This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






In the Matter of Las Americas (340 East Lake Street)
WIC Vendor No. 7395,
Las Americas (1311 East Franklin)
WIC Vender Nos. 0304 and 0081,
Las Americas (2750 Nicollet Avenue South)
WIC Vendor No. 7780.


Filed August 5, 2003


Wright, Judge


Health Department

File Nos. 4-0900-14646-2


Jordan S. Kushner, 636 Sexton Building, 529 South Seventh Street, Minneapolis, MN  55415 (for relator Las Americas, Inc.)


Mike Hatch, Attorney General, Stuart T. Alger, Assistant Attorney General, 525 Park Street, Suite 500, St. Paul, MN  55103 (for respondent Commissioner, Minnesota Department of Health)


            Considered and decided by Peterson, Presiding Judge, Willis, Judge, and Wright, Judge.

U N P U B L I S H E D  O P I N I O N




Relator Las Americas, Inc. challenges the Commissioner of the Minnesota Department of Health’s three-year disqualification from the Women, Infants, and Children program, arguing that notice of prior violations was untimely and inadequate and that procedures used by the department’s investigators were inherently unreliable.  We affirm. 



The Special Supplemental Nutritional Program for Women, Infants, and Children (WIC) provides its participants with nutritional supplements and other health-care services.  The program is funded by the United States Department of Agriculture and administered locally by the Minnesota Department of Health (MDH).

            Las Americas, Inc. executed Retail Food Vendor Agreements to obtain WIC vendor status.  The agreements comprehensively outlined the program’s operational requirements and disqualification provisions.  As approved vendors, Las Americas’s grocery stores were authorized to accept WIC vouchers.  WIC vouchers list specific food items that eligible participants can purchase.  WIC vouchers also provide spaces for the participant’s signature, the vendor’s WIC stamp, and the vendor’s “usual and customary” charge for WIC food items. 

The Code of Federal Regulations requires periodic monitoring of WIC vendors.  7 CFR § 246.12(j) (2001).  State agencies are given broad authority to design and implement a monitoring system.  In Minnesota, MDH hires independent contractors to conduct undercover “compliance buys” with WIC vouchers.  From 1999 through 2001, MDH investigated Las Americas’s Minneapolis grocery stores located on Franklin Avenue, Nicollet Avenue, and Lake Street.  The investigations uncovered numerous WIC program violations at each store.  Las Americas received letters outlining each store’s violations and warning that future violations may result in disqualification from the WIC program.  The MDH conducted a second round of investigations in August 2001 and again uncovered WIC violations at each of the stores.  Based on a pattern of overcharging, all three stores were disqualified for three years from the WIC program. 

Las Americas appealed the disqualifications.  At three separate administrative hearings, Las Americas argued that the investigative procedures used in the compliance purchases were flawed, that its cashiers followed the proper procedures, and that notice of earlier violations was not timely provided.  In each case, however, the administrative law judge (ALJ) concluded that MDH followed sufficiently reliable procedures, the timing of the warning notice did not prejudice Las Americas, and MDH had demonstrated by a preponderance of the evidence that Las Americas had engaged in disqualifying conduct.  In each case, the commissioner accepted the ALJ’s findings and upheld the disqualifications.

In this consolidated appeal, Las Americas now challenges the commissioner’s disqualifications. 

 D E C I S I O N


Our review of contested administrative cases is governed by Minn. Stat. § 14.69 (2002).  Under the statute, we may reverse or modify an agency’s decision only if “substantial rights” of the parties have been prejudiced because of the agency’s decision and the decision violates constitutional provisions, exceeds statutory authority or the agency’s jurisdiction, is made using unlawful procedures, is affected by error of law, is unsupported by substantial evidence, or is arbitrary or capricious.  Id.  An agency’s decision carries a presumption of correctness, and we generally defer to an agency’s expertise and its “special knowledge in the field of [its] technical training, education and experience.”  Reserve Mining Co. v. Herbst, 256 N.W.2d 808, 824 (Minn. 1977).



