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Administrative Review Board

200 Constitution Ave. NW

Washington, DC 20210-0001

IN THE MATTER OF:

ADMINISTRATOR, WAGE AND

HOUR DIVISION, UNITED STATES

DEPARTMENT OF LABOR,

ARB CASE NO. 2021-0047

PROSECUTING PARTY,

DATE: December 22, 2022

ALJ CASE NO. 2018-TNE-00022

GRAHAM AND ROLLINS, INC.,

RESPONDENT.

Appearances:

For the Respondent:

Leon R. Sequeira, Esq.; LRS Law; Prospect, Kentucky

For the Administrator, Wage and Hour Division:

Seema Nanda, Esq.; Jennifer S. Brand, Esq.; Rachel Goldberg, Esq.;

Sara A. Conrath, Esq.; U.S. Department of Labor, Office of the

Solicitor; Washington, District of Columbia

For Amici Curiae Outdoor Amusement Business Association & Morton

Concessions:

R. Wayne Pierce, Esq.; The Pierce Law Firm, LLC; Annapolis,

Maryland

Before HARTHILL, Chief Administrative Appeals Judge, and BURRELL,

and PUST, Administrative Appeal Judges; HARTHILL, Chief

Administrative Appeals Judge, concurring in part, dissenting in part, and

concurring in the judgment

DECISION AND ORDER AFFIRMING IN PART AND REVERSING IN PART

BURRELL, Administrative Appeals Judge:

This case arises under the Equal Access to Justice Act (EAJA), and its

implementing regulations.1 The merits of the original case were addressed by the

Administrative Review Board (ARB or Board) in ARB Case Number 2019-0009

under the H-2B provisions of the Immigration and Nationality Act (H-2B, INA, or

Act), as amended, and its implementing regulations.2 On June 26, 2018, an

Administrative Law Judge (ALJ) dismissed the case, and the Board affirmed.

Respondent Graham and Rollins, Inc. (Respondent or Graham & Rollins)

subsequently filed a motion for attorney’s fees under EAJA. The ALJ awarded fees,

and the Administrator (Administrator) of the United States Department of Labor’s

(Department of Labor, Department, or Agency) Wage and Hour Division (WHD)

appealed to the Board. The Board AFFIRMS the ALJ’s decision that EAJA applies

to this matter but REVERSES the finding that the Agency’s position was not

substantially justified during the litigation. Accordingly, Respondent’s request for

fees under EAJA is DENIED.

BACKGROUND

This case originated when the Administrator brought an enforcement action

on February 13, 2018, against Graham & Rollins.3 On June 26, 2018, an ALJ found

that the Administrator brought the action outside the five-year statute of

limitations and dismissed the case. The Board issued a Decision and Order on

November 16, 2020, affirming the ALJ’s decision.4

5 U.S.C. § 504; 29 C.F.R. Part 16.

8 U.S.C. §§ 1101(a)(15)(H)(ii)(b), 1184(c)(14). The statute’s implementing regulations

are found at 20 C.F.R. Part 655, subpart A. The original INA was enacted in 1952 and has

been amended numerous times. Congress enacted the H-2B provision at issue in Section

404 of the Emergency Supplemental Appropriations Act for Defense, The Global War on

Terror, and Tsunami Relief, 2005, Div. B, The Real ID Act of 2005, § 404, Pub. L. No. 109–

13, 119 Stat 231 (codified at 8 U.S.C. § 1184(c)(14)).

Adm’r, Wage & Hour Div., U.S. Dep’t of Labor v. Graham & Rollins, Inc., ALJ No.

2008-TNE-00022, slip op. at 3 (ALJ June 26, 2018), adopted and attached by the

Administrative Review Board, Adm’r, Wage & Hour Div., U.S. Dep’t of Labor v. Graham &

Rollins, Inc., ARB No. 2019-0009, ALJ No. 2018-TNE-00022 (ARB Nov. 16, 2020).

Graham & Rollins, Inc., ARB No. 2019-0009, ALJ No. 2018-TNE-00022, slip op. at 2

(ARB Nov. 16, 2020).

Subsequent to the Board’s decision, on December 16, 2020, Graham & Rollins

filed a motion for attorney’s fees pursuant to EAJA. The Administrator did not file a

response to the motion. On May 19, 2021, the ALJ issued a Decision and Order

awarding attorney’s fees (Recommended Decision and Order) in the amount of

$22,100, concluding that EAJA applied and that the Administrator had not carried

her burden of showing that the Agency’s enforcement position was substantially

justified.5 The Administrator filed a timely petition for review with the Board on

November 8, 2021. Outdoor Amusement Business Association and Morton

Concessions, Inc. (Amici) filed an amicus brief.

JURISDICTION AND STANDARD OF REVIEW

The Secretary has delegated the authority to review this matter to the

Board.6 The Board acts with “all the powers [the Secretary] would have in making

the initial decision.”7 Contrary to the standard applied in judicial appeals of final

administrative action related to EAJA fees,8 in this administrative appeal of the

ALJ’s EAJA award, the Board conducts a de novo review of the ALJ’s findings of

fact and conclusions of law.9

May 19, 2021 Recommended Decision and Order Awarding Attorney’s Fees (R. D. &

O.). On June 1, 2021, the Acting Administrator of WHD filed a Motion to Vacate the ALJ’s

Decision and Order. Graham & Rollins filed its Opposition to the Administrator’s Motion to

Vacate with the ALJ on September 15, 2021. On September 24, 2021, the ALJ issued an

Order Denying Motion to Vacate (Denial Order).

Secretary’s Order No. 01-2020 (Delegation of Authority and Assignment of

Responsibility to the Administrative Review Board), 85 Fed. Reg. 13,186 (Mar. 6, 2020); 29

C.F.R. § 16.306.

5 U.S.C. § 557(b); Zappala Farms, ARB No. 2004-0047, ALJ No. 1997-MSP-00009-P,

slip op. at 4 (ARB Apr. 28, 2006).

As directed by the U. S. Supreme Court in Pierce v. Underwood, 487 U.S. 552 (1988),

judicial courts apply the abuse of discretion standard of review upon appeal of final agency

actions related to EAJA fees. See Throckmorton v. U.S. Dep’t of Health & Hum. Servs., No.

90-2011, 1990 WL 187131, at *4 (4th Cir. Aug. 15, 1990) (applying Pierce).

Lion Uniform, Inc., Janesville Apparel Div. v. Nat’l Lab. Rels. Bd., 905 F.2d 120,

123-24 (6th Cir. 1990), cert denied, 498 U.S. 992 (1990); see also Becker v. Sullivan, No.

CIV. A. HAR-90-1889, 1991 WL 107857, at *4–5 (D. Md. June 12, 1991) (concluding that de

novo standard first announced in Lion Uniform was properly applied in agency’s

independent review of internal administrative record).

DISCUSSION

This case presents an issue of first impression for the Board’s consideration.

While the Board has addressed EAJA in other circumstances, it has not addressed

whether EAJA applies to H-2B enforcement matters before a Department of Labor

ALJ.

Congress passed EAJA to allow prevailing parties that are not the United

States to recover attorney’s fees and costs from the federal government in cases

involving an “adversary adjudication.”10 Because it allows a monetary claim against

the federal government, EAJA constitutes a partial waiver of sovereign immunity,

and we are mindful that such waivers are narrowly construed.11 EAJA’s statutory

language provides:

An agency that conducts an adversary adjudication shall

award, to a prevailing party other than the United States,

fees and other expenses incurred by that party in

connection with that proceeding, unless the adjudicative

officer of the agency finds that the position of the agency

was substantially justified or that special circumstances

make an award unjust. Whether or not the position of the

agency was substantially justified shall be determined on

the basis of the administrative record, as a whole, which is

made in the adversary adjudication for which fees and

other expenses are sought.[12]

The Administrator does not dispute that Respondent is a prevailing party.

Thus, we must determine whether: (1) EAJA applies to H-2B enforcement matters

because they are “adversary adjudications” within the meaning of EAJA; and if so,

(2) whether the government’s position during the litigation was substantially

justified.

5 U.S.C. § 504(a)(1).

Ardestani v. Immigr. & Naturalization Serv., 502 U.S. 129, 137 (1991); HELEN

HERSHKOFF, WRIGHT & MILLER, 14 FED. PRAC. & PROC. JURIS. § 3660.1 (4th ed. 2022)

(“With the enactment of the EAJA, the United States has waived its immunity, and that of

its agencies and officers acting in their official capacity, to liability for attorney’s fees and

expenses . . . .”).

5 U.S.C. § 504(a)(1).

1. An H-2B Proceeding Is an Adversary Adjudication

EAJA defines an “adversary adjudication” as “an adjudication under section

554 of [the Administrative Procedure Act] in which the position of the United States

is represented by counsel or otherwise.”13 Neither party disputes that the United

States was represented by counsel during this proceeding.

A proceeding is considered “under” Section 554 of the Administrative

Procedure Act (APA) if it is “subject to” or “governed by” that “section.”14 Section

554 states that its provisions apply to “every case of adjudication required by

statute to be determined on the record after opportunity for an agency hearing.”15

Section 554 initiates the APA’s formal adjudication procedures.16 “Section 554 does

not merely describe a type of agency proceeding; it also prescribes that certain

procedures be followed in the adjudications that fall within its scope.”17 These

formal procedures follow those found in judicial proceedings and can be located in

Sections 556 and 557, which are cross-referenced in Section 554.

The Department of Labor’s implementing EAJA regulations largely mirror

EAJA’s statutory language. Section 16.102(b) defines “adversary adjudication” as

“an adjudication under 5 U.S.C. § 554 or other proceeding required by statute to be

determined on the record after an opportunity for an agency hearing, but excludes

an adjudication for the purpose of establishing or fixing a rate or for the purpose of

granting or renewing a license.”18 The Department’s EAJA regulations also contain

a list of proceedings to which the regulations apply, but do not include H-2B

Id. § 504(b)(1)(C)(i).

Aageson Grain & Cattle v. U.S. Dep’t of Agric., 500 F.3d 1038, 1042 (9th Cir. 2007)

(citing Ardestani, 502 U.S. at 135).

There are some exceptions outlined in the statute that are not relevant to this case.

5 U.S.C. § 554(a).

Ardestani, 502 U.S. at 132–33 (1991); see also 5 U.S.C. §§ 556, 557. The APA’s

Section 555 covers informal adjudications.

Ardestani, 502 U.S. at 136.

29 C.F.R. § 16.102(b). The Agency regulations specifically exclude “an adjudication

for the purpose of establishing or fixing a rate or for the purpose of granting or renewing a

license,” “but proceedings to modify, suspend or revoke licenses are covered if they are

otherwise adversary adjudications.” 29 C.F.R. §§ 16.102, .104(a).

enforcement actions as the Department’s EAJA regulations pre-date the

Department’s H-2B enforcement authority.19

As EAJA’s statutory and regulatory definitions of “adversary adjudication”20

refer to Section 554, we examine the three elements set forth in Section 554 in

determining whether EAJA applies to H-2B enforcement proceedings. First, there

must be an adjudication. Second, the adjudication must be required by statute to be

determined “on the record.” And finally, the statute must provide an “opportunity

for an agency hearing.”21

A. Agency Adjudications Under the H-2B Program Require Hearings if

Requested

The H-2B program’s enforcement provisions are contained in Section 404 of

the 2005 Real ID Act22:

(14)(A) If the Secretary of Homeland Security finds, after

notice and an opportunity for a hearing, a substantial

failure to meet any of the conditions of the petition to admit

or otherwise provide status to a nonimmigrant worker

under section 1101(a)(15)(H)(ii)(b) of this title or a willful

misrepresentation of a material fact in such petition—

(i) the Secretary of Homeland Security may, in addition to

any other remedy authorized by law, impose such

administrative remedies (including civil monetary

penalties in an amount not to exceed $10,000 per violation)

The current regulations were updated in 2007, prior to the Agency receiving

authority over H-2B employment matters. Infra note 24.

5 U.S.C. § 504(b)(1)(C).

The United States Court of Appeals for the Eighth Circuit applied a similar threepart test to determine whether EAJA applied to Farmer Home Administration National

Appeal Division (NAD) proceedings. Lane v. U.S. Dep’t of Agric., 120 F.3d 106, 108 (8th Cir.

1997) (EAJA applies to NAD proceedings “because all three prerequisites for coverage

[under § 554] have been satisfied. NAD proceedings are: 1) adjudications; 2) there is an

opportunity for a hearing; and 3) the hearing must be on the record.”); Five Points Rd. Joint

Venture v. Johanns, 542 F.3d 1121, 1125 (7th Cir. 2008) (same).

Emergency Supplemental Appropriations Act for Defense, The Global War on

Terror, and Tsunami Relief, 2005, Div. B, The Real ID Act of 2005, § 404, Pub. L. No. 10913, 119 Stat 231 (codified at 8 U.S.C. § 1184(c)(14)).

as the Secretary of Homeland Security determines to be

appropriate; and

(ii) the Secretary of Homeland Security may deny

petitions filed with respect to that employer under section

1154 of this title or paragraph (1) of this subsection during

a period of at least 1 year but not more than 5 years

for aliens to be employed by the employer.

(B) The Secretary of Homeland Security may delegate to

the Secretary of Labor, with the agreement of the Secretary

of Labor, any of the authority given to the Secretary of

Homeland Security under subparagraph (A)(i).

under subparagraph (A), the highest penalties shall be

reserved for willful failures to meet any of the conditions of

the petition that involve harm to United States workers.

