case who were a snap authorized retailer the supplemental nutrition assistance program is what food stamps has become over the years as well as cult we refer to it in the briefing as now the agency refers to it as  four different scanned categories these are also referred to this transaction patterns and each of these transactions patterns contain dozens or in some cases hundreds of individual transactions which give rise to these particular patterns these are the basis the patterns are the basis for the charge letter that was issued to my clients back in two thousand and sixteen but the transactions themselves occurred over a period of time that was six months in two thousand and fifteen by the time the retailer receives a charge letter like this a number of months have passed since those transactions occur but they're expected to respond to the agency and indicate the basis for how the transaction characteristics came to pass now this particular case went through two different administrative faces neither which rabbit entry both are very informal there's no administrative law judge there's nothing of that nature which is actions and the administrative review that are provided for under the regulations mr tepper that brings me to my st question the statute where we're used to seeing administrative reviews in which standard is did the agency was the agency's decision supported by substantial evidence we see a one million immigration cases and half a one million social security cases where that's the standard this is is distinctly different is that right this is a de novo review by the district court this is a completely different beast then all of the a p a cases the way that this statute is drafted is intended and i believe there's an old case called run and it talks that this is designed to give the retailer the opportunity to have an evident rehearing and discover there is not a formal administrative record that's compiled so the so it's not only that the district court has a standard of review that stay novo it's also that the procedure could include a whole new trial albeit i take it not a jury trial is that right it is a bench trial and i'd be hesitant to say that it's a whole new trial these cases do not involve the disclosure of evidence or really any allegations at the administrative levels all that's included are the transactions it's after the charge and those are set up the record here this isn't something though where there's a a give and take there's frequently not an interview of the retailer there's very rarely any actual exchange of the basis for why the initial determination is made only explanation it's received comes in the form of the final agency decision that is the administrative review officers final action on behalf of the department this is unusual so you're saying it's not exactly exactly a do over it's just to do that this would be the st hearing that the store owner gets it is the  hearing is the st entry process the st discovery so one other thing that puzzles me is the government sites and i think you may cite as well cases from other courts not from the circuit saying that the burden of proof is on the store owner and that seemed to me at least odd even if it were a de novo do over of a hearing that took place in the agency which you say it's not a do over to me does not immediately call to mind a do over with the burden of proof reversed is it your do you agree that the burden of proof is on you in this new trial before the district court to prove that you didn't violate your client didn't violate the regulations there is a long track records and in court cases and things that need to do place the burden on the retailer judicial review presumably the agency action or can take an action the agency has the burden this is all that i view of our cases and i do all over the country but there's never been any case that i have seen that has placed that burden on the government by the time you get to the initial for you i personally do not agree with that approach but you know i'm not congress so i can change that budget congress say that the burden of proof is on the the stronger is this an inference the courts have drawn from something in the statute it's an inference it's not in the statute itself seven u s two thousand and twenty three seems to have been drafted together from a number of different places and sort of different lines thought but when it comes to the three sub provisions that deal with the should issue reviews none of them speak to berger they're largely procedural in nature they talk about when things are supposed to be filed and where they're permitted to file and it it really just sets up at the district court has to look to see whether or not the agency has erred in the decision and this is what happened in this case was not a an evidentiary hearing or a bench trial but it was a summary judgment for the government  so the standard of review even assuming that the burden of proof is on you is if you raised sufficient evidence that a reasonable fact finder could conclude that you had not violated the statute any discovery had been conducted this came more or less a multimedia slee with the production of the administrative record and that was an objection that we had raised during the district court proceedings and i had indicated to the court that we would like depositions and things of that nature we filed i believe a five thousand and sixty response the motion for summary judgment indicating that we needed depositions to really flesh this out having said that the court did give us some limited discovery and for purposes of our motion for summary judgment we presented eight different categories of evidence that were explaining how it was these particular transaction categories can't be it the primary focus here though i think has to be on what the evidentiary objective is for the retailers because these are data driven cases this isn't something where someone has witnessed any of these transactions this is where the agency has determined that these particular transaction types may correlate to trafficking and we see that there's a lot of these transactions at your store please tell us what it is that causes these particular character asked characteristics to occur time and again in your business so it's one of those things where it's very circumstantial  particular transactions are not the question i think that we covered it pretty thoroughly in our reply brief that the actual pattern that transactions categories are what the agency is seeking a response for and that's what our evidence was directed to in response the motion for summary j that we had a portion of the receipts from these transactions we had affidavits from snap participants or shop the store who talked about why they shopped at the store versus a different stork we had ended tory records that