Gonzalez v. State

IN THE SUPREME COURT OF THE STATE OF DELAWARE
CINDY GONZALEZ, §
§ No. 416, 2018
Defendant Below, §
Appellant, § Court Below: Superior Court
§ of the State of Delaware
v. §
§
THE STATE OF DELAWARE, § C.A. No. N18C-01-144-RRC
§
Plaintiff Below, §
Appellee. §
Submitted: February 20, 2019
Decided: March 12, 2019
Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and
TRAYNOR, Justices.
Upon appeal from the Superior Court. REVERSED.
John S. Whitelaw, Esquire (Argued), Katherine E. Sell, Esquire, COMMUNITY
LEGAL AID SOCIETY, INC., Wilmington and Dover, Delaware; Travis W.
England, Esquire, NATIONAL CENTER FOR LAW AND ECONOMIC JUSTICE,
New York, New York, for Appellant, Cindy Gonzalez.
Oliver J. Cleary, Esquire (Argued), Department of Justice, Wilmington, Delaware,
for Appellee, the State of Delaware.
Joanna J. Cline, Esquire, PEPPER HAMILTON LLP, Wilmington, Delaware, for
Amicus Curiae David. A. Super, Georgetown University Law Center, in Support of
Appellant.
STRINE, Chief Justice:
The Supplemental Nutrition Assistance Program (“SNAP”) is a public
benefits program funded by the federal government and governed by federal
regulations but administered on a day-to-day basis in substantial part by the states.
Designed to “alleviate . . . hunger and malnutrition,”1 SNAP provides low-income
households with electronic payment cards—formerly called “food stamps”—which
they can use to buy food. Like many federal benefits programs, a household’s
eligibility for SNAP is subject to limitations under federal law.
In this case, a SNAP recipient, Cindy Gonzalez, was found to have defrauded
the federal government of $6,159 worth of SNAP benefits by representing that she
lived alone and did not receive any income, when in fact she was not living alone
and was receiving income. After discovering this wrongdoing, the Delaware
Department of Health and Social Services (“DHSS”) brought an administrative
proceeding against Gonzalez to disqualify her from continued participation in SNAP
and claw back the benefits she received through her misrepresentations. The hearing
officer found that DHSS had established intentional program violations and
disqualified Gonzalez from continued participation in SNAP for one year, and
DHSS’s audit and recovery arm assessed an overpayment of $6,159, which the
federal government has started to collect by offsetting the other federal benefits she
receives against her SNAP obligations.
1
7 U.S.C. § 2011.
About five months after the DHSS final decision, the State of Delaware
brought a civil action in the Superior Court against Gonzalez under Delaware
common law and the Delaware False Claims and Reporting Act based on the same
circumstances underlying the DHSS administrative proceeding. This time, however,
the State sought between approximately $200,000 and $375,000 in restitution,
damages, and penalties; attorneys’ fees and costs; and an order enjoining Gonzalez
from participating in SNAP until she pays the judgment. Gonzalez in turn filed an
answer asserting an affirmative defense that federal law preempts the State’s
Delaware law claims, and the State moved for judgment on the pleadings. The
Superior Court granted the State’s motion, holding that federal law did not preempt
the State’s claims. Gonzalez brings an interlocutory appeal from that determination.
We reverse because federal law prohibits the State from bringing consecutive
administrative and civil actions against a SNAP recipient based on the same fraud.
Under our system of government, federal law is “the supreme Law of the Land.”2 In
this case, the United States Congress passed a law that gives its state partners in
SNAP a choice of different enforcement options, but requires states to pick one or
the other: “Each State agency shall proceed against an individual alleged to have
engaged in [food benefits fraud] either by way of administrative hearings . . . or by
referring such matters to appropriate authorities for civil or criminal action in a court
2
U.S. CONST. art. VI, cl. 2.
2
of law.”3 The relevant statutory history and administrative interpretations of that
provision confirm the most facially reasonable reading of the statute, which is that
Congress intended to use the word “or” in an exclusive sense. That is, a state can
proceed through “either” an administrative hearing “or” an action in court, but not
both. Here, DHSS already obtained a final decision against Gonzalez in an
administrative setting, which bars the State from proceeding against her again in
court, notwithstanding any state law to the contrary.
I.
A.
Unless otherwise noted, the facts of this case are drawn from the pleadings in
the Superior Court and are not in material dispute. Around June 2013, Gonzalez
submitted an electronic application for SNAP benefits to DHSS,4 which is the state
agency that administers Delaware’s implementation of the program. On her
application, Gonzalez indicated that she lived alone and received $536.50 in monthly
assistance from her mother. In later application renewals and periodic reports,
Gonzalez indicated that she continued to live alone and had no income, except Social
3
7 U.S.C. § 2015(b)(2) (emphasis added).
4
The pleadings distinguish between the different arms of DHSS, such as the Division of Social
Services for application processing and the Audit and Recovery Management Services subdivision
for DHSS’s investigative work. For the sake of simplicity, we refer to all these divisions and
subdivisions as simply “DHSS.”
3
Security benefits that she started receiving in 2016. Gonzalez kept telling DHSS
that she was living alone until at least October 2016.
But a DHSS investigation uncovered evidence that Gonzalez had not lived
alone and had received additional household income. On October 29, 2014,
Gonzalez got married, and according to DHSS, Gonzalez’s landlord told agency
investigators that Gonzalez had been living with her spouse since 2011 and with her
mother since 2014. According to DHSS, further investigation produced more
evidence that Gonzalez and her spouse lived together.
Following its investigation, DHSS brought an administrative proceeding
against Gonzalez seeking to disqualify her from receiving future SNAP benefits. In
that proceeding, DHSS alleged fraud and intentional program violations due to
Gonzalez’s falsification of her SNAP submissions by claiming she lived alone and
received no income, when in fact she lived with other people and did receive income.
On August 18, 2017, after holding a hearing during which Gonzalez was not
represented by counsel,5 the hearing officer issued a final decision finding that DHSS
had established fraud through clear and convincing evidence and disqualifying
Gonzalez from receiving SNAP benefits for one year. Gonzalez did not file an
appeal from that decision. DHSS then assessed a $6,159 overpayment, which was
the total value of the SNAP benefits Gonzalez received as a result of her
5
Opening Br. at 1.
4
misrepresentations. According to Gonzalez, the federal government has started
collecting that money by withholding her other federal benefits.6
B.
After knowing that Gonzalez had not appealed and that DHSS’s decision
against her had become final,7 the State of Delaware brought a civil action in the
Superior Court against Gonzalez seeking monetary damages and civil penalties
under Delaware common law and the Delaware False Claims and Reporting Act.
The State’s complaint was based on the same factual allegations as the prior DHSS
action, but this time, the State was asking for a lot more money: $6,159 in restitution,
$18,477 in statutory treble damages, and between $5,500 and $11,000 in statutory
civil penalties for each of the 32 false statements and fraudulent claims described in
the complaint. In total, that adds up to between about $200,000 and $375,000.
