Receiver-Managed Utility Rates Not a “Federal Assistance Program” Under the Food and Nutrition Act

Introduction

In State of Mississippi v. JXN Water (5th Cir. Apr. 10, 2025), the Fifth Circuit confronted a novel question under the Food and Nutrition Act of 2008 (“FNA”), 7 U.S.C. §§ 2011–2036d: whether a court-appointed federal receiver’s municipal water and sewer rate-setting qualified as administration of a “federal assistance program,” thus authorizing non-consensual access to Supplemental Nutrition Assistance Program (“SNAP”) recipient data.

Background: The State of Mississippi and the United States sued the City of Jackson for persistent Clean Water Act (“CWA”) and Safe Drinking Water Act (“SDWA”) violations. After federal enforcement actions and emergency orders, the district court appointed Edward Henefin (through JXN Water, Inc.) as Interim Third-Party Manager (“ITPM”) to operate Jackson’s water and sewer systems. To encourage payment by low-income households, the ITPM set a tiered rate schedule giving SNAP recipients a 75 percent discount—but needed recipient names and addresses to implement it. The district court ordered disclosure, finding the rate plan itself constituted a “federal assistance program” under 7 U.S.C. § 2020(e)(8)(A)(i). Mississippi and the United States appealed.

Summary of the Judgment

The Fifth Circuit reversed. It held that:

The FNA’s exception for disclosure of SNAP data to administrators of “[f]ederal assistance programs” applies only to programs run or funded by the federal government under federal law, not to state or municipal functions—even when carried out by a federal receiver.
JXN Water’s authority to set rates derived exclusively from local ordinances and the district court’s consent orders, not from any federal statute creating a benefit program.
The district court therefore exceeded its statutory authority in ordering MDHS to release SNAP recipient information to JXN Water.

The court also confirmed its jurisdiction to hear this interlocutory appeal under the collateral order doctrine and remanded for further proceedings.

Analysis

1. Precedents Cited

Brown v. Gardner, 513 U.S. 115 (1994): Emphasized that when Congress uses different terminology in proximate provisions—“federal assistance” versus “federally-assisted State”—it must intend a meaningful distinction.
In re Deepwater Horizon, 793 F.3d 479 (5th Cir. 2015): Set forth the stringent three-prong test for interlocutory appeals under the collateral order doctrine.
SEC v. Stanford Int’l Bank, Ltd., 927 F.3d 830 (5th Cir. 2019): Clarified that federal receivers operate under state law (28 U.S.C. § 959(b)), not as independent federal agencies.
Vantage Health Plan v. Willis-Knighton Med. Ctr., 913 F.3d 443 (5th Cir. 2019): Held that once confidential data is released, the harm is irreparable and unreviewable on appeal from a final judgment.

2. Legal Reasoning

• Plain Text and Structure: Section 2020(e)(8)(A)(i) allows disclosure only to persons connected with federal SNAP administration or enforcement, or to “federal assistance programs” (distinct from “federally-assisted State programs”). The absence of “state” or “local” in that list signals that Congress meant only truly federal programs.

• Statutory History: Earlier Food Stamp Act provisions and USDA regulations listed specific federally run programs (AFDC, Medicaid, SSI) as examples of “federal assistance programs.” When Congress broadened the language in 1982, it did not purport to capture state or municipal initiatives.

• Receivership Law: Under 28 U.S.C. § 959(b), federal receivers must manage property according to state law. JXN Water’s rate-setting power derived from Jackson’s municipal code and a consent decree, not from any federal benefit statute.

3. Impact

Data Privacy Protections: Reinforces robust confidentiality for SNAP recipients by restricting non-consensual data disclosure to bona fide federal agencies and programs.
Limits on Receiver Powers: Confirms that federal receivers cannot transmogrify local functions into federal programs simply by virtue of court appointment and federal funding in related enforcement actions.
Guidance for Lower Courts: Signals greater scrutiny of third-party data requests where no clear statutory authorization exists.
Statutory Interpretation: Affirms the principle that “federal” in a statutory exemption denotes administration by the federal government.

Complex Concepts Simplified

Federal Assistance Program: A benefit or subsidy program administered and funded by the United States government under federal law (e.g., SNAP, Medicaid), not any program that merely advances federal policy or uses federal funds.
Federal Receiver: A court-appointed manager who operates under state and local law; not an independent federal agency with sovereign powers.
Collateral Order Doctrine: Allows appeal of a non-final order that (1) conclusively resolves an important issue, (2) is collateral to the merits, and (3) is effectively unreviewable later—here, because confidential data cannot be “un-released.”
Statutory Canons: When Congress uses two distinct phrases in the same statute (“federal assistance programs” vs. “federally assisted State programs”), it does so intentionally to draw a line between them.

Conclusion

By holding that a court-appointed receiver’s rate-setting authority under local law and consent decrees does not elevate the activity to a “federal assistance program,” the Fifth Circuit preserves the strong privacy safeguards Congress built into the FNA. The decision clarifies that only entities statutorily empowered to operate or enforce SNAP (or similar federal benefit programs) may access recipient data without consent. This ruling will guide federal and state courts, receivers, and utility managers, ensuring that federal data-privacy exemptions are not stretched beyond their textual and historical bounds.