East Food & Liquor, Inc. v. United States Department of Agriculture

843 F. Supp. 1215, 1993 U.S. Dist. LEXIS 16117, 1993 WL 573239
CourtDistrict Court, N.D. Illinois
DecidedNovember 9, 1993
DocketNos. 93 C 3217, 93 C 6078
StatusPublished

This text of 843 F. Supp. 1215 (East Food & Liquor, Inc. v. United States Department of Agriculture) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
East Food & Liquor, Inc. v. United States Department of Agriculture, 843 F. Supp. 1215, 1993 U.S. Dist. LEXIS 16117, 1993 WL 573239 (N.D. Ill. 1993).

Opinion

MEMORANDUM AND ORDER

MORAN, Chief Judge.

These two cases present similar scenarios: a retail store was suspended from the WIC program by a State of Illinois proceeding. The United States Department of Agriculture Food and Nutrition Service (FNS) thereafter suspended the store from the food stamp program for the same period, the store lost an administrative appeal and it now seeks judicial determination of the food stamp program suspension. The government has filed a motion for summary judgment in East Food & Liquor, Inc., (East Food). In Garden Foods, Inc. (Garden Foods) plaintiff seeks a stay of the suspension pending trial before this court.

Some explanation of the programs is necessary for an understanding of the issues here. The WIC (Women, Infants and Children) program was created as a special food program, supplemental to the food stamp program, to provide highly nutritional foods to pregnant, postpartum and breast-feeding women. It is administered in Illinois by the State of Illinois Department of Public Health, and charges leading to a store’s possible disqualification from the WIC program are processed through state administrative proceedings which provide for a full due process hearing. 72 C.F.R. § 246.18.

The food stamp program is administered by FNS, and charges leading to possible disqualification from the food stamp program are processed through FNS administrative proceedings — far less expansive than WIC hearings. Pursuant to 7 U.S.C. § 2021, FNS, acting for the Secretary of Agriculture, may disqualify a store for a first violation for six months to five years or, if it is determined that a disqualification would cause hardship to food stamp households, may impose a civil penalty of up to $10,000 for each violation. If a store is disqualified or subjected to civil penalties and the sanction is upheld after administrative review, the store can obtain in federal court a de novo trial, in which the court makes its own determination of whether or not there have been violations but does not second-guess the Secretary on sanctions, so long as they are authorized. McGlory v. United States, 763 F.2d 309, 311 (7th Cir.1985).

The Secretary has promulgated regulations to carry out the statutory mandate. The issues here arise from the interaction between those regulations and both the WIC program and the food stamp program statutory provisions. The federal regulation, 7 C.F.R. § 278.1(m), provides for disqualification from the food stamp program upon disqualification from the WIC program for certain specified violations if the store was provided timely notice during the WIC program violation proceeding that it could be withdrawn from the food stamp program based on the WIC violation. 7 C.F.R. § 278.6(f) authorizes the imposition of a civil money penalty in certain circumstances, but it is unclear, at least to this court, whether or not this option is available when the disqualification is mandated by 7 C.F.R. § 278.1(m).

■ The circumstances here are not dissimilar from those in several reported and unreported cases, in all of which the courts have upheld the administrative disqualification. Rahim v. United States, 805 F.Supp. 676 (E.D.Wisc.1992); Russell’s Old Trading Post, Inc. v. United States, 783 F.Supp. 395 (N.D.Ind.1992); DeLaNueces v. United States, 778 F.Supp. 191 (S.D.N.Y.1991); Davis v. United States, No. 91 C 1390 (E.D.Wisc. 8/19/92); Jumbo Food & Liquor, Inc. v. United States, No. 93 C 3180 (N.D.Ill. 6/23/93). Both stores here were cited for WIC violations. In Garden Foods, plaintiff alleges that he relied upon advice of counsel to concede one violation of two cited by the state authorities in return for a $2500 fine and a one-year disqualification from the WIC program, even though the violations did not in fact occur. It was unaware that disqualification from the WIC program would lead to disqualification from the food stamp program. In East Food, plaintiff contends that the Secretary had a duty to consider hardship to food stamp households and failed to do so and, in any event, it was entitled to an independent determination whether or not there had been violations and that the state [1217]*1217proceeding, for that matter, never did establish that there had been violations of the food stamp program.

There is in at least one of these and in other cases a recurring theme. Participation in the WIC program is apparently not as economically important to many stores as participation in the food stamp program. A store charged with a violation of the WIC program accepts a disqualification sanction rather than contesting it, not realizing that its food stamp program participation will, as a matter of course, terminate for the same period. When it does realize the consequences it wants to start over. 7 C.F.R. § 278.6(f) does require FNS to notify the store during the WIC proceedings that the store could be withdrawn from the food stamp program based on the WIC violation, and both stores were so notified here. Perhaps FNS should be more forceful and explicit in describing the impact of a WIC violation — if the violation is serious enough the food stamp program termination is not something that “could” happen, but “will,” and the notification itself is confined to one sentence in a state notice and one sentence in an FNS letter to the store. Federal regulations are, after all, not the normal fare of neighborhood stores or, for that matter, neighborhood lawyers.

It is not up to the courts, however, to insist that administrative agencies do what a judge thinks may be more desirable. He must determine only whether the procedures adopted by the agency conform to law. A store has the opportunity for a full hearing on the WIC violation. In East Food, the store availed itself of that opportunity; in Garden Foods, the store conceded one violation in settlement. FNS disqualified both stores from participation in the food stamp program on the basis of the undisputed evidence that there had been a WIC determination of a WIC violation and each had been disqualified from the WIC program as a result, and they had then been notified in appropriate fashion that the disqualification could result in disqualification from the food stamp program. Both stores now contend that FNS could not rely upon the WIC disqualification. They argue that they were entitled to an independent determination of the charged violations by FNS and, if they were dissatisfied by that determination, to a trial de novo here.

We have no quarrel with the notion that a store is entitled to one administrative due process hearing — not two. The WIC program is related to the food stamp program. We think FNS is well within the ambit of its authorized discretion in adopting the WIC hearing as its own. Indeed, WIC provides for a full evidentiary hearing, well beyond the administrative review under the food stamp program.

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843 F. Supp. 1215, 1993 U.S. Dist. LEXIS 16117, 1993 WL 573239, Counsel Stack Legal Research, https://law.counselstack.com/opinion/east-food-liquor-inc-v-united-states-department-of-agriculture-ilnd-1993.