In a decision of importance to convenience stores, grocers, and other retailers, a California District Court judge held that the 30-day period for seeking judicial review of an adverse decision by USDA’s Food and Nutrition Service (FNS) in SNAP retailer licensing proceedings is not jurisdictional. While the issue of whether Congress intended for limitations periods in federal statutes to be jurisdictional is an arcane one that may be exciting only to geekiest of litigators, the Northern District of California’s Order in Joseph v. United States is one of importance to those retailers who face the loss of their store’s license to accept SNAP benefits.
Formerly known as the Food Stamp Program, SNAP is the nation’s largest nutrition assistance program. While the number of SNAP beneficiaries is not known (because FNS has not published data in nearly a year), as many as 50 million Americans currently receive SNAP benefits. SNAP beneficiaries redeem SNAP benefits are more than 240,000 retailers authorized to participate in SNAP. Each year, several thousand SNAP retailers face administrative proceedings brought by FNS. These charges range from relatively minor (e.g. relating to the sale of ineligible items like paper towels and plastic cutlery) to the most serious – trafficking in SNAP benefits; retailers found to have engaged in trafficking are permanently disqualification from the food stamp program.
After the completion of administrative proceedings, which frequently results in a term or permanent disqualification, retailers may seek judicial review in federal court. SNAP administrative proceedings have been designed and implemented by FNS in a manner that results in the disqualification of nearly all convenience stores and small grocers charged with trafficking and other program violations. As a result, these small retailers often needed to seek judicial review in federal court; during those proceedings, discovery (including depositions of FNS officials) is routinely permitted. However, judicial review must typically be sought within 30 days pursuant to 7 U.S.C. § 2023(a)(13).
In Joseph, after FNS disqualified the store for trafficking, a judicial review complaint was not filed for 66 days. Not surprising, the U.S. Department of Justice (DOJ) sought to dismiss the case on the ground that the store waited too long to file suit, arguing that Congress only waived the government’s immunity for thirty days and not a moment longer. The District Court rejected DOJ’s arguments and denied its motion, holding that Congress did not intend for the 30-day statutory deadline to be a jurisdictional one. Stated differently, the Court held that the Food and Nutrition Act’s statutory deadline was not one that deprived a court of jurisdiction to entertain a judicial review lawsuit filed after the 30-day period. In his Order, District Court Judge James Donato noted that the 30-day limitations period was “not particularly long” and the was no indication that Congress clearly manifested an intent to preclude tolling of the limitations period in appropriate circumstances.
The District Court held that room for flexibility in appropriate circumstances exists. Here, the circumstances surrounding the COVID-19 pandemic excused the store’s failure to meet the 30-day deadline because the record indicated that the store exercised reasonable diligence in attempting to hire an attorney and the delay was of minimal duration.
This decision is a welcome development for SNAP retailers. FNS’s regulations impose unduly short deadlines – only 10 days – for responding to charge letters and seeking administrative review. No legitimate basis exists for such an unduly short administrative limitations period other than FNS’s overzealous goals to remove as many mom-and-pop retailers from the SNAP program as quickly as possible. FNS’s efforts have continued unabated during the COVID-19 pandemic, resulting in the closure of numerous stores, the loss of hundreds of jobs, and the expansion of food deserts in impoverished areas largely populated by minorities. Without doubt, FNS’s administrative review process has a disparate (discriminatory) impact on hundreds of SNAP retailers owned by immigrants from the Indian subcontinent and the Middle East. Hopefully, the incoming Biden administration and new leadership at USDA will embark on a comprehensive reform of FNS’s SNAP retailer administrative process. Reform is long overdue in a program that frequently results in the disqualification of retailers who did nothing wrong other than getting caught in FNS’s overbroad trafficking net.