Las Americas contends that MDH provided inadequate and untimely notice of the WIC program violations.  While Las Americas admits receiving letters outlining violations occurring in 1999 and 2000, it contends that notice was provided so long after the violations occurred that it was unable to determine which employees were involved in the transactions and how the errors occurred.  To support its argument, Las Americas cites Minn. R. 4617.0084, subp. 1 (2000), which provides:  “If a violation * * * does not result in disqualification or a civil money penalty, the commissioner shall mail or deliver to the vendor a notice of violation.”  Contrary to Las Americas’s argument, the notice provision does not outline a timetable for providing notice.  Rather, the provision states that the commissioner shall provide notice if the violation does not result in disqualification or civil penalty.  Id.  It is undisputed that Las Americas received notice of violations occurring over a two-year period.  The commissioner’s ruling also established that Las Americas’s violations in 1999 and 2000 were not the basis for disqualification.  We, therefore, conclude that the commissioner correctly determined that the timing of the warning notice did not prejudice Las Americas.

Las Americas also contends that the notice was legally inadequate.  Each letter contained the specific dates and outlined the nature of each violation.  The letters also stated that future infractions could lead to disqualification.  Yet, Las Americas maintains that the notice was inadequate because the violation dates for the Nicollet Avenue and Lake Street stores do not correspond with the violation descriptions.  The letters, however, advised Las Americas of the name and contact information of the MDH employee that could provide assistance if Las Americas had questions about the violations or if Las Americas required assistance in training its cashiers.  Moreover, the letters provided ample information to permit Las Americas to implement training to prevent future infractions.  The Las Americas stores had approximately one year to correct their errors by implementing procedures to ensure future compliance with the WIC program rules. The evidence supports the commissioner’s determination that Las Americas received adequate notice of prior violations.  


Las Americas next contends that the commissioner’s decision was based on inherently unreliable evidence because the investigations were procedurally deficient.  The record establishes that the WIC investigators carefully followed MDH’s procedures while investigating the Las Americas stores.  An undercover agent and lead investigator arrived at the store.  Prior to entering, the undercover agent turned over any cash, vouchers, or food stamps that might be in his or her possession.  The lead investigator gave the agent a fictitious WIC identification card and a WIC voucher and recorded the time when the agent entered the store.  In the store, the agent collected food items specified on the voucher.  The agent also collected food items not covered under the WIC program or omitted food items described on the voucher.  The agent presented the voucher, waited for the clerk to record the price, and signed the voucher without producing a WIC identification card for signature comparison unless requested.  Upon leaving the store, the agent proceeded directly to the lead investigator with the bag of groceries.  The lead investigator recorded the time and prepared a written inventory.  Finally, the investigator labeled and photographed the food items. 

            The commissioner did not err in determining that these procedures, which have been in place for more than a decade, are an adequate means to gather reliable evidence as to whether the vendor is complying with the WIC program requirements.  These requirements include (1) ensuring that the purchaser is a WIC program participant, (2) charging the WIC program only for WIC-allowed food actually received by the WIC program participant, and (3) charging the WIC program no more than the vendor’s current shelf price for the item.  Based on the evidence derived from these investigative procedures, the commissioner determined that MDH met its burden of proving by a preponderance of the evidence that Las Americas committed two or more violations in a two-year period, justifying the three-year disqualification.  

The commissioner’s determination is supported by substantial evidence.  At the Franklin Avenue store, MDH investigators purchased two unapproved WIC food items.  The vendor crossed out the actual price, entered a higher price on a WIC voucher, and engaged in a pattern of overcharging.  The Nicollet Avenue store charged the investigator for food items not purchased and altered the price on the voucher after the investigator signed it.  The Lake Street store permitted two investigators to purchase unapproved WIC items and overcharged each investigator.

Las Americas contends that, because its witnesses disputed the violations, MDH’s investigations and the resulting evidence are inadequate.  But “[a]ssessments of witness credibility are peculiarly within the province of the factfinder[,]” which we will not disturb on appeal.  In re Friedenson, 574 N.W.2d 463, 466-67 (Minn. App. 1998) (citations omitted), review denied (Minn. Apr. 30, 1998).  Thus, Las Americas’s credibility challenge fails to overcome the commissioner’s determination that the violations were investigated using lawful procedures and are supported by substantial evidence.[1]  Accordingly, on this record, we conclude that the commissioner correctly determined that MDH’s investigative procedures are sufficiently reliable and that substantial evidence supports the WIC program disqualification.


[1]  Las Americas also argues that the MDH’s hiring of unlicensed, independent contractors violates Minnesota law.  Because this argument was not raised at the administrative hearings, we decline to address it on appeal.  In re S. Wash. County Sch. Dist. 833, 620 N.W.2d 45, 48 n.3 (Minn. App. 2000).