Additionally, the State sought attorneys’ fees and costs and to enjoin Gonzalez from
applying for or receiving SNAP benefits until she pays the judgment that the court
imposes. In fact, the State sought to collaterally use the administrative hearing
officer’s factual findings against Gonzalez, asserting in its complaint that “[l]iability
6
Id.; see also App. to Opening Br. at A75–76 (notice from the U.S. Department of the Treasury
informing Gonzalez that Treasury will withhold up to 15 percent of her Social Security benefits).
7
See 31 Del. C. § 520 (giving a recipient of public assistance benefits against whom an
administrative hearing decision has been decided 30 days from the final administrative decision to
file an appeal with the Superior Court); 16 Del. Admin. C. § 2023.5(8) (precluding any
administrative appeal after an adverse administrative disqualification hearing).
5
and intent in this matter are established by the [administrative disqualification
hearing] decision pursuant to 6 Del. C. § 1204(f).”8
In response, Gonzalez filed an answer asserting an affirmative defense that
the federal statute that created SNAP, the Food and Nutrition Act of 2008,9 preempts
the State’s claims.10
The State then moved for judgment on the pleadings, which Gonzalez
opposed on preemption grounds.11 In essence, Gonzalez argued that there was either
a specific conflict between the Food and Nutrition Act and the State’s action against
her or a more general conflict based on the notion that the State’s action stands as an
obstacle to the execution of Congress’s intent.12 The State denied that there was any
preemption.
The Superior Court granted the State’s motion, holding that federal law did
not preempt the State’s claims, and referred the case to a Superior Court
Commissioner for a hearing to determine the amount of fees and costs due under the
Delaware False Claims and Reporting Act.13
8
App. to Opening Br. at A16 (Complaint).
9
7 U.S.C. §§ 2011 et seq.
10
App. to Opening Br. at A39 (Answer). At oral argument, counsel for Gonzalez stated that the
underlying facts are not in dispute, except to the extent that they indicate criminal liability.
11
Gonzalez also asserted that each separate false statement would not provide the basis for a
separate False Claims and Reporting Act count, but that argument is not at issue in this appeal.
12
App. to Opening Br. at A68–71 (Def.’s Resp. to Pl.’s Mot. for J. on the Pleadings).
13
State v. Gonzalez, 2018 WL 3655705, at *3–4 (Del. Super. Ct. July 19, 2018). The Superior
Court concluded that Gonzalez had “admitted all factual allegations in the Answer.” Id. at *1. In
reality, Gonzalez admitted to having represented that she lived alone and did not receive income
6
In ruling for the State, the Superior Court relied primarily on a federal
regulatory provision promulgated under the Food and Nutrition Act by the federal
agency responsible for implementing that statute, the Food and Nutrition Service, to
govern court referrals by state agencies that are exempt from establishing an
administrative disqualification system.14 In particular, the court emphasized a
provision in that regulation that requires exempt state agencies to “encourage State
and local prosecutors to recommend to the courts that a disqualification penalty as
provided in [the Food and Nutrition Act] be imposed in addition to any other civil
or criminal penalties for such violations.”15 The trial court viewed that provision as
for much of the relevant time, but she did not admit to having lived with anyone else in her
household or receiving unreported income. See, e.g., App. to Opening Br. at A47 (Answer)
(“Defendant is without sufficient knowledge to be able to admit or deny with regard to ‘additional
evidence that Clark and Gonzalez lived together,’ except that she denies that ‘information made
publicly available on the Internet by Defendant’ proves such an allegation.”). She also denied
having “knowingly” made any misrepresentation regarding her income and household
composition. Id. at A50 (denying having “knowingly submitted falsified claims . . . by knowingly
misstating her income and household composition” or having “knowingly presented, or caus[ing]
to be presented . . . false or fraudulent claims”). It is possible that the Superior Court was using
the hearing officer’s factual findings against Gonzalez collaterally, although the Superior Court’s
opinion is unclear on this point. Nevertheless, Gonzalez’s response to the State’s motion for
judgment on the pleadings below raised only the preemption issue and another legal issue that is
not at issue here, and on appeal, Gonzalez does not challenge the Superior Court’s conclusion that
she “admitted all factual allegations in the Answer.” Gonzalez, 2018 WL 3655705, at *1. We
therefore address only the preemption issue.
14
7 C.F.R. § 273.16(g) (“Any State agency exempted from the requirement to establish an
administrative disqualification system in accordance with paragraph (a) of this section shall refer
appropriate cases for prosecution by a court of appropriate jurisdiction in accordance with the
requirements outlined in this section.”).
15
Gonzalez, 2018 WL 3655705, at *3 (quoting 7 C.F.R. § 273.16(g)(1)(ii)) (emphasis and internal
quotation marks omitted).
7
“contemplat[ing] additional remedies the state can seek in addition to an
administrative disqualification hearing.”16
The Superior Court also cited a U.S. District Court decision, United States v.
Byrd,17 which involved a merchant who allegedly violated the federal False Claims
Act by illegally redeeming food stamp coupons, to support its position. Although
Byrd did not consider the preemption issue and involved a merchant who redeemed
food stamps (as opposed to a food stamp recipient),18 the Superior Court agreed with
the State that “it is difficult to understand why the government could not bring a state
False Claims Act claim against the Defendant but could bring a federal False Claims
Act against the Defendant.”19
After the Superior Court’s decision, Gonzalez sought interlocutory review of
the court’s decision granting judgment on the pleadings to the State, which the
Superior Court certified and this Court granted.
16
Id.17
100 F. Supp. 2d 342 (E.D.N.C. 2000).
18
See id. at 343.
19
Gonzalez, 2018 WL 3655705, at *3 (quoting Pl.’s Mot. for J. on the Pleadings) (internal
quotation marks omitted).
8
II.
This Court reviews the Superior Court’s decision granting judgment on the
pleadings de novo “to determine whether the court committed legal error in
formulating or applying legal precepts.”20
III.
On appeal, Gonzalez’s main argument is that the Food and Nutrition Act
preempts the State’s claims against her because the Act prohibits states from
bringing consecutive administrative and civil actions based on the same intentional
program violations.21 Specifically, she points to § 6(b)(2) of the Act, which requires
each state agency to “proceed against an individual alleged to have engaged in [an
intentional program violation] either by way of administrative hearings, after notice
20
Desert Equities, Inc. v. Morgan Stanley Leveraged Equity Fund, II, L.P., 624 A.2d 1199, 1204
(Del. 1993).
21
At oral argument, Gonzalez’s counsel focused exclusively on this argument. In her briefing, she
also made two additional arguments. First, Gonzalez claimed that by creating a detailed and
comprehensive scheme for determining participant eligibility, disqualification, and recoupment of
overissued benefits, Congress intended “to occupy [the] entire field of regulation as to state
activities relating to SNAP program participants.” Opening Br. at 20–25. Such field preemption,
Gonzalez submitted, completely bars the State from assessing disqualification periods or financial
penalties in excess of those provided for by federal law. Second, she argued that the State’s
imposition of enormous fraud penalties for an intentional program violation “would ‘stand[] as an
obstacle to the accomplishment and execution of the full purposes and objectives’ of SNAP—to
provide nutrition assistance to low-income individuals.” Id. at 20, 33–35. To that point, Gonzalez
contended that the penalties sought by the State—“damages in an amount of nearly fifty times the
value of the SNAP benefits she has already been ordered to repay, and an ongoing bar from
participation in SNAP until repayment of this sum”—would serve only as “a cudgel to threaten
tens of thousands of dollars in liability from low-income SNAP program participants.” Id. at 33–
35. Because we reverse on the basis of her first theory of preemption, we need not address these
other theories.
