Euclid Market Inc. v. United States, 60 F.4th 423

USDA’s ALERT data review (Apr–Sep 2018) flagged Euclid Market for three suspicious patterns: many transactions ending in .98, clustered transactions from individual SNAP accounts, and unusually large purchases for the store’s profile.
USDA conducted an on-site inspection, issued a charging letter alleging SNAP trafficking, and permanently disqualified Euclid Market after its administrative appeal was denied.
Euclid Market sued under 7 U.S.C. § 2023; the district court held a de novo bench trial and ruled for the government, placing the burden on Euclid and requiring transaction-specific rebuttals for each alleged trafficking transaction.
The district court relied heavily on the absence of receipts for 59 transactions and found the receipts produced were not sufficiently credible or itemized to rebut trafficking allegations.
On appeal the Eighth Circuit: (1) affirmed that the challenger (Euclid) bears the burden of proof under the ordinary default rule; but (2) vacated and remanded because the district court erred by applying a hard rule requiring transaction-specific evidence for every USDA-identified transaction.
The court declined to affirm on alternative grounds (e.g., the district court’s footnote invoking “substantial evidence”) because of ambiguity whether the district court was recounting administrative facts or making independent factual findings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Allocation of burden of proof when a retailer challenges USDA debarment under 7 U.S.C. § 2023	USDA should bear burden because it alleges the violation and the review is de novo	Default rule places burden on the party seeking relief—here the disqualified store—so Euclid should bear the burden	Euclid (the challenger) bears the burden; Schaffer default rule controls
Whether a court may require transaction-specific rebuttal evidence for every USDA-identified suspicious transaction	District court erred; general, non-transaction-specific admissible evidence (store policies, typical sales, inventory practices) can suffice to rebut patterns	Stores must provide transaction-specific evidence (receipts, eyewitnesses) to rebut trafficking claims	District court erred to adopt a hardline rule; transaction-specific evidence is not always required—courts may consider relevant admissible evidence and weigh probative value; remand for reconsideration under correct standard
Whether this Court should affirm on alternative factual/administrative-evidence grounds (e.g., substantial evidence)	Euclid argues remand is required to apply correct legal standard	Government urges affirmation based on district court facts/footnote asserting “substantial evidence” supporting USDA	Court declined to affirm; ambiguous factual vs. administrative recitations warrant remand for fresh factfinding under correct legal standard

Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49 (2005) (default rule: plaintiff bears burden of proof absent statutory command)
Irobe v. U.S. Dep’t of Agric., 890 F.3d 371 (1st Cir. 2018) (challenger bears burden; skepticism that transaction-specific rebuttal is always required)
Fells v. United States, 627 F.3d 1250 (7th Cir. 2010) (placing burden on party challenging USDA decision)
Warren v. United States, 932 F.2d 582 (6th Cir. 1991) (same)
Plaid Pantry Stores, Inc. v. United States, 799 F.2d 560 (9th Cir. 1986) (same)
Redmond v. United States, 507 F.2d 1007 (5th Cir. 1975) (same)
Concrete Pipe & Prod. v. Const. Laborers Pension Tr., 508 U.S. 602 (1993) (distinguishing burden of proof from standard of review)
Ghattas v. United States, 40 F.3d 281 (8th Cir. 1994) (describing trial de novo review under § 2023)