First on First Deli v. United States

Background

First on First Deli and other plaintiffs sought court review of the Department of Agriculture’s Food and Nutrition Service decision permanently disqualifying First on First Deli from participating in the Supplemental Nutrition Assistance Program after the agency found trafficking. The parties disputed whether the plaintiffs needed discovery before summary-judgment briefing.

The plaintiffs sought discovery concerning the reliability of the Food and Nutrition Service’s ALERT system and household information that could identify customers associated with flagged electronic-benefit-transfer transactions. They said customer testimony could help show that some transactions were legitimate purchases or involved customers purchasing eligible items on credit. The government argued that the certified administrative record was sufficient, that the agency could rely on transaction data, and that its decision rested on an independent investigation involving store operations, transaction patterns, comparisons with other stores, and customer shopping patterns.

Court’s Analysis

The court explained that discovery should be allowed when the requested information might affect the outcome and is needed to oppose summary judgment. Because review of the agency’s decision would be conducted anew, the plaintiffs could offer relevant evidence even if it had not previously been submitted to the agency. But the plaintiffs still had to show that the requested evidence was relevant, noncumulative, and not speculative.

Household Data

The government represented that it did not possess or control the household-identification information the plaintiffs wanted. The court stated that New York State maintained the relevant data, so the plaintiffs could seek it from New York State if they believed it would help.

The court permitted the plaintiffs 45 days to subpoena documents from New York State. It directed them to provide a status letter by April 15, 2022, stating whether they sought depositions and explaining why. No depositions were permitted without further court authorization. The court also emphasized that the plaintiffs would need to address each alleged trafficking transaction; showing that some transactions were legitimate or credit-based would not be enough if other trafficking violations remained.

ALERT-System Discovery

The court denied discovery about the ALERT system. It found that the plaintiffs had not shown how information about the system’s reliability would be relevant to their defenses. The court stated that the central question was whether the plaintiffs could prove that they did not engage in the charged trafficking, not whether ALERT was a reliable investigative tool.

According to the opinion, ALERT triggered the investigation, but the government then analyzed the plaintiffs’ data, compared it with nearby stores, and conducted an in-store investigation. The court concluded that the ALERT system’s reliability was therefore not relevant to the agency’s disqualification decision.

Disposition

The court granted in part and denied in part the plaintiffs’ discovery request. The order addressed discovery only; it did not decide the merits of the plaintiffs’ challenge to their disqualification.