Kokomo convenience store seeking judicial review after USDA imposes suspension from SNAP payments

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A Kokomo convenience store owner is asking for judicial review of a U.S. Department of Agriculture decision to temporarily prohibit the store from accepting Supplemental Nutrition Assistance Program payments from customers.

The case, Express Gas 1 & Food Mart LLC and Ahmed Abdulkarim Kassim v. United States Department of Agriculture, Food and Nutrition Service, 1:23-CV-341, was filed Friday in the U.S. District Court for the Southern District of Indiana, Indianapolis Division.

The convenience store is an authorized retail participant in the federal food aid program known as SNAP, in which individuals receive benefits they can use to purchase eligible food items.

The lawsuit traces back to the spring of 2022, when a USDA investigator visited Express Gas three times to purchase merchandise. According to the USDA investigative reports that are part of the docket in Express 1’s complaint, on each of the three occasions the investigator was able to purchase both eligible and noneligible items using SNAP benefits.

The eligible items included cans of energy drinks, candy and chips. The ineligible items included boxes of foil, plastic freezer bags, plastic wrap and cigarettes.

On the third visit, the USDA investigator also asked the clerk to give him cash back from his SNAP benefits card — a violation of SNAP rules — but the clerk refused, the USDA report said.

The USDA sent the plaintiffs a letter on May 18 notifying them of the investigation and informing them that they had violated SNAP rules by accepting SNAP benefits for nonfood items. The violations warranted a disqualification period of six months, during which the store would not be allowed to participate in the SNAP program, the letter said.

Express 1 alleges in its complaint that it refuted the USDA’s allegations in writing, but the USDA did not consider Express 1’s oppositions before concluding that the alleged violations did, in fact, occur.

Express 1 says it then requested an administrative review of the USDA’s final determination, but on Jan. 25, the USDA informed the retailer of its final decision to impose a six-month disqualification against the store.

The USDA’s decision is “arbitrary and capricious and without merit,” Express 1 says in its complaint, for reasons that include the USDA’s refusal to allow the store to confront and examine the USDA investigator.

In its complaint, the plaintiffs also allege that they had an “unblemished prior record during the previous years as SNAP participants,” and that the suspension is “grossly disproportionate” to the modest value of the transactions.

Express 1 is asking the court to review and set aside the USDA’s decision.

Indiana Lawyer has contacted the USDA, but as of publication deadline the agency had not provided a response.

The plaintiffs are being represented by Philadelphia attorney Joseph Bahgat of The Privacy Firm P.C.

Bahgat, who has represented retailers in similar lawsuits in multiple states, said SNAP suspensions can have a big impact on retailers. He said the USDA imposed its suspension on Express 1 beginning last week.

“The typical client of mine, maybe a third of their business might come from SNAP,” Bahgat said. “In most cases, the owners have to sell if they can’t get around the suspension.”

The Kokomo case is Bahgat’s first in Indiana, but he said this case is typical of ones he’s handled elsewhere.

As is the case here, Bahgat said the USDA tends to target mom-and-pop stores for its SNAP investigations. Those small retailers, he said, usually lack the more sophisticated point-of-sale systems that larger retail chains have.

As a result, the mom-and-pops must rely on their clerks to prevent customers from purchasing ineligible items using SNAP benefits.

“The bigger corporate-owned stores have software that prevents that from happening,” Bahgat said.

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