MICHIGAN FOOD MARKET v. USDA RETAILER OPERATIONS DIVISION (2024)

ENTRY GRANTING MOTION TO DISMISS

Plaintiff Michigan Food Market filed this lawsuit to challenge the United States Department of Agriculture's (“USDA”) determination that it should be permanently disqualified from the Supplemental Nutrition Assistance Program (“SNAP”). (See Filing No. 1). This action is deficient in a multitude of respects, with the most serious being that the court lacks subject-matter jurisdiction. Defendant USDA Retailer Operations Division points out this deficiency—among others—in its motion to dismiss for lack of subject-matter jurisdiction, insufficient service of process, and failure to state a claim. (See Filing No. 22). For the reasons discussed below, that motion is GRANTED.

Michigan Food Market provides next to no information about this action in its complaint, which is erroneously entitled “Notice of Appeal.” (See Filing No. 1). All it pleads is that it was permanently disqualified from participating in SNAP pursuant to a “Final Agency Decision” of the USDA. (Id.). Consequently, it brought this lawsuit against the USDA Retailer Operations Division for “judicial review of the agency decision.” (Id.). Michigan Food Market does not provide a basis for this court's jurisdiction. (See id.).

“[T]he United States may not be sued without its consent and ․ the existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206, 212 (1983); see also FDIC v. Meyer, 510 U.S. 471, 475 (1994). This applies to any suit against the sovereign, not just suits for damages. See United States v. Sherwood, 312 U.S. 584, 586 (1941) (collecting cases). (But see Filing No. 24, Pl.’s Resp. Br. at 2 (“Sovereign Immunity would preclude [Defendant] from being litigated against if [Plaintiff] were a Plaintiff suing for damages ․ but that is not the case here.”)). The United States consents to suit when Congress clearly and unambiguously waived that immunity. Barmes v. United States, 199 F.3d 386, 388 (7th Cir. 1999) (“[T]he United States cannot be sued unless by statute Congress has expressly and unequivocally waived the government's sovereign immunity.”). The plaintiff bears the burden of showing the United States has waived its sovereign immunity. Clark v. United States, 326 F.3d 911, 912 (7th Cir. 2003) (“To maintain an action against the United States in federal court, a plaintiff must identify a statute that confers subject matter jurisdiction on the district court and a federal law that waives the sovereign immunity of the United States to the cause of action.”); Cole v. United States, 657 F.2d 107, 109 (7th Cir. 1981) (“A party who sues the United States has the burden of pointing to a congressional act that gives consent.”).

Michigan Food Market does not even attempt to meet this burden; it cites no cases, statutes, or authority anywhere in its complaint or response brief. As helpfully provided by Defendant however, 7 U.S.C. § 2023(a)(13) provides this court subject-matter jurisdiction and waives the United States’ sovereign immunity when a “store, concern, or State agency ․ fil[es] a complaint against the United States in the United States court for the district in which it resides or is engaged in business ․ within thirty days after the date of delivery or service” of the exclusion notice. Id. (emphasis added). Michigan Food Market is adamant that its “ ‘Notice of Appeal’ was not intended as a complaint, nor is a complaint intended to be filed at any time with respect to this matter,” which is problem number one. The United States waives its sovereign immunity only if the plaintiff files a complaint.

Moreover, Michigan Food Market has sued the USDA Retailer Operations Division instead of the United States, which deprives the court of subject-matter jurisdiction. See Calderon v. U.S. Dep't of Agric., Food & Nutrition Serv., 756 F. Supp. 181, 183–84 (D.N.J. 1990) (“Since Calderon's suit is against a federal agency rather than the United States itself, the suit is barred.”); Martin's Food & Liquor, Inc. v. U.S. Dep't of Agric., 702 F. Supp. 215, 216 (N.D. Ill. 1988) (explaining “the case against the USDA must be dismissed” because “a suit against the United States Department of Agriculture, or any other federal agency, is not a suit against the United States of America”); RN & Sons, Inc. v. Vilsack, No. 21-cv-3029, 2022 WL 1172738, at *2 (N.D. Ill. Apr. 20, 2022) (dismissing because “a plaintiff seeking judicial review of an FNS final decision ․ must name the United States as the sole defendant in the corresponding lawsuit; naming the Secretary of the USDA or the USDA as defendants does not suffice”); Minhas v. U.S. Dep't of Agric. Food & Nutrition Serv., No. C13-758 MJP, 2013 WL 5675116, at *1 (W.D. Wash. Oct. 17, 2013) (“Because Plaintiff chose to sue the USDA and not the United States, this Court has no jurisdiction over his claims.”); Arias v. United States, No. 13 CIV. 8542 HBP, 2014 WL 5004409, at *14 (S.D.N.Y. Sept. 29, 2014) (same); Twin Grocery v. Deegan, CIV. No. 16-6151, 2017 WL 2362410, at *4 (E.D. Pa. May 31, 2017) (same).

