Justices Question Labor Department's Power to Fine a Farm Using Its Own Judges

WASHINGTON. Several Supreme Court justices on Tuesday questioned whether the Labor Department may use its own in-house judges to order a New Jersey farm to pay civil penalties and back wages, in a case that could further limit how federal agencies enforce the law.

The case, Department of Labor v. Sun Valley Orchards, No. 25-966, asks whether Article III of the Constitution, which governs the federal courts, bars the department from adjudicating proceedings to collect money from employers accused of violating the terms of the H-2A seasonal farmworker visa program. The court also agreed to decide whether the underlying statute authorizes such proceedings at all, according to the docket.

The argument ran from 10:04 a.m. to 11:47 a.m., according to the official transcript.

A farm, a visa program and a half-million-dollar order

Sun Valley first used the H-2A program in 2015, hiring 96 foreign workers and 51 domestic workers in corresponding jobs, according to a July 2025 opinion by the U.S. Court of Appeals for the Third Circuit. Department investigators concluded that the farm had broken promises in its job order, the appeals court said.

The department first assessed $212,250 in civil penalties and $369,703.22 in back wages. After a hearing, an administrative law judge reduced those figures to $211,800 and $344,945.80, and the department's Administrative Review Board affirmed, the Third Circuit wrote.

A three-judge panel reversed. "Following the Supreme Court's recent decision in SEC v. Jarkesy," Judge Thomas Hardiman wrote, "we hold that Sun Valley was entitled to have its case decided by an Article III court." In Jarkesy, decided in 2024, the Supreme Court held that the Securities and Exchange Commission could not impose civil penalties for securities fraud in its own forum.

The government: immigration is different

Sarah M. Harris, the principal deputy solicitor general, argued that the case falls within the "public rights" exception that Jarkesy recognized, which lets Congress assign some matters to agencies. "The government is exercising its plenary immigration power on the employer's behalf to grant aliens visas and allow them to stay and work for that employer," she told the court.

Chief Justice John G. Roberts Jr. suggested that the government's main precedent, Oceanic Steam, which Ms. Harris said upheld similar remedies "a century ago," involved "a classic condition of entry." "The H-2A workers here have been in the country for some time," he said.

Justice Brett M. Kavanaugh noted that the court had said in a 1987 case, Tull v. United States, that a civil penalty was a remedy that could only be enforced in courts of law, and that Jarkesy repeated that statement. "That's a fairly definitive statement in our precedent," he said. "What are we supposed to do with that?"

Justice Neil M. Gorsuch, pointing to the statute's language about penalties, asked why the court should read it "to actually allow you to set up a whole court system" to finally decide penalties.

Justice Elena Kagan pushed back on the farm's position. "I feel at the base of your argument, Mr. Johnson, you're trying to get us to think that the H-2A program is not an immigration program but it is an immigration program," she said.

The farm: 'a far cry'

Robert E. Johnson, a lawyer with the Institute for Justice who represented Sun Valley, according to the docket, said the government had pointed to "no history" extending the immigration tradition to penalties and back wages. He called the government's reliance on history from disparate areas "that blunderbuss approach," which he said "is the opposite of the close analysis that Jarkesy requires."

The government's key precedent, he said, involved penalties tied to whether immigrants could be admitted at the border. "That is a far cry from a case about labor issues at a farm in New Jersey with a mix of foreign and domestic workers," he said. Under the government's broader theory, he argued, "little would be left of this Court's decision in Jarkesy."

Ms. Harris closed by warning about the stakes for other programs. "It would be a big deal for the government to lose, but an even bigger deal would be to have a mess," she said, and asked the justices to say whether the government needed to involve its legislative affairs staff, "because this will snowball. Please reverse."

The Cato Institute is among the groups that filed friend-of-the-court briefs, the docket shows. A decision is expected by the end of the court's term.