showed that the store was well stops or had expensive statistically when you look at the pattern of the things that occurred here there are too many critic transactions on two different cards or too many situations where all of the benefits are used up at once and so on and your evidence offered in response i think you want to scary about is to some degree this is like experts to testicle testimony and you'd like to hear something about how they derived their formulas and why the court should be persuaded that these patterns reflect an actual violation that's the kind of discovery you want to do that is the basis of significant portion of the discovery that i wanted in this particular case and in most of these cases the truth of the matter is a lot of the case law that's out there takes at face value that these transaction categories have a statistically significant correlation to the act of trafficking in snap benefits now we didn't dive into this case as we didn't many other cases about the fact that there is no statistical study and i think if we were to allow this case to proceed all the way to trial there would be some lay witness testimony problems and some expert testimony problems here because the data analysis amounts to a statistical evaluation and not specifically important if you consider the fact that the regulations nor the statutes set out that these transaction characteristics are violent this has to do the timing of the transaction transactions and the size of the transactions neither of which the retailer has control over retailer has to accept transactions presented for purchase that involve eligible items on any bt clock so these are our transactions retailers can't control they have nothing in the regulations or in the statute that indicate that there's something nefarious about them and we would argue that if you were to certainly look at it from the basis of a preponderance of the evidence standard which is what we're dealing with here most of what the government's evidence is is speculation hearsay and arbitrary frankly so you know when get our response and how this case is set up though the appellant went to great length to talk about these different business practices these different issues that exist for the nepalis community that caused these particular though is it your understanding of the district court's conclusion and is it your theory that the government having presented what seems to me to be a fairly persuasive case that  there are a lot of transactions that might look odd the burden on the plaintiffs was to establish that each and every one of the cited transactions identify transactions hundreds of identified individual transactions but there's no exceeded but there's no individualized evidence that the government offered that any of these transactions was improper right you're relying on patterns and the notion that these patterns are peculiar yes we don't just rely on the patterns of evidence  and so came into the store and this is precisely what he did he bought a giant bag of rice that was very expensive and then he paid for half of it with his card and then the next guy paid the other half with that card and i remember that happening absent that kind of evidence they have not shown anything about this particular transaction and so they lose your honor guard humorous ways for the store to demonstrate that as i understand it was some evidence that here are examples of reasons why the things that the government thinks are suspicious could have been and here are witnesses saying this particular time that is what happened i remember that that is what happened but so what is what is missing i mean that that seems to me to create a fair ground of of argument as to what is or is not a an appropriate pattern what is missing your honor is that the explanations do not satisfy or if they're really explain all of the transactions quest pointed out or five different transactions in the st category showing that it was physically impossible given the physical attributes of the store the makeup of the store the inventory it was physically impossible for these hundreds of dollars of track of transactions to occur with in twenty seven seconds it's us mall store with no shopping carts no conveyor belt people have to have a shopping basket and they carry small dollar items such as rags and milk and cans of beans you know even bags bags of rice that might be one or two things that are more expensive but certainly not in the hundreds of dollars that you're looking at at these transactions and so these or money now what typically happens and is what's an clear pattern of trafficking is it occurs when a household is trying to hide the fact that they are getting more money and so they use multiple smaller dollars for his actions in order to present the appearance that they are not cashing out and benefit a rd tranche and when you say that when you say that's what people do what is the evidence that was before the district court that that is a pattern of trafficking that's something that happens that's the agency's expertise that it is the pattern that is identified in the  actual transactions themselves and the case as well we know the pattern and see the pattern that's identified by the transactions is the e v t card is used for a two dollar transaction and then later in the day for a ten dollars transaction or whatever the numbers are you're saying that that's what traffickers do that's not what regular people do traffickers come and instead of cashing in the card for all that's worth they come back several times on the same day and take smaller amounts of money that seems to laws of all to me but what is the evidence in the record that that is what traffickers typically do or that there's a history of this kind of behavior happening  mad then went to the data pulled all the transactions from this store and compared and put together an abuser undisputed transactions these all occurred at the store there's no disputing that they additional explanation there on the administrative process the market had the opportunity and did indeed present inventory records but only for one month provided some receipts but not specific to any from the store went to new york city and bought some you know foodstuff to bring back to vermont so these records are analyzed they are presented and the explanations are provided in this case there were five affidavits that were presented  agency at the initial level that were the next level of the investing review it were additional documents and evidence provided so the agency had numerous opportunities before the agency customers but fortunately none of these customers were any of the households that were identified as having had these suspicious transactions so after all of this investigation i done then the agency issues its final decision and then lets case the