, the
average SNAP transaction in the Lewiston area was
about $45.
• With respect to multiple purchases in quick
succession, 103 pairs of SNAP transactions were
recorded on the store's point-of-sale device
during the relevant period in under nine minutes.
These paired transactions included twenty-
one pairs of transactions completed in
sixty seconds or less and four pairs of
- 17 - transactions completed in under thirty-
nine seconds. Given normal shopping behavior,
the practical realities of shopping at the store,
and the availability of only a single clerk, these
paired transactions raise obvious concerns.
See Irobe, 890 F.3d at 379.
Those disparities were stark enough to put the ball into
the store's court — but that does not mean that a similar result
must pertain either in a case where less stark disparities exist
or where evidence suggesting stark disparities was persuasively
explained away. After all, there is a difference between a coin
that flips to heads four out of five times and a coin that flips
to heads ten out of ten times.
All that being said, we conclude that the numerical data
here is enough to generate an inference of fraud in the absence of
a statistical rebuttal or competent evidence of an alternative
explanation for the apparent disparity. A change from fourteen
scanned transactions in a six-month period to 158 in the next
period, combined with thirty-three Scan B2 transactions as
compared to two for two reasonable comparators, is stark enough to
call for an explanation founded on competent evidence. In fine,
the factual differences between this case and Irobe are not enough
to distinguish it, so as a subsequent panel, we must follow Irobe.
See San Juan Cable, 612 F.3d at 33.
- 18 - IV
Battling on, the Market contends that, even if Irobe
controls, the district court erroneously entered summary judgment
because the data analysis underlying the determination that it had
trafficked in SNAP benefits presented a genuine issue of material
fact. Given that our review is de novo, we accord no deference to
the agency's finding that trafficking had occurred. See Irobe,
890 F.3d at 379.
Our starting point is the FNS's evidentiary showing.
The party seeking summary judgment must identify the relevant
evidence and legal basis to demonstrate that the record — construed
in the light most favorable to the nonmovant — presents no genuine
issue of material fact and entitles the movant to judgment as a
matter of law. See Borges, 605 F.3d at 5. Once the movant makes
such a showing, the nonmovant must adduce "significantly
probative" evidence of a genuine dispute about a dispositive issue
to avoid summary judgment. Anderson, 477 U.S. at 249-50.
Here — as in Irobe — the agency built its case on
inferences drawn from SNAP transaction data. See Alam & Sarker,
2023 WL 6444379, at *6-8. The Market processed a vastly
disproportionate number of Scan F transactions relative to its
sales during the same six-month period one year earlier and
relative to other stores in the area. See id. at *4, 8. So, too,
- 19 - the Market processed thirty-three Scan B2 transactions when it had
processed no such transactions during the same six-month period
one year earlier and two other similar stores processed a combined
two of these transactions. See id. at *3.
We agree with the district court that these facts suffice
to ground a strong inference that trafficking had occurred. See
id. at *8; see also Irobe, 890 F.3d at 380 (concluding that "large
number of aberrational transactions reflected in the Store's
[SNAP] database [were] adequate to ground a strong inference of
trafficking"). And although "[i]rregular patterns may emerge in
virtually any retail operation, . . . a drumbeat of irregularities
can be highly probative of unlawful conduct." Id. Once the FNS
had cleared this hurdle, the burden shifted to the Market to rebut
the inference of trafficking. See Anderson, 477 U.S. at 249-50.
The Market points out that the pertinent regulations do
not specifically prohibit Scan B2 or Scan F transactions. Nor do
they prohibit large numbers of either type of transaction. Thus
— in the Market's view — the agency's case rests entirely on
comparisons to transactions from the previous year and
transactions from other stores. The Market submits that this
evidence does not meaningfully cut in the agency's favor.
To begin, the Market notes that the contractor's report
did not accurately document its inventory or its shoppers'
- 20 - purchasing habits. This, in turn, led the agency to use dissimilar
stores as comparators. The Market's fallback position is that its
higher volume of SNAP transactions relative to those of other
stores can be explained by its more copious inventory.
We turn first to the contractor's report. The Market
asserts that the report omitted images of its storeroom and failed
to mention that it sold cases of soda and frozen shrimp. The
record belies these assertions: the report included images of the
storeroom and noted that the Market sold frozen shrimp. To be
sure, the report related that the Market sold individual bottles
of soda instead of cases of soda — but this seems to be a
distinction that makes no difference. Importantly, none of this
blunts the thrust of the SNAP transaction data.
