DOL’s Administrative Judge System Survives Constitutional Test

The US Department of Labor’s administrative law judge system survived a constitutional challenge after a federal judge tossed a case filed by a New Jersey farm owner.

Sun Valley Orchards LLC’s case was based on violations of DOL regulations on the H-2A agricultural visa program and was related to a government action that was properly adjudicated in an administrative tribunal, Judge Joseph Rodriguez of the US District Court for the District of New Jersey ruled Thursday.

US Supreme Court precedent allows the government to handle adjudication of public rights matters—like immigration enforcement—outside of Article III courts, he wrote.

Granting the DOL’s motion to dismiss, Rodriguez also found that the agency’s administrative law judge system is allowed under the plain language of the Immigration and Nationality Act and administrative law.

“Based on the clear language of the statute, Congress authorized the DOL to adjudicate civil monetary penalties or back pay in administrative proceedings,” he said.

The libertarian group Institute for Justice, which represented the New Jersey farm owner, has brought multiple challenges to the constitutionality of the DOL’s internal administrative judge system, including backing a lawn care company’s case in federal district court in Washington, D.C., involving fines under the H-2B visa program.

Challenge to H-2A Fees

Sun Valley’s case dates back to 2015, when a DOL investigation found multiple violations of the H-2A program, which allows farm employers to hire foreign workers on a temporary or seasonal basis. An administrative law judge upheld the findings, including $344,946 in back wages and $211,800 in other penalties. The agency’s Administrative Review Board affirmed the decision.

Instead of seeking a reversal of that decision in federal district court, Sun Valley challenged the constitutionality of the entire administrative law system. The Supreme Court’s 2022 ruling in West Virginia v. EPA, which limited federal agencies’ regulatory powers, bolstered the case against the DOL administrative judge’s authority, the group’s lawyers argued last year.

DOL lawyers responded that the scope of agency actions finding violations by single employers don’t come “remotely close” to the extraordinary cases identified by the high court in West Virignia v. EPA.

Rodriguez’s opinion shows that the law forces Article III judges “to defer to agency bureaucrats,” Institute for Justice attorney Rob Johnson said in a statement in response to the ruling Thursday.

“Sun Valley was fined more than half a million dollars in an agency court, where agency employees served as prosecutor, judge, and jury,” he said. “Now, when Sun Valley finally had a chance to make its case before a real judge, the judge held he had no choice but to give a rubber stamp to that biased administrative proceeding.”

A Department of Labor spokesperson didn’t immediately respond to a request for comment.

The case is Sun Valley Orchards, LLC v. DOL, 2023 BL 257903, D.N.J., No. 1:21-cv-16625, 7/27/23.