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Faisal & A, LLC v. United States

United States District Court, S.D. Florida

September 25, 2019




         This matter is before the Court on Plaintiffs’ Motion for Preliminary Injunction at docket entry 15. Defendant filed a Response at docket entry 18. Plaintiffs did not file a Reply. Pursuant to the parties’ agreement at docket entry 17, the Court did not set this matter for a hearing. In the interest of expediency, the Court has taken the rendition of the background facts in this case from the parties’ briefing papers. For the reasons set forth below, Plaintiffs’ Motion is denied.


         This is a case about the redemption of food stamps. Congress designed a food stamp program to alleviate hunger and malnutrition among low-income households by augmenting their ability to purchase food. 7 U.S.C. §§ 2011, 2013(a). To that end, Congress provided for the issuance of food stamps that could be redeemed in exchange for food items from retail food stores that have been approved for participation in the Program. 7 U.S.C. § 2013(a). As their name suggests, “food” stamps can only be used to purchase food, which is defined as “any food or food product for home consumption except alcoholic beverages, [and] tobacco . . . .” 7 U.S.C. § 2012(k). Coupons issued and used as provided in the statute are redeemed at face value by the Secretary through the facilities of the Treasury of the United States. 7 U.S.C. § 2013(a).

         Plaintiffs’ store, Tip Top Discount in Stuart, Florida, was first authorized to accept food stamps, now known as Supplemental Nutrition Assistance Program (“SNAP”) benefits, in 2009. See DE 18-1, Exhibit A - Administrative Record (“AR”). In 2018, the Department of Agriculture Food and Nutrition Service (“FNS”) initiated an investigation into Plaintiffs’ store. (AR at 38-89). From April 19, 2018, through June 27, 2018, an FNS investigator and a confidential informant visited the store on seven occasions to engage in transactions to determine whether the store was engaged in unlawful practices in violation of FNS statutes and regulations. Id.

         On five of the seven visits, the investigator documented SNAP violations by the Plaintiffs’ store. Id. A store employee allowed the confidential informant to purchase non-food items using SNAP benefits.[1] Id. These included plastic forks, plastic spoons, straws, cups, bathroom tissue, and soap. Id.

         On August 28, 2018, FNS sent Plaintiffs a Letter of Charges outlining the violations and assessing a six-month penalty for those violations. (AR at 69-70). Plaintiffs responded to the Letter of Charges by indicating that the store did not sell certain products identified in the investigator’s report. (AR at 100). Plaintiffs argued that the prices of items purchased in one of the transactions did not add up to the correct total. Id. Over Plaintiffs’ objections, however, FNS imposed a six-month disqualification of Plaintiffs’ store from participating in the SNAP program on September 27, 2018. (AR 110-111). Plaintiffs administratively appealed the disqualification (See AR 119), but on April 24, 2019, FNS issued its Final Agency Decision upholding the disqualification. (AR 129-136). The disqualification took effect approximately 31 days later and remains in effect as of this Order.

         On May 28, 2019, Plaintiffs filed their Complaint in this action, seeking judicial review of the FNS’s Final Agency Decision upholding the six-month disqualification of Plaintiffs’ store from participation in the SNAP program. On August 30, 2019, Plaintiffs filed their Motion for a Preliminary Injunction. DE 15.[2] Plaintiffs seek an Order staying the disqualification of Plaintiffs’ store from participating in SNAP until such time as the Court can conduct a trial in this action or otherwise address the matter on its merits. See DE 15-1.


         Chapter 7 of the United States Code, section 2021 provides for sanctions of retailers who violate SNAP regulations. In pertinent part, subsection (a)(2) of the statute permits the USDA to promulgate regulations pertaining to the criteria for finding a store in violation of the SNAP regulations, and sanctions and penalties resulting therefrom. Congress described the types of information that the Department could use in its evaluation of SNAP retailers:

The Department may penalize a store on the basis of evidence that may include facts established through on-site investigations, inconsistent redemption data, or evidence obtained through a transaction report under an electronic benefit transfer system.

7 U.S.C. § 2021.

         Under the authority granted to it by § 2021, USDA promulgated a series of regulations that govern SNAP, including 7 C.F.R. §§ 271-285. SNAP violations are of three types: (1) discriminatory activity toward SNAP participants; (2) the sale of ineligible items, either conspicuous or minor in nature; and (3) trafficking. Each category of violation, together with the retailer’s past history and the circumstances of the violations, warrant different sanctions under § 278.6. In this case, FNS has rendered a decision under § 278.6(e)(5), which states that a firm should be disqualified for six months where “evidence shows that personnel of the firm have committed violations such as but not limited to the sale of common nonfood items due to carelessness or poor supervision by the firm’s ownership or management.” 7 C.F.R. § 278.6.

         STANDARD ...

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