U.S. Department of Labor

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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. 2024-0043

ALJ CASE NO. 2020-TNE-00056

ALJ PATRICK M. ROSENOW

PROSECUTING PARTY,

DATE: April 9, 2026

MORTON CONCESSIONS, INC.,

RESPONDENT.

Appearances:

For the Administrator, Wage and Hour Division:

Seema Nanda, Esq.; Jennifer S. Brand, Esq.; Sarah Kay Marcus, Esq.;

Sara A. Conrath, Esq.; and Joseph E. Abboud, Esq.; U.S. Department

of Labor, Office of the Solicitor; Washington, District of Columbia

For the Respondent:

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

Maryland

Before JOHNSON, Chief Administrative Appeals Judge, and BURRELL

and KIKO, Administrative Appeals Judges; BURRELL, concurring

DECISION AND ORDER

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

its implementing regulations.1 The case before us today presents the narrow

question of whether EAJA allows an eligible employer to recover attorney’s fees and

costs under that Act when prevailing against the government in an enforcement

action brought under the H-2B provisions of the Immigration and Nationality Act

5 U.S.C. § 504; 29 C.F.R. Part 16 (2025).

(H-2B and INA, respectively), as amended, and its implementing regulations.2

The prior Acting Secretary of Labor, Julie Su (Acting Secretary), previously

determined in Administrator, Wage and Hour Division, U.S. Department of Labor v.

Graham & Rollins, Inc. (Graham & Rollins) that EAJA does not apply to such

proceedings. In reaching this result, the Acting Secretary reversed a contrary

decision by the ARB, which had upheld a decision by the Administrative Law Judge

(ALJ) below on the precise same issue.3 In essence, the disagreements of

interpretation in these opinions, as much discussed below, turn on whether the fact

that the H-2B statute does not expressly say “on the record” forecloses application of

EAJA.

Relying on the Acting Secretary’s Graham & Rollins decision, the ALJ in this

case denied Respondent Morton Concessions, Inc.’s, request for attorney’s fees

under EAJA. Because we are bound by the decision in Graham & Rollins, we affirm

the ALJ. However, we take this opportunity to highlight our concerns with that

decision and encourage the current Secretary of Labor to revisit the issue.

We of course do not make a recommendation to revisit or overturn a prior

Secretary’s decision lightly and therefore provide detailed supporting analysis. We

divide this decision into several sections.

In our Background section, we begin with a short discussion of EAJA and the

Administrative Procedure Act (APA),4 providing an overview of the legal standards

and definitions that will guide our discussion. This includes articulating what must

be shown to establish that EAJA applies to these H-2B proceedings—namely, that

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 (2025), with additional enforcement regulations

at 29 C.F.R. Part 503 (2025). 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 Lab. v. Graham & Rollins, Inc.

(Graham & Rollins (Acting Secretary)), ARB No. 2021-0047, ALJ No. 2018-TNE-00022

(Sec’y Aug. 9, 2023) (Final Agency Decision and Order), rev’g Adm’r, Wage & Hour Div.,

U.S. Dep’t of Lab. v. Graham & Rollins, Inc. (Graham & Rollins (ARB)), ARB No. 20210047, ALJ No. 2018-TNE-00022 (ARB Dec. 22, 2022) (Decision and Order Affirming in Part

and Reversing in Part).

5 U.S.C. §§ 551-559.

Congress intended for these proceedings to be conducted “on the record” under the

procedures of the APA.

Second, we provide background regarding the purposes of EAJA and the

societal forces that led to its enactment—a discussion that is absent from the Acting

Secretary’s decision in Graham & Rollins. We highlight legislative history showing

that EAJA arose out of a concern over the growing power of federal agencies and the

inability of small businesses to protect themselves against baseless, heavy-handed

agency enforcement actions. EAJA, passed in 1980 and reauthorized in 1985 on a

largely bipartisan basis, sought to level this sharply unfair playing field.

Third, we provide a brief description of the H-2B program along with an

overview of the Board’s and the Acting Secretary’s decision in Graham & Rollins.

In that case, after the ALJ and ARB dismissed the enforcement action of the

Administrator of the Wage and Hour Division (Administrator) under the applicable

statute of limitations, the employer sought attorney’s fees against the Department

under EAJA, arguing that the Administrator’s position was not substantially

justified. The Administrator opposed the action, arguing that EAJA did not apply to

the proceedings. A two-Member majority of the Board (Majority) conducted a

detailed and thorough review of the H-2B enforcement provisions, their legislative

history, the APA and its legislative history, caselaw from the Supreme Court and

courts of appeals, and other factors. The Majority concluded that although the H2B enforcement statute does not explicitly state that the proceedings must be

determined “on the record,” Congress clearly intended these quasi-judicial

proceedings to be determined on the record and subject to the APA. However, the

Acting Secretary, largely guided by a narrow view of waivers of sovereign

immunity, overturned the ARB’s decision and concluded that the H-2B proceedings

were not required to be determined “on the record,” and, thus, were not subject to

EAJA.

Finally, we give a brief background on the present case. As in

Graham & Rollins, the ALJ dismissed an untimely enforcement action brought by

the Administrator under the applicable statute of limitations. Morton Concessions

moved for attorney’s fees under EAJA. Based on the Acting Secretary’s decision in

Graham & Rollins, the ALJ here ruled that EAJA did not apply and did not reach a

conclusion on whether the Administrator’s position was substantially justified.

Following this Background, we offer our Discussion. In the first section of our

Discussion, we recognize that Graham & Rollins compels us to affirm the ALJ in

this instance. As a delegee of the Secretary of Labor, we are bound to follow the

Secretary’s decisions. The Acting Secretary’s conclusion in Graham & Rollins was

clear: EAJA does not apply to H-2B enforcement proceedings. That is the precise

issue presented in this case and dictates this case’s outcome.

In the second section of our Discussion, though, we explain why we believe

the Acting Secretary reached the wrong conclusion in Graham & Rollins. There are

five primary reasons for our opinion.

First, we believe the decision did not give due consideration to the purposes

of EAJA. The Acting Secretary’s decision in Graham & Rollins was essentially

silent as to the very important purposes of EAJA. Instead, the decision featured

what we consider to be a hyper-technical statutory analysis without discussion of

the important context of the purposes of the statute. As we emphasize below,

examining the purpose of a statute is a staple of statutory interpretation and the

decision’s failure to explore the purposes of EAJA was, in our view, error.

Second, and in contrast, we believe the decision gave excessive weight to

sovereign immunity. It is clear from the decision that principles of sovereign

immunity essentially dictated the result in Graham & Rollins—it featured in

essentially every point of analysis and effectively created what amounted to an

insurmountable presumption that EAJA did not apply. We disagree with how

stringently and forcefully the decision applied sovereign immunity. The decision did

not appropriately recognize that EAJA offers a clear waiver of sovereign immunity

and the well-settled law that states that, once Congress evinces its intent to waive

sovereign immunity, tribunals should be careful not to narrow the waiver that

Congress intended. This principle is especially important and true in the context of

EAJA, which already provides guardrails protecting the public fisc. Restrictively

applying principles of sovereign immunity is superfluous and contrary to

congressional intent.

Third, we explain why we believe that Congress intended H-2B enforcement

proceedings to be decided on the record. We reiterate the ARB Majority’s view from

Graham & Rollins that courts of appeals have consistently stated that talismanic

“on the record” language is not necessary for Congress to have intended for the APA

to apply to these proceedings; rather, what counts is whether we or the Secretary

can otherwise conclude that Congress intended for the agency to adhere to the

requirements of the APA and thus that a proceeding be “on the record.” We then

explore nearly 80 years of legal precedent, dating back to the publication of the

United States Department of Justice’s Attorney General’s Manual on the

Administrative Procedure Act (APA Manual) in 1947,5 explaining that courts

generally presume, absent evidence to the contrary, that Congress intends for the

APA to apply to traditional, quasi-judicial adjudications like these H-2B

enforcement proceedings. We identify numerous courts of appeals cases confirming

this principle—including some that the Acting Secretary cited in Graham & Rollins.

Also highlighted are the hallmarks and characteristics of the proceedings in those

cases that led the courts to conclude that Congress intended the APA to apply, that

match the proceedings here under the H-2B statute. Likewise explained is why the

cases the Acting Secretary cited to the contrary are distinguishable or otherwise do

not undermine this well-established presumption.

Fourth, we believe the Acting Secretary gave undue weight to language

contained in other provisions of the INA. In concluding that Congress must not have

intended to apply the APA to H-2B enforcement proceedings, the decision

emphasized that other provisions of the INA refer specifically to the APA or

explicitly state that the proceedings must be determined “on the record,” while the

H-2B statute does not. The comparison of the H-2B enforcement statute to other

provisions in the INA presumes that Congress made the deliberate choice to use

other language in the H-2B statute to eliminate an “on the record” requirement.

Based solely on a canon of interpretation, we believe that argument begs too much

in this situation. The provisions to which the Acting Secretary compared the H-2B

enforcement statute were drafted at different times by different Congresses and

deal with different issues in different contexts. It is not reasonable to conclude that

Congress intended the differing language to mean the H-2B provisions were

excluded from the APA.

Finally, we close with some common sense. The Acting Secretary’s

conclusion—that H-2B enforcement proceedings need not be determined “on the

record” or be subject to the APA—leads to the negative result that these factintensive and hotly contested cases might be decided on evidence that was never

introduced to the decisionmaker or, worse, that a court could never be sure existed.

This plainly cannot be Congress’s intent. Instead, we think it is imminently

reasonable to conclude, in line with nearly 80 years of precedent and legal

presumptions, that Congress intended to apply the APA to these quasi-judicial

adjudications and thus that H-2B enforcement proceedings be “on the record.”

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

PROCEDURE ACT (1947).

BACKGROUND

1. EAJA and the Administrative Procedure Act

EAJA allows 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,” in which the government’s position is not “substantially

justified.”6 The question in this appeal is whether H-2B enforcement proceedings

are “adversary adjudications” under EAJA.7

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

554 of [the APA] in which the position of the United States is represented by

counsel or otherwise.”8 Section 554 and subsequent provisions, in turn, prescribe

the APA’s formal adjudication procedures.9

A proceeding is considered “under” Section 554 of the APA if it is “subject to”

or “governed by” that section.10 Section 554 applies “in every case of adjudication

required by statute to be determined on the record after opportunity for an agency

hearing . . . .”11 Thus, for an adjudication to be considered “under” APA Section 554,

three conditions must be met. First, there must be an “adjudication.” Second, the

The statute, in relevant part, 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.” 5 U.S.C. § 504(a).

We need not and do not reach the issue of whether the Agency’s position was

“substantially justified” or whether other “special circumstances” exist to make an award

unjust. If the Secretary agrees with us that these proceedings are subject to EAJA, those

are issues that must be addressed in the first instance by the ALJ.

5 U.S.C. § 504(b)(1)(C)(i); see also 29 C.F.R. § 16.102(b) (defining “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 . . . .”).

The Agency was and is represented by counsel from the Office of the Solicitor of Labor in

this case.

5 U.S.C. §§ 554, 556, 557.

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

(quoting Ardestani v. Immigr. & Naturalization Serv., 502 U.S. 129, 135 (1991)).

5 U.S.C. § 554(a).

adjudication must be required by statute to be determined “on the record.” Third,

the statute must provide an “opportunity for an agency hearing.”

The H-2B statute at issue here provides, in relevant part, that if the

Secretary of Labor “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 [the H-2B program] or a

willful misrepresentation of a material fact in such petition,” the Secretary may

take appropriate remedial action.12 Thus, EAJA prongs one (adjudication)13 and

three (opportunity for a hearing)14 are clearly satisfied. The only question is

whether the adjudication is “determined on the record” (prong two).

2. Legislative History and Purpose of EAJA

In setting the stage for our discussion, we provide some useful background

regarding the purposes of EAJA, the overarching statute in play here, and the

societal forces which led to its enactment.15

The basic parameters of EAJA, which has been described as “one of the

broadest reaching, yet most obscure federal laws in existence,”16 can be summarized

8 U.S.C. § 1184(c)(14). The statute gives power over enforcement proceedings to the

Secretary of Homeland Security who, in 2009, delegated the Department of Labor its

investigative and enforcement authority. 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. 78020,

78046 (Dec. 19, 2008) (effective Jan. 18, 2009).

The APA defines an “adjudication” as an “agency process for the formulation of an

order.” 5 U.S.C. § 551(7). 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.” Id. § 551(6). H-2B enforcement

proceedings involve an “adjudication.” Graham & Rollins (ARB), ARB No. 2021-0047,

slip op. at 8.

See 8 U.S.C. § 1184(c)(14)(A) (providing for “an opportunity for a hearing”).

Indeed, we think exploring the legislative history and purpose of EAJA is

particularly important in this case, given the lack of any such meaningful discussion in the

Acting Secretary’s prior decision in Graham & Rollins, as discussed in more detail below,

infra Discussion Section 2.A.

For an in-depth review of the development and passage of the Act, see Lowell E.

Baier, Reforming the Equal Access to Justice Act, 38 J. LEGIS. 1, 2 (2012) (“The Equal

Access to Justice Act (EAJA) is one of the broadest reaching, yet most obscure federal laws

in existence. Its basic function is simple: in any case, be it in court or in an administrative

quickly. The Act provides that certain covered small entities may recover their

attorney’s fees and costs when prevailing against the government in an enforcement

action unless the government can show that its case was “substantially justified” or

“special circumstances” would make an award unjust.17 However, this basic

summary, while accurate, belies the intensity of the debate which led to enactment

of the Act in 1980, its reenactment in 1985, and the extensive litigation

underpinning many of the words used in the Act.

Current debates over the size of government and whether agencies have

become too powerful as compared to average citizens are hardly a recent

phenomenon. The APA was enacted in part because of the rise of the administrative

state under the New Deal and to set certain structures and procedures to govern the

seemingly ever-expanding number of agencies. However, the APA did not waive

sovereign immunity and therefore the regulated community remained subject to the

so-called “American rule” under which an entity, regardless of its size and no matter

how “outgunned” it might have been in comparison to agency resources, would have

to bear its own costs in litigation even where successfully challenging an agency

enforcement action.

In the late 1970s, there arose growing concern about the power of federal

agencies and the inability of small businesses to protect themselves against baseless

agency enforcement actions—simply because they could not afford the costs,

principally attorney’s fees, to defend themselves.18 As Justice Jackson had opined

earlier:

The rise of administrative bodies probably has been the

most significant legal trend of the last century and perhaps

more values today are affected by their decisions than by

those of all the courts, review of administrative decisions

agency proceeding, where the federal government's position is not substantially justified,

a prevailing party is entitled to receive attorneys’ fees, provided that there is no other

applicable fee-shifting statute. It is a safety net, designed to make sure that a party cannot

be harassed by unjustifiable government activity solely because of the prohibitive expense

of attorney’s fees, and it was originally passed to protect the small business community

from governmental overreach, just as earlier fee-shifting statutes were designed to promote

specific causes such as civil rights legislation.”).

5 U.S.C. § 504(a).

See generally Baier, supra note 16, at 4-20.

apart. They also have begun to have important

consequences on personal rights. They have become a

veritable fourth branch of the Government, which has

deranged our three-branch legal theories much as the

concept of a fourth dimension unsettles our threedimensional thinking.[19]

Senator Pete Domenici (R-NM), in describing the need for a precursor to

EAJA in December 15, 1977 Floor debates, noted:

The purpose of that amendment was to compensate the

average American and the small businessman for legal

costs in litigation to protect his rights. . . . Individuals

and small businessmen would no longer be forced to

knuckle under to arbitrary or capricious

interpretations and regulations, because they could

not afford to take the matter to court, or to challenge

the administrative action.[20]

The Senator also cited a Wall Street Journal article, stating:

The need for this legislation highlights a basic dilemma

which the United States faces along with the other

industrial democracies. Can we have a powerful national

Government to enforce the laws which protect public

health and safety and preserve competition in the

marketplace, while avoiding a Government which is

so powerful, intrusive, and arbitrary that it poses a

menace to individual and economic freedom.[21]

Fed. Trade Comm’n v. Ruberoid Co., 343 U.S. 470, 487 (1952) (Jackson, J.,

dissenting) (citation omitted).

