On September 17, 2026, a federal judge in the US District Court of Oregon set aside a portion of a USDA guidance regarding state implementation of “One Big Beautiful Bill Act” Supplemental Nutrition Assistance Program (SNAP) programs. Specifically, the court sided with 21 states and the District of Columbia to vacate the agency’s established “grace period” for implementation mistakes. To read the decision in its entirety, click here.
Background on HR 1
On July 4, 2025, President Trump signed House Resolution 1 (HR 1), often referred to as the “One Big Beautiful Bill Act.” This legislation was an omnibus appropriations bill that funded the federal government for Fiscal Year 2025 and included several legislative components that are usually enacted through the Farm Bill. Specifically, HR 1 amended provisions related to SNAP. For a more detailed breakdown of HR 1’s Nutrition amendments, click here to read NALC article “One Big Beautiful Bill Act: Nutrition Title.”
USDA Guidance
SNAP is a federal nutrition program that provides monthly benefits to low-income families for the purchase of household foods. SNAP is managed by the US Department of Agriculture (USDA) but administered on a local level by state actors. Because of this joint administration, USDA and state agencies play distinct roles in SNAP’s operation. Though both government actors play a certain role, Congress grants USDA the authority to create national standards for eligibility and issue regulations that state actors must comply with. Thus, when Congress enacts legislation that affects the operations of SNAP, USDA will often provide guidance to the states for the implementation of that legislation.
Following the enactment of HR 1, which took effect on the date the President signed it, USDA sent four memorandums, or “Guidance Documents,” to states agencies over the span of a few months. Guidance Documents are a tool used by agency actors to explain their current thinking on a topic, but these documents do not carry the force of law. Here, the Guidance Documents were sent to state SNAP agencies to guide state implantation of HR 1’s changes to the program. Specifically, these Guidance Documents – sent on Aug. 29, 2025, Oct. 3, 2025, Oct. 31, 2025, and Nov. 14, 2025 – are at issue in this case.
Background on Case
On November 26, 2025, 22 state Attorneys General and the Attorney General for the District of Columbia sued USDA and its Secretary, Brooke Rollins. Specifically, the Plaintiffs challenged two of HR 1’s SNAP provisions as contrary to law and arbitrary and capricious under the Administrative Procedures Act. The challenged provisions included 1) the state quality control incentive program and 2) categories of non-citizens eligible for SNAP benefits.
Exclusionary Period
As mentioned previously, SNAP is jointly administered by both federal and state actors. Traditionally under this joint-administration, the federal government paid fully for the cost of SNAP benefits, while USDA and the states would split the costs of administering the program. However, under HR 1, Congress changed this by establishing the “state quality control incentive” which required a state to pay a portion of its benefit costs if its “payment error rate” was above a certain percentage. A payment error rate “measures the accuracy of each state’s eligibly and benefit determinations.” Essentially this means it tracks the occurrence of fraud in a state’s administration of SNAP benefits.
Under the state quality control incentive, states will be required to share in the cost of SNAP benefits if their payment error rate meets or is above a certain percentage. It creates different levels of payment error rate percentages that correspond with an increasingly larger percentage of shared benefit costs. For example, a state with a payment error rate between 6 and 8 percent will be required to pay 5 percent of the cost of benefits. Conversely, a state with a payment error rate equal to or greater than 10 percent will be required to pay 15 percent of the cost of benefits. The state quality control incentive will go into effect in Fiscal Year 2028, and HR 1 offers the option for states to either use their payment error rates from 2025 or 2026 that year. However, for Fiscal Year 2029 and beyond, the payment error rate for the third fiscal year preceding it will be used. For example, Fiscal Year 2029 will use the payment error rate from Fiscal Year 2026, and Fiscal Year 2030 will use the payment error rate from Fiscal Year 2027.
This provision was quite controversial, and several states spoke out both during and after the legislative process about how it would impact their administration of SNAP. Most opposing states noted that they might not have the funds available to pay their portion of the cost-share and might be forced to instead stop administering the program altogether. States were further worried by of the scale of HR 1’s SNAP changes because payment error rates – calculated based on the number of mistakes a state might make in its administration of SNAP – now determine the amount of benefit costs a state will have to pay. However, according to both federal statutes and USDA regulations, the agency will typically provide an “exclusionary period” of 120 days for states following a change in federal law. During this exclusionary period, mistakes that a state agency might make are not counted towards their payment error rate. The 120 days start on the “required implementation date.”