(D) In this paragraph, the term “substantial failure”

means the willful failure to comply with the requirements

of this section that constitutes a significant deviation from

the terms and conditions of a petition.[23]

In 2009, the Department of Homeland Security delegated to the Department

of Labor its investigative and enforcement authority under the H-2B program.24 The

H-2B statute, as delegated, directs the Department of Labor to investigate and

impose administrative remedies if, after opportunity for hearing, the Department

finds a substantial violation of the terms and conditions set forth in the employer’s

H-2B petition.25

8 U.S.C. § 1184(c)(14).

Labor Certification Process and Enforcement for Temporary Employment in

Occupations Other Than Agriculture or Registered Nursing in the United States (H-2B

Workers), and Other Technical Changes, 73 Fed. Reg. 78,020, 78,046 (Dec. 19, 2008)

(effective Jan. 18, 2009) (discussing delegation of H-2B enforcement from Department of

Homeland Security to the Department of Labor). The authority was granted pursuant to 8

U.S.C. § 1184(c)(14)(A)(i), (c)(14)(B). The 2008 Rule was superseded by the Interim Final

Rule that was published and took effect on April 29, 2015, but this case involved only

violations of the 2008 Rule. 80 Fed. Reg. 24,042 (Apr. 29, 2015).

8 U.S.C. § 1184(c)(14)(A)(i).

For H-2B enforcement proceedings, prongs one (adjudication) and three

(opportunity for hearing) of Section 554’s test are met by examining the H-2B

statutory language in the context of the APA’s definitions. The APA defines an

“adjudication” as an “agency process for the formulation of an order.”26 An “order”

under the APA is “the whole or a part of a final disposition, whether affirmative,

negative, injunctive, or declaratory in form, of an agency in a matter other than rule

making but including licensing.”27 Neither party disputes that H-2B enforcement

proceedings involve an “adjudication.”28 The statute itself requires “notice and an

opportunity for a hearing.”29 Because the Department’s adjudication under the H2B program requires a hearing if requested, the only remaining inquiry is whether

the adjudication is “determined on the record.”30

B. H-2B Enforcement Proceedings Are “On the Record”

We start our analysis with the statute’s text.31 The H-2B enforcement statute

provides that if the Agency:

finds, after notice and an opportunity for a hearing,

a substantial failure to meet any of the conditions [and

obligations of the program, it] may, in addition to any other

5 U.S.C. § 551(7).

Id. § 551(6).

Upon determining that an employer has violated any of obligations and

responsibilities under the H-2B program, 29 C.F.R. § 503.19, the Administrator may assess

civil monetary penalties and order debarment pursuant to the H-2B program. Id. § 503.20.

The party against whom civil monetary penalties, debarment, or other administrative

remedies have been assessed will be notified in writing of such determination. Id. § 503.41.

Such notification will inform the party of their right to request a hearing. Id. § 503.42(b).

Under 29 C.F.R. § 503.43, “[a]ny party desiring review of a determination issued under §

503.41, including judicial review, must make a request for such an administrative hearing

in writing to the Chief ALJ . . . .”

8 U.S.C. § 1184(c)(14)(A).

The H-2B enforcement provisions’ statutory text provides an opportunity for

hearing, and the implementing regulations provide the procedure for a party to request a

hearing. This situation is distinguishable from another where the ALJ has the discretion to

hold a hearing. Smedberg Mach. & Tool, Inc. v. Donovan, 730 F.2d 1089, 1092–93 (7th Cir.

1984) (concluding that the labor certification review proceeding was not an adjudication

under Section 554 because “[t]he statutory provision regarding labor certification does not

provide for any administrative review, and certainly not a hearing review, of the Secretary

of Labor’s decisions denying or granting the certifications”).

Ardestani, 502 U.S. at 135.

remedy authorized by law, impose such administrative

remedies (including civil monetary penalties in an amount

not to exceed $10,000 per violation) . . . .[32]

The Administrator argues that because the H-2B enforcement statute does

not state that the hearing must be “on the record,” EAJA does not apply.33 Graham

& Rollins and the Amici in this case argue that the statutory words “on the record”

are not required, and that the analysis should focus on whether Congress intended

for Section 554’s “on the record” procedures to apply to the hearing at issue. For the

reasons set forth below, we agree that express “on the record” language is not

required and that Congress intended that H-2B enforcement proceedings be

conducted on the record.

i. No “Magic Words” Are Required for an Adjudication to be “On the Record”

The Administrator relies on St. Louis Fuel & Supply Co. v. Fed. Energy

Regulatory Commission, where the United States Court of Appeals for the D.C.

Circuit found that EAJA did not apply to a Federal Energy Regulatory Commission

(FERC) proceeding because “[s]ection 7193(c) of the DOE Organization Act affords

‘an opportunity for a hearing’ but does not expressly state that the hearing must be

‘on the record’ and does not cross-reference section 554.”34 Appellant St. Louis Fuel

& Supply Co. entered into a consent order with the Department of Energy (DOE)

settling the appellant’s challenge to a DOE price regulation remedial order.35 In St.

Louis Fuel & Supply Co., the D.C. Circuit reasoned that there were alternative

hearing procedures outlined in the statute and that “what counts is whether the

statute indicates whether Congress intended to require full agency adherence to all

Section 554 procedural components.”36 The D.C. Circuit cited legislative history

indicating that the procedure associated with remedial orders was “a little bit less”

than the “full adjudicatory type hearing . . . afforded by the [APA]”: “We do not

grant quite as many procedural safeguards to the person subjected to agency action

8 U.S.C. § 1184(c)(14)(A). The Agency can also order that employers be debarred

from participating in the H-2B program.

Acting Administrator’s Opening Brief (Adm’r Br.) at 16–17.

St. Louis Fuel & Supply Co. v. Fed. Energy Regul. Comm’n, 890 F.2d 446, 448 (D.C.

Cir. 1989).

Id. at 447.

Id. at 448–49 (emphasis in original).

as does [sic] sections 554 and 556 of the Administrative Procedure Act.”37

Accordingly, the court concluded that Congress did not intend for formal APA

procedures to apply to FERC proceedings, and therefore EAJA did not apply to the

proceedings.

The D.C. Circuit’s conclusion in St. Louis Fuel & Supply Co., did not hinge on

the absence of the words “on the record.”38 This has been the consistent position

recognized in other circuits as well. In Marathon Oil Co. v. Environmental

Protection Agency, the United States Court of Appeals for the Ninth Circuit

concluded that formal APA procedures applied to EPA permits under Section 402 of

the Federal Water Pollution Control Act39 despite the absence of “on the record”

language:

The 79th Congress’ purpose in limiting the APA provisions

to determinations made ‘on the record’ after opportunity for

a hearing was not to provide future Congresses with a

talisman that they would use to signify whether or not

sections 554, 556 and 557 of the APA should apply. It was

to limit the [APA’s formal procedures] to those types of

adjudications, discussed above, needing special procedural

safeguards.[40]

Other circuit courts uniformly agree that the words “on the record” are not

required to ascertain whether formal APA procedures apply.41 Rather, the inquiry

focuses on whether Congress intended for the agency to adhere to the requirements

of the APA.42

Id. at 449.

Id. at 448–49 (“Our decision, we emphasize, does not turn, mechanically, on the

absence of magic words”).

33 U.S.C. § 1342.

Marathon Oil Co. v. Env’t Prot. Agency, 564 F.2d 1253, 1263 (9th Cir. 1977).

Five Points Rd. Joint Venture, 542 F.3d at 1126 (stating “on the record” is not

required in the enabling statute for EAJA to apply; “‘those three magic words need not

appear for a court to determine that formal hearings are required’”) (quoting City of W. Chi.

v. U.S. Nuclear Regul. Comm’n, 701 F.2d 632, 641 (7th Cir. 1983)).

See generally St. Louis Fuel & Supply Co., 890 F.2d 446; Lane, 120 F.3d 106;

Dantran, Inc. v. U.S. Dep’t of Lab., 246 F.3d 36 (1st Cir. 2001); Aageson Grain & Cattle, 500

F.3d at 1046; Friends of the Earth v. Reilly, 966 F.2d 690, 692–95 (D.C. Cir. 1992).

ii. The Legislative History of the APA Explains When “On the Record”

Language is Needed

Neither the parties nor Amici have identified legislative history specifically

addressing Congress’s basis for choosing the hearing language that it included in

the H-2B program statute. However, Congress enacted the H-2B enforcement

provisions in the backdrop of the APA’s governing framework on agency

adjudication.43 Expanding the scope of inquiry to include the broader structure of

the APA, we agree that Congress intended for H-2B adjudications to be “on the

record.”44

The APA governs both agency rulemaking and agency adjudications. APA

adjudications and rulemaking can be both formal and informal.45 Recognizing the

distinction between these two kinds of procedures is at the heart of the dispute in

this case.

Use of statutory language “on the record,” in the administrative

context, is one way of referencing the APA’s formal procedures set out in

See generally U. S. Dep’t of Justice, ATTORNEY GENERAL’S MANUAL ON THE

ADMINISTRATIVE PROCEDURE ACT (1947); Steadman v. Sec. & Exchange Comm’n, 450 U.S.

91, 102 n.22 (1981) (“We have previously noted that the ATTORNEY GENERAL’S MANUAL ON

THE ADMINISTRATIVE PROCEDURE ACT (1947) has been ‘given some deference by this Court

because of the role played by the Department of Justice in drafting the legislation,’ and

Justice Clark was Attorney General both when the APA was passed and when the Manual

was published.”) (quoting Vt. Yankee Nuclear Power Corp. v. Nat. Res. Def. Council, Inc.,

435 U.S. 519, 546 (1978)); see also Chrysler Corp. v. Brown, 441 U.S. 281, 302 n.31 (1979).

“Congress need only ‘clearly indicate its intent to trigger the formal, on-the-record

hearing provisions of the APA.’” Five Points Rd. Joint Venture, 542 F.3d at 1126 (citing City

of W. Chi., 701 F.2d at 641).

The Department of Labor’s administrative regulations for H-2B proceedings provide

for formal APA adjudications. 29 C.F.R. §§ 503.44, 18.10(b). In determining whether an

adjudication is “on the record,” courts have stressed that Congress is the focus, not the

agency’s regulations. An agency’s adherence to formal APA procedures, without Congress

actually intending for APA adherence, is insufficient to find that EAJA applies. “An

agency’s interpretation of a statute, however, is not necessarily indicative of Congress's

intent. Congress is frequently silent or ambiguous with respect to an issue.” Friends of the

Earth, 966 F.2d at 695.

Formal APA adjudications are subject to Section 554 which cross-references the

procedures outlined in Sections 556 and 557. Informal adjudications need only follow the

procedures of Section 555. Rulemaking can also be formal, following Sections 556 and 557,

or informal following Section 553(c). United States v. Fla. East Coast Ry. Co., 410 U.S. 224,

236–37 (1973) (discussing APA); APA MANUAL at 31 (same).

Sections 554, 556, and 557.46 In the United States Department of Justice’s

Attorney General’s Manual on the Administrative Procedure Act (1947) (APA

Manual), the Attorney General explained when and why “on the record”

language is needed. Primarily, such language is needed to distinguish formal

from informal agency action. Generally, rulemaking does not require formal

procedure. Thus, to set aside those aspects of formal rulemaking from

informal rulemaking, Congress uses the language: “required by statute to be

made on the record after opportunity for an agency hearing” when it is

intended for formal rulemaking to take place.47

The distinction between formal and informal procedure also reaches agency

adjudications. The Attorney General explained that there are two types of

adjudications: (1) those historically not regarded as adjudicatory but might

inadvertently fit within the residual nature of the APA’s broader definitions of

“adjudication”; and (2) those that were inherently and historically adjudicatory in

the traditional sense of quasi-judicial fact-finding. Addressing the former, the

Attorney General explained that “on the record” language is required for the same

reason it is required for all rulemaking statutes.48 Like rulemakings, fringe

adjudications not historically regarded as adjudicatory are traditionally not quasijudicial, so if Congress intends for the agency to have formal adjudications, it needs

to provide specific language indicating so. Otherwise, informal adjudication is

acceptable, as in the case where Congress does not provide for a hearing or a

hearing is discretionary.49

For those quasi-judicial adjudications that are inherently adjudicatory in

nature, “on the record” language is not necessary because these are presumed to

follow the formal procedures set out in APA Sections 554, 556 and 557.50

5 U.S.C. § 554.

Id. § 553; APA MANUAL at 12–14, 26, 31–33.

APA MANUAL at 40–42.

Marathon Oil Co., 564 F.2d. at 1263 (“The failure of Congress to provide for any

hearing whatsoever within an administrative process may well be a valid indication that

Congress either did not feel that it was providing for an “adjudication” in the traditional

sense of the word or did not intend the APA procedures to apply.”); Smedberg Mach. & Tool,

Inc., 730 F.2d at 1092–93 (discretionary hearings are not adversarial adjudications for

purposes of EAJA).

APA MANUAL at 42 (“Other statutes authorizing agency action which is clearly

adjudicatory in nature, such as the revocation of licenses, specifically require the agency to

hold a hearing but contain no provision expressly requiring decision ‘on the record’. . . .

Commenting on statutes requiring hearing before adjudication, the Attorney

General stated:

It is believed that with respect to adjudication the specific

statutory requirement of a hearing, without anything

more, carries with it the further requirement of decision on

the basis of the evidence adduced at the hearing. With

respect to rule making, it was concluded, supra, that a

statutory provision that rules be issued after a hearing,

without more, should not be construed as requiring agency

action “on the record,” but rather as merely requiring an

opportunity for the expression of views. That conclusion

was based on the legislative nature of rule making, from

which it was inferred, unless a statute requires otherwise,

that an agency hearing on proposed rules would be similar

to a hearing before a legislative committee, with neither

the legislature nor the agency being limited to the material

adduced at the hearing. No such rationale applies to

administrative adjudication. In fact, it is assumed that

where a statute specifically provides for administrative

adjudication (such as the suspension or revocation of a

license) after opportunity for an agency hearing, such

specific requirement for a hearing ordinarily implies the

further requirement of decision in accordance with

evidence adduced at the hearing. H.R. Rep. p. 51, fn. 9 (Sen.

Doc. p. 285).[51]

The Supreme Court has applied the reasoning set forth in the APA Manual

when deciding whether agency action requires formal or informal APA procedures.52

[Agencies] ha[ve] always assumed that these orders must be based upon the evidentiary

record made in the hearing, and the courts have held that upon review the validity of an

order issued under the [enabling act] must be determined upon the administrative record.

