WASHINGTON—The Institute for Justice (IJ) filed a new lawsuit on behalf of a small business owner asking whether a single government agency can act as prosecutor, judge, and jury when handing out potentially ruinous fines. C.S. Lawn & Landscaping, a Maryland small business owned by Chuck Saine, is challenging $55,000 in liability imposed by the U.S. Department of Labor (DOL) through its system of administrative law judges (ALJs). Under Article III of the U.S. Constitution, Chuck should have been entitled to make his defense in a real federal court, with a real federal judge.
“Americans have a constitutional right to a judge and jury before the government takes their private property,” said IJ Attorney Bob Belden. “C.S. Lawn & Landscaping’s seven-year slog defending itself against DOL’s allegations in DOL’s in-house courts shows why this is a system that does not square with the Constitution.”
C.S. Lawn & Landscaping is a small business that specializes in landscape design, installation, and maintenance for both residential and commercial clients in and around Annapolis and Kent Island. For decades, C.S. Lawn participated in the federal government’s H-2B visa program, which allows employers to bring workers into the country legally to fill jobs that cannot be filled from the domestic labor market.
Early in 2015, a DOL investigator began to examine C.S. Lawn, looking for violations of regulations that govern H-2B employers. After decisions by an ALJ and DOL’s Administrative Review Board were completed in 2022, DOL issued a final decision imposing almost $55,000 in liability—$38,083.20 in back wages and $16,000 in civil monetary penalties. The bulk of this liability ($36,000 in back wages plus $7,500 in penalties) was imposed because of an alleged violation of the local zoning code, not federal rules. The apartment workers lived in was located in an area zoned Suburban Industrial (though the local zoning code does allow for migrant labor camps in the area).
C.S. Lawn’s lawsuit, filed in the U.S. District Court for the District of Columbia, is challenging the agency’s $55,000 sanction as a violation of both Article III and the Seventh Amendment. In addition, C.S. Lawn is also challenging the liability imposed in its case as a violation of the Excessive Fines Clause of the Eighth Amendment.
“The liability imposed on C.S. Lawn is entirely out of proportion—big fines for small violations—and therefore constitutionally excessive,” said IJ Senior Attorney Rob Johnson. “Fortunately, the Constitution guarantees that a punishment must fit the offense.”
In 2021, IJ launched a similar challenge on behalf of Sun Valley Farms, a family-owned farm in New Jersey. In that case, DOL imposed hundreds of thousands of dollars in fines that eventually led the family to sell the farm. The case is currently being considered by the U.S. District Court for the District of New Jersey.
This new case is filed even as the Supreme Court is set to consider in June whether to hear Jarkesy v. SEC, a case where the 5th U.S. Circuit Court of Appeals held that the Securities and Exchange Commission’s similar use of in-house agency judges violates the Seventh Amendment. If the Supreme Court declines to hear Jarkesy, the case filed on behalf of C.S. Lawn will allow the D.C. Circuit to weigh in on the important constitutional question of whether agencies may impose monetary sanctions in their own in-house agency courts, without the involvement of a real judge or jury.
“An entire alphabet soup of federal agencies use in-house agency courts to impose millions of dollars in liability every year, burdening individuals and businesses across the country. That’s totally illegitimate,” said Johnson. “Agency judges have an appropriate constitutional role doing things like processing claims for social security benefits. But if a federal agency is going to fine you tens of thousands of dollars, then you should have a hearing in a real court with a real judge and jury.”