Automated Summary
Key Facts
The United States Court of Appeals for the Ninth Circuit affirmed the district court's summary judgment in favor of the government in Brothers Market LLC No. 2's challenge to its permanent disqualification from the Supplemental Nutrition Assistance Program (SNAP). The Food and Nutrition Service of the USDA charged the Market with trafficking in SNAP benefits after detecting hundreds of suspicious transaction patterns over six months, including 649 unusually large transactions, 190 benefits-depleting transactions, 127 rapid transactions, and scores of repeated same-dollar-value transactions. The Market and its owner Brad Brown failed to provide sufficient evidence to create a genuine dispute over whether the flagged transactions evidenced SNAP trafficking. The Market is a small convenience store in downtown Los Angeles with 540 square feet of retail space, one cash register, and limited inventory.
Issues
- The court addressed whether the plaintiffs (Brothers Market LLC No. 2) demonstrated a genuine dispute of material fact regarding transaction patterns that evidence SNAP trafficking. The panel affirmed the district court's summary judgment for the government, holding that plaintiffs failed to raise a genuine dispute over whether transactions flagged by the Agency evidenced SNAP trafficking, given the overwhelming evidence of suspicious transaction patterns and plaintiffs' lack of meaningful showing to the contrary.
- The court examined the legal standards for SNAP trafficking determinations under the Supplemental Nutrition Assistance Program. The government bears the initial burden to show that the record does not raise a genuine dispute of material fact, which it may do by offering evidence of trafficking including patterns of suspicious transactions. If the government makes this showing, the burden shifts to the store to show a genuine dispute of material fact by producing sufficient evidence to allow a finding at trial that it did not engage in SNAP trafficking.
Holdings
The Ninth Circuit affirmed the district court's grant of summary judgment for the government in Brothers Market LLC No. 2's challenge to the Food and Nutrition Service's permanent disqualification of the store from participating in the Supplemental Nutrition Assistance Program (SNAP). The court held that Plaintiffs failed to raise a genuine dispute of material fact as to whether the transaction patterns evidenced SNAP trafficking. The government produced evidence of several suspicious transaction patterns—including unusually large transactions, benefits-depleting transactions, rapid transactions, and repeated same-dollar-value transactions—that established an inference of SNAP trafficking. Plaintiffs' evidence was insufficient to create a genuine dispute over the Agency's trafficking determination.
Remedies
The court affirmed the district court's summary judgment upholding the Agency's permanent disqualification of Brothers Market LLC No. 2 from the Supplemental Nutrition Assistance Program (SNAP) due to evidence of SNAP trafficking.
Legal Principles
- In summary judgment proceedings involving SNAP trafficking determinations, the government bears the initial burden to produce evidence of trafficking or show the store's evidence cannot carry its burden at trial. If the government makes this showing, the burden shifts to the store to demonstrate a genuine dispute of material fact by presenting evidence supporting a legitimate explanation for each flagged transaction pattern.
- When a store seeks judicial review of its disqualification from SNAP, it must show by preponderance of the evidence that the Agency's trafficking determination is invalid. The store must produce sufficient evidence to allow a finding at trial that it did not engage in SNAP trafficking.
- Courts reviewing SNAP trafficking determinations de novo give no weight to the agency's finding but may draw reasonable inferences from transaction data. Circumstantial evidence of transaction patterns can establish trafficking. A store need not address every transaction in each pattern but must raise triable issues as to each flagged transaction pattern.
Precedent Name
- Irobe v. USDA
- Cohen v. Apple Inc.
- Anderson v. Liberty Lobby, Inc.
Cited Statute
- Code of Federal Regulations title 7 section 278.6
- United States Code title 7 section 2021
- United States Code title 28 section 1291
- United States Code title 7 section 2024
- United States Code title 7 section 2023
Judge Name
- Anthony D. Johnstone, Circuit Judge
- Johnnie B. Rawlinson, Circuit Judge
- Eric D. Miller, Circuit Judge
Passage Text
- A store may not accept SNAP benefits for cash. 7 C.F.R. § 278.2(a). If a store exchanges SNAP benefits for anything but SNAP-eligible items, it commits SNAP trafficking. Id. § 271.2; see 7 U.S.C. § 2024(b). The penalty for SNAP trafficking is permanent disqualification from the program. 7 U.S.C. § 2021(b)(3)(B); see 7 C.F.R. § 278.6(e)(1)(i).
- Plaintiffs do not show a genuine dispute of material fact as to whether the transaction patterns evidence SNAP trafficking. We affirm because Plaintiffs failed to raise a genuine dispute over whether the flagged transactions evidence SNAP trafficking.
- The government produced evidence of several suspicious transaction patterns that establish an inference of SNAP trafficking. The record shows that the Market processed hundreds of unusually large transactions, nearly 200 benefits-depleting transactions, more than 100 rapid transactions, and scores of large same-dollar-value transactions. Although Plaintiffs had several opportunities to refute these suspicious patterns with evidence, they did not.