ORDERS:
ORDER
This
matter is before the Administrative Law Court (“ALC”) in its appellate
jurisdiction pursuant to 7 C.F.R. § 273.16 (2006) and S.C. Code Ann. 1-23-600(D)
(Supp. 2007). Judieth Ann Berry (“Berry”) appeals the decision of the
Department of Social Services (“Department”) to disqualify Berry from the Food
Stamp Program for a period of twelve months.
FACTS
AND PROCEDURAL HISTORY
Berry
has received federal food stamps intermittently over the past few years. In
June of 2006, during Berry’s employment by the Family YMCA in Augusta, Georgia,
Berry completed a food stamp recertification form provided by the Department.
The form asked Berry to indicate whether any individual living in her home was
employed. Berry wrote “N/A,” indicating that that section did not apply to
her. The form also asked whether anyone living in the home had received any
money in the month of the recertification. Berry checked “No” for this
question. Berry was employed by the YMCA from December of 2005 until September
of 2006 on an as-needed basis.
Based
on Berry’s answers on the recertification form and the Department’s discovery
that Berry had been employed on an as-needed basis by the YMCA during this time
period, the Department charged Berry with an Intentional Program Violation (“IPV”)
by letter dated April 25, 2007. In addition, the Department claimed it had
overpaid Berry by $72, and the Department sought repayment of that amount. Berry
appealed that decision, and on July 26, 2007, an administrative hearing was
held before a Department hearing officer.
At
the hearing, Berry testified that she had completed the recertification form
with the answers in question because of various letters she had received from
the Department that indicated
that Berry did
not need to report any income unless it exceeded a specified amount—approximately
$1062. Berry indicated that she had assumed that the letters from the
Department and the recertification form complemented one another, such that the
$1062 minimum contained in the Department letters applied to her
recertification form; because Berry did not earn that amount of money, or more
than that amount, she believed that she did not have to report her income.
Berry
further testified that, during a period of employment from March of 2004
through July of 2005, Berry had previously terminated her food stamps because
she earned more than the specified amount. Berry testified that this previous action
by her to discontinue her food stamps after she began earning more than the specified
amount provided evidence that she would have done the same thing in this
situation if she had made more than the specified amount. Berry testified that
no Department employee clarified the discrepancy in the Department letters and
the recertification form until after she had been charged with an IPV.
In
the Final Administrative Order, the hearing officer found that Berry had
committed an IPV and disqualified Berry from the food stamp program for a
period of twelve months. Berry then appealed to this court. See S.C.
Code Ann. § 1-23-600(D) (granting jurisdiction to ALC over all appeals from
final decisions of contested cases pursuant to the Administrative Procedures
Act with certain exceptions).
STANDARD
OF REVIEW
As
set forth above, this matter is before the ALC in its appellate jurisdiction
pursuant to S.C. Code Ann. § 1-23-600(D). Accordingly, the APA’s standard of
review governs this appeal. See S.C. Code Ann. § 1-23-380(A) (Supp. 2007); see also Byerly Hosp. v. S.C. State Health & Human Servs. Fin.
Comm’n, 319 S.C. 225, 229, 460 S.E.2d 383, 385 (1995). The standard used
by appellate bodies, including the ALC, to review agency decisions is provided
by S.C. Code Ann. §1-23-380(A)(5). See S.C. Code Ann. § 1-23-380(B)
(Supp. 2007) (directing administrative law judges to conduct appellate review
in the same manner prescribed in Section 1-23-380(A)). This section provides:
The court may not
substitute its judgment for the judgment of the agency as to the weight of the
evidence on questions of fact. The court may affirm the decision of the agency
or remand the case for further proceedings. The court may reverse or modify
the decision [of the agency] if substantial rights of the appellant have been
prejudiced because the administrative findings, inferences, conclusions, or
decisions are:
(a) in
violation of constitutional or statutory provisions;
(b) in
excess of the statutory authority of the agency;
(c) made
upon unlawful procedure;
(d) affected
by other error of law;
(e) clearly
erroneous in view of the reliable, probative, and substantial evidence on the
whole record; or
(f) arbitrary or
capricious or characterized by abuse of discretion or clearly unwarranted
exercise of discretion.
S.C. Code Ann. §
1-23-380(A)(5).
A
decision is supported by “substantial evidence” when the record as a whole allows
reasonable minds to reach the same conclusion reached by the agency. Bilton
v. Best Western Royal Motor Lodge, 282 S.C. 634, 321 S.E.2d 63 (Ct. App.
1984). Further, “substantial evidence” means that a decision will not be set
aside simply because reasonable minds may differ on the judgment. Lark v.
Bi-Lo, 276 S.C.130, 276 S.E.2d 304 (1981). The fact that the record, when
considered as a whole, presents the possibility of drawing two inconsistent
conclusions from the evidence does not prevent the agency’s finding from being
supported by substantial evidence. Id.; Waters v. S.C. Land Res.
Conservation Comm’n, 321 S.C. 219, 467 S.E.2d 913 (1996); Grant v. S.C.
Coastal Council, 319 S.C. 348, 461 S.E.2d 388 (1995).
