New Lawsuit from Oklahoma Small Business Challenges Administrative Courts Handing Down Ruinous Fines

TULSA, Okla.—The federal government is demanding that ProCraft Masonry pay more than $31,000 in fines, but it could be years before the company is allowed to have its case heard in a federal court. And it may never get to present its case to a jury. Married couple Danny and Diana Barbee, ProCraft’s owner and administrative director, respectively, cannot afford to spend years contesting their fines in administrative procedures before they get their day in a real court with a jury. They are teaming up with the Institute for Justice (IJ), a nonprofit, public interest law firm, to challenge the constitutionality of an agency court system that acts as prosecutor, judge, and jury.

READ the complaint.

“Danny and Diana face devastating fines for alleged paperwork errors. The Constitution says they have the right to defend themselves against those fines in a real court—one with an independent judge and the right to a jury,” said IJ Attorney Bob Belden. “But small businesses like ProCraft instead face years of costly and unconstitutional administrative proceedings where employees in federal law enforcement agencies like the Department of Justice act as investigator, prosecutor, judge, and jury.”

Danny Barbee used his decades of experience in stone masonry to open ProCraft in 2010. Diana has worked for ProCraft since those early days and runs the front office. The company focuses on residential projects and employs 11 people. The company’s problems began in 2020 when an investigator from the Department of Homeland Security (DHS) showed up at their office asking to look at their employees’ I-9 forms. The I-9 form verifies the identity and employment authorization of individuals hired for employment in the U.S.

After nearly three years of investigation, DHS issued $31,325.70 in fines for technical violations related to I-9s. But ProCraft is not being taken to court, where its case would be overseen by a neutral judge and where it would be entitled to trial by a jury. Instead, the case would be decided by agency employees in the Department of Justice’s (DOJ) Office of the Chief Administrative Hearing Officer, a costly and time-consuming process where the deck is stacked in the government’s favor. Since January 2022, not including settlements between DHS and employers, DOJ’s agency judges have ruled in favor of DHS at in all 11 cases alleging employer errors on Form I-9. The fines in those cases totaled over $2.4 million.

“I worked hard to build my business and now I could lose it without ever getting a chance to have a judge and jury hear the case,” said Danny. “If I got a speeding ticket, I would get a court date. But with my livelihood on the line, it could be years before we even get a final decision from bureaucrats.”

IJ has launched similar challenges on behalf of a family-owned farm in New Jersey and a landscaping company in Maryland. This new case is filed as the Supreme Court is set to hear oral arguments in SEC v. Jarkesy, 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. Depending on the outcome in Jarkesy, ProCraft’s case could allow courts the opportunity to build on the Supreme Court’s precedent.

“When the government fines someone for violating the law, it has to bring its case in a court of law and provide a jury if the accused requests one,” said IJ Attorney Jared McClain. “Administrative agencies have a lot of important functions, but they are not a substitute for the courts when the government wants to punish someone.”