decision was against the store then the store has the opportunity to get to know homer you know in the district court and i think it's important to understand the reason why this is a two noble review as rahner and initially alluded to the administrative process is is shorter and more perfunctory  the district court and the reason for that is because this is the largest program in the us vs we are talking about that hundreds of thousands of beneficiaries we're talking about thousands and thousands of stores that are the district court here that person say that in person and decide that person's credibility because no reasonable fact finder it's not just that the court looks at these records and thinks i think this is how it comes  the court can decide that no reasonable fact finder would believe this person's explanations that's correct because and importantly in this case those explanations to not address all of the transactions in this case and that's precisely the problem with the evidence that was presented the evidence and recall that the store has the burden of proof and i mean why and why do you say that i mean where does it say in the discussed at length which we cite in our brief why the store has the presence that is because they're bringing they're bringing the case if they are also in the best position to present the records they know and can explain what whether or not the transactions were legitimate counsel let me ask you this i mean i do understand that the store is in the better position to explain how it does business and what its customers do and  take place but how can any store be in a position to account for every one of say two hundred and fifty transactions identified by a computer i mean even if you maintain really good records single transaction needs to have evidence you know the testimony explaining what it was the court cases even the cases that the plaintiff cites indicate that there are  example a business practice that could explain away an entire pattern for example let's say someone sells funnels of meat for our you know fifty dollars fifty dollars and no cents and there are numerous transactions and this is one of the patterns although not in means you are and you are you've identified two problems with the way this company does business it says the yeah multiple snap transactions from different households within a short period of time and then there multiples not transactions from the same household within a short period of time so basically what you're saying is they have transactions that take place within a short period of time and i don't know what a store owner household have to have have transactions on the different age of technology we all go to grocery stores and we get itemized receipts showing exactly what we bought not only not in everything not in every bodega in new york city maybe this is true and vermont although i would guess that there are going to be small towns in vermont where there's a general store that does not have a scanner print souder receipt saying exactly what each customer bought them a bunch of stuff on the shelves somebody goes in that something's up put sound some cash and that's the but getting back to the issue of the summary judgment on her this is a case where the market had to provide some intense probative evidence demonstrating instance where one of your whole one of your whole patterns is a pattern of a number of cases in which early in the month someone uses up their whole food stamp a lot and i've seen that done in streisand in front of happened in front of me in a store that that happens and they put in evidence that that happens these are supplemental benefits this is not the whole welfare check of the person or the whole income of the person that they have to save some for the last week of the month what what is the basis for you know and they're saying that's what people do in our community and you're saying it's not now why isn't that a households in this case that were identified as having suspicious transactions and instead of providing those households instead of you know providing evidence as to those t in those file those households and they were generalize from pollutions about general shopping adams yes but you are relying on the other side entirely on a general pattern in order to make the case and they are responding that's not such a good pattern and your honor we do not rely just on the pattern that is that is not the case we rely on the individual tins actions and the appearance of the transaction the patterns are what generate the used their whole food stamp allotment on one shopping trip that's the fact that's presumably not disputed by anybody the question is did the did what is what happened that the store owner gave them a pile of cash in return for simply a discounted pile of cash traffickers don't do this for the pleasure of that discount a pile of cash for the food stamps or was this an actual purchase and your evidence is there's a pattern that kind of thing only happens or mostly happens with traffickers that's not normal and they want to depose the person who came to that conclusion to find out what's the not saying that they are all trafficking behavior and it but it is up to you so the court looks at the transactions and analyzes them base and comes to its own who it doesn't matter what the customer went to cosco up the road and spent one hundred and fifty dollars and then turned around a half an hour later and went to the market and spent four hundred and eleven dollars leaving zero dollars forty three cents left on the benefit heart for the rest of the money that is not likely given the amount of and you have to look at the entire investigation and that's fine but just the pattern alone is not what needs to be looked at and again the court looked at not only the patterns but the makeup of the store  combination of whether you know the amounts there was nothing in the store that justified hundreds of let me know what does the government have to introduce with respect to a particular transaction here what does the government have to do to to to put the store and to place upon the store the burden of proving that that that a transaction or series of transactions is legitimate that is to say is it enough for the government to say that there are large numbers of fifty dollars transactions something that you just tense a show me all of your transactions the government has about as a bird to come from the river with something and i'm saying what is the minimum that the government has to come forward with that should require the store to prove that every transaction in the category or particular transactions need to be justified are you asking for the number of transactions i'm not sure i think i think the question is simply what is the burden on the government a stab or to disqualify the store and that's