Gus's Market, Inc. et al v. United States of America

Filing 17

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the motion of defendant to dismiss (Doc. 10 ) is denied without prejudice. Signed by Magistrate Judge David D. Noce on 3/12/15. (JAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

GUS’S MARKET, INC. and
GHASSAN AL-HAMID,
Plaintiffs,
v.
UNITED STATES OF AMERICA,
Defendant.

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No. 4:15 CV 3 DDN

MEMORANDUM AND ORDER
This action is before the court on the motion of defendant United States of
America to dismiss plaintiffs’ claims under Federal Rule of Civil Procedure 12(b)(1) for
lack of subject matter jurisdiction. (Doc. 10.) The parties have consented to the exercise
of plenary authority by the undersigned United States Magistrate Judge pursuant to 28
U.S.C. § 636(c). (Doc. 4.) The court heard oral argument on March 9, 2015.
On November 21, 2014, plaintiffs Gus’s Market, Inc. and Ghassan Al-Hamid
commenced this action in the Circuit Court of the City of St. Louis, Missouri. In this
action, plaintiffs allege that on or about April 19, 2013, they applied for participation in
the federal Supplemental Nutrition Assistance Program (SNAP). Plaintiffs allege they
received a July 24, 2013 letter of the federal Department of Agriculture (USDA) issued to
them that the USDA could not process their application because their "firm was
permanently disqualified as a SNAP retailer." (Doc. 2 at 3.) Plaintiffs allege that on
August 2, 2013, they mailed a written request for administrative review of the decision
contained in the July 24, 2013 letter. Plaintiffs allege that they have received no response
to their August 2, 2013 request for administrative review. As stated, on November 21,
2014, plaintiffs commenced this action in the Missouri Circuit Court.

On January 2, 2015, defendant United States removed this action to this court
pursuant to 28 U.S.C. § 1442(a)(1), as the United States government is the defendant. A
suit for judicial review may be brought in the United States District Court for the district
in which the aggrieved store or person resides; this federal action must be commenced
within 30 days "after the date of delivery or service of the final notice of determination
upon it." 7 U.S.C. § 2023(a)(13). This court generally has subject matter jurisdiction over
such an action for judicial review of the applicable final determination. 7 U.S.C. § 6999.
According to plaintiffs the following facts are relevant. In 1996 Art’s Supermarket
was sold to Adnan Hawijia Al-Abboud, plaintiff’s brother. (Doc. 12-1.) Plaintiff AlHamid is the sole shareholder of plaintiff Gus’s Market, Inc. Gus’s Market is
incorporated in the State of Missouri and is located in St. Louis, Missouri. (Doc. 1-4 ¶¶ 12.)
On April 19, 2013 plaintiffs filed an application to participate in the SNAP
program. (Id. ¶ 8.) Defendant sent notice to plaintiffs that their application could not be
processed because they were permanently disqualified as a SNAP retailer. (Id. ¶ 9.)
Plaintiffs allege, and defendant acknowledges, that the denial of plaintiffs' application
was due to the Department of Agriculture’s belief that plaintiff Al-Hamid had been an
"associated person" of Art’s Supermarket and that Art’s Supermarket and associated
persons were permanently disqualified from participation in SNAP as of August 11,
2010. Defendant informed plaintiffs that they must file a request for administrative
review within ten days. (Id.) Plaintiffs mailed a written request for review on August 2,
2013, but never received a response to their request for review. (Id. ¶¶ 11-12.)
Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(1),
arguing that this court does not have subject matter jurisdiction. Specifically, defendant
argues the United States government’s waiver of sovereign immunity is strictly limited to
the applicable limitations periods. For administrative review of the agency's decisions, an
aggrieved applicant must file a request for such review within 10 days of the date of
delivery of the decision. 7 U.S.C. § 2023(a)(3). The date of delivery should be known
precisely as the statute provides that a method of delivery must “provide [the Secretary]
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evidence of the delivery.” 7 U.S.C. § 2023(2). For judicial review of the agency's final
decision, the aggrieved applicant must file a judicial complaint within 30 days of receipt
of the final decision. 7 U.S.C. § 2023(a)(13). Unlike the previous subsection, this
subsection does not specify how the Secretary must deliver a final decision. See 7 U.S.C.
§ 2023. Defendant argues that both limitations periods relating to plaintiff's claim have
long passed.
Plaintiffs argue that neither of them was party to or had knowledge of the original
permanent disqualification of Arts Supermarket and its associated persons. Therefore,
they had no opportunity to challenge it and the thirty day limitation for judicial review
does not apply. (Doc. 12.) Second, plaintiffs argue that they filed a request for
administrative review within ten days of the July 24, 2013 denial letter. (Id.)
A motion to dismiss under F. R. Civ. P. 12(b)(1) challenges the power of the court
to hear the case. See Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990) (quoting
Mortensen v. First Fed. Sav. & Loan Ass’n, 549 F.2d 884, 891 (3d Cir. 1977)). A court
may dismiss based on lack of subject matter jurisdiction on any of three bases: “(1) the
complaint alone; (2) the complaint supplemented by undisputed facts; (3) the complaint
supplemented by undisputed facts plus the court’s resolution of disputed facts.” Johnson
v. United States, 534 F.3d 958, 962 (8th Cir. 2008). A court has “broader power to decide
its own right to hear the case than it has when the merits of the case are reached.” Osborn,
918 F.2d at 729; Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir. 1981). There are two
types of 12(b)(1) motions, ones that make a facial attack on the pleadings and those that
make a factual attack using material outside the pleadings. See MC Produce, Inc. v.
Aggressive Devs. of Missouri, L.L.C., et al., No. 1:09 CV 19 CDP, 2009 WL 1309899, at
* 1 (E.D. Mo. May 11, 2009) (citing Osborn, 918 F.2d at 729 n.6). The motion at hand
invokes a factual basis for lack of jurisdiction.
In evaluating a factual challenge to subject matter jurisdiction the court must
“weigh the evidence and satisfy itself to the existence of its power to hear the case.” MC
Produce, Inc., 2009 WL 1309899, at * 1 (quoting Osborn, 918 F.2d at 730). “In short, no
presumptive truthfulness attaches to the plaintiff’s allegations, and the existence of
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disputed material facts will not preclude the trial court from evaluating for itself the
merits of jurisdictional claims.” MC Produce, Inc., 2009 WL 1309899, at *1 (quoting
Osborn, 918 F.2d at 730). The plaintiff bears the burden of proof of jurisdiction when
defending a factual attack. MC Produce, Inc., 2009 WL 309899, at *1 (citing Osborn, 918
F.2d at 730).
The court has considered the material submitted by both parties and finds that, at
this time, a motion to dismiss is premature. The court cannot determine whether plaintiff
Ghassan al-Hamid was on notice of his permanent disqualification by the Department of
Agriculture in 2010. The government has suggested it needs additional time to collect
evidence regarding whether the Department of Agriculture provided plaintiff al-Hamid
notice of his permanent disqualification.
For the reasons stated above,
IT IS HEREBY ORDERED that the motion of defendant to dismiss (Doc. 10) is
denied without prejudice.

/S/ David D. Noce
u
UNITED STATES MAGISTRATE JUDGE
Signed on March 12, 2015.

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