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Negash v. United States

United States District Court, D. Maryland

July 16, 2018

ISRAEL K. NEGASH, et al., Plaintiffs,
v.
UNITED STATES OF AMERICA, Defendant.

          MEMORANDUM OPINION

          RICHARD D. BENNETT UNITED STATES DISTRICT JUDGE

         On February 20, 2018, Plaintiffs Ethio, Inc. and Israel K. Negash (collectively “Plaintiffs”), filed an Amended Motion for Reconsideration (ECF No. 23)[1] based upon this Court's previous Memorandum Opinion and Order granting the Defendant United States of America's (“Defendant”) Motion for Summary Judgment. (ECF Nos. 20, 21.) On March 1, 2018, the Defendant filed its Response in Opposition to the Plaintiffs' Motion for Reconsideration, arguing that the Plaintiffs are not entitled to relief under Rule 59(e) of the Federal Rules of Civil Procedure. (ECF No. 24.) The pending Motion was fully briefed by both parties and no hearing is necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons that follow, Plaintiffs' Motion for Reconsideration (ECF No. 23) is DENIED.[2]

         BACKGROUND

         The background facts of this case are set forth in this Court's Memorandum Opinion on February 5, 2018. (ECF No. 20); Negash v. United States, Civ. No. RDB-17-1954, 2018 WL 722481 (D. Md. Feb. 5, 2019). To summarize, Plaintiff Negash (“Negash”) is the owner and operator of Ethio, Inc., d/b/a Sunoco Food Mart (“the Store”) in Baltimore, Maryland. Id. at *1. In May 2001, the Store began participating in the Supplemental Nutrition Assistance Program (“SNAP”). Id. Pursuant to regulations governing SNAP retailers, the Food and Nutrition Service (“FNS”)[3] is authorized to permanently disqualify any SNAP retailer that it finds “trafficking”[4] SNAP benefits. See 7 C.F.R. § 278.6.

         Between February and July 2016, the FNS electronic alert system indicated that the Store's Electronic Benefits Transfer (“EBT”)[5] data was consistent with possible trafficking in EBT benefits. Negash, 2018 WL 722481, at *3. As a result, the FNS Retailer Operations Division (“ROD”) began an investigation into the Store and subsequently sent an individual from ROD to visit the Store on June 18, 2016. Id. ROD also compared the Store's transactions to those of other stores in the area, including four other convenience stores within a one-mile radius. Id. After analyzing all of the information gathered during its investigation, ROD determined that the transactions discovered by the FNS electronic system were, in fact, suspicious, and inconsistent with the transactions of other similarly situated SNAP retailers. Id. The Store's suspicious transactions fell into three categories: (1) rapid and repetitive transactions in a short period of time from the same household; (2) transactions involving the depletion of the majority or all of a household's benefits in a short timeframe; and (3) high dollar transactions. Id.

         On August 11, 2016, the FNS sent a letter to Negash, informing him that the Store was being charged with trafficking EBT benefits under 7 C.F.R. § 271.2.[6] Negash, 2018 WL 722481, at *4. Eventually, Negash responded to the substantive allegations, offering a litany of explanations for the suspicious transactions.[7] Id. After inquiring into Negash's explanations, FNS found: (1) no evidence the Store was anything but a typical convenience store; (2) and Negash's other explanations did not account for the suspicious transactions. Id. On September 20, 2017, the FNS issued a determination letter informing Negash that it found the Store had engaged in trafficking SNAP benefits and was therefore permanently disqualified from participation in SNAP. Id.

