Court Opinion

ID: 9493445
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:08:28.576998+00
Date Added: 2024-06-11T17:55:50.898005
License: Public Domain

WIDENER, Circuit Judge,
concurring:
Although I concur in the result because of circuit precedent, I write separately to express my continuing doubt with the arbitrary and capricious standard of review established by this court’s divided decision in Cross v. United States, 512 F.2d 1212, 1217-19 (1975) (en banc), and applied by the district court in this case. In Cross, this court ignored the language of the Food Stamp Act, 7 U.S.C. §§ 2011 et seq. (1996), and held that “de novo” does not mean de novo. Rather, in this circuit, de novo review by a district court of penalties imposed1 under the Food Stamp Act means a district court is limited to the arbitrary and capricious standard general*178ly used in administrative review. See Cross, 512 F.2d at 1218 (“To be ‘valid,’ a sanction must not be arbitrary and capricious, and a sanction is arbitrary and capricious if it is unwarranted in law or without justification in fact.”). With this proposition, I do not agree.
The Food Stamp Act mandates de novo review by a district court. The Act states that “[t]he suit in the United States district court ... shall be a trial de novo by the court in which the court shall determine the validity2 of the questioned administrative action in issue, except that judicial review of determinations ... made pursuant to section 2025(c) ... shall be a review on the administrative record.” 7 U.S.C. § 2023(a)(15) (1996) (emphasis added). Thus, the plain language of the Act requires de novo review. In addition, the § 2025(c) exception indicates and emphasizes that Congress intended a de novo hearing in all cases, except when specifically limited to a lesser standard of review under the Act.3 Any judicially created limit on a district court’s power of review, like that created in Cross, thus defeats this expressed intent of Congress. Moreover, because an “administrative action” under 7 U.S.C. § 2023(a)(15) must consist both of the finding of a violation and the punishment of that violation, I think, contrary to the Cross decision, that the Act mandates de novo review on both the finding of guilt and the sanction that is imposed. See Ghattas v. United States, 40 F.3d 281, 287 (8th Cir.1994) (conducting de novo review on liability as well as sanction).
This full right of review would have allowed the district court to make its own independent judgment as to the severity of Traficanti’s permanent disqualification in light of the factual findings. Significantly, the district court noted that Traficanti did not have knowledge of or benefit from the illegal acts of his employee, Rachel White, Traficanti fired White upon learning of the illegal acts, and White was aware that food stamp trafficking was illegal. Most importantly, the district court found that White vengefully committed the illegal acts with the intent to cause harm to Traficanti. Cf. R Ranch Market Corp. v. United States, 861 F.2d 236, 239 (9th Cir.1988), superced-ed by statute 7 U.S.C. § 2021(b) (1988 amendment) (stating that “courts should not abandon their traditional function of giving very close scrutiny to situations involving the tortious or criminal actions of employees” and not holding employer liable because employer did not know of employee’s trafficking). R Ranch Market for that principle followed Badwan v. United States, 541 F.2d 1388 (10th Cir.1976).
Moreover, de novo review would have given the district court power to evaluate Traficanti’s sanction and whether his failure to produce sufficient documentation of a compliance program must lead to permanent disqualification. See 7 U.S.C. § 2021(b)(3)(B); 7 C.F.R. § 278.6(i). In this respect, because a compliance program will not deter or stop a disgruntled employee from intentionally setting up her employer, a district court could evaluate whether the compliance program requirements are applicable at all when an employee violates the law with the intent to sabotage her employer. The district court should also determine how to treat these situations under the Act. In short, de novo review, as intended under the Act, would have given the district court flexibility to address this issue of first impression and to avoid the harsh outcome that inevitably results from the application of the Cross standard in a case such as this. Cf. Sims v. United States Dep’t of Agriculture Food & Nutrition Serv., 860 F.2d 858, 863 (8th Cir.1988) (holding district court should have reduced sanction under Food Stamp Act); Ghattas v. United States, 40 F.3d 281, 287 (8th Cir.1994) (conducting de *179novo review on liability as well as sanction under Food Stamp Act); United States v. Acosta, 17 F.3d 538, 544 (2d Cir.1994) (illustrating harsh result under Federal Food, Drug, and Cosmetic Act, 9 U.S.C. § 331, where liability attaches without proof of intent).4
In sum, we continue to decline to give effect to the plain words “trial de novo ” as found in § 2023(a)(15) of the statute.
In United States v. First City National Bank, 386 U.S. 361, 368, 87 S.Ct. 1088, 18 L.Ed.2d 151 (1967), the Court defined the clause “shall review de novo the issues presented.” It reasoned that “The words ‘review’ and ‘trial’ might conceivably be used interchangeably. The critical words seem to be ‘de novo ’ and ‘issues presented.’ They mean to us that the court should make an independent determination of the issues.” First City Nat. Bank, 386 U.S. at 368, 87 S.Ct. 1088 (emphasis added). The words at issue in the case at hand are that the suit in court to review penalties such as those imposed in this case “shall be a trial de novo by the court in which the court shall determine the validity of the questioned administrative action in issue.” 7 U.S.C. § 2023(a)(15). The penalties are certainly a part of “the administrative action in issue,” yet we persist in giving little or no effect to the words “the court shall determine” (emphasis added). Our continued insistence on not giving effect to either the statute’s words or the Supreme Court’s definition is something I cannot justify. In my opinion, we should revisit Cross, follow the principle of Ghattas v. United States, 40 F.3d 281, 287 (8th Cir.1994), and remand this case to the district court.

. Interestingly, a district court reviews the finding of liability according to the plain language of the statute — under a de novo standard of review. See Cross, 512 F.2d at 1218 ("[T]he scope of review of a sanction is not as broad as the scope of review of the fact of violations.”).

. When the district court determines that the administrative action is invalid, it is free to enter a judgment or order in accordance with the law and the evidence. See 7 U.S.C. § 2023(a)(16) (1996).

. This exception applies to payment accuracy programs and is not applicable in this case.

. The majority, fn. 1, finds undisputed that Traficanti did not submit any documents that he had a compliance policy or training program in place. It is equally undisputed, I suggest, that no policy or training program can prevent such a disgruntled employee from setting up her employer and in so doing, in all likelihood, committing a felony. See 7 U.S.C. § 2024(b)(1). If the courts in this circuit were not forbidden by our own precedent from making a de novo determination of penalty they could obviate the harsh and unjust result obtained here, as the cases I have cited from other circuits demonstrate.