The Market's "inventory" defense simply does not move
the needle. To be specific, evidence of a larger inventory that
includes some more expensive goods does not explain why the Market
processed so many back-to-back transactions in rapid succession
for a single SNAP account. Nor does that evidence explain the
volume of high-dollar transactions that the Market processed. Put
another way, the Market failed to adduce evidence to show that it
maintained a large supply of pricey items and that it sold those
items frequently enough to explain the disproportionate number of
Scan F transactions.
- 21 - The Market also complains that the other stores to which
the agency compared it ran significantly different operations. It
suggests that it should have been characterized as an "above
average convenience store," which would distinguish it from the
comparators that the agency used. This complaint, however, was
not advanced before the district court and, thus, we deem it
waived. See Teamsters, Chauffeurs, Warehousemen & Helpers Union,
Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir.
1992) ("[A]bsent the most extraordinary circumstances, legal
theories not raised squarely in the lower court cannot be broached
for the first time on appeal.")
The Market also attempts to attach significance to a
supposed lack of local competition. That attempt is fruitless:
the lack of local competition might result in an increase in sales
and in the average sale price. But the absence of competition
fails to explain other suspicious attributes, such as the
rapid-fire nature of many of the transactions. To cinch the
matter, the Market adduced no probative evidence that its theory
of competition played out in practice. We reject the Market's
suggestion that we attach decretory significance to theoretical
economic forces, when that theorizing is contradicted by evidence
that shoppers frequented other establishments in the area.
Finally, the owners' testimony describing the nature of
the Market's business does not gain the Market any traction. As
- 22 - we previously have made clear, a store owner's unsupported
generalized, and conclusory observations about customers'
predilections are insufficient to contradict reasonable inferences
drawn from concrete SNAP transaction data. See Irobe, 890 F.3d at
381.
The short of it is that the Market failed meaningfully
to rebut the strong inference of trafficking that flows from the
agency's evidence. Thus, a rational factfinder — employing a
preponderance of the evidence standard — could not reach any
conclusion except that the Market had engaged in SNAP trafficking.
It follows that the district court did not err in entering summary
judgment in favor of the agency.
V
The Market launches one last-ditch argument. It
contends that the process by which it was disqualified violated
due process because the FNS never advised it of the alleged
misconduct with sufficient particularity.5 In the Market's
estimation, the charge letter accused it of trafficking based on
irregular transaction data but failed to provide a "description or
This argument relies on a lack of proper notice and does 5
not claim that any infirmity exists with respect to the substance of any statute or regulation. Thus, we treat the challenge as one sounding in procedural due process and deem any substantive due process challenge to be waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (explaining that "issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived").
- 23 - allegation of what specific activity . . . qualifie[d] as
trafficking." This contention lacks force.
When the government accuses a party of violating the
law, the Constitution guarantees certain procedural protections.
See In Re Gault, 387 U.S. 1, 33 (1967). As relevant here, the
government "must set forth the alleged misconduct with
particularity." Id. (quotation omitted). This required "notice
contemplates specifications of acts or patterns of conduct, not
general, conclusory charges unsupported by specific factual
allegations." Spinelli v. City of New York, 579 F.3d 160, 172 (2d
Cir. 2009).
We have yet to adjudicate a procedural due process
challenge in the SNAP-disqualification context. Even so, our
decision is informed by the approaches that other courts of appeals
have developed in considering procedural due process challenges in
SNAP-disqualification cases.
In Traficanti v. United States, the Fourth Circuit held
that, "[e]ven assuming arguendo that a procedural due process
violation existed at the administrative level, the de novo hearing
in the district court cured the violation." 227 F.3d 170, 175
(4th Cir. 2000) (emphases in original). To like effect, in Kim v.
United States, the Ninth Circuit held that "[a] trial de novo, in
which the existence of a violation is examined afresh, and the
parties are not limited in their arguments to the contents of the
- 24 - administrative record, satisfies the strictures of procedural due
process." 121 F.3d 1269, 1274 (9th Cir. 1997). And in TRM, Inc.
v. United States, the Eleventh Circuit held that "[a] de novo
hearing in the district court adequately protects an aggrieved
store owner's procedural due process rights." 52 F.3d 941, 944
(11th Cir. 1995).
We share the view of our sister circuits. Inasmuch as
the Market received a trial de novo in the district court in which
it could examine and dispute the full range of evidence against
it, we hold that it received all the process that was due.
Consequently, this claim of error founders.6
VI
We need go no further. For the reasons elucidated above,
the judgment of the district court is
Affirmed.
6 In light of the foregoing, it is unnecessary for us to offer any opinion on whether the agency satisfied the strictures of due process. See, e.g., Traficanti, 227 F.3d at 175.
- 25 -