IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Randy & Dayleen, :
Petitioner :
:
v. :
:
Department of Health, : No. 1221 C.D. 2017
Respondent : Argued: April 12, 2018
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: May 10, 2018
Randy & Dayleen (Store) petitions for review of the July 31, 2017 order
of the Department of Health (Department), which affirmed the April 25, 2016
decision of the Department’s Bureau of Women, Infants and Children (WIC)
disqualifying the Store from participation in the WIC program for a period of three
years. We affirm.
On April 25, 2016, the Department mailed the Store a letter informing
it that the Department was disqualifying the Store from participation in the WIC
program for a period of three years because of two or more incidents of overcharges1
1
An overcharge is “[a] charge by a WIC authorized store to the WIC Program through
redemption of a WIC check for an allowable food in excess of the store’s shelf price for that food
or in excess of the price charged a non-WIC participant for that food.” 28 Pa. Code § 1101.2; see
discovered during a compliance investigation.2 Hearing Examiner’s Findings of
Fact (F.F.) No. 81. The Store filed an appeal with the Department, and a hearing
was held on April 19, 2017, at which both the Store and the Department offered
evidence.
The Department presented the testimony of Jannette Mosquera
(Mosquera), an investigator with the Department’s WIC program. F.F. No. 23.
Mosquera explained how she conducts compliance buys. Id. Mosquera testified
that she is given vouchers to purchase food items at a store under an alias.
Reproduced Record (R.R.) at 87a-88a; see F.F. No 26. Mosquera takes notes during
her buy, including recording the prices for each item she purchases. R.R. at 87a, 89a
& 92a. As she is gathering the items for purchase, she records the price as listed on
the shelf or on the item itself, or if those are not available, she asks the cashier. R.R.
at 89a.
Mosquera testified that she conducted compliance buys at the Store on
October 6, 2015 and on December 28, 2015. F.F. Nos. 25 & 41. Mosquera testified
that immediately after each compliance buy, she completed a Pennsylvania
Compliance Buy Report Form For WIC Retail Stores (Compliance Buy Report),
which documented the results of her buys. F.F. Nos. 25 & 41. R.R. at 86a-87a &
also F.F. No. 79. An overcharge includes both intentional and unintentional conduct. Diamond
Mini Mkt. v. Dep’t of Health, 79 A.3d 759, 765 (Pa. Cmwlth. 2013) (citing 7 C.F.R. § 246.3).
2
A compliance investigation is “[a] series of at least two compliance buys conducted at
the same WIC authorized store.” 28 Pa. Code § 1101.2; see also Department’s 7/31/17
Adjudication at 13.
A compliance buy is “[a] covert purchase at a WIC authorized store, with a WIC check,
conducted to enable the Department to evaluate adherence by a WIC authorized store with this
part governing the store’s participation in the WIC Program.” 28 Pa. Code § 1101.2, see also F.F.
No. 77.
2
92a. Reading from the Compliance Buy Reports for each of the buys on October 6,
2015 and December 28, 2015, Mosquera described the items she bought, along with
each item’s size, quantity and price. R.R. at 89a, 92-94a; see F.F. Nos. 27-32, 43-
46. Mosquera testified that she speaks Spanish but could not recall what language
she used with the cashier during her compliance buys on October 6, 2015 and
December 28, 2015. F.F. Nos. 24 & 48.
The Department also offered the testimony of Jay Mast (Mast), who
supervises the Department’s section that reviews compliance buy investigations.
F.F. No. 52. Mast is familiar with the compliance investigation of the Store. Id.
Mast testified regarding the amount of the WIC checks deposited by the Store for
the compliance buys. R.R. at 105a-10a. Mast explained that his staff completes a
Compliance Investigation Purchase Calculation Form based off of the report that the
investigator completes for the compliance buy. Id. at 104a; see R.R. at 108a-09a.
Mast identified the checks as well as the Compliance Investigation Purchase
Calculation Forms relating to the October 6, 2015 and December 28, 2015
compliance buys. R.R. at 104a-05a, 107a-09a.
