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A Touch of Merengue, LLC v. United States

United States District Court, D. Rhode Island

November 20, 2014


For A Touch of Merengue LLC-The Atom, Plaintiff: Edward M. Pepe, LEAD ATTORNEY, Moretti Perlow & Bonin, Cranston, RI.

For United States of America, Defendant: Leslie J. Kane, U.S. Attorney's Office, Providence, RI.


John J. McConnell, Jr., United States District Judge.

Plaintiff A Touch of Merengue, LLC -- The Atom (" The Atom") challenges its permanent disqualification from the Supplemental Nutrition Assistance Program (" SNAP") by the Food and Nutrition Service (" FNS") of the United States Department of Agriculture (" USDA"). The Atom was banned from SNAP for engaging in trafficking of Electronic Benefit Transfers (" EBT"). Trafficking is defined as " [t]he buying, selling, stealing or otherwise effecting an exchange of SNAP benefits issued and accessed via Electronic Benefit Transfer (EBT) cards ... for cash or consideration other than eligible food." 7 C.F.R. § 271.2; 7 U.S.C. § 2021(b)(3)(B).

Before the Court is the Defendant United States' Motion for Summary Judgment, where the United States argues that the USDA's decision to disqualify The Atom was soundly supported by the undisputed record and neither arbitrary nor capricious as a matter of law. (ECF No. 4.) The Atom objected. (ECF No. 7.) For the reasons stated below, the Court GRANTS the United States' motion and enters judgment in its favor.


The Atom is a convenience store located at 47 Academy Avenue in Providence, Rhode Island. The Atom accepted payment for eligible food items through the SNAP, a program designated by Congress to alleviate hunger and malnutrition among poor households. Eligible participants receive an EBT card, which is linked to their SNAP account, containing funds that they can use to purchase food. The card is swiped at the store at the time of purchase, the customer enters a personal identification number, and the amount is deducted from their monthly SNAP benefits.

The FNS is able to monitor the SNAP and EBT transactions in order to detect and eliminate fraud. It uses an Anti-Fraud Locator using Electronic Benefit Retailer Transactions (" ALERT") program to detect trafficking. The Atom appeared on a USDA ALERT Watch List in 2013, prompting an investigation and analysis of EBT redemptions from May 2013 through July 2013. FNS identified four categories of irregular transaction patterns -- 1) rapid sets of purchases by different households made too rapidly to be credible, 2) rapid and repetitive transactions by the same households; 3) the depletion of the majority of monthly benefits in one transaction or within a short period; and 4) a large volume of high dollar transactions. On June 5, 2013, an FNS reviewer visited The Atom to evaluate the market's EBT transactions.

On August 28, 2013, FNS sent a letter to Joseph Manzanillo, The Atom's owner, informing him that FNS was charging The Atom with trafficking. The letter identified the irregular transaction patterns and advised Mr. Manzanillo of his right to respond within ten days of the letter. Mr. Manzanillo responded to the letter, asserting essentially that the activity can be explained by the fact that his store sells bulk groceries and provides free delivery of those bulk purchases. FNS reviewed Mr. Manzanillo's responses and found that they did not overcome the finding of trafficking. FNS permanently disqualified The Atom from the EBT program in September 2013. Mr. Manzanillo requested administrative review and the disqualification was affirmed. This suit followed.


Summary judgment can be granted only when the Court finds that there is no genuine issue of material fact and that the undisputed facts give rise to an entitlement to judgment as a matter of law. Wilson v. Moulison N. Corp., 639 F.3d 1, 6 (1st Cir. 2011). The Court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in her favor. Id. However, the non-moving party " must point to 'competent evidence' and 'specific facts' to stave off summary judgment." Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London, 637 F.3d 53, 56 (1st Cir. 2011) (quoting McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995)). A summary judgment motion cannot be defeated by " conclusory allegations, improbable inferences, acrimonious invective, or rank speculation." Ahem v. Shinseki, 629 F.3d 49, 54 (1st Cir. 2010).

The Court must conduct a de novo review to " determine the validity of the questioned administrative action." 7 U.S.C. § 2023(a)(15). This de novo review, however, is limited to the USDA's determination of whether a SNAP violation took place. Broad St. Food Mkt., Inc. v. United States, 720 F.2d 217, 220 (1st Cir. 1983); Objio v. United States, 113 F.Supp.2d 204, 208 (D. Mass. 2000). If the Court finds that the USDA's finding was correct, review of the sanction that the USDA imposed is limited to whether that sanction was arbitrary or capricious. Id. A store disqualified from participating in SNAP bears the burden of ...

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