straight from the record right to seventy six correct disqualification will result from finding think that that's consistent with a violation that's enough to disqualify them and that ben triggers the burden correct that's correct the agency presents this evidence it's in the that's at the administrative level and then in the district court the burden is on the complaint to a store in order to demonstrate that these were legitimate transactions that it was not trafficking and that agency's decision was out if this is not a difficult or or time consuming or you know effort or it doesn't need to be if the store is maintaining accurate records if the store has addresses the transactions and in this case the store did not address the transactions instead it addressed the patterns and it said well we've explained the patterns well no you haven't you have not explained how all of the transactions with in this pattern say certainly the store can come forward with a business practice or other explanations that can demonstrate the end of the certainly in the four or five there were numerous administrative decisions provided by the market demonstrating that the even see did come out and say oh yeah ok we accept these legitimate transactions these were legitimate so we are reversing it's the most egregious cases are the ones that come before the courts and so  the pattern i have a pattern here this is what explains that when there are numerous unexplained transactions with in that pattern all of the transactions within that pattern have to be accounted for and if they're not then they are trafficking and congress had said i said that one instance computerized point of sale terminals that the store has even to register i have represented stores over the years who have had a calculator and any bt terminal so there's no records required anywhere in the regulations not receipt not invoice not anything and when these cases are issue the date of the charge letter is typically nine months removed from the st step to transaction and we talked a lot to the court talked a lot about the burden the burden here is massive and when you look at this from a logistics of well mr tapp let me lay try to make this concrete so that we can understand what we're talking about in the charge letter i think the st thing that they say is are a series of snap e v t transactions multiple purchase transactions made to rapidly to be credible and there if i just take the very st two st ones in that list one on seconds of each other what is the explanation for that those transactions are the result of one of two things one is create tabulation and that is that the eighty four dollars transaction was compiled over time as the customer came up and put stuff on the countertop and there was a running tabulation and by the time the fifty two dollars fifty four cents cent transaction was processed the next transaction was entered into the end terminal  seconds between them where the nd one is almost three hundred dollars now i can certainly see why the agency is suspicious of that and you're saying that it is a sufficiently common thing for transactions to be rung up in the way that you just described that three times in the same day and there may be more i'm just looking at the st three pairs of transactions in that particular both twenty four seconds each and you know you look at the eighty four dollars that the nd part of that explanation earlier is d that there are a lot of high dollar high priced bulk items that are purchased here i believe there is an affidavit where one of the clients purchases an entire create mangoes because they're imported from i think it was the dominican republic but these are not items that were put together at three dollars five dollars and six dollars some of these items are fifteen pound bags of rice they go for two thousand and forty you know however much dollars in their crates of fruit so this store isn't a convenience store this store is a good sized grocery an operation a primary grocery for a number of these snap participants and that's that's what the affidavit said and so we have evidence in the record the last thing that i wanted to mention real quick when it comes to burden this this isn't just do we keep a license do we not keep a license this case has been ongoing for four years these machines get turned off as soon as decisions made on a charge so this machine went off a number of years ago and then the statute seven u s c two thousand and twenty three subsection eighteen notes that we are not as a retailer allowed to go back against the department if their decision is wrong in asking reimbursement of lost profits this is something where the retailer stands to lose a business which the store in this case even close now and this is a case where we can't go back and fix this even when the department has made a mistake so we've got ten days to respond we got hundreds of transactions a deal with it counsel mention that there is a case out there that talks about having to provide an explanation for most of these transactions what the court did here the court very specifically said the appellant have a savage a genuine disputed material fact as to some of the suspicious transactions but they felt it was devilish it did genuine dispute to each charge transaction in each category this is the way that the district court he handled this review would have made the burden on the other side of the moon and it would have been impossible to do from an economic standpoint if five hundred dollars transactions if we're talking about this work file that's days and days and days and days the court isn't half so i believe that the majority the cases we've cited including the administrative cases that the the  itself issues a clock about address the characteristics of the transactions if you provide adequate explanation for the characteristics of the transactions you don't need to explain every single transaction this is a preponderance of the evidence standard and this is the information that we presented was more than satisfactory to at least defeat the motion for summary judgment if not satisfy the proponents the evidence if the court would allow me one last point counsel also made a mention of how it's not just the patterns that are considered here the patterns are the concrete foundation for everything else if you look through the administrative record the conclusions that the administrator that the agency staff came to are all speculative why would this person go to that store and that store must be trapped because there's no evidence it's simply supposition and that's not what the evidence code that's not what the federal rules permit us to be able to consider so that's a separate issue that comes out later but again you know i believe that we have enough here to discuss demonstrated genuine issue of material fact is disputed