United States District Court, D. Columbia.
ROMEO MORGAN, Plaintiff, Pro se, Washington, DC.
For JAIME RAGAN, U.S. Department of Agriculture, Food and Nutrition Service (FNS), Defendant: John G. Interrante, LEAD ATTORNEY, U.S. ATTORNEY'S OFFICE, Washington, DC.
COLLEEN KOLLAR-KOTELLY, United States District Judge.
Plaintiff Romeo Morgan has filed suit against Defendant United States, seeking
review of the Final Agency Decision of the Food and Nutrition Service (" FNS" ), U.S. Department of Agriculture, sustaining a decision by FNS Retailer Operations to withdraw the authorization of Morgan's Seafood, owned by Plaintiff, to participate as a retailer in the Supplemental Nutrition Assistance Program (" SNAP" ). Presently before the Court is Defendant's  Motion to Dismiss or, in the Alternative, for Summary Judgment. Upon consideration of the pleadings, the relevant legal authorities, and the record, the Court GRANTS Defendant's Motion for Summary Judgment and DENIES Defendant's Motion to Dismiss insofar as it seeks to dismiss the action for failure to state a claim. Accordingly, JUDGMENT shall enter for the Defendant and this action shall be DISMISSED in its entirety.
A. Statutory Background
Congress created the food stamp program in 1964 to " permit those households with low incomes to receive a greater share of the Nation's food abundance." The Food Stamp Act of 1964, Pub. L. No. 88-525, § 2, 78 Stat. 703, 703. " Retail stores authorized to participate in the program may accept food stamp benefits instead of cash for designated food items." Affum v. United States, 566 F.3d 1150, 1153, 386 U.S.App.D.C. 104 (D.C. Cir. 2009) (citing 7 U.S.C. § 2013(a).). " The stores then redeem these benefits with the government for face value." Id. In 2008, Congress amended the Food Stamp Act, renaming it the Food and Nutrition Act and renaming the " food stamp program" the " supplemental nutrition assistance program" or " SNAP." Id.
A business seeking approval as a " retail food store" under SNAP must comply with the requirements of 7 U.S.C. § 2018. This provision authorizes the Secretary of Agriculture to issue regulations governing the approval and reauthorization of retail food stores to participate in SNAP. 7 U.S.C. § 2018(a)(2). Pursuant to this statutory authority, the Secretary has issued the regulation at issue here, 7 C.F.R. § 278.1. This provision states, in relevant part, that the Food and Nutrition Service of the Department of Agriculture (" FNS" ), " shall withdraw the authorization of any firm authorized to participate in the program for any of the following reasons: . . . (iii) The firm fails to meet the requirements for eligibility under Criterion A or B, as specified in paragraph (b)(1)(i) of this section . . . ." 7 C.F.R. § 278.1(l)(1).
Criterion A and B are standards governing the variety and quantity of food sold by a particular retailer. In order to meet Criterion A, the store must offer " for sale, on a continuous basis, a variety of qualifying foods in each of the four categories of staple foods as defined in § 271.2 of this chapter, including perishable foods in at least two of the categories." Id. § 278.1(b)(1)(i)(A). See also id. § 278.1(b)(1)(ii) (explaining this definition in greater detail). Criterion B is satisfied
if " more than 50 percent of the total gross retail sales of the establishment or route [are] in staple foods." Id. § 278.1(b)(1)(i)(A). See also id. § 278.1(b)(1)(iii) (explaining this definition in greater detail). As defined by 7 C.F.R. § 271.2, " [s]taple food means those food items intended for home preparation and consumption in each of the following food categories: meat, poultry, or fish; bread or cereals; vegetables or fruits; and dairy products." Id. § 271.2.
Another provision of 7 C.F.R. § 278.1 sets out " ineligible firms" for participation in SNAP, and explicitly qualifies Criterion A and B. This provision states:
Ineligible firms under this paragraph include, but are not limited to, stores selling only accessory foods, including spices, candy, soft drinks, tea, or coffee; ice cream vendors selling solely ice cream; and specialty doughnut shops or bakeries not selling bread. In addition, firms that are considered to be restaurants, that is, firms that have more than 50 percent of their total gross retail sales in hot and/or cold prepared foods not intended for home preparation and consumption, shall not qualify for participation as retail food stores under Criterion A or B. This includes firms that primarily sell prepared foods that are consumed on the premises or sold for carryout. Such firms may qualify, however, under the special restaurant programs that serve the elderly, disabled, and homeless populations, as set forth in paragraph (d) of this section.
