USDA DISQUALIFICATION DETERMINATION – APPEAL

The U.S. Department of Agricultural Supplemental Nutrition Assistance Program, or snap, is the primary food assistance program in the United States. Vendors or merchants are able to apply to participate in the program. If accepted, the merchants can sell certain foodstuffs to program participants via the snap EBT payment system.

Notification and Charging Letter

Every year, vendors or merchants in New York, and across the United States, receive notification that they are alleged to have committed snap violations. Such allegations are communicated to vendors or merchants via what is known as a charging letter.

Response to Allegations

Upon receiving a charging letter, a vendor or business is able to take steps to defend against allegations being made. The first step in that process is responding directly to the allegations raised in the charging letter. That response is made directly to the USDA snap program itself. This initially response must be made within 10 days of receipt of the charging letter. Failure to meet that deadline results in the allegations made by the agency to be accepted as true, resulting in further agency action. That agency action can be disqualification of the vendor or merchant from participating further in the snap program.

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Legal Scenario: What Would You Do?

Scenario

You own a small grocery store that has participated in SNAP for over a decade, but you just received a letter from the USDA Food and Nutrition Service stating that your store is being permanently disqualified from the program due to alleged trafficking violations based on unusual transaction patterns. Your store generates nearly 40% of its revenue from SNAP transactions, and losing authorization would be devastating to both your business and the low-income community you serve.

Can I appeal this USDA disqualification determination, and what are my options for staying in the program while the appeal is pending?

Attorney's Answer

Under Section 14 of the Food and Nutrition Act of 2008 (7 U.S.C. § 2023), you have the right to file an administrative review within 10 days of receiving the disqualification notice, and if that is unsuccessful, you can file a judicial appeal in U.S. District Court within 30 days of the final administrative decision. In cases of permanent disqualification for trafficking, the USDA applies a strict standard, but courts have overturned these determinations where the evidence consisted solely of unusual transaction patterns without direct proof of actual trafficking — the store owner can present evidence of legitimate reasons for the flagged transactions. It is also critical to request a civil money penalty in lieu of disqualification under 7 C.F.R. § 278.6, arguing that permanent disqualification would cause hardship to the SNAP population in the area if no other authorized retailers are nearby. An experienced attorney can challenge the statistical models the USDA uses to flag stores and present alternative explanations that demonstrate compliance with program rules.

This is general information only. Contact us for advice specific to your situation.

USDA Disqualification Appeals Process