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F & G SUPERETTE, INC. v. USDA

January 16, 1986

F & G SUPERETTE, INC., Petitioner, against UNITED STATES DEPARTMENT OF AGRICULTURE, Respondent


The opinion of the court was delivered by: MCLAUGHLIN

MEMORANDUM AND ORDER

McLAUGHLIN, District Judge

 The plaintiff, F & G Superette, Inc. ("F & G"), is a retail food store participating in the Food Stamp Program established pursuant to the Food Stamp Act, 7 U.S.C. § 2011 et seq. Plaintiff brought this action under 7 U.S.C. § 2023 seeking judicial review of its disqualification from the program for a period of five years. For the reasons developed below, the disqualification is upheld and the complaint is dismissed.

 Findings of Fact

 On or about October 7, 1982, a representative from the United States Department of Agriculture Food and Nutrition Service ("FNS") visited F & G. The FNS representative discussed with Abraham Grunspan, the store's president, the fact that an unusually high number of food stamps had been redeemed at F & G, as compared with other stores in the area (Transcript of Proceedings ("Tr.") at 5). In a letter dated October 21, 1982, FNS expressed its suspicions that F & G might be generating its high volume in food stamps by accepting the stamps for products, like beer, *fn1" that may not be purchased with food stamps. It warned F & G that violations of the Food Stamp Act could result in the store's disqualification from the program (Administrative Record ("AR") at 4).

 On or about March 25, 1983, FNS investigator Edward Agostini made the first of four "undercover" visits to the store. On that occasion, a clerk later identified as Mr. Grunspan accepted food stamp coupons from Agostini in exchange for several ineligible items (AR at 24-25).

 During his later visits to the store, Agostini exchanged food stamps for ineligible items from Philip Davidowitz (April 21, 1983 and June 2, 1983) (AR at 14-15, 21-22) and Grunspan's mother-in-law, Miriam Fischer (May 24, 1983) (AR at 18-19).

 As a result of these transactions, plaintiff was informed by letter dated August 17, 1983 that the store was being considered for disqualification from the program (AR at 32-33; Tr. at 11). By letter dated August 24, 1983 plaintiff formally denied any knowing violations of the food stamp regulations (AR at 38).

 On September 28, 1983, Angela Mackey, the FNS Officer in Charge, recommended a five-year disqualification from the program (AR at 39-40). She noted that disqualification would have no harmful effect on local food stamp customers since at least two other stores are located within four blocks of plaintiff's store (Id.)

 Plaintiff requested and received an administrative review of the FNS decision (AR 51-59). By letter dated May 22, 1984, plaintiff was informed that the five-year disqualification had been sustained (AR 59).

 This action was commenced in August, 1984. The parties agreed that imposition of the sanction would be stayed pending resolution of this action.

 Discussion

 Pursuant to 7 U.S.C. § 2023, plaintiff is entitled to a trial de novo by the district court, in which the court shall determine the validity of the administrative action. See J.C.B. Supermarkets, Inc. v. United States, 57 F.R.D. 500, 502-03 (W.D.N.Y. 1972), aff'd 530 F.2d 1119 (2d Cir. 1976).

 Upon consideration of the record in its entirety, including the evidence adduced at a hearing before this Court, I find that the four sales of ineligible items occurred on the dates previously discussed. Hence, the agency's finding of a violation of the Act must be ...


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