Victory! Farmers Vindicate The Right To A Real Judge

Sun Valley Orchards is a fourth-generation family farm. Its owners, brothers Joe and Russell Marino, grow vegetables—including peppers, eggplants, cucumbers, and asparagus. Or, rather, they did, before they shut down in the face of over $500,000 in penalties imposed by the U.S. Department of Labor.  

Those penalties were imposed in an agency court, where the judge and prosecutor were both agency employees. There was no jury and no independent judge. An agency bureaucrat proposed the penalty, and a second bureaucrat approved it. 

Most allegations were ones only a bureaucrat could love. Over half the liability was imposed based on a harmless paperwork violation, misdescribing the workers’ meal plan. Much of the rest was imposed for dastardly deeds like selling beer to workers without a liquor license. To the extent the agency accused the farm of anything of substance—like prematurely firing some workers—the farm hotly disputed the agency’s version of the facts. 

By constitutional design, allegations like these would have been heard in real federal courts, before independent judges, and Joe and Russell would have had a right to make their case before a jury of their peers. But, starting in the 1970s, agencies began imposing penalties in their own in-house agency courts, staffed by their own agency employees. 

By 2021, when IJ took the case, that once-novel practice had become a settled part of the bureaucratic landscape of the administrative state. Agencies had been imposing penalties in their own in-house courts for almost half a century. But IJ delights in challenging the status quo. 

Sun Valley’s was the first of several cases that IJ filed challenging the legality of agency courts. And when the U.S. Supreme Court took up the legality of agency courts in a case called SEC v. Jarkesy, IJ filed an amicus brief on behalf of all our clients in those cases—including Sun Valley. 

The decision in Jarkesy transformed the legal landscape: In 2024, the Supreme Court held that the SEC could not use its in-house courts to impose penalties for securities fraud. But now the lower courts must decide how Jarkesy applies to other federal agencies and other types of penalties. 

So it was a big deal when the 3rd Circuit sided with Sun Valley. The panel held that forcing the farm to defend itself in the agency’s court violated Article III of the U.S. Constitution—the constitutional provision that guarantees an independent judiciary. 

If the question is how broadly Jarkesy applies, the 3rd Circuit answered: very broadly, including to the powerful Department of Labor. 

The decision is also a big deal for Sun Valley. The farm has already closed—a victim of bureaucratic excess and the difficulties of finding and retaining farm workers today—but Joe and Russell can finally rest easy knowing they are safe from the looming threat of DOL’s half-million-dollar judgment.

Other farmers and small-business owners can rest easier as well, as the 3rd Circuit decision vindicates the right to a real court with a real judge—not an agency bureaucrat.

Rob Johnson is an IJ senior attorney.