The Department moved into evidence the Compliance Buy Reports,
Compliance Investigation Purchase Calculation Forms and checks from each of the
compliance buys on October 6, 2015 and December 28, 2015. Department’s 7/31/17
Adjudication (Adjudication) at 2. These documents were admitted into evidence
without objection. See id.; F.F. Nos. 54-55.
The Store’s owner appeared and testified on the Store’s behalf. F.F.
No. 84. The Store also offered rebuttal testimony from a Store employee.
Adjudication at 17. Both testified that the Store’s cashier spoke little to no English.
R.R. at 118a & 121a; see F.F. No. 5. The Store’s owner admitted, however, that the
3
cashier spoke and understood “basic stuff” such as numbers, and that if he were
asked a price, he could answer. F.F. No. 5; R.R. at 118a-19a.
Based on the evidence presented, the hearing examiner made the
following findings with respect to the October 6, 2015 compliance buy. The
aggregate cost of the shelf prices observed for the Food Instrument (FI)3 was $28.56;
however, the total amount annotated on the FI after the Store’s cashier added the
costs of the items was $37.05. F.F. Nos. 35-36; see R.R. at 107a. The aggregate
cost for the shelf prices observed for the Cash-Value Voucher (CVV)4 transaction
was $7.16; however, the CVV redeemed by the Store was in the amount of $7.96.
F.F. Nos. 37-38. The Store overcharged WIC in the amount of $8.49 for the items
purchased with the FI, and $0.80 for the items purchased with the CVV. F.F. Nos.
49-50; see R.R. at 107a.
With respect to the December 28, 2015 compliance buy, the hearing
examiner made the following findings. The aggregate cost of the shelf prices
observed for the FI was $30.65; however, the total amount annotated on the FI was
$37.05. F.F. Nos. 56-57. The aggregate cost for the shelf prices observed for the
CVV transaction was $7.16; however, the CVV redeemed by the Store was in the
3
A Food Instrument is “a voucher, check, electronic benefits transfer card (EBT), coupon
or other document which is used by a participant to obtain supplemental foods.” 7 C.F.R. § 246.2.
Supplemental foods are “those foods containing nutrients determined by nutritional research to be
lacking in the diets of pregnant, breastfeeding and postpartum women, infants, and children, and
foods that promote the health of the population served by the WIC Program as indicated by relevant
nutrition science, public health concerns, and cultural eating patterns, as prescribed by the
Secretary in § 246.10.” Id.
4
A Cash-Value Voucher is “a fixed-dollar amount check, voucher, electronic benefit
transfer (EBT) card or other document which is used by a participant to obtain authorized fruits
and vegetables. Cash-value voucher is also known as cash-value benefit (CVB) in an EBT
environment.” 7 C.F.R. § 246.2.
4
amount of $7.96.5 F.F. Nos. 58-59. Consequently, the hearing examiner found that
the Store overcharged WIC the amount of $6.40 for the items purchased with the FI
and $0.846 for the items purchased with the CVV. F.F. Nos. 60-61.
The hearing examiner concluded that the evidence supported the
Department’s determination that the Store overcharged the WIC program during two
separate compliance buys conducted on October 6, 2015 and December 28, 2015.
Conclusions of Law (C.L.) No. 3. The hearing examiner further concluded that the
Department’s determination to disqualify the Store from participation in the WIC
program for three years is consistent with State and Federal regulations and
supported by the evidence. C.L. No. 4. Accordingly, on July 31, 2017, the hearing
examiner issued an order affirming the Department’s April 25, 2016 decision to
disqualify the Store from participation in the WIC program for a period of three
years. Department’s 7/31/17 Order.
The Store now petitions for review of the Department’s July 31, 2017,
adjudication and order, raising the following two issues for our review:7 (1) whether
the Department met its burden of proof in establishing the Store’s violations of the
WIC program; and (2) whether the Department abused its discretion by disqualifying
the Store from participation in the WIC program for a period of three years.
5
The hearing examiner’s Finding of Fact contains a typographical error in that the CVV
was redeemed for $8.00, not $7.96. See R.R. at 110a. This typographical error does not affect our
analysis or the result, as the CVV was still redeemed for more than the observed shelf prices.