9
and an opportunity for a hearing at the State level, or by referring such matters to
appropriate authorities for civil or criminal action in a court of law.”22 Gonzalez
interprets that language to mean that Congress intended to allow states to proceed
either administratively or in court, but not both. Here, she argues, the State was
precluded from proceeding against her in court because DHSS had already
successfully proceeded against her in an administrative setting.
In response, the State’s briefing seems to suggest that the “either/or” language
in § 6(b)(2) should be read inclusively, giving the government the discretion to
proceed administratively using the Food and Nutrition Act’s disqualification and
recoupment provisions, in court under state law, or through both means.23
Additionally, the State claims that “two state agencies are involved in this matter”—
DHSS and the Delaware Department of Justice (“DDOJ”)—and that the DDOJ “is
not bound by whatever requirements of the [Food and Nutrition Act]” there may be
that bind DHSS.24 Clarifying this position at oral argument, the State asserted that
§ 6(b)(2) applies to only “one state agency”—defined by the Act to be “the
administering agency administering the SNAP program”—which shows that
“Congress intended to preclude actions by the administering agency but not by other
22
7 U.S.C. § 2015(b)(2) (emphasis added); Opening Br. at 20–23.
23
See Answering Br. at 15–16 (“That language [in § 6(b)(2)] does not preclude Delaware from
pursuing its chosen method of resolving the issue of the fraud committed by Gonzalez. Rather
than simply suing Gonzalez under the [Delaware False Claims and Reporting Act] . . . , Delaware
opted to avail itself of an [administrative disqualification hearing] first . . . .”).
24
Id. at 25.
10
agencies.”25 In other words, the State views § 6(b)(2) as binding only the state
agency charged with overseeing SNAP—DHSS—and leaving the rest of the state
government free to proceed as it wishes.26
Under the Supremacy Clause of the United States Constitution, “federal law
preempts contrary state law.”27 In general, the types of preemption recognized by
federal courts can divided into three categories: express preemption, field
preemption, and conflict preemption.28 Express preemption occurs when Congress
preempts state law “in express terms.”29 Field and conflict preemption, by contrast,
take a more contextual approach. Field preemption exists “when it is clear, despite
the absence of explicit preemptive language, that Congress has intended, by
legislating comprehensively, to occupy an entire field of regulation and has thereby
25
Oral Argument Video at 14:37–15:00. See also 7 U.S.C. § 2012(s) (defining “State agency” as
“the agency of State government, including the local offices thereof, which has the responsibility
for the administration of the federally aided public assistance programs within such State, and in
those States where such assistance programs are operated on a decentralized basis, the term shall
include the counterpart local agencies administering such programs”).
26
Asked whether the State’s view was that “Congress only wants to control the actual entity that
would have a role under the program, leaving everyone else free to do whatever they wanted,”
counsel for the State replied: “Correct, Your Honor.” Oral Argument Video at 16:10–25.
27
Hughes v. Talen Energy Marketing, LLC, 136 S. Ct. 1288, 1297 (2016).
28
See Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372–73 (2000) (explaining that
“[e]ven without an express provision for preemption, we have found state law to be preempted by
Congressional legislation in at least two circumstances,” including “[w]hen Congress intends
federal law to occupy the field” and when there is a conflict between state law and a federal statute
(internal quotation marks omitted)); Thomas H. Sosnowski, Narrowing the Field: The Case
Against Implied Preemption of State Product Liability Law, 88 N.Y.U. L. REV. 2286, 2294–96
(2013) (dividing preemption into “express preemption” and two types of “implied preemption”:
field and conflict preemption).
29
Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 713 (1985).
11
‘left no room for the States to supplement’ federal law.”30 As for conflict
preemption, “even if Congress has not occupied the field, state law is naturally
preempted to the extent of any conflict with a federal statute.”31 Thus, conflict
preemption exists “when compliance with both state and federal law is impossible,
or when state law stands as an obstacle to the accomplishment and execution of the
full purposes and objective of Congress.”32 But these “categories of preemption are
not rigidly distinct,”33 and “the ultimate touchstone” in every preemption case
involving a federal statute is “the purpose of Congress.”34 Courts should not “rely
on a talismanic pre-emption vocabulary.”35
Because the text, statutory history, and relevant regulatory interpretations of
the Food and Nutrition Act demonstrate that Congress intended to require states to
choose between an administrative hearing and court when proceeding against an
individual for fraud in obtaining SNAP benefits, we hold that federal law preempts
the State’s claims in this case.
30
Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699 (1984) (quoting Rice v. Sante Fe Elevator
Corp., 331 U.S. 218, 230 (1947)).
31
Crosby, 530 U.S. at 372.
32
Capital Cities, 467 U.S. at 699 (internal citations and quotation marks omitted).
33
Crosby, 530 U.S. at 372 n.6 (internal quotation marks omitted).
34
Hughes v. Talen Energy Marketing, LLC, 136 S. Ct. 1288, 1297 (2016) (internal quotation marks
omitted).
35
Id. at 1300 (Sotomayor, J., concurring); cf. id. at 1300–01 (Thomas, J., concurring in part and
concurring in the judgment) (endorsing a preemption analysis based on “the text and structure” of
the federal statute at issue).
12
A.
Starting with the statutory text, the provision that Gonzalez relies on is tied to
the Food and Nutrition Act’s disqualification penalties for fraud, misrepresentation,
and other intentional program violations, including violations of state statutes, that
are committed “for the purpose of using, presenting, transferring, acquiring,
receiving, or possessing program benefits.”36 The Act provides that any person
found by a state or federal court or administrative agency to have committed one of
these intentional programs violations will be disqualified from further participation
in SNAP, with the length of the disqualification depending on whether the person is
a repeat offender and on the type of violation.37 The provision that Gonzalez relies
on, § 6(b)(2), goes on to provide:
Each State agency shall proceed against an individual
alleged to have engaged in [activity constituting an
intentional program violation] either by way of
administrative hearings, after notice and an opportunity
for a hearing at the State level, or by referring such matters
to appropriate authorities for civil or criminal action in a
court of law.38
Thus, when a SNAP participant commits an intentional program violation—broadly
defined to include both outright fraud and other intentional violations related to
36
7 U.S.C. § 2015(b)(1).
37
See id. § 2015(b)(1)(i) (one year on first violation); id. § 2015(b)(1)(ii) (two years on second
violation or first violation involving the trading of a controlled substance for benefits); id.
§ 2015(b)(1)(iii) (permanently on third violation, second violation involving the trading of a
controlled substance for benefits, or first violation in certain other cases).
38
Id. § 2015(b)(2) (emphasis added).