In
applying the substantial evidence rule, the factual findings of the
administrative agency are presumed to be correct. Rodney v. Michelin Tire
Co., 320 S.C. 515, 466 S.E.2d 357 (1996). Furthermore, the reviewing court
is prohibited from substituting its judgment for that of the agency as to the
weight of the evidence on questions of fact. Grant, 3319 S.C. at 53, 461
S.E.2d at 391. Finally, the party challenging an agency action has the burden
of proving convincingly that the agency’s decision is unsupported by
substantial evidence. Waters, 321 S.C. at 226, 467 S.E.2d at 917.
issue on appeal
Is
the Department’s decision that Berry committed an Intentional Program Violation
by not reporting her employment on her recertification form for the Food Stamp
Program supported by substantial evidence?
DISCUSSION
The
Food Stamp Program is “designed to promote the general
welfare and to safeguard the health and well being of the Nation’s population
by raising the levels of nutrition among low-income households.” 7 C.F.R. § 271.1(a). Within each state, the
Food Stamp Program is administered by a specific state agency. 7 C.F.R. §
273.4. In South Carolina, the Department of Social Services (“Department”)
administers the Food Stamp Program. See S.C. Code Ann. § 43-5-10. The
Department must administer the Program according to federal guidelines. See 7 C.F.R. § 271.1.
An Intentional Program Violation of the Food
Stamp Program
shall consist of having intentionally:
(1) made a false or
misleading statement, or misrepresented, concealed or withheld facts; or
(2) committed any act
that constitutes a violation of the Food Stamp Act, the Food Stamp Program
Regulations, or any State statute for the purpose of using, presenting,
transferring, acquiring, receiving, possessing or trafficking of coupons,
authorization cards or reusable documents used as part of an automated benefit
delivery system (access device).
7 C.F.R.
273.16(c).
Here,
the Department claims that Berry’s failure to list her employment on her
reapplication form constitutes an IPV. In contrast, Berry asserts that she had
no intention of making a misleading statement, but believed, based on the
Department’s own letters, that she was not required to report income below the threshold
amount on that form.
Generally,
in an administrative hearing regarding an IPV, the Department has the burden of
proof to show by clear and convincing evidence that the act in question was
intentionally committed. 7 C.F.R. 273.16(e)(6). Clear and convincing evidence has
been defined as a “degree of proof which will produce
in the mind of the trier of facts a firm belief as to the allegations sought to
be established. Such measure of proof is intermediate, more than a mere
preponderance but less than is required for proof beyond a reasonable doubt; it
does not mean clear and unequivocal.” Peeler v. Spartan Radiocasting, Inc.,
324 S.C. 261, 265 n.4, 478 S.E.2d 282, 284 n.4 (1996) (citing Middleton v.
Johnston, 273 S.E.2d 800 (Va. 1981)). See also Direx
Israel, Ltd. v. Breakthrough Med. Corp.,
952 F.2d 802, 810 n.7 (4th Cir. 1992) (stating that clear
and convincing is an “‘intermediate standard,’ which is to be applied in cases where the
interests at stake ‘are deemed to be more substantial than mere loss of money.’
. . . A relevant treatise, for example, defines ‘clear and convincing’ as
meaning ‘highly probable.’”) (citations omitted). The
Record does not contain substantial evidence permitting the Department hearing
officer to reasonably conclude that the Department carried its burden to prove by
clear and convincing evidence that Berry intended to provide false
information. The only evidence before the Department hearing officer was that Berry
did not understand that she had to report her employment because numerous
letters from the Department itself specifically stated that Berry did not have
to report her employment unless her earnings reached a specified amount. Berry
testified to the fact that it was the Department’s own letters that led to her
misunderstanding about what should be included on the form. Cf. Hazelton
v. Comm’r of Dep’t of Human Servs. for Minn., 612 N.W.2d 468 (Minn. Ct.
App. 2000) (holding that a food stamps applicant did not commit an IPV where
the Department’s forms were “unclear and confusing,” and separate notices from
the Department were “less than clear.”); Smith v. Dep’t of Health and Rehab.
Servs., 522 So.2d 956 (Fla. Dist. Ct. App. 1988) (“Mere failure to report
income does not establish by clear and convincing evidence that there was
intent to commit an intentional program violation.”).
Furthermore,
the fact that Berry had followed the Department’s procedure a few years earlier
by reporting income for a previous job tends to show that Berry was willing to
comply with Department policies. In this case, the only reasonable conclusion,
viewing the Record as a whole, is that Berry simply misunderstood what
information was necessary for her reapplication.
Thus,
the court finds that the Department determination that Berry committed an IPV
is not supported by substantial evidence. Accordingly, the Department’s Final
Administrative Order is REVERSED IN PART. It is therefore
ORDERED that the Department’s decision disqualifying Berry from the Food Stamp Program
for twelve months due to an Intentional Program Violation is reversed. It is
further
ORDERED that the Department’s decision requiring Berry to repay the $72 overpayment
to the Department is affirmed.
IT
IS SO ORDERED.
PAIGE
J. GOSSETT
Administrative Law Judge
April 24, 2008
Columbia, South
Carolina
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