It seems clear that administrative adjudication exercised in this context is subject to

sections 5, 7 and 8 [APA Sections 554, 556, 557].”) (citations omitted).

Id. at 42–43; cf. id. at 33 (certain statutes “rarely specify in terms that the agency

action must be taken on the basis of the ‘record’ developed in the hearing;” however, when

agency action follows a hearing required by statute, the “agencies themselves and the

courts have long assumed that the agency’s action must be based upon the evidence

adduced at the hearing.”).

Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 218 (1988) (Scalia, J., concurring)

(“The position the Secretary takes in this litigation [concerning retroactivity] is out of

accord with the Government’s own most authoritative interpretation of the APA, the 1947

Attorney General’s Manual on the Administrative Procedure Act (AG’s Manual), which we

In United States v. Allegheny-Ludlum Steel Co., the Court examined the Esch Car

Service Act53 which authorized the Interstate Commerce Commission to engage in

rulemaking “after hearing.”54 The statute did not provide for a hearing “on the

record after opportunity for an agency hearing” as used in Section 553(c) to signify

that the formal procedures of Sections 556 and 557 apply.55 A party had challenged

the Commission’s factual basis and legal conclusions for a rule. In evaluating this

challenge, the Supreme Court addressed whether the statute at issue required

formal or informal procedures as part of the hearing. The Court held that the formal

procedures of Sections 556 and 557 were not required because this case involved a

rulemaking proceeding and “on the record” or equivalent language was not

included. The Court explained:

Appellees claim that the Commission’s procedure here

departed from the provisions of 5 U.S.C. §§ 556 and 557 of

the Act. Those sections, however, govern a rule-making

proceeding only when 5 U.S.C. § 553 so requires. The latter

section, dealing generally with rulemaking, makes

applicable the provisions of §§ 556 and 557 only ‘(w)hen

rules are required by statute to be made on the record after

opportunity for an agency hearing . . ..’ The Esch Act,

authorizing the Commission ‘after hearing, on a complaint

or upon its own initiative without complaint, (to) establish

reasonable rules, regulations, and practices with respect to

car service . . .,’ 49 U.S.C. § 1(14)(a), does not require that

such rules ‘be made on the record.’ 5 U.S.C. § 553. That

distinction is determinative for this case.[56]

Following the same reasoning set forth in the APA Manual, the Court

distinguished this analysis and disposition from what would have been the case if

the matter had been an adjudication rather than a rulemaking.57

have repeatedly given great weight.”); supra note 43 (citing authority relying on APA

Manual for meaning of APA).

49 U.S.C. § 1(14)(a) (1972) (subsequently repealed).

United States v. Allegheny-Ludlum Steel Co., 406 U.S. 742, 756–57 (1972).

Id.

Id. at 757; see also Fla. East Coast Ry. Co., 410 U.S. at 251 (“We recognized,

however, that the precise words ‘on the record’ are not talismanic, but that the crucial

question is whether the proceedings under review are ‘an exercise of legislative rulemaking’

or ‘adjudicatory hearings.’”) (discussing Allegheny-Ludlum Steel and reasoning that the

Because the proceedings under review were an exercise of

legislative rulemaking power rather than adjudicatory

hearings as in [Wong Yang Sung v. McGrath, 339 U.S. 33

(1950), and Ohio Bell Telephone Co. v. Public Utilities

Comm’n, 301 U.S. 292 (1937)], and because 49 U.S.C. §

1(14)(a) does not require a determination ‘on the record,’

the provisions of 5 U.S.C. §§ 556 and 557 were

inapplicable.[58]

The Court suggested that if the matter had been an adjudication it would have

viewed the absence of “on the record” language differently when deciding whether

formal APA procedures found in Sections 556 and 557 were required.59

As explained above, for adjudications such as those found in H-2B

enforcement proceedings, courts do not require that Congress use express “on the

record” language when ascertaining whether Congress intended that a hearing on

the record to take place. Examining the H-2B statutory language in conjunction

with the APA’s governing structure, we conclude that Congress enacted the H-2B

enforcement program intending for a formal agency adjudication “on the record.”

C. Formal APA Procedures Apply to H-2B Proceedings Because They Are

Quasi-Judicial and Involve Disputed Individual Rights

The discussion above explaining when and why Congress includes “on the

record” language to trigger formal APA procedures dovetails with judicial

application. Courts require formal procedure to satisfy due process concerns when

adjudicative facts and individual rights are at issue.60

formal adjudicatory provisions of Sections 556 and 557 did not apply as the statutory

provision for rulemaking only required a hearing and not a hearing on the record).

Allegheny-Ludlum Steel Co., 406 U.S. at 757.

Id. at 757; see also Marathon Oil Co., 564 F.2d at 1261–64 (citing the APA’s

legislative history and the need for “on the record” language to exclude such procedures

from run-of-the-mill non-adversarial adjudications).

Melissa M. Berry, Beyond Chevron’s Domain: Agency Interpretations of Statutory

Procedural Provisions, 30 SEATTLE U. L. REV. 541, 561 (2007) (discussing the distinction

between quasi-legislative rulemaking and quasi-judicial adjudication).

Administrative action can be quasi-legislative or quasi-judicial.61 Quasijudicial proceedings involve traditional fact-finding based on an evidentiary record

including witness testimony, cross-examination, and documentary evidence. This

evidentiary record is required for appeals of administrative final decisions to the

federal courts.62 The APA was implemented, in part, to provide parties with

appropriate process and protection when rights and liabilities involving past acts

are at stake. The APA Manual provides:

[A]djudication [under the APA] is concerned with the

determination of past and present rights and liabilities.

Normally, there is involved a decision as to whether past

conduct was unlawful, so that the proceeding is

characterized by an accusatory flavor and may result in

disciplinary action. […] In such proceedings, the issues of

fact are often sharply controverted.[63]

Adjudicatory fact-finding often imposes immediate economic consequences on

a party, in contrast to a legislative, policy-like determination with prospective

effects. As explained above, for quasi-judicial proceedings steeped in traditional

adjudicatory fact-finding, the Attorney General noted that formal procedures are

assumed.64

Following the APA Manual’s explanation for when and why “on the record”

language is needed, several circuit courts have relied upon the nature of the rights

at issue when evaluating the type of “hearing” Congress provided for and whether

that hearing triggered formal APA procedures.65 These two analyses go hand in

hand.

Allegheny-Ludlum Steel Corp., 406 U.S. at 749.

APA MANUAL at 33–34, 41 (judicial review presumes “on the record”); Marathon Oil

Co., 564 F.2d at 1262–63. The APA provides a presumption favoring judicial review of

agency actions. See, e.g., Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667, 670

(1986). “A person suffering legal wrong because of agency action, or adversely affected or

aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial

review thereof.” 5 U.S.C. § 702. Exceptions to judicial review exist where the statute

expressly precludes review or the agency action was committed to the discretion of the

agency. Id. § 701(a).

APA MANUAL at 14–15.

Id. at 42, 43.

Marathon Oil Co., 564 F.2d at 1261–64 (noting difference between adjudication and

rulemaking and citing the APA MANUAL for the point that adversarial proceedings are

In Dantran, Inc. v. United States Department of Labor, the United States

Court of Appeal for the First Circuit considered the type of rights at issue in

determining whether a hearing triggered formal APA requirements.66 Dantran

involved an appeal from this Board arising under the McNamara-O’Hara Service

Contract Act of 1965.67 The Court found that EAJA applied despite the absence of

“on the record” language because of the nature of the dispute.68 “[A]n adjudication

such as this, which involves specific factual findings with potential for ‘serious

impact on private rights,’ is ‘exactly the kind of quasi-judicial proceeding for which

the adjudicatory procedures of the APA were intended.’”69

In Friends of the Earth v. Reilly, the D.C. Circuit referenced the APA’s formal

adjudication when distinguishing adjudicatory facts from legislative facts.

implied in cases of sharply disputed facts); Seacoast Anti-Pollution League v. Costle, 572

F.2d 872, 876–77 (1st Cir. 1978) (rejecting a requirement for “on the record” to appear in

the text if Congress intended for a type of adversarial adjudication based on the nature of

the hearing and the rights at issue), superseded by Dominion Energy Brayton Pt. LLC v.

Johnson, 443 F.3d 12 (1st Cir. 2006); City of W. Chi., 701 F.2d at 641, 644 n.11 (“Of course,

if a formal adjudicatory hearing is mandated by the due process clause, the absence of the

‘on the record’ requirement will not preclude application of the APA.”).

In Collord v. U.S. Dep’t of Interior, 154 F.3d 933, 934-37 (9th Cir. 1998), the

Department of Interior held a hearing to adjudicate the validity of a mining claim. The

ALJ’s decision was reversed by the agency. Because Collord was a prevailing party, Collord

filed for attorney’s fees under EAJA. The question for the Ninth Circuit was whether EAJA

applied given the statute at issue did not require a hearing. Citing Wong Yang Sung v.

McGrath, 339 U.S. 33 (1950), the Ninth Circuit went so far to say that EAJA applied

because a formal APA adversarial adjudication under §§ 554, 556, and 557 was required

even though Congress did not provide for a hearing.

In Wong Yang Sung, the Supreme Court considered whether administrative

hearings in deportation cases must conform to the APA where the legislation did not

provide for hearing. Id. at 48. The Court explained “[b]ut the difficulty with any argument

premised on the proposition that the deportation statute does not require a hearing is that,

without such hearing, there would be no constitutional authority for deportation.” Id. at 49.

We need not explore the merits of this analysis involving a statute that does not provide for

a hearing as the statute at issue provides notice and opportunity for a hearing. Smedberg

Mach. & Tool, Inc., 730 F.2d at 1093 (discounting a due process argument underpinning

“adversarial adjudication” where hearing was discretionary).

Dantran, Inc., 246 F.3d at 46.

41 U.S.C. §§ 6701–6707 (formerly §§ 351–358).

Dantran, Inc., 246 F.3d at 46.

Id.

A section 554 hearing, with its attendant procedural

protections, has as its primary purpose the determination

of “adjudicative facts,” i.e., those facts which “usually

answer the questions of who did what, where, when, how,

why, with what motive or intent ... [and] are roughly the

kind of facts that go to a jury in a jury case.” A section 554

hearing is, in short, like a trial proceeding. But it does not

necessarily follow that the nature of the interests at stake

in a [hazardous waste authorization] withdrawal

proceeding requires a section 554 proceeding.[70]

Under the H-2B enforcement program, the Administrator is authorized, after

notice and an opportunity for a hearing, to impose administrative remedies against

the violator including civil monetary penalties and debarment.71 These proceedings

are quasi-judicial as the rights at issue in this case involve disputed adjudicatory

facts decided on the basis of an evidentiary record, similar to those contemplated in

Dantran and Friends of the Earth.72

D. Statutory Construction of EAJA’s Waiver of Sovereign Immunity

For purposes of evaluating EAJA’s waiver of sovereign immunity in this case,

three statutes are in play: EAJA, the H-2B enabling statute, and the APA. EAJA’s

applicability to H-2B enforcement actions depends on characteristics of the H-2B

enabling statute and the adjudications held thereunder. Both EAJA and the H-2B

enforcement program are intertwined with the APA’s governing framework.

Because all three statutes are essential, we examine all three when applying the

canons of statutory construction.

Waivers of sovereign immunity must be strictly construed in favor of the

United States.73 The canon of strict construction extends also to the scope of the

Friends of the Earth, 966 F.2d at 693 (internal footnotes and citations omitted).

8 U.S.C. § 1184(c)(14)(A)–(B).

Supra note 28 (outlining administrative procedures facilitating the dispute between

the Administrator’s assessment of civil monetary penalties, back wages, or debarment

against a party and the party opportunity to respond and request a hearing); infra note 80

(providing the procedure for the administrative record in an H-2B proceeding).

Lane v. Pena, 518 U.S. 187, 192 (1996).

waiver.74 The Supreme Court has stated that strict construction is neither hostile

nor hyper-technical. “[Courts] should not take it upon [them]selves to extend the

waiver beyond that which Congress intended. Neither, however, should we assume

the authority to narrow the waiver that Congress intended.”75 The Supreme Court

in Chickasaw Nation v. United States, noted that “canons are not mandatory rules”

but rather “are designed to help judges determine the Legislature’s intent as

embodied in particular statutory language.”76 The Court in Richlin Security Service

Co. v. Chertoff, an EAJA case, explained as follows:

The sovereign immunity canon is just that—a canon of

construction. It is a tool for interpreting the law, and we

have never held that it displaces the other traditional tools

of statutory construction. Indeed, the cases on which the

Government relies all used other tools of construction in

tandem with the sovereign immunity canon. . . . In this

case, traditional tools of statutory construction and

considerations of stare decisis compel the conclusion

[paralegal fees are recoverable under EAJA]. There is no

need for us to resort to the sovereign immunity canon

because there is no ambiguity left for us to construe.[77]

Applying the above guidelines to this case, we note that analyzing the scope

of EAJA’s waiver under strict construction principles is particularly difficult

because of its conditional features. EAJA’s statutory language provides:

An agency that conducts an adversary adjudication shall

award, to a prevailing party other than the United States,

fees and other expenses incurred by that party in

connection with that proceeding, unless the adjudicative

officer of the agency finds that the position of the agency

was substantially justified or that special circumstances

make an award unjust. . . .[78]

Id.

Smith v. United States, 507 U.S. 197, 203 (1993) (quoting United States v. Kubrick,

444 U.S. 111, 117–18 (1979)).

Chickasaw Nation v. United States, 534 U.S. 84, 94 (2001).

Richlin Sec. Serv. Co. v. Chertoff, 553 U.S. 571, 589–90 (2008) (internal citations

omitted).

