Michigan Express, Inc. Mahmoud Abdallah Nabil Ajami v. United States

374 F.3d 424, 2004 U.S. App. LEXIS 13323, 2004 WL 1440600
CourtCourt of Appeals for the Sixth Circuit
DecidedJune 29, 2004
Docket03-1595
StatusPublished
Cited by45 cases

This text of 374 F.3d 424 (Michigan Express, Inc. Mahmoud Abdallah Nabil Ajami v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Michigan Express, Inc. Mahmoud Abdallah Nabil Ajami v. United States, 374 F.3d 424, 2004 U.S. App. LEXIS 13323, 2004 WL 1440600 (6th Cir. 2004).

Opinion

OPINION

BOYCE F. MARTIN, JR., Circuit Judge.

Michigan Express Inc., Mahmoud Ab-dallah, and Nabil Ajami appeal from the district court’s grant of summary judgment for the United States. The district court held that the fining of Mr. Abdallah and Mr. Ajami by the Food and Nutrition Services, a division of the Department of Agriculture, was proper. We AFFIRM.

I.

Mr. Abdallah and Mr. Ajami owned shares in Michigan Express, Inc., a retail grocery store located in Detroit, Michigan. The Department of Agriculture authorized Michigan Express to accept food stamps.

Between May 3, 2000, and September 8, 2000, the Department of Agriculture’s Food and Nutrition Service conducted an undercover investigation of. Michigan Express to ensure it was complying with food-stamp laws and regulations. On four occasions, Michigan Express personnel accepted food stamps in payment for ineligible, non-food items. On three occasions, Michigan Express personnel accepted cash in exchange for food stamps.

On November 13, 2000, the Food and Nutrition Service informed Mr. Abdallah that Michigan Express was disqualified *426 from participating in the food-stamp program, the disqualification of the business did not preclude further action being taken by the Department of Agriculture or any other federal agency, and he and Mr. Aja-mi faced civil penalty if Michigan Express was sold or otherwise transferred. An Assistant United States Attorney sent Mr. Abdallah and Mr. Ajami a letter, dated April 24, 2001, which, in pertinent part, reads:

I am writing to inform you that, upon further review and consideration, this office has determined that it will not pursue a False Claims Act action or other federal action against you for alleged food stamp trafficking at Michigan Express, Inc.

On September 7, 2001, Mr. Abdallah and Mr. Ajami, relying on the letter, sold Michigan Express. After learning of the sale, the Food and Nutrition Service informed Mr. Abdallah and Mr. Ajami that they would be required to pay a $23,918 fine for selling the store after it had been disqualified from the food-stamp program. 1 Michigan Express, Mr. Abdallah, and Mr. Ajami requested an administrative review, arguing that the letter from the Assistant United States Attorney estopped the government from pursuing other penalties against them. The Department of Agriculture’s Administrative Review Board sustained the fine. Michigan Express, Mr. Abdallah and Mr. Ajami then filed suit in the United States District Court for the Eastern District of Michigan seeking an order rescinding the fine. On cross-summary-judgment motions, the district court affirmed the decision of the Review Board. This appeal followed.

II.

We review de novo a district court’s order granting summary judgment, Markva v. Haveman, 317 F.3d 547, 552 (6th Cir.2003), and in our review, we view the evidence in the light most favorable to the non-moving party. Williams v. Int’l Paper Co., 227 F.3d 706, 710 (6th Cir.2000). We will affirm if a party fails to make a showing sufficient to establish the existence of an essential element on which it would bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If a party claims the government is estopped from making an argument, summary judgment is appropriate in favor of the government if there is an insufficient showing for any of the estoppel elements. Kennedy v. United States, 965 F.2d 413, 417 (7th Cir.1992).

III.

Although separated into two parts in their brief, Michigan Express, Mr. Abdal-lah, and Mr. Ajami make one basic argument. They contend that the government, *427 by the language of the Assistant United States Attorney’s letter, was estopped from fining or pursuing any punitive action against them in regards to their sale of the business. They do not argue that the fine was illegally imposed; they argue only that the government should have been es-topped from pursuing it.

A.

“Estoppel is an equitable doctrine which a court may invoke to avoid injustice in particular cases.” Fisher v. Peters, 249 F.3d 438, 444 (6th Cir.2001). “[T]he traditional elements of equitable estoppel are: (1) misrepresentation by the party against whom estoppel is asserted; (2) reasonable reliance on the misrepresentation by the party asserting estoppel; and (3) detriment to the party asserting estop-pel.” LaBonte v. United States, 233 F.3d 1049, 1053 (7th Cir.2000). The government, however, “may not be estopped on the same terms as any other litigant.” Heckler v. Cmty. Health Servs. of Crawford Cty., Inc., 467 U.S. 51, 60, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984). Instead, “[a] party attempting to estop the government bears a very heavy burden” in sustaining its argument. Fisher, 249 F.3d at 444. At a minimum, the party must demonstrate some “affirmative misconduct” by the government in addition to the other estoppel elements. Ibid.

Our Court has never announced the definition of “affirmative misconduct.” Although we have cases applying the rule, see, e.g., In re Gardner, 360 F.3d 551, 559 (6th Cir.2004), we have not set the bounds of the concept. A review of our sister circuits, however, reflects a general consensus on the definition.

The Ninth Circuit defines “affirmative misconduct” as a deliberate lie or a pattern of false promises. Socop-Gonzalez v. I.N.S., 272 F.3d 1176, 1184 (9th Cir.2001) (en banc). In an earlier case it gave a more developed definition, explaining that “[njeither the failure to inform an individual of his or her legal rights nor the negligent provision of misinformation constitute affirmative misconduct.” Sulit v. Schiltgen, 213 F.3d 449, 454 (9th Cir.2000). The Seventh Circuit defines “affirmative misconduct” as “more than mere negligence .... It requires an affirmative act to misrepresent or mislead.” LaBonte, 233 F.3d at 1053. The Fifth Circuit, in almost identical language, defines “affirmative misconduct” as “something more than merely negligent conduct.” United States v. Marine Shale Processors,

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374 F.3d 424, 2004 U.S. App. LEXIS 13323, 2004 WL 1440600, Counsel Stack Legal Research, https://law.counselstack.com/opinion/michigan-express-inc-mahmoud-abdallah-nabil-ajami-v-united-states-ca6-2004.