Negash et al v. USA

Filing 26

MEMORANDUM OPINION. Signed by Judge Richard D. Bennett on 7/16/2018. (aos, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
ISRAEL K. NEGASH, et al.,

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Plaintiffs,

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v.

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UNITED STATES OF AMERICA,

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Defendant.
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Civil Action No. RDB-17-1954

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MEMORANDUM OPINION
On February 20, 2018, Plaintiffs Ethio, Inc. and Israel K. Negash (collectively
“Plaintiffs”), filed an Amended Motion for Reconsideration (ECF No. 23)1 based upon this
Court’s previous Memorandum Opinion and Order granting the Defendant United States of
America’s (“Defendant”) Motion for Summary Judgment. (ECF Nos. 20, 21.) On March 1,
2018, the Defendant filed its Response in Opposition to the Plaintiffs’ Motion for
Reconsideration, arguing that the Plaintiffs are not entitled to relief under Rule 59(e) of the
Federal Rules of Civil Procedure. (ECF No. 24.) The pending Motion was fully briefed by
both parties and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons
that follow, Plaintiffs’ Motion for Reconsideration (ECF No. 23) is DENIED.2
BACKGROUND
The background facts of this case are set forth in this Court’s Memorandum Opinion
on February 5, 2018. (ECF No. 20); Negash v. United States, Civ. No. RDB-17-1954, 2018 WL
Plaintiffs’ first Motion for Reconsideration is MOOT. (ECF No. 22.)
On April 6, 2018, Plaintiffs also submitted an Ex Parte Motion for Extension of Time to File Appeal fourteen (14) days
after this Court’s entry of the order. (ECF No. 25.) This Motion is GRANTED.
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722481 (D. Md. Feb. 5, 2019). To summarize, Plaintiff Negash (“Negash”) is the owner and
operator of Ethio, Inc., d/b/a Sunoco Food Mart (“the Store”) in Baltimore, Maryland. Id.
at *1. In May 2001, the Store began participating in the Supplemental Nutrition Assistance
Program (“SNAP”). Id. Pursuant to regulations governing SNAP retailers, the Food and
Nutrition Service (“FNS”)3 is authorized to permanently disqualify any SNAP retailer that it
finds “trafficking”4 SNAP benefits. See 7 C.F.R. § 278.6.
Between February and July 2016, the FNS electronic alert system indicated that the
Store’s Electronic Benefits Transfer (“EBT”)5 data was consistent with possible trafficking
in EBT benefits. Negash, 2018 WL 722481, at *3. As a result, the FNS Retailer Operations
Division (“ROD”) began an investigation into the Store and subsequently sent an individual
from ROD to visit the Store on June 18, 2016. Id. ROD also compared the Store’s
transactions to those of other stores in the area, including four other convenience stores
within a one-mile radius. Id. After analyzing all of the information gathered during its
investigation, ROD determined that the transactions discovered by the FNS electronic
system were, in fact, suspicious, and inconsistent with the transactions of other similarly
situated SNAP retailers. Id. The Store’s suspicious transactions fell into three categories: (1)
rapid and repetitive transactions in a short period of time from the same household; (2)
transactions involving the depletion of the majority or all of a household’s benefits in a short
timeframe; and (3) high dollar transactions. Id.
3 SNAP is a government program operated by the FNS, a component of the United States Department of Agriculture
(“USDA”). See 7 C.F.R. § 271.3.
4 “Trafficking” is defined in pertinent part as “buying, selling, stealing or otherwise effecting an exchange of SNAP
benefits issued and accessed via (EBT) cards . . . for cash or consideration other than eligible food, either directly,
indirectly, in complicity or collusion with others, or acting alone.” 7 C.F.R. § 271.2.
5 SNAP beneficiaries are awarded benefits in the form of an Electronic Benefits Transfer (“EBT”) card, which is akin to
a debit card and can be used only for the purchase of food and certain other eligible items sold by approved SNAP
retailers. See id. §§ 2013(a), 2016(j); see also 7 C.F.R. 271.2.

