Savera Super Store LLC v. USA

Filing 15

///ORDER granting 12 Motion for Summary Judgment. Clerk shall enter judgment and close the case. So Ordered by Judge Joseph A. DiClerico, Jr.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Savera Super Store, LLC
(SSS Tobacco Outlet)
v.

Civil No. 14-cv-554-JD
Opinion No. 2016 DNH 004

United States of America

O R D E R
After Savera Super Store, LLC (“Savera”) was permanently
disqualified from the Supplemental Nutrition Assistance Program
(“SNAP”) by the United States Department of Agriculture, Savera
sought review under 7 U.S.C. § 2023 and 7 C.F.R. § 279.7.

The

United States moves for summary judgment, asserting that the
undisputed facts show that Savera trafficked in SNAP benefits.
Savera objects, arguing that the circumstances cited by the
United States as evidence of trafficking in SNAP benefits are
ordinary shopping activities at the store.
Standard of Review
After a final disqualification decision, the aggrieved
party can file a complaint seeking judicial review.
§ 2023(a)(13).

7 U.S.C.

The review is “a trial de novo by the court in

which the court shall determine the validity of the questioned
administrative action in issue.”

§ 2023(a)(15).

The store

owner who seeks review bears the burden of showing, by a
preponderance of the evidence, that the agency’s decision was
invalid.

Fells v. United States, 627 F.3d 1250, 1253 (7th Cir.

2010); A Touch of Merengue, LLC – The Atom v. United States,
2014 WL 6609478, at *2 (D.R.I. Nov. 20, 2014); Rockland
Convenience Store v. United States, 2011 WL 5120410, at *3
(D.N.H. Oct. 27, 2011).
Summary judgment is an appropriate procedure in cases
brought under § 2023(a)(13).

Nadia Int’l Market v. United

States, 2015 WL 7854290, at *5 (D. Vt. Dec. 2, 2015).

Summary

judgment may be granted when the moving party “shows that there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.”
56(a).

Fed. R. Civ. P.

“A genuine dispute is one that a reasonable fact-finder

could resolve in favor of either party and a material fact is
one that could affect the outcome of the case.”
of Am. Corp., 780 F.3d 1, 7 (1st Cir. 2015).

Flood v. Bank

Reasonable

inferences are taken in the light most favorable to the
nonmoving party, but unsupported speculation and evidence that
“is less than significantly probative” are not sufficient to
avoid summary judgment.

Planadeball v. Wyndham Vacation

Resorts, Inc., 793 F.3d 169, 174 (1st Cir. 2015) (internal
quotation marks omitted).

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In the context of review under § 2023, courts recognize
that the agency decision of disqualification may be based on the
investigation, redemption data, and transaction reports from the
store.

Nadia Int’l Mkt., 2015 WL 7854290, at *5.

For that

reason, summary judgment may be appropriate based on that record
evidence even in the absence of “red handed” evidence of
trafficking.

Id.; 109 Merrick Deli Corp. v. United States, 2014

WL 6891944, at 4 (E.D.N.Y. Sept. 30, 2014).
Background
The Food and Nutrition Service (“FNS”) operates SNAP on
behalf of the Department of Agriculture to provide a means for
low income persons to buy food at retail food stores.
§ 2013(a); 7 C.F.R. § 271.3(a).

7 U.S.C.

SNAP provides benefits through

electronic benefit (“EBT”) cards, and a recipient can then buy
eligible food at an authorized store with the EBT card.
Merrick Deli Corp, 2014 WL 6891944, at *1.

See 109

Stores may not sell

ineligible items through an EBT transaction or exchange EBT
benefits for cash, which is trafficking in SNAP benefits.1

Id.

Trafficking specifically means “buying, selling, or
otherwise effecting an exchange of SNAP benefits issued and
accessed via [EBT] cards, card numbers and personal
identification numbers (PINs), or by manual voucher and
signature, 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. Trafficking also
means “[t]he exchange of firearms, ammunition, explosives, or
controlled substances . . . for SNAP benefits.” Id.
1

3

Authorized stores have EBT terminals to swipe the SNAP
recipient’s EBT card for a SNAP purchase, and the recipient
enters a personal identification number for the transaction.
The purchase amount is deducted from the recipient’s account and
credited to the store.

The terminal makes a receipt for each

transaction, which shows the balance in the recipient’s account.
SNAP benefit transactions are monitored by the FNS.

Each

EBT card transaction is electronically recorded, showing the
date and time of the purchase, the amount of the purchase, and
the card number.

The FNS uses a program called “ALERT” to

detect and then begin an investigation when irregular activity
is recorded from an EBT card.