123 CONG. REC. 39116 (Dec. 15, 1977) (emphasis added).

124 CONG. REC. 6999 (Mar. 15, 1978) (emphasis added).

Senator Gaylord Nelson (D-WI) similarly noted:

As Chairman of the Small Business Committee, I have long

been aware of the deep frustrations and resentment that

small business proprietors feel toward the Federal

bureaucracy and its regulatory apparatus. . . . The horror

stories coming out of our regulatory efforts are

becoming all too common. In case after case, a

Federal bureaucratic blitzkrieg has rolled over

innocent victims, causing unjustified damage to

large numbers of business enterprises and

individuals. . . . A small businessman facing what he

believes to be an unjust agency order will frequently find

that, given the protracted nature of agency proceedings

and the skyrocketing costs of legal counsel, it would cost

him more money even to win against the Government than

to accept the penalty. Inevitably in this situation, the

businessman is forced to pay the penalty, rather than fight

it, no matter how unjust the agency’s action might

have been. Such a result mocks our principles of

equal justice and due process. . . . Without legislation

like this, the possibility that the bureaucracy may enforce

its will in more and more questionable cases cannot be

discounted. . . . This idea of justice is also mocked by

the current situation when small businessmen

facing a fine or other penalty decide that compliance

is a preferable course to litigation, regardless of the

merits of the case, because of the costs involved.[22]

Senator Domenici again noted on January 31, 1979:

Individuals and small businesses are in far too many cases

forced to knuckle under to regulations even though

they have a direct and substantial impact because they

cannot afford the adjudication process. . . . The purpose of

the bill is to redress the balance between the Government

acting in its discretionary capacity and the individual. . . .

123 CONG. REC. 39117-18 (emphasis added).

It is to insure against capricious and arbitrary

Federal regulation.[23]

Senator Dennis DeConcini (D-AZ) stated:

Mr. President, in closing I would like to emphasize again

that the imbalance between the power of the

bureaucracy and the power of the American citizen

must be redressed. Congressional oversight alone will

never be a sufficient safeguard against regulatory abuse.

Individual citizens and small businesses, the

persons who bear the brunt of administrative

regulation, must be able to check arbitrary agency

actions by contesting them. Through the device of fee

shifting, this legislation will improve our citizens’ access to

courts and administrative proceedings. It will encourage

them to vindicate their rights and not to acquiesce in a

ruling or sanction which they believe arbitrary, misguided

or unfair.[24]

Similar feelings were expressed during the reauthorization of the Act in

1985, with Senator Domenici noting:

We have entered the age of Federal regulation and there

are very few elements of life, commercial or otherwise,

where the Federal Government does not play some role.

Often, this government action is arbitrary and capricious.

. . . They say that “You can’t fight city hall,” and the

prevailing attitude of many today is that even if you do

fight the Federal Government and win in court you still

lose because of the cost. We must eliminate the possibility

of such Pyrrhic victories. The average American must

be made to feel that he or she can question the

exercise of the Government’s discretionary power as

125 CONG. REC. 1437 (Jan. 31, 1979) (emphasis added).

Id. at 1439 (emphasis added).

to its reasonableness without incurring large costs if he

or she prevails.[25]

A key House Report noted:

In many cases, particularly in litigation with the

government, the [A]merican rule is in fact having the

opposite effect. For many citizens, the costs of securing

vindication of their rights and the inability to recover

attorney fees preclude resort to the adjudicatory process.

When the cost of contesting a government order, for

example, exceeds the amount at stake, a party has no

realistic choice and no effective remedy. In these cases, it

is more practical to endure an injustice than to contest it.

The deterrent effect created by this inability to recover fees

against the government is particularly disturbing in light

of the rapid growth in government regulations in recent

years. While the influence of the bureaucracy over all

aspects of life has increased, the ability of most citizens

to contest any unreasonable exercise of authority

has decreased. Thus, at the present time, the

government with its greater resources and expertise

can in effect coerce compliance with its position.

Where compliance is coerced, precedent may be established

on the basis of an uncontested order rather than the

thoughtful presentation and consideration of opposing

views. In fact, there is evidence that small businesses

are the target of agency action precisely because

they do not have the resources to fully litigate the

issue. This kind of truncated justice undermines the

integrity of the decisionmaking process.[26]

131 CONG. REC. 20353-54 (July 24, 1985) (emphasis added).

H.R. REP. NO. 96-1418, at 9-10 (1980) (House Committee on the Judiciary)

(emphasis added).

A subsequent 2015 Report by the House Committee on the Judiciary, looking back

on the history and purpose of EAJA, noted:

Civil litigation can become a war of attrition as parties

strategically try to deplete one another’s resources to force

a settlement. Fundamentally, EAJA recognizes the

enormous “disparity of resources between individuals,

small businesses and other organizations with limited

resources and the Federal Government.” This imbalance

could discourage a citizen from hiring counsel to challenge

abusive government policy or could induce a citizen

to settle a capricious civil or administrative

enforcement action on unfavorable terms. EAJA “is

meant to discourage the Federal Government from using

its superior litigating resources unreasonably—it is in

this respect an ‘anti-bully’ law.” Consequently, EAJA

is “probably is the most important” and also “among

the most litigated” of the Federal fee-shifting statutes.[27]

In sum, concerned with apparent abusive government overreach against

small entities ill-equipped to defend their rights, simply because of a lack of

resources, Congress then, on a bipartisan basis, enacted EAJA in 1980 (Pub. L. No.

96-481), thereby waiving sovereign immunity and requiring that an agency pay the

costs and other fees of a small entity when that entity prevails against the

government in an enforcement action, unless the government can show that its

position was substantially justified or that “special circumstances” would make an

award unjust. Because the Act contained a “sunset” expiration date, Congress

reauthorized the law in 1985 (Pub. L. No. 99-80), with some modest expansions,

again on a broad bipartisan basis.28

H.R. REP. NO. 114-351, at 2-3 (2015) (citations omitted) (emphasis added). The bill

was eventually incorporated into the Bipartisan Sportsman Act of 2015, S.405, 114th Cong.

§ 108 (2015), reinstating required reports on EAJA’s utilization by the U.S. Administrative

Conference.

Many cases discuss EAJA’s purposes and goals (but overlook the intensity of the

debate), but for two particularly good overviews, see Ibrahim v. U.S. Department of

Homeland Security, 912 F.3d 1147, 1166-67 (9th Cir. 2019), rev’g en banc 835 F.3d 1048

(9th Cir. 2016), and Metropolitan Van & Storage, Inc. v. United States, 101 Fed. Cl. 173,

182-84 (Fed. Cl. 2011). The lengthy court decision in Ibrahim paints a particularly

3. The H-2B Program and Graham & Rollins

The H-2B visa program allows employers to recruit and hire alien

nonimmigrants to perform temporary, nonagricultural labor or services in the

United States.29 Employers who wish to employ H-2B workers must submit an

Application for Temporary Employment Certification and, if approved, an I-129

Petition that will allow the workers to enter and work in the United States.30

The Administrator has been delegated enforcement responsibility for ensuring that

employers comply with the statutory and regulatory labor certification

requirements.31 This includes the power to impose administrative remedies,

including civil money penalties and debarment, for program violations.32

In 2011 and 2012, Graham and Rollins, Inc., applied to the Department of

Labor to recruit and hire employees under the H-2B program.33 In 2018—more than

a half of a decade later—the Administrator issued a Determination Letter finding

that Graham and Rollins failed to pay outbound transportation costs to H-2B

workers whose employment was terminated prior the end of their contract.34

The Administrator assessed $16,560 against Graham and Rollins for the alleged

violations.35

Graham and Rollins challenged the assessment, asserting that the

Administrator’s enforcement effort was untimely under the applicable statute of

limitations.36 The Administrator countered that no statute of limitations applied to

Kafkaesque journey through one individual’s efforts to recover costs under EAJA “[a]fter

the government engaged in years of scorched earth litigation.” Ibrahim, 912 F.3d at 1171.

8 U.S.C. § 1101(a)(15)(H)(ii)(b).

Id. § 1184(c)(1); 20 C.F.R. §§ 655.5, .15.

8 U.S.C. §§ 1184(c)(14)(A)-(B), 1103(a)(6); 20 C.F.R. § 655.2(b).

8 U.S.C. § 1184(c)(14)(A)(i), (B); 29 C.F.R. §§ 503.20, .23, .24.

Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Graham & Rollins, Inc. (Graham &

Rollins (ALJ)), ALJ No. 2018-TNE-00022, slip op. at 2-3 (ALJ June 26, 2018) (Decision and

Order Granting Employer’s Motion to Dismiss and Order Cancelling Hearing and Order

Dismissing Case).

Id. at 3-4.

Id. at 2.

Id.

its enforcement action.37 The ALJ and the ARB agreed with Graham and Rollins,

applied the five-year statute of limitations of 28 U.S.C. § 2462, and dismissed the

case.38

Graham and Rollins subsequently moved for attorney’s fees under EAJA.39

The Administrator opposed the request for fees, arguing that EAJA did not apply to

the H-2B proceedings and that, even if it did, the Department’s position was

substantially justified. The ALJ again agreed with Graham and Rollins, concluded

that EAJA applied to the H-2B proceedings, and determined that the Administrator

had not carried her burden to show that the Agency’s enforcement position was

substantially justified.40 The Administrator appealed the ALJ’s decision to the ARB.

As set forth above, for EAJA to apply, three conditions must be satisfied:

(1) there must be an adjudication, (2) the adjudication must be required by statute

to be determined “on the record,” and (3) the statute must provide an “opportunity

for an agency hearing.” The H-2B statutory enforcement provision applicable both

in this case and in Graham & Rollins provides that if the Secretary “finds, after

notice and an opportunity for a hearing, a substantial failure to meet” a

program obligation, the Secretary may bring an enforcement action for specified

remedies.41 There was no dispute in Graham & Rollins that the H-2B enforcement

proceedings constituted an adjudication (prong one) and provided an opportunity for

an agency hearing (prong three). As in the present case, the only question was

whether the adjudication was required to be determined “on the record.”42

In a divided decision, a two-Member Majority concluded that the H-2B

proceedings were required to be determined “on the record,” and, therefore, were

subject to EAJA.43 The Majority conducted an extensive and well-reasoned analysis.

Id.

Id. at 11; Adm’r, Wage & Hour Div., U.S. Dep’t of Lab. v. Graham & Rollins, Inc.,

ARB No. 2019-0009, ALJ No. 2018-TNE-00022, slip op. at 2 (ARB Nov. 16, 2020) (Decision

and Order). See also infra note 74 for further explanation of the statute of limitations issues

in play here.

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 3.

Id.

8 U.S.C. § 1184(c)(14)(A) (emphasis added).

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 8.

Id. at 8-15.

First, the Majority emphasized that it has been the consistent position of courts of

appeals that no “magic words” are necessary to conclude that an adjudication is

required to be determined on the record.44 Rather than focusing on the specific

language used in the statute, the inquiry instead focuses more broadly on whether

Congress intended for the agency to adhere to the requirements of the APA.45 Thus,

the absence of the words “on the record” from the statute was not determinative.

Turning to other indicia of congressional intent, the Majority explained that

Congress enacted the H-2B enforcement provisions in the backdrop of the APA’s

governing framework on agency adjudication.46 The Majority then provided a

thorough review of the history and purposes of the APA, with special reference to

the authoritative APA Manual.47 The Majority explained that under the APA,

quasi-judicial adjudications like these H-2B enforcement proceedings are presumed

to follow the formal procedures set out in APA Sections 554, 556, and 557 and are

presumed to be conducted “on the record.”48 With this fundamental backdrop, the

Majority concluded that there was no indication that Congress intended to go

against this weighty and longstanding presumption with the H-2B proceedings at

issue in the case.49

The Majority also explained that H-2B proceedings are consistent with the

type of quasi-judicial proceedings to which this fundamental presumption applies.50

The Majority observed that these proceedings are steeped in traditional

adjudicatory fact-finding and authorize the imposition of administrative remedies

against the violator, including civil money penalties and debarment.51 The Majority

cited courts of appeals cases that determined that these types of rights and

remedies were precisely the type of quasi-judicial proceeding for which the

adjudicatory procedures of the APA were intended.52

Id. at 9-10.

Id. at 10 (citations omitted).

Id. at 11.

Id. at 11-15.

Id. at 15.

Id.

Id. at 15-18.

Id. at 16, 18.

Id. at 17-18 (citations omitted).

One Member disagreed with the Majority (Concurrence).53 In concluding that

the H-2B proceedings did not need to be conducted “on the record,” the Concurrence

relied heavily on the principle of sovereign immunity, arguing that any waiver

thereof must be “strictly construed in favor of the United States.”54 This premise

influenced the remainder of the Concurrence’s opinion, leading her to conclude that

with the principle of sovereign immunity in mind, she could not decipher from the

language, context, or history of the H-2B enforcement provisions that Congress

clearly intended to require the proceedings to be determined on the record.55

In particular, the Concurrence noted the absence of “on the record” language in the

statute (despite agreeing with the Majority that magic words were not necessary) 56

and compared the H-2B enforcement statute to other provisions of the INA that

expressly invoked APA section 554.57

On January 9, 2026, the Acting Secretary determined to undertake further

review of the Majority’s decision pursuant to sections 6(b)(2) and 6(c)(1) of

Secretary’s Order 01-2020.58 On August 9, 2023, the Acting Secretary issued a

Final Agency Decision and Order (FAD) reversing in part the Majority decision and

concluding that EAJA does not apply to the H-2B enforcement proceedings because

they are not required to be determined “on the record.”59

Like the Concurrence, the FAD led by leaning heavily into sovereign

immunity, calling it a “high threshold to clear” and stating that “any statutory

ambiguities are construed in favor of the government and against a waiver—both as

to whether Congress has waived immunity at all and as to the scope of any

The Concurrence disagreed with the Majority that EAJA applied to the proceedings,

but agreed with the Majority that, if it applied, the Administrator’s position was

“substantially justified,” so an award of fees was not warranted. Id. at 36 n.149.

Id. at 37-38 (citations omitted).

Id. at 38.

Id. at 38-39.

Id. at 39-42.

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

Responsibility to the Administrative Review Board), 85 Fed. Reg. 13186 (Mar. 6, 2020).

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 6-17. The

Acting Secretary, like the Concurrence, agreed that if EAJA applied, the Administrator’s

position was substantially justified. Thus, the Acting Secretary affirmed the ARB in that

regard. Id. at 17-18.

waiver.”60 The Acting Secretary agreed with the Concurrence’s conclusion that there

was no clear indication that Congress intended to waive sovereign immunity and

apply the APA (or by extension EAJA) to these H-2B proceedings.61 Specifically, the

FAD stated that the text of the H-2B enforcement provision itself did not explicitly

require the proceedings to be conducted on the record (despite, like the

Concurrence, recognizing that no such magic words are necessary)62 and that there

was no other “textual evidence of Congressional intent,” including no other

statutory “procedural requirements” beyond the opportunity for a hearing.63

Like the Concurrence, the FAD also gave weight to the fact that other INA

provisions expressly invoked APA Section 55464 and rejected the Majority’s analysis

regarding the backdrop of the APA and the presumption that traditional quasijudicial hearings are presumed to be on the record.65

4. Morton Concessions and the Present Case

In 2014 and 2015, Morton Concessions applied to the United States

Department of Labor to recruit and hire employees under the H-2B program.66

The Administrator opened an investigation into Morton Concessions’ H-2B practices

in November 2014.67

Reminiscent of the Administrator’s severely delayed approach in

Graham & Rollins, more than five and a half years after opening the investigation,

the Administrator finally issued a determination letter on July 17, 2020, finding

that Morton Concessions failed to pay the required wage rate to six H-2B

employees.68 The Administrator assessed $21,390.40 in back wages and $633.11 in

Id. at 4-5 (citations omitted).

Id. at 16-17.

Id. at 6-8.

Id. at 8-10.

Id. at 8-9 (citations omitted).

Id. at 10-15.

Ruling on Respondent’s Motion to Dismiss at 1-2.

Administrator’s Opposition to Respondent’s Motion to Dismiss at 2.

