Lawsuit challenges USDA approval of SNAP waivers in five states

The plaintiffs argue that USDA lacks statutory authority to permit states to redefine “food” through waivers that exclude broad categories of products otherwise eligible under federal law. They further allege that USDA’s actions represent an unprecedented departure from SNAP’s long standing statutory framework in which Congress has maintained a uniform national definition of eligible food for over sixty years. According to the complaint, the waivers permit states to narrow the definition of “food” in inconsistent and ambiguous ways, and USDA approved the waivers without meeting notice-and-comment requirements. As alleged, the challenged waivers effectively allow states to redraw statutory lines by excluding items such as soft drinks or candy, even though Congress has never authorized such categorical exclusions; only narrow ones, such as for alcohol, tobacco, and hot prepared foods. The plaintiff’s arguments are laid out in more detail below, followed by a summary of USDA’s retailer compliance policy for the SNAP waivers.

Challenged State Waivers

The challenged waivers are all set to take effect in 2026, but USDA announced a one-time 90-day grace period for retailer compliance tied to each state’s beginning date.² For example, retailers in states with waivers that begin on January 1, 2026 have a one-time grace period until April 1, 2026 to comply with waiver terms. The lawsuit challenges the following state SNAP waivers approved by USDA:

• Colorado: Restricts the purchase of soft drinks. USDA approved an implementation date of March 1, 2026, but Colorado has delayed implementation to April 30, 2026.
• Iowa: Restricts the purchase of all taxable food items under Iowa law, which includes certain prepared foods and soft drinks. The waiver took effect January 1, 2026, though USDA enforcement will begin on April 1, 2026.
• Nebraska: Restricts the purchase of soda, soft drinks, and energy drinks. The waiver took effect January 1, 2026, though USDA enforcement will begin on April 1, 2026.
• Tennessee: Restricts the purchase of “processed foods” with sugar or corn syrup as a first ingredient and beverages with sugar or corn syrup as a first ingredient or second to water. The waiver is set to take effect July 31, 2026.
• West Virginia: Restricts the purchase of soda. The waiver took effect January 1, 2026, though USDA enforcement will begin on April 1, 2026.³

The lawsuit, brought by the nonprofit National Center for Law and Economic Justice, makes three claims under the Administrative Procedure Act (APA):

1. Impermissible purpose for SNAP waiver pilot projects

First, the plaintiffs allege that USDA exceeded its statutory authority under 7 U.S.C. § 2026 by approving the waivers as “pilot or experimental projects” because the waivers are not pilot projects designed to test changes that would increase the efficiency of SNAP or improve delivery of benefits. Specifically, the waivers do not serve any of the four permissible statutory purposes for approving pilot projects, which are: improving program administration; increasing the self-sufficiency of SNAP recipients; testing innovative welfare reform strategies; and allowing greater conformity with the rules of other programs. The complaint also notes that USDA’s website identifies alternative purposes for waivers—restoring nutritional value and ensuring that taxpayer dollars provide nutritious outcomes that improve health outcomes—that plaintiffs contend are not authorized by Congress in § 2026(b).

2. Waiver approvals are arbitrary and capricious

Second, plaintiffs allege that USDA’s approvals are arbitrary and capricious because the agency failed to include any metrics or meaningful evaluation methodology in the approval, despite the requirement in 7 U.S.C. § 2026(b) that demonstration projects include an evaluation capable of determining the project’s effects. As further evidence of arbitrary and capricious action, the plaintiffs note USDA’s failure to address the concerns it previously raised when the agency rejected Maine and Nevada’s proposed candy and soda waivers in 2018. According to the complaint, USDA had denied both proposals because they would raise administrative costs, burden retailers, present difficulty in delineating allowable and excluded foods, and would require the government to select winners and losers in the food industry.

3. Lack of Notice and Opportunity to Comment on SNAP Waivers

Third, the complaint alleges that USDA violated procedural requirements by approving the waivers without providing notice and an opportunity for public comment. The plaintiffs cite to USDA regulations requiring the agency to publish a Federal Register notice when a SNAP demonstration project is likely to have a significant impact on the public. The complaint emphasizes that though the waivers affect all SNAP participants and all SNAP authorized retailers within participating states, USDA approved them without public engagement or explanation of how to mitigate foreseeable consequences.

USDA’s Retailer Compliance Policy for State SNAP Waivers

The complaint also summarizes waivers’ effects on SNAP-authorized retailers. The plaintiffs state that the SNAP waivers impose on consumers and retailers the responsibility to make product level eligibility determinations that vary by state and, in some cases, by store format or fulfillment method, raising compliance costs. The complaint notes that only Oklahoma currently provides a full list of UPCs restricted under its waiver; elsewhere, retailers must make their own assessments based on limited or vague state guidance.

The plaintiffs argue that compliance issues are compounded by USDA’s December 30, 2025 policy memo that outlines how SNAP-authorized retailers must implement and comply with SNAP waivers.⁴ Under the new policy, walk-in SNAP retailers located in a waiver state must apply that state’s restrictions to all SNAP transactions. Retailers with online ordering capacity that fulfill orders directly from warehouses must implement compliance procedures for every state with a waiver into which they sell products through their websites.

USDA also outlined a two-strike enforcement framework: the Food and Nutrition Service (FNS) intends to conduct undercover compliance investigations beginning 90 days after implementation, FNS will issue a warning letter on the first verified violation, and FNS may impose upon the retailer involuntary withdrawal from the SNAP program for a second violation identified after an additional 30-day period. Retailers may seek administrative review of a withdrawal decision, which pauses the withdrawal action pending the outcome of the review.

USDA announced in its memo that retailers have a one-time 90-day grace period from each waiver’s implementation date before FNS begins compliance enforcement, though some states have delayed implementation dates after approval. The agency has generally approved SNAP waivers for an initial two year period, with the option for states to seek extensions of up to three additional years.

Next Steps

If granted, the plaintiffs’ request to stay or vacate the waiver approvals would affect states with waivers that have already taken effect, as well as those preparing to launch restrictions later in 2026. A court order suspending approvals would force USDA and states to pause enforcement/ implementation of the waivers, or revisit waiver terms while litigation proceeds. Industry should monitor the litigation closely, as an adverse ruling could constrain USDA’s waiver authority or affect procedural requirements for future SNAP waivers.

Authored by Veronica Colas and Noah Brown.