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On August 11, 2016, the FNS sent a letter to Negash, informing him that the Store
was being charged with trafficking EBT benefits under 7 C.F.R. § 271.2.6 Negash, 2018 WL
722481, at *4. Eventually, Negash responded to the substantive allegations, offering a litany
of explanations for the suspicious transactions.7 Id. After inquiring into Negash’s
explanations, FNS found: (1) no evidence the Store was anything but a typical convenience
store; (2) and Negash’s other explanations did not account for the suspicious transactions. Id.
On September 20, 2017, the FNS issued a determination letter informing Negash that it
found the Store had engaged in trafficking SNAP benefits and was therefore permanently
disqualified from participation in SNAP. Id.
Negash sought an administrative review of the decision to disqualify the Store,
reiterating many of the same explanations offered in response to the initial charge letter. Id.
An FNS Administrative Review Officer (“ARO”) reviewed the information submitted by
Negash and then issued a Final Agency Decision on June 13, 2017. Id. The ARO found,
among other things, that the Store was simply a typical convenience store/gas station, and
that its inventory did not lend itself to the many large, suspicious transactions at issue. Id. It
also noted that following the Store’s receipt of the initial charge letter there was a precipitous
decline in the number of suspicious transactions—a fact that was in itself suspicious. Id.
Therefore, the ARO upheld both the decision that “trafficking” had occurred and the
decision to permanently disqualify the Store from the SNAP program. Id. On July 13, 2017,

6 The letter stated that Negash had a right to explain the suspicious charges and a right-within ten days-to request a CMP
(“Civil Money Penalty”) in lieu of permanent disqualification. Id. at *3-4.
7 The explanations offered by Negash primarily revolved around the notion that the Store was not a typical convenience
store/gas station, but was instead the primary grocer for many individuals. Id. at *4.

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Negash filed a Complaint with this Court requesting a judicial review of the FNS
determination. (ECF No. 1.)
STANDARD OF REVIEW
The Federal Rules of Civil Procedure do not expressly recognize motions for
“reconsideration.” Instead, Rule 59(e) authorizes a district court to alter, amend, or vacate a
prior judgment, and Rule 60 provides for relief from judgment. See Katyle v. Penn Nat’l
Gaming, Inc., 637 F.3d 462, 471 n.4 (4th Cir. 2011), cert. denied, 132 S. Ct. 115 (2011). As this
Court explained in Cross v. Fleet Reserve Ass’n Pension Plan, Civ. No. WDQ-05-0001, 2010 WL
3609530, at *2 (D. Md. Sept. 14, 2010):
A party may move to alter or amend a judgment under Rule 59(e), or for relief
from a judgment under Rule 60(b). See Fed. R. Civ. P. 59(e) & 60(b). A motion
to alter or amend filed within 28 days of the judgment is analyzed under Rule
59(e); if the motion is filed later, Rule 60(b) controls. See Fed. R. Civ. P. 59(e);
MLC Auto., LLC v. Town of S. Pines, 532 F.3d 269, 280 (4th Cir. 2008); In re
Burnley, 988 F.2d 1, 2-3 (4th Cir. 1992).
(footnote omitted). In this case, Negash timely filed his Motion for Reconsideration (ECF
No. 23) within twenty-eight (28) days of this Court’s Order granting Defendant’s Motion for
Summary Judgment. (ECF No. 21.) Thus, Plaintiff Negash’s Motion will be considered
under Rule 59(e).
The United States Court of Appeals for the Fourth Circuit has repeatedly recognized
that a final judgment8 may be amended under Rule 59(e) in only three circumstances: (1) to
accommodate an intervening change in controlling law; (2) to account for new evidence not
available at trial; or (3) to correct a clear error of law or prevent manifest injustice. See, e.g.,

Rule 59(e) applies only to final judgments. See Fayetteville Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1469 (4th Cir.
1991)
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Gagliano v. Reliance Standard Life Ins. Co., 547 F.3d 230, 241 n.8 (4th Cir. 2008); see also Fleming
v. Maryland National Capital Park & Panning Commission, Civ. No. DKC-11-2769, 2012 WL
12877387, at *1 (D. Md. Mar. 8, 2012). A Rule 59(e) motion “may not be used to relitigate
old matters, or to raise arguments or present evidence that could have been raised prior to
entry of judgment.” Pac. Ins. Co. v. Am. Nat’l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998);
see also Kelly v. Simpson, Civ. No. RDB-16-4067, 2017 WL 4065820, at *1 (D. Md. Jan. 26,
2017). Moreover, “[t]he district court has considerable discretion in deciding whether to
modify or amend a judgment.” Fleming, 2012 WL 12877387, at *1.
ANALYSIS
Plaintiff Negash alleges that this Court’s Order granting Defendant’s Motion for
Summary Judgment was improper because: (1) summary judgment was granted without
affording Negash an opportunity for discovery; and (2) the correlation between the
electronic alert system’s transaction patterns and EBT trafficking was accepted “despite no
evidence being presented to establish a connection.” (ECF No. 23.) Negash claims he was
“entitled” to discovery before this Court made its ruling because “material issues of fact
[still] remain[ed] for evidentiary presentation” and discovery was necessary in order to “fully
review the allegations brought against [him]” and to “gather evidence to rebut the
allegations.” (Id. at 4, 6.) Negash also contends that he has “repeatedly disputed that the
ALERT system’s transaction patterns have any relevant relation to trafficking” and criticizes
this Court for “accept[ing] this correlation despite no evidence being presented to establish
such a connection . . ..” (Id. at 8.) In addition, Negash now proceeds to add a new claim that