5 U.S.C. § 504(a)(1).

Prevailing parties may recover fees if certain conditions are met. A party

must prevail in an “adversary adjudication.” EAJA defines an adversarial

adjudication as “an adjudication under section 554 of [the APA] in which the

position of the United States is represented by counsel or otherwise.”79 Yet, it is not

enough for a party to prevail against the government, represented by counsel, in an

adversarial adjudication governed by formal APA procedures under Section 554.

These prerequisites can take place through adjudications arising under agency

regulations following formal APA procedure.80 This is so because an agency’s

voluntary compliance with APA procedure is not credited in the typical EAJAapplicability analysis.81 Congress must require these procedures.

The lynchpin language shifting the focus from EAJA’s conditional elements

back to Congress and the canons of statutory construction is Section 554’s language

that the section “applies, according to the provisions thereof, in every case of

Id. § 504(b)(1)(C)(i).

The Department of Labor’s implementing regulations provide for formal APA

adjudication of H-2B enforcement proceedings by referencing Sections 556 and 557. “As

provided in the Administrative Procedure Act, 5 U.S.C. 556, any oral or documentary

evidence may be received in proceedings under this part.” 29 C.F.R. § 503.44(b); see also id.

§ 18.12(b). ALJs keep a record of proceedings and forward that record to the ARB if the

matter is appealed. Id. §§ 503.52, 5.6. Section 503.44 states that the ALJ Rules of Practice

and Procedure at 29 C.F.R. Part 18 apply. The ALJ Rules provide that unless stated

otherwise in the governing statute or regulation that ALJ’s will follow Sections 551–559 of

the APA. Id. § 18.10(b).

Supra note 44 (citing H-2B regulatory provisions providing for formal APA hearings

and noting that Courts do not permit agency regulations to satisfy EAJA waivers because

Congress’s intent is the focus).

Courts’ treatment of agency regulations differs in EAJA contexts. Outside of EAJA,

agency regulations receive deference. After the seminal Chevron U.S.A., Inc. v. Natural Res.

Def. Council, Inc., 467 U.S. 837 (1984) decision, several circuits rejected initial positions

concluding that formal APA procedures apply to agency adjudications. In light of Chevron’s

holdings, courts defer to agency regulations providing for informal process. Compare Union

of Concerned Scientists v. U.S. Nuclear Regul. Comm’n, 735 F.2d 1437, 1444 n.12 (D.C. Cir.

1984) (pre-Chevron analysis discussing presumption for APA formal procedures for

adjudications involving specific fact-finding affecting individuals) with Chemical Waste

Mgmt., Inc. v. U.S. Env’t Prot. Agency, 873 F.2d 1477, 1482 (D.C. Cir. 1989) (D.C. Circuit

case revisiting the presumption for APA formal procedures in light of Chevron deference to

agency regulations providing for informal processes); Seacoast Anti-Pollution League, 572

F.2d at 876–77 (pre-Chevron) with Dominion Energy Brayton Point, LLC v. Johnson, 443

F.3d 12, 17 (1st Cir. 2006) (post-Chevron dismissal of presumption for APA evidentiary

hearing in light of agency regulations). See also William Funk, Slip Slidin’ Away: The

Erosion of APA Adjudication, 122 PENN ST. L. REV. 141 (2017).

adjudication required by statute to be determined on the record after opportunity

for an agency hearing.”82 Because Section 554’s language is pivotal to EAJA’s

applicability, its background and legislative history as to when and why Congress

uses “on the record” language is an essential part of the sovereign immunity and

strict construction analysis, not just the text and background of the enabling

statute.83

This interrelationship between the APA and the enabling statute is

confirmed by the APA’s history in the courts. The Supreme Court identified that the

APA’s remedial nature aimed to fix a variety of discordant agency procedures and

apply widely to agencies and agency process.84 Congress enacted the APA as a crosscutting, interagency rulebook for standardized procedure.85

Congress’s H-2B enforcement provision amends the INA. The INA was first

enacted in 1952 in part because of the fallout from the APA’s application to

deportation proceedings.86 Authored by the same members of Congress, the APA

and INA have a colorful history, providing both a view into the meaning of the APA

and also a means to evaluate the APA’s applicability to the INA and other

statutes.87 As demonstrated by the flurry of legislative and judicial activity at the

5 U.S.C. § 554(a).

Courts evaluate whether sovereign immunity is waived by examining not only

express text but also the statute’s legislative history. Ardestani, 502 U.S. at 135–36; St.

Louis Fuel & Supply Co., 890 F.2d at 449 (examining legislative history to support position

that Congress intended less than full APA procedure to apply to DOE remedial orders).

Wong Yang Sung, 339 U.S. at 36–42 (examining APA background and need for

comprehensive administrative procedure act applicable across the agencies); APA MANUAL

at 9 (“Coverage of the Administrative Procedure Act: The Administrative Procedure Act

applies, with certain exceptions to be discussed, to every agency and authority of the

Government.”), 139 (“However, the act is intended to express general standards of wide

applicability. It is believed that the courts should as a rule of construction interpret the act

as applicable on a broad basis, unless some subsequent act clearly provides to the

contrary.”).

Because of its standardized procedure across the administrative state, the APA has

been referred to as a superstatute. Emily S. Bremer, The Exceptionalism Norm in

Administrative Adjudication, 2019 WIS. L. REV. 1351, 1359-60 (2019).

Wong Yang Sung, 339 U.S. 33; Marcello v. Bonds, 349 U.S. 302 (1955).

See generally Marcello, 349 U.S. 302. The dissent cites other amendments to the

INA providing for formal APA procedure (Dissenting Opinion at 40–42) for the position that

Congress’s omission of similar language in the 2005 amendments codified at 8 U.S.C. §

1184(c)(14) should be deemed intentional and meaningful, citing Russello v. United States,

inception of the INA in 1952, Congress knows how to exclude formal APA

procedures from agency procedure.88 When determining whether Congress intended

to exclude the APA from applicable agency procedure, courts carefully examine the

APA alongside the statute. This careful analysis is necessary because the APA is

presumed to apply to agencies.89 Because the Court found clear intent excluding the

APA’s formal procedures from deportation proceedings, the Court explained there

464 U.S. 16, 23 (1983). Russello is built on a presumption of careful draftsmanship, but

courts have recognized exceptions and reasons not to apply the Russello presumption.

Kapral v. United States, 166 F.3d 565, 579-80 (3d. Cir. 1999) (Alito, J., concurring) (noting

reasons to limit the Russello presumption). The Russello presumption has traction when

the disparity occurs in the same legislation. “‘[N]egative implications raised by disparate

provisions are strongest’ when the provisions were ‘considered simultaneously when the

language raising the implication was inserted.’” Gross v. FBL Fin. Serv., Inc., 557 U.S. 167,

175 (2009), quoting Lindh v. Murphy, 521 U.S. 320, 330 (1997).

Marcello, 349 U.S. at 308–09 (observing that Congress followed the APA as a model

in INA deportation proceedings because it is useful for some deportation procedure but also

noting that deportation varied in specific points; because it was both similar and different

from APA procedure, Congress clarified that the INA’s deportation procedure was the “sole

and exclusive procedure” applicable to avoid confusion).

Id.; Cisternas-Estay v. Immigr. & Naturalization Serv., 531 F.2d 155, 163 (3d Cir.

1976) (Gibbons, J., dissenting):

[T]he Court in Marcello v. Bonds did not discuss the relationship

between the APA and other immigration proceedings besides

deportation hearings. What the Court did establish in that

decision, however was a method of analysis to employ in

discovering the interrelationship between the two acts. A court

must compare the INA with analogous provisions of the APA to

determine if Congress meant to adapt the procedural safeguards

of the APA to the particular needs of the INS. In cases of doubt

the court should refer to the legislative history of both acts for

guidance. But the fundamental presumption underlying this

analysis is that where Congress has not specifically deviated

from the APA by either adaptations of its provisions within the

INA itself or statements in the legislative history, the APA

should govern. This presumption is consistent with the language

and policy of [section] 12 of the APA, 5 U.S.C. § 559, which states

in relevant part that a subsequent statute like the INA ‘may not

be held to supersede or modify this subchapter (which includes

s 5(c)) . . . except to the extent it does so expressly.’

Id. (citations omitted). The Attorney General did not examine Section 12 (as amended,

Section 559) of the APA in detail as part of the main discussion but did provide a summary

at page 139 of the APA Manual.

was no need for “magical passwords in order to effectuate an exemption from the

Administrative Procedure Act . . . .”90

The history between the APA and INA indicates that courts do not examine

the enabling statute in isolation. While the H-2B statutory text “after notice and an

opportunity for a hearing,”91 does not reference Section 554 or provide for a hearing

“on the record,” we conclude, for the above stated reasons, that Congress

nevertheless intended for formal APA procedures to apply to H-2B enforcement

hearings. Courts have consistently held that specific words “on the record” are not

required when determining whether Congress intended for an adversarial

adjudication. The Attorney General in the APA Manual explained when and why

Congress uses “on the record” to provide for formal APA procedure. Courts have

credited these explanations when determining that a statute that provides for a

hearing in a quasi-judicial proceeding is an adversarial adjudication on the record. 92

Taken as a whole, we conclude that Congress intended for formal APA

procedures identified in Sections 554, 556, and 557 to apply to H-2B enforcement

proceedings. Thus, H-2B enforcement proceedings are adversarial adjudications for

purposes of EAJA’s applicability and waiver of sovereign immunity. Accordingly, a

prevailing party may be entitled to fees if the government is not substantially

justified in its position.

2. The Administrator’s Position Was Substantially Justified

Having found that EAJA applies to H-2B enforcement matters, we turn now

to determining whether attorney’s fees were appropriately awarded in this case.

When EAJA applies, a party is eligible for an award of attorney’s fees if: (1) the

party is a prevailing party; (2) the agency’s position was not substantially justified;

(3) an award of fees would not be unjust; and (4) EAJA’s timeliness requirements

Marcello, 349 U.S. at 310; see also Ardestani, 502 U.S. 129. In the 2005 amendment

to the INA providing for H-2B enforcement, Congress excluded formal APA procedure from

several sections of the Real ID Act to allow for faster agency implementation of the

statutory language. Emergency Supplemental Appropriations Act for Defense, The Global

War on Terror, And Tsunami Relief, 2005, Div. B, The Real-ID Act, § 407, Pub. L. No. 109–

13, 119 Stat. 231.

8 U.S.C. § 1184(c)(14); supra note 23.

Supra Parts 1.A–C; notes 43, 52 (identifying Supreme Court precedent relying on

the APA Manual as authoritative).

are met.93 There is no dispute that Graham & Rollins was the prevailing party

below and submitted its request for EAJA fees in a timely manner. Because the ALJ

found that no special circumstances made an award of EAJA fees unjust, the only

remaining issue for determination is whether the Administrator’s position was

substantially justified. The government bears the burden on this issue.94

As addressed below, we find that the Administrator’s position was

substantially justified. We further find that the Administrator did not waive its

argument on substantial justification by failing to timely respond to the fee

application before the ALJ. Based on a full evaluation of the Administrator’s

position during the course of the litigation, we conclude that the Administrator’s

position was reasonable, and thus was substantially justified.

A. The Administrator Did Not Waive the Argument on Substantial

Justification

At the outset, we address Respondent’s contention that the Administrator

waived any argument regarding the substantially justified issue by failing to

respond to the EAJA petition below. It is undisputed that the Administrator did not

oppose Respondent’s EAJA fee petition filed before the ALJ.95 Citing a

miscommunication as the reason for her inaction, the Administrator subsequently

included arguments in opposition to EAJA fees in a motion to vacate.96 In her order

denying the motion to vacate, the ALJ addressed some of the Administrator’s

arguments in concluding that “nothing that the Administrator has presented in the

motion to vacate identifies an intervening change in the law, the availability of new

evidence, or the need to correct a clear error or prevent manifest injustice.”97

In a civil action where an agency files no response to a petition for EAJA fees,

courts applying EAJA’s parallel provisions at 28 U.S.C. § 2412 have found the

petition to be uncontroverted and the agency’s burden unmet such that fees are

5 U.S.C. § 504(a)(1)–(2); R. D. & O. at 1.

Zappala Farms, ARB No. 2004-0047, slip op. at 5; Lively v. Bowen, 858 F.2d 177, 180

(4th Cir. 1988).

R. D. & O. at 1.

Denial Order.

Id. at 4.

properly awarded.98 However, even without the aid of a filing in opposition to

Respondent’s petition for fees, under 5 U.S.C. § 504 the ALJ was required to

examine the record to determine whether the government’s position was

substantially justified. The statute provides:

An agency that conducts an adversary adjudication shall

award, to a prevailing party other than the United

States, fees and other expenses incurred by that party in

connection with that proceeding, unless the adjudicative

officer of the agency finds that the position of the

agency was substantially justified or that special

circumstances make an award unjust. Whether or not

the position of the agency was substantially justified shall

be determined on the basis of the administrative record, as

a whole, which is made in the adversary adjudication for

which fees and other expenses are sought.[99]

Thus, it fell to the ALJ to determine whether the government’s position was

substantially justified. The government’s failure to respond to Respondent’s

application for EAJA fees in a timely manner did not relieve the ALJ of this

required task.100

Respondent next cites longstanding case law in support of its additional

argument that the ARB historically does not, and in the present case should not,

consider arguments first raised on appeal. Respondent correctly notes that the

Board generally requires that a party raise an argument before the ALJ in order to

28 U.S.C. § 2412; see, e.g., Cedo-Trabal v. Comm’r of Soc. Sec., No. 19-1676 (GLS),

2021 WL 2596785, at *3 (D.P.R. June 23, 2021) (finding agency position not substantially

justified given agency’s failure to contest motion for fees); McKenzie v. Astrue, No.

1:10cv02036 AWI DLB, 2012 WL 1345756, at *1 (E.D. Cal. Apr. 16, 2012) (finding that

failure to oppose the request constituted failure to establish position was substantially

justified).