Id. § 278.1(b)(1)(iv) (emphasis added).
B. Factual Background
In March 2008, FNS authorized Morgan's Seafood, an unincorporated business in Washington, D.C., to participate in SNAP. AR 1-13. On June 14, 2013, Plaintiff, as the owner of Morgan's Seafood, completed an FNS-252-R reauthorization application in order to continue his participation in the program. AR 51. As part of its review of this application and its assessment of the continued eligibility of Morgan's Seafood to participate in SNAP, FNS contract review officials conducted two separate store visits of Morgan's Seafood. AR 14-50, 90-116. These visits occurred on November 7, 2013, and January 3, 2014. The November 7, 2013, review identified as issues " empty coolers" and " broken coolers" and provided the following observations:
1) Owner stated that his display cooler is broken, forcing him to store most of his seafood in the back coolers. The food used for making hot food was mixed  with the raw (as-is) seafood but the reviewer asked what is what. Prepared salads are also in the back coolers. The beef/meat/sausage in the storage cooler was for cooking only, per owner.
2) The empty tank in photo #693 is of a tank that was full of lobsters that were stolen by burglars, per owner statement.
3) Prices for the deli are not posted. Owner claims that he recently acquired the cooler and deli products but has not created a price list. The menu did not include sandwiches.
4) The prepared cold salads and the yams are also for sale as-is or by themselves, per owner, if customers choose so. However, the cooked yams are on the menu and salads come as sides to hot dishes.
In order to qualify for SNAP, applicants must submit information that would " permit a determination to be made as to whether such applicant qualifies, or continues to qualify, for approval." 7 U.S.C. § 2018.
Indeed, following the November 7, 2013, visit, Morgan was sent a letter, dated November 26, 2013, requesting additional information to assist FNS in determining whether Morgan's Seafood was eligible to participate in SNAP. AR 51. Specifically, the letter requested confirmation that the " sales information you provided to the FNS on your Reauthorization application included all the items sold at this location." Id. Plaintiff provided his 2011 tax records in response, but did not provide any of the other requested information. See AR 117, Notice of Involuntary Withdrawal Reauthorization 2013 for Morgan's Seafood (" Did not submit sales tax documents, licenses/permits, verification of gross sales, other sales or non food sales as requested" ). The Court notes that Plaintiff has still not submitted this information. In summarizing the January 3, 2014, visit, the reviewer noted " empty coolers" and " broken coolers" and offered the following comments:
Store did not have prices posted for meat/cheese. Owner stated that alcohol is not for sale, it's for personal use even though it's posted on the menu so I did not mark alcohol on the survey. Sandwiches are made to order.
AR 91. Both reviewers took a number of photographs of the interior of Morgan's Seafood, which have been included in the administrative record. AR 20-50, 96-116.
A USDA final recommendation form, completed on January 10, 2014, listed several factors justifying the recommended denial of Morgan's Seafood's reauthorization for SNAP:
o With respect to the stock available on day of visit, less than three items were available in following categories: dairy, bread/cereals, fruits/vegetables. See AR 117
o " Froze[n] fish items are not displayed for sale or packaged for individual sale. No prices advertise/posted for meat or cold cuts by the pound. Prices that are posted are for take out -- hot items, dinner specials, side orders." Id.
o Owner failed to provide requested documentation by due date: " Owner submitted requested Federal Tax Return for business & personnel. Did not submit sales tax documents, licenses/permits, verification of gross sales, other sales or non food sales as requested." Id.
o " Criteria A: insufficient evidence to support sales of at least three varieties" : " The store does not carry an ample variety of Dairy, Fruit/Vegt/Bread/Grain." Id. at 117-118. The recommendation also reiterated the comments of the reviewer discussing the November 7, 2013, visit, reprinted above as well. See id. (" Owner stated that his display cooler is broken . . . However the cooked yams are on the menu and salads come as sides to hot dishes." ); see AR 15.
o " Criteria B: insufficient evidence to support sales of more than 50% staple food" : " 85% per Reauthorization Form 252R. Store Visit shows business primarily a Take Out business with a number of advertised hot food specialties. More than 95% of business floor space is dedicated to food prep area, hot food serving area, seating area with tables. Tax returns list business name as = MORGAN SEAFOOD BAR & GRILL." AR 117-118.
o The form recited another factor why the facility does not qualify for SNAP: " 278.1(b)(1)(ii)(C) Ineligible Firms. Ineligible firms under this paragraph include, but not limited to, stores selling only accessory food, including . . . . specialty ...