Sun Valley Orchards LLC v. United States Department of Labor

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 23-2608

____________

SUN VALLEY ORCHARDS, LLC,

Appellant

v.

U.S. DEPARTMENT OF LABOR; UNITED STATES

SECRETARY OF LABOR

____________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 1:21-cv-16625)

District Judge: Hon. Joseph H. Rodriguez

__________

Argued on April 10, 2025

Before: HARDIMAN, PORTER, and SMITH, Circuit

Judges.

(Filed: July 29, 2025)

Robert M. Belden

Institute for Justice

901 N. Glebe Road

Suite 900

Arlington, VA 22203

Robert E. Johnson [Argued]

Institute for Justice

16781 Chagrin Boulevard

Suite 256

Shaker Heights, OH 44120

Counsel for Appellant

Daniel J. Aguilar [Argued]

U.S. Department of Justice

Civil Division

950 Pennsylvania Avenue NW

Room 7266

Washington, D.C. 20530

Counsel for Appellees

Adina H. Rosenbaum

Nicolas A. Sansone

Allison M. Zieve

Public Citizen Litigation Group

1600 20th Street NW

Washington, D.C. 20009

Counsel for Amicus Curiae Public Citizen in

Support of Appellees

2

___________

OPINION OF THE COURT

____________

HARDIMAN, Circuit Judge.

The United States Department of Labor (DOL) alleged

that Sun Valley Orchards, a New Jersey farm, breached an

employment agreement formed under the H-2A nonimmigrant

visa program. Instead of pursuing its case in a federal district

court, DOL imposed hundreds of thousands of dollars in civil

penalties and back wages through in-house administrative

proceedings. Sun Valley challenged this order under the

Administrative Procedure Act, but the District Court dismissed

its claims. Following the Supreme Court’s recent decision in

SEC v. Jarkesy, 603 U.S. 109 (2024), we hold that Sun Valley

was entitled to have its case decided by an Article III court. We

will reverse.

I

A

Under the H-2A nonimmigrant visa program, domestic

employers may temporarily hire foreign laborers to perform

seasonal agricultural work. See 8 U.S.C.

§ 1101(a)(15)(H)(ii)(a). Because the program exists at the

intersection of labor and immigration law, it is administered

jointly by DOL and the Department of Homeland Security

(DHS). Prospective H-2A employers must obtain two forms of

authorization: a labor certification from DOL and a visa

petition approval from DHS. See id. § 1188(a).

3

This case arises from regulations under the labor

certification process. The Immigration and Nationality Act

(INA) requires prospective H-2A employers to demonstrate

that:

(A) there are not sufficient workers who are able,

willing, and qualified, and who will be available

at the time and place needed, to perform the labor

or services involved in the petition, and

(B) the employment of the alien in such labor or

services will not adversely affect the wages and

working conditions of workers in the United

States similarly employed.

Id. § 1188(a)(1).

To satisfy that statutory requirement, employers must

first attempt to recruit U.S. workers. See id. § 1188(b)(4); 20

C.F.R. § 655.121(f). To that end, employers must offer U.S.

workers “no less than the same benefits, wages, and working

conditions” that the employer offers H-2A workers. 20 C.F.R.

§ 655.122(a). Regulations dictate what benefits H-2A

workers—and therefore, corresponding U.S. workers—must

receive. See generally id. § 655.122. Relevant here, employers

must provide no-cost housing, see id. § 655.122(d)(1), access

to a kitchen or meal plan, see id. § 655.122(g), and

transportation to the work site, see id. § 655.122(h). These

conditions are incorporated into a “job order,” which is posted

domestically before it is circulated to foreign workers. Id.

§ 655.121(f).

The job order functions as a work contract absent a

written agreement, and DOL may enforce its terms. See id.

4

§ 655.122(q). Federal law authorizes the Secretary of Labor “to

take such actions, including imposing appropriate penalties

and seeking appropriate injunctive relief and specific

performance of contractual obligations, as may be necessary to

assure employer compliance with terms and conditions of

employment under” the H-2A program. 8 U.S.C. § 1188(g)(2).

Relying on that language, DOL has promulgated regulations

authorizing its Wage and Hour Division to impose civil

penalties and back wages on participating employers. 1 See 29

C.F.R. § 501.16; 20 C.F.R. § 655.101(b).