5 U.S.C. § 504(a)(1) (emphasis added); see also Jackson v. Bowen, 807 F.2d 127, 129

(8th Cir. 1986) (citing Campbell v. Bowen, 800 F.2d 1247, 1249 (4th Cir. 1986) (noting that

formal opposition is not a precondition for a denial of EAJA fees if the record demonstrates

that agency’s position was substantially justified)).

Respondent cites 29 C.F.R. § 16.302(a) for the position that failure to file an answer

within the thirty-day period may be treated as a consent to the award requested. In light of

the statutory language, and for other reasons set out below, we do not find the permissive

regulation militates in favor of a finding of consent.

100

preserve it for review.101 However, the Board does not always require that an issue

be fully litigated below in order to maintain reviewability; raising the issue can

suffice in appropriate circumstances.102 The Board has also considered waived or

forfeited arguments when “necessary to avoid a manifest injustice or where the

argument presents a question of law and there is no need for additional factfinding.”103

In evaluating whether to consider the Administrator’s argument on appeal,

we note that this case presents a novel issue of law, and there is no need for

additional fact-finding. This exact legal issue—the availability of EAJA awards in

H-2B proceedings—is also relevant to other cases currently pending in the Office of

Administrative Law Judges. Accordingly, we find that the unique circumstances of

this case, combined with the statutory requirement that the adjudicative officer

determine the issue of substantial justification, warrant our considering the

Administrator’s arguments in this appeal.

B. The Agency’s Position Is Substantially Justified if a Reasonable Person

Could Find It Appropriate

Having decided that the ALJ did not err in evaluating the unopposed EAJA

fee application and that the ARB will consider the Administrator’s position on

appeal, we turn to the standard for evaluating whether the Administrator’s position

was substantially justified.

The United States Supreme Court has defined “substantially justified” to

mean “justified in substance or the main—that is, justified to a degree that could

Mancinelli v. E. Air Ctr., Inc., ARB No. 2006-0085, ALJ No. 2006-AIR-00006, slip op.

at 4–5 (ARB Feb. 29, 2008).

101

Kanj v. Viejas Band of Kumeyaay Indians, ARB No. 2009-0065, ALJ No. 2006-WPC00001, slip op. at 6 (ARB Dec. 17, 2010) (citing Rose v. Dole, 945 F.2d 1331, 1334 (6th Cir.

1991) (an argument may be preserved for appeal even if not forcefully raised below)).

102

Avlon v. Am. Express Co., ARB No. 2009-0089, ALJ No. 2008-SOX-00051, slip op. at

5 (ARB Sept. 14, 2011) (internal quotations omitted).

103

satisfy a reasonable person.”104 To meet this test, “the government must show that

its position had a reasonable basis in both law and fact.”105

Applying this test, courts have articulated a set of guardrails to guide the

analysis as to whether a government agency’s position is substantially justified. The

fact that the government did not prevail in the underlying litigation does not create

a presumption that its position was not substantially justified.106 “[T]he

government’s case need not be frivolous to support an award of fees, but, on the

other hand, the litigation need not be a cliffhanger to be sufficiently justified.”107

Agency actions that are “flatly at odds with the controlling case law,” or pursued in

“the face of an unbroken line of authority” or against a “string of losses” suffer from

“defects common to positions that are not substantially justified.”108 When questions

of law are not settled, there is more leeway for the government when arguing its

position.109 A decision on the merits in litigation, on its own, is insufficient to

determine the substantial justification issue.110

Evaluating whether the agency’s position was substantially justified does not

require “an issue-by-issue analysis” but instead involves an examination of “the

totality of circumstances.”111 EAJA provides in relevant part that “[w]hether or not

the position of the agency was substantially justified shall be determined on the

U.S. Dep’t of Lab., Emp. & Training Admin., Div. of Foreign Lab. Certification v.

Barry’s Ground Cover, ARB No. 2012-0079, ALJ Nos. 2012-TLC-00011, -00023, -00026,

-00030, -00032, -00034, -00035, -00037 to -00039, -00042, -00046, -00050, slip op. at 4 (ARB

Jan. 16, 2014) (citing Pierce, 487 U.S. at 565).

104

Id. at 4 (citing Fed. Election Comm’n v. Pol. Contributions Data, Inc., 995 F.2d 383,

386 (2d Cir. 1993)).

105

106

Dantran, Inc., 246 F.3d at 40–41 (citing Pierce, 487 U.S. at 569)).

Id. at 41 (citing Pierce, 487 U.S. at 566); see also United States v. Paisley, 957 F.2d

1161, 1165 (4th Cir. 1992).

107

Hill v. Gould, 555 F.3d 1003, 1008 (D.C. Cir. 2009) (internal citations and quotations

omitted).

108

Hanover Potato Prods. v. Shalala, 989 F.2d 123, 131 (3rd Cir. 1993) (“We do not

believe it is unjustified for a government agency to assert a position in one court merely

because it has been rejected in another. Such a rule would tend to give undue authority to

the first appellate court to decide an issue and chill advocacy.”)

109

110

Paisley, 957 F.2d at 1167.

Strong v. Comm’r of Soc. Sec. Admin., 461 F. App’x 299, 301 (4th Cir. 2012) (citing

Roanoke River Basin Ass’n v. Hudson, 991 F.2d 132, 139 (4th Cir. 1993)).

111

basis of the administrative record, as a whole, which is made in the adversary

adjudication for which fees and other expenses are sought.”112 The agency’s

“position” includes both “the position taken by the agency in the adversary

adjudication” itself and “the action . . . by the agency upon which the adversary

adjudication is based.”113 The Supreme Court has stated that the government’s

position is singular, even though there can be degrees of justification on individual

issues in a case: “EAJA—like other fee-shifting statutes—favors treating a case as

an inclusive whole, rather than as atomized line-items.”114 The statute itself also

refers to the government’s position in the singular.115 Overall, the agency’s position

can be found to be substantially justified “if there is a ‘genuine dispute’ such that

‘reasonable people could differ as to [the appropriateness of the contested

action].’”116

C. The ALJ Erred in Her Analysis of the Issue of Substantial Justification

Applying these standards, we have independently assessed the

“administrative record, as a whole” de novo,117 including the Administrator’s

conduct leading up to this enforcement action as well as the substantive legal

positions taken throughout the litigation.118 Due to the uncertain nature of the legal

question at hand, the merits of the Administrator’s argument, and the

Administrator’s mixed results when taking this position in other matters, we

conclude that the Administrator’s position was substantially justified.

In her Recommended Decision and Order, the ALJ found that the

Administrator’s position was not substantially justified. First, the ALJ found that

the Administrator’s positions during discovery and briefing “were not reasonable or

even entirely professional,” and that throughout litigation the Administrator’s

112

5 U.S.C. § 504(a)(1).

113

Id. § 504(b)(1)(E).

114

Comm’r, Immigr. & Naturalization Serv. v. Jean, 496 U.S. 154, 161–62 (1990).

115

5 U.S.C. § 504(b)(1)(E); see also Jean, 496 U.S. at 159.

116

Pierce, 487 U.S. at 565 (alteration in original) (internal quotation marks omitted).

Supra notes 9, 99; see also Ndiaye v. CVS Store No. 6081, ARB No. 2005-0024, ALJ

No. 2004-LCA-00036, slip op. at 4 (ARB Nov. 29, 2006) (“Under a de novo standard of

review, the reviewing court considers the matter anew and freely substitutes its own

judgment for that of the lower court.”).

117

118

5 U.S.C. § 504(a)(1).

positions were “combative and unreasonable in nature.”119 Next, the ALJ found that

the Administrator’s legal positions were also not substantially justified. The ALJ

highlighted that the Administrator’s position that no statute of limitations applied

to H-2B enforcement proceedings would place a significant burden on employers

participating in the H-2B program.120

In support of her legal position, the Administrator argues that the position

was not seeking to penalize—which would place the action within the purview of

the catch-all five-year statute of limitations at 28 U.S.C. § 2462.121 Rather, the

Administrator took the position that the assessed amount reflected unpaid

outbound transportation costs that constituted back wages122 owed to former H-2B

employees, which the Administrator had authority to impose against Respondent as

“other administrative remedies” permitted by 20 C.F.R. § 655.65(i).123 Further, as

back wages, no recovery limitation period was stated in applicable statutes or

regulations, and so none applied.124

Respondent counters that the Administrator fails to accurately frame the

issue by calling an enforcement proceeding for civil monetary penalties as one for

back wages.125 Before the ALJ, Respondent argued that the assessments constituted

not “wages” but a “penalty” and so were barred by the five-year limitation period of

28 U.S.C. § 2462.126 In this appeal, Respondent highlights that “there was nothing

unsettled or novel about the applicability of 28 U.S.C. § 2462 to actions seeking civil

money penalties.”127

119

R. D. & O. at 5.

120

Id.

121

Adm’r Br. at 28–29.

“Graham and Rollins Inc. must pay back wages in the amounts listed on the

Summary of Unpaid Wages [that has been] provided.” Administrator’s Determination

Letter at 1.

122

123

Graham & Rollins, Inc., ALJ No. 2008-TNE-00022, slip op. at 8 (ALJ June 26, 2018).

“[S]tatutes of limitations do not run in administrative proceedings initiated by the

federal government, unless a federal statute directly sets a time limit.” Id. at 6 (quoting

Administrator’s Brief in Opposition to the Motion to Dismiss).

124

125

Respondent’s Response Brief (Resp. Br.) at 24.

Graham & Rollins, Inc., ALJ No. 2008-TNE-00022, slip op. at 4 (ALJ June 26, 2018).

Graham & Rollins also argued that other statutes of limitations apply.

126

127

Resp. Br. at 25.

The ALJ agreed with Respondent and found that the Administrator sought

“penalties” which were untimely and unenforceable, having been assessed outside

the five-year limitation period set out in Section 2462.128 The ARB summarily

affirmed the ALJ’s determination on the merits.129

We conclude that the ALJ committed two errors: (1) the ALJ hyper-focused

on the conduct of the Agency’s counsel with respect to specific procedural matters

and in so doing failed to properly analyze the Agency’s position for bringing the

assessment against Respondent; and (2) the ALJ recycled the underlying merits

analysis in place of the required analysis as to whether the Administrator’s position

was substantially justified.

i. The ALJ’s Analysis Inappropriately Focused on Counsel’s Attitude Rather

than the Challenged Agency Position

First, the ALJ examined the Agency’s counsel’s actions, finding such to be

“combative and unreasonable” in certain instances.130 Specifically, the ALJ noted

that counsel had refused to review a settlement proposal prior to receiving discovery

responses, moved for a motion deadline extension due to unresolved discovery

issues after earlier stating that such would not be necessary, and refused to agree to

a short motion response extension necessitated by opposing counsel’s having

suffered a home fire. Labeling these actions as “not reasonable or even entirely

professional,” the ALJ concluded that the Administrator’s position “could not be

said to be substantially justified” given these procedural actions of the Agency’s

counsel.131

The record is too sparse for us to thoroughly examine the reasons

precipitating counsel’s actions. Even so, we disagree with the ALJ’s finding that

these three limited instances of an attorney’s litigation demeanor or procedural

128

Graham & Rollins, Inc., ALJ No. 2008-TNE-00022, slip op. at 11 (ALJ June 26,

2018).

Graham & Rollins, Inc., ARB No. 2019-0009, ALJ No. 2018-TNE-00022 (ARB Nov.

16, 2020). The ARB did not discuss recent and subsequent court cases relevant to the issue.

Infra note 148.

129

130

R. D. & O. at 5.

131

Id.

choices constitute the required analysis or establish a sufficient basis for deeming

the Agency’s position not substantially justified.

EAJA directs the ALJ, and the Board on appeal, to determine whether the

Agency’s “position” was substantially justified, not to simply judge the procedural

cooperativeness of Agency’s counsel. The critical issue is whether “there is a

‘genuine dispute’ such that ‘reasonable people could differ as to [the appropriateness

of the contested action].’”132 The contested action is the “position” that is the subject

of examination. In this case, the contested action is the Agency’s position citing

Respondent for nonpayment of outbound transportation expenses incurred more

than five years in the past. This is the position which Respondent challenged below,

and this is the challenged action that forms the essential “position” that must be

substantially justified to avoid an award of EAJA fees.

Instead of focusing on this position, the ALJ incorrectly allowed the perceived

unprofessionalism of counsel to become the “agency action” subject to scrutiny.

Rather than examining the Administrator’s position as a whole, the ALJ catalogued

the Administrator’s errors and isolated procedural errors. The error in this

approach is well illustrated in Morgan v. Perry.133 In Morgan, the United States

Court of Appeals for the Third Circuit found in favor of a former servicemember on

the merits of his claim that the U.S. Marine Corps (Corps) and various federal

agencies violated his procedural due process rights when they refused to allow him

to withdraw his earlier request for an other-than-honorable (OTH) discharge and

proceed to trial by general court-martial. During the proceedings, a prosecutor for

the Corps engaged in unprofessional and unethical conduct. When ruling upon the

servicemember’s subsequent petition for EAJA fees, the Court noted, correctly, that

though it was required to scrutinize both the government’s prelitigation and

litigation position in determining if the government was substantially justified,

consideration of alleged attorney misconduct may not substitute for the required

focus on the specifically challenged action:

Although we in no way minimize the gravity or impropriety

of [the prosecutor’s] conduct, it is clear to us that [his]

conduct is not the issue before us. Rather, the issue is [the

Corps’] refusal to allow Morgan to withdraw his request of

an OTH discharge and proceed to a general court martial.

132

Pierce, 487 U.S. at 565.

133

142 F.3d 670, 686–87 (3d Cir. 1998).

The fact that Morgan’s request was triggered by [the

prosecutor’s] conduct does not elevate that conduct to the

level of agency action under the facts before us nor

transform his conduct into the decision that was challenged

in court. Morgan challenged [the Corp’s] decision [not to

allow him to withdraw his request for an OTH discharge],

and that is the agency action that must be substantially

justified if Morgan is to be denied fees under the EAJA . . .

