Brothers Market LLC No. 2, a small convenience store in downtown Los Angeles owned by Brad Brown, was permanently disqualified from the federal Supplemental Nutrition Assistance Program after the Food and Nutrition Service detected suspicious transaction patterns over six months in 2022. The Agency identified more than 600 unusually large transactions, nearly 200 transactions that depleted customers' monthly benefits, over 100 rapid transactions by the same households, and dozens of repeated transactions for identical dollar amounts like $99 and $100.
Circuit Judge Johnstone emphasized that while stores can rebut trafficking allegations, "general denials of trafficking or speculative theories of how the patterns emerged will not suffice." The court noted that Brown's affidavit offered theories about shelter residents and homeless customers but "does not attest to the legitimacy of any one transaction based on his personal knowledge." Johnstone wrote that even viewing evidence in the light most favorable to plaintiffs, "no reasonable factfinder could conclude from this evidence that the Market did not engage in SNAP trafficking."
U.S. District Judge Wesley Hsu had initially granted summary judgment for the government after the Agency's administrative proceedings. Brown argued that customers from a nearby women's rehabilitation center made large purchases due to COVID-19 restrictions and that the store's point-of-sale system could pause transactions. The Agency had flagged transactions including two sales totaling $445.96 within minutes and multiple transactions for the same household completed in under 30 seconds.
The decision reinforces that SNAP retailers must provide substantial evidence beyond conclusory affidavits to dispute trafficking allegations. The ruling may influence how convenience stores near social service facilities document their transactions and customer patterns. Plaintiffs also raised due process and joint hearing arguments, but the panel rejected these claims as forfeited or within the district court's discretion.