13
SNAP—the state agency must proceed against that participant either by way of an
administrative hearing or by referring the case to appropriate authorities for a civil
or criminal action in court. The Act and its implementing regulations also require
state agencies to collect the overissued benefits on behalf of the federal
government,39 with the state retaining 35% of the amount collected.40
Absent the use of the word “either,” § 6(b)(2) could conceivably be read in
one of two ways: (1) a state agency can proceed either administratively or in court,
but not both (the exclusive use of “or”); or (2) a state agency can proceed
administratively, in court, or through both means (the inclusive use of “or”). As
scholars and other courts have recognized, drafters of legal text, like ordinary
humans, can use the word “or” in either sense.41 For example, if a waiter says that
39
See 7 U.S.C. § 2022(b) (requiring state agencies to “collect any overissuance of benefits issued
to a household”); 7 C.F.R. § 273.18(c) (setting forth the criteria for the amount to collect); id.§ 273.18(a)(2) (providing that a “claim is a Federal debt”); id. § 273.18(l) (requiring states to send
the federal government “the value of funds collected”).
40
7 C.F.R. § 273.18(k)(1) (giving the state 35% for intentional program violations, 20% for
inadvertent household errors, 35% for inadvertent household errors by reducing the person’s
unemployment compensation benefit, and nothing for state agency errors).
41
See, e.g., Hansen v. U.S. Bank, Nat’l Ass’n, 2016 WL 7105865, at *4 (D. Idaho Dec. 5, 2016)
(“[A] disjunctive ‘or’ can come in both exclusive and inclusive forms. When used in the exclusive
disjunctive sense, ‘or’ indicates that one or the other of the listed things can be true, but not both.
When used in the inclusive disjunctive sense, ‘or’ indicates that one or more of the listed things
can be true.”); Burke v. State ex rel. Dep’t of Land Conservation & Dev., 290 P.3d 790, 794 (Or.
2012) (“To say that ‘or’ is ‘disjunctive’ is true enough. But authorities agree that a disjunctive
connector can have either an ‘inclusive’ or an ‘exclusive’ sense. Thus, ‘A or B’ can mean one or
the other, but not both. But it can also mean one or the other, or both.” (citing BRYAN A. GARNER,
A DICTIONARY OF MODERN LEGAL USAGE 624 (2d ed. 1995)); DietGoal Innovations LLC v.
Chipotle Mex. Grill, Inc., 2015 WL 164072, at *3 (E.D. Tex. Jan. 13, 2015) (“It is well recognized
that the word ‘or’ can be used in either an inclusive or an exclusive sense, depending on context.
That is, the term ‘or’ can mean ‘A or B, but not both,’ or it can mean ‘A or B, or both.’” (internal
citations omitted); Layman E. Allen, Symbolic Logic: A Razor-Edged Tool for Drafting and
14
the breakfast special comes with either coffee or tea, he is probably using “or”
exclusively—the meal doesn’t come with both. But if that same waiter tells his
manager that he will quit his job unless he receives a raise or more vacation time, he
is probably using “or” inclusively—he would be happy to receive a raise, more
vacation time, or both. Given these varying uses of “or,” “[t]he intended meaning
must be interpreted from context.”42
But in this instance, Congress used the word “either” in concert with “or.”
The statute’s use of the “either/or” construct suggests that Congress intended to use
“or” in the exclusive sense (i.e., “P or Q, but not both”). In ordinary English, the
phrase “P or Q” on its own often suggests the inclusive sense of “or,” but the addition
of the word “either” before “P or Q” weighs toward the exclusive use.43 This
Interpreting Legal Documents, 66 YALE L.J. 833, 842–48 (1957) (distinguishing between
exclusive and inclusive disjunctions); E. Allan Farnsworth, “Meaning” in the Law of Contracts,
76 YALE L.J. 939, 955 (1967) (describing the ambiguity “between ‘or’ as an exclusive disjunctive
(P or else Q, but not both) and as an inclusive disjunctive (P or else Q, or else both)”).
42
Hansen, 2016 WL 7105865, at *4; accord DietGoal, 2015 WL 164072, at *3; Lake v. Woodcreek
Homeowners Ass’n, 243 P.3d 1283, 528 (Wash. 2010).
43
See WEBSTER’S NINTH NEW COLLEGIATE DICTIONARY 399 (1988) (defining the conjunction
“either” as “a function word [used] before two or more coordinate words, phrases, or clauses joined
usu. by or to indicate that what immediately follows is the first of two or more alternatives” and
the noun “either–or” as “an unavoidable choice or exclusive division between only two
alternatives”); Delfani v. U.S. Capitol Guide Bd., 2005 WL 736644, at *4 & n.4 (D.D.C. Mar. 31,
2005), aff’d, 198 F. App’x 9 (D.C. Cir. 2006) (considering “either . . . or” language and holding
that it provided two mutually exclusive alternatives); Nat’l Neighbors, Inc. v. United States, 839
F.2d 1539, 1542 (Fed. Cir. 1988) (describing “the binding election of forums” that a government
contractor may use to challenge a contracting officer’s decision as “an ‘either-or’ alternative” that
“does not provide a contractor with dual avenues for contesting a contracting officer’s adverse
decision”); Turner v. Precision Surgical, L.L.C., 274 S.W.3d 245, 250 (Tex. Ct. App. 2008) (using
the phrase “either/or question” to describe a “question posed in a manner that necessarily prevents
the two factual alternatives inquired about from being found to exist” (internal quotation marks
omitted)).
15
understanding of the “either/or” construct finds support in the U.S. District Court for
the District of Columbia’s decision in Delfani v. U.S. Capitol Guide Board,44 where
the court considered whether it had subject matter jurisdiction over employment
discrimination claims brought by a former employee of the federal government. The
plaintiff in that case was bringing her claims under the Congressional Accountability
Act, which “permits an employee to ‘either (1) file a complaint with the Office [of
Compliance] . . . or (2) file a civil action.’”45 Before filing suit in the district court,
the plaintiff had filed an administrative complaint with the Office of Compliance.46
Reasoning that “the statute plainly requires an employee to make a choice between
alternatives, and therefore forecloses the possibility of parallel proceedings in both
administrative and adjudicative fora,” the district court dismissed the plaintiff’s
claims for lack of subject matter jurisdiction.47 The D.C. Circuit affirmed the district
court’s decision on appeal, reasoning that “[t]he district court lacked subject matter
jurisdiction because the plaintiff had an administrative complaint pending when she
filed this civil action.”48
44
2005 WL 736644.
45
Id. at *4 (alteration and emphasis in original) (quoting 2 U.S.C. §§ 1404, 1408).
46
Id. at *1.
47
Id. at *4–5.
48
Delfani, 198 F. App’x at 9.
16
To the extent that the current statutory text can conceivably be viewed as
ambiguous, the history of the statutory text of § 6(b)49 dispositively shows that
Congress intended to make state agencies choose between one forum or the other.