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the Store’s permanent disqualification from SNAP violated his “right to Substantive Due
Process under the Fifth Amendment.” (Id. at 9.)
A. Relitigating Previous Arguments Under Rule 59(e)
As explained previously, a Rule 59(e) motion “may not be used to relitigate old
matters, or to raise arguments or present evidence that could have been raised prior to entry
of judgment.” Pac. Ins. Co., 148 F.3d at 403; see also Kelly, 2017 WL 4065820, at *1. Here,
Plaintiff Negash’s demands for discovery and his contentions questioning the relationship
between the electronic alert system data and EBT trafficking were previously raised and
considered by this Court in Plaintiffs’ Response in Opposition to Defendant’s Motion for
Summary Judgment. (ECF No. 17.) After Negash’s arguments were assessed, this Court
found “that the Store engaged in trafficking is supported by the administrative record and
[Plaintiffs] ha[ve] failed to offer any credible argument to the contrary.” Negash, 2018 WL
722481, at *3, 4. In addition, this Court also found Negash’s “attacks on the FNS’s use of its
electronic alert system [to be] wholly unpersuasive.” Id. at *4. Therefore, Negash’s request
for relief under Rule 59(e) is improper because it “merely reiterates arguments [the] Court
previously rejected in its Memorandum Opinion[.]” Redner’s Markets, Inc. v. Joppatown G.P.
Ltd. P’ship, Civ. No. RDB-11-1864, 2013 WL 5274356, at *8 (D. Md. Sept. 17, 2013).
B. Presentation of New Argument
Negash also attempts to raise a new claim that the Store’s permanent disqualification
from SNAP violated his rights to due process. (ECF No. 23 at 9-10.) However, unlike
previous complaints seeking de novo judicial review of FNS’s permanent disqualification of a
SNAP retailer, Negash’s one-count Complaint did not allege that the Store’s permanent
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disqualification from SNAP violated Negash’s substantive due process rights. (ECF No. 1.)
See, e.g., Hanif v. United States, Civ. No. H-15-2718, 2017 WL 447465, at *7 (S.D. Tex. Feb. 2,
2017); Alhalemi, Inc. v. United States, 224 F. Supp. 3d 587, 589 (E.D. Mich. 2016); Duchimaza v.
United States, 211 F. Supp. 3d 421, 440 (D. Conn. 2016). Although Negash referenced due
process in his Response in Opposition to Defendant’s Motion for Summary Judgment, he
did not apply the factors implicated in a substantive due process claim nor did he reference
any case law. (ECF No. 17 at 5, 6, 23, 24.) Because this due process claim could have been
raised previously, Negash is barred from now bringing it under Rule 59(e). See, e.g., Pac. Ins.
Co., 148 F.3d at 404 (“Rule 59(e) may not be used to raise new arguments . . . that could have
been raised prior to judgment”); Kelly, 2017 WL 4065820, at *1 (D. Md. Jan. 26, 2017)
(“[T]he Fourth Circuit has cautioned that a party may not use a Rule 59(e) motion to raise
arguments which could have been raised prior to the issuance of the judgment. . ..”) (internal
quotation marks omitted).
C. No Clear Error of Law or Manifest Injustice
Further, relief is not necessary to “correct a clear error of law or prevent manifest
injustice.”9 See, e.g., Gagliano, 547 F.3d at 241 n.8; see also Fleming, 2012 WL 12877387, at *1.
This Court has emphasized that “[c]lear error or manifest injustice occurs where a court has
patently misunderstood a party, or has made a decision outside the adversarial issues
presented to the Court by the parties, or has made an error not of reasoning but of
apprehension . . ..” Wagner v. Warden, Civ. No. ELH-14-791, 2016 WL 1169937, at *3 (D.
9 Plaintiff Negash fails to explain on which of the limited grounds for reconsideration his Motion is based. (ECF No.
23.) Because Negash does not assert an intervening change in controlling law or present newly discovered evidence,
presumably he contends that this Court must “correct clear error of law or prevent manifest injustice.” See, e.g., Gagliano,
547 F.3d at 241 n.8; see also Fleming, 2012 WL 12877387, at *1.