FNS has determined that irregular

activity includes rapid and repetitive EBT debits of low dollar
amounts, an unusually high number of transactions where the
amount ends in “00”, and debits of large amounts in small stores
that do not have shopping baskets and have limited inventory of
eligible SNAP items.
Muhammed I. Toor owns Savera Super Store, which is a
convenience store that sells some inexpensive food items along
with other items on Laurel Street in Manchester, New Hampshire.
Toor applied for SNAP authorization in October of 2012.

In the

application, Toor stated that only 5% of the sales at the store
would be SNAP eligible.

The application was granted in January

of 2013.
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The store primarily sells tobacco products, does not have
shopping baskets or carts, and has only one small check-out
location with one register.
12:00 am, every day.
business at the store.

The store is open from 7:00 am to

Food sales are a small part of the
Within a mile of the Savera Super Store,

there are forty-five SNAP authorized stores, including many
convenience stores, three small grocery stores, six medium
grocery stores, and one large grocery store.
Transactions at Savera Super Store triggered the ALERT
program in late 2013.

As a result, transactions at the store

were analyzed from November of 2013 through January of 2014.

An

investigator visited the store on February 22, 2014, with notice
to and consent from the store.

Through his on-site visit, the

investigator confirmed that the Savera Super Store primarily
stocked products that were not eligible for SNAP, did not have
shopping carts or baskets, had one cash register with limited
space, and did not stock any expensive eligible food or ethnic
items that were not available at other locations.2

On March 10,

2014, a fire occurred at the Savera Super Store.

Although Toor states in his declaration that Savera Super
Store carries “a wide variety of food products that are
preferred in the Nepalese community,” he does not provide any
detail about what products are preferred, whether the preferred
products are SNAP eligible, and whether they are available at
other less expensive stores.
2

5

The FNS concluded that Savera Super Store was engaging in
trafficking of SNAP benefits based on the investigation.

The

FNS notified Savera Super Store on July 7, 2014, that it was
charged with trafficking.

The activities identified as showing

trafficking were rapid and repetitive transactions for the same
household, an excessive number of high dollar amount
transactions, and an unusual number of transactions ending in
the same cents amount.

Toor denied the charges made by FNS and

provided explanations for the cited transactional patterns.
Toor also represented that he could not provide documentary
evidence to contest the FNS’s findings because his records had
been lost in the fire.
After reviewing the information provided by Toor about
Savera Super Store’s transactions, the FNS sustained the charge
of trafficking and permanently disqualified the store from SNAP.
The FNS found that Savera Super Store was not eligible for a
monetary penalty because it had not submitted evidence to
support a request for that alternative penalty.

The

Administrative Review Officer sustained permanent
disqualification.
Discussion
The United States moves for summary judgment on the ground
that the facts show that Savera Super Store engaged in

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trafficking of SNAP benefits.

Savera Super Store objects,

arguing that the activities cited by the United States are not
unusual, irregular, or inexplicable, as alleged, but instead are
common at the store.

As a result, Savera Super Store contends,

disputed material facts preclude summary judgment.
The FNS is authorized to disqualify a store for SNAP
violations based on its analysis of EBT transactions and
redemptions and its investigator’s report from visiting the
store.

Nadia Int’l Market, 2015 WL 7854290, at *5 (citing 7

U.S.C. § 2021(a)(2).

Although the parties are able to present

any relevant evidence that meets the Rule 56 standard for
purposes of de novo review, both the United States and Savera
Super Store primarily relied on the evidence presented in the
record.
A.

Transactions Ending in “00” Amounts
During the three-month investigation period, 25% of the

SNAP benefit sales ended in “00”.

The FNS found that pattern

suspicious because few items in the SNAP-eligible inventory at
the store had whole dollar prices and many of the goods ended in
“.09”.

Other courts have concluded that a disproportionately

high number of transactions ending in “00” are evidence of
trafficking.

See Nadia Int’l Mkt., 2015 WL 7854290, at *6; 109

Merrick Deli Corp., 2014 WL 6891944, at *4; Onukwugha v. United

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States, 2013 WL 1620247, at *8-*9 (E.D. Wis. Apr. 12, 2013);
Rockland Convenience Store, 2011 WL 5120410, at *9.
Savera Super Store argues that the “00” amounts are common
among all of its transactions, not just the SNAP transactions,
and that its sales and special offers of two for $2.00 or five
for $10.00 explain the transaction amounts.3

Savera Super Store,

however, does not address the specific prices charged for its
SNAP-eligible products or the government’s finding that few SNAP
eligible items ended in “00”.

Sales and specials for non-

eligible items would not affect legitimate SNAP purchases.
Therefore, Savera Super Store has not shown a factual
dispute as to whether the relatively high percentage of
transactions with “00” amounts indicates trafficking.
B.

