Timsina v. United States ( 2020 )

19-3214
Timsina v. United States
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL
APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY
CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY
COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 17th day of November, two thousand twenty.
PRESENT:
DENNIS JACOBS,
GERARD E. LYNCH,
RICHARD J. SULLIVAN,
Circuit Judges.
_____________________________________
Som N. Timsina, an individual, Bhakti R.
Adhikari, an individual, Central Market
Winooski, LLC, Vermont Limited Liability
Company,
Plaintiffs-Appellants,
v. No. 19-3214
United States of America,
Defendant-Appellee.
_____________________________________
For Plaintiffs-Appellants: ANDREW Z. TAPP, Metropolitan Law
Group, PLLC, Brandon, FL.
For Defendant-Appellee: MELISSA A.D. RANALDO (Julia L. Torti,
Gregory L. Waples, on the brief),
Assistant United States Attorneys, for
Christina E. Nolan, United States
Attorney for the District of Vermont,
Burlington, VT.
Appeal from the judgment of the United States District Court for the District
of Vermont (Christina Reiss, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the district court is
AFFIRMED.
Plaintiffs-Appellants Som N. Timsina, Bhakti R. Adhikari, and their store,
Central Market Winooski, LLC (“Central Market”) (collectively, “the Market”),
appeal from the district court’s order denying the Market’s request for additional
discovery and granting summary judgment in favor of the government in
connection with an administrative decision by the Food and Nutrition Service
(“FNS”) to disqualify their store from participating in the Supplemental Nutrition
Assistance Program (“SNAP”). On appeal, the Market contends that the district
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court (1) abused its discretion by denying the Market’s request to depose FNS
officials and to probe their investigative protocol for potential SNAP violations;
and (2) erred in granting summary judgment to the government because the court
misconstrued the Market’s burden to raise genuine disputes of material facts
regarding the suspicious SNAP transactions. We assume the parties’ familiarity
with the underlying facts, the procedural history of the case, and the issues on
appeal.
I. The district court did not abuse its discretion by denying the Market’s
request for additional discovery.
We review a district court’s denial of a Rule 56(d) motion for additional
discovery for abuse of discretion. See Alphonse Hotel Corp. v. Tran, 828 F.3d 146,
151 (2d Cir. 2016). “A party seeking to delay resolution of a summary judgment
motion on grounds that he has been deprived of certain discovery materials must
show that the material sought is germane to the defense, and that it is neither
cumulative nor speculative, and a bare assertion that the evidence supporting a
plaintiff’s allegation is in the hands of the defendant is insufficient.” Id. (internal
quotation marks omitted).
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The Market asserts that the district court abused its discretion when it
denied the Market’s requests for discovery, including depositions, regarding the
FNS’s investigative protocol for detecting potential SNAP violations. But that
evidence would not have been “germane to” the Market’s opposition to the
government’s motion for summary judgment. Id. The Market’s burden in
overcoming the government’s motion was to raise a genuine issue of material fact
regarding whether it had engaged in SNAP benefits trafficking – a not uncommon
form of fraud whereby SNAP recipients sell their benefits for cash, typically at a
deep discount, to food retailers who camouflage the transaction to look like
legitimate food purchases. See, e.g., Irobe v. U.S. Dep’t of Agric., 890 F.3d 371, 375
(1st Cir. 2018); see also 7 C.F.R. § 271.2 (defining SNAP “[t]rafficking” as including
“[t]he buying, selling, stealing or otherwise effecting an exchange of SNAP
benefits . . . for cash or consideration other than eligible food”). Depositions
directed toward uncovering the FNS’s internal procedures and decision-making
were simply not relevant to meeting that burden, since the district court was
required to conduct its own independent review of the underlying data. See 7
U.S.C. § 2023(a)(15). Accordingly, the district court did not abuse its discretion
by denying the Market’s request for additional discovery.
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II. The district court properly granted summary judgment to the government.
“We review a grant of summary judgment de novo, examining the evidence
in the light most favorable to, and drawing all inferences in favor of, the non-
movant.” Sullivan-Mestecky v. Verizon Commc’ns Inc., 961 F.3d 91, 97 (2d Cir. 2020)
(internal quotation marks omitted). Under the Food and Nutrition Act of 2008
(“FNA”), judicial review of the FNS’s decision to disqualify an entity from
participating in SNAP is “a trial de novo . . . in which the court shall determine the
validity of the questioned administrative action in issue.” 7 U.S.C. § 2023(a)(15). 1
This review “requires the district court to reexamine the agency’s decision on a
fresh record, rather than determining whether the administrative decision was
supported by substantial evidence.” Ibrahim v. United States, 834 F.2d 52, 53 (2d
Cir. 1987). 2
1The FNA’s judicial review provision was originally enacted as part of the Food Stamp Act of 1964. See
Pub. L. No. 88-525, § 13, 78 Stat. 703, 708 (1964).
