Quick Korner Market v. U.S. Department of Agriculture, Food & Nutrition Service

180 F. Supp. 3d 683, 2016 U.S. Dist. LEXIS 60053, 2016 WL 2620301
CourtDistrict Court, S.D. California
DecidedMay 4, 2016
DocketCase No. 15-CV-1364-BAS-JMA
StatusPublished
Cited by8 cases

This text of 180 F. Supp. 3d 683 (Quick Korner Market v. U.S. Department of Agriculture, Food & Nutrition Service) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quick Korner Market v. U.S. Department of Agriculture, Food & Nutrition Service, 180 F. Supp. 3d 683, 2016 U.S. Dist. LEXIS 60053, 2016 WL 2620301 (S.D. Cal. 2016).

Opinion

OPINION AND ORDER

Hon. Cynthia Bashant, United States District Judge

Plaintiffs Janan Stephan and Donna Marie Stephan bring this action against the United States Department of Agriculture, Food and Nutrition Service (“FNS” or “Agency”) seeking judicial review of the Agency’s decision to withdraw authorization from Plaintiffs’ grocery store to participate in the Supplemental Nutrition Assistance Program. (ECF No. 1.) Plaintiffs also bring an action for review under the Administrative Procedures Act, 5 U.S.C. § 701 et seq., and claims under 42 U.S.C. § 1983 for violation of the Fifth Amendment’s due process protections. Defendant United States of America (“United States” or “Government”)1 moves to dis[686]*686miss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction and pursuant to Rule 12(b)(6) for failure to state a claim. The Government also moves to transfer venue should any claims survive dismissal. (ECF No. 3.) Plaintiffs oppose. (ECF No. 6.)

The Court finds this motion suitable for determination on the papers submitted and without oral argument.- See Civ. L.R. 7.1(d)(1). For the reasons that follow, the Court will GRANT IN PART the Government’s motion to dismiss. The Government’s motion to transfer venue is DENIED AS MOOT.2

I. STATUTORY BACKGROUND

Congress enacted the Food and Nutrition Act of-2008 (the “Act”), 7 U.S.C. §§: 2011-2036, a successor statute to the Food Stamp Act of 1964,.“to safeguard the health and well-being of the Nation’s population by raising levels of nutrition among low-income households.” 7 U.S.C. § 2011. A core component of the Act is the Supplemental Nutrition Assistance Program (“SNAP” or “Program”), which aims to alleviate .hunger and malnutrition among low-income households by augmenting their ability to purchase certain food items. 7 U.S.C. §§ 2011, 2013(a). To be eligible for SNAP benefits, a household must meet certain income and resource constraint requirements. 7 U.S.C. § 2014. Beneficiaries receive SNAP benefits in the form of an electronic benefit transfer card, which they may use at retail food stores approved to participate in the Program. See 7 U.S.C. § 2016.

The participation of retail food stores in SNAP is critical to advancing the policy objectives envisioned by the Act. Store owners who wish to accept and redeem SNAP benefits must apply to, and receive authorization from, the FNS. See 7 U.S.C. § 2018. In considering grocery store applications, the FNS considers, among other factors, the nature and extent of the food business conducted by the applicant; whether the applicant is located in an area with significantly limited access to food; and the- business integrity and reputation of the applicant. See 7 U.S.C. § 2018(a)(1).

Once a store has been approved to participate in SNAP, the FNS may penalize or disqualify the store from participating in the Program for certain offenses, such as “trafficking” in food stamps. See 7 U.S.C. § 2021. Trafficking includes “[t]he buying, selling, or otherwise effecting an exchange of SNAP benefits ... for cash or consideration other than eligible food.” 7 C.F.R. § 271.2. The penalty for trafficking is severe: the Act provides that a store’s first-time trafficking offense results in permanent disqualification from the Program.3 7 U.S.C. § 2021(b)(3)(B). [687]*687Furthermore, under the Program’s implementing regulations, the FNS may "withdraw a grocery store’s. authorization to participate in the Program based on “a lack of business integrity.” 7 C.F.R. §§ 278.1(b)(3), (k)(3).

A store that has been disqualified from SNAP or otherwise sanctioned by the FNS may request administrative review of the decision within ten days of receiving notice of the decision.' ■ 7 U.S.C. §§ 2023(a)(1), (a)(3). Once completed, administrative review results in a-final agency determination. 7 U.S.C. § 2023(a)(12). A store facing an adverse final agency determination may then seek judicial review under Section 14 of the Act, codified at 7 U.S.C. § 2023(a)(13). That provision provides:

If the store ... feels aggrieved by such final determination, it may obtain judicial review thereof by filing a complaint against the United States in the United States court for the district in which it resides or is engaged in business, or, in the case of a retail food store or wholesale food concern, in any court of record of the State having competent jurisdiction, within thirty days after the date of delivery or service of the final notice of determination upon it, requesting the court to set aside such determination. 7 U.S.C. §, 2023(a)(13).

Two additional provisions of the Act discuss the standard of review for - district courts reviewing an FNS final agency determination. Section 2023(a)(15) provides that the suit for judicial review “shall be a trial de novo by the court in which the court shall determine the validity of the questioned administrative action in issue[.]” Section 2023(a)(16) states that “If the court determines that such administrative action is invalid, it shall enter such judgment or order as it determines is in accordance with the law and the evidence.” An aggrieved store may also request the district court temporarily stay the challenged administrative action pending judicial review. 7 U.S.C. § 2023(17).

II. FACTUAL BACKGROUND

Plaintiffs are current owners of the retail store Quick Korner Market located in Phoenix, Arizona (“Phoenix store”), and previous owners of the Quick Korner Market & Deli located in El Cajon, California (“El Cajon store).4 (CompLIffl 1, 5, 9.) In January 2005, while Plaintiffs owned the El Cajon store, the FNS sent Plaintiffs a charge letter indicating that the FNS had evidence of trafficking violations at the El Cajon store.

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Bluebook (online)
180 F. Supp. 3d 683, 2016 U.S. Dist. LEXIS 60053, 2016 WL 2620301, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quick-korner-market-v-us-department-of-agriculture-food-nutrition-casd-2016.