Before 1981, the relevant language in § 6(b) provided:
Each State agency shall proceed against such alleged
fraudulent activity either by way of administrative fraud
hearings in accordance with clause (1) of this subsection
or by referring such matters to appropriate legal authorities
for civil or criminal action in accordance with clause (2)
of this subsection, or both.50
The use of the “or both” language in that version of § 6(b) makes clear that, before
1981, Congress intended to use “or” in the inclusive sense. That is, Congress wanted
to allow states to proceed against an individual in a single forum “or both.” But in
1981, things changed when, in the Omnibus Budget Reconciliation Act of 1981,
Congress amended § 6(b) to strike the “or both” language, with the provision now
reading:
Each State agency shall proceed against an individual
alleged to have engaged in [activity constituting an
49
Some commentators have distinguished between “statutory history” and “legislative history,”
elevating the former above the latter. Justice Scalia and Professor Bryan Garner, for example,
have explained that they “oppose the use of legislative history, which consists of the hearings,
committee reports, and debate leading up to the enactment in question . . . [b]ut quite separate from
legislative history is statutory history—the statutes repealed or amended by the statute under
consideration.” ANTONIN SCALIA & BRYAN A. GARNER, READING LAW: THE INTERPRETATION OF
LEGAL TEXTS 256 (2012) (emphasis in original). In Justice Scalia and Garner’s view, this statutory
history “form[s] part of the context of the statute, and (unlike legislative history) can properly be
presumed to have been before all the members of the legislature when they voted,” and thus “a
change in the language of a prior statute presumably connotes a change in meaning.” Id.
50
Food Stamp Act Amendments of 1980, Pub. L. No. 96-249, 94 Stat. 357, § 109 (1980) (emphasis
added) (amending Section 6(b) of the Food Stamp Act of 1977).
17
intentional program violation] either by way of
administrative hearings, after notice and an opportunity
for a hearing at the State level, or by referring such matters
to appropriate authorities for civil or criminal action in a
court of law.51
That language is the same, word for word, as the statute’s current language.
If we are to give any effect to Congress’s removal of the “or both” language—
as fundamental principles of statutory interpretation suggest we must52—the
amended statute has to be read as requiring states to “either” choose one forum “or”
the other, but not “both.”
B.
Although the statutory text and history alone are clear enough to resolve this
question, we note that our interpretation—that Congress intended to limit states to a
single forum for any given case of SNAP fraud—is also supported by the Food and
51
Omnibus Budget Reconciliation Act of 1981, Pub. L. No. 97-35, 95 Stat. 357, § 112 (1981)
(amending Section 6(b) of the Food Stamp Act of 1977). In the version of the 1981 omnibus bill
that originally passed the House of Representatives, the relevant language was still identical to the
previous version of § 6(b) (i.e., each state agency was required to proceed administratively, in
court, or through both means). See Omnibus Budget Reconciliation Act of 1981, H.R. 3982, 97th
Cong., 1st Sess., § 1012 (1981) (version placed on the calendar July 8). Congress ultimately
rejected that language and instead adopted the Senate’s proposed amendments to § 6(b), which
omitted the “or both” language. See Omnibus Reconciliation Act of 1981, S. 1377, 97th Cong. 1st
Sess., § 161 (1981) (version passed the Senate June 25).
52
See, e.g., Stone v. INS, 514 U.S. 386, 397 (1995) (“When Congress acts to amend a statute, we
presume it intends its amendment to have real and substantial effect.”); Ross v. Blake, 136 S. Ct.
1850, 1857–58 (2016) (reasoning that the statute’s history confirmed the Court’s textual reading);
United States v. Brown, 333 U.S. 18, 25 (1948) (interpreting a statutory amendment to have
“broaden[ed] the Act’s coverage” because “[o]therwise there would be no reason for or meaning
in the change”); SCALIA & GARNER, supra, at 256 (“[A] change in the language of a prior statute
presumably connotes a change in meaning.”).
18
Nutrition Service’s explanation of the food stamp rulemaking it finalized in 1983,
less than two years after the 1981 omnibus legislation that amended § 6(b).
Explaining the final rule’s provisions regarding administrative responsibility for
seeking disqualification penalties for intentional program violations, the Service
noted that its previous regulation had “clarifi[ed] that administrative fraud hearings
can be conducted regardless of whether other legal action is planned against the
household member.”53 But the Service deleted that provision “to reflect a change in
the language of the statutory requirement governing State agency action in pursuit
of cases of alleged Program abuse.”54 Specifically, the Service explained:
[W]hereas the [predecessor statute to the Food and
Nutrition Act][55] previously mandated State agency
proceedings against individuals alleged to have committed
fraud either by way of administrative hearings or by
referring such matters to appropriate legal authorities, or
both . . . , the language was amended by the Omnibus
Budget Reconciliation Act of 1981 . . . to simply require
that the proceedings be either by way of administrative
hearings or referrals to appropriate legal authorities. . . .
We continue to believe that Congress intended to prevent
the State agency from pursuing the same case of alleged
Program abuse by way of both an administrative hearing
53
Food Stamp Program; Disqualification Penalties for Intentional Program Violation, and
Improved Recovery of Overpayments, 48 Fed. Reg. 6836, 6840 (Feb. 15, 1983) (to be codified at
7 C.F.R. pts. 272, 273, 276, 277).
54
Id.55
Before 2008, the Food and Nutrition Act was called the Food Stamp Act of 1977. See Food and
Nutrition Service, A Short History of SNAP, https://www.fns.usda.gov/snap/short-history-snap
(last visited Feb. 27, 2019) (“In efforts to fight stigma, the law changed the name of the Federal
program to the Supplemental Nutrition Assistance Program or SNAP as of October 1, 2008, and
changed the name of the Food Stamp Act of 1977 to the Food and Nutrition Act of 2008.”).
19
and referral for prosecution when the language of the
statute was changed.56
As the italicized language makes clear, the Food and Nutrition Service viewed
Congress’s decision to delete the “or both” language from § 6(b) as an attempt to
prevent states from bringing one case in an administrative hearing and another one
in court when the two cases are based on the same fraud. Even if we were to find
the text of § 6(b)(2) ambiguous, the Food and Nutrition Service—the federal agency
charged with administering the Food and Nutrition Act—reads the statute in exactly
the same manner we have concluded is the most facially reasonable interpretation of
the statute.57
The text and structure of the Service’s regulation governing disqualification
for intentional program violations highlight this. Consistent with the statutory
language, the regulation makes each state agency “responsible for investigating any
case of alleged intentional Program violation, and ensuring that appropriate cases
are acted upon either through administrative disqualification hearings or referral to
a court of appropriate jurisdiction in accordance with the procedures outlined in [the
regulation].”58 Then, in detailing the specific circumstances under which agencies
56
Food Stamp Program, 48 Fed. Reg. at 6840 (emphasis added)
57
See Michigan v. EPA, 135 S. Ct. 2699, 2707 (2015) (“Chevron directs courts to accept an
agency’s reasonable resolution of an ambiguity in a statute that the agency administers.”).
