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YOUNG HAN v. FOOD & NUTRITION SERV. OF THE USDA

March 8, 1984

YOUNG G. HAN, t/a HAN'S FARM MARKET, Plaintiff,
v.
FOOD AND NUTRITION SERVICE OF THE UNITED STATES DEPARTMENT OF AGRICULTURE, and MALACHY P. COX, CHIEF, COUPON USE AND REDEMPTION SECTION, and BERT S. HALL, FOOD STAMP REVIEW OFFICER, Defendants



The opinion of the court was delivered by: BISSELL

 Plaintiff, Young G. Han, t/a Han's Farm Market, brings this civil action against the United States for a review of a decision of the Department of Agriculture's Food and Nutrition Service (FNS) withdrawing his authorization to participate in the Federal Food Stamp Program, 7 U.S.C. §§ 2011, et seq.

 Plaintiff, the owner of Han's Farm Market in Trenton, New Jersey, was authorized to accept food stamps from customers in exchange for eligible food items and, in turn, to redeem the stamps for cash or additional food inventory, pursuant to 7 U.S.C. § 2011. Defendant, United States, is authorized to be sued pursuant to 7 U.S.C. § 2011 when a participant in the Food Stamp Program has been disqualified for a period of time by the United States Department of Agriculture (USDA) for violations of the Food Stamp Program.

 In early 1978, FNS determined that Han's Farm Market was redeeming food stamps at a rate in excess of other food stamp stores in the Trenton area. Accordingly, Mr. R. McConnell, a representative of the FNS, visited plaintiff's market in order to review regulations of the Food Stamp Program and to explain that the high redemption rate was a possible indication of violations of the Food Stamp Program, leading potentially to disqualification from the program.

 A second visit by an FNS representative, confirmed by a letter dated September 11, 1980, again warned Mr. Han that violations of the Food Stamp Program could lead to disqualification. The confirmation letter also informed plaintiff Han that he would be responsible for violations committed by other persons handling food stamp transactions in Han's Farm Market.

 The plaintiff's redemption rate of food stamps remained high in the early part of 1981, prompting Maurice C. McGrath, Officer in Charge of the Jersey City Field Office, to request that FNS investigate Han's Farm Market. Between February 5 and 10, 1981, five visits were made by FNS investigators to Han's Farm Market to determine whether plaintiff or his employees were violating food stamp regulations. On these five occasions, investigators were permitted to purchase with food stamps twenty-one ineligible products, including cigarettes, detergents, roach spray, oven cleaner and other non-food items. On four of the visits in question, plaintiff's wife participated in the sale; on one the plaintiff himself.

 As a result of these visits and a report submitted by the investigators, FNS, on March 23, 1981, sent to plaintiff an additional letter charging violations of the Food Stamp Program's regulations, delineating the specific transactions where ineligible items were purchased with food stamps. Plaintiff responded to these charges, and FNS then proceeded to reach a determination which was rendered in letter form on August 21, 1981. FNS determined that violations had occurred and that Han's Farm Market would be disqualified from participating in the Food Stamp Program for a period of one year.

 On August 25, 1981, plaintiff's attorney requested an administrative review of the FNS determination. Pursuant to this review, Administrative Review Officer Bert S. Hall, on June 16, 1982, affirmed the one-year disqualification imposed by the FNS. As a result of Mr. Hall's decision, plaintiff commenced this action on July 16, 1982.

 
The suit in the United States district court or state court shall be a trial de novo by the court in which the court shall determine the validity of the questioned administrative action in issue.

 7 U.S.C. § 2022 (Supp. IV 1982).

 The Government has presently moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) or, in the alternative, if matters outside the pleadings are considered, for summary judgment, pursuant to Fed.R.Civ.P. 56.

 Plaintiff contends that this motion should be denied because there are genuine issues of material fact, specifically that plaintiff has never admitted that the violations which led to his disqualification occurred. Defendant points out that plaintiff's failure to respond adequately to defendant's requests for admissions under Fed.R.Civ.P. 36(a) operates as an admission. Rule 36(a) provides that "an answering party may not give lack of information or knowledge as a reason for failure to admit or deny, unless he states that he has made a reasonable inquiry and that the information known or readily obtainable by him is insufficient to enable him to admit or deny." Requests for Admissions numbered 14 through 34 delineate the purchases of ineligible items which are the subject of the present proceedings. As plaintiff states in his brief: "plaintiff has responded that he has insufficient information to admit or deny same as defendant has refused to provide discovery in this regard." On its face, this response is inadequate under Rule 36(a), for it fails to allege and specify any reasonable inquiry undertaken to obtain information which would enable plaintiff to admit or deny the admissions requested.

 Plaintiff advances two related arguments which, he asserts, demonstrate the insufficiency of information which justifies his answers to Requests 14 through 34. He argues that the identities of the investigators and private citizens assisting the investigation who made the purchases in issue were never disclosed to him during administrative proceedings, because FNS claimed they were exempt from disclosure under the Freedom of Information Act (FOIA). See Plaintiff's Brief, Exs. 1, 2, 3 and 5 U.S.C. §§ 552(b) (6), 552(b) (7) (C) and 552(b) (7) (D). *fn1" Plaintiff also contends that this information has not been provided by defendants in answer to plaintiff's interrogatories in this action. See Interrogatories 1-4 annexed to Plaintiff's Brief as Exhibit 4. Answers to these interrogatories would, arguably, permit plaintiff to interview or depose the people disclosed, thus supplying the information necessary to either admit or deny items 14 through 34 of the ...


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