Michigan Express, Inc.; Mahmoud Abdallah; Nabil Ajami v. United States of America

*The Honorable Glen M. Williams, Senior United States District
Judge for the Western District of Virginia, sitting by designation.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2004 FED App. 0198P (6th Cir.)
File Name: 04a0198p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
MICHIGAN EXPRESS, INC.;
MAHMOUD ABDALLAH;
NABIL AJAMI,
Plaintiffs-Appellants,
v.
UNITED STATES OF AMERICA,
Defendant-Appellee.
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No. 03-1595
Appeal from the United States District Court
for the Eastern District of Michigan at Detroit.
No. 02-71772—George E. Woods, District Judge.
Argued: June 10, 2004
Decided and Filed: June 29, 2004
Before: MARTIN and SUTTON, Circuit Judges;
WILLIAMS, Senior District Judge.*
2 Mich. Express Inc., et al.
v. United States
No. 03-1595
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COUNSEL
ARGUED: Lawrence W. Rattner, RATTNER MEDINA
PROFESSIONAL CORPORATION, Detroit, Michigan, for
Appellants. Peter A. Caplan, ASSISTANT UNITED
STATES ATTORNEY, Detroit, Michigan, for Appellee.
ON BRIEF: Lawrence W. Rattner, RATTNER MEDINA
PROFESSIONAL CORPORATION, Detroit, Michigan, for
Appellants. Peter A. Caplan, ASSISTANT UNITED
STATES ATTORNEY, Detroit, Michigan, for Appellee.
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OPINION
_________________
BOYCE F. MARTIN, JR., Circuit Judge. Michigan
Express Inc., Mahmoud Abdallah, and Nabil Ajami appeal
from the district court's grant of summary judgment for the
United States. The district court held that the fining of Mr.
Abdallah and Mr. Ajami by the Food and Nutrition Services,
a division of the Department of Agriculture, was proper. We
AFFIRM.
I.
Mr. Abdallah and Mr. Ajami owned shares in Michigan
Express, Inc., a retail grocery store located in Detroit,
Michigan. The Department of Agriculture authorized
Michigan Express to accept food stamps.
Between May 3, 2000, and September 8, 2000, the
Department of Agriculture's Food and Nutrition Service
conducted an undercover investigation of Michigan Express
to ensure it was complying with food-stamp laws and
regulations. On four occasions, Michigan Express personnel

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No. 03-1595 Mich. Express Inc., et al.
v. United States
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1The Food and Nutrition Service imposed the fine pursuant to
7 C.F.R . § 278 .6(f)(2), which read s:
In the event any retail food store or wholesale food concern which
has been disqualified is sold or the ownership thereof is otherwise
transferred to a purchaser or transferee, the person or other legal
entity who sells or otherwise transfers o wnership of the retail food
store or wholesale food concern shall be subjected to and liable for
a civil money penalty in an amount to reflect that portion of the
disqualification period that has not expired, to be calculated using the
method found at § 278.6(g). If the retail food store or wholesale food
accepted food stamps in payment for ineligible, non-food
items. On three occasions, Michigan Express personnel
accepted cash in exchange for food stamps.
On November 13, 2000, the Food and Nutrition Service
informed Mr. Abdallah that Michigan Express was
disqualified from participating in the food-stamp program, the
disqualification of the business did not preclude further action
being taken by the Department of Agriculture or any other
federal agency, and he and Mr. Ajami faced civil penalty if
Michigan Express was sold or otherwise transferred. An
Assistant United States Attorney sent Mr. Abdallah and Mr.
Ajami a letter, dated April 24, 2001, which, in pertinent part,
reads:
I am writing to inform you that, upon further review and
consideration, this office has determined that it will not
pursue a False Claims Act action or other federal action
against you for alleged food stamp trafficking at
Michigan Express, Inc.
On September 7, 2001, Mr. Abdallah and Mr. Ajami,
relying on the letter, sold Michigan Express. After learning
of the sale, the Food and Nutrition Service informed Mr.
Abdallah and Mr. Ajami that they would be required to pay
a $23,918 fine for selling the store after it had been
disqualified from the food-stamp program.1 Michigan
4 Mich. Express Inc., et al.
v. United States
No. 03-1595
concern has been permanently disqualified, the civil money penalty
shall be double the penalty for a ten year disqualification period. The
disqualification shall continue in effect at the disqualified location for
the person or other legal entity who tra nsfers ownership of the retail
food store or wholesale food conce rn notwithstanding the imposition
of a civil money penalty under this paragraph.
Express, Mr. Abdallah, and Mr. Ajami requested an
administrative review, arguing that the letter from the
Assistant United States Attorney estopped the government
from pursuing other penalties against them. The Department
of Agriculture's Administrative Review Board sustained the
fine. Michigan Express, Mr. Abdallah and Mr. Ajami then
filed suit in the United States District Court for the Eastern
District of Michigan seeking an order rescinding the fine. On
cross-summary-judgment motions, the district court affirmed
the decision of the Review Board. This appeal followed.
II.
We review de novo a district court's order granting
summary judgment, Markva v. Haveman, 317 F.3d 547, 552
(6th Cir. 2003), and in our review, we view the evidence in
the light most favorable to the non-moving party. Williams
v. Int'l Paper Co., 227 F.3d 706, 710 (6th Cir. 2000). We will
affirm if a party fails to make a showing sufficient to establish
the existence of an essential element on which it would bear
the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317,
322 (1986). If a party claims the government is estopped
from making an argument, summary judgment is appropriate
in favor of the government if there is an insufficient showing
for any of the estoppel elements. Kennedy v. United States,
965 F.2d 413, 417 (7th Cir. 1992).

