Not sure I understand the reason for denial. I recommend you take the denial letter to an experienced immigration attorney to determine what action is best to take at this late point in time.
To qualify for naturalization you must have been a resident of the state in which you're applying for three months at the time you apply. It appears you didn't make this requirement, so appealing may not help. I suggest you start over, and maybe speak with an immigration attorney first to make sure you have all the eligibility requirements. If your income is under 125% of the poverty guidelines or you receive means-tested benefits, you might qualify for a fee waiver.
The information offered is general in nature and not meant to be relied upon as legal advice. No client-attorney relationship is created through this information. Please consult an attorney prior to making legal decisions.
I'd re-file it. The USCIS office lacked jurisdiction to entertain the application. You must reside in the district 90 days prior to filing. Yes, you will need to go through the entire process again and yes you will need to pay the fees again (unless you can get a fee waiver granted).
Sorry, you weren't qualified to file when you did ... they properly denied the application (or, was it a rejection?)
Yes, you can start new.
Perhaps you'll consider hiring an attorney to help you .... as you can see, it isn't as easy of a process as it may look.
PROFESSOR OF IMMIGRATION LAW for over 10 years -- This blog posting is offered for informational purposes only. It does not constitute an attorney-client relationship. Also, keep in mind that this is an INTERNET BLOG. You should not rely on anything you read here to make decisions which impact on your life. Meet with an attorney, via Skype, or in person, to obtain competent personal and professional guidance.
Probably your best bet is to file it again, since according to what you explained the denial was not erroneous because you hadn't lived in the district for the 90 days required. Consult with an experienced immigration lawyer to review your case this time.
Your case is a good example of why having an experienced immigration attorney can save you a lot of money and headaches in the long run. There is much more to immigration then just filling our forms.
In order to be eligible for naturalization you must be have been residing in your state of residence for 90 days prior to your application. If you were only resident in Florida (the state in which you indicate you live) for 2 months and 20 days then you are statutorily ineligible for naturalization and the chance of winning an appeal is, as a practical matter, zero.
You will need to file a new application and pay all of the appropriate fees again. I suggest you consult with an experienced immigration attorney this time to make sure you are otherwise eligible prior to reapplying.
While this answer is provided by a Florida Bar Certified Expert in Immigration and Nationality Law, it is for general information purposes only and an attorney/client relationship is neither intended nor created. You should seek out qualified counsel to review your case and provide you with advice specific to your situation. Call +1-561-478-5353 to schedule a consultation with Mr. Devore.