St. Paul food distributor says USDA unfairly banned it from taking food stamps from North Dakota customers

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• Food stamp users tell critics: Walk in our shoes

A St. Paul food distributor says USDA unfairly cut off its use of food stamps from customers.

Brad Schmitz and Kevin Brennan, both of St. Paul, doing business as Lakeland Fine Foods,filed a complaint this week in federal court in Bismarck against the U.S. Department of Agriculture.

The men claim USDA unfairly has banned them from taking EBT card payments, formerly known as food stamps, for their products, said Alex Reichert, the Grand Forks attorney representing the men.

Reichert, a Grand Forks attorney, said USDA wrongly used a computer model to conclude Lakeland was exchanging cash, not food, for Electronic Benefit Transfer card payments from customers.

EBT cards, used like bank debit cards, are used by welfare recipients who qualify for what formerly was known as food stamps, under USDA's Supplemental Nutrition Assistance Program, or SNAP.

In December, USDA charged them with misusing the SNAP program and ordered them to stop taking EBT card payments.

Lakeland has four trucks which deliver frozen food products and dry goods across North Dakota and South Dakota, similar to Schwan's trucks, Reichert said.

Many of their customers are on Indian reservations, where the use of EBT cards is much more prevalent, Reichert said. Schmitz and Brennan provide a needed service on reservations where many people can't easily get to grocery stores to get quality food, he said.

His clients are being penalized "for being too successful," Reichert said. "They sell too much volume."

Reichert said USDA just uses a computer model that says Lakeland could never sell that much food, and wrongly concluded there was some misuse of the SNAP program.

"We are being unfairly accused," Schmitz said Saturday.

Reichert said he's confident that when a U.S. District judge in Bismarck hears the case, the testimony of Lakeland's customers and reams of documented sales will make it clear the company acted properly.

Reichert is asking that his clients get a new hearing on USDA's decision, plus monetary sanctions against USDA for denying his clients' "due process right," and for attorney's fees and costs.

In 2010, Schmitz and Brennan bought the right to use the name Lakeland Fine Foods from Jason Harmon, of Grand Forks, who started the food distribution company in 2004.

Harmon says he has nothing to do with the operation of Schmitz and Brennan and separatelyt runs a smaller route himself out of Grand Forks, distributing food products.

Reichert corroborated that Harmon is not part of the federal complaint.

Tags: north dakota, food stamps, st paul, lakeland fine foods, federal court, news, usda, food, updates, minnesota, courts, business