An employer targeted for enforcement may request a

hearing before an Administrative Law Judge (ALJ). See 29

C.F.R. § 501.33. ALJs are removeable by the Secretary of

Labor for cause, see 5 U.S.C. § 7521(a), and the Federal Rules

of Evidence do not apply to their proceedings, see 29 C.F.R.

§ 501.34. ALJ decisions become final unless review is taken

by the Administrative Review Board. See id. § 501.42.

B

Sun Valley is a farm in New Jersey. The farm grows

fruits and vegetables, including asparagus, zucchini,

1

DOL may enforce contractual obligations on behalf of both

H-2A workers and workers in “corresponding employment,”

which can include U.S. workers. 29 C.F.R. § 501.0; see also

20 C.F.R. § 655.103(b) (defining “corresponding

employment”). This “ensure[s] that foreign workers will not

appear more attractive to the ‘employer’ than domestic

workers, thus avoiding any adverse effects for domestic

workers.” Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d

1276, 1285 (11th Cir. 2016).

5

cucumber, eggplant, peppers, and peaches. Sun Valley relies

on seasonal workers hired through the H-2A program.

Sun Valley first participated in the program in 2015,

hiring 96 foreign workers and 51 corresponding domestic

workers. Through a job order, Sun Valley promised at least

forty hours of work per week for twenty-six weeks of

employment. Consistent with applicable regulations, Sun

Valley guaranteed employment for “the hourly equivalent of

3/4” of the hours contemplated by the agreement. App. 203. It

offered no-cost housing and free transportation to the worksite.

And it promised to “furnish free cooking and kitchen facilities

to those workers who are entitled to live in the employers’

housing so that workers may prepare their own meals” and to

provide “free transportation” to the closest grocery store. App.

193.

According to DOL, Sun Valley did not keep those

promises. After spending time at the farm in 2015, agency

investigators identified several job order violations. DOL

confirmed those violations in a letter to Sun Valley, assessing

hundreds of thousands of dollars in civil penalties and back

wages.

DOL first identified violations concerning housing. Sun

Valley’s job order had promised its employees no-cost housing

satisfying “the full set of DOL Occupational Safety and Health

Administration (OSHA) standards.” App. 193; see also 20

C.F.R. § 655.122(d)(1). But the investigation found that “the

housing facility provided for workers was missing window

screens and had screen doors not in good repair,” which

contributed to an “insect infestation throughout the camp.”

App. 154. The investigation also revealed that “[s]everal

bathroom sinks did not have hot water, refuse containers

6

throughout [the] facility were missing fly tight lids and

multiple mattresses used by occupants for sleeping purposes

were directly on the floor without a bed frame.” Id. DOL

assessed $3,600 in civil penalties for these alleged violations.

DOL also found violations related to Sun Valley’s meal

plan. Sun Valley’s job order had not mentioned a meal plan,

instead promising to “furnish free cooking and kitchen

facilities . . . so that workers may prepare their own meals” and

to provide “free transportation” to nearby grocery stores. App.

193. The investigation revealed, however, that Sun Valley had

failed to provide meaningful kitchen access in violation of the

job order, instead deciding to charge workers for meals without

notice. The investigator also found that a supervisor regularly

charged workers for drinks. Because Sun Valley did not

provide kitchen access, failed to give notice of its alternative

meal plan, and sold drinks at a profit, DOL assessed $198,450

in penalties and $234,079.28 in back wages.

DOL identified a violation related to transportation, as

well. H-2A employers must provide workers with

transportation to the job site that “compl[ies] with all

applicable local, State, or Federal laws and regulations,”

including those governing “transportation safety standards,

driver’s licensure, and vehicle insurance.” 20 C.F.R.

§ 655.122(h)(4)(i). Consistent with that requirement, Sun

Valley promised its employees “free transportation” from the

“housing facility both to and from the daily work site.” App.

205. But DOL’s investigation revealed that “three of the five

vehicles used to transport workers had insufficient tread on the

tires for safe operation and one had a non-functioning rear

directional.” App. 154–55. The investigation also revealed that

“the five vehicles used to transport H-2A and corresponding

[domestic] workers were operated by drivers who failed to

7

possess valid, unexpired driver’s licenses.” App. 155. DOL

assessed $7,500 in civil penalties for this violation.

