## Facts

- William C. Haskell, Jr. owned Haskell Brothers Grocery, a retail store authorized to participate in the federal food stamp program beginning in 1978.
- After concerns about excessive food stamp redemptions, FNS investigated the store in 1980; the store was penalized in 1981 for exchanging food stamps for cash and marijuana.
- FNS made periodic educational visits to the store until January 1986, when it began a second investigation; Haskell’s sister was then a co-owner.
- From October 1986 to January 1987, an investigative aide conducted multiple monitored transactions at the store.
- FNS concluded that owners and employees trafficked in food stamps for cash and marijuana and exchanged food stamps for other ineligible items, charging thirteen regulatory violations.
- The Secretary of Agriculture permanently disqualified the store from the food stamp program, relying in part on written transaction reports prepared by the investigative aide and supervising investigator.
- Haskell sought review in federal district court under 7 U.S.C. § 2023; the court admitted the transaction reports, denied Haskell’s suppression motion, and granted summary judgment for USDA.

## Issues

1. Whether FNS transaction reports documenting controlled investigative transactions were inadmissible hearsay or lacked sufficient reliability for admission.
2. Whether the administrative process violated procedural due process by not providing an evidentiary hearing with live testimony and cross-examination.
3. Whether permanent disqualification was properly affirmed as supported by the evidence and consistent with governing law and regulations.

## Decision

- The court of appeals affirmed the grant of summary judgment for USDA.
- The transaction reports were admissible under hearsay exceptions (including the public-records exception) and were sufficiently reliable to be considered on summary judgment.
- The administrative procedures did not violate due process given notice, an opportunity to respond through agency review, and the statutory right to de novo judicial review in district court.
- Permanent disqualification was authorized for trafficking and supported by evidence of serious, repeated violations; the sanction was not arbitrary, capricious, or contrary to law.

## Legal Principles

- In a retailer’s de novo review action under 7 U.S.C. § 2023, the Federal Rules of Evidence apply, and FNS investigative transaction reports may be admitted under Rule 803(8) (and related exceptions) when circumstances show reliability.
- Reliability of enforcement reports may be supported by contemporaneous documentation, supervision, standardized procedures, and the absence of concrete proof of bias or fabrication.
- Procedural due process does not require a trial-type evidentiary hearing at the agency stage of food stamp disqualification when the retailer receives notice and an opportunity to respond and may obtain de novo judicial review in federal court.
- Courts generally sustain the Secretary’s chosen sanction when authorized by regulation and supported by evidence; the sanction is disturbed only if arbitrary, capricious, or contrary to law.

## Conclusion

The Tenth Circuit upheld USDA’s permanent disqualification of a retailer for food stamp trafficking, ruling that FNS investigative reports were admissible and that the statutory scheme providing de novo judicial review supplied constitutionally sufficient process despite the lack of an administrative evidentiary hearing.


Haskell v. U.S. Dep’t of Agric., 930 F.2d 816 (10th Cir. 1991)