The Delaware Supreme Court on Tuesday blocked the state from pursuing a civil action seeking up to $375,000 from a woman who had bilked the federal government out of $6,100 in food benefits, ruling that the claims were pre-empted by federal law.
In a 34-page opinion, a full panel of the Delaware Department of Justice’s lawsuit ran afoul of federal statute prohibiting states from launching consecutive administrative and civil actions against people who receive benefits through the Supplemental Nutrition Assistance Program, or SNAP.
Writing for the court, Chief Justice Leo E. Strine Jr. said the law required states to choose between either an administrative hearing or court actions in cases of intentional program violations. The state’s case, he said, had instead tried to use factual findings from an already-completed hearing to build out a civil lawsuit where the “consequences are much starker.”
“For these reasons, we hold that federal law prohibits the State from bringing a civil action against a SNAP recipient after already bringing a successful administrative action against the recipient based on the same intentional program violations,” Strine wrote.
According to court documents, the state agency responsible for implementing the SNAP program in Delaware brought an administrative proceeding in 2017, which resulted in a $6,159 against Cindy Gonzalez for lying about her income and marital status while receiving SNAP benefits.
Gonzalez, who has started repaying the sum, declined to appeal and was banned from participating in SNAP for one year. Under federal law, 35 percent of the recovered federal funds would be remitted to the state.
The DOJ later brought its own civil case against Gonzalez under the Delaware False Claims and Reporting Act for restitution, treble damages and between $5,500 and $11,000 in statutory penalties for each violation—a total that tallied between $200,000 and $375,000.
Last July, Superior Court Resident Judge Richard R. Cooch ruled that the state was entitled to judgment on the pleadings.
On appeal, however, Gonzalez and her attorneys from Community Legal Aid Society Inc. and the National Center for Law and Economic Justice, argued the decision should be reversed on the basis of federal pre-emption, saying the state lacked the legal authority to pursue a civil case on top of the administrative hearing.
Attorneys for the DOJ countered that the federal statute applied to the Department of Health and Social Services, which oversees SNAP in Delaware, but not to the DOJ, which was free to pursue court actions.
In his ruling, Strine said the DOJ’s “odd argument” ran contrary to the departments own practices and would allow any other state state with no legitimate role to proceed in “any way that other entity sees fit” against a recipient who might have improperly obtained federal benefits.
“We find it improbable that Congress intended for a summary administrative disqualification hearing—which should theoretically result in only a one-year disqualification and a few thousand dollars in liability—to bind a low-income individual in a later civil action that may result in a lifetime disqualification and hundreds of thousands of dollars in liability that won’t be dischargeable in bankruptcy,” Strine said.
John S. Whitelaw, who represented Gonzalez, said the “state should pursue allegations of fraud, and it did” with the administrative hearing. However, he said, the DOJ’s lawsuit against his client was far disproportionate to the wrongdoing.
“It was clearly meant to send a statement, and the impact to Ms. Gonzalez would have been horrendous,” said Whitelaw, advocacy director at CLASI.
“She was and is being significantly punished,” he said. “It’s not that she’s trying to avoid responsibility. It’s that the relief sought by the state was draconian and excessive.”
A spokesman for the DOJ declined to comment.
Gonzalez was also represented by Travis W. England of the National Center for Law and Economic Justice.
Oliver J. Cleary of the DOJ argued the appeal on behalf of the state.
Whitelaw said the suit would likely now return to the Superior Court for arguments on whether the Supreme Court’s ruling was dispositive to the case.
The lawsuit is captioned State v. Gonzalez.