Finally, DOL claimed that Sun Valley violated the

“three-fourths guarantee.” Id. Consistent with regulations, Sun

Valley had guaranteed employment for “the hourly equivalent

of 3/4” of the workdays contemplated by the job order. App.

203; see also 20 C.F.R. § 655.122(i). But DOL’s investigation

revealed that, following a dispute between workers and

management, Sun Valley “constructively forced [some

employees] to return home prior to the end of the contract

period,” coercing them to “sign a form . . . stating that they

were leaving early for ‘personal reasons.’” App. 155–56. This

action, DOL alleged, violated both Sun Valley’s job order and

a regulation prohibiting employers from “seek[ing] to have an

H-2A worker . . . waive any rights conferred under” laws and

regulations governing the program. 29 C.F.R. § 501.5. DOL

assessed $2,700 in penalties and $135,623.94 in back wages

for these violations.

All told, Sun Valley was assessed $212,250 in civil

penalties and $369,703.22 in back wages, payable directly to

DOL. DOL notified Sun Valley of its “right to request a

hearing” before an ALJ to contest the assessment. App. 150;

see also 29 C.F.R. § 501.33. But if the farm failed to request a

hearing within thirty days, DOL’s findings would become “the

final and unappealable Order of the Secretary.” App. 150.

C

Sun Valley timely requested a hearing before an ALJ.

The ALJ affirmed in part and modified in part DOL’s findings.

In a lengthy written opinion, the ALJ agreed with DOL that

Sun Valley violated a host of job order provisions. The ALJ

8

parted with DOL’s view only as to the amount of civil penalties

and back wages owed, modifying those figures to $211,800

and $344,945.80, respectively. Sun Valley petitioned the

Administrative Review Board for review, which affirmed the

ALJ’s decision in its entirety.

Sun Valley challenged DOL’s decision in the District

Court, seeking declaratory and injunctive relief under the

Administrative Procedure Act. It alleged several statutory and

constitutional defects in DOL’s order, including that: (1) it

adjudicated private rights in violation of Article III of the

Constitution, (2) the ALJ presiding over the case was

appointed and insulated from removal in violation of Article II

of the Constitution, (3) the penalties and back wages assessed

by the order were excessive in violation of the Eighth

Amendment, and (4) DOL lacked statutory authority to impose

civil penalties and back wages through administrative

proceedings. 2 DOL moved to dismiss, and both parties cross-

moved for summary judgment.

The District Court granted DOL’s motion to dismiss all

of Sun Valley’s claims. The Court first addressed Sun Valley’s

Article III claim, holding that agency adjudication was

appropriate because DOL’s action fit within the “public-rights

doctrine.” Sun Valley Orchards, LLC v. Dep’t of Lab., 2023

WL 4784204, at *6 (D.N.J. July 27, 2023). The Court next

rejected Sun Valley’s claim that DOL lacked statutory

authority to impose civil penalties and award back wages in-

2

Sun Valley also alleged that DOL’s order was “not supported

by substantial evidence,” “an abuse of discretion,” or

“otherwise not in accordance with law.” App. 136. The District

Court dismissed that claim as well, but Sun Valley does not

raise it on appeal.

9

house, reasoning that the “clear language of the statute” vested

DOL with that authority. Id. at *7, 10–11. As for its Article II

claims, the Court concluded that Sun Valley failed to exhaust

the issue before the agency and dismissed on that basis. But it

also explained that ratification cured any Appointments Clause

defect, and that ALJs are shielded from removal by only one

level of good-cause protection. Finally, the Court held that the

civil penalty award did not violate the Excessive Fines Clause,

explaining that it was “not grossly disproportionate to Sun

Valley’s offenses.” Id. at *11. Sun Valley filed this appeal.

II

The District Court had jurisdiction under 28 U.S.C.

§ 1331, and we have jurisdiction under 28 U.S.C. § 1291. “A

district court’s order dismissing a complaint is subject to

plenary review.” Pension Ben. Guar. Corp. v. White Consol.

