Studt v. United States
Opinion of the Court
The United States appeals from a decision of the United States District Court, District of South Dakota,
Wayne Studt owns and operates Studt’s Super Valu, a retail grocery store in High-more, South Dakota. During a three-day period in October of 1977, the Food and Nutrition Service, a branch of the Department of Agriculture, conducted an investigation of Studt’s Super Valu after statistics compiled by that office revealed that redemption of food stamps at the store was substantially higher than the redemption rate at other retail grocery stores in the
As a result of the investigation Studt was disqualified from participating in the Food Stamp Program for a period of one year. At his request, a hearing and review of this decision was held by the Food and Nutrition Service, which upheld the sanction originally imposed. Studt appealed this determination to the Hyde County Court of South Dakota; the case was removed to the United States District Court, District of South Dakota pursuant to 28 U.S.C. § 1442(a). The district court held that the imposition of a year’s disqualification was arbitrary and capricious, finding that no policy existed in the store to violate the Food Stamp Act, and therefore reduced the period of disqualification from one year to 60 days.
On appeal, appellant United States contends that the district court erred in substituting its judgment for the judgment of the Department of Agriculture as to the appropriate sanction for violation of the Food Stamp Act. At no time has Studt denied that he was in violation of the Food Stamp Act. The only question before us, therefore, is the appropriate standard of review of the sanction imposed on the appellee. The section of the Food Stamp Act that authorizes review of an action taken by the Department of Agriculture is found in 7 U.S.C. § 2023 (1978). Section 2023 provides in part:
The suit in the United States district 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. If the court determines that such administrative action is invalid, it shall enter such judgment or order as it determines is in accordance with the law and the evidence.
We are persuaded that the Fourth Circuit’s decision in Cross v. United States, 512 F.2d 1212 (4th Cir. 1975 (en banc)), is the correct interpretation of the review provisions of § 2023. In that case the Fourth Circuit recognized that the district court is authorized to conduct a de novo review of the validity of the Department of Agriculture’s determination that the Food Stamp Act has been violated. A more limited scope of review applies, however, when the administrative determination that a violation has occurred is valid and the challenge is to the sanction imposed on the violator of the Act. According to the decision in Cross, if only the sanction is challenged, the district court must limit its review to a determination of whether the sanction imposed on the violator is arbitrary and capricious. See id. at 1217-18. We agree with the analysis of the Fourth Circuit that the de novo review provision of § 2023 applies only to a determination of the validity of the Department of Agriculture action, and hereby adopt the reasoning of their decision in Cross. When violation of the Food Stamp Act is admitted, the district court is not authorized under § 2023 to substitute its judgment for that of the Department of Agriculture in determining the appropriate sanction to be imposed for violation of the Act. Only when the Department of Agriculture has acted in an arbitrary and capricious manner in imposing a sanction may the district court alter the sanction.
. The Honorable ANDREW W. BOGUE, United States District Judge for the District of South Dakota.
Reference
- Full Case Name
- Wayne STUDT d/b/a Studt's Super Valu v. UNITED STATES of America Robert Bergland, Secretary of the Department of Agriculture Food and Nutrition Services
- Cited By
- 19 cases
- Status
- Published