2 This Court has not yet decided which party bears the burden of proof at a trial under § 2023(a)(15) – i.e.,
whether the Market must prove by a preponderance of the evidence that the disqualification decision “is
invalid,” 7 U.S.C. § 2023(a)(16), or the government must prove “the validity of the questioned
administrative action,” id. § 2023(a)(15). On the one hand, the disqualified store is cast as the plaintiff or
claimant in the action, and thus the party that more naturally bears the burden of proving that (in this case)
it was wrongly disqualified. See Irobe, 890 F.3d at 378. On the other, the governing statute providing for
judicial review, 7 U.S.C. § 2023(a)(15), somewhat unusually provides for a “trial de novo” in the district
court, and directs that “the court shall determine the validity of the questioned administrative action in
issue,” thus appearing to contemplate a do-over of sorts in the district court, in which the government
would have to prove a violation. Cf. Spano v. Western Fruit Growers, 83 F.2d 150, 152 (10th Cir. 1936) (“‘Trial
de novo’ is generally held to mean a trial anew of the entire controversy, including the hearing of evidence
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The Market claims that the district court erred by granting summary
judgment to the government because the Market’s burden should not have been
“to prove each and every transaction to be legitimate, but rather to provide
evidentiarily supported explanations that could legitimately account for the
presence of the transaction patterns cited by the [FNS].” Market’s Br. at 12.
Under the FNA, the FNS may permanently disqualify a store “upon . . . the first
occasion” of SNAP benefits trafficking. 7 U.S.C. § 2021(b)(3)(B). Thus, on the
assumption that the Market bore the burden of proof in this action, it faced the
difficult burden of establishing that it had not engaged in any such transactions.
And in this case, the government presented the district court with a considerable
body of circumstantial evidence demonstrating that the Market had engaged in
SNAP benefits trafficking, including 515 transactions that were flagged as
suspicious by the FNS’s national electronic database because they (1) were
processed in unusually short time-frames, (2) depleted the majority of a
as though no previous action had been taken.”). The Market, however, does not challenge the district
court’s determination that the burden rests with the Market. See Timsina v. United States, No. 17-cv-00126
(CR), 2019 WL 3254689, at *8 (D. Vt. July 19, 2019). The Market has therefore waived this argument on
appeal. See Norton v. Sam’s Club, 145 F.3d 114, 117 (2d Cir. 1998) (“Issues not sufficiently argued in the
briefs are considered waived and normally will not be addressed on appeal.”). Accordingly, we assume,
without deciding, that the district court correctly placed the burden of proof on the Market.
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household’s monthly benefits in one or two transactions, or (3) were excessively
large in comparison to other Vermont grocery stores of a similar size.
In an attempt to rebut this overwhelming circumstantial evidence, the
Market offered several general explanations for the suspicious transactions,
including that Central Market regularly sold a number of expensive SNAP-eligible
items, that its customers frequently shopped together in large groups, and that
many of its customers were from large refugee households that purchased large
amounts of food in a single transaction. But even after considering these
conclusory rationalizations, the district court determined that many of the
transactions could not be explained or justified. In one particularly noteworthy
example cited by the district court, a household “spent $159.77 at Costco,” the
retail warehouse giant, “approximately one hour before spending $411.00 at
Central Market,” a store with about 1,500 square feet of shopping space, only one
cash register, one two-foot-by-three-foot checkout counter, and one optical
scanner. Timsina v. United States, No. 17-cv-00126, 2019 WL 3254689, at *4 & n.4,
*7 (D. Vt. July 19, 2019). Similarly, the district court considered other suspicious
transactions and found that there was “no plausible way” that Central Market
could have processed “$292.90 worth of eligible food items in two minutes and
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forty-eight seconds” or “$278.06 worth of eligible food items in one minute and
forty-four seconds.” 3 Id. at *10–11. And “[a]lthough Central Market’s inventory
reveals ten products that were priced between $20.00 and $45.00,” the district court
found that these few high-dollar items “[did] not explain why customers
frequently made purchases worth hundreds of dollars.” Id. at *13. Indeed,
there were at least four SNAP-authorized stores located near Central Market that
offered similar specialty food products and were frequented by the Market’s
customers, and yet none of them displayed the same types of suspicious
transactions. App’x at 774; see also Irobe, 890 F.3d at 379 (“[T]he factfinder may
reasonably infer trafficking when the redemption data shows that a store regularly
processes purported SNAP transactions for significantly higher per-transaction
amounts than nearby stores offering similar wares.”).
So even if the Market’s proffered explanations could account for some of the
suspicious transactions, there still remained ample circumstantial evidence to
support the inference that the Market had trafficked in SNAP benefits. The
3 The record reveals a host of even more suspicious transactions not explicitly cited in the district court’s
decision. In one such example, exactly $150.00 worth of food items was processed in thirty seconds.
App’x at 155. In another, the same household made one purchase followed by a second purchase one
minute and twenty-seven seconds later for exactly $100.00. Id. at 158. These transactions are doubly
suspicious due to their unusually short processing times and round-number totals.
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district court’s reliance on this circumstantial evidence was not improper. As we
have emphasized time and again, “[c]ircumstantial evidence . . . is of no lesser
probative value than direct evidence,” United States v. Casamento, 887 F.2d 1141,
1156 (2d Cir. 1989), particularly when, as here, it is the only proof likely to be
available, see, e.g., New York v. United Parcel Serv., Inc., 942 F.3d 554, 594 (2d Cir.
2019), cert. denied, --- S. Ct. ----, No. 19-1306, 2020 WL 5882264 (Oct. 5, 2020); see also
7 U.S.C. § 2021(a)(2) (authorizing FNS to disqualify a store on the basis of
“inconsistent redemption data” and SNAP “transaction report[s]”).
Accordingly, the district court properly granted summary judgment in favor of
the government because no reasonable factfinder could conclude that the Market
established that it had not engaged in any transactions in violation of the
regulations governing the SNAP program.
* * *
We have considered the Market’s remaining arguments and find them to be
without merit. Accordingly, we AFFIRM the judgment of the district court.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
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