United States District Court, Southern District of California
January 14, 2000
HANI ILAIAN AND KHAWLA ILAIAN, D.B.A. NEAR EAST FOODS, PLAINTIFFS,
UNITED STATES DEPARTMENT OF AGRICULTURE, FOOD AND NUTRITION SERVICE, AND DOES 1 THROUGH 10, INCLUSIVE, DEFENDANTS.
The opinion of the court was delivered by: Jones, District Judge.
ORDER DENYING PLAINTIFFS'
APPLICATION FOR STAY OF
Hani and Khawla Ilaian ("Plaintiffs") are the owners of Near East
Foods, a market that specializes in "halal" food and caters to a large
number of food stamp recipients. The Food and Nutrition Service ("FNS")
disqualified Plaintiffs (revoked their right to accept food stamps from
recipients) because it found that Plaintiffs had "trafficked" in food
stamps in violation of the Food Stamp Act ("the Act"). "Trafficking" is
defined as "the buying or selling of coupons, ATP cards or other benefit
instruments for cash or consideration other than eligible food."
7 C.F.R. § 271.2. The sanction of disqualification is apparently*fn1
required by 7 C.F.R. § 278.6(e), which states that "The FNS regional
office shall: (1) Disqualify a firm permanently if: (I) personnel of the
firm have trafficked as defined in § 271.1."
Plaintiffs request a stay of their disqualification from participating
in the Food Stamps Program ("the Program") pending their appeal on the
merits, also to be decided by this Court. Therefore, the Court must
decide if it has the power to issue a stay when disqualification is based
The Court requested and received supplemental briefing on the issue of
whether 7 C.F.R. § 279.10(d) which prohibits permanently disqualified
food stamp program vendors from obtaining a stay of the disqualification
sanction is a reasonable agency
interpretation of recent amendments to the Food Stamp Act. The Court
concludes it is and, accordingly, Plaintiffs request for a stay pending
judicial review is DENIED.
When the Court reviews an agency's construction of a statute
administered by that agency, the Court must engage in a two pronged
". . . whether Congress has directly spoken to the
precise question of issue. If the intent of Congress
is clear that is the end of the matter. . . If . . .
Congress has not directly addressed the precise
question at issue [If] the statute is silent or
ambiguous the question for the Court is whether the
agencies answer is based on a permissible construction
of the statute."
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837, 842-843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Court
agrees with Defendants that the plain language of
7 U.S.C. § 2023(a)(18) reflects that a stay is not available in cases
of permanent disqualification for trafficking. Section 2023(a)(18)
Notwithstanding any other provision of this
subsection, any permanent disqualification of a retail
food store . . . shall be effective from the date of
receipt of the notice of disqualification. It the
disqualification is reversed through administrative or
judicial review, the secretary shall not be liable for
the value of any sales lost
7 U.S.C. § 2023(a)(18). Furthermore, the regulations promulgated to
implement this section support this plain meaning:
However, permanent disqualification actions taken in
accordance with § 278.6(e)(1) of this chapter
shall not be subject to such a stay of administrative
action. If the disqualification action is reversed
through administrative or judicial review, the
Secretary shall not be liable for the value of any
sales lost during the disqualification period.
7 C.F.R. § 279.10(d). The plain language of the first sentence of the
regulation clearly forbids the Court from issuing a stay in this case.
Further, the immunity afforded the Secretary shows that disqualified
parties may suffer substantial economic losses pending review of their
cases, which would not be true if they could be given injunctive relief
by the courts.
Based on the foregoing, Plaintiffs' request for a stay of their
disqualification by the FNS pending appeal is DENIED.
It is further ordered that all papers submitted in the future shall
conform with the 16th edition of the Bluebook Uniform System of Citation
and the Local Rules for the Southern District of California. Papers not
in substantial compliance with said rules will be rejected by the Court.
IT IS SO ORDERED.