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Md. Mar. 24, 2016) (internal quotation marks omitted). “When a party argues that Rule 59(e)
relief is necessary to correct a clear error of law or to prevent manifest injustice, mere
disagreement with the Court’s previous decision will not suffice.” June v. Thomasson, Civ. No.
GLR-14-2450, 2016 WL 7374432, at *3 (D. Md. Dec. 20, 2016). Instead, to justify altering or
amending a judgment on this basis, “the prior judgment cannot be ‘just maybe or probably
wrong; it must . . . strike the court as wrong with the force of a five-week-old, unrefrigerated
dead fish.’” Id. (quoting Fontell v. Hassett, 891 F. Supp. 2d 739, 741 (D. Md. 2012)); see also
Bellsouth Telesensor v. Info. Sys. & Networks Corp., 65 F.3d 166 (4th Cir. 1995). In other words,
the Court’s previous judgment must be “dead wrong.” See TFWS, Inc. v. Franchot, 572 F.3d
186, 194 (4th Cir. 2009). “In general, reconsideration of a judgment after its entry is an
extraordinary remedy which should be used sparingly.” Id. (internal citations and quotation
marks omitted); see also Jarvis v. Berryhill, Civ. No. TMD-15-2226, 2017 WL 467736, at *2 (D.
Md. Feb. 3, 2017).
Negash is not “entitled” to discovery in this case. In fact, Negash had the opportunity
to provide evidence rebutting the FNS’s determination. See Negash, 2018 WL 722481, at *4
(“[This] [C]ourt finds Negash’s explanations for the suspicious transactions—largely the
same explanations offered at the administrative review stage—unpersuasive.”). In Negash’s
Motion, he cites H.T. Saunders vs. United States, 507 F.2d 33 (6th Cir. 1974), as “one of the
more well outlined SNAP review cases,” which “outline[s] what task rests before the District
[C]ourt.” (ECF No. 23 at 2-3.) In that case, the Sixth Circuit concluded that:
Since the procedures followed at the administrative level do not provide for
discovery or testing the evidence of the Department of Agriculture by crossexamination, it is particularly important that an aggrieved person who seeks
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judicial review in a trial de novo not be deprived of these traditional tools
unless it is clear that no issue of fact exists.
H.T. Saunders, 507 F.2d 33 at 36 (emphasis added). Here, this Court concluded that no issue of
fact existed when the determination of FNS “that the Store engaged in trafficking [was]
supported by the administrative record and [Plaintiffs] had failed to offer any credible
argument to the contrary.” See Negash, 2018 WL 722481, at *3. Additionally, the types of
discovery Negash seeks would not create a genuine issue of material fact. Negash contends
that he is entitled to discover the identities of households whose EBT data was contained in
the administrative record in addition to the identities of the comparison stores. (ECF No. 23
at 3, 5, 6, 7, 9.) However, Negash fails to articulate how these identities will create any
dispute of material fact as to each of the hundreds of suspicious transfers that FNS
identified.10 This Court has continually granted pre-discovery judgment in favor of the
United States in numerous SNAP cases and therefore, Plaintiff Negash’s demand for
discovery fails. See 7-Eleven, Inc. v. United States, Civ. No. GLR-15-0543, 2016 WL 5107129, at
*3-4 (D. Md. Jan. 29, 2016); Mahmood v. United States, Civ. No. WMN-12-0228, 2012 WL
3038638, at *1 n.4; AJS Petroleum, Inc. v. United States, Civ. No. L-11-1085, 2012 WL 683538,
at *5 (D. Md. Mar. 1, 2012); Bernal Deli Grocery v. United States, Civ. No. MJG-10-1761 (D.
Md. Aug. 26, 2011).