6
See n.5, supra. Thus, the overcharged amount of $0.84 for the CVV is correct, even
though the math is not accurate using the figures set forth in the Findings of Fact.
7
Our review is limited to determining whether an error of law was committed, whether
constitutional rights were violated or whether necessary findings of fact are supported by
substantial evidence. 2 Pa. C.S. § 704; Woods Servs., Inc. v. Dep’t of Pub. Welfare, 803 A.2d 260,
263 (Pa. Cmwlth. 2002), aff'd, 839 A.2d 184 (Pa. 2003).
5
The Store argues that the Department failed to establish the Store’s
violations of the WIC program, because the hearing examiner abused its discretion
in crediting Mosquera’s testimony. The Store argues that because Mosquera’s
testimony did not take place until April 19, 2017, her independent recollection of the
details was not reliable and she could only reiterate what was recorded in her
previously recorded Compliance Buy Reports. Store’s Brief at 10. The Store also
argues that the situation is unfair because its cashier did not speak English.
The Store’s argument is without merit, as it is nothing more than an
attempt to argue the Store’s preferred version of the facts. The hearing examiner
expressly rejected the Store’s contention that the Department’s witnesses lacked
credibility due to their purported inability to credibly recall the events of the
compliance buys. Adjudication at 17. Additionally, the hearing examiner ruled that
the Store’s attack on the validity of the compliance buys based upon its cashier’s
inability to speak English was not supported by the evidence. Id.; see F.F. No. 5.
The hearing examiner noted that Mosquera spoke Spanish and that the record
showed that the cashier spoke limited English and was able to understand the basics
of English, including numbers and prices.8 Id.; see F.F. Nos. 5 & 24; R.R. at 118a-
19a.
8
The hearing examiner noted that the Store’s owner was not present at the Store during
any of the compliance buys and, therefore, had no personal knowledge. Adjudication at 17; F.F.
No. 2. The store employee who testified also was not present when the cashier interacted with the
investigators during the compliance buys. F.F. No. 8.
The Store’s owner completed its annual mandatory training prior to August 25, 2015 and
then trained the Store’s cashier in Spanish. F.F. Nos. 66 & 71.
A WIC authorized store is required to attend corrective training after two compliance buys
detect violations of a statute or regulation governing the store’s participation in the WIC program.
F.F. No. 72; see 28 Pa. Code § 1105.6(b)(4). The Department had also detected a violation after
a compliance buy on August 25, 2015. See F.F. Nos. 14 & 22. Thus, the Store was required to
6
The hearing examiner is the arbiter of credibility. Colon v. Dep’t of
Pub. Welfare, 537 A.2d 936, 940 (Pa. Cmwlth. 1988). Such determinations are
binding on appeal unless made arbitrarily and capriciously.9 Casne v. Workers’
Comp. Appeal Bd., (Stat Couriers, Inc.), 962 A.2d 14, 19 (Pa. Cmwlth. 2008). Here,
the factfinder did not observe the testimony that is the basis of the evidence.10
Because the factfinder was not present during the testimony, there is a need for an
articulated, reasoned basis for credibility determinations. McElwee v. Se.
Pennsylvania Transp. Auth., 948 A.2d 762, 774 n.10 (Pa. 2008).
In his thorough and well-written adjudication, the hearing examiner
explained that Mosquera recorded the events of the compliance buys either
contemporaneously with the buys or soon thereafter and that the Compliance Buy
Reports thoroughly memorialized the events of each transaction. See Adjudication
at 16-18; F.F. No. 25. The hearing examiner further found that the information
contained in the Department’s documents, along with the Department’s hearing
testimony, provided credible evidence of the Store’s overcharging of WIC.
attend mandatory corrective training and did so on or about November 13, 2015. F.F. No. 73.
After store personnel have attended mandatory corrective training, the Department continues its
compliance investigation. 28 Pa. Code § 1105.6(b)(5).