Ruling on Respondent’s Motion to Dismiss at 2.

civil money penalties for the alleged violations.69 Morton Concessions challenged

the assessment and requested a hearing with an ALJ.70

On December 22, 2020, Morton Concessions filed a Motion to Dismiss,

arguing that the Administrator’s enforcement action was untimely because the

alleged violations occurred more than five years prior.71 Taking the same position it

took in Graham & Rollins, the Administrator argued that no statute of limitations

applied to its enforcement action.72 Alternatively, the Administrator argued that

even if a five-year statute of limitations applied, some of the cited violations

occurred within the five-year period.73

Like the ALJ in Graham & Rollins, the ALJ in this case determined that the

five-year statute of limitations in 28 U.S.C. § 2462 applied to the Administrator’s

assessments for back wages and civil money penalties.74 Thus, the ALJ granted

Id.

Id. at 2-3.

Id. at 4-7. One issue that pervades both Graham & Rollins and this case is the

question of what statute of limitations, if any, governs the Administrator in bringing an

enforcement action under the H-2B statute. All parties agree that the statute does not

contain any express limitation and thus the question revolves around 28 U.S.C. § 2462’s

five-year statute of limitations, which is typically applied if a specific enabling statute does

not contain its own statute of limitations. Section 2462 is not a model of clarity, and its

scope has been much litigated. The Administrator has consistently argued that Section

2462 has limited reach in H-2B enforcement cases and certainly does not govern an action

against an employer claiming “back pay” as a remedy—a phrase itself which has been

litigated as to its meaning. See Administrator’s Response in Opposition to Morton

Concessions’ Application for the Award of Fees and Expenses under EAJA at 20-24; see also

Graham & Rollins (ALJ), ALJ No. 2018-TNE-00022, slip op. at 5; Graham & Rollins (ARB),

ARB No. 2021-0047, slip op. 29-30, 32-36. This issue is not before us, but we bring it to the

Secretary’s attention as one which may arise in future litigation and arguably is in need of

close attention given the many well-established purposes of a statute of limitations to

“avoid stale claims, lost evidence, or faded memories, and the importance to the welfare of

society by promoting timely justice and stability in human affairs.” Carl S. Rauh & Olivia

A. Rauh, The Five-Year Statute of Limitations for Government Enforcement Actions for Civil

Penalties: Recently Settled and Still Unsettled Issues Regarding 28 U.S.C. Section 2462,

BUSINESS LAW TODAY (May 27, 2021), https://www.businesslawtoday.org/

2021/05/the-five-year-statute-of-limitations-for-government-enforcement-actions-for-civilpenalties-recently-settled-and-still-unsettled-issues-regarding-28-u-s-c-section-2462/;

see also 3M Co. (Minn. Mining & Mfg.) v. Browner, 17 F.3d 1453, 1457 (D.C. Cir. 1994)

Morton Concessions’ Motion to Dismiss in part, concluding that all claims for

violations that occurred more than five years prior to the issuance of the

determination letter were untimely.75

After the ALJ’s ruling on the Motion to Dismiss, the Administrator filed a

Motion for Summary Decision as to the remaining violations. According to the

Administrator, Morton Concessions still owed $1,843.51, plus interest, in back

wages to five H-2B employees and $633.11 in civil money penalties for the remining

violations.76 Morton Concessions responded by agreeing to pay the back wages

assessment and $569.80 in civil money penalties and asked to withdraw its request

for a hearing.77 The ALJ granted Morton Concession’s request for withdrawal and

dismissed the case on August 26, 2011.78

On October 27, 2021, Morton Concessions applied to the ALJ for an award of

attorney’s fees and expenses under EAJA. The Administrator opposed the

application.

On January 18, 2022, the ALJ issued an Order Staying Proceedings. At the

time, Graham & Rollins was pending with the Board and the ALJ stayed these

proceedings pending the ARB’s decision.79 The ALJ briefly lifted the stay on

January 19, 2023, after the ARB issued its decision, before staying the case again

on March 7, 2023, after the Acting Secretary elected to review the ARB’s

Graham & Rollins decision.

After the Acting Secretary issued the FAD in Graham & Rollins, the ALJ

again lifted the stay in this case and invited supplemental briefing from the parties.

On April 1, 2024, the ALJ issued a Recommended Decision and Order (D. & O.),

(“The concern that after the passage of time evidence has been lost, memories have faded,

and witnesses have disappeared pertains equally to factfinding by a court and factfinding

by an agency.”) (internal quotations and citations omitted).

Ruling on Respondent’s Motion to Dismiss at 8.

Ruling on Respondent’s Motion to Withdraw Request for Hearing and Order

Dismissing Case at 2.

Id.

Order Staying Proceedings at 1-2.

concluding that the Acting Secretary’s FAD in Graham & Rollins precluded the

application of EAJA or the award of attorney’s fees in this case.80

Morton Concessions filed a Petition for Review with the Board on May 14,

2014.

JURISDICTION AND STANDARD OF REVIEW

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

Board.81 The Board acts with “all the powers [the Secretary] would have in making

the initial decision.”82

DISCUSSION

As the delegee of the Secretary of Labor, we are bound by the Secretary’s

decisions and precedent. Thus, the prior Acting Secretary’s decision in

Graham & Rollins compels us to affirm the ALJ’s decision that EAJA does not

apply to these H-2B enforcement proceedings.

However, the Secretary has the power and authority to revisit past

precedent. We strongly urge the Secretary to revisit the prior Acting Secretary’s

decision in Graham & Rollins. As explained in detail below, we believe the decision

improperly overemphasized sovereign immunity, failed to properly weigh and

consider evidence of Congressional intent and longstanding presumptions about the

applicability of the APA, and reached the wrong conclusion.

1. Graham & Rollins Compels Us to Affirm the ALJ

The Secretary of Labor created the Board and delegated it authority to act for

the Secretary in review of matters arising under specifically enumerated statutes,

including EAJA.83 The Board’s decisions are subject to review and reversal by the

D. & O. at 3-4.

Secretary’s Order No. 01-2020, 85 Fed. Reg. at 13186; 29 C.F.R. § 16.306.

5 U.S.C. § 557(b); Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 3

(citations omitted).

Secretary’s Order No. 02-1996 (Authority and Responsibilities of the Administrative

Review Board), 61 Fed. Reg. 19978 (May 3, 1996).

Secretary, who is ultimately responsible for issuing final agency decisions under

each of the enumerated statutes.84 In the delegations of authority to the Board, the

Secretary has made clear that the Board must “adhere to the rules of decision and

precedent applicable under each of the [enumerated] laws.”85 Likewise, when the

Secretary undertakes review of a Board decision and issues a final agency decision,

as in Graham & Rollins, “[t]he Secretary’s decision shall constitute final action by

the Department and shall serve as binding precedent on all Department employees

and in all Department proceedings involving the same issue or issues.”86 Simply

stated, we are bound by the Secretary’s decisions, even if we might disagree with

them.

In reversing in part the Majority’s decision in Graham & Rollins, the Acting

Secretary provided a clear holding: H-2B enforcement proceedings are not required

to be decided “on the record” and, therefore, are not subject to EAJA.87 This is the

exact issue presented in the present case and we are bound by the decision.

In an attempt to navigate around the FAD in Graham & Rollins, Morton

Concessions argues that the Acting Secretary was bound to follow, but never

properly analyzed or applied, controlling law of the Ninth Circuit Court of

Appeals.88 According to Morton Concessions, Ninth Circuit case law, including

specifically Marathon Oil Company v. Environmental Protection Agency,89 dictates a

different result and the Acting Secretary erred by failing to follow this precedent.90

Even if we agreed with Morton Concessions, we would nevertheless still be

bound by the Acting Secretary’s decision in Graham & Rollins. The holding that

H-2B enforcement proceedings are not subject to EAJA was clear and was not

Secretary’s Order No. 01-2020, 85 Fed. Reg. at 13187-88.

Id. at 13187; Secretary’s Order No. 02-1996, 61 Fed. Reg. at 19979.

Secretary’s Order No. 01-2020, 85 Fed. Reg. at 13188.

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 17-18.

Amended Brief of Employer-Respondent (Resp. Br.) at 6-10.

564 F.2d 1253 (9th Cir. 1977).

Resp. Br. at 7; Reply Brief of Employer-Respondent at 1.

limited to the Circuit in which that case arose.91 Because this case involves “the

same issue or issues,” we are bound by the decision.92

2. The Secretary Should Revisit Graham & Rollins

Although we are bound by the FAD in Graham & Rollins, we have serious

misgivings about that decision. Among other things, the decision did not review the

purposes of EAJA, gave extreme weight to sovereign immunity, rejected decadeslong presumptions surrounding quasi-judicial proceedings, and passed over what we

consider to be clear indicia in the nature of the H-2B enforcement proceedings that

indicate they were intended to be determined on the record.

The Secretary has the power and authority to revisit past precedent.93

We urge the Secretary to do so in this case. As stated above, we do not make this

recommendation lightly. Therefore, we provide a detailed analysis discussing our

views on the issue and the concerns we have with the Acting Secretary’s decision.

A. The Decision Did Not Give Due Consideration to the Purposes of EAJA

As an initial and fundamental matter, the Acting Secretary did not give due

(or any) weight to the purposes of EAJA in reversing the Majority in

Graham & Rollins. Above, we detailed the essential principles and purposes

underlying EAJA. Briefly restated, EAJA grew out of a growing concern over the

unequal positions of private litigants vis-à-vis an ever-expanding bureaucracy.

Private litigants—even those with meritorious defenses—found themselves

In its Petition for Review, Morton Concessions also argued that “[t]he Secretary

correctly concluded that the Ninth Circuit will award EAJA fees in H-2B enforcement

actions,” citing footnote 10 of the FAD. Petition at 2. We disagree with Morton Concessions’

interpretation of that footnote and the Acting Secretary’s holding. In that footnote, the

Acting Secretary referred to Marathon Oil, but concluded that as a non-EAJA case and in

light of her reading of other cases, it was not persuasive. Graham & Rollins (Acting

Secretary), ARB No. 2021-0047, slip op. at 14 n.10. Finding Marathon Oil unpersuasive is a

far cry from finding that the Secretary would have been forced to reach a different result

had the case arisen in the Ninth Circuit.

Secretary’s Order No. 01-2020, 85 Fed. Reg. at 13188; see Petition at 1 (identifying

the relevant issue as “[w]hether under Ninth Circuit case law, H-2B enforcement actions

fall within the scope of the Equal Access to Justice Act”).

Secretary’s Order No. 01-2020, 85 Fed. Reg. at 13187 (stating that the Board is

bound to follow rules of decision and precedent, “until and unless the Board or other

authority explicitly reverses such rules of decision or precedent”).

outmanned and overmatched when facing heavy-handed government enforcement

actions. The problems EAJA sought to address were magnified with the exponential

growth of the administrative state. This imbalance of power led to many ills.

Individuals and small businesses were rolled over by arbitrary or capricious

exercises of agency power, small businesses were unjustly compelled to pay

penalties rather than fight unfair government action in costly litigation, and small

businesses were specifically targeted for agency action precisely because they did

not have the resources to litigate. Thus, EAJA serves several important goals:

it reduces the disparity between individuals, small businesses, and other

organizations with limited resources vis-à-vis the federal government; it encourages

and reduces the hurdles for private parties to challenge unreasonable and

oppressive government behavior; and it deters unreasonable and heavy-handed

behavior by agencies, federal officials, and regulators. The concerns and goals giving

rise to EAJA in 1980 are, perhaps, more pressing and important today than ever

before.

The FAD in Graham & Rollins does not include any meaningful discussion of

the important purposes behind EAJA. The decision featured a hyper-technical

(and, in our view, misguided) statutory analysis, without addressing the context

and issues presented in the underlying case and the purposes of the relevant

statute. Any interpretation of the scope of EAJA must necessarily consider, as a

backdrop, the important purposes of that Act. Indeed, “[e]xamination of purpose is a

staple of statutory interpretation that makes up the daily faire of every appellate

court in the country.”94 The failure to discuss or apparently even consider the

purposes of EAJA necessitates further review by the Secretary in this case.

B. The Decision Gave Excessive Weight to Sovereign Immunity

While giving little or no weight to the purposes behind EAJA, the FAD at the

same time gave excessive weight to the principle of sovereign immunity. It is clear

that sovereign immunity heavily influenced—if not outright dictated—the

Concurrence’s and the Acting Secretary’s decisions in Graham & Rollins.

Both introduced their discussions by laying out the principles of sovereign

McCreary Cnty. v. Am. Civ. Liberties Union of Ky., 545 U.S. 844, 861 (2005)

(citations omitted); accord Abramski v. United States, 573 U.S. 169, 179 (2014)

(“In [interpreting the statute], we must (as usual) interpret the relevant words not in a

vacuum, but with reference to the statutory context, structure, history, and purpose.”)

(internal quotations and citations omitted).

immunity and signaled the overwhelming weight they gave the doctrine.

For example, the Concurrence led her analysis by stating that when deciding

whether EAJA applied to H-2B enforcement proceedings, “we must remain mindful

that EAJA constitutes a partial waiver of sovereign immunity.”95 She then went on

to conclude that when “[c]onsidering the fundamental principles” of sovereign

immunity, there was not sufficient indicia that Congress intended to waive

sovereign immunity and apply EAJA in the H-2B context.96

The Acting Secretary leaned even heavier into the application of sovereign

immunity. The FAD began with a discussion of the “Governing Legal Framework”

by emphasizing the “elementary” and “crystal clear” principles of sovereign

immunity and noting the “high threshold” a litigant must overcome to demonstrate

that Congress intended to waive it—“both as to whether Congress has waived

immunity at all and as to the scope of any waiver.”97 With that preface, sovereign

immunity then featured in nearly every section of the legal analysis, including in

teeing up the general issues of the applicability of EAJA,98 in discussing the text of

the H-2B enforcement provision,99 in deemphasizing the longstanding presumption

regarding applicability of the APA in quasi-judicial proceedings,100 in discussing

what the Acting Secretary perceived as an ambiguity in the H-2B statute,101 and

even in distinguishing cases cited by the Majority.102 In fact, in the 18 page opinion,

“sovereign immunity” was referenced 44 times. As we read the FAD, the decision

gave sovereign immunity so much weight as to make it effectively determinative

and nearly impossible to overcome.

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 37.

Id. at 38.

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 4-5.

Id. at 5 (“Additionally, because EAJA constitutes a partial waiver of the United

States’ sovereign immunity . . . it must be strictly construed in favor of the United States.”)

(internal quotation and citation omitted).

Id. at 7 (“This principle [of plain text reading] applies with even greater force when

determining whether a statute waives sovereign immunity . . .”).

Id. at 11-12 (stating that such presumption is “contrary to bedrock sovereign

immunity principles,” that the APA Manual did not discuss sovereign immunity, and that

the APA Manual could not waive sovereign immunity).

100

Id. at 14-15 (concluding that in light of such ambiguity, there could be no waiver of

sovereign immunity).

101

102

Id. at 16 n.13.

While we do not disagree with many of the general statements of the law

with respect to sovereign immunity and the importance that doctrine has in our

legal system, we do disagree with the outsized and effectively decisive reliance the

FAD placed on sovereign immunity in that case. While it is generally true that

waivers of sovereign immunity must be clear, there is no doubt or ambiguity that

Congress waived sovereign immunity through EAJA.103 As outlined above, to

counteract growing overreach by the federal government and negate existing and

nearly insurmountable disincentives and disparities that discouraged (or outright

prevented) litigants, especially small businesses, from pursuing even the most

meritorious and just defenses against heavy-handed and unjustified government

action, Congress enacted EAJA. EAJA waived sovereign immunity, indicated

Congress’s intent to place the goal of incentivizing private parties to vindicate and

defend their rights ahead of preserving the federal treasury, and subjected the

government to liability for attorney’s fees in cases in which it could not

substantially justify its position.104 In invoking the general principle that statutory

ambiguities are construed in favor of retaining immunity, the decision singularly

focused on perceived ambiguities in the H-2B enforcement statute, without

acknowledging the proper starting point that EAJA itself provides a clear and

unambiguous waiver of sovereign immunity.

Furthermore, while we generally agree with the notion that courts should be

careful not to construe a waiver of sovereign immunity more broadly than Congress

intended, it is equally true that once Congress has waived sovereign immunity—as

it has clearly done with EAJA—courts “should be careful not to ‘assume the

authority to narrow the waiver that Congress intended.’”105 As we read the FAD in

See Five Points Rd. Joint Venture v. Johanns, 542 F.3d 1121, 1125 n.3 (7th Cir.

2008); Aageson Grain & Cattle, 500 F.3d at 1045.