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No. 03-1595 Mich. Express Inc., et al.
v. United States
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III.
Although separated into two parts in their brief, Michigan
Express, Mr. Abdallah, and Mr. Ajami make one basic
argument. They contend that the government, by the
language of the Assistant United States Attorney's letter, was
estopped from fining or pursuing any punitive action against
them in regards to their sale of the business. They do not
argue that the fine was illegally imposed; they argue only that
the government should have been estopped from pursuing it.
A.
"Estoppel is an equitable doctrine which a court may
invoke to avoid injustice in particular cases." Fisher v.
Peters, 249 F.3d 433, 444 (6th Cir. 2001). "[T]he traditional
elements of equitable estoppel are: (1) misrepresentation by
the party against whom estoppel is asserted; (2) reasonable
reliance on the misrepresentation by the party asserting
estoppel; and (3) detriment to the party asserting estoppel."
LaBonte v. United States, 233 F.3d 1049, 1053 (7th Cir.
2000). The government, however, "may not be estopped on
the same terms as any other litigant." Heckler v. Cmty.
Health Servs. of Crawford Cty., Inc., 467 U.S. 51, 60 (1984).
Instead, "[a] party attempting to estop the government bears
a very heavy burden" in sustaining its argument. Fisher, 249
F.3d at 444. At a minimum, the party must demonstrate some
"affirmative misconduct" by the government in addition to the
other estoppel elements. Ibid.
Our Court has never announced the definition of
"affirmative misconduct." Although we have cases applying
the rule, see, e.g., In re Gardner, 360 F.3d 551, 559 (6th Cir.
2004), we have not set the bounds of the concept. A review
of our sister circuits, however, reflects a general consensus on
the definition.
6 Mich. Express Inc., et al.
v. United States
No. 03-1595
The Ninth Circuit defines "affirmative misconduct" as a
deliberate lie or a pattern of false promises. Socop-Gonzalez
v. I.N.S., 272 F.3d 1176, 1184 (9th Cir. 2001) (en banc). In
an earlier case it gave a more developed definition, explaining
that "[n]either the failure to inform an individual of his or her
legal rights nor the negligent provision of misinformation
constitute affirmative misconduct." Sulit v. Schiltgen, 213
F.3d 449, 454 (9th Cir. 2000). The Seventh Circuit defines
"affirmative misconduct" as "more than mere negligence . . . .
It requires an affirmative act to misrepresent or mislead."
LaBonte, 233 F.3d at 1053. The Fifth Circuit, in almost
identical language, defines "affirmative misconduct" as
"something more than merely negligent conduct." United
States v. Marine Shale Processors, 81 F.3d 1329, 1350 n. 12
(5th Cir. 1996). Instead, "the [government] official must
intentionally or recklessly mislead the estoppel claimant." Id.
at 1350. Lastly, the Fourth Circuit defines "affirmative
misconduct" as lying rather than misleading and as malicious,
not negligent, conduct. Keener v. E. Associated Coal Corp.,
954 F.2d 209, 214 n.6 (4th Cir. 1992).
Finding the common approach of sister circuits prudential,
we hold that "affirmative misconduct" is more than mere
negligence. It is an act by the government that either
intentionally or recklessly misleads the claimant. The party
asserting estoppel against the government bears the burden of
proving an intentional act by an agent of the government and
the agent's requisite intent.
B.
The government's conduct in this case does not rise to the
requisite level of malfeasance to qualify as "affirmative
misconduct." It is true that the government could have
worded the letter better, explaining in clearer terms that its
waiver of claims was limited to punishing past conduct and
expressly retaining the right to pursue punishment if

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No. 03-1595 Mich. Express Inc., et al.
v. United States
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Michigan Express were sold. But, the failure to explain is at
best a negligent error, not a reckless one.
The government was not attempting to trick Mr. Abdallah
or Mr. Ajami. Instead, the government was attempting, in
good-faith, to advise Mr. Abdallah and Mr. Ajami as to its
intended course of action based on the facts that it knew. Mr.
Abdallah or Mr. Ajami seem to admit as much in describing
the Assistant United States Attorney as "culpably negligent."
They admit that they do not believe that the attorney's loose
language was deceptively drafted with malicious intent, and
that admission defeats their argument.
As the Supreme Court has pointed out, punishing the good-
faith and conscientious efforts of the government by an easy
rule of estoppel "might create not more reliable advice, but
less advice. . .." Office of Personnel Mgmt. v. Richmond, 496
U.S. 414, 433 (1990). We wish to avoid that consequence.
We AFFIRM the judgment of the district court.

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