Court Opinion

ID: 4394619
Source: CourtListenerOpinion
Date Created: 2019-05-07 19:00:37.295107+00
Date Added: 2024-06-11T14:52:04.149581
License: Public Domain

UNPUBLISHED

                       UNITED STATES COURT OF APPEALS
                           FOR THE FOURTH CIRCUIT

                                      No. 18-1869

ISRAEL K. NEGASH, an individual; ETHIO, INC., a Maryland Corporation d/b/a
Sunoco Food Mart,

                    Plaintiffs - Appellants,

             v.

UNITED STATES OF AMERICA,

                    Defendant - Appellee.

Appeal from the United States District Court for the District of Maryland, at Baltimore.
Richard D. Bennett, District Judge. (1:17-cv-01954-RDB)

Submitted: March 26, 2019                                         Decided: May 7, 2019

Before WILKINSON and HARRIS, Circuit Judges, and HAMILTON, Senior Circuit
Judge.

Affirmed by unpublished per curiam opinion.

Andrew Z. Tapp, METROPOLITAN LAW GROUP, PLLC, Brandon, Florida; William
N. Sinclair, SILVERMAN THOMPSON SLUTKIN WHITE, LLC, Baltimore, Maryland,
for Appellants. Robert K. Hur, United States Attorney, Alan C. Lazerow, Assistant
United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Baltimore,
Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       Israel K. Negash and Ethio, Inc. (collectively, Appellants), filed a petition

pursuant to 7 U.S.C. § 2023 (2012), seeking judicial review of the United States

Department of Agriculture (USDA)’s decision to permanently disqualify them from

participating in the Supplemental Nutrition Assistance Program (SNAP). The district

court granted the USDA’s motion for summary judgment and denied the Appellants’ Fed.

R. Civ. P. 59(e) motion. The Appellants contend that the district court erred in granting

summary judgment prior to discovery. We affirm the district court’s orders.

       We “review[] de novo the district court’s order granting summary judgment.”

Jacobs v. N.C. Admin. Office of the Courts, 780 F.3d 562, 565 n.1 (4th Cir. 2015). “A

district court ‘shall grant summary judgment if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.’”

Id. at 568 (quoting Fed. R. Civ. P. 56(a)). “A dispute is genuine if a reasonable jury

could return a verdict for the nonmoving party.” Id. (internal quotation marks omitted).

In determining whether a genuine dispute of material fact exists, “we view the facts and

all justifiable inferences arising therefrom in the light most favorable to . . . the

nonmoving party.” Id. at 565 n.1 (internal quotation marks omitted). However, “the

nonmoving party must rely on more than conclusory allegations, mere speculation, the

building of one inference upon another, or the mere existence of a scintilla of evidence.”

Dash v. Mayweather, 731 F.3d 303, 311 (4th Cir. 2013).

       “We review a district court’s denial of a Rule 56(d) motion for abuse of

discretion.” Pisano v. Strach, 743 F.3d 927, 931 (4th Cir. 2014). We will not reverse the

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denial of a Rule 56(d) motion absent a clear abuse of discretion or a real possibility that

the denial of discovery resulted in prejudice to the moving party. Strag v. Bd. of Trs., 55
F.3d 943, 954 (4th Cir. 1995). Relief under Rule 56(d) is “broadly favored and should be

liberally granted in order to protect non-moving parties from premature summary

judgment motions.” McCray v. Md. Dep’t of Transp., 741 F.3d 480, 484 (4th Cir. 2014)

(internal quotation marks omitted). However, “a court may deny a Rule 56(d) motion

when the information sought would not by itself create a genuine issue of material fact

sufficient for the nonmovant to survive summary judgment.” Pisano, 743 F.3d at 931.

       “Congress has been quite firm in ensuring that [SNAP benefits] are used only to

purchase eligible food items, and are not exchanged for cash or other things of value.”

Idias v. United States, 359 F.3d 695, 697 (4th Cir. 2004) (internal quotation marks

omitted). “[A] store that is caught trafficking in food stamps even one time must be

permanently disqualified from [SNAP], unless the Secretary of Agriculture determines

that the store had in place an effective anti-trafficking policy.” Id. Trafficking is defined,

as relevant here, as “buying, selling, stealing or otherwise effecting an exchange of SNAP

benefits issued and accessed via [EBT] cards . . . for cash or consideration other than

eligible food, either directly, indirectly, in complicity or collusion with others, or acting

alone.” 7 C.F.R. § 271.2 (2018). An aggrieved party may seek judicial review of the

USDA’s finding that it trafficked in benefits. 7 U.S.C. § 2023(a)(13). Unlike most

judicial review of agency action, review of the USDA’s trafficking determination is de

novo, and is not limited to the administrative record. 7 U.S.C. § 2023(a)(15).

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       We conclude that the district court did not abuse its discretion in granting

summary judgment prior to discovery. On appeal, the Appellants seek primarily two

pieces of information—the identities of the stores the USDA compared the Appellants’

store’s sales to (“the comparison stores”) and the identity of the households whose

transactions the USDA identified as suspicious.        As to the comparison stores, the

Appellants contend that this information is necessary for them to discover whether they

were appropriate comparators. For the household information, the Appellants argue they

could use this information to obtain affidavits or depose them to discover the reasons for

their shopping habits.

       While this information would have been useful, the Appellants did not seek this

information in the district court. Absent exceptional circumstances, we will not consider

issues raised for the first time on appeal. See In re Under Seal, 749 F.3d 276, 285 (4th

Cir. 2014). In the district court, the Appellants only sought the identity of the households

to demonstrate that they shopped at their store because of their selection of ethnic food.

This evidence cannot create a genuine dispute of material fact given the objective

evidence in the record demonstrating that the store’s inventory was similar to that of a

normal convenience store—the pictures taken by the USDA’s inspector and the invoices

submitted by the Appellants. See Scott v. Harris, 550 U.S. 372, 380 (2007) (“When

opposing parties tell two different stories, one of which is blatantly contradicted by the

record, so that no reasonable jury could believe it, a court should not adopt that version of

the facts for purposes of ruling on a motion for summary judgment.”).

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       As to the comparison stores, in the district court the Appellants only sought the

transaction data for the stores the USDA compared their store to.          However, this

information would not have created a genuine dispute of material fact. While the USDA

did not reveal the identities of the comparison stores, the administrative record contains

their EBT sales data and they were all located within one mile of the Appellants’ store.

Additionally, the administrative record shows that several of the Appellants’ store’s

customers also used their EBT benefits at larger grocery stores and supermarkets,

rebutting their contention that their customers lacked transportation to such businesses.

To the extent that the Appellants seek this information to argue that they have a more

superior grocery selection than the comparison stores, the record clearly refutes their

argument that they were anything other than a normal convenience store. While a court

considering a summary judgment motion must give the nonmoving party the benefit of

all reasonable inferences, the Appellants instead ask us to abandon common sense—the

USDA rightfully concluded that there is no logical explanation for 72 individuals

spending over $100 on convenience store items when the Appellants’ store does not have

a single shopping cart or basket, households were visiting larger grocery stores in

addition to the Appellants’ store, and suspicious transactions quickly decreased once the

Appellants were on notice that their sales were under investigation.

       Accordingly, we affirm the district court’s orders.       We dispense with oral

argument because the facts and legal contentions are adequately presented in the

materials before this court and argument would not aid the decisional process.

                                                                             AFFIRMED

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