103

104

5 U.S.C. § 504(a).

Ardestani, 502 U.S. at 137 (quoting United States v. Kubrick, 444 U.S. 111, 118

(1979)); accord Internal Revenue Serv. v. Murphy, 892 F.3d 29, 40 (1st Cir. 2018)

(“We thus must be careful not to be more stinting in the interpretation of the provision than

its language requires, for just as the courts should not construe a waiver of sovereign

immunity more broadly than Congress intended, neither, however, should we assume the

authority to narrow the waiver that Congress intended.”) (internal quotations and citations

omitted); Five Points Rd., 542 F.3d at 1124 n.3 (“The Government contends, rightly, that

any such waiver must be strictly construed in favor of the United States. Nevertheless, once

Congress has waived sovereign immunity over certain subject matter, a court should be

careful not to assume the authority to narrow the waiver that Congress intended. As we

point out in our statutory analysis, here, Congress expressly has waived sovereign

immunity with respect to attorney’s fees and costs to a prevailing party in an adversarial

105

Graham & Rollins, the presumption in favor of preserving sovereign immunity was

nearly so strong and so fundamental to the analysis as to be effectively

insurmountable, even when Congress clearly expressed in EAJA that it intended to

waive sovereign immunity and subject the government to liability for unreasonable

litigation.

The Supreme Court has warned against over-relying on sovereign immunity

principles in assessing the applicability of EAJA. In Richlin Security Service Co. v.

Chertoff,106 a prevailing litigant sought to recover paralegal fees under EAJA, but

the government opposed its request.107 The Supreme Court ruled in favor of the

litigant, holding that the litigant could recover paralegal fees at prevailing market

rates.108 The Supreme Court stiffly rejected the government’s insistence that the

scope of EAJA must be narrowly construed in light of sovereign immunity:

“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.”109

Courts of appeals likewise have pushed back against agencies’ overreliance

on the principle that waivers of sovereign immunity should be strictly construed in

EAJA cases, particularly in light of the Supreme Court’s recent decision in

Loper Bright Enterprises v. Raimondo.110 As the Tenth Circuit recently explained:

That said, we may not resort to the sovereign immunity

canon at the first sign of any potential ambiguity in the text

as this would abdicate our responsibility to interpret the

statutes in front of us. Before turning to the canon, we must

adjudication under section 504.”) (internal quotations and citations omitted);

Aageson Grain & Cattle, 500 F.3d at 1045 (“Even Ardestani acknowledged, however, that

the Supreme Court has recognized that, once Congress has waived sovereign immunity over

certain subject matter, the Court should be careful not to assume the authority to narrow

the waiver that Congress intended. . . . [W]e shall not assume the authority to narrow

Congress’s waiver of sovereign immunity under the EAJA.”) (internal quotations and

citations omitted).

106

553 U.S. 571 (2008).

107

Id. at 574-75.

108

Id. at 577-80.

109

Id. at 589.

110

603 U.S. 369 (2024).

exhaust all traditional tools of statutory construction. . . .

Put differently, we cannot reflexively apply the sovereign

immunity canon to adopt an immunity-preserving

interpretation simply because that interpretation appears

plausible on preliminary review.[111]

The important principle that courts should be careful not to narrow the

waiver of sovereign immunity that Congress intended is especially important and

true in the context of EAJA. The purpose of narrowly construing waivers of

sovereign immunity is to “protect the public fisc and to provide breathing space for

legitimate Government action that might be deterred by litigation.”112 But, “these

purposes are already fulfilled by the EAJA’s requirement that even prevailing

parties may not be awarded fees unless the Government’s position lacked

substantial justification.”113 In other words, while waiving sovereign immunity,

EAJA also builds in important guardrails and restrictions on when a litigant can

prevail against the government and recover against the “sovereign,” thereby still

protecting the public fisc. 114 Narrowing the applicability of EAJA even further

Daley v. Ceja, 158 F.4th 1152, 1157 (10th Cir. 2025) (citing Loper Bright, 603 U.S. at

385; other internal quotations and citations omitted).

111

112

Ardestani, 502 U.S. at 147 (Blackmun, J., dissenting).

113

Id.

See, e.g., H.R. REP. NO. 96-1418, at 11 (“The standard [for determining whether

government action is substantially justified] should not be read to raise a presumption that

the government position was not substantially justified, simply because it lost the case.

Nor, in fact, does the standard require the government to establish that its decision to

litigate was based on a substantial probability of prevailing. Furthermore, the government

should not be held liable where ‘special circumstances would make an award unjust.’

This ‘safety valve’ helps to insure that the government is not deterred from advancing in

good faith the novel but credible extensions and interpretations of the law that often

underlie vigorous enforcement efforts. It also gives the court discretion to deny awards

where equitable considerations dictate an award should not be made.”). Importantly, these

limitations should quell any fear of opening the floodgates for attorney’s fees against the

government. What constitutes “substantial justification” under EAJA has been much

litigated and suffice it to say it is a defense often successfully asserted by the government.

See Kevin W. Brown, What constitutes substantial justification of government’s position so

as to prohibit awards of attorneys’ fees against government under Equal Access to Justice

Act (28 U.S.C.A. § 2412(d)(1)(A)), 69 A.L.R. Fed. 130 (annotating hundreds of cases). The

“special circumstances” proviso is much less litigated and intended to allow the government

to pursue novel but credible legal theories and allow consideration of equitable factors. In

the key case of Pierce v. Underwood, the Supreme Court (majority opinion authored by

Justice Scalia) rejected the petitioner’s argument that “substantial justification” should

mean “justified to a high degree” and opted for a test more favorable to the government of

114

through the overly rigid application of sovereign immunity principles is both

superfluous and plainly inconsistent with the Congressional intent behind the Act

because Congress already clearly built limiting guardrails into the Act.115

Finally, we believe the primacy given to sovereign immunity is especially

problematic given Congress’s apparent lack of concern with application of the

doctrine when passing EAJA. EAJA necessarily had to waive sovereign immunity

against the federal government to allow recovery of costs, and there is some

mention and recognition of a waiver of the so-called “American Rule” in the

legislative history behind the Act.116 Even so, a search of the legislative history and

a review of both the 1980 and 1985 enabling statutes finds little discussion of

“sovereign immunity,” much less any suggestion that the concept should be

regarded with paramount importance in restricting the interpretation of EAJA or

used as an interpretive rule in defining (mush less limiting) the scope of the Act.

“justified to a degree that would satisfy a reasonable person.” 487 U.S. 552, 565 (1988).

A more stringent test, less favorable to the government and favored by Justice Brennan,

was rejected. See id. at 578 (Brennan, J., concurring in part).

Ardestani, 502 U.S. at 147-48. We recognize that Justice Blackmun’s view did not

ultimately prevail in Ardestani. Nevertheless, as noted above, even the majority in that

case recognized the fundamental principle that once Congress has waived sovereign

immunity, courts “should be careful not to assume the authority to narrow the waiver that

Congress intended.” Id. at 137. The Acting Secretary relied on the Ardestani majority

decision, which she said stands for the proposition that the Supreme Court “rejected the

argument that EAJA applies to all ‘trial-type proceedings in which the Government is

represented,’” and which she says “foreclosed” the Majority’s arguments. Graham & Rollins

(Acting Secretary), ARB No. 2021-0047, slip op. at 11, 15. We read Ardestani to address a

different, less specific issue than the line of courts of appeals cases cited above.

In Ardestani, it appears that the plaintiff’s principal argument was that EAJA should apply

to all proceedings that were conducted like those defined in APA Section 554, even if they

were not specifically and technically “governed by” that section. Ardestani, 502 U.S. at 134

(“She thus contends that the phrase ‘under section 554’ encompasses all adjudications ‘as

defined in’ § 554(a), even if they are not governed by the procedural provisions established

in the remainder of that section.”). In other words, the Supreme Court had to decide the

meaning and reach of the phrase “under section 554” in EAJA. The narrower issue here and

in the cited courts of appeals cases, which were decided both before and after Ardestani,

is the application of the phrase “under section 554” (as defined by Ardestani) to the statutes

at issue. The Supreme Court in Ardestani did not reject the principle that courts can safely

presume that quasi-judicial proceedings were intended by Congress to be governed by APA

Section 554, absent an expression of congressional intent to the contrary. Thus, we disagree

that the Majority’s arguments in Graham & Rollins are “foreclosed” by Ardestani.

115

116

E.g., H.R. REP. NO. 96-1418, at 9-10.

To the contrary, the limited discussion in the legislative history suggests that

sovereign immunity was not intended as a bar to application of EAJA. For example,

in one hearing on the legislation and related other bills, Representative Robert

Kastenmeier (D-WI) stated:

However, since that time, it has come to our attention that

the United States, as a sovereign, is generally not liable for

attorneys’ fees even under the common law bad faith

exception. Also, although the United States may be liable

for attorneys’ fees under approximately 20 Federal

statutes, there are many other cases in which the United

States cannot be held liable absent a statute.

It is the purpose of all the pending bills to expand

the liability of the Federal Government in agency

proceedings and court actions.[117]

This statement confirms that Congress clearly intended to waive sovereign

immunity, while simultaneously providing no sense that that waiver should be

narrowly interpreted to limit the reach of EAJA or to undermine the protections of

the Act. While EAJA has not engendered widespread awards against agencies,

for reasons that have been much debated,118 it remains a clear expression of

congressional concern over the problems posed by a powerful administrative deep

state and the need to provide some avenue of relief for a small entity which

successfully proves its innocence in an enforcement action—and allows for that

relief by waiving sovereign immunity and permitting an award of attorney’s fees

and costs under certain conditions.

Award of Attorney Fees Against the Federal Government: Hearings Before the

Subcomm. on Courts, Civ. Liberties, & the Admin. of Justice of the Comm. on the Judiciary,

House of Representatives, 96th Cong. 1 (1980) (Statement of Rep. Robert Kastermeier).

In one other mention, Senator Domenici was very critical of the Department of Justice’s

(DOJ) apparent assertion of sovereign immunity in cases in which it pursued protracted

litigation “beyond common sense.” 125 CONG. REC. 5766 (Mar. 21, 1979).

117

See, e.g., Equal Access to Justice Reform Act of 2005: Hearing Before the Subcomm.

on Courts, the Internet, & Intell. Prop., Comm. on the Judiciary, House of Representatives,

109th Cong. (2006).

118

Thus, we believe it was improper to interpret the sovereign immunity waiver

encompassed in EAJA as narrowly or restrictively as the Acting Secretary did in

Graham & Rollins.

C. Congress Intended H-2B Enforcement Proceedings to be Decided on the

Record

When we strip away the undue weight given to sovereign immunity and

consider the fundamental purposes as expressed by Congress in passing EAJA, it

becomes clear, as the Majority decided in Graham & Rollins, that Congress

intended the H-2B enforcement proceedings to be determined “on the record.” While

we do not intend to restate the entirety of Majority’s opinion (which we believe is

thoroughly researched, well-reasoned, and legally correct, and which we endorse in

full), we believe it is important to emphasize critical points in the Majority’s

analysis, while at the same time addressing counterpoints in the Acting Secretary’s

analysis with which we do not agree. In short, despite the absence of the words “on

the record” in the H-2B enforcement statute, it is clear from the nature of the

proceedings and the longstanding and well-established presumptions about the

APA’s applicability to quasi-judicial proceedings that these H-2B enforcement

proceedings are precisely the type of proceedings to which the APA was intended to

apply.

i. Talismanic Statutory Language is Not Required

First, we cannot overstate the fundamental principle that the H-2B

enforcement statute need not use the words “on the record” or make explicit

reference to APA Section 554 to conclude that Congress intended for the

proceedings to be determined on the record.119 What counts instead, as the Majority

explained, is whether we or the Secretary can otherwise conclude that Congress

intended for the agency to adhere to the requirements of the APA.120

Federal courts, including the Supreme Court, hold this principle to be true

and have routinely found that statutes that do not contain such language are still

119

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 9-10.

Id. at 10 (citing St. Louis Fuel & Supply Co. v. Fed. Energy Regul. Comm’n, 890 F.2d

446 (D.C. Cir. 1989); Lane v. U.S. Dep’t of Agric., 120 F.3d 106 (8th Cir. 1997); 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)).

120

governed by the APA.121 Even cases that ultimately conclude that that the

proceedings are not governed by the APA—including some of those cited by the

Acting Secretary122—still recognize that such explicit language need not be present

and do not turn on the presence or absence of such talismanic language.123

E.g., Steadman v. S.E.C., 450 U.S. 91, 97 n.13 (1981) (“[T]he absence of the specific

phrase [‘on the record’] from [the statute] does not make the instant proceeding not subject

to § 554. . . . Rather, the ‘on the record’ requirement for [the statute] is satisfied by the

substantive content of the adjudication.”) (citations omitted); Union Pac. R.R. Co. v. Surface

Transp. Bd., 113 F.4th 823, 836 (8th Cir. 2024) (“In summary, the crucial question is not

whether particular talismanic language was used but whether the proceedings under

review fall within that category of quasi-judicial proceedings deserving of special procedural

protections.”) (internal quotations and citations omitted); Five Points Rd., 542 F.3d at 1126

(“The NAD statutes do not require expressly the hearing to be on the record; nonetheless,

Congress’ intent is clear. . . . [T]hose magic words need not appear for a court to determine

that formal hearings are required. Congress need only clearly indicate its intent to trigger

the formal, on-the-record hearing provisions of the APA.”) (internal quotations and citations

omitted); Dantran, 246 F.3d at 46 (“That the statute does not command a hearing ‘on the

record’—in the language of APA section 554—is of modest significance, as it has long been

recognized that the applicability of the APA does not turn on the presence or absence of the

precise words ‘on the record’ . . . . Rather, the resolution of this issue turns on the

substantive nature of the hearing Congress intended to provide.”) (internal quotations and

citations omitted); Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 876 (1st Cir.

1978) (“Both [statutes] provide for public hearings, but neither states that the hearing must

be ‘on the record.’ . . . At the outset we reject the position of intervenor PSCO that the

precise words ‘on the record’ must be used to trigger the APA. . . . Rather, we think that the

resolution of this issue turns on the substantive nature of the hearing Congress intended to

provide.”); Marathon Oil, 564 F.2d at 1262 (“Since [the statute] requires only an

‘opportunity for a public hearing’ and fails to specify that permit limitations must be

‘determined on the record,’ the EPA argues that the formal adjudicatory hearing provisions

of the APA are inapplicable. We disagree.”).

121

122

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 8.

E.g., Friends of Earth, 966 F.2d at 693 (“The text [of the statute] requires only a

‘public hearing’; it does not expressly require either that the withdrawal hearing be ‘subject

to section 554’ or that the hearing be ‘on the record.’ Nevertheless, the absence of these

‘magic words’ is not dispositive.”) (citations omitted); St. Louis Fuel, 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.”) (citations omitted); City of W. Chi. v.

U.S. Nuclear Regul. Comm’n, 701 F.2d 632, 641 (7th Cir. 1983) (“Although Section 554

specifies that the governing statute must satisfy the ‘on the record’ requirement, those

three magic words need not appear for a court to determine that formal hearings are

required.”) (citations omitted).

123

Dantran, Inc. v. United States Department of Labor is particularly instructive

on this point. In that case, after six years of litigation challenging the Department

of Labor’s attempt to bar them from government contracting for alleged violations of

the Service Contract Act (SCA), the plaintiff finally prevailed.124 The plaintiff then

sought recovery of attorney’s fees from the Department under EAJA.125 Similar to

the H-2B enforcement statute here, the SCA provided an opportunity for a hearing,

but did not specifically state that a determination had to be made “on the record.”126

The First Circuit Court of Appeals began its analysis by flatly rejecting the

notion that the absence of the words “on the record” dictated the outcome of the

case.127 To the contrary, the court found the absence of those magic words only “of

modest significance.”128 Instead, “the resolution of this issue turns on the

substantive nature of the hearing Congress intended to provide.”129 With this

fundamental principle in mind, the court determined that it had “no reason to doubt

that Congress intended this adjudication to be governed by standard APA

procedures.”130 As is the case here (and as discussed more fully below), the court

observed that the enforcement proceedings dealt with factual findings with the

potential for a “serious impact on private rights.” This was “exactly the kind of

quasi-judicial proceeding for which the adjudicatory procedures of the APA were

intended.131

Like federal courts, the Department of Labor itself has also determined that

the APA and EAJA apply to statutes that do not explicitly require determinations

“on the record” or refer explicitly to the APA. In 29 C.F.R. § 16.104, the Department

identifies several proceedings that the Agency has “deemed to be adversarial

124

Dantran, 246 F.3d at 38.