58
7 C.F.R. § 273.16(a)(1).
20
should bring administrative disqualification hearings versus legal actions in court,
the regulation indicates that states should choose between one or the other:
The State agency should conduct administrative
disqualification hearings in cases in which the State
agency believes the facts of the individual case do not
warrant civil or criminal prosecution through the
appropriate court system, in cases previously referred for
prosecution that were declined by the appropriate legal
authority, and in previously referred cases where no action
was taken within a reasonable period of time and the
referral was formally withdrawn by the State agency. The
State agency shall not initiate an administrative
disqualification hearing against an accused individual
whose case is currently being referred for prosecution or
subsequent to any action taken against the accused
individual by the prosecutor or court of appropriate
jurisdiction, if the factual issues of the case arise out of the
same, or related, circumstances.59
That language contemplates administrative actions being brought in addition to
lawsuits in court only under limited circumstances: (1) “in cases previously referred
for prosecution that were declined by the appropriate legal authority”; and (2) “in
previously referred cases where no action was taken within a reasonable period of
time and the referral was formally withdrawn by the State agency.”60 Critically, each
of those circumstances involves a situation where the court action is not completed.
Indeed, the regulation provides that “[t]he State agency shall not initiate an
administrative disqualification hearing against an accused individual” at the same
59
Id.60
Id.21
time as or after a case against that person in court “if the factual issues of the case
arise out of the same, or related, circumstances.”61 Here, the State is essentially
trying to do the reverse: obtain relief in an administrative action first and, after that
action is successful, then bring a lawsuit in court. Indeed, the State waited to bring
its civil lawsuit until after the deadline for appealing the administrative
determination had passed.62
C.
This interpretation of § 6(b)(2) also makes sense as a matter of congressional
policy. Under federal law, administrative disqualification hearings take place on an
expedited basis and are more informal than civil actions in court, with state-level
hearings and decisions being required to occur within 60 days of the request for a
hearing and households being granted only one 30-day extension.63 That gives a
beneficiary like Gonzalez less of an opportunity to contest the charges than she
would get in court, where she could file motions,64 obtain more extensive
61
Id. (emphasis added).
62
See 31 Del. C. § 520 (setting a 30-day deadline).
63
See 7 C.F.R. § 273.15(c)(1) (“Within 60 days of receipt of a request for a fair hearing, the State
agency shall assure that the hearing is conducted, a decision is reached, and the household and
local agency are notified of the decision.”); id. § 273.15(c)(4) (“The household may request and is
entitled to receive a postponement of the scheduled hearing. The postponement shall not exceed
30 days and the time limit for action on the decision may be extended for as many days as the
hearing is postponed.”).
64
See Del. Super. Ct. R. 12.
22
discovery,65 and get a full trial (possibly by jury).66 And even more importantly,
there is less of an incentive to contest the charges because the worst that could
seemingly happen is disqualification under § 6(b) and an obligation to pay back the
overissued benefits. For a first-time offender like Gonzalez, that result would not
turn her life permanently upside down: she would only be disqualified from
receiving SNAP benefits for one year and have to pay back the $6,159 in overissued
benefits she received. Given those consequences, paying for an attorney—if
Gonzalez could even afford one—may not be worth it, and resource-constrained
legal aid organizations might not take on her case. Indeed, Gonzalez was
unrepresented in the administrative hearing and did not file an appeal. That is not
surprising given the apparent low stakes.
As the facts of this case illustrate, however, a final, adverse ruling in an
administrative proceeding could have substantially greater consequences if the State
can use that ruling collaterally by bringing a follow-on fraud suit in court, such as
Delaware is trying to do here. In its complaint in this case, the State asserted that
“[l]iability and intent in this matter are established by the [administrative
disqualification hearing] decision pursuant to 6 Del. C. § 1204(f).”67 The State
repeated this claim in its motion for judgment on the pleadings, arguing that
65
See Del. Super. Ct. R. 26.
66
See Del. Super. Ct. R. 38, 39.
67
App. to Opening Br. at A16 (Complaint).
23
Gonzalez was “without legal basis to challenge the factual findings of the Fair
Hearing Officer” in the prior administrative action,68 and has done so again on
appeal, claiming that the administrative hearing “created dispositive factual findings
for use in a subsequent [Delaware False Claims and Reporting Act] lawsuit.”69 In
essence, the State is trying to use the prior administrative action as a form of
offensive collateral estoppel. Given Gonzalez’s limited ability and incentive to put
up a vigorous defense in that administrative action, however, it would arguably be
unfair to use the hearing officer’s factual findings against her in a later action where
the consequences are much starker: a judgment of around $200,000 to $375,000,
plus the State’s attorneys’ fees and costs and what would probably amount to
lifetime ban on receiving SNAP benefits.70
For these reasons, 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-
68
Id. at A57 (Pl.’s Mot. for J. on the Pleadings) (“[U]nder the [Delaware False Claims and
Reporting Act], the Defendant is without legal basis to challenge the factual findings of the Fair
Hearing Officer who issued a decision in this matter on August 18, 2017.”).
69
Answering Br. at 15.
70
See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330 (1979) (observing that the offensive use
of collateral estoppel “may be unfair to the defendant” where the “defendant in the first action is
sued for small or nominal damages” because “he may have little incentive to defend vigorously,
particularly if future suits are not foreseeable”); Berner v. British Commonwealth Pac. Airlines,
Ltd., 346 F.2d 532, 538–41 (2d Cir. 1965) (reasoning that it would be unfair to apply collateral
estoppel where the defendant did not appeal a $35,000 judgment and was later sued for about $7
million in damages).
24
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.71
D.
The regulatory provisions cited by the Superior Court below and by the State
on appeal must, of course, give way to Congress’s clear intent in requiring states to
proceed either administratively or in court, but not both. But in any event, these
provisions do not undermine our analysis. To start, 7 C.F.R. § 271.4(b), entitled
“Claims delegation,” does not delegate authority to the State to bring a fraud action
under state law in addition to administrative disqualification and recoupment. This
provision “delegates to the State agency, subject to the standards in § 273.18, the
authority to determine the amount of, and settle, adjust, compromise or deny all or
part of any claim which results from fraudulent or nonfraudulent overissuances to
participating households.”72 Observing that the provision “speaks to the ability of
state agencies to pursue collection efforts,” the trial court found the language “to be
squarely on point in this matter and . . . quite persuasive.” 73 On appeal, the State
further characterizes this language as giving it “federal authority to pursue
71
See 11 U.S.C. § 523(a)(7) (“A discharge [of an individual’s debts in bankruptcy] does not
discharge an individual debtor from any debt . . . to the extent such debt is for a fine, penalty, or
forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual
pecuniary loss, other than [certain tax penalties] . . . .”).
72
7 C.F.R. § 241.4(b).
73
State v. Gonzalez, 2018 WL 3655705, at *3 (Del. Super. Ct. July 19, 2018).
