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Broad Street Supermarket, Inc. v. Do-073 Georgia Department of Public Health

Court of Appeals of Georgia, Second Division

March 6, 2018

BROAD STREET SUPERMARKET, INC., et al.
v.
DO-073 GEORGIA DEPARTMENT OF PUBLIC HEALTH.

          MILLER, P. J., DOYLE, P. J., and REESE, J.

          Doyle, Presiding Judge.

         We granted a discretionary application filed by Broad Street Supermarket, Inc., d/b/a Moon's Supermarket ("Broad Street"), seeking review of the superior court's order affirming a decision of the Department of Public Health ("DPH"), which disqualified Broad Street's grocery stores from participating in the federal Special Supplemental Nutrition Program for Women, Infants, and Children ("WIC") in Georgia. For the reasons that follow, we reverse.

         In 2014, Broad Street obtained WIC authorization for Broad Street's first store, Moon's Supermarket ("Moon's"). On December 23, 2014, Broad Street bought Monticello Family Foods ("Monticello"). Monticello was authorized as a WIC vendor under its previous ownership, but Broad Street did not apply immediately for new WIC authorization when it purchased Monticello.

         In February 2015, based on an automatic notification from the federal government that Monticello was no longer a participant in the United States Department of Agriculture's Supplemental Nutrition Assistance Program ("SNAP"), [1]DPH conducted an on-site investigation of Monticello. During the February 13, 2015 site investigation, store manager Tracy Gilman told the investigators that Monticello "did not have any WIC vouchers on hand, " but the store still accepted the vouchers and that owner Jim Morrell "comes into the store once a week to pick up the WIC vouchers." Later that day, DPH contacted Morrell, who told an investigator that he had used Moon's vendor stamp to accept WIC vouchers used at Monticello and deposited those vouchers into Moon's account after Broad Street acquired Monticello because Morrell believed that the WIC application for Monticello could not be processed until March of 2015; he asked the investigator what he should do about WIC vouchers while the application was pending for Monticello, and the investigator advised him not to accept them at Monticello prior to application approval. Morrell submitted a WIC vendor application for Monticello that same day.

         DPH subsequently disqualified Moon's from WIC participation for three years, on the ground that Moon's had engaged in "[a] pattern of receiving, transacting[, ] and/or redeeming food instruments or cash-value vouchers outside of authorized channels, " under 7 CFR § 246.12 (l) (1) (iii) (D).[2] An Administrative Law Judge ("ALJ") reversed Moon's disqualification on grounds that: (i) the record did not establish when or how often Monticello had accepted WIC vouchers; and (ii) DPH had not given Broad Street the required notice and opportunity to take corrective action before disqualifying Moon's. On agency appeal, the agency disagreed with the ALJ on both grounds, reversed the decision, and reinstated Moon's disqualification. The agency subsequently denied Broad Street's request for reconsideration, and on appeal to the superior court, the agency's decision was affirmed. This Court thereafter granted Broad Street's application for discretionary appeal.

         1. The Georgia Administrative Procedure Act, OCGA § 50-13-1 et seq., authorizes the superior court to reverse or modify an agency decision only if: substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(1)In violation of constitutional or statutory provisions;
(2)In excess of the statutory authority of the agency;
(3)Made upon unlawful procedure;
(4)Affected by other error of law;
(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or
(6)Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.[3]

Thus, courts review agency findings of fact "to determine whether they are supported by any evidence, " while conclusions of law are reviewed de novo.[4] "Upon further discretionary appeal to this Court, our duty is not to review whether the record supports the superior court's decision but whether the record supports the final decision of the administrative agency."[5]

         7 CFR § 246.12 "sets forth design and operational requirements for food delivery systems, " including electronic benefit transfer systems, home delivery, cash-value vouchers and food instruments, among others; and provides a framework for states to authorize private vendors to distribute supplemental food under the federal SNAP program.[6]

         As discussed above, DPH disqualified Moon's under 7 CFR § 246.12 (l) (1) (iii) (D), which is part of a larger subsection listing "[m]andatory vendor sanctions." These sanctions include (i) permanent disqualifications for "trafficking in food instruments or cash-value vouchers or selling firearms [and other items] for food instruments or cash-value vouchers;" (ii) six-year disqualifications for "one incidence of buying or selling food instruments, or cash-value vouchers, for cash . . . or firearms [or other items];" (iii) three-year disqualifications, and (vi) ...


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