Indus., Inc., 998 F.2d 1192, 1197 (3d Cir. 1993). Under the

Administrative Procedure Act, we must “hold unlawful and set

aside” DOL’s action if we find it to be, among other things,

“arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law”; “contrary to constitutional right,

power, privilege, or immunity”; or “in excess of statutory

jurisdiction, authority, or limitations, or short of statutory

right.” 5 U.S.C. § 706(2).

III

We begin and end with Sun Valley’s Article III

argument. The Constitution vests “[t]he judicial Power of the

United States . . . in one supreme Court, and in such inferior

Courts as the Congress may from time to time ordain and

establish.” U.S. Const. art. 3, § 1. The judges of those courts

enjoy life tenure and salary protection, attributes that preserve

10

an “independent spirit” that is “essential to the faithful

performance” of their duty. The Federalist No. 78, p. 469 (C.

Rossiter ed. 1961) (A. Hamilton). Because non-Article III

tribunals lack these important qualities, Congress may not

“withdraw from judicial cognizance any matter which, from its

nature, is the subject of a suit at the common law, or in equity,

or admiralty.” Murray’s Lessee v. Hoboken Land &

Improvement Co., 59 U.S. (18 How.) 272, 284 (1855).

On top of that rule, the Supreme Court has explained

that certain “public rights” cases may be adjudicated outside

Article III. Id. Because the public rights exception “has no

textual basis in the Constitution,” it must “derive instead from

background legal principles.” Jarkesy, 603 U.S. at 131. History

therefore looms large in the public rights analysis, requiring

courts to pay “close attention to the basis for each asserted

application of the doctrine.” Id. In evaluating whether a given

case fits within the public rights exception, we look for “a

serious and unbroken” history of non-Article-III resolution. Id.

at 153 (Gorsuch, J., concurring).

With these principles in mind, we turn to Sun Valley’s

Article III challenge. The farm contends that DOL violated

Article III by adjudicating its private rights through in-house

proceedings. To resolve this claim, we must decide (1) whether

DOL’s action concerns private rights (that is, whether it is in

the nature of a common law suit), (2) whether DOL’s action

fits within the public rights exception, and (3) whether Sun

Valley waived its right to Article III adjudication. 3

3

Sun Valley argues on appeal that DOL’s adjudication violates

“Article III and, by extension, the Seventh Amendment.” Sun

11

A

We first consider whether DOL’s enforcement concerns

private rights, asking if it “is made of the stuff of the traditional

actions at common law tried by the courts at Westminster in

1789.” Id. at 128 (majority opinion) (citation modified). As the

Supreme Court’s recent decision in Jarkesy explains, a party

challenging enforcement under Article III need not match the

agency’s action to an exact historical comparator. Id. at 134.

Jarkesy considered whether the SEC could, consistent with

Article III and the Seventh Amendment, enforce federal

antifraud statutes through in-house civil penalty proceedings.

Id. at 120. The Court said no. Id. at 121. The SEC sought civil

penalties, which traditionally “could only be enforced in courts

of law.” Id. at 134 (citation modified). And its action, though

based on federal law, “target[ed] the same basic conduct as

common law fraud, employ[ed] the same terms of art, and

operate[d] pursuant to similar legal principles.” Id. Because

both the action and the remedies that the SEC pursued could

be traced to English common law, Jarkesy’s case

presumptively “involve[d] a matter of private rather than

public right.” Id. (citation modified).

Those same considerations require Article III

adjudication here. Start with the nature of DOL’s claim. While

regulations require H-2A employers to provide housing, meals,

Valley Br. 3. The Supreme Court has long recognized the close

relationship between Article III and the Seventh Amendment.

See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53–54

(1989). And in Jarkesy, the Court appeared to confirm their

analytical similarity. See 603 U.S. at 134. But because Sun

Valley’s complaint did not allege a violation of the Seventh

Amendment, we consider only its challenge under Article III.

12

transportation, and guaranteed work, employee benefits are

formalized in an employer’s “job order.” See generally 20

C.F.R. § 655.122. Where, as here, the employer does not pen

another agreement with its employees, the job order functions

as a “work contract” between them. Id. § 655.122(q). It is the

violation of the terms of that work contract, rather than the

regulations that shape it, that supports H-2A enforcement

actions. See 29 C.F.R. § 501.0 (authorizing “the enforcement

of all contractual obligations . . . applicable to the employment

of H-2A workers and workers in corresponding

employment”). 4

Consistent with that scheme, DOL framed its

enforcement action against Sun Valley in contractual terms.