         Negash sought an administrative review of the decision to disqualify the Store, reiterating many of the same explanations offered in response to the initial charge letter. Id. An FNS Administrative Review Officer (“ARO”) reviewed the information submitted by Negash and then issued a Final Agency Decision on June 13, 2017. Id. The ARO found, among other things, that the Store was simply a typical convenience store/gas station, and that its inventory did not lend itself to the many large, suspicious transactions at issue. Id. It also noted that following the Store's receipt of the initial charge letter there was a precipitous decline in the number of suspicious transactions-a fact that was in itself suspicious. Id. Therefore, the ARO upheld both the decision that “trafficking” had occurred and the decision to permanently disqualify the Store from the SNAP program. Id. On July 13, 2017, Negash filed a Complaint with this Court requesting a judicial review of the FNS determination. (ECF No. 1.)

         STANDARD OF REVIEW

         The Federal Rules of Civil Procedure do not expressly recognize motions for “reconsideration.” Instead, Rule 59(e) authorizes a district court to alter, amend, or vacate a prior judgment, and Rule 60 provides for relief from judgment. See Katyle v. Penn Nat'l Gaming, Inc., 637 F.3d 462, 471 n.4 (4th Cir. 2011), cert. denied, 132 S.Ct. 115 (2011). As this Court explained in Cross v. Fleet Reserve Ass'n Pension Plan, Civ. No. WDQ-05-0001, 2010 WL 3609530, at *2 (D. Md. Sept. 14, 2010):

A party may move to alter or amend a judgment under Rule 59(e), or for relief from a judgment under Rule 60(b). See Fed. R. Civ. P. 59(e) & 60(b). A motion to alter or amend filed within 28 days of the judgment is analyzed under Rule 59(e); if the motion is filed later, Rule 60(b) controls. See Fed. R. Civ. P. 59(e); MLC Auto., LLC v. Town of S. Pines, 532 F.3d 269, 280 (4th Cir. 2008); In re Burnley, 988 F.2d 1, 2-3 (4th Cir. 1992).

(footnote omitted). In this case, Negash timely filed his Motion for Reconsideration (ECF No. 23) within twenty-eight (28) days of this Court's Order granting Defendant's Motion for Summary Judgment. (ECF No. 21.) Thus, Plaintiff Negash's Motion will be considered under Rule 59(e).

         The United States Court of Appeals for the Fourth Circuit has repeatedly recognized that a final judgment[8] may be amended under Rule 59(e) in only three circumstances: (1) to accommodate an intervening change in controlling law; (2) to account for new evidence not available at trial; or (3) to correct a clear error of law or prevent manifest injustice. See, e.g., Gagliano v. Reliance Standard Life Ins. Co., 547 F.3d 230, 241 n.8 (4th Cir. 2008); see also Fleming v. Maryland National Capital Park & Panning Commission, Civ. No. DKC-11-2769, 2012 WL 12877387, at *1 (D. Md. Mar. 8, 2012). A Rule 59(e) motion “may not be used to relitigate old matters, or to raise arguments or present evidence that could have been raised prior to entry of judgment.” Pac. Ins. Co. v. Am. Nat'l Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998); see also Kelly v. Simpson, Civ. No. RDB-16-4067, 2017 WL 4065820, at *1 (D. Md. Jan. 26, 2017). Moreover, “[t]he district court has considerable discretion in deciding whether to modify or amend a judgment.” Fleming, 2012 WL 12877387, at *1.

         ANALYSIS

         Plaintiff Negash alleges that this Court's Order granting Defendant's Motion for Summary Judgment was improper because: (1) summary judgment was granted without affording Negash an opportunity for discovery; and (2) the correlation between the electronic alert system's transaction patterns and EBT trafficking was accepted “despite no evidence being presented to establish a connection.” (ECF No. 23.) Negash claims he was “entitled” to discovery before this Court made its ruling because “material issues of fact [still] remain[ed] for evidentiary presentation” and discovery was necessary in order to “fully review the allegations brought against [him]” and to “gather evidence to rebut the allegations.” (Id. at 4, 6.) Negash also contends that he has “repeatedly disputed that the ALERT system's transaction patterns have any relevant relation to trafficking” and criticizes this Court for “accept[ing] this correlation despite no evidence being ...


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