125

Id.

Id. at 45. The SCA provided: “Where the Secretary does not otherwise recommend

because of unusual circumstances, he shall, not later than ninety days after a hearing

examiner has made a finding of a violation of this chapter,” place the individual on the

debarment list. Id. (quoting 41 U.S.C. § 354(a)).

126

127

Id. at 46.

128

Id.

129

Id. (quoting Seacoast, 572 F.2d at 876).

130

Id.

131

Id. (citation omitted).

adjudications which are covered by” EAJA.132 Of the statutes listed, as least three

do not explicitly require the determinations to be made “on the record” or explicitly

invoke the APA.133 Even absent such magic words, the Department has still

determined the statutes must be determined “on the record.” The same should hold

true here.

The Majority and Concurrence in Graham & Rollins both agreed that the

absence of the words “on the record” or explicit reference to the APA was not

determinative.134 The Acting Secretary also agreed that the absence of such

language from the H-2B enforcement statute was not determinative.135 However, it

is clear from the remainder of the Acting Secretary’s analysis that, like the weight

afforded to sovereign immunity, the absence of the talismanic words was effectively

determinative in the decision.136 That approach was inconsistent with

overwhelming federal authority to the contrary and warrants reconsideration by the

Secretary in light of the other clear indicia of Congressional intent discussed below.

29 C.F.R. § 16.104(a). The regulation was last amended on July 9, 2007, prior to the

Department of Labor receiving authority over H-2B enforcement matters. Graham &

Rollins (ARB), ARB No. 2021-0047, slip op. at 6 n.19. Therefore, the H-2B enforcement

statute naturally does not appear on the list.

132

29 C.F.R. § 16.104(a)(5)(i) (citing 29 U.S.C. § 2936, which has since been repealed

(“[T]he applicant may request a hearing before an [ALJ].”)), (ii) (citing 26 U.S.C. § 3303(b)

(stating that the Secretary may not take action until “after reasonable notice and

opportunity for hearing”) and § 3304(c) (stating that the Secretary may not take action until

“after reasonable notice and opportunity for hearing”)), (iii) (citing 42 U.S.C. § 503(b)

(“Whenever the Secretary of Labor, after reasonable notice and opportunity for

hearing . . . .”)).

133

134

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 9-10, 38-39.

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 7 (quoting

St. Louis Fuel, 890 F.2d at 448, for the proposition that “EAJA applicability ‘does not turn,

mechanically, on the absence of magic words.’”).

135

See id. at 6 (“[T]he majority failed give sufficient weight to the text of the INA . . . .”),

8 (“[I]n addition to the lack of any explicit ‘on the record’ language or provision

incorporating section 554 or the APA, there is no other textual evidence of Congressional

intent . . . to require the H-2B enforcement proceedings be conducted on the record or in full

compliance with section 554.”).

136

ii. H-2B Enforcement Proceedings Are Precisely the Type of Quasi-Judicial

Proceedings to Which the APA Was Meant to Apply

Rather than focusing on the presence or absence of specific talismanic

language or magic words, federal courts make clear that the relevant inquiry should

instead focus on the “substantive content of the adjudication” to determine whether

Congress intended for the proceedings to be determined on the record under the

APA.137 In conducting this analysis, courts look for certain hallmarks or

characteristics of what they refer to as “quasi-judicial proceedings.” For example,

courts consider whether the proceedings deal with disputes of fact or require

specific factual findings and whether the proceedings involve issues impacting

specific parties and private rights.138 When the adjudication at issue bears these

characteristics, courts presume that Congress intended for the proceedings to be

determined “on the record,” even if such language is missing from the statute.

For example, in Dantran, discussed above, the underlying proceedings

involved a government contractor seeking review of an administrative order

debarring the contractor from receiving government contracts for its alleged

violations of the SCA.139 The First Circuit stated that the applicability of the APA

“turns on the substantive nature of the hearing Congress intended to provide.”140

For the SCA proceedings, the court had “no reason to doubt that Congress intended

this adjudication to be governed by standard APA procedures,” because the

adjudication “involve[d] specific factual findings with potential for serious impact on

private rights.”141 The court concluded that this was “exactly the kind of quasiSteadman, 450 U.S. at 97 n.13; accord Union Pac., 113 F.4th at 836 (“Application of

the procedural safeguards [of the APA] ‘rests on the substantive character of the

proceedings involved,’ ‘[a]bsent congressional intent to the contrary.’ . . . A court’s inquiry

must be ‘focused on the nature of the administrative determination before [it].’”) (quoting

Marathon Oil, 564 F.2d at 1263-64); Seacoast, 572 F.2d at 876 (“Rather, we think that the

resolution of this issue turns on the substantive nature of the hearing Congress intended to

provide.”); Marathon Oil, 564 F.2d at 1264 (“In summary, the crucial question is not

whether particular talismanic language was used but whether the proceedings under

review fall within that category of quasi-judicial proceedings deserving of special procedural

protections.”) (citations omitted).

137

E.g., Union Pac., 113 F.4th at 836; Dantran, 246 F.3d at 46; Seacoast, 572 F.2d at

876; Marathon Oil, 564 F.2d at 1261.

138

139

Dantran, 246 F.3d at 38.

140

Id. at 46 (citation omitted).

141

Id. (internal quotations and citation omitted).

judicial proceeding for which the adjudicatory procedures of the APA were

intended.”142

The First Circuit reached a similar result in an earlier case, Seacoast v. AntiPollution League v. Costle, dealing with a party’s application to the EPA for a

permit to discharge pollutants.143 Like in Dantran, the First Circuit determined

that Congress intended the APA to apply to the proceedings, despite the absence of

the words “on the record” from the applicable statute, because “the resolution of this

issue turns on the substantive nature of the hearing Congress intended to

provide.”144 The proceedings required the agency decisionmaker to “make specific

factual findings about the effects of discharges from a specific point source,” and to

determine whether to grant permits to a specific applicant based on these

findings.145 Additionally, the decision would “not make general policy,” and “[o]nly

the rights of the specific applicant will be affected.”146 Further, “the factual

questions involved in the issuance of [the permits] will frequently be sharply

disputed.”147 Based on these characteristics, the court determined that “[t]his is

exactly the kind of quasi-judicial proceeding for which the adjudicatory procedures

of the APA were intended.”148

Id. (internal quotations and citations omitted). The Acting Secretary attempted to

distinguish Dantran because the First Circuit also considered the fact that “the APA is

indirectly made applicable by statute” through a chain of cross-references to another

statute. Id. at 47; see also Graham & Rollins (Acting Secretary), ARB No. 2021-0047,

slip op. at 8. However, the fact that the court was also able to patch together a

“chain of relationship” pointing to the applicability of the APA does not detract from

Dantran’s central thesis that “the resolution of this issue turns on the substantive nature of

the hearing Congress intended to provide.” Dantran, 246 F.3d at 46 (internal quotations

and citations omitted).

142

143

572 F.2d at 874.

144

Id. at 876.

145

Id.

146

Id.

147

Id.

Id. As the Acting Secretary noted in Graham & Rollins, the First Circuit later

rejected a party’s reliance on Seacoast in Dominion Energy Brayton Point, LLC v. Johnson,

443 F.3d 12 (1st Cir. 2006). See Graham & Rollins (Acting Secretary), ARB No. 2021-0047,

slip op. at 14 n.10. However, the First Circuit in Dominion Energy stated that it “in no way

disparage[d] the soundness of Seacoast’s reasoning,” but was compelled to adopt the

agency’s new, conflicting interpretation because the Supreme Court had since decided

Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984). Dominion

148

The Ninth Circuit likewise concluded in Marathon Oil that the nature of the

proceedings, rather than the words of the statute, determined whether Congress

intended for formal APA procedures to apply. In that case, the underlying

proceedings dealt with limitations placed by the EPA on applicants’ permits with

respect to offshore oil platforms.149 Once again, although the statute provided an

opportunity for a hearing, it did not explicitly reference the APA or clearly signal

that determinations had to be made “on the record.”150 The EPA argued that the

absence of the words “on the record” signaled that the formal hearing provisions of

the APA were inapplicable.151 The Ninth Circuit disagreed, reasoning that the

determination of whether the APA applied “does not rest on the presence or absence

of the magical phrase ‘on the record.’” Instead, “[a]bsent congressional intent to the

contrary, it rests on the substantive character of the proceedings involved.”152

In reaching this conclusion, the court explained that “Congress recognized

that certain administrative decisions closely resemble judicial determinations and,

in the interest of fairness, require similar procedural protections” under the APA. 153

“These ‘quasi-judicial’ proceedings determine the specific rights of particular

individuals or entities. And, like judicial proceedings, the ultimate decision often

turns, in large part, on sharply-disputed factual issues.”154 These classic

adjudications are “precisely the category of proceedings Congress sought to address

in the APA.”155

The Eighth Circuit recently conducted the same analysis in Union Pacific

Railroad v. Surface Transportation Board, dealing with adjudications of rate

disputes between shippers and rail carriers.156 Once again, the statute called for an

Energy, 443 F.3d at 18. As discussed infra page 45, the Supreme Court has since

overturned Chevron, so Seacoast’s reasoning should still stand in the First Circuit.

149

Marathon Oil, 564 F.2d at 1256.

150

Id. at 1262.

151

Id.

152

Id. at 1263.

153

Id. at 1261.

154

Id.

155

Id. at 1264.

156

113 F.4th at 828.

opportunity for a hearing, but did not explicitly state that the adjudication had to be

determined “on the record.”157 Citing heavily to Marathon Oil, the court confirmed

that its inquiry must be “focused ‘on the nature of the administrative determination

before [it],’” rather than on the presence or absence of magic words.158 Considering

the nature of the proceedings, the court determined that the agency adjudicator was

“engaging in ‘an agency process leading to a final disposition’ of the parties’ rate

dispute,” signaling that Congress intended formal APA procedures to apply.159

These proceedings that bear the characteristics of traditional judicial

adjudications can be contrasted with other, less formal adjudications and other

proceedings that do not warrant the same presumption regarding the applicability

of formal APA procedures. For example, in Friends of the Earth v. Reilly, the Court

of Appeals for the D.C. Circuit considered proceedings to withdraw a state’s

authorization to administer a hazardous waste program.160 Consistent with

Dantran, Seacoast, Marathon Oil, and Union Pacific, the court in Friends of the

Earth opined that “it is the nature of the issues to be resolved in the [ ] proceeding

which is determinative” of whether Congress intended the APA to apply.161

The court explained that “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.’”162 In contrast, the withdrawal

proceedings at issue in that case primarily involved legal issues and issues best

classified as involving “legislative facts”—“those ‘general facts which help the

tribunal decide questions of law and policy.’”163 Thus, the proceedings were not the

type of quasi-judicial proceedings for which courts presume Congress intended APA

Section 554 to apply.

157

Id. at 836.

158

Id. (quoting Marathon Oil, 564 F.2d at 1264).

159

Id. (quoting Marathon Oil, 564 F.2d at 1263).

160

966 F.2d at 691.

161

Id. at 693 (citation omitted).

162

Id. (quoting Kennth Culp Davis, Administrative Law Treatise § 12.3, at 413 (2d ed.

1979)).

163

Id. at 693-94 (quoting Davis § 12.3, at 413).

An earlier case from the Third Circuit Court of Appeals, Bell Telephone

Company v. Federal Communications Commission, applied similar reasoning.164

In that case, the court considered whether the statute at issue, dealing with a

requirement for telephone companies to provide certain communication services and

facilities to other carriers, required an evidentiary hearing under the APA.165

Analyzing the nature of the issues involved in the proceedings, the court

determined that an APA evidentiary hearing was not required.166 “When an

administrative agency develops a general policy applicable on a prospective basis,

courts have found it unnecessary to require evidentiary hearings” under the APA.167

The court specifically contrasted the issues there dealing with the implementation

of “a new policy based upon the general characteristics of an industry,” with more

traditional “[a]djudicatory hearings . . . when the agency bases its decision on the

peculiar situation of individual parties who know more about this than anyone

else.”168 Whereas the former are not subject to the APA, the latter are.

All of these cases—many of which were already cited in Graham & Rollins—

consistently and abundantly make clear that when Congress enacts statutes

providing for proceedings that bear the hallmarks of traditional judicial

adjudications, including proceedings dealing with the rights of particular

individuals or entities and decisions that turn on disputed factual issues, Congress

presumes that the hearings will be conducted “on the record” in accordance with the

formal procedures of the APA. In contrast, when the proceedings deal with

164

503 F.2d 1250 (3d Cir. 1974).

165

Id. at 1253-54, 1264.

166

Id. at 1266.

167

Id. (citations omitted).

Id. at 1266-67. The FAD appears to have selectively quoted Bell Telephone, stating

“[t]he phrase ‘opportunity for hearing’ lacks the reference to a ‘record’ necessary to trigger

the evidentiary requirements of the [APA].” Graham & Rollins (Acting Secretary), ARB No.

2021-0047, slip op. at 13-14 (quoting Bell Tel., 503 F.2d at 1264). In context, it is clear that

the reason the Third Circuit reached this result is because the adjudication in the case did

not bear the classic characteristics of a typical quasi-judicial adjudication; therefore,

consistent with the presumption proffered above, more explicit reference to “on the record”

proceedings was necessary to trigger application of the APA. Indeed, the Third Circuit cited

United States v. Florida East Coast Railway Co., 410 U.S. 224 (1973), and United States v.

Allegheny-Ludlum Steel Corp., 406 U.S. 742 (1972), both of which dealt with rulemaking, as

opposed to traditional quasi-judicial adjudication, and both of which suggested that

traditional quasi-judicial adjudication would not need the same “on the record” language to

trigger the APA. See infra note 183.

168

questions of law or policy, “legislative facts,” or only apply prospectively,

Congress must state more clearly if it intends for APA Section 554 to apply.169

As the Majority in Graham & Rollins took great care to explain, this basic

dichotomy between quasi-judicial proceedings and other, less formal adjudications

and rulemaking, is important and consistent with longstanding interpretations and

presumptions about the APA dating back nearly 80 years, or more.170 Not long after

the APA was passed in 1946, the Attorney General issued the APA Manual in 1947,

providing a definitive and thorough examination of the APA, its purposes, and its

legislative history. Consistent with Dantran, Seacoast, Marathon Oil, Union Pacific,

Friends of the Earth, and Bell Telephone, the APA Manual clearly explains when

“on the record” language is needed to trigger the APA and conversely when it is

assumed by Congress that the APA applies to the proceedings even in the absence

of such language. In rulemaking and non-traditional or residual “fringe”

adjudication, for example, Congress must include specific language that the

proceedings must be determined “on the record” or otherwise expressly invoke the

APA for the APA’s procedural requirements to attach. In contrast, Congress

presumes that traditional quasi-judicial proceedings, like the H-2B enforcement

proceedings here, are governed by the APA even in the absence of such language:

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

To be clear, we do not read the words “on the record” out of the statute or otherwise

consider them surplusage or meaningless. See Graham & Rollins (Acting Secretary),

ARB No. 2021-0047, slip op. at 10 n.6. As the Majority carefully explained, the legislative

history of the APA explains when and why more precise or explicit “on the record” language

is needed when dealing with rulemaking or less formal adjudication. Graham & Rollins

(ARB), ARB No. 2021-0047, slip op. at 11-15; see also Seacoast, 572 F.2d at 877 (“Our

holding does not render the opening phrases of s 554 of the APA meaningless. We are

persuaded that their purpose was to exclude governmental functions . . . which traditionally

have never been regarded as adjudicative in nature . . . . Without some kind of limiting

language, the broad sweep of the definition of ‘adjudication’, defined principally as that

which is not rule making, 5 U.S.C. s 551(6), (7), would include such ordinary procedures

that do not require any kind of hearing at all.”) (citations and quotations omitted).

169

Our concurring colleague provides a robust, incredibly thorough examination of the

history and passage of the APA dating back even further. His analysis shows that with the

passage of the APA, lawmakers intended that if Congress mandated a hearing for

adjudications, then the agency’s decision would be decided based on the record developed at

the hearing.