Repeat Transactions in Short Time Periods
The FNS concluded that the low cost of the SNAP eligible

items, the lack of shopping carts and baskets, and the
restricted checkout space at the Savera Super Store were
inconsistent with the number of repetitive transactions in a
short period.

Specifically, the FNS cited an example from

December 5, 2013, when the same recipient first made an EBT

The customer affidavits that repeat that sales of multiple
items for a round dollar amount were offered at the store do not
state what items were offered in those sales other than a
general reference to groceries.
3

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transaction for $49.47 and then a minute and a half later made a
transaction for $58.50.

The FNS noted the unlikely total of

$107.97 for SNAP eligible items, which are low priced, and the
unlikely time frame of repeat transactions within a minute and a
half of each other.
Savera Super Store explains that the repeat transactions
occurred on less than twenty percent of the days the store was
open and that it was not uncommon for customers to make a
purchase and then realize they needed other items and make
another purchase.

The store also represents that customers

might return for additional purchases later the same day.

The

store further explains that because it is located in a poor
neighborhood where customers have to walk to the store, they
make bigger purchases to avoid walking to another store at a
greater distance.

The store cites customer affidavits that show

customers did make repeat purchases in the same day.
Savera Super Store, however, did not address the low prices
of its SNAP-eligible products, cited by the FNS, or the
logistics of managing a large number of low-priced items to show
how a customer could make repeat purchases of eligible products,
totaling over $100, in just a few minutes.

For example, the

store did not explain how a customer would have time to buy
$49.47 in SNAP-eligible products and then in a minute and a half
find, carry to the checkout, and purchase another $58.50 worth
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of SNAP-eligible products.

As such, Savera Super Store’s

evidence of some legitimate repeat purchases does not undermine
the evidence that other transactions on EBT cards were not
legitimate.
*6;

See, e.g., Nadia Int’l Mkt., 2015 WL 7854290, at

A Touch of Merengue, LLC - The Atom, 2014 WL 6609478, at

*3-*4; Hajifarah v. United States, 779 F. Supp. 2d 191, 205-06
(D. Me. 2011); Alkabsh v. United States, 733 F. Supp. 2d 929,
937-38 (W.D. Tenn. 2010).
C.

Large Transaction Amounts
The FNS investigation also found that the Savera Super

Store had an inordinate number of high dollar amount
transactions, which were 300% higher than purchases in similar
stores.

The store justifies the amount of its transactions

based on the closing of two grocery stores in the area and
provided customer affidavits that they made large purchases at
the store.

Savera Super Store provides affidavits of a few

customers who state that they have made SNAP purchases in excess
of $30.00.
The United States provides evidence that despite the
closing of two grocery stores, there were forty-five other
stores within a mile of Savera Super Store that were authorized
to accept SNAP benefits.

The United States notes that Savera

Super Store’s customers preferred that store because of its

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location and would not have shopped at the larger grocery stores
that were farther away.

Therefore, Savera Super Store has not

shown that the closing of two grocery stores, which were more
than a mile away, affected its business.
In addition, other stores close to Savera Super Store, such
as Market Basket, sold many more SNAP-eligible products at lower
prices.

The United States provides evidence that on one

occasion during the investigation a SNAP recipient bought
$199.57 worth of items at Savera Super Store with the EBT card,
then bought $31.21 worth of items at Market Basket with the EBT
card, and twenty-two minutes later returned to Savera Super
Store to buy another $34.95 worth of items on the EBT card.
That series of transactions, and similar transactions, are
evidence of trafficking because buying more at Savera Super
Store than at Market Basket is not consistent with legitimate
activity.

Similarly, another recipient bought $234.52 worth of

items on an EBT card in one day at Savera Super Store, despite
having access to and using Market Basket on other occasions.
Transactions of large amounts, particularly in a series, are
evidence of trafficking.

See, e.g., Arias v. United States,

2014 WL 5004409, at *8-*9 (S.D.N.Y. Sept. 29, 2014); Narin Mkt.,
LLC v. United States, 2014 WL 1820447, at *2-*3 (D.R.I. May 7,
2014); Hajifarah, 779 F. Supp. 2d at 207.

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The undisputed evidence shows that Savera Super Store
engaged in suspicious transactions that support trafficking
findings.

Savera Super Store has not shown a material factual

dispute, about whether it engaged in trafficking, to avoid
summary judgment.
Conclusion
For the foregoing reasons, the defendant’s motion for
summary judgment (document no. 12) is granted.
The clerk of court shall enter judgment accordingly and
close the case.
SO ORDERED.

________________________________
Joseph DiClerico, Jr.
United States District Judge
January 5, 2016
cc:

Jenna Marie Bergeron, Esq.
Michael J. Iacopino, Esq.
Terry L. Ollila, Esq.

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