Michigan Food Market contends none of this matters because this action is, apparently, an appeal rather than a lawsuit, and the requirements of the Federal Rules of Civil Procedure and federal statutes do not apply. This is entirely frivolous. Congress requires Michigan Food Market to initiate the action by “filing a complaint,” 7 U.S.C. § 2023(a)(13), which triggers a civil action under the Federal Rules, Fed. R. Civ. P. 3 (“A civil action is commenced by filing a complaint with the court.”). That surely brings this case within the ambit of the Federal Rules of Civil Procedure; there is only one form of action available under the Federal Rules of Civil Procedure—“the civil action.” Fed. R. Civ. P. 2. This is not an appeal, rather a civil action (or lawsuit) seeking judicial review of an agency's decision (i.e., in the same way judicial review of a non-adjudicative executive policy is not an appeal of that policy). See 7 U.S.C. § 2023(a)(15) (explaining “[t]he suit in the United States district court ․ shall be a trial de novo,” or a proceeding in which the court conducts proceedings anew without deference or consideration to the agency's reasoning); see also Colten v. Kentucky, 407 U.S. 104, 117 (1972) (explaining, in a different context, that a “trial de novo represents a completely fresh determination of guilt or innocence” and “is not an appeal on the record”).

The final issue is whether Michigan Food Market should be allowed to amend its complaint to substitute the United States for the USDA Retailer Operations Division as the Defendant. Leave to amend should be granted if justice so requires. See Fed. R. Civ. P. 15(a)(2). Most notably, justice does not require a district court to grant leave to amend when, as here, the plaintiff does not request it. Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 335 (7th Cir. 2013) (“Nothing in Rule 15, nor in any of our cases, suggests that a district court must give leave to amend a complaint where a party does not request it.”). Nor does justice require granting leave to amend when amendment would be futile. See Zimmerman v. Bornick, 25 F.4th 491, 494 (7th Cir. 2022). Granting leave to amend would be futile here because Congress only waived the United States’ sovereign immunity when a complaint is filed “against the United States ․ within thirty days after the date of delivery or service of the final notice of determination upon it.” 7 U.S.C. § 2023(a)(13). This complaint was filed over 200 days ago, meaning that adding the United States now must be outside the 30-day window considered by Congress’ waiver of sovereign immunity.

Even still, the relation back doctrine might allow a plaintiff to circumvent this time limit so long as the proposed amendment meets the strictures of Federal Rule of Civil Procedure 15(c). See Williams v. U.S. Postal Serv., 873 F.2d 1069, 1071–72 (7th Cir. 1989) (explaining when the plaintiff did not name the only proper defendant within the 30-day window provided for by statute, the district court “could only have had jurisdiction over [the] action if adding the [proper defendant] would relate back to the date of [the] original complaint”). Under Rule 15(c), “[a]n amendment to a pleading relates back to the date of the original pleading when:” the proposed amendment “changes the party or the naming of the party against whom a claim is asserted ․ within the period provided by Rule 4(m) for serving the summons and complaint.” Fed. R. Civ. P. 15(c)(1)(C). A complaint substituting the United States for another party relates back when “during the stated period [in Rule 4(m)], process was delivered or mailed to the United States attorney or the United States attorney's designee, to the Attorney General of the United States, or to the officer or agency.” Fed. R. Civ. P. 15(c)(2).

Federal Rule of Civil Procedure 4(m) requires a plaintiff to serve the defendant “within 90 days after the complaint is filed,” but the court may extend this time “if the plaintiff shows good cause for the failure.” See also UWM Student Assoc. v. Lovell, 888 F.3d 854, 858 n.2 (7th Cir. 2018). As an initial matter, Michigan Food Market has not asked for additional time to effectuate service or attempted to show good cause for failing to serve the Defendant within 90 days. Thus, in order for this court to have jurisdiction over this action, the summons must have been mailed or served within 90 days after the complaint is filed. Michigan Food Market did not comply with this requirement; process was not mailed until 91 days after the filing of the complaint and was served even later.¹ (See Filing No. 12, Summons Issued by Certified Mail; see also Filing No. 22-1, Woods Decl. ¶ 4 (declaring process was served four day after mailing)).

Because the summons were mailed outside the period set by Federal Rule of Civil Procedure 4(m), substituting the United States for the USDA Retailer Operations Division does not relate back to the original complaint, and any amendment would fail to remedy the jurisdictional defect. Williams, 873 F.2d at 1072 (“Failure to remedy the jurisdictional defects of a complaint is one example of where an amendment would prove futile.”). Put differently, because Michigan Food Market has sued the wrong defendant and because the United States cannot be substituted as the defendant due to its immunity from suit outside the now elapsed 30-day period, the court lacks subject-matter jurisdiction over this action. Consequently, Defendant's Motion to Dismiss (Filing No. 22) is GRANTED. This action is DISMISSED without prejudice. Final judgment shall follow by separate order.

IT IS SO ORDERED this 9th day of April 2024.

Distributed Electronically to Registered Counsels of Record.

FOOTNOTES

1.   Michigan Food Market did submit proposed summons within the 90-day period set by Federal Rule of Civil Procedure 4(m), (see Filing No. 7–11), but this is not enough. The Federal Rules are quite specific. Process needs to be “served,” Fed. R. Civ. P. 4(m), or “delivered or mailed,” Fed. R. Civ. P. 15(c)(2), within 90 days, not proposed within 90 days.

RICHARD L. YOUNG, JUDGE United States District Court Southern District of Indiana