Here is where the first issue of the case arises. The parties disagree about the implementation date and the resulting start of the exclusionary period. USDA claims that the implementation date is July 4, 2025 – the day HR 1 went into effect. The Plaintiffs argue that the exclusionary period cannot start until USDA sends implementation guidance to the states. Following HR 1’s enactment, USDA did not send guidance to the states until August 29, 2025. The Plaintiffs claim this memo was the first notice they were given that the exclusionary period had started 66 days before on July 4. Thus, the Plaintiffs have challenged the exclusionary period highlighted in the Guidance Documents as 1) contrary to USDA regulations and 2) arbitrary and capricious.
Contrary to Law
The court first looks at the claim that the exclusionary period is contrary to law. 7 CFR § 275.12(d)(2)(vii) excludes “variances,” or mistakes, “resulting from application of a new [ . . .] implementing memorandum of a mandatory or optional change in Federal law that occurs during the first 120 days from the required implementation date.” Essentially, this creates a “regulatory exclusionary period” that gives states a grace period of 120 days where any mistakes from implementing the new policies are not counted toward the state’s payment error rates. Plaintiffs argue that the exclusionary period USDA announced in the guidance documents – beginning on July 4, 2025 – is contrary to its own regulations. They argue that this is the case because the regulations require an exclusionary period to begin once a USDA has sent out an “implementing memorandum,” or guidance.
In its analysis, the court first looks to the plain meaning of 7 CFR § 275.12(d)(2)(vii). The court determines that based on the text of the regulation, a “variance” must result from a “implementing memorandum” that tells States how to implement “a mandatory or optional change in federal law.” Further, the court interprets 7 CFR § 275.12(d)(2)(vii)(M) to clarify that “the ‘required implementation date’ means the date a state agency must issue statewide notification to its workers of changes to SNAP.” Thus, the court concludes that a plain reading of the regulation supports Plaintiffs’ claims that setting the implementation date on a day that occurs before States receive guidance on implementation is contrary to the text of the regulation.
USDA argues that its interpretation is supported by the plain meaning of “implement,” which the agency defines as “giv[ing] practical effect and ensur[ing] actual fulfilment by concrete measures.” Using this definition, USDA claims that by making HR 1 effective upon its enactment, Congress intended for July 4 – the day it received practical effect – to be the implementation date. However, the court notes that USDA’s records reflect a history of treating implementation and effective dates as two separate things. In fact, in its last update to the exclusionary period regulations, USDA “designed [it] to account for implementing legislative provisions that are effective prior to any communication from USDA.” This means that USDA has previous created a mechanism for handling situations like these – where legislation becomes effective before the agency can send out its implementation guidance – and that mechanism did not require the “implementation date” to be the date the legislation became effective. Thus, based on past behavior and previous rulemaking, USDA’s application of “implement” is inappropriate here.
Because it is “inconsistent with the text, context, and history of the regulatory exclusionary period,” the court finds that USDA’s interpretation is not entitled to deference. Thus, the exclusionary period established through USDA’s guidance documents is found to be contrary to its own regulations.
Arbitrary and Capricious
The court looks next to Plaintiffs’ claims that the exclusionary period USDA established in the guidance documents is arbitrary and capricious. If an agency action fails to make a “rational connection between the facts and decision made” it is arbitrary and capricious. Further, the court notes that an agency must provide a reasoned explanation when it departs from past practice and must provide fair notice to states.
Here, the court notes that USDA’s guidance does not provide the agency’s reasoning for picking July 4th as the implementation date nor why it waited until August 29 to release its first guidance. Further, the court notes that USDA failed to explain its decision to set the implementation date on the date of HR 1’s enactment – a departure from its past practice. Additionally, the court found that USDA failed to provide fair notice to the Plaintiffs because it waited until August 29 to notify states of the exclusionary period’s start. As a result, the court found that USDA’s exclusionary period was arbitrary and capricious.
Non-Citizen Eligibility
Along with challenging the exclusionary period established in USDA’s guidance documents for HR 1, the Plaintiffs also specifically challenged USDA’s Oct. 31, 2025 guidance. This document, titled “SNAP Implementation of the One Big Beautiful Bill Act of 2025 – Alien SNAP Eligibility,” gave guidance for states on their implementation of HR 1’s non-citizen eligibility categories. Plaintiffs challenged this document as both1) contrary to law and 2) arbitrary and capricious because it does not properly reflect the changes for Humanitarian Immigrant Groups in HR 1.
Background on non-citizen changes
Prior to HR 1’s enactment SNAP benefits were available for US citizens and certain lawfully present non-citizens. HR 1 limits the categories of non-citizens that are eligible. Under its rules, only 1) immigrants lawfully admitted for permanent residence (LPRs), persons who have been granted the status of Cuban and Haitian entrants, and individuals who lawfully reside in the US in accordance with a Compact of Free Association can receive SNAP benefits.