25
alternative remedies for collection efforts.”74 But for at least two reasons, that
language does not permit the State to bring an action under the Delaware False
Claims and Reporting Act. First, the collection of “claims” must be distinguished
from bringing an action under state law that will result in penalties being deposited
in state coffers. In the SNAP context, “claims” are explicitly defined to be “a Federal
debt,” which the state agency must collect on behalf of the federal government.75
Here, by contrast, counsel for the State candidly admitted at oral argument that any
funds collected under the Delaware False Claims and Reporting Act would go to
Delaware’s General Fund.76 Second, the regulation explicitly makes the delegation
of authority “subject to the standards in § 273.18,”77 and § 273.18 sets forth formulas
for determining the amounts of claims that cap claims like those in this case at
basically the value of the overissued benefits.78 If anything, this provision supports
the argument for preemption.
74
Answering Br. at 23.
75
7 C.F.R. § 273.18(a)(2); see also Br. of Amicus Curiae David A. Super at 7 (“When [DHSS]
becomes involved in collecting overissuances from households, it is doing so not on its own behalf
but rather under a delegation of responsibility from the real party in interest: the federal
government.”).
76
Oral Argument Video at 13:27–37 (“It would go to the General Fund, Your Honor.”).
77
7 C.F.R. § 271.4(b); see also Br. of Amicus Curiae David A. Super at 7 (“This delegation is
strictly constrained by detailed federal regulations on the computation of claims against
households. These regulations give states some discretion in how to collect claims against
households but none over the computation of those claims.”).
78
See 7 C.F.R. § 273.18(c)(1) (setting forth the procedures for calculating “[c]laims not related to
trafficking”).
26
Nor does 7 C.F.R § 273.16(g)(1)(ii) suggest that the State can proceed against
a SNAP beneficiary in both an administrative disqualification hearing and a civil
action in court. That provision reads:
State agencies are encouraged to refer for prosecution
under State or local statutes those individuals suspected of
committing intentional Program violation, particularly if
large amounts of food stamps are suspected of having been
obtained by intentional Program violation, or the
individual is suspected of committing more than one act of
intentional Program violation. The State agency shall
confer with its legal representative to determine the types
of cases which will be accepted for possible prosecution.
State agencies shall also encourage State and local
prosecutors to recommend to the courts that a
disqualification penalty as provided in section 6(b) of the
[predecessor statute to the Food and Nutrition Act] be
imposed in addition to any other civil or criminal penalties
for such violations.79
The Superior Court relied on this language to conclude there was no preemption,80
and the State argues that the provision “appears to contemplate additional remedies
beyond an [administrative disqualification hearing] and tax intercepts.”81 In context,
however, this provision is far less meaningful than the State insists. As previously
discussed, § 273.16 is the regulation that governs disqualification for intentional
program violations—the one that implements the Food and Nutrition Act’s
instruction that states proceed either administratively or in court. But this particular
79
Id. § 273.16(g)(1)(ii).
80
See State v. Gonzalez, 2018 WL 3655705, at *3 (Del. Super. Ct. July 19, 2018).
81
Answering Br. at 24.
27
language is found in a subsection that carries the title “Court referrals” and sets forth
the requirements for state agencies that are “exempted from the requirement to
establish an administrative disqualification system” and therefore whose only option
is to “refer appropriate cases for prosecution by a court of appropriate jurisdiction.”82
In other words, this provision is really intended only for those states that are limited
to proceeding in court. Indeed, § 273.16(g)(1)(ii) speaks in terms of prosecutors
recommending both disqualification penalties and any other civil or criminal
penalties only “to the courts.”83 Nothing in the provision suggests that states may
bring one action in an administrative setting and another in court.
Nor do the cases cited by the Superior Court below and the State on appeal
support the State’s argument against preemption. To start, the State cites three
cases84 in which “the federal False Claims Act has been used to penalize food
benefits fraud.”85 But these are cases in which the federal government used a federal
statute to seek penalties. Section 6(b)(2) of the Food and Nutrition Act, by contrast,
applies to “State agenc[ies],” not the United States.86 Congress likely had good
reasons for that decision. In collecting overissued claims, state agencies act on
82
7 C.F.R. § 273.16(g) (emphasis added).
83
Id. § 273.16(g)(1)(ii).
84
United States v. Byrd, 100 F. Supp. 2d 342 (E.D.N.C. 2000); United States v. Tran, 11 F. Supp.
2d 938 (S.D. Tex. 1998); United States v. Truong, 860 F. Supp. 1137 (E.D. La. 1994). The
Superior Court also relied on Byrd in its opinion below. State v. Gonzalez, 2018 WL 3655705, at
*3 (Del. Super. Ct. July 19, 2018).
85
Answering Br. at 27.
86
7 U.S.C. § 2015(b)(2).
28
behalf of the federal government, who is “the real party in interest” because SNAP
benefits are funded entirely by the federal government.87 As for the other cases cited
by the State, none of them deal with the specific issue raised by Gonzalez: whether
the Food and Nutrition Act prohibits a state from pursuing one case against a SNAP
beneficiary in an administrative action and another in court when the two cases are
based on the same program abuse.88 Indeed, none of these cases even cite § 6(b)(2).
E.
As to the State’s argument that § 6(b)(2) restricts only the state agency that is
responsible for administering SNAP—and not other parts of state government—
there are many problems with this argument. The basic premise of the State’s
argument is that § 6(b)(2) applies only to “[e]ach State agency,”89 which the Food
and Nutrition Act defines in relevant part to mean only “the agency of State
government, including the local offices thereof, which has the responsibility for the
administration of the federally aided public assistance programs within such State.”90
87
Br. of Amicus Curiae David A. Super at 7.
88
See Answering Br. at 28–29; Dupler v. City of Portland, 421 F. Supp. 1314 (D. Me. 1976);
Williams v. City of Philadelphia, 164 A.3d 576 (Pa. Commw. Ct. 2017); Harrelson v. Butz, 547
F.2d 915 (4th Cir. 1977); People v. Triuck, 669 N.Y.S.2d 1018 (N.Y. Sup. Ct. 1998); Turner v.
Chandler, 995 P.2d 1062 (Haw. 1998); State v. Bolar, 530 N.E.2d 940 (Oh. Ct. App. 1987); Bazan
v. Dep’t of Soc. & Health Servs., 612 P.2d 413 (Wash. Ct. App. 1980).
89
7 U.S.C. § 2015(b)(2).
90
Id. § 2012(s). The Act also defines the term “State agency” to include, “in those States where
such assistance programs are operated on a decentralized basis, . . . the counterpart local agencies
administering such programs,” and “the tribal organization of an Indian tribe determined by the
Secretary to be capable of effectively administering a food distribution program under section
2013(b) of this title or a supplemental nutrition assistance program under section 2020(d) of this
title.” Id.
29
In Delaware, that “State agency” is DHSS, not the DDOJ. Based on that fact, the
State argues that whatever § 6(b)(2) may mean for DHSS, it does not stop the DDOJ
from bringing a lawsuit.