Additionally, Negash’s reliance on Randallstown International Market, LLC v. United States, Civil No. GLR-16-4050 (D.
Md. Dec. 20, 2016) – currently pending in this Court – is misguided. Negash relies on Randallstown as a case in which this
Court “permitted discovery,” contending that if this Court “had ruled [in Randallstown] the way that this Court has [in
this case], the plaintiffs in that matter would never have had an opportunity to discover . . . bias and problems with the
Defendant’s judgment.” (ECF No. 23 at 8.) However, in Randallstown, this Court did not “permit” or “rule” that the
plaintiffs in that case were entitled to discovery, but rather plaintiffs conducted discovery after the United States filed an
answer to the complaint. See Randallstown, Civil No. GLR-16-04050.
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This Court also finds Plaintiff Negash’s argument criticizing the correlation between
the electronic alert system’s transaction patterns and EBT trafficking unavailing. Pursuant to
7 U.S.C. § 2021(a)(2), federal regulations may provide criteria for the “disqualification of . . .
a retail food store . . . on the basis of evidence that may include facts established through . . .
inconsistent redemption data, or evidence obtained through a transaction report under an
electronic benefit transfer system.” See 7 C.F.R. § 276.8(a). Further, the Fourth Circuit has
also allowed the Government to rely on EBT transaction reports as circumstantial evidence
“[t]o prove that trafficking has taken place.” ANS Food Market v. United States, Civil No. JKB14-2071, 2015 WL 1880155, at *2 (D. Md. Apr. 22, 2015); see also Idias v. United States, 359
F.3d 695 (4th Cir. 2004). Additionally, while the electronic alert system triggered the
investigation, an “on-site investigation” and “inconsistent redemption data” were considered
before the FNS determined that “trafficking” occurred. Negash, 2018 WL 722481, at *4.
Although Negash admits that an “on-site inventory”11 was conducted, he emphasizes that no
violations were observed. (ECF No. 23 at 5.) However, as this Court previously stated, the
“decision to hold a SNAP retailer liable for trafficking can be made even where the retailer is
not caught red-handed exchanging SNAP benefits for cash or consideration other than
eligible food.” Negash, 2018 WL 722481, at *3 (citing AJS Petroleum, 2012 WL 683538, at *5)
(emphasis added). In this case, given the fully developed administrative record, together with
Negash’s inability to present a genuine dispute of material fact, Defendant was entitled to
summary judgment in its favor. See AJS Petroleum, 2012 WL 683538, at *5 (“Because

11 Plaintiff Negash contends “there was no on-site investigation,” but then admits “there was an on-site inventory that
was conducted . . ..” (ECF No. 23 at 5.) However, it has been established on the record that a contractor for FNS
conducted a store visit in June 2016, to which the Plaintiffs consented. See Administrative Record, ECF No. 9-2 at 3031.)

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additional discovery would not change the factual landscape in this case, an analysis under
the summary judgment standard is appropriate.”).
Finally, even if Negash had raised a substantive due-process argument previously, the
Fourth Circuit has held that the SNAP-disqualification scheme is constitutional on
substantive due-process grounds. See Traficanti v. United States, 277 F.3d 170, 174 (4th Cir.
2000) (rejecting plaintiff’s procedural and substantive due process claims with regard to its
permanent disqualification from the food stamp program); Bon Supermarket & Deli v. United
States, 87 F. Supp. 2d 593, 604 (E.D. Va. 2000) (finding that “the permanent disqualification
is rationally related to the purposes of the food stamp program and, therefore, does not
violate plaintiffs’ substantive due process rights.”). Nor could Negash argue that pre-discovery
summary judgment violated his substantive due-process rights. This Court has held several
times that pre-discovery summary judgment is appropriate where the administrative record
supports the conclusion that a SNAP retailer was trafficking in benefits. See 7-Eleven, Inc.,
2016 WL 5107129, at *3-4 (D. Md. Jan. 29, 2016); Mahmood, 2012 WL 3038638, at *1 n.4;
AJS Petroleum, Inc., 2012 WL 683538, at *5; Bernal Deli Grocery, Civ. No. MJG-10-1761 (D.
Md. Aug. 26, 2011). In sum, Plaintiff Negash has failed to bring forth issues that rise to the
level of a “clear error of law” or reflect a “manifest injustice,” and his Motion for
Reconsideration (ECF No. 23) is DENIED.
CONCLUSION
For the foregoing reasons, Plaintiffs’ Motion for Reconsideration (ECF No. 23) as to
this Court’s Memorandum and Order granting summary judgment in Defendant’s favor is

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DENIED. Plaintiffs’ Ex Parte Motion for Extension of Time to File Appeal (ECF No. 25)
fourteen (14) days after the date of this Court’s Order is GRANTED.
A separate order follows.
Dated: July 16, 2018
______/s/____________________________
Richard D. Bennett
United States District Judge

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