On Monday, Americans for Prosperity Foundation and the Buckeye Institute, joined an amicus brief the New Civil Liberties Alliance filed in the U.S. Supreme Court in Department of Labor (“DOL”) v. Sun Valley Orchards, a constitutional challenge to an inhouse administrative tribunal in which the DOL wears multiple hats, acting as both the prosecutor and judge of its own cause to impose severe monetary penalties on private parties. The amicus brief argues that this enforcement scheme violates the separation of powers and due process by allowing an executive law enforcement agency to exercise judicial power the Constitution reserves to federal courts. The brief further urges the Supreme Court to squarely overrule its precedent that allows Congress to create these juryless administrative tribunals with the power to issue binding orders depriving private citizens of property and restricting their liberty.
How is it constitutional for a federal agency to act as prosecutor, judge, and jury?
One might think that, in this country, the prosecuting agency is not allowed to be the judge and jury of its own cause. That is the antithesis of the most basic requirements of due process: a fair trial in a fair forum. But as Sun Valley, which is represented by the Institute for Justice, explains, in this case the company “was held liable by an administrative agency that created its own system of administrative adjudication without clear statutory authority; that wrote the applicable rules and regulations; and that employed both the enforcement staff and the judge.” In other words, the same party that investigated and prosecuted the case was also the judge of its own cause—unsurprisingly ruling in favor of itself and imposing substantial civil penalties and back wages. A host of other statutory schemes cutting across many sectors of the private economy are enforced through similar inhouse administrative tribunals, including by formerly “independent” agencies like the Federal Trade Commission.
So how is this slanted, fundamentally unfair process constitutionally permissible? After all, at least when someone’s private property or liberty is on the line, Article III of the Constitution guarantees a right to a trial in a neutral federal court in “all Cases, in Law and Equity, arising under” federal law. The Fifth Amendment promises that “[n]o person shall . . . be deprived of life, liberty, or property, without due process of law[.]” And when the government seeks “legal” relief like civil fines, the Seventh Amendment safeguards the right to a jury trial.
These extraconstitutional administrative tribunals flow from a strand of the Supreme Court’s modern case law creating an expansive “public rights” exception to Article III’s demands, the usual requirements of due process, and the Seventh Amendment. In 1977, in Atlas Roofing v. Occupational Safety & Health Review Commisssion, the Court said that it applied to statutes Congress enacts that “create[] new statutory obligations, provide[] for civil penalties for their violation, and commit[] exclusively to an administrative agency the function of deciding whether a violation has in fact occurred.” Thankfully, the Court has narrowed that sweeping understanding of “public rights,” most recently in SEC v. Jarkesy.
In Jarkesy, the Court described Atlas Roofing as an outlier decision that “depart[ed] from our legal traditions,” explaining that the “public rights exception” “has no textual basis in the Constitution and must therefore derive instead from background legal principles.” As Justice Gorsuch put it in his concurring opinion:
[D]espite its misleading name, the [“public rights”] exception does not refer to all matters brought by the government against an individual to remedy public harms, or even all those that spring from a statute. Instead, public rights are a narrow class defined and limited by history. . . . [But w]hatever their roots, traditionally recognized public rights have at least one feature in common: a serious and unbroken historical pedigree.
But the Court stopped short of overruling Atlas Roofing. And to this day, that decision’s misguided reasoning persists in lower courts.
The Supreme Court should squarely overrule Atlas Roofing
Sun Valley provides the Supreme Court with an opportunity to build on Jarkesy, take the next step, and further restore the Constitution’s promise of a fair trial in a fair tribunal. At its core, that is what this case is about. The groups’ amicus brief urges the Court to squarely overrule Atlas Roofing and reaffirm that it meant what it said in Jarkesy. The Court should do so and return to constitutional first principles by enforcing Article III’s promise that, at least where private rights are at stake, “all Cases, in Law and Equity, arising under” federal law must be adjudicated in court. If the federal government wishes to prosecute a private party and deprive them of property or restrict their liberty, the Constitution requires that the government do in federal court. The Supreme Court should unequivocally say so.
The full amicus brief is available here.
Michael Pepson is Regulatory Counsel at Americans for Prosperity Foundation.