170

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).[171]

Courts like the First Circuit in Dantran and Seacoast recognize the APA Manual’s

authoritative analysis in assessing Congress’s intent.172

Here, there is no question that the H-2B enforcement proceedings bear the

same characteristics and hallmarks of quasi-judicial proceedings as Dantran,

Seacoast, Marathon Oil, and Union Pacific and as recognized in the APA Manual.

APA Manual at 42-43; accord id. at 33 (stating 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”), 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’. . . . [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).

171

172

Dantran, 246 F.3d at 46; Seacoast, 572 F.2d at 877.

As the Majority explained in Graham & Rollins, these proceedings involve disputed

issues of fact that impact the rights of specific parties.173 The Administrator

penalizes specific employers for alleged violations of H-2B program requirements.

The proceedings are fact-intensive and often involve heavily disputed factual

questions—whether the employer engaged in the behavior of which it is accused,

and whether such behavior violates the program regulations. The proceedings are

also constrained to the specific entities named in the action and address only past

alleged violations—the decisions reached by the agency are not prospective, do not

dictate or create matters of general policy, and, though they have precedential

value, do not specifically address the rights or responsibilities of any other entity

outside of the adjudication. The proceedings also carry significant and immediate

economic consequences for the specific entities involved, including repayment of

wages, payment of civil money penalties, and debarment. Thus, the H-2B

enforcement proceedings are “exactly the kind of quasi-judicial proceeding for which

the adjudicatory procedures of the APA were intended.”174

In the FAD, the Acting Secretary stated that she “disagree[d] with the

majority that caselaw under EAJA supports a conclusion that Congress intended for

H-2B enforcement proceedings to be covered by EAJA because they are ‘quasijudicial.’”175 She likewise proffered that “courts have generally rejected the majority

and Respondent’s argument that a statutorily required adjudicative hearing is

presumptively ‘on the record.’”176

The FAD largely disregarded or attempted to distinguish the cases cited

above, citing instead other cases, none of which, in our view, undercut the

longstanding fundamental principles and presumptions articulated above. First, the

decision cites Crestview Parke Care Center v. Thompson.177 In that case, the Centers

for Medicare and Medicaid imposed a civil money penalty on a nursing facility as a

sanction for violations of regulations.178 The nursing facility requested a hearing

before an ALJ to dispute the penalty.179 Unlike here, the statute at issue in that

173

See Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 18.

174

See Dantran, 246 F.3d at 46 (internal quotations and citations omitted).

175

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 15.

176

Id. at 13.

177

373 F.3d 743 (2004).

178

Id. at 744.

179

Id.

case required the agency to hold a hearing “on the record.” Because the statute

included the words “on the record,” the Sixth Circuit concluded that the statute

expressly “invoke[d] the panoply of procedures described by the formal-adjudication

provisions of the APA.”180

In dicta, the Sixth Circuit also proffered that “[t]he Supreme Court has also

implied that formal adjudication procedures are only necessary when a statute uses

the magic words ‘on the record,’” citing United States v. Florida East Coast

Railway.181 Florida East Coast Railway dealt with agency rulemaking, rather than

adjudication.182 As discussed above, the presumptions are radically different in the

two contexts—while “magic words” may be necessary in the rulemaking context to

signal adherence to the APA, they are not required in traditional adjudication, as

all of the courts of appeals cases cited above indicate and as even the Acting

Secretary acknowledged in Graham & Rollins. Indeed, the Supreme Court

suggested as much in Florida East Coast Railway and a subsequent case, United

States v. Allegheny-Ludlum Steel Corporation, with both stating that the decisions

turned on the specific fact that the agency action at issue was rulemaking and that

the outcome would differ for cases involving adjudication.183 Thus, the Sixth

Circuit’s statement is inconsistent with the weight of federal authority, including

the very case it cited for the proposition.

180

Id. at 748.

181

Id.

182

Fla. E. Coast Ry., 410 U.S. at 231.

In Florida East Coast Railway, the Supreme Court concluded the statute which

required action “after hearing,” was not required to be decided on the record under the

APA. However, the case involved rulemaking, and the Supreme Court recognized that the

term “hearing” “undoubtedly has a host of meanings,” which “undoubtedly will vary,

depending on whether it is used in the context of a rulemaking-type proceeding or in the

context of a proceeding devoted to the adjudication of particular disputed facts.” Id. at 239.

The Court also took care to discuss “[t]he basic distinction between rulemaking and

adjudication,” and distinguish another case because it involved “a ‘quasi-judicial’ proceeding

of a quite different nature form the one we review here.” Id. at 244. In Allegheny-Ludlum

Steel, the Supreme Court likewise concluded another statute, which required action “after

hearing,” was not required to be decided on the record under the APA. However, the case

again involved rulemaking, and the Supreme Court again took care to distinguish between

rulemaking and adjudication. Allegheny-Ludlum Steel Corp., 406 U.S. at 757.

183

Next, the FAD cited Chemical Waste Management, Inc. v.

U.S. Environmental Protection Agency184 and Dominion Energy Brayton Point, LLC

v. Johnson.185 In both cases, the courts of appeals determined that statutes that

required proceedings to be conducted after a “hearing,” without explicit reference to

whether the proceedings needed to be determined “on the record,” did not trigger

the APA.186 However, both cases turned on Chevron U.S.A. v. Natural Resources

Defense Council,187 under which courts deferred to federal agencies’ reasonable

interpretations of ambiguous statutes.188 Citing Chevron, the courts in both cases

deferred to agency interpretations that the statutes did not trigger the APA’s

procedural requirements.

Significantly, the Supreme Court expressly and firmly overturned Chevron in

2024’s Loper Bright Enterprises v. Raimondo.189 In that decision, the Court held

that rather than deferring to agency interpretations, “[c]ourts must exercise their

independent judgment in deciding whether an agency has acted within its statutory

authority.”190 Thus, the reasoning of Chemical Waste Management and Dominion

Energy no longer stands and the cases cannot undermine the weight of authority

discussed above.191

Finally, the FAD cited City of West Chicago v. U.S. Nuclear Regulatory

Commission.192 Consistent with the many cases cited above, the Seventh Circuit

184

873 F.2d 1477 (D.C. Cir. 1989).

185

443 F.3d 12 (1st Cir. 2006).

186

Chem. Waste Mgmt., 873 F.2d at 1480-82; Dominion Energy, 443 F.3d at 14-17.

187

467 U.S. 837 (1984).

188

Chem. Waste Mgmt., 873 F.2d at 1480-82; Dominion Energy, 443 F.3d at 14-17.

189

603 U.S. 369 (2024).

190

Id. at 412.

In Loper Bright, the Court explained that Chevron incorrectly “demand[ed] that

courts mechanically afford binding deference to agency interpretations, even those that

have been inconsistent over time. Still worse, it forces courts to do so even when a preexisting judicial precedent holds that the statute means something else . . . .” Loper Bright,

603 U.S. at 399 (emphasis original). Dominion Energy provides a quintessential example of

this concern in action. In that case, the EPA had previously required formal evidentiary

hearings consistent with the APA via regulation. After Chevron, though, the EPA amended

the regulations to remove the evidentiary hearing requirement and cited Chevron to compel

the court to defer to its new interpretation. Dominion Energy, 443 F.3d at 15.

191

192

701 F.2d 632 (7th Cir. 1983).

recognized in that case that the statute need not include the “magic words” of “on

the record” for Congress to have intended for formal hearings under the APA to

apply.193 Like the cases above, the Seventh Circuit also recognized the distinction

between formal adjudication and informal adjudication.194 Even so, the Seventh

Circuit ultimately concluded it could not discern “evidence that Congress intended

to require formal hearings” under the statute at issue.195 Notably, though, the

Seventh Circuit did not carefully review the characteristics of the nature of the

proceedings in determining whether the APA applied to the statute and proceedings

at issue. As a result, the Seventh Circuit’s analysis diverges markedly from its

sister courts discussed above.196

Accordingly, we believe the longstanding and well-established presumptions

articulated by the Majority in Graham & Rollins dictate the conclusion that

Congress intended for these proceedings to be governed by the APA and decided on

the record.

D. The Decision Gave Undue Weight to Language Contained in Other

Provisions of the INA

In concluding that Congress did not intend to require that H-2B enforcement

proceedings be conducted on the record, the Acting Secretary, like the Concurrence,

observed that unlike the H-2B enforcement provision, “‘several of the other

193

Id. at 641.

194

Id. at 644.

195

Id. at 645.

Elsewhere, the FAD also cited St. Louis Fuel in support of the proposition that

“in cases where the statutory provisions at issue does not demonstrate intent to apply all of

section 554’s required procedures, courts have concluded that EAJA does not apply.”

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 8. Consistent with

Dantran, Seacoast, Marathon Oil, Union Pacific, and the other cases cited above, the court

in St. Louis Fuel recognized that the “absence of magic words” was not determinative.

St. Louis Fuel, 890 F.2d at 448. However, the statute at issue there provided specific

procedural requirements that “provide[d] something less than APA section 554 mandates.”

Id. at 449. Indeed, legislative history confirmed that the statute was intended to “afford[ ]

a little bit less opportunity for a full adjudicatory type hearing than is afforded by the

Administrative Procedure Act.” Id. Thus, Congress clearly did not intend for the APA to

apply to the proceedings. Here, in contrast, there are no separately identified minimum

procedural requirements that would suggest “something less than APA section 554

mandates.” If anything, the absence of alternative procedural requirements suggests that

Congress instead intended for APA Section 554 to apply.

196

enforcement provisions Congress added elsewhere to the INA, both before and after

the 2005 enactment of the H-2B enforcement provisions,’ do ‘expressly invoke and

incorporate APA section 554.’”197 The Acting Secretary then cited to selected

provisions governing the employment of unauthorized migrants, a provision

governing document fraud, and a provision governing international marriage

brokers, as well as certain enforcement provisions under the H-1B, H-1B1, and E-3

programs.198 Citing the Supreme Court’s decision in Russello v. United States,199

the Acting Secretary stated that “[t]hese INA provisions demonstrate that when

Congress intends for an immigration enforcement proceeding to be subject to section

554’s procedures for formal adjudications, it is aware of the language it can use to

make such intent clear.”200

We disagree. The canon applied by the Supreme Court in Russello logically

depends on the provisions in question being very closely aligned and being drafted

in close temporal proximity. To be sure, it may be a valid interpretive presumption

in certain cases like Russello, where the reviewing court can confirm that Congress

was careful and deliberate in drafting disparate pieces of legislation.201 However,

this presumption does not apply when the sections are dissimilar, with different

language and different formulations addressing different circumstances;202 when

there are examples or proof of inexact drafting in the statute;203 when there are

alternative explanations for a difference in statutory language;204 when the

provisions are not enacted or considered simultaneously;205 or when the provisions

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 8 (quoting

Graham & Rollins (ARB), ARB No. 2021-0047, slip op. at 39) (emphasis original).

197

198

Id. at 8-9.

464 U.S. 16, 23 (1983) (“[W]here Congress includes particular language in one

section of a statute but omits it in another . . . , it is generally presumed that Congress

act[ed] intentionally and purposely.”).

199

200

Graham & Rollins (Acting Secretary), ARB No. 2021-0047, slip op. at 9.

201

Russello, 464 U.S. at 22-24.

Reichert v. Kellogg Co., Nos. 24-1442, 5945, 2026 WL 734673, at *10 (6th Cir. Mar.

16, 2026).

202

Port Auth. Trans-Hudson Corp. v. Sec’y, U.S. Dep’t of Lab., 776 F.3d 157, 165

(3d Cir. 2015).

203

204

Gormon v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1156 (9th Cir. 2009).

U.S. ex rel. Int’l Bhd. of Elec. Workers Loc. Union No. 98 v. Farfield Co., 5 F.4th 315,

332 (3d Cir. 2021) (citation omitted).

205

address wholly distinct subject matters.206 Thus, “Russello does not provide a

dispositive canon. Even at its strongest, Russello provides a single canon, a subset

of a single tool of statutory interpretation, which may be displaced by other tools.”207

In this case, the FAD cited a handful of disparate provisions of the INA that

were passed by different Congresses at different times in different legislation, and

that deal with different types of proceedings that are handled in different

contexts.208 In our view, we think it is unreasonable and illogical to apply the

Russello presumption in these circumstances and conclude that the omission of the

words “on the record” in the H-2B enforcement provision evinces a careful and

purposeful choice by Congress to omit this provision from the scope of the APA.

To ascribe the determinative meaning the Assistant Secretary asserts would be a

myopic view of the legislative machinations of Congress in drafting provisions

which can often be ad-hoc in reality and not necessarily consistent with each other,

depending on the circumstances and timing of that draftsmanship. Stated more

directly, the congressional cauldron of decision-making does not always proceed on a

linear straight line of logic, as is assumed under the Russello presumption.

Instead, we believe it is far more appropriate to conclude, consistent with

eighty years of legal interpretations discussed above, that Congress intended for

these proceedings to be determined “on the record” under formal APA adjudication

procedures, just like the myriad other quasi-judicial proceedings across the

administrative landscape that bear the same characteristics.

206

Id. (citations omitted).

Grand Trunk W. R.R. Co. v. U.S. Dep’t of Lab., Admin. Rev. Bd., 875 F.3d 821, 825

(6th Cir. 2017) (citation omitted).

207

The provisions cited by the Acting Secretary also use different language to invoke

the “on the record” or APA requirement. Some require a hearing “in accordance with the

requirements of section 554 of Title 5” (8 U.S.C. §§ 1324a(e)(3)(B), 1324c(d)(2)(B)); one

requires a hearing “on the record in accordance with subchapter II of chapter 5 of Title 5

(popularly known as the Administrative Procedure Act)” (8 U.S.C. § 1375a(d)(5)(A)(ii)); and

some require a hearing “in accordance with section 556 of Title 5” (8 U.S.C. § 1182(n)(2)(B),

(n)(2)(G)(viii), (t)(3)(B)). If anything, the disparate language and lack of uniformity evince a

lack of purposeful draftsmanship by Congress.

208

E. Common Sense Dictates that Congress Intended H-2B Enforcement

Proceedings be Determined “On the Record”

Finally, we end with obvious common sense that supports concluding that

Congress intended formal APA procedures, including the requirement for a

determination to be made “on the record,” to apply to H-2B enforcement

proceedings, just like other traditional quasi-judicial adjudications. Employers

participating in the H-2B program must comply with many requirements and

conditions. For example, as was at issue in this case, employers must pay the

appropriate wage to the H-2B employees, free and clear.209 Employers must also

ensure that they do not give preferential treatment to H-2B employees over

domestic employees;210 must provide full-time work;211 must list, and abide by,

job qualifications and requirements;212 must pay visa fees and transportation costs

to and from the place of employment;213 must disclose, and abide by, the

geographical area of intended employment;214 must abide by certain requirements if

employees separate from employment early;215 and are bound by a continuing

requirement to hire U.S. workers.216 The Administrator may bring enforcement

actions for violations of these program regulations and seek the recovery of unpaid

wages, civil money penalties, and debarment from participating in the H-2B

program for up to five years, among other remedies.217

Thus, H-2B enforcement proceedings can involve serious accusations of

wrongdoing and steep remedies. If H-2B enforcement proceedings like these are not

made and decided “on the record,” then each case “could be decided on the basis of

evidence that a court would never see or, what is worse, that a court could not be

sure existed.”218 Congress cannot have intended such a result and the proposition

209

29 C.F.R. § 503.16(a), (b).

210

Id. § 503.16(q).

211

Id. § 503.16 (d).

212

Id. § 503.16 (e).

213

Id. § 503.16(j).

214

Id. § 503.16(x).

215

Id. § 503.16(y).

216

Id. § 503.16(t).

217

Id. §§ 503.19, .20.

218

See Seacoast, 572 F.2d at 877.

that an agency could bring enforcement actions and sanctions against an employer,

or any other entity, in a hearing type forum without concurrently creating a record

of those proceedings for the purposes of subsequent review by another body is

absurd. The time of the King’s Star Chamber is long past. Yet this is the logical

result of the FAD’s reasoning.219 Instead, we think it is safe and imminently

reasonable to conclude, in line with nearly 80 years of precedent and legal

presumptions, and in line with common sense, that Congress intended to apply the

panoply of procedural protections provided by the APA to these quasi-judicial

adjudications.

CONCLUSION

In sum, we are bound by the Acting Secretary’s decision in Graham &

Rollins, and therefore are compelled to affirm the ALJ’s dismissal of this case.

However, for the reasons above, we encourage the Secretary of Labor to revisit and

reverse Graham & Rollins, apply the reasoning of the Majority to this case, and

conclude that EAJA applies to these H-2B enforcement proceedings so that Morton

Concessions’ EAJA fees petition can be considered by the ALJ below.

SO ORDERED.

RANDEL K. JOHNSON

Chief Administrative Appeals Judge

PHILIP G. KIKO

Administrative Appeals Judge

This absurd result also buttresses the conclusions of the concurring opinion

discussing why it was not logically necessary to always state “on the record” every time a

hearing was required in a statute. As night follows day, the two logically and simply flow

together.

219

Judge Burrell, concurring:

The majority opinion cites the ATTORNEY GENERAL’S MANUAL,220 for

explanation as to why Congress used “on the record” in Section 5 (now Section 554).

In this concurring opinion, I expand upon those points with a fuller illumination of

Congress’s use of “on the record” language and how it came to be in the form it was

for the APA.

INTRODUCTION221

The APA at Section 554(a) provides as follows:

This section applies, according to the provisions thereof, in

every case of adjudication required by statute to be

determined on the record after opportunity for an agency

hearing, except to the extent that there is involved [listing

several exceptions]. . . .[222]

In the H-2B grant at issue, Congress provided for penalties and remedies if

the Secretary finds “after notice and opportunity for hearing” failures in the

conditions of the petition warrant action.223 It does not expressly provide for the

hearing “to be determined on the record”:

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 . . . .[224]

220

ATTORNEY GENERAL’S MANUAL ON THE ADMINISTRATIVE PROCEDURE ACT (1947).

221

Throughout, emphasis is added to key statutory or congressional language for effect.

222

5 U.S.C. § 554.

8 U.S.C. § 1184(C)(14)(A)(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) as the Secretary of

Homeland Security determines to be appropriate . . . .”).

223

224

8 U.S.C. § 1184(C)(14)(A).

For reasons set out below, H-2B’s statutory hearing language should be construed to

require the Secretary’s decision to be made upon the record developed at hearing.

1. Precursors to the APA: Initial Reform Efforts Addressed Formal

Adjudication

The APA, enacted in 1946, has a rich legislative history as the reform effort

worked through various stages of academic, judicial, and legislative input. In the

late 1930s, Congress sought to reform administrative procedure across the

Executive Branch. The President and the Attorney General formed a committee to

review administrative procedure and make recommendations for reform. 225 Over

the course of a multi-year period, the AG Committee conducted studies and held

public hearings. The AG Committee issued a final report in January 1941,

hereinafter “FINAL REPORT.”226

One of the criticisms of administrative procedure before the APA’s watershed

reform was inconsistent agency adjudication deficient in key respects. In the FINAL

REPORT, the AG Committee distinguished between formal and informal

adjudication.227 The AG Committee identified that over 90% of administrative

matters were decided informally without formal procedure, that is “without

controversy, and by agreement between the agency and the individual citizen who is

affected.”228 “[I]n all but a surprisingly small percentage of cases, these methods [of

SEN. DOC. NO. 77-8, 77th CONG. 1st Sess. (FINAL REPORT) at 1-4 (President

Roosevelt requested the Attorney General form the Committee); see also SEN. DOC.

NO. 79-248, 79th CONG. 2d Sess. at 48, 189-90. Around the same time, both the House and

the Senate passed the Walter-Logan Bill to address problems with administrative

procedure, but this legislation was vetoed by the President in 1940. The President wanted

the AG Committee’s input before signing far-reaching legislation. SEN. DOC. NO. 79-248 at

49, 64-65, 189-90, 351 for history of the Walter-Logan Bill.

225

226

FINAL REPORT, supra note 225.

Id. at 5 (briefly covering attributes of both forms of adjudication). In formal

procedure, “testimony is taken, subject to cross-examination, and embodied into a record.”

Id.

227

HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON THE JUDICIARY UNITED

STATES SENATE, 77TH CONG. 1ST SESS. ON S. 674, S. 675, AND S. 918, PART 1, APRIL 2-APRIL

29, 1941, at 804.

228

informal adjudication] finally dispose of the matter at hand.”229 The AG Committee

appreciated the need to standardize formal adjudication when needed but to allow

for informal adjudication where available to speed up resolution at lower cost.

A. Congress’s Gatekeeper Test in Section 301

In the FINAL REPORT, the AG Committee included proposed legislation.230

Growing out of the FINAL REPORT, the Senate Judiciary Committee also proposed

legislation and held hearings on administrative reform in 1941. Chief among the

bills considered by the Judiciary Committee was S. 675.231

Both the AG Committee’s proposal and the Senate’s S. 675 provided for

comprehensive reform of agency adjudication in Title III to address when formal

procedure is required, and if formal adjudication is required, describing in

subsequent sections of Title III what constitutes standard formal procedure across

the various agencies.

The issue before us requires a thorough examination of the legislative

language indicating when formal procedure applies, which was addressed in a

preface or gatekeeper test at Section 301 of the proposed legislation. The gatekeeper

function was critical for reform because Congress wanted to preserve informal

adjudication where possible given that the vast majority of agency orders take place

without hearing. The gatekeeper language built upon existing agency statutory

frameworks or enabling legislation rather than directing Congress to amend agency

statutes on this point.232

FINAL REPORT, supra note 225, at 5, 17-18; see also id. at 35 (“Comparatively few

cases flower into controversies in which the parties take conflicting positions of such

moment to them that resort is necessary to the procedure of the courtroom”). For example,

the AG Committee cited millions of informal adjudications in tax, veterans affairs, and

social security. FINAL REPORT, supra note 225, at 35, 38-39.

229

230

FINAL REPORT, supra note 225, at 191.

HEARINGS, supra note 228, at 17. There were three bills to consider: S. 675 was the

Committee’s majority position, S. 674 was the Committee’s minority provision, and S. 918

was a third provision receiving less attention. SEN. DOC. NO. 79-248 at 190.

231

In describing the proposed language, Acting Attorney General Biddle stated S. 675,

the favored proposal, “requires formal adjudicatory proceedings and the hearing

commissioner system only in those cases where formal proceedings are already

required by Congress in the specific statutes administered.” HEARINGS, supra note

232

SEC. 301. APPLICATION OF TITLE. The provisions of

sections 302 to 309, inclusive, of this title shall be

applicable only to proceedings wherein rights, duties, or

other legal relations are required by law to be determined

after opportunity for hearing, and, if a hearing be held, only

upon the basis of a record made in the course of such

hearing. They shall not apply to . . . . [233]

The gatekeeper language in these drafts is the precursor to Section 554 of the

APA in its current form. Just as Section 554 determines when the formal

procedures of Sections 554 and 556-557 apply, Section 301 determined when

Sections 302-309 would apply. Conceptually, the current version of the APA’s 554

language is identical to Section 301. Both the final version and the precursor drafts

require the application of formal procedure when Congress provides for a hearing

before adjudication. However, the text shifted from initial proposal to final adoption

concerning “on the record” language.

There are three elements of Section 301: (1) proceedings wherein rights,

duties, or other legal relations are at issue;234 (2) “required by law to be determined

228, at 1477 (reform is not intended to change existing informal procedures; only where

trial examination is now in effect).

HEARINGS, supra note 228, at 20 (S. 675). Section 301 of the AG Committee’s

proposed bill is identical for purposes of the gatekeeper test. FINAL REPORT, supra note 225,

at 195.

233

In adversarial proceedings, administrative judges weigh contested arguments and

evidence to resolve disputes with economic or important consequence for the parties.

These disputes are resolved through trial-like proceedings. See J. Forrester Davidson,

Use of Public Documents and Reports in Administrative Proceedings, 25 IOWA L. REV. 555,

573-74 (1940) (observing that legislative facts are prospective whereas adjudicative facts

put to rest past individual conflicts and are judicial in nature); Kenneth Culp Davis,

The Requirement of Opportunity to be Heard in the Administrative Process, 51 YALE L.J.

1093, 1094, 1112 (1942) (distinguishing speech-making, legislative hearings from trial-type

hearings where the latter require opportunity for evidence, cross-examination, and findings

of fact based upon evidence of record).

234

after opportunity for hearing;”235 and (3) “if a hearing be held . . . only upon the

basis of a record.”236

The drafters’ use of “required by law” recognized both Congress’s statutory

text in agency statutes as well as constitutional requirements raised by the courts

when reviewing agency determinations.237 Prior to the pivotal APA reform, courts

reviewing agency action238 mandated that agency determinations affecting the

rights or legal relations of parties comply with constitutional requirements that:

(1) agencies give notice of the claim and disclose evidence of opposing parties or the

government;239 (2) parties have an opportunity to challenge that evidence or crossexamine witnesses;240 (3) the agency consider only the evidence of record and not

“Required by law” was criticized because agencies did not know if “law” included

their regulations whereby they ex gratia provided for hearings when statutes were silent.

HEARINGS, supra note 228, at 1456. The Justice Department recommended changing

“required by law” to “required by statute or the Constitution” which tips a hat to the heavy

influence courts had in shaping administrative reform with “due process” requirements for

agency procedure. Id.; see also id. at 577 (recommending changing “required by law” to

“only to proceedings wherein rights, duties or other legal relations are required by the

constitution or statutes to be determined after opportunity for formal hearing, and if such a

hearing be held, only upon the basis of a record made in the course of such hearing.”).

235

236

HEARINGS, supra note 228, at 20 (S. 675).

Supra note 235; see also George E. Hale, Administrative Hearings under the Federal

Constitution, 30 KENTUCKY L.J. 137, 137 (1942); Elden S. Magaw, Legal Aspects of

Administrative Hearings and Findings Part II, 12 MISS. L. J. 393, 397 (1940); Elden S.

Magaw, Legal Aspects of Administrative Hearings and Findings Part I, 12 MISS. L. J. 295,

309 (1940).

237

See, e.g., Morgan v. United States, 298 U.S. 468 (1936); Morgan v. United States, 304

U.S. 1 (1938); Interstate Com. Comm’n v. Louisville & Nashville R.R. Co., 227 U.S. 88

(1913); United States v. Abilene & S. Ry. Co., 265 U.S. 274 (1924); Ohio Bell Tel. Co. v. Pub.

Utils. Comm’n of Ohio, 301 U.S. 292 (1937).

238

West Ohio Gas Co. v. Pub. Utils. Comm’n of Ohio, 294 U.S. 63, 69-70 (1935) (citing

instance where commission included into the record several annual reports without giving

the company any notice of the inclusion and opportunity to challenge with evidence);

see also Hale, supra note 237, at 138-44 (examining the requirements of administrative

notice); Magaw, Part II, supra note 237, at 395 (there must be notice and hearing at some

stage in the proceedings where determination involves life, liberty, or property); FINAL

REPORT at 130 (identifying areas for the Veterans’ Administration Office to improve notice

and disclosure of information); FINAL REPORT, supra note 225, at 154 (criticizing the Post

Office practice of suspending mails upon unverified complaints without giving notice and

opportunity to answer or rebut allegations).

239

The right to submit evidence and argument in a quasi-judicial proceeding involving

named individuals and entities implies that the decision will be based on that evidence.

240

consider ex parte evidence in reaching a decision;241 and (4) the agency’s findings of

fact be supported by substantial evidence of record.

In the Morgan cases, the United States Supreme Court combined 50 suits

against the U.S. Department of Agriculture to discuss common problems with

administrative procedure.242 The Department of Agriculture had fixed maximum

rates for buying and selling livestock but its procedure did not comply with

statutory requirements for a full hearing before the agency decision.243 The Court

said there was no need to look to the Constitution to determine whether a hearing

was required because the requirement was in the statute.244 In criticizing the

agency’s procedure, the Court discussed the attributes of what constitutes a full

hearing.245 The Court concluded that no hearing was given if the person who

Magaw, Part II, note 237, at 405 (right to present evidence); Hale, supra note 237, at 144

(presentation of evidence); FINAL REPORT at 137 (recommending changes to Department of

Agricultural proceedings to more closely resemble quasi-judicial proceedings); FINAL

REPORT, supra note 225, at 140-41 (recommending that in cases of recovery of overpayment

that the payee be given an opportunity to be heard to argue and rebut contested facts

associated with the overpayment and waiver); FINAL REPORT, supra note 225, at 142

(criticizing banking practice where applications are denied and recommending agencies

provide notice of evidence and opportunity for rebuttal).

Morgan, 298 U.S. at 480, 481; Abilene & S. Ry. Co., 265 U.S. at 286-89 (order that

relied upon evidence not of record was deemed invalid); see also Hale, supra note 237, at

155-56 & n.103 (collecting cases where courts held that administrative decision must be

based on evidence introduced at hearing and incorporated into the record).

241

These principles were discussed in the debates on proposed legislation. FINAL

REPORT, supra note 225, at 144 (discouraging use of ex parte information by decisionmakers in marine inspection and discipline cases); id. at 155-56 (recommending

improvement in War Department procedure regarding fixing prices and the use of ex parte

information not disclosed to all affected prior to hearing so they may have opportunity to

confront it); id. at 163 (discussing use of ex parte or extra-record information in

investigations at the Department of Interior); id. at 179 (“The Committee believes that the

Commission or its hearing officer may properly take official notice of such information when

clearly relevant, if in the course of the hearing, or thereafter, there is notice of what is

proposed to be done and if opportunity is given to every party to explain or rebut the

information of which official notice is to be taken.”).

See Morgan v. United States, 298 U.S. 468 (1936); Morgan v. United States, 304 U.S.

1 (1938).

242

Morgan, 298 U.S. at 471; Morgan, 304 U.S. at 18-20 (discussing full hearing with

respect to due process and fairness concerns).

243

244

Morgan, 298 U.S. at 477-78.

Morgan, 298 U.S. at 479-80; see also Morgan, 304 U.S. at 18-19 (“But a ‘full

hearing’—a fair and open hearing—requires more than that. The right to a hearing

245

decides did not consider the evidence or argument of record.246 Plaintiffs were

entitled to be apprised of the government’s charges and given the opportunity to

meet the evidence before the agency’s final decision:

A proceeding of this sort requiring the taking and weighing

of evidence, determinations of fact based upon the

consideration of the evidence, and the making of an order

supported by such findings, has a quality resembling that

of a judicial proceeding. Hence it is frequently described as

a proceeding of a quasi judicial character. The requirement

of a ‘full hearing’ has obvious reference to the tradition of

judicial proceedings in which evidence is received and

weighed by the trier of the facts. The ‘hearing’ is

designed to afford the safeguard that the one who

decides shall be bound in good conscience to

consider the evidence, to be guided by that alone,

and to reach his conclusion uninfluenced by

extraneous considerations which in other fields might

have play in determining purely executive action. The

‘hearing’ is the hearing of evidence and argument. If the

one who determines the facts which underlie the order has

not considered evidence or argument, it is manifest that

the hearing has not been given.[247]

Morgan worked its way through the courts and the Supreme Court numerous times

over a multi-year period.248

embraces not only the right to present evidence, but also a reasonable opportunity to know

the claims of the opposing party and to meet them. The right to submit argument implies

that opportunity; otherwise the right may be but a barren one. Those who are brought into

contest with the Government in a quasi-judicial proceeding aimed at the control of their

activities are entitled to be fairly advised of what the Government proposes and to be heard

upon its proposals before it issues its final command.”).

246

Morgan, 298 U.S. at 480-81.

247

Id. at 480-81.

See, e.g., Morgan v. United States, 298 U.S. 468 (1936); 304 U.S. 1 (1938); 307 U.S.

183 (1939); 313 U.S. 409 (1941).