For instance, DOL told the ALJ that “Sun Valley’s assurances

formed part of the farm’s contract with H-2A workers.” A.R.

145. It then alleged that Sun Valley “violat[ed]” those

“contractual obligations.” Id. The ALJ’s decision, too, sounded

partially in contract. For example, the decision found that Sun

4

This contractual framing distinguishes the enforcement action

here from the one we recently considered in Axalta Coating

Systems LLC v. FAA, --- F.4th ---, 2025 WL 1934352 (3d Cir.

July 15, 2025). That case considered whether the Seventh

Amendment permitted the Federal Aviation Administration to

seek civil penalties from a paint supplier through in-house

proceedings. Id. at *1. The action there involved “technical”

hazardous materials regulations with no common law origins,

which made it relevantly similar to the Supreme Court’s

decision in Atlas Roofing Co. v. Occupational Safety & Health

Review Commission, 430 U.S. 442 (1977). Axalta, 2025 WL

1934352, at *5. The enforcement action in this case, by

contrast, resembles common law breach of contract, so Atlas

Roofing does not control.

13

Valley “breached a material term of the job order” when it

failed to provide employees with kitchen access. App. 83–84.

And it ordered penalties and back wages for Sun Valley’s

decision to terminate workers “before they worked the

guaranteed three-fourths of the hours promised in their

contracts.” App. 92. DOL’s action was therefore litigated like

a suit for breach of contract, which would have traditionally

been heard in common law courts. See N. Pipeline Constr. Co.

v. Marathon Pipe Line Co., 458 U.S. 50, 90 (1982) (Rehnquist,

J., concurring in the judgment) (recognizing “breach of

contract” as “the stuff of the traditional actions at common law

tried by the courts at Westminster in 1789”).

We also think it significant that DOL sought common

law remedies: civil penalties and back wages. The Supreme

Court has long maintained that “[a] civil penalty was a type of

remedy at common law that could only be enforced in courts

of law.” Tull v. United States, 481 U.S. 412, 422 (1987); see

also Jarkesy, 603 U.S. at 123. And to the extent that back

wages are designed “to punish or deter the wrongdoer,” they,

too, are legal in nature. Jarkesy, 603 U.S. at 123 (citation

modified). The ALJ here assessed back wages at least in part

“[t]o deter such harm from occurring in the future.” App. 88.

The Administrative Review Board likewise cited the need to

“deter other H-2A employers” when upholding the award. 5

App. 42. That DOL sought punitive remedies therefore only

confirms that its action was “made of the stuff of the traditional

5

In a different context, we recently described back wages as

an equitable remedy. See NLRB v. Starbucks Corp., 125 F.4th

78, 96 (3d Cir. 2024). But because the back wages here were

imposed to deter wrongdoers, rather than solely to provide

restitution, they are properly characterized as legal. See

Jarkesy, 603 U.S. at 123.

14

actions at common law,” presumptively entitling Sun Valley to

adjudication before an Article III court. Jarkesy, 603 U.S. at

128 (citation modified).

B

DOL resists this conclusion. Despite the appearance of

a common law contract action, it contends that this case is

really about immigration. And because immigration is

traditionally a matter of public rights, DOL insists that Sun

Valley was not entitled to adjudication by an Article III court.

We are unpersuaded. While history does sanction non-Article

III adjudication for certain immigration-related matters, this

case falls well outside the heartland of that tradition.

The political branches have long asserted control over

the Nation’s borders. While the President has possessed some

authority to remove aliens since the founding, see Dep’t of

State v. Munoz, 602 U.S. 899, 912 (2024), Congress first

enacted general restrictions on immigration during the late

nineteenth century, see Kleindienst v. Mandel, 408 U.S. 753,

761 (1972). From the beginning, these statutes empowered

executive branch officials to adjudicate issues surrounding

admission and exclusion. See Dep’t of Homeland Sec. v.

Thuraissigiam, 591 U.S. 103, 129–30 (2020) (collecting

statutes).

