Pick Your Poison: Federal Ct or Agency Tribunal

Letter to Romans: Just 2 yrs ago the Supremes limited federal agencies’ ASSUMED power to not only regulate their areas of responsibility but also act as prosecutor, judge & jury via administrative courts. Tuesday, the Justices revisit their landmark Jarkesy ruling …

As the WSJ noted, Department of Labor v Sun Valley Orchards “is a textbook case of how regulatory agencies arbitrarily write, enforce & adjudicate rules.” In this pending case, the oral arguments will center on DOL regulations that order employers using the H-2A guest-worker visa program to specify in worker contracts the dates of employment, wage deductions & benefits. In 2016, the agency fined family-owned Sun Valley farm over $650,000 after alleging, then, ruling it had violated those regs. The family owners supposedly didn’t give kitchen access for guest workers as the farm had promised & laid off workers before their contractual end date. The paper suggests an administrative law judge & an Administrative Review Board “rubber stamped DOL’s allegations,” thereby forcing Sun Valley to close its doors. In Jarkesy,however, the Supreme Court had held that the 7^th Amendment guarantees a trial by jury in FEDERAL COURT for “suits at common law.” In that instance, the Securities & Exchange Commission was NOT entitled to “drag a defendant through its administrative tribunals to enforce monetary penalties for securities fraud” when fraud is basically a “common law” offense. Simple?

But did the DOL penalties in Sun Valley for what sounds like a common law breach of contract satisfy or violate Jarkesy? Unlike an NFL replay ruling limited to either “upholding” or “confirming” a ruling on the field, here’s a chance for the Justices to clarify if not extend its idea of what a “common law” cause of action must look like to kick a given agency’s case to federal court. Trial lawyers will have their own reasons for paying special attention to the outcome. That’s because many corporate attorneys prefer practicing before the administrative courts that are arguably faster & cheaper in delivering a result; they may also have developed “relationships” with the agencies & think they have some influence over them. Then, again, many trial lawyers are naturally more comfortable in the federal courts they practice in regularly & are willing to put up with longer wait times in return for a more nonpartisan mindset.

Davd Soul