Supreme Court to Test Article III Limits in H-2A Labor Dispute

The U.S. Supreme Court will hear argument on Nov. 10 in Department of Labor v. Sun Valley Orchards, a case that asks whether Congress may let executive branch officials, rather than Article III judges, adjudicate an employer's compliance with employment contracts signed with temporary foreign agricultural workers. The stakes extend well beyond one Nebraska orchard. The answer could unsettle decades of administrative adjudication across the federal government.

What happened below?

The dispute arises from the H-2A visa program, which permits employers to hire temporary foreign agricultural workers. The Department of Labor contended that Sun Valley Orchards failed, in several respects, to compensate such workers as it had promised the government it would when qualifying for the program.

The procedural path is familiar to administrative practitioners. Employees of the DOL's Wage and Hour Division brought the charges. A DOL administrative law judge largely sided with the agency. On appeal, a second set of DOL employees — the department's administrative review board — accepted the ALJ's findings. Only then, for the first time, could Sun Valley take the dispute to Article III judges, and the governing statute required the federal district court to defer substantially to the DOL's adjudication.

The U.S. Court of Appeals for the 3rd Circuit held that this administrative adjudication of the department's charges cannot be reconciled with Article III of the Constitution. The government appealed. That ruling now stands or falls before the justices.

How does the 'public rights' doctrine frame the fight?

At a high level of generality, the doctrinal framework is settled. All parties agree Congress may constitutionally assign adjudication to executive officials rather than judges. All agree that power extends only to cases involving "public rights" — a notoriously vague category separating traditionally executive actions, such as granting a visa, from disputes traditionally resolved in court, such as tort and contract litigation. When administrative adjudication goes beyond public rights, it intrudes on the judiciary's exclusive Article III authority.

The details are another matter. Chief Justice William Rehnquist, channeling Matthew Arnold, famously described the rulings in this area as "landmarks on a judicial 'darkling plain' where ignorant armies have clashed by night." That assessment has aged well. The precedent is neither stable nor persuasive at the margins.

What do the parties argue?

The government frames the case as squarely involving public rights, on two grounds: it concerns immigration, and it concerns remedies for transgressing privileges the executive granted.

Sun Valley answers that the adjudication is, at bottom, a contract dispute. Granting the government full authority to decide visa entitlements, the employer argues the actual question is whether it complied with its employment contracts — a prototypically private dispute of the kind that could have been brought before a court at Westminster in Old England when Article III was drafted. On that view, Congress cannot assign it to the executive branch.

Why might precedent not save the government?

Expecting the justices to feel bound by existing precedent would be naive. The case implicates the judiciary's own prerogatives, and the justices will see it that way. Recent decisions — Loper Bright Enterprises v. Raimondo on Chevron deference, and Trump v. Slaughter — reveal a bench with considerable appetite for reining in the administrative state even where precedents are settled and directly on point.

The government faces a second problem, one the solicitor general's brief does not fully confront. Many of the authorities it relies on predate Franklin Roosevelt and the rise of the modern administrative state. None of them, on the employer's reading, crisply validates an administrative adjudication that takes money from one private party and gives it to another. That gap matters.

Who are the justices to watch?

Justice Neil Gorsuch figures prominently. He has pressed this precise point for several years, albeit in the securities law context. For him, the government's warning that affirmance would disrupt a large swath of long-accepted administrative arrangements is a feature, not a bug. Chief Justice John Roberts is also likely to be an important player; he has authored several of the modern opinions in this field.

The practical consequence for practitioners is considerable. A ruling for Sun Valley could force restructuring of DOL adjudication under the H-2A program and cast doubt on other agency tribunals that move money between private parties, redirecting such disputes into federal district courts. A ruling for the government would entrench the status quo, though on doctrinal footing the Court has never made fully coherent.

The takeaway in plain words: a seemingly narrow fight over farmworker pay could deliver the Court's next major blow to the administrative state.