Recognizing the political branches’ “plenary power”

over immigration, the Supreme Court largely endorsed this

regime of administrative enforcement. See Castro v. United

States Dep’t of Homeland Sec., 835 F.3d 422, 439–41 (3d Cir.

2016) (citing Chae Chan Ping v. United States, 130 U.S. 581

(1889); Nishimura Ekiu v. United States, 142 U.S. 651 (1892);

Fong Yue Ting v. United States, 149 U.S. 698 (1893)). The

15

Court observed long ago that exclusion was an “incident of

sovereignty belonging to the government,” so that issue was

generally not appropriate “for judicial determination.” Chae

Chan Ping, 130 U.S. at 609. The “plenary power” doctrine has

undergone changes since then, see Castro, 835 F.3d at 441–44,

but the Supreme Court has consistently “recognized that the

admission and exclusion of foreign nationals is a fundamental

sovereign attribute exercised by the Government’s political

departments largely immune from judicial control,” Trump v.

Hawaii, 585 U.S. 667, 702 (2018) (citation modified).

This history provides the foundation for an immigration

exception to Article III adjudication. See Jarkesy, 603 U.S. at

128–30 (listing “immigration” as an example of “public

rights”). But it also suggests limitations. The public rights

exception captures only matters that “historically could have

been determined exclusively by the executive and legislative

branches.” Id. at 128 (citation modified). And the above

historical discussion suggests that non-Article III adjudication

was traditionally appropriate in cases closely related to the

admission and exclusion of aliens.

The Supreme Court’s decision in Oceanic Steam

Navigation Co. v. Stranahan exemplifies this limitation. 214

U.S. 320 (1909). The plaintiff there, a steamship operator, was

sanctioned under a statute authorizing the Secretaries of Labor

and Commerce to impose penalties for “bringing into the

United States alien immigrants afflicted with ‘loathsome or

dangerous contagious diseases.’” Id. at 332. The operator

claimed that this order violated Article III, but the Court

disagreed. Congress had “plenary power . . . as to the

admission of aliens,” so it could authorize executive branch

officials to impose a penalty without Article III adjudication.

Id. at 343. Oceanic Steam, the Court would later explain,

16

stands for the proposition that Congress may “prohibit

immigration by certain classes of persons and enforce those

prohibitions with administrative penalties assessed without” an

independent judge or jury. Jarkesy, 603 U.S. at 129. So

Oceanic Steam related closely to the admission and exclusion

of aliens. See Lloyd Sabaudo Societa Anonima Per Azioni v.

Elting, 287 U.S. 329, 335 (1932) (observing that Oceanic

Steam concerned the federal government’s “plenary power to

control the admission of aliens”).

Sun Valley’s case falls outside the immigration

exception and the tradition that shaped it. Although the H-2A

program facilitates temporary migration, its labor certification

regulations do not directly address the admission and exclusion

of aliens. Instead, the labor certification process is designed to

vindicate the domestic national policy goal of preserving “the

wages and working conditions of workers in the United

States.” 8 U.S.C. § 1188(a)(1)(B). Rules about worker hours,

housing, cooking, and transportation regard employment law,

not “Congress’ plenary authority to control immigration.”

Dep’t Br. 36. This is especially true considering that H-2A

labor certification rules apply to foreign and domestic workers

alike. See 29 C.F.R. § 501.0. So while H-2A labor certification

regulations may ultimately serve immigration-related goals,

extending Oceanic Steam to reach this case would allow “the

exception [to] swallow the rule.” Jarkesy, 603 U.S. at 131.

DOL disagrees. In its view, the H-2A program

implicates “a variety of foreign-policy concerns” that situate it

comfortably within the public rights exception. Dep’t Br. 33.

For example, the Secretaries of State and Homeland Security

“determine which countries are eligible to participate in the

program,” using participation as leverage to achieve foreign

and domestic policy objectives. Dep’t Br. 8. Because of these

17

quintessentially public interests, it says, adjudications under

the H-2A program need not take place in an Article III court.

This argument proves too much. It is true that portions

of the sprawling H-2A program implicate the President’s

unique power over foreign affairs. But at best, that shows that

some H-2A-related actions may proceed in agency tribunals.

For example, DOL could use agency proceedings to bar Sun

Valley from the program or to remove ineligible foreign

workers from its employ. See 20 C.F.R. § 655.182. Those

actions, to the extent they vindicate the federal government’s

critical interest in border control, likely fall within the

immigration exception. But the fact that DOL has some

authority to proceed in a non-Article III tribunal does not give

it carte blanche to do so for all violations. Such a rule would

eviscerate Jarkesy’s instruction that we “evaluate[] the legal

basis for [DOL’s] assertion [of the public rights] doctrine with

care.” 603 U.S. at 131.

In short, because the H-2A labor certification

regulations mainly concern the federal government’s local

interest in domestic wages, DOL’s action does not fit within

the public rights exception to Article III adjudication.

C

DOL’s last-ditch argument is that Sun Valley did not

preserve its Article III objection during administrative

proceedings. By failing to raise this issue before the ALJ, DOL

says, Sun Valley “either waived any Article III claim [] or

failed to exhaust it.” Dep’t Br. 41. We disagree.

For its waiver argument, DOL relies on Wellness

International Network, Ltd. v. Sharif, 575 U.S. 665 (2015).

18

That case addressed whether Article III permitted bankruptcy

courts to hear non-core proceedings “with the consent of all the

parties to the proceeding.” Id. at 671 (quoting 28 U.S.C.

§ 157(c)(2)). The Supreme Court answered yes, holding that

“Article III is not violated when the parties knowingly and

voluntarily consent to adjudication by a bankruptcy judge.” Id.

at 669. Although knowing and voluntary consent could be

implied, the Court explained, “the key inquiry [was] whether

the litigant or counsel was made aware of the need for consent

and the right to refuse it, and still voluntarily appeared to try

the case before the non-Article III adjudicator.” Id. at 685

(citation modified).

These preconditions for implied consent are not present

here. DOL points to no evidence that Sun Valley “was made

aware of the need for consent and the right to refuse it.” Id.

(citation modified). To the contrary, DOL’s letter assessing

civil penalties provided that “the determination of the

Administrator shall become the final and unappealable Order

of the Secretary” if “a request for a hearing [before an ALJ] is

not received within the time specified.” App. 150. So Sun

Valley lacked any real choice about where it could challenge

DOL’s action, meaning that it “did not truly consent to”

adjudication before an ALJ. Wellness Int’l Network, 575 U.S.

at 681 (citation modified).

We also reject DOL’s exhaustion argument. It is true

that a party sometimes must exhaust issues it intends to raise

during administrative, and later, judicial proceedings. See Carr

v. Saul, 593 U.S. 83, 88 (2021). But even assuming Sun Valley

failed to exhaust its Article III claim before the agency, we may

still consider it here. That’s because a “nonjurisdictional,

mandatory exhaustion requirement functions as an affirmative

defense, and thus can be waived or forfeited by the

19

government’s failure to raise it.” Fleming v. United States

Dep’t of Agric., 987 F.3d 1093, 1099 (D.C. Cir. 2021); see also

Santos-Zacaria v. Garland, 598 U.S. 411, 417 (2023)

(explaining that “[e]xhaustion is typically nonjurisdictional”).

Because DOL did not raise a failure-to-exhaust defense before

the District Court, we will “treat that argument as forfeited.”

Simko v. United States Steel Corp., 992 F.3d 198, 205 (3d Cir.

2021). DOL has not offered any exceptional circumstances to

excuse this forfeiture, so we will not address its exhaustion

argument. Cf. Freeman v. Pittsburgh Glass Works, LLC, 709

F.3d 240, 250 (3d Cir. 2013) (“The doctrine of appellate waiver

is not somehow exempt from itself. This means that a party can

waive a waiver argument by not making the argument below

or in its briefs.” (citation omitted)). 6

* * *

An administrative tribunal ordered Sun Valley to pay

civil penalties and back wages for breaching contractual

obligations under the H-2A nonimmigrant visa program.

Because Article III required the Department of Labor to instead

proceed before a federal district court, we will reverse and

remand with instruction to enter judgment in favor of Sun

Valley.

6

Because we hold that DOL’s enforcement action violated

Article III, we need not reach Sun Valley’s alternative

statutory, Article II, and Eighth Amendment arguments.

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