.[134]

Likewise, in the present case the Administrator issued a determination that

Respondent owed $16,560 in outbound transportation costs from more than five

years past. This is the Agency action that Respondent challenged and this is the

Agency action that must be found to be substantially justified to avoid the award of

EAJA fees.

ii. The ALJ Failed to Properly Analyze the Agency’s Position for Substantial

Justification as Required by EAJA

EAJA “is not a ‘loser pays’ statute.”135 Correct application of the statute

requires that the ALJ look beyond the fact that the government lost on the merits

and separately analyze whether the government’s position was substantially

justified.136 The ALJ must “do more than explain, repeat, characterize, and describe

the merits . . . decision.”137 Instead, the ALJ must “analyze why the government’s

position failed in court: if, for example, the government lost because it vainly

pressed a position ‘flatly at odds with the controlling case law,’ that is one thing;

quite another if the government lost because an unsettled question was resolved

unfavorably.”138

134

Id.

135

Id. at 685.

Cooper v. U.S. R.R. Ret. Bd., 24 F.3d 1414, 1416 (D.C. Cir. 1994) (“[T]he inquiry into

reasonableness for EAJA purposes may not be collapsed into [the] antecedent evaluation of

the merits, for EAJA sets forth a distinct legal standard.” (internal quotations omitted)).

136

137

Halverson v. Slater, 206 F.3d 1205, 1209 (D.C. Cir. 2000).

Taucher v. Brown-Hruska, 396 F.3d 1168, 1174 (D.C. Cir. 2005) (quoting Am.

Wrecking Corp. v. Sec. of Labor, 364 F.3d 321, 326–27 (D.C. Cir. 2004) (internal quotation

marks omitted)).

138

In the present case, the ALJ failed to “reexamine the legal and factual

circumstances of the case from a different perspective”139 but instead merely

restated her merits analysis to find that that Administrator’s position was not

substantially justified. Other than relying on the conduct of agency counsel as noted

above, the ALJ’s legal analysis of the substantial justification issue is set forth in

total below:

Furthermore, with regard to the issue on which this

proceeding was ultimately dismissed—the untimeliness of

the H-2B enforcement action against Employer—the

Administrator’s position was similarly unreasonable. The

Administrator essentially took the stance that in the

absence of a statute of limitations directly applicable to H2B proceedings, they are not subject to any statute of

limitations at all. However, as discussed in my dismissal

order, the five-year catch-all statute of limitations in 28

U.S.C. § 2462 clearly applied, in the absence of another

specific statute, and the Administrator’s arguments

against Employer’s motion were misplaced and not

“substantially justified.” The burden that no statute of

limitations would place upon employers is extreme; at

some point, defendants must have some expectation of the

cessation of remote obligations.[140]

In essence, the ALJ found that the Administrator’s substantive legal position

regarding the inapplicability of the five-year limitations period was not persuasive

and would impose an undue burden on employers.

This analysis was insufficient to support the ALJ’s legal conclusion that the

Administrator’s assessment was not substantially justified. The ALJ failed to

analyze “why” the Administrator lost below and instead merely restated her

conclusion that that the Agency’s arguments were “misplaced” and

“unreasonable.”141 While the ALJ’s ultimate conclusion that the Administrator’s

assessments were penalties and thus barred by Section 2462’s five-year limitations

period prevailed before the ARB, that legal conclusion is not determinative of the

issue of whether the position was substantially justified currently before the ARB.

United States v. Hallmark Constr. Co., 200 F.3d 1076, 1080 (7th Cir. 2000) (cited in

Taucher, 396 F.3d at 1174).

139

140

R. D. & O. at 5.

141

Id. at 5-6.

We are required, as was the ALJ, to assess the reasonableness of the

Administrator’s position at the time the challenged action was taken.142 Stated

more directly, we must examine whether a reasonable person could agree that

requiring an employer to compensate its former H-2B employees for legally required

outbound transportation expenses could reasonably be considered as imposing owed

“wages” and not “penalties,” such that no limitations period would bar the action.

That was the position espoused by the Agency throughout this proceeding.

We answer this question in the affirmative for several reasons. First, it is

important to note that this issue—the proper limitation period, if any, for

imposition of outbound transportation costs on employers—had never before been

determined by any court. In fact, until this Board ruled that the five-year catch-all

statute of limitations of 28 U.S.C. § 2462 applied to H-2B enforcement proceedings,

no other direct guidance existed to aid the Administrator in charting the Agency’s

position.143 This is not a case where existing case law mandated a clear answer that

the Agency chose to ignore. This is a case of first impression, which is the type of

case in which “courts are more likely to find that the Government’s position was

substantially justified.”144

Respondent continues to argue that the law was clear and that the

Administrator refused to follow it. We agree with Respondent that the law was clear

that a penalty cannot be assessed beyond the five-year window set by Section 2462.

What was not clear was whether outbound transportation expenses owed to former

H-2B employees were to be properly categorized as “wages” not subject to any

limitation period or as “penalties” barred after five years.

Just as the Administrator’s position was not taken in contravention of

binding case law, neither was her position taken without any support. The

Administrator had taken this exact same position in other matters presented to the

Taucher, 396 F.3d at 1173 (In considering substantial justification under EAJA, “as

in other areas[,] courts need to guard against being subtly influenced by the familiar

shortcomings of hindsight judgment.” (internal quotations omitted)) (cited in Johnson v.

McDonald, 28 Vet. App. 136, 146–50 (U.S. Ct. of Vet. Claims 2016), aff’d sub nom. Butts v.

Wilkie, 721 F. App’x 988 (Fed. Cir. 2018)).

142

Graham & Rollins, Inc., ARB No. 2019-0009, ALJ No. 2018-TNE-00022 (ARB Nov.

16, 2020).

143

144

Johnson, 28 Vet. App. at 147.

Department’s Office of Administrative Law Judges, with a mixed record of success

and failure.145

In support of the Agency’s position, the Administrator relied on longstanding

case law to establish that there is no binding limitations period for administrative

actions unless a federal statute creates one.146 Without a statutory limit, the

government is permitted to act without time constraint.147 The ALJ rejected that

argument, not because the case law had been overruled or was otherwise

inapplicable but because the ALJ rejected the underlying premise that unpaid

outbound transportation expenses were owed wages. Whether or not the relief the

Administrator was seeking was the type to which the catch-all five-year statute of

limitations applied was and remains an unsettled issue.148 After finding that the

assessments constitute penalties instead of wages, the ALJ correctly relied upon the

five-year limitations period applicable to penalty assessments. Doing so required a

detailed analysis and factual differentiation of the Administrator’s cited authorities,

Adm’r Br. at 30 (citing, among others, Adm’r v. JML Landscape Mgmt., ALJ No.

2017-TNE-00008, slip op. at 7–8 (ALJ Oct. 22, 2018) (“Congress has imposed no explicit

time limitation on an H-2B enforcement action such as the instant matter.”). But see Adm’r

v. Butler Amusements, Inc., ALJ No. 2018-TNE-00019, slip op. at 15–17 (ALJ Nov. 14, 2018)

(five-year limitations period for 28 U.S.C. 2462 applies to H-2B enforcement actions for

improper job classification in the form of unpaid wages); Adm’r v. Deggeller Attractions,

Inc., ALJ No. 2018-TNE-00008, slip op. at 5 (ALJ Sept. 20, 2018) (same, alleged failure to

specify deductions in job offer); Adm’r v. Hotelmacher, LLC, ALJ Nos. 2017-TNE-00001,00011, slip op. at 4–5 (ALJ May 17, 2018).

145

Adm’r Br. at 29–30 (citing cases); see also BP Am. Production Co. v. Burton, 549 U.S.

84, 95–96 (2006) (identifying canon of construction that no time runs against the sovereign).

146

“Statutes of limitation sought to be applied to bar rights of the Government, must

receive a strict construction in favor of the Government.” Badaracco v. Comm’r, 464 U.S.

386, 391 (1984) (quoting E. I. Du Pont De Nemours & Co. v. Davis, 264 U.S. 456 (1924)).

147

The Board affirmed the ALJ’s analysis on 28 U.S.C. § 2462 without discussion.

Neither the ALJ nor the ARB discussed recent Supreme Court case law on penalties and §

2462. Kokesh v. Sec. & Exchange Comm’n, 137 S. Ct. 1635, 1642 (2017) (holding that SEC

disgorgement enforcement proceedings imposed penalties such that § 2462’s limitations

period applies) and Liu v. Sec. & Exchange Comm’n, 140 S. Ct. 1936 (2020) (clarifying that

Kokesh did not foreclose disgorgement actions in equity, which historically excluded

punitive sanctions); see also Sec. & Exchange Comm’n v. Sharp, No. 21-11276-WGY, 2022

WL 4085676, at *8–13 (D. Mass. Sept. 6, 2022) (summarizing Kokesh and Liu and

analyzing congressional amendments to the statute of limitations for SEC disgorgement

proceedings). Given these developments and in light of the fact that our summary

affirmance of the ALJ’s decision on the merits is now part of the law of this case and not

challenged on this appeal, our opinion today is limited to the relevant EAJA issues and does

not constitute or indicate an affirmance of the ARB’s 2020 opinion on the merits.

148

As relevant to this case, for EAJA to apply, Respondent must establish that

these H-2B enforcement proceedings constitute an “an adjudication under section

554 of” the APA.150 Section 554 of the APA, in turn, applies “in every case of

adjudication required by statute to be determined on the record after opportunity

for an agency hearing.”151 Thus, APA section 554 applies when three distinct

prerequisites are met: (1) there must be an “adjudication”; (2) the adjudication must

be determined “on the record”; and (3) there must be an opportunity for an agency

hearing.152 Congress must have “intended to require full agency adherence” to each

of these three procedural components for APA section 554 and, consequently, EAJA

to apply.153

When deciding whether Congress intended these H-2B enforcement

proceedings to constitute an adjudication under APA section 554 and EAJA, we

must remain mindful that EAJA constitutes a partial waiver of sovereign immunity

because it renders the United States liable for attorney’s fees and costs which it

would otherwise not be obligated to pay.154 A waiver of sovereign immunity “cannot

be implied but must be unequivocally expressed,”155 and “[a]ny such waiver must be

strictly construed in favor of the United States.”156

EAJA. However, I do not think it is necessary to reach this issue, given my conclusion with

respect to the precursory issue of the applicability of EAJA.

150

5 U.S.C. § 504(a)(1), (b)(1)(C).

151

Id. § 554(a).

Five Points Rd. Joint Venture v. Johanns, 542 F.3d 1121, 1125 (7th Cir. 2008)

(citations omitted); Aageson Grain & Cattle v. U.S. Dep’t of Agric., 500 F.3d 1038, 1043 (9th

Cir. 2007) (citations omitted); Lane v. U.S. Dep’t of Agric., 120 F.3d 106, 108 (8th Cir. 1997).

152

See St. Louis Fuel & Supply Co. v. Fed. Energy Regul. Comm’n, 890 F.2d 446, 448–

49 (D.C. Cir. 1989) (emphasis original) (citations omitted); accord City of W. Chi. v. U.S.

Nuclear Regul. Comm’n, 701 F.2d 632, 641 (7th Cir. 1983) (citations omitted) (“Congress

must clearly indicate its intent to trigger the formal, on-the-record hearing provisions of the

APA.”).

153

154

Ardestani v. Immigr. & Naturalization Serv., 502 U.S. 129, 137 (1991).

Irwin v. Dep’t of Veterans Affs., 498 U.S. 89, 95 (1990) (quoting United States v.

Mitchell, 445 U.S. 535, 538 (1980)).

155

Ardestani, 502 U.S. at 137 (citations omitted). The majority, Respondent, and Amici

challenge, to varying degrees, the applicability of the principles concerning the waiver of

sovereign immunity in the context of this case. Majority Opinion (Maj. Op.) at 18–23; Resp.

Br. at 22–23; Brief of Amicus Curiae Outdoor Amusement Business Association & Morton

Concessions Supporting Employer and Affirmance (Amici Br.) at 19–25. In Ardestani, the

156

As explained by the majority, there is no dispute that the H-2B enforcement

proceedings at issue in this case constitute an “adjudication” as defined by the

APA,157 and that the proceedings offer the opportunity for a hearing. Nevertheless,

the Administrator argues that these proceedings do not fall under APA section 554

and EAJA because the statute does not require these proceedings to be determined

“on the record.” Considering the fundamental principles identified above, I agree

with the Administrator, and conclude that nothing in the language, context, or

history of the H-2B enforcement provisions indicates that Congress intended to

require these proceedings to be determined “on the record” under APA section 554.

I begin, as I must, with the text of the statute.158 The INA’s H-2B

enforcement provisions provide, in relevant part, that the Secretary of Labor, by

delegation from the Secretary of Homeland Security, may impose administrative

remedies and take other action against an employer if he “finds, after notice and

an opportunity for a hearing, a substantial failure to meet any of the conditions

Supreme Court relied, in part, on the presumption against waivers of sovereign immunity

to narrowly construe whether the administrative adjudicatory proceedings at issue in that

case were required to be conducted under APA section 554 and, thus, subject to EAJA.

Ardestani, 502 U.S. at 138 (“But we cannot extend the EAJA to administrative deportation

proceedings when the plain language of the statute, coupled with the strict construction of

waivers of sovereign immunity, constrain us to do otherwise.”); see also Friends of the Earth

v. Reilly, 966 F.2d 690, 696 (D.C. Cir. 1992) (considering the presumption against waiver of

sovereign immunity when resolving whether Congress intended administrative

adjudication to fall under APA section 554). The Board should do the same here. To be sure,

I agree with the majority that the canon calling for strict construction of waivers of

sovereign immunity is not inalienable and will not apply where Congress has clearly

expressed its intent to waive sovereign immunity. However, as set forth below, Congress

has not expressed such intent with respect to the specific provisions at issue in this case.