9
“A capricious disregard of evidence exists ‘when there is a willful and deliberate disregard
of competent testimony and relevant evidence which one of ordinary intelligence could not
possibly have avoided in reaching a result.’” Casne v. Workers’ Comp. Appeal Bd. (Stat Couriers,
Inc.), 962 A.2d 14, 19 n.5 (Pa. Cmwlth. 2008) (quoting Station Square Gaming L.P. v. Pa. Gaming
Control Bd., 927 A.2d 232, 237 (Pa. 2007)). “The meaning of arbitrary includes ‘founded on
prejudice or preference rather than on reason or fact.’” Casne, 962 A.2d at 19 n.5 (quoting
BLACK'S LAW DICTIONARY 112 (8th ed. 2004)).
10
The hearing examiner who presided over the hearing subsequently left the Department,
so the matter was reassigned to another hearing examiner who issued the July 31, 2017
adjudication and order that is before the Court.
7
Adjudication at 18. The hearing examiner provided a reasoned basis for his
credibility determinations; thus, those determinations are not arbitrary or capricious.
Additionally, our review of the record reveals that the findings of fact
are supported by substantial evidence. Therefore, the findings are conclusive and
binding on this Court. Woods Servs., Inc. v. Dep’t of Pub. Welfare, 803 A.2d 260,
263 (Pa. Cmwlth. 2002), aff’d, 839 A.2d 184 (Pa. 2003). The findings support the
hearing examiner’s conclusion that the Department sustained its burden to prove that
the Store overcharged the WIC program during two separate compliance buys
conducted at the Store on October 6, 2015 and December 28, 2015.
Next, the Store raises the issue of whether the Department abused its
discretion by disqualifying the Store from participation in the WIC program for a
period of three years. The Store argues that its violations were de minimis and a
three-year suspension is unfair.
The Department, however, has no discretion regarding the length of the
disqualification to be imposed. See Diamond Mini Mkt. v. Dep’t of Health, 79 A.3d
759, 761 (Pa. Cmwlth. 2013) (disqualifying a store for three overcharges totaling
0.51 cents despite it being a “nominal” amount). The Department’s regulations
provide, in pertinent part, that “The Department will disqualify a WIC authorized
store for 3 years for any of the following violations: . . . [t]wo or more incidences
of overcharges.” 28 Pa. Code § 1107.1a(c)(3) (emphasis added). In Diamond Mini
Market, we addressed the issue of discretion, stating:
the federal scheme mandates a three-year period of
disqualification once the requisite number of overcharge
violations has been detected. See 7 C.F.R. § 246.12(l)
(1)(iii)(C) (providing that State agency must disqualify a
vendor for three years for a pattern of overcharges)
(emphasis added). Although the Department’s regulation
8
is not expressed in such absolute language, it does not
allow for a lesser sanction. See 28 Pa. Code §
1107.1a(c)(3) (providing that the Department will
disqualify a store for three years for two or more
incidences of overcharges) (emphasis added).
Id. at 765. We further noted that neither federal nor state regulations direct that the
circumstances surrounding an overcharge, such as intent to overcharge or amount
involved, shall be considered in determining the sanction. Id. at 766. Thus, where,
as here, the Department determines that a store engaged in “two or more incidences”
of overcharges, the Department’s regulations require the Department to disqualify a
store from the WIC program for a period of three years.11 See 28 Pa. Code §
1107.1a(c)(3); see also Diamond Mini Mkt., 79 A.3d at 765. Consequently, the
Department did not abuse its discretion.
Accordingly, for the foregoing reasons, we affirm.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
11
Additionally, as the hearing officer noted, the Store cannot evade responsibility by
attributing the overcharges to the cashier involved in the October 6, 2015, and December 28, 2015
transactions. See 7 C.F.R. § 246.12(h)(3)(xiv) (stating that the vendor (the entity operating the
store) is “accountable for owners, officers, managers, agents and employees who commit vendor
violations”); 28 Pa. Code § 1101.2 (defining a “store violation” as the “[i]ntentional or
unintentional action by the owners, officers, managers, agents or employees of a WIC authorized
store that violates the requirements in this part governing the store's participation in the WIC
Program . . . .”).
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Randy & Dayleen, :
Petitioner :
:
v. :
:
Department of Health, : No. 1221 C.D. 2017
Respondent :
ORDER
AND NOW, this 10th day of May, 2018, the July 31, 2017 order of the
Department of Health is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge