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November 7, 1996


The opinion of the court was delivered by: SCHEINDLIN


 Plaintiff Young Jin Choi brings this action for judicial review of a final determination of the Food and Nutrition Service ("FNS") disqualifying plaintiff's retail food store, Brothers Market, from participation in the Food Stamp Program of the United States Department of Agriculture. Pursuant to 7 U.S.C. § 2023(a) and proceeding by Order to Show Cause, plaintiff seeks a preliminary injunction enjoining the federal government from enforcing plaintiff's three year disqualification. For the reasons set forth below, plaintiff's motion is denied.


 Plaintiff and his wife took over the ownership of Brothers Market from a relative in May 1995. Administrative Record ("AR") 20. The following month, plaintiff applied for and was authorized to participate in the Food Stamp Program, effective June 29, 1995. AR 23, 29. On five occasions between the dates of June 22 and August 2, 1995, an FNS investigator visited plaintiff's store between the hours of 9:30 a.m. and 12:25 p.m., using food stamps to purchase ineligible items from plaintiff's brother. AR 3-16. On three of these occasions, the investigator purchased alcohol. AR 10, 13, 16.

 On the basis of this investigation, the FNS advised plaintiff by letter dated March 29, 1996 that he was being charged with having violated the regulations governing the Food Stamp Program. AR 32-33. The letter informed plaintiff that because of the seriousness of the charges, FNS was considering disqualification of the store, or the imposition of a civil monetary penalty. AR 33. Plaintiff responded to this letter via his attorney, explaining that he was forced to be absent from the store in the mornings, and that his wife had to stay home and watch their children. AR 38. Plaintiff stated that his brother, Young Sik Choi, who had only been in the United States for one year, was managing the store temporarily in his absence. AR 38. Plaintiff also indicated that Brothers Market had ceased the sale of alcohol and cigarettes in an effort to prevent further violations. AR 39.

 Subsequently, the FNS determined that the violations warranted disqualification for three years, and advised plaintiff of this decision by letter dated May 20, 1996. AR 41-42. Plaintiff requested administrative review of this determination, stating that the three year disqualification would cause him to go out of business, and reiterating that the store no longer sold cigarettes or alcohol. AR 44-45. Plaintiff explained that his brother had only been working for him for two months at the time of the violations, and had no prior experience working as a cashier. AR 44. The FNS Administrative Review Officer upheld the three year disqualification on July 2, 1996. AR 52-58. On July 25, 1996, plaintiff commenced this action pursuant to 7 U.S.C. § 2023(a) seeking judicial review of that determination.


 Plaintiff must demonstrate both irreparable harm and a likelihood of success on the merits to obtain a preliminary injunction in this action for judicial review under 7 U.S.C. § 2023(a). See De La Nueces v. United States, 778 F. Supp. 191, 193 (S.D.N.Y. 1991). The more rigorous likelihood of success standard must be met where, as here, the movant seeks to "stay governmental action taken in the public interest pursuant to a statutory or regulatory scheme." Plaza Health Laboratories, Inc. v. Perales, 878 F.2d 577, 580 (2d Cir. 1989) (standard of sufficiently serious question going to the merits and balance of hardships tipping in movant's favor does not apply when movant seeks to enjoin government action taken in public interest).

 To succeed on the merits of his claim, plaintiff must show that the sanction imposed was arbitrary and capricious, "unwarranted in law and or without justification in fact." Willy's Grocery v. United States, 656 F.2d 24, 26 (2d Cir. 1981), cert. denied, 454 U.S. 1148, 71 L. Ed. 2d 301, 102 S. Ct. 1011 (1982). *fn1" A sanction is not arbitrary and capricious when a federal agency properly adheres to its own regulations and guidelines when imposing it. Lawrence v. United States, 693 F.2d 274, 276 (2d Cir. 1982).

 The regulations governing penalties for violations of the Food Stamp Act ("the Act") or its regulations provide for a three year disqualification if it is the firm's practice to accept food stamps in exchange for alcoholic beverages. 7 C.F.R. § 278.6(e) (3) (ii). This sanction may be imposed even if the firm "had not previously [been] advised . . . of the possibility that violations were occurring and of the possible consequences of violating the regulations." Id. Plaintiff's violation of this provision is clear. On three separate, documented occasions, plaintiff's brother sold alcohol to an FNS investigator in exchange for food coupons. AR 10, 13, 16.

 Plaintiff seeks a reduction of the penalty imposed on Brothers Market from a three year disqualification to a civil monetary penalty. When determining the severity of the sanction to be imposed, the government must consider:

(1) the nature and scope of the violations committed by personnel of the firm, (2) any prior action taken by FCS to warn the firm about the possibility that violations are occurring, and (3) any other evidence that shows the firm's intent to violate the regulations.

 7 C.F.R. § 278.6(d). Plaintiff argues that the penalty imposed on Brothers Market is too severe because plaintiff was not warned that violations were taking place prior to disqualification. The regulation that plaintiff violated, ...

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