Accordingly, the well-established convention that waivers of sovereign immunity must be

strictly construed is a valid and important principle in this case, and reinforces my

conclusion as to congressional intent with enacting INA section 1184(c)(14)(A). See

Ardestani, 502 U.S. at 137 (relying on the canon as “reinforce[ment]” for the independent

“conclusion that any ambiguities in the legislative history are insufficient to undercut the

ordinary understanding of the statutory language”), cited in Richlin Sec. Serv. Co. v.

Chertoff, 553 U.S. 571, 589 (2008).

The APA defines “adjudication” as an “agency process for the formulation of an

order.” 5 U.S.C. § 551(7).

157

BedRoc Ltd., LLC v. United States, 541 U.S. 176, 183 (2004) (stating that “our

inquiry begins with the statutory text,” because “[t]he preeminent canon of statutory

interpretation requires us to presume that the legislature says in a statute what it means

and means in a statute what it says there” (internal quotations and citations omitted)).

158

of the petition to admit or otherwise provide status to a nonimmigrant [H-2B]

worker . . . .”159 Noticeably, the text of the statute does not explicitly require the

proceedings to be determined or conducted “on the record,” or otherwise reference or

incorporate APA section 554. I agree with my colleagues that Congress need not

necessarily explicitly state in the statute that proceedings must be “on the record”

to invoke the APA.160 However, the absence of such language from the H-2B

enforcement provisions is notable, at least because we cannot deduce, from the face

of the statutory text alone, that Congress clearly intended to require adherence to

the full panoply of section 554’s procedural components in these proceedings.161

Congress’s omission of any indication in the statute itself that H-2B

enforcement proceedings must be conducted “on the record” or otherwise pursuant

to APA section 554 is also significant when considered in the context of other

provisions within the INA. Unlike the H-2B enforcement provisions, several of the

other enforcement provisions Congress added elsewhere to the INA, both before and

after the 2005 enactment of the H-2B enforcement provisions, expressly invoke and

incorporate APA section 554.162 Likewise, Congress expressly invoked APA section

159

8 U.S.C. § 1184(c)(14)(A) (emphasis added).

Maj. Op. at 9–10; see St. Louis Fuel & Supply Co., 890 F.2d at 448–49 (“Our

decision, we emphasize, does not turn, mechanically, on the absence of magic words. What

counts is whether the statute indicates that Congress intended to require full agency

adherence to all section 554 procedural components.” (emphasis original) (internal citations

and quotations omitted)).

160

City of W. Chi., 701 F.2d at 644 (“Thus even in adjudication, the ‘on the record’

requirement is significant at least as an indication of congressional intent.”).

161

Immigration Reform and Control Act of 1986, Pub. L. No. 99-603, § 101, 100 Stat.

3359, 3366 (codified as amended at 8 U.S.C. § 1324a(e)(3)(B) (“The hearing shall be

conducted in accordance with the requirements of section 554 of title 5, United States

Code.”); Immigration Act of 1990, Pub. L. No. 101-649, § 544, 104 Stat. 4978, 5060 (codified

as amended at 8 U.S.C. § 1324c(d)(2)(B)) (“The hearing shall be conducted in accordance

with the requirements of section 554 of title 5, United States Code.”); Violence Against

Women and Department of Justice Reauthorization Act of 2005, Pub. L. No. 109-162, § 833,

119 Stat. 2960, 3074 (codified as amended at 8 U.S.C. § 1375a(d)(5)(A)(ii)) (“. . . after notice

and an opportunity for an agency hearing on the record in accordance with subchapter II of

chapter 5 of title 5 (popularly known as the Administrative Procedure Act)”). Other

enforcement provisions in the INA, including some that were added shortly before the H-2B

enforcement provisions, also explicitly incorporate APA section 556, which describes in

detail the hearings required by APA section 554. Immigration Act of 1990 § 205 (codified as

amended at 8 U.S.C. § 1182(n)(2)(B)); United States-Chile Free Trade Agreement

Implementation Act, Pub. L. No. 108-77, § 402, 117 Stat. 909, 942 (2003) (codified as

162

554, or expressly dictated that agency determinations must be made “on the record,”

in numerous other enforcement and whistleblower statutes entrusted to the

Secretary of Labor and, by delegation, to the Board.163 Basic tenets of statutory

construction dictate that the omission of any reference to APA section 554 or “on the

record” proceedings in the H-2B enforcement provisions, in light of the inclusion of

such language elsewhere in the INA, was an intentional and meaningful choice by

Congress.164 As the Supreme Court stated in Russello v. United States, “where

amended at 8 U.S.C. § 1182(t)(3)(B)); Consolidated Appropriations Act, 2005, Pub. L. No.

108-447, § 424, 118 Stat. 2809, 3355 (codified as amended at 8 U.S.C. § 1182(n)(2)(G)(viii)).

E.g., 42 U.S.C. § 7622(b)(2)(A) (Clean Air Act) (“An order of the Secretary shall be

made on the record after notice and opportunity for public hearing.”); 42 U.S.C. §

5851(b)(2)(A) (Energy Reorganization Act) (“An order of the Secretary shall be made on the

record after notice and opportunity for public hearing.”); 29 U.S.C. § 216(e)(4) (Fair Labor

Standards Act) (“[F]inal determination of the penalty shall be made in an administrative

proceeding after opportunity for hearing in accordance with section 554 of title 5 . . . .”); 33

U.S.C. § 1367(b) (Federal Water Pollution Control Act) (“Any such hearing shall be of record

and shall be subject to section 554 of title 5.”); 29 U.S.C. § 1813(b)(1) (Migrant and Seasonal

Agricultural Worker Protection Act) (“In such hearing, all issues shall be determined on the

record pursuant to section 554 of title 5.”); 42 U.S.C. § 300j-9(i)(2)(B)(i) (Safe Drinking

Water Act) (“An order of the Secretary shall be made on the record after notice and

opportunity for agency hearing.”); 42 U.S.C. § 6971(b) (Solid Waste Disposal Act) (“Any

such hearing shall be of record and shall be subject to section 554 of title 5.”); 49 U.S.C. §

31105(b)(2)(B) (Surface Transportation Assistance Act) (“[T]he complainant and the person

alleged to have committed the violation may file objections to the findings or preliminary

order, or both, and request a hearing on the record.”); 15 U.S.C. § 2622(b)(2)(A) (Toxic

Substances Control Act) (“An order of the Secretary shall be made on the record after notice

and opportunity for agency hearing.”); 49 U.S.C. § 42121(b)(2)(A) (Wendell H. Ford Aviation

Investment and Reform Act for the 21st Century (AIR-21)) (“[E]ither the person alleged to

have committed the violation or the complainant may file objections to the findings or

preliminary order, or both, and request a hearing on the record.”). Other statutes also

incorporate the procedural requirements of statutes that explicitly refer to APA section 554

or require “on the record” determinations. 29 U.S.C. § 20109(d)(2) (Federal Railroad Safety

Act) (incorporating AIR-21’s procedural requirements); 18 U.S.C. § 1514A(b)(2) (SarbanesOxley Act) (same).

163

See Russello v. United States, 464 U.S. 16, 22–23 (1983); see also Friends of the

Earth, 966 F.2d at 694 (“We think it also significant that while Congress, in enacting [the

enforcement provision at issue], merely required a ‘public hearing,’ it required a hearing

‘subject to section 554’ in enacting [another provision in the same act].”); St. Louis Fuel &

Supply Co., 890 F.2d at 449 (finding it “significant” that unlike the enforcement provision

at issue, “other prescriptions in the [same act] expressly invoke the APA” (citations

omitted)); In the Matter of Dominion Concepts, Inc., FAA Order No. 2005-4, 2005 WL

916050, at *4 (F.A.A. Mar. 8, 2005) (“Further, where Congress expressly invokes the APA in

one part of the statute, the absence of any reference to Section 554 in the statute’s hearing

164

Congress includes particular language in one section of a statute but omits it in

another . . ., it is generally presumed that Congress acts intentionally and purposely

in the disparate inclusion or exclusion.”165

The majority disputes the applicability of the Russello presumption in this

case because these disparate provisions were enacted at different times and were

not part of the same legislation.166 Even if Russello’s selective inclusion

presumption may be strongest if the disparate provisions are enacted at the same

time, the fact that the disparate provisions here were enacted at different times

does not render the presumption inapplicable in the context of this case.167 “Courts

presume that Congress legislates against the backdrop of existing statutes,” and

that “Congress understood the statutory framework into which it legislate[d]” the

disparate provisions.168

Congress’s frequent practice of clearly and explicitly requiring several of the

INA’s enforcement provisions to be adjudicated under the APA, both before and

after it enacted the H-2B enforcement provisions without the same requirement,

should, consistent with Russello, be considered purposeful, rather than a careless,

one-off oversight by Congress. This is especially true because, as emphasized

herein, there is no expression of contrary congressional intent anywhere in the H2B enforcement provisions, in their legislative history, or in the broader INA

statute.169 Consequently, in context, the absence of such language in the H-2B

provision indicates that Congress intentionally rejected any requirement that the APA

govern the hearings.” (citations omitted)).

165

Russello, 464 U.S. at 23 (internal quotations and citation omitted).

Maj. Op. at 21 n.87 (citing Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 175 (2009)

(“[N]egative implications raised by disparate provisions are strongest when the provisions

were considered simultaneously when the language raising the implication was inserted.”

(internal quotations and citation omitted))).

166

See Orton Motor, Inc. v. U.S. Dep’t of Health & Human Servs., 884 F.3d 1205, 1214

(D.C. Cir. 2018) (applying Russello presumption even though the disparate provisions were

enacted at different times).

167

Id. (citing Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 185 (1988); Jerman v.

Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573, 590 (2010)).

168

See id. (“While that [Russello] presumption may be overcome by specific language

that is a reliable indicator of congressional intent, the [provisions at issue] included no such

clear language distinguishing the new [ ] provisions from the rest of the [act] into which

they were incorporated.” (internal quotations and citation omitted)).

169

enforcement provisions indicates that Congress did not “intend[ ] to require full

agency adherence” to APA section 554’s procedural requirements.170

Nevertheless, the majority assumes that Congress intended for H-2B

enforcement proceedings to be conducted under APA section 554 because of the

quasi-judicial nature of the proceedings. For this proposition, the majority

principally relies on the 1947 APA Manual.171 As quoted by the majority, the APA

Manual states “[i]t is believed that with respect to adjudication the specific

statutory requirement of a hearing, without anything more, carries with it the

further requirement of decision on the basis of the evidence adduced at the

hearing.”172 Respondent and Amici similarly argue that a statutorily required

hearing is the “sine qua none” for triggering applicability of the APA’s adjudication

St. Louis Fuel & Supply Co., 890 F.2d at 448–49. It is also telling that Respondent

and Amici have not identified any legislative history in connection with the enactment of

the H-2B enforcement provisions indicating that Congress intended these proceedings to be

conducted under APA section 554. See City of W. Chi., 701 F.2d at 641 (“We find no such

clear intention [to trigger APA section 554] in the legislative history of the AEA, and

therefore conclude that formal hearings are not statutorily required . . . .”); cf. St. Louis

Fuel & Supply Co., 890 F.2d at 449 (“Most directly opposing the conclusion that APA

section 554 governs DOE remedial order hearings are the remarks of the legislators

instrumental in the enactment of the DOE provisions” indicating that the provisions were

intended to afford something less than the APA procedural requirements).

170

Maj. Op. at 11–16. The majority contrasts agency adjudication—where the majority

asserts it is assumed that Congress intended the proceedings to be conducted “on the

record” under the APA—with agency rulemaking—where the majority asserts the same

assumption does not apply. In addition to the APA Manual, the majority cites United States

v. Allegheny-Ludlum Steel Corp., 406 U.S. 742 (1972), for this distinction. In that case, the

Supreme Court stated that “[b]ecause the proceedings under review were an exercise of

legislative rulemaking power rather than adjudicatory hearings . . . and because the

[statute] does not require a determination ‘on the record,’ the provisions of [the APA] were

inapplicable.” Id. at 757. From this, the majority extrapolates that the Supreme Court

suggested that it “would have viewed the absence of ‘on the record’ language differently

when deciding whether formal APA procedures . . . were required.” Maj. Op. at 15. I

disagree with the majority’s reading of Allegheny-Ludlum Steel. Although the Supreme

Court made passing reference to the distinction between agency rulemaking and agency

adjudication, the Court did not indicate that the distinction was essential to its decision, did

not definitively hold that it would have reached a different result if the proceedings at issue

had been adjudicatory in nature, and did not state that adjudicatory proceedings are

presumed to be “on the record” and subject to the APA even absent a clear expression of

congressional intent to that effect.

171

U.S. DEP’T OF JUSTICE, ATTORNEY GENERAL’S MANUAL ON THE ADMINISTRATIVE

PROCEDURE ACT 42 (1947); see Maj. Op. at 13. It is notable that the Attorney General

hedged in the APA Manual, stating that he “believed” this assumption to hold true.

172

rules, absent a clear expression of congressional intent to the contrary.173 Yet,

contrary to the majority’s, Respondent’s, and Amici’s conclusions, several Courts of

Appeals have made clear that the statutory obligation to provide a hearing and the

statutory obligation to make a determination “on the record” are independent,

discrete procedural components of adversarial adjudication under the APA, each of

which is required for APA section 554 to apply to the proceedings.174

The majority’s, Respondent’s, and Amici’s interpretation also runs afoul of

the rule against surplusage, which requires courts to give each word and clause in a

statue operative effect, if possible, and to avoid interpreting a statutory provision in

any way that would render terms superfluous, redundant, or inoperative.175 If, as

the majority, Respondent, and Amici suggest, the obligation to provide a hearing is

the operative or determinative element for applicability of APA section 554, the

phrase “on the record” would be rendered superfluous.