An LPR, also known as a “green card holder,” is someone who has “lawfully accorded the privilege of residing permanently in the United States as an immigrant in accordance with the immigration laws.” 8 USC § 1101(a)(20). If an LPR meets certain criteria, including living as an LPR in the US for at least five years, they may receive SNAP benefits. However, there are certain LPRs that are excluded from the five-year waiting period, including the statuses “Deportation Withheld,” “Refugees,” “Individuals Granted Asylum,” etc. (collectively, “Humanitarian Immigrant Groups”) In its Oct. 31 guidance, the USDA listed groups of LPRs that are exempt from the five-year waiting period, but this list did not include the Humanitarian Immigrant Groups. Though USDA did later publish a Question-and-Answer Document in December 2025 that did correctly list all groups, including humanitarian immigrant groups, as exempt from the waiting period, the Plaintiffs are still challenging the Oct 31 guidance as both contrary to law and arbitrary and capricious.
Contrary to Law
The court first addressed USDA’s argument that the list contained in the Oct. 31 guidance was inexhaustive. USDA claims that the guidance includes language stating that “all LPRs are eligible for SNAP benefits if they meet other eligibility requirements,” and argues this general statement indicates all LPRs are eligible if they meet certain criteria. Specifically, the agency claims that the list where Humanitarian Immigrant Groups were omitted was just an “inexhaustible list,” and that the specific statements should not override the general statement that LPRs are eligible for SNAP benefits.
However, the court disagrees and claims that “nothing in the [guidance] supports this view.” The court further notes that the list is proceeded by the limiting statement “LPRs may still be eligible for SNAP without a waiting period [. . .] if [LPRs] meet one or more of the following conditions,” then contains a list of conditions that excludes any of the Humanitarian Immigrant Group categories. Therefore, since the guidance makes assertions that are not aligned with federal law, the court finds this guidance is contrary to law.
Arbitrary and Capricious
Next, the court looks to Plaintiffs’ claim that the Oct. 31 guidance was arbitrary and capricious. An agency action is arbitrary and capricious if it “entirely failed to consider an important aspect of the problem” or “offered an explanation that runs counter to the evidence before the agency.” Here, the guidance offers no explanation for why Humanitarian Immigrant Groups are omitted from the list of LPRs eligible for SNAP without a five-year waiting period. USDA claims that it was omitted because the guidance was intended to be used as a “quick reference guide.” However, the court rejects this argument because it was not included in the record, and they do not accept “a post hoc rationalization.” Thus, because it offers no explanation for the omissions, the Oct 31 guidance was found to be arbitrary and capricious.
Remedies
In this case, the Plaintiffs have sought both vacatur and declaratory relief. This means that the Plaintiffs have asked that the guidance be set aside (vacatur) and that the court make declaratory statements clarifying its legal position on the matter (declaratory relief). While legally binding, a declaratory judgement does not order a party to take any action, but it will “state the court’s authoritative opinion regarding the exact nature of the legal matter.”
Here, the court sets aside the exclusionary period established by the four guidance documents. It also refuses to limit vacatur to just the Plaintiffs in the case. This means that the vacatur will apply to all 50 states, not just ones challenging it. The court does not vacate the entire guidance documents but sets aside the portions which establish July 4, 2025 – Nov. 1, 2025 as the exclusionary period.
Further, the court made the following declaratory judgments, “1) the exclusionary period set forth in the guidance documents are unlawful, 2) defendants must give the states 120 days after they issue an implementing memorandum and provide a required implementation date consistent with this opinion and order, and 3) defendants must provide adequate notice of when a state must implement the changes under HR 1 in order to exclude errors prior to the state’s implementation.” Because a declaratory judgement does not order a party to act, these statements do not require USDA to take any particular action. However, by vacating the established exclusionary period, USDA will be prohibited from using any implementation mistakes made during the July 4, 2025 – Nov. 1, 2025 period in its calculation of a state’s payment error rate. It remains unclear at the moment what dates will be used to establish the exclusionary period.
Regarding the Oct. 31 guidance, the court also issued a declaratory judgement. Here, the court states that “LPRs are eligible for SNAP regardless of prior status, and that [the] five-year waiting period does not apply to LPRs that are or were members of a Humanitarian Immigrant Group.” The Oct. 31 guidance has not been set aside in its entirety, but similar to the other three implementation guidance documents, its provision establishing July 4, 2025 – Nov 1, 2024 as the exclusionary period has been vacated.
As of now, USDA has not appealed this order, but the agency will have until November 27, 2026 to do so.