Judge Blocks USDA SNAP Penalty Countdown: Unlawful 120-Day Rule

• Federal Judge Mustafa Kasubhai blocked the USDA's 120-day countdown for states to implement new SNAP rules, finding it unlawfully started before guidance was issued.
• The ruling sided with 22 states and the District of Columbia, stating the USDA's timeline violated the Administrative Procedure Act.
• The court clarified that the 120-day exclusionary period for state penalties begins from the required implementation date, not the law's effective date.
• Judge Kasubhai also ruled that USDA guidance unlawfully excluded humanitarian immigrant groups, such as refugees and asylum grantees, from SNAP eligibility and a five-year waiting period exemption.
• States faced significant financial penalties, with North Carolina alone potentially facing $420 million annually, which could force the termination of its SNAP program.

The court found that the USDA's regulations specifically link the 120-day exclusionary period to the required implementation date for changes, not merely the law's effective date.

A federal judge has issued a significant ruling that effectively blocks the USDA's 120-day SNAP penalty countdown, finding that the agency unlawfully initiated the compliance period for new food assistance rules before providing states with necessary guidance. U.S. District Judge Mustafa Kasubhai, presiding in the District of Oregon, sided with 22 states and the District of Columbia in a lawsuit challenging the Trump administration's implementation of changes to the Supplemental Nutrition Assistance Program (SNAP).

The core of the dispute revolved around the timeline for states to adapt to new regulations introduced by the “One Big Beautiful Bill Act,” passed on July 4, 2025. This legislation narrowed eligibility for noncitizens seeking food assistance and established financial penalties for states that exceeded specific error rates in determining benefit allocations. Federal rules typically grant states a 120-day window to implement such changes before penalties accrue. However, the Department of Agriculture asserted that this 120-day clock began on the law's effective date, July 4, 2025.

This interpretation was not communicated until late August, and crucial guidance on the new noncitizen rules was only released on October 31, 2025 – just one day before the USDA's self-imposed 120-day period was set to expire. States found themselves in an untenable position, expected to comply with complex new requirements without adequate instruction, facing potential financial repercussions for delays.

Judge Kasubhai, a Biden appointee, declared the USDA's interpretation of the 120-day exclusionary period unlawful. The court found that the USDA's regulations specifically link the 120-day exclusionary period to the required implementation date for changes, not merely the law's effective date. The court noted that the USDA had historically managed these deadlines differently for years, yet abruptly altered its approach without offering any justification.

In his ruling, Judge Kasubhai criticized the USDA for creating an "impossible situation" for states to timely implement the changes mandated by H.R. 1, citing "contradictory, absent, and misleading messaging." He explicitly found that the USDA's exclusionary period violated the Administrative Procedure Act (APA), underscoring the agency's failure to adhere to proper administrative processes. States like Oregon and Massachusetts reported being instructed by the USDA to await federal guidance before making changes, only to then face the prospect of penalties for that very delay.

Beyond the timeline dispute, the Mustafa Kasubhai ruling also addressed a separate, critical aspect of the USDA's guidance concerning noncitizen SNAP eligibility. The court found that the USDA's official charts detailing who qualifies for benefits unlawfully omitted several humanitarian immigrant groups. Specifically, refugees, individuals granted asylum, and certain Afghan and Ukrainian parolees were left off lists of those eligible for SNAP as lawful permanent residents (LPRs) and those exempt from the standard five-year waiting period for benefits.

Judge Kasubhai unequivocally stated that these Humanitarian Immigrant Groups should be recognized as both eligible for SNAP upon becoming LPRs and exempt from the five-year waiting period. He rejected the government's argument that its charts were merely a quick, incomplete reference, emphasizing that the Non-Citizen Guidance communicated an incorrect status for these vulnerable populations. This aspect of the ruling provides crucial clarity for state agencies and ensures proper access to vital food assistance for these groups.

The financial implications of the USDA's initial stance were substantial for states. North Carolina, for instance, informed the court that maintaining a SNAP error rate above 10% could result in penalties as high as $420 million annually by 2028. State officials there warned that such a financial burden could compel North Carolina to terminate its SNAP program, which currently serves approximately 1.4 million residents.

The human impact was also evident, with Maryland reporting a 25% surge in calls from individuals affected by the new rules pertaining to noncitizens. This ruling, therefore, provides critical relief, preventing states from facing severe financial penalties due to the USDA's unlawful implementation timeline for new SNAP rules and ensuring that essential food assistance programs can continue to operate effectively for millions of Americans.

This ruling provides critical relief for states facing potential financial penalties due to the USDA's unlawful implementation timeline for new SNAP rules. Compliance officers and legal counsel advising state agencies should review their SNAP implementation strategies and noncitizen eligibility guidelines in light of this decision, particularly regarding the 120-day exclusionary period and the clarified status of humanitarian immigrant groups.

Source: Original reporting via Courthouse News Service