Furthermore, even accepting the general validity of the APA Manual’s

proposition that it might ordinarily be assumed that Congress intends for quasijudicial adjudicatory proceedings to be conducted “on the record,” the APA Manual

goes on to provide a critical caveat: “Of course, the foregoing discussion [regarding

the assumption of an “on the record” hearing] is inapplicable to any situation in

which the legislative history or the context of the pertinent statute indicates a

contrary congressional intent.”176 As set forth above, the context of the INA

173

Resp. Br. at 10-12; Amici Br. at 5–10.

Five Points Rd., 542 F.3d at 1125; Aageson Grain & Cattle, 500 F.3d at 1043; Lane,

120 F.3d at 108; see also Friends of the Earth, 966 F.2d at 692–96 (finding proceedings did

not require “on the record” determination pursuant to APA section 554, despite statutory

obligation to provide a hearing); St. Louis Fuel & Supply Co., 890 F.2d at 448–49 (same).

174

Barton v. Barr, 140 S.Ct. 1442, 1458 (2020) (describing the rule against surplusage,

and counting the rule “[a]mong the most basic interpretative canons” (internal citations and

quotations omitted)); Duncan v. Walker, 533 U.S. 167, 174 (2001) (“It is our duty to give

effect, if possible, to every clause and word of a statute. . . . We are thus reluctant to treat

statutory terms as surplusage in any setting.” (internal citations and quotations omitted));

see also VALERIE C. BRANNON, CONG. RSCH. SERV., R45153, STATUTORY INTERPRETATION:

THEORIES, TOOLS, AND TRENDS 31 (2022).

175

APA MANUAL at 43. The majority did not include this caveat in its quotations of the

APA Manual. See Maj. Op. 13. The majority also cites the dissenting opinion in CisternasEstay v. Immigration & Naturalization Service for the proposition that “the APA is

presumed to apply to agencies.” Maj. Op. at 22 & n.89 (citing Cisternas-Estay v. Immigr. &

Naturalization Serv., 531 F.2d 155, 163 (3d Cir. 1976) (Gibbons, J., dissenting)). Consistent

with the caveat articulated in the APA Manual, the dissenting judge in Cisternas-Estay

176

indicates that Congress did not intend for APA section 554 to apply to these H-2B

enforcement proceedings. Whereas several enforcement provisions within the INA

expressly invoke APA section 554, the H-2B enforcement provisions, conspicuously,

do not.177 Consistent with basic tenets of statutory construction, I regard this as

sufficient to overcome the APA Manual’s proffered assumption, particularly because

of the sovereign immunity issues at stake with the application of EAJA.178

Respondent and Amici also cite several cases in support of the proposition

that the quasi-judicial nature of the proceedings dictates that the hearing must

necessarily be “on the record” under the APA. However, in most of the cases, there

was some affirmative indication of congressional intent, beyond the mere quasijudicial nature of the proceedings, that contributed to the courts’ conclusions that

APA section 554 applied. For example, in Dantran, Inc. v. United States Department

of Labor, the statute at issue incorporated by reference the enforcement authority of

another statute that expressly required adherence to the APA.179 In Seacoast AntiPollution League v. Costle and Marathon Oil Co. v. Environmental Protection

Agency, the courts observed that the statute at issue expressly provided that the

agency’s adjudicatory determinations were subject to judicial review, and the

judicial review provision, as written, implied that the agency’s determination had to

be made “on the record.”180 The court in Seacoast also relied on the context of the act

recognized that the general rule of thumb upon which the majority relies is not applicable

where “Congress has [ ] specifically deviated from the APA by either adaptations of its

provisions within the INA itself or statements in the legislative history.” Cisternas-Estay,

531 F.2d at 163 (citations omitted).

The fact that Congress has so often explicitly made clear that certain enforcement

provisions are governed by the APA’s formal adjudication rules tends to undermine the

majority’s position that such explicit pronouncements are unnecessary and assumed.

177

The APA Manual does not discuss sovereign immunity, or how a tribunal’s

obligation to narrowly construe waivers of sovereign immunity impacts the Attorney

General’s analysis and assumptions regarding congressional intent. Cf. Friends of the

Earth, 966 F.2d at 696 (“Friends’ argument that recovery under the EAJA is precluded only

if ‘Congress explicitly provided that something less than full formal procedures would be

made available under the statute in question,’ erroneously inverts the presumption against

waiver of sovereign immunity.”).

178

179

Dantran, Inc. v. U.S. Dep’t of Labor, 246 F.3d 36, 47 (1st Cir. 2001).

Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 876 n.6, 878 n.10 (1st Cir.

1978); Marathon Oil Co. v. Env’t Prot. Agency, 564 F.2d 1253, 1263 (9th Cir. 1977). But see

City of W. Chi., 701 F.2d at 643-44 (distinguishing Seacoast and Marathon Oil Co. because

of the fact that the statute in those cases included a provision providing for judicial review,

the language of which implied that the adjudicatory proceedings had to be determined “on

the record.”). Although the court in Seacoast found it “significant” that the statute at issue

180

at issue, which, according to that court, suggested that the agency adjudication was

intended to be conducted under APA section 554.181 Finally, in Five Points Rd.,

Aageson Grain & Cattle, and Lane, the act at issue made repeated references to the

administrative record and provided for trial-type procedures consistent with the

APA.182 No such affirmative indication of congressional intent exists in this case.

Relatedly, the majority opines that due process concerns, the nature of the

interests and rights involved, and the immediate economic consequences that could

result from these H-2B enforcement proceedings weigh in favor of concluding that

Congress intended to require these proceedings to be conducted under APA section

554.183 I agree with the Administrator that these circumstances do not evince

congressional intent or necessitate full compliance with APA section 554’s

procedural components. As the Administrator correctly observes, Congress permits

the Secretary of Labor to impose monetary penalties, debar violators, and impose

other administrative remedies in other enforcement proceedings without even

conducting a hearing, let alone an adversarial adjudication conducted in compliance

with the full range of procedures required by the APA.184 Likewise, the

expressly provided for judicial review of the agency’s adjudicatory decision, it nevertheless

concluded that the opportunity for judicial review was insufficient, on its own, to “satisfy[y]

an ‘on the record’ requirement” under the APA. 572 F.2d at 876 n.6. The court recognized

that the APA “makes it clear that in some cases review of agency action can be had though

the action was not on the record.” Id. The court’s rationale in Seacoast stands in contrast to

the majority’s assertion that an “evidentiary record [consistent with the APA] is required

for appeals of administrative final decisions to the federal courts.” Maj. Op. at 16 & n.62.

181

Seacoast, 572 F.2d at 878 n.10.

Five Points Rd., 542 F.3d at 1126; Lane, 120 F.3d at 109; see also Aageson Grain &

Cattle, 500 F.3d at 1044.

182

Maj. Op. at 15–18. The majority also cites to the Department’s ALJ regulations and

H-2B enforcement regulations as examples of adversarial procedure (id. at 18 n.72), but as

the majority also recognizes (id. at 11 n.44), regulatory enforcement procedures that track

the APA are not relevant in sovereign immunity cases; what we are required to examine is

what Congress intended.

183

See Cody-Ziegler, Inc. v. Adm’r, Wage & Hour Div., U.S. Dep’t of Labor, ARB Nos.

2001-0014, -0015, ALJ No. 1997-DBA-00017, slip op. at 15 (ARB Dec. 19, 2003) (citations

omitted) (“The ARB has held that administrative proceedings under the DBA and Related

Acts are not subject to the attorney’s fee and costs provisions of the EAJA, 5 U.S.C.A. § 504,

as they are not ‘adversarial adjudications’ within the meaning of the EAJA, because there is

no statutory requirement for an administrative proceeding conducted pursuant to the APA

and as DBA proceedings are not listed in the enumerated types of DOL administrative

proceedings subject to the EAJA.”); Roderick Constr. Co., No. 1988-39, slip op. at 10 (WAB

Dec. 20, 1990) (“Accordingly, since the Davis-Bacon Act does not set forth a hearing

184

Administrator is correct that a litigant’s right to due process does not necessarily

require a formal adversarial adjudication of the type contemplated by APA section

554 in all instances.185

requirement, a Davis-Bacon Act administrative proceeding is not an ‘adversary

adjudication’ within the meaning of the EAJA and the EAJA is not applicable to such

proceedings.”).

See Mathews v. Eldridge, 424 U.S. 319, 334 (1976) (recognizing the “truism that due

process, unlike some legal rules, is not a technical conception with a fixed content unrelated

to time, place and circumstances” and that “[d]ue process is flexible and calls for such

procedural protections as the particular situation demands.” (internal quotations and

citations omitted)); 2-Bar Ranch Ltd. P’ship v. U.S. Forest Serv., 996 F.3d 984, 994–95 (9th

Cir. 2021) (concluding that due process does not necessarily require administrative

proceedings to adhere to APA section 554); see also Smedberg Machine & Tool, Inc. v.

Donovan, 730 F.2d 1089, 1093 (7th Cir. 1984) (“Plaintiffs argue that the labor certification

review proceedings is [sic] compelled by the due process clause of the Fifth Amendment

(U.S. Const., Amend. V) [and, therefore, is an adjudication under APA section 554] even if

the proceeding is not mandated by statute . . . . In urging an expansive reading of that

clause, however, plaintiffs fail to recognize that the EAJA is a waiver of the sovereign’s

traditional immunity from claims for attorneys fees.” (citation omitted)). The majority cites

the Seventh Circuit’s statement in a footnote in City of West Chicago v. U.S. Nuclear

Regulatory Commission that “if a formal adjudicatory hearing is mandated by the due

process clause, the absence of the ‘on the record’ requirement will not preclude application

of the APA.” City of W. Chi., 701 F.2d at 645 n.11 (citations omitted); Maj. Op. at 17 n.65.

However, the fact that the statutory language does not explicitly call for the proceedings to

be conducted ‘on the record’ does not preclude application of the APA when due process

mandates such proceedings does not mean that due process requires, in all instances, that

adjudications be conducted under the APA. Indeed, the Seventh Circuit went on to state

that even if due process concerns were implicated by the nature of the adjudicatory

proceedings in that case, the procedures afforded to the litigants, though not necessarily in

compliance with APA section 554, nevertheless constituted sufficient process. Id. at 645–46

(citing Mathews, 424 U.S. 319). The majority also references Wong Yang Sung v. McGrath,

in which the Supreme Court determined that the APA applied to deportation proceedings,

even though the statute at issue did not expressly require any hearing or adjudication in

such proceedings. Wong Yang Sung v. McGrath, 339 U.S. 33, 48–51 (1950), superseded by

statute, Supplemental Appropriation Act, 1951, Pub. L. No. 81-843, 64 Stat. 1044, 1048, as

recognized in Ardestani, 502 U.S. at 133; Maj. Op. at 17 n.65. The Supreme Court reasoned

that due process under the Constitution required the agency to conduct hearings in

accordance with the APA. Similarly, the majority references Collord v. United States

Department of the Interior, which cited Wong for the broad proposition that “hearings

necessitated by the Constitution are included in the scope of hearings that are covered by §

554 of the APA.” Collord v. U.S. Dep’t of the Interior, 154 F.3d 933, 936 (9th Cir. 1998); Maj.

Op. at 17 n.65. Yet, as the cases cited above, including Mathews, make clear, due process

does not necessarily require a formal hearing and the full range of other procedural

requirements dictated by the APA in all instances. In any event, the majority seems to

acknowledge that Wong and Collord may not be useful for their analysis in this case: “We

need not explore the merits of this [Wong/Collord] analysis involving a statute that does

185

Finally, the majority cites a statutory note included with the 2005

amendments to the INA as evidence that Congress intended for the APA’s formal

adjudication provisions to apply to these H-2B enforcement proceedings.186 That

note, identified as section 407, “Exemption from Administrative Procedure Act,”

provides that certain new provisions added to the INA with the 2005 amendments

concerning the limitations on the number of H-2B visas that could be issued each

year (section 402), a fraud prevention and detection fee for employers applying for

H-2B workers (section 403), and rules allocating H-2B visas over the fiscal year

(section 405), were exempt from the APA’s formal rulemaking requirements.187 The

statutory note does not mention the H-2B enforcement provisions (section 404 of the

2005 amendments), or the applicability of the APA’s formal adjudication rules

thereto.

The majority appears to suggest that because Congress expressly exempted

other sections of the 2005 amendments from the APA’s rulemaking requirements,

without making reference to the H-2B enforcement provisions, Congress intended

for the APA’s formal adjudication provisions to apply to these H-2B enforcement

proceedings. I disagree. It is clear that with the creation of section 407, Congress

was singularly focused on ensuring that the new provisions concerning numerical

limits, allocation, and the anti-fraud fee were exempted from the APA’s rulemaking

requirements.188 Congress wanted to ensure that the new legislation could be

not provide for a hearing as the statute at issue provides notice and opportunity for a

hearing [citing Smedberg, 730 at 1092–93].” Maj. Op. at 17 n.65.

186

Id. at 23 n.90.

Emergency Supplemental Appropriations Act for Defense, the Global War on Terror,

and Tsunami Relief, 2005, Pub. L. No. 109-13, § 407, 119 Stat. 231, 321.

187

Id. (exempting the enumerated provisions from the APA “or any other law relating

to rulemaking, information collection or publication in the Federal Register”). Although

section 407 exempts certain provisions from the “Administrative Procedure Act,” generally,

the subsequent, more specific enumeration of “or any other law relating to rulemaking,

information collection or publication in the Federal Register” clarifies that the exemption is

from the APA’s rulemaking rules, specifically. See Yates v. United States, 574 U.S. 528,

543–46 (2015) (describing the interpretive cannons of noscitur a sociis—pursuant to which

the tribunal should “avoid ascribing to one word a meaning so broad that it is inconsistent

with its accompanying words, thus giving unintended breadth to the Acts of Congress”—

and ejusdem generis—providing that “[w]here general words follow specific words in a

statutory enumeration, the general words are usually construed to embrace only objects

similar in nature to those objects enumerated by the preceding specific words.” (internal

quotations and citations omitted)); see also 5 U.S.C. § 553 (governing APA rulemaking).

188

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