For starters, we draw a different conclusion from the fact that § 6(b)(2) is
directed only at “State agencies” rather than the State as a whole. Under the Food
and Nutrition Act and its implementing regulations, it is the “State agency” rather
than the “State” that has responsibility for administering the program,91 including
the collection of overissued benefits resulting from fraudulent claims. 92 That
undermines, not strengthens, the notion that Congress intended for other state
entities such as the DDOJ to have their own independent role in enforcing
prohibitions on fraud in obtaining SNAP benefits. In other words, SNAP is a
91
See, e.g., id. § 2013(a) (authorizing the Secretary of the Department of Agriculture “to formulate
and administer a supplemental nutrition assistance program under which, at the request of the State
agency, eligible households within the State shall be provided an opportunity to obtain a more
nutritious diet”); id. § 2020(a)(1) (“The State agency of each participating State shall have
responsibility for certifying applicant households and issuing EBT cards.”); id. § 2020(b) (“When
a State agency learns . . . that it has improperly denied, terminated, or underissued benefits to an
eligible household, the State agency shall promptly restore any improperly denied benefits to the
extent required . . . .”); id. § 2020(c)(2) (requiring “[t]he administration of the program by a State
agency” to be consistent with the Age Discrimination Act of 1975, § 504 of the Rehabilitation Act
of 1973, the Americans with Disabilities Act of 1990, and Title VI of the Civil Rights Act of 1964);
id. § 2015(d)(1)(C) (giving the “State agency” a role in determining the length of ineligibility to
participate in SNAP for individuals who refuse employment); id. § 2016(e) (making the “State
agency . . . strictly liable to the Secretary for any financial losses involved in the acceptance,
storage and issuance of benefits,” with certain exceptions); 7 C.F.R. § 271.4(a) (“The State agency
shall be responsible for the administration of the program within the State . . . .”).
92
See 7 U.S.C. § 2022(b) (requiring the “State agency” to “collect any overissuance of benefits
issued to a household”); 7 C.F.R. § 271.4(b) (“FNS delegates to the State agency, subject to the
standards in § 273.18, the authority to determine the amount of, and settle, adjust, compromise or
deny all or part of any claim which results from fraudulent or nonfraudulent overissuances to
participating households.”).
30
cooperative federalism program, and the entity of the State of Delaware that serves
as the federal government’s implementing partner is DHSS. It is DHSS, not the
DDOJ, that Congress has given the authority to act under the Food and Nutrition
Act. It would do violence to the Act to read it as addressing only the one state agency
that actually has a proper role under the statute, with every other entity of the State—
none of which has a legitimate role under the Act—being left free to proceed against
a recipient who might have improperly obtained benefits in any way that the other
entity sees fit.93 That is especially the case where—unlike some other cooperative
federalism programs such as Medicaid where the federal and state governments
share the costs of providing benefits—the improperly obtained benefits are entirely
federally funded.94
Most importantly, the State’s argument, if accepted, would in reality nullify
Congress’s decision in the 1981 omnibus legislation to amend § 6(b)(2) to strike the
“or both” language. If states could proceed in both ways simply by funneling the
93
We also wonder how the State assumes that DHSS is free to share beneficiary files, which likely
involve personal information, with state agencies that are not authorized to receive it and have no
role under the Food and Nutrition Act. In this regard, it seems likely that the DDOJ is involved
because it acted as counsel for DHSS in the administrative proceeding against Gonzalez. See
Answering Br. at 16–17 (“[A] Deputy Attorney General litigated the [administrative hearing] on
behalf of [DHSS].”).
94
Although federal and state governments share administrative expenses under SNAP, the cost of
the actual benefits—which comprise the lion’s share of the costs of the program—are entirely
funded by the federal government. See Food and Nutrition Service, Supplemental Nutrition
Assistance Program Participation and Costs (Feb. 22, 2019), https://fns-
prod.azureedge.net/sites/default/files/pd/SNAPsummary.pdf.
31
court action through another agency and ensuring that there is no “referral” by the
state agency responsible for administering the benefits, Congress’s decision to
change the statutory text would have little consequence. We must presume,
however, that “[w]hen Congress acts to amend a statute, . . . it intends its amendment
to have real and substantial effect.”95
Finally, the State’s odd argument is also belied by Delaware’s own practices
and procedures regarding SNAP. Even under the State’s view—in which § 6(b)(2)
applies only to the state agency responsible for day-to-day program administration—
a state agency such as DHSS could not both proceed administratively and “refer[]”
the matter “to appropriate authorities for civil or criminal action in a court of law.”96
But the State’s regulations governing the collection of overpayments in connection
with intentional program violations demonstrate that, as one would expect, DHSS is
the entity that determines when there is a case of potential SNAP fraud, and upon
discovery of such fraud, it may “refer[]” the matter to the DDOJ for a civil or
criminal action in court.97 The Delaware Social Services Manual sets forth specific
criteria governing when “[o]verpayments should be referred to [the DDOJ] for
95
Stone v. INS, 514 U.S. 386, 397 (1995).
96
7 U.S.C. § 2015(b)(2).
97
See 16 Del. Admin. C. § 7001 (giving the Audit and Recovery Management Services arm of
DHSS “the responsibility for . . . the preparation of Referral for Prosecution for felony indictment
to the Office of the Attorney General; referral of a case directly to a court of competent jurisdiction;
or, preparation of an administrative overpayment”); id. § 7003.1 (directing DHSS to “refer[]”
overpayments to the DDOJ for prosecution when there is “evidence of intentional violation (e.g.,
information intentionally omitted from application form)”).
32
prosecution,” with “[s]uspected intentional violations meeting [these] criteria . . . to
be transmitted using a ‘Referral for Prosecution and Overpayment Form.’”98 Such
referral for prosecution is supposed to occur “in lieu of an administrative
disqualification hearing.”99 In effect, the State’s view of § 6(b)(2) would depend on
there being a loophole in which a state could proceed both administratively and in
court so long as the agency that administers the benefits program does not “refer”
the case to the prosecuting agency,100 but Delaware’s own procedures and practices
suggest that this condition of “no referral” will not be met. Indeed, the State does
not claim that DHSS—the “State agency” under § 6(b)(2)—did not refer this matter.
* * *
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.
98
Id. § 7003.1. The regulations recommend referral when there is evidence of an intentional
violation and either estimated net overpayment in excess of $1,000, interstate fraud, or a case
involving a repeat offender with previous documented offenses of $500 or more. Id.
99
Id. § 2023.3 (“If the condition in items 1 or 2 [defining intentional program violations] are met
and the claim meets the criteria for referral to the Department of Justice as set forth in DSSM 7003,
it will be referred for prosecution in lieu of an administrative disqualification hearing.”).
100
We have no doubt that Congress did not intend to create such an artificial distinction based
solely on whether the prosecuting agency receives a “referral” or discovers the fraud in some other
way.
33
IV.
When determining whether a federal statute preempts state law, the “ultimate
touchstone” of our inquiry is “the purpose of Congress.”101 In this case, the relevant
statutory text, statutory history, and administrative interpretations of that statute
show that Congress intended to require its state partners in SNAP to choose between
proceeding against an individual accused of food benefits fraud either
administratively or in court. By doing both, the State did not comply with that
federal mandate. Because federal law prohibits the State’s course of action and
federal law is the supreme law of the land, we reverse the Superior Court’s decision
granting the State’s motion for judgment on the pleadings.
101
Hughes v. Talen Energy Marketing, LLC, 136 S. Ct. 1288, 1297 (2016) (internal quotation
marks omitted).
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