Court Opinion

ID: 9471679
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:38:25.424635+00
Date Added: 2024-06-11T17:42:31.777772
License: Public Domain

CORNELIA G. KENNEDY, Circuit Judge,
dissenting.
I agree with the majority with respect to the scope of the District Court’s review of the Secretary of Agriculture’s action in this case. The statute provides that review “shall be a trial de novo by the court in which the court shall determine the validity of the questioned administrative action.” 7 U.S.C. § 2023. To be valid the action must comply with the applicable statutes and regulations. The District Court may not, however, review matters the statutes and regulations leave to the Secretary’s discretion. I therefore agree with the majority that the District Court’s reversal of the Secretary’s action cannot be supported by its finding that the Secretary did not adequately consider hardship to the community when declining to impose a civil money penalty rather than a suspension. The District Court was within its authority, however, when it made factual findings concerning whether the firm’s policy was to sell alcohol or expensive or conspicuous nonfood items for food stamps and whether the firm had received a warning; these requirements for a one-year suspension are both in the regulations. I therefore agree with the majority that the question posed to this Court is whether those findings were clearly erroneous. I also agree that the District Court was clearly erroneous in finding that there was no warning. I dissent, however, from the majority’s holding that the District Court’s finding with regard to the firm’s policy was clearly erroneous.
I do not quarrel with the majority’s recital of the evidence regarding the firm’s policy. There was evidence sufficient to support a finding that there was such a policy. I also agree that the evidence adverse to Mrs. Woodard falls within the guidelines utilized by the Food and Nutrition Service of the Department of Agriculture. However, as the majority notes, these guidelines are not binding on the District Court in the de novo trial. The guidelines are merely rules of thumb to assist government investigators. A District Court is free to draw inferences other than those suggested by the guidelines. It is not clearly erroneous if it does so.
There was persuasive evidence that it was not the firm’s policy to sell alcoholic beverages for food stamps.1 Mrs. Woodard’s eldest son, who was also the store manager, refused to sell nonfood items on the only occasion on which he was tested. Both Mrs. Woodard and the manager testified that employees were instructed not to take food stamps for nonfood items. The offending employees were fired although the younger son did continue to help out at the store. Mrs. Woodard herself, although she usually worked in the store, did not work there during the three months in question because she was hospitalized for *1080phlebitis. The employees who accepted food stamps improperly did so when the manager was not there. They worked in the late afternoon and evening.
Under the totality of the evidence, I believe the District Court was not clearly erroneous in concluding that the offending employees were acting on their own and not in accordance with the store’s policy.
The evidence regarding the amount of food stamps received by the store and the volume of food sold is persuasive that violations occurred, but there is no evidence that Mrs. Woodard or her manager son had examined these figures. The testimony of Mr. Brown, who met with the Woodards to warn them that their food stamp redemp-tions were excessive, is less than clear. I cannot tell if he told them that 75% of their food sales were paid for with food stamps or that 92% were. The son testified that he believed Mr. Brown was satisfied after that meeting that the food stamp redemptions were high because the store was across from a public housing project.2
The District Judge had the opportunity to see Mrs. Woodard and her manager son. He apparently found them credible witnesses. I would uphold his finding.
There is no dispute but that the alternative ground for a one-year disqualification was established, namely, the firm bought coupons at a discount. 7 C.F.R. § 278.-6(e)(2)(i)(B). This does not, however, permit affirmance. We do not know what penalty the Secretary would impose were this the only violation. It seems unlikely that Mrs. Woodard was aware of this practice. It is much more likely that the employees who engaged in this practice pocketed the discount from the face value of the stamps. The Secretary should be permitted to exercise his discretion as to what penalty he will impose based on the findings of the District Court, as corrected.
Accordingly, I dissent.

. The regulation applied by the Secretary requires a policy to sell “expensive or conspicuous nonfood items, cartons of cigarettes, or alcoholic beverages” for food coupons. 7 C.F.R. § 278.6(e)(2)(i)(A). Since none of the violations involved expensive or conspicuous nonfood items or cartons of cigarettes, a finding of such a policy must be based solely on the three beer sales made to investigators for food stamps.

. It may be that my disagreement with the majority arises from whether we are talking about the policy advocated by management or policy actually produced by the employees. The possibility of this confusion was recognized by the Department of Agriculture and has been addressed in the present regulations. The Department amended its regulations in 1982 to delete all reference to the “firm’s policy,” giving its reasons as follows:
Traditionally, the length of the period of disqualification has been based, in part, on whether it was the firm’s policy to violate. Because of the difficulty in defining, and confusion surrounding the concept of firm policy, the Department has replaced the “firm’s policy” with the new term “firm’s practice”. This change is intended to render a firm liable for the violative actions of its employees regardless of whether a policy to violate is announced or advocated by firm management.
47 Fed.Reg. 56,470 (1982).