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O&B Inc. v. United States

United States District Court, Eastern District of Michigan, Southern Division

February 5, 2015

O&B, INC., Plaintiff,
v.
UNITED STATES OF AMERICA, Defendant.

MEMORANDUM AND ORDER DENYING DEFENDANT’S MOTION FOR DISCOVERY SANCTION OF DISMISSAL (Doc. 14) AND LIMITING PLAINTIFF’S PROOFS AT TRIAL

AVERN COHN UNITED STATES DISTRICT JUDGE

I. Introduction

This is a case seeking judicial review of a final agency decision by the United States Department of Agriculture suspending plaintiff O&B, Inc. (O&B) from participating as an authorized retailer in the Supplemental Nutrition Assistance Program (SNAP) for three (3) years.

Before the Court is the government’s Motion for Discovery Sanction of Dismissal on the grounds that O&B has failed to comply with discovery. The government says that dismissal is the only appropriate remedy as a result of O&B’s non-compliance.

The Court held a hearing on the motion on November 12, 2014, at which time it cautioned counsel for O&B that is must comply with discovery or the Court may impose sanctions, including dismissal.

Thereafter, the parties filed supplemental papers. The matter is now ready for decision. For the reasons that follow, the motion is DENIED. However, O&B is limited to its proofs at trial as described below.

II. Background

A. In General

Congress established the Food Stamp Program, now known as SNAP, to provide for the nutrition of the underprivileged and to strengthen the nation’s agricultural economy. See 7 U.S.C. § 2011. The Department of Agriculture (USDA) has been authorized to “formulate and administer” SNAP. 7 U.S.C. § 2013(a). To oversee this program, the USDA is obligated to disqualify retailers “when there is evidence that the store or concern is not adhering to the requirements established in the [Food Stamp Act].” S. Rep. 88-1124, at 15 (1964), as reprinted in 1964 U.S.C.C.A.N. 3275, 3291.

B.

On January 9, 2014, O&B filed a complaint challenging the three-year withdrawal of its authorization to participate in SNAP. The Food and Nutrition Service (FNS) of the USDA withdrew the authorization of O&B under 7 C.F.R. § 278.1(l)(1)(iv) because of the involvement of a previously disqualified individual in the business.

Thus, a key issue in the case is the nature of the relationship among O&B, the plaintiff-corporation, its purported owner (Kamal Berro), and the previously disqualified relative and prior owner who still works at the store (Oussama Berro). In investigating the complaint, the government believes that the two Berros may also be the sole members of a limited liability company, O&KB, LLC, which seems to lease property to O&B.

On April 17, 2014, the government served O&B with written discovery in the form of requests for ...


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