Challenge to DOL Internal Judge System Goes Before Third Circuit

A New Jersey farm’s attack on the Department of Labor’s internal judicial system will go before a federal appeals court Thursday, the latest case to test the power of agency judges.

Sun Valley Orchards LLC will attempt to convince the US Court of Appeals for the Third Circuit that more than half a million dollars in penalties stemming from violations of the H-2A visa program should be tossed because the DOL’s administrative law judge system is unconstitutional.

The Third Circuit could be the first appellate court to examine Labor Department ALJs in light of recent US Supreme Court and Fifth Circuit precedent in SEC v. Jarkesy on the validity of agency judges.

The justices in 2024 found that defendants facing civil penalties have a Seventh Amendment right to a jury trial in federal court.

However, they didn’t address arguments that the judges were unconstitutionally insulated from removal by the president—a separate holding in the Fifth Circuit’s decision.

Employers, including Elon Musk’s SpaceX and Walmart, have sued multiple regulators over the constitutionality of other administrative judges. These challenges persist as the Trump administration has sought to loosen protections for these judges and bring them under control of the White House.

Comcast Corp. and Perdue Farms last year targeted whistleblower cases before DOL judges. The Justice Department pulled out of defending the Comcast case in February.

DOJ Chief of Staff Chad Mizelle issued a statement in February that removal protections for administrative law judges are unconstitutional. DOJ would restore “constitutional accountability so that Executive Branch officials answer to the President and to the people,” he said in the statement.

H-2A Violations

A DOL investigation of Sun Valley in 2015 found multiple violations of the H-2A visa program and an administrative judge upheld penalties, including $344,946 in back wages and $211,800 in other penalties.

The temporary visa program allows agricultural program to hire foreign workers on a seasonal basis when there aren’t adequate numbers of US job seekers to meet labor needs. Sun Valley sued in district court over the penalties, claiming the entire ALJ system was unlawful.

A New Jersey district court dismissed the challenge in 2023, finding that Supreme Court precedent allows the government to handle adjudication of such cases outside of federal courts. That decision also found that the ALJ system was allowed under a plain reading of the Immigration and Nationality Act.

The DOL has argued that matters of public rights like immigration law can be adjudicated within the executive branch and said the Third Circuit should affirm the lower court’s decision. It also argued in a November court filing that Sun Valley had failed to preserve its argument over unlawful removal restrictions for ALJs because it wasn’t raised in enforcement proceedings.

The Trump administration’s solution to concerns over removal protections offered since then “would only make a bad situation worse,” said Rob Johnson, senior attorney at Institute for Justice, a libertarian legal group representing Sun Valley.

“When an administrative agency is trying to take your money, you don’t want your judge to be accountable to higher-ups at the agency,” he said in an emailed statement. “You want your judge to be independent.”

William Araiza, an administrative law professor at Brooklyn Law School, said there’s nothing necessarily inconsistent about the government adopting a position that existing removal protections for administrative law judges are unconstitutional but nevertheless arguing that a case still falls under the public rights exception.

“You could imagine that’s exactly what the Trump administration would want,” he said. “ALJs get to adjudicate a claim, but are now deemed to be under the president’s direct control.”

DOJ didn’t immediately respond to a request for comment.

The plaintiffs are also represented by Wilhelm & Roemersma, P.C. DOL is represented by the Department of Justice.

The case is Sun Valley Orchards LLC v. DOL, 3d Cir., No. 23-02608, oral arguments scheduled 4/10/25.