248

Similarly, in Interstate Commerce Commission v. Louisville & Nashville

Railroad Co., the Supreme Court rejected the government’s attempt to defend a

Commission agency decision in conflict with the hearing record.249 The Supreme

Court held that the law gave the parties a right to a hearing, the right to know of

and challenge the evidence against it,250 and imposed upon the agency the duty that

the decision be decided in accordance with the facts proved at that hearing.251

The Court stated as follows:

But the statute gave the right to a full hearing, and that

conferred the privilege of introducing testimony, and at

the same time imposed the duty of deciding in

accordance with the facts proved. A finding without

evidence is arbitrary and baseless. And if the government’s

contention is correct, it would mean that the Commission

had a power possessed by no other officer, administrative

body, or tribunal under our government. It would mean

that, where rights depended upon facts, the Commission

could disregard all rules of evidence, and capriciously make

findings by administrative fiat. Such authority, however

beneficently exercised in one case, could be injuriously

exerted in another, is inconsistent with rational justice,

and comes under the Constitution’s condemnation of all

arbitrary exercise of power.[252]

249

227 U.S. 88, 90 (1913).

227 U.S. at 93 (“. . . [F]or manifestly there is no hearing when the party does not

know what evidence is offered or considered, and is not given an opportunity to test,

explain, or refute. . . . All parties must be fully apprised of the evidence submitted or to be

considered, and must be given opportunity to cross-examine witnesses, to inspect

documents, and to offer evidence in explanation or rebuttal. In no other way can a party

maintain its rights or make its defense. In no other way can it test the sufficiency of the

facts to support the finding . . . .”).

250

227 U.S. at 91-92 (“In the comparatively few cases in which such questions have

arisen it has been distinctly recognized that administrative orders, quasi judicial in

character, are void if a hearing was denied; if that [hearing] granted was inadequate or

manifestly unfair; if the finding was contrary to the ‘indisputable character of the

evidence’ or if the facts found do not, as a matter of law, support the order made.”)

(internal citations omitted).

251

252

Id. at 91.

The Commission was not empowered to ignore the hearing record and trial

examiner’s adjustment when determining whether a rate was unreasonable.253

This resulted in an extra-record or arbitrary decision.

With this background, the AG Committee appreciated that courts on judicial

review would ask several questions, and these became a basis for ideal formal

procedure set out in the proposed draft:

Are notice and hearing prerequisite to the validity of the

administrative action? If so, what kind of notice and what

kind of hearing? Before whom may the hearing be held and

by whom must the administrative determination be made?

Was the aggrieved party given proper opportunity to

present relevant evidence and to contest evidence used by

the agency? Is the administrative decision required to be

based only on evidence of record and, if so, did the agency

take into consideration evidence not made part of the

record? Is the agency required to formulate findings as a

basis for its action and, if so, did it properly make the

required findings? These are questions which the court

may ask on review and the answers to which may

determine the validity of the administrative action.[254]

These requirements became the substance of “formal procedure”

implemented by the reform effort.255 With particular significance to our matter, if

253

Id. at 91, 92.

254

FINAL REPORT, supra note 225, at 88 (citing Morgan).

255

Id. at 62:

There are certain criteria of fairness in the hearing process

which, in the absence of clear evidence of inapplicability in

particular circumstances, should regularly be observed. Before

adverse action is to be taken by an agency, whether it be denying

privileges to an applicant or bounties to a claimant, before a

cease-and-desist order is issued or privileges or bounties are

permanently withdrawn, before an individual is ordered directly

to alter his method of business, or before discipline is imposed

upon him, the individual immediately concerned should

be apprised not only of the contemplated action with

sufficient precision to permit his preparation to resist,

but, before final action, he should be apprised of the

the statute required a hearing, courts recognized a requirement that the record and

decision be based upon the evidence adduced at that hearing out of due process

concerns.256 During the AG Committee and Senate Judiciary Committee hearings

on formal procedure for adjudications, these cases and others were identified. In

particular, Louisville & Nashville Railroad Co. was identified as one of the sources

of Section 301’s language—that the agency decision be based on the record at

hearing.257

These cases had the effect of tethering the decision to the hearing record;

judicial review required a record and decision on the record supported by

substantial evidence.258 “Whatever may be the practice before administrative

tribunals then, the constitutional theory is plain; an administrative tribunal must

evidence and contentions brought forward against him

so that he may meet them. He must be offered a forum

which provides him with an opportunity to bring his own

contentions home to those who will adjudicate the

controversy in which he is concerned. The forum itself must

be one which is prepared to receive and consider all that he offers

which is relevant to the controversy.

These may properly be termed the fundamentals ordinarily

requisite to a fair hearing leading to adverse action against an

individual.

256

Supra notes 241, 250-54 and accompanying text.

257

Mr. Aitchison, Commissioner of the Interstate Commerce Commission commented:

. . . The final qualification, “and, if a hearing be held,

determine only upon the basis of a record made in the

course of such hearing,” is intended, of course, to differentiate

between cases of the familiar type of the Norwegian Nitrogen

case, 288 U.S. 294, and the Louisville & Nashville case, 227 U.S.

88, 91, where it was held that the statutory right to a full

hearing “imposes the duty of deciding in accordance with

the facts proved.” This distinction we consider to be sound:

Experience readily indicates the line of division between cases

where the hearing is, at most, advisory, and those where it is allcontrolling; and this line of division should be maintained.

HEARINGS, supra note 228, at 453-54.

FINAL REPORT, supra note 225, at 88 (identifying that reviewing courts will review

factual questions and questions of law under appropriate standards); id. at 134

(recommending that denial of applications be given the opportunity for a hearing so that

the record at hearing could serve as a source for judicial review).

258

act only on information presented to it at a hearing.”259 The AG Committee wrote in

the FINAL REPORT:

The parties, then, are entitled to be apprised of the data

upon which the agency is acting. They are entitled not only

to refute but, what in this situation is usually more

important, to supplement, explain, and give different

perspective to the facts upon which the agency relies. In

addition, upon judicial review, the court must be informed

of what facts the agency has utilized in order that the

existence of supporting evidence may be ascertained.[260]

All reform roads lead to the statutory hearing. The statutory hearing was the

foundational block for APA reform. Before the APA was enacted, many enabling

statutes required hearings for quasi-judicial action, perhaps because it had been a

long-standing requirement of courts that agencies do so. When Congress, in existing

agency statutes, required hearings for disputes involving individual rights and legal

relations, this triggered proposed reform ensuring that agencies comply with formal

procedure set out in the proposed legislation.261

B. “On the Record” is Part of Determination Following Agency Hearing

Under Section 301, formal procedure was limited to enabling statutes

requiring a hearing before adjudication. The accompanying language requiring the

decision to be made “upon the record” is part and parcel of the entire interwoven

fabric of reforms. To specify that the decision must be “on the record” is not

necessary if one is discussing a quasi-judicial hearing involving rights where the

statute requires hearing before decision. It is not so much that the enabling statute

259

Hale, supra note 237, at 156 (citations omitted) (summarizing cases).

260

FINAL REPORT, supra note 225, at 72.

Supra note 232; SEN. DOC. NO. 79-248 at 330 (“The [] bill is designed primarily to

secure publicity of administrative law and procedure, to require that administrative

hearings and decisions shall be conducted in such manner as to preclude the secret

reception of evidence or argument, to restate but not expand the right of and procedures for

judicial review, and to foster the foregoing by requiring an intra-agency segregation of

deciding and prosecuting functions and personnel. No attempt is made to require

formal administrative hearings where the law under which the agency operates

has not so required. No attempt is made to limit existing administrative authority.

Agencies are simply confined to the scope of their authority.”).

261

required the agency decision to be “on the record” as it provided for an agency

hearing in connection with the agency’s order or adjudication. The “on the record”

text fits interstitially between the statutory pillars of (1) agency making a decision

and (2) that decision taking place after notice and opportunity for hearing. The

common statutory grant for agency adjudication does not merely state that notice

and a hearing take place but that the order “be determined upon” . . . “agency finds

after”. . . “be based on” . . . “made upon” a hearing.262 It is tautological that if

Congress has specified that the agency’s decision must be made following notice and

opportunity for hearing, that the agency’s decision be based on that hearing

record.263 The Supreme Court in the Chicago Junction Case264 observed that

Congress’s choice to provide a hearing before an opinion created a quasi-judicial

action wherein evidence is introduced and judgment follows the record thereof:

Congress by using the phrase ‘whenever the Commission is

of opinion, after hearing,’ prescribed quasi judicial action.

Upon application of a carrier, the Commission must form a

judgment whether the acquisition proposed will be in the

public interest. It may form this judgment only after

hearing. The provision for a hearing implies both the

privilege of introducing evidence and the duty of deciding

in accordance with it. To refuse to consider evidence

introduced or to make an essential finding without

supporting evidence is arbitrary action.[265]

During the Senate Judiciary Committee’s hearings, agencies commented that

there was some confusion around the proposed Section 301 language. One agency

questioned the awkwardness of Section 301’s language for both a statutory hearing,

but also a conditional that “if a hearing be held” by resolving: “certainly it must be

implicit in any statutory requirement for hearing that decision will be made upon

the record.”266

262

Supra note 232.

263

Supra notes 241, 250-54, 257 and accompanying text.

264

264 U.S. 258 (1924).

265

264 U.S. at 264-65 (footnotes omitted).

266

HEARINGS, supra note 228, at 546.

One explanation for why draftsmen chose the language they did was that

some agencies pre-APA had loose language or procedures for what they deemed a

“hearing.” Oral arguments, narratives, or conferences might be viewed as a hearing

even though they were not adversarial,267 i.e., they were not in front of trial

examiners with evidence and argument from opposing parties constituting the

hearing record upon which the decision was made concerning the rights of parties.

In a statement to the Senate Judiciary Committee, the DOJ observed the

general theme throughout the APA reform effort that informal adjudication is

preferred, but for those areas where there is a trial examiner, the agency holds a

formal hearing, and its decision is required to be based upon the formal record

developed at hearing:

The most important factor is that the bill is not intended to

change existing informal procedures. The hearingcommissioner system is, in general, to be used only

where the trial examiner system is now in effect.

Where the agency does not hold a formal hearing

and where its decision is not required to be based

upon the formal record of that formal hearing (the

situation where the trial examiner system is most

commonly used), the provisions of sections 302 and

309 of S. 675 are not intended to apply. In no case is

a formal hearing before a hearing commissioner

intended to be required where no formal hearings

are now required by law to be held.

Nevertheless, some confusion seems to exist concerning the

applicability of S. 675 to informal adjudications. This

apparently is because some agencies, such as the Bureau

of Internal Revenue and the Veterans’ Administration,

attach a different meaning to the word “hearing” and to the

word “record” than that attached to those words by the bill.

Representatives of those agencies feel that any sort of

hearing, including ordinary conferences or the sort of

narrative oral argument taking place before the Veterans’

Abilene & S. Ry. Co., 265 U.S. at 289 (“Every proceeding is adversary, in substance,

if it may result in an order in favor of one [party] as against another.”).

267

Administration, are included. They also regard that a file

of information may be interpreted to be a “record.” Of

course, one can scarcely envisage an administrative

decision of any sort which is not based upon a file. But the

requirement of section 301 is that the record be

made in the course of the hearing. This seems to

exclude situations where decision is made in part

upon the basis of some sort of informal hearing and

in part on the file, since the file clearly is not the

record made in the course of such hearing.[268]

Reformers needed to address ambiguity to preserve the important line

between formal and informal procedure. For adjudicatory hearings, the evidence is

gathered at hearing and the decision is made on the basis of that record at

hearing.269 When considering these requirements for full hearing and adjudication,

it is needless to state that the agency decision be determined on the record.270 To

allow adjudication to include extra-record material on disputes involving rights of

parties would run contrary to judicial standards cited by courts on review and

reverse the reform effort.271

2. McCarran-Summers S. 7 in 1945-1946

Following the Senate Judiciary Committee hearings in 1941, World War II

intervened and occupied concern. Congress picked up the issue of reforming

administrative procedure in 1944. Senator McCarran introduced S. 7 in early

January 1945.272 Accompanying S. 7, Congressman Summers introduced an

268

HEARINGS, supra note 228, at 1500-01.

Id. at 831 (“Although comparatively few cases reach the stage of formal

adjudication—and by that I mean full hearing where testimony is under oath and subject to

cross-examination and where the ultimate decision must be based solely on such testimony

and evidence—positions are strongly held, interests clash, and issues are often difficult and

technical.”).

269

Magaw, Part II, supra note 237, at 411 (“Corollary to the right of cross-examination

is the well settled rule that the decision of the administrative body must be based on

evidence of record. . . .”); see also supra notes 241, 250-54, 257, 262-263, and accompanying

text.

270

271

Supra notes 237-254.

272

SEN. DOC. NO. 79-248 at 300.

identical bill, H.R. 1203, in the House.273 At this point, the draft APA was the

culmination of almost ten years of investigation, deliberation, and craftsmanship by

judges, practitioners, agencies, and congressmen.274

A. Section 301 became Section 5 in S. 7

What was Section 301 in the earlier effort became Section 5 in the 1945 draft

of S. 7. The draftsmen of the Senate Judiciary Committee had taken up the

recommendations provided to the Senate Judiciary Committee in 1941 and changed

“required by law” to “required by statute.”275 They removed the “if there is a hearing

. . . on the basis of a record” clause completely.276

In a set of revisions in early 1945, S. 7’s gatekeeper language for adjudication

was revised to add back “on the record” in the form it would take in the enacted

version of Section 5 (currently in Section 554):

Sec. 5. In every case of adjudication required by statute

to be determined on the record after opportunity for

an agency hearing,[277] except to the extent that there is

273

Id. at 11, 300-01.

274

Id. at 48.

275

See, e.g., HEARINGS, supra note 228, at 209, 1456 (recommending changes).

The reproduced June 1945 Committee Print indicates that the Committee chose not

to include the initial language of S. 7 because it is identical to H.R. 1203, which was

included. SEN. DOC. NO. 79-248, at 11. H.R. 1203 (S. 7’s initial draft) provided for Section 5

as follows:

276

Section 5. In every case of adjudication required by statute to

be determined after opportunity for an agency hearing, except

to the extent there is directly involved any matter subject to a

subsequent trial of the law and the facts de novo . . . .

SEN. DOC. NO. 79-248, at 157. The Committee then took additional comment and made a set

of revisions for the June Print. Id.

Section 301 had stated that formal procedure is required if the “law” requires a

hearing and, if a hearing be held, “only upon the basis of a record.” The “if a hearing be held

. . .” language is itself a conditional. Why have a conditional “if a hearing be held . . .” on top

of a requirement that presupposes a hearing by statute? The answer may be because the

language “opportunity for hearing” accounts for the situation where a statutory hearing

might not take place due to settlement or default proceedings. So, if we reformulate the

277

involved (1) any matter subject to a subsequent trial of the

law and the facts de novo in any court, (2) the selection or

tenure of an officer or employee of the United States, (3)

proceedings in which decisions rest solely on inspections,

tests, or elections, (4) the conduct of military, naval, or

foreign affairs function, (5) cases in which an agency is

acting as an agent for a court, and (6) the certification of

employee representatives—[278]

Throughout the subsequent discussions on the draft, the language relevant to

our discussion does not change for adjudications.279 The reformatting and inclusion

of “on the record” in its final form in the June 1945 draft does not appear to be a

substantive change. The draftsmen explained these changes and included other

notes and suggestions but did not provide any comment on the change of adding “on

the record” back into the test.280 Numerous times, universally or near universally,

when draftsmen and commentators discussed the meaning of or explained the

gatekeeper test for formal adjudication, they did so without discussing the “on the

record” language. Rather, the language triggering formal procedure was described

simply in the form: formal procedure is required when the agency’s statute requires

“hearing before adjudication” or “adjudication after notice and opportunity for

hearing.”

Critically, when explaining the revised draft quoted above with “on the

record” included in final form, the Senate Judiciary Committee explained:

. . . The introductory clause removes from the operation of

sections 5, 7, and 8 all administrative procedures in which

Congress has not required orders to be made upon a

requirement without accounting for nonparticipation, the easiest way to combine the

phrases is to move “upon the basis of a record” behind “to be determined” as follows:

[T]he formal procedure set out in the subsequent provisions

shall be applicable only to proceedings wherein rights, duties, or

other legal relations are required by law to be determined upon

the basis of a record after opportunity for hearing.

This is very similar to the final version of Section 5.

278

SEN. DOC. NO. 79-248 at 21.

279

Id. at 4, 21.

280

Id. at 21-22.

hearing, . . . Limiting application of the sections to those

cases in which statutes require a hearing is particularly

significant, because thereby are excluded the great mass of

administrative routine as well as pensions, claims, and a

variety of similar matters in which Congress has usually

intentionally or traditionally refrained from

requiring an administrative hearing.[281]

This explanation, one of the most informed explanations available for the

final gatekeeper test, ignores “on the record” as a unique facet and generalizes that

Section 5 limits formal procedures to those cases where Congress has required

orders to be made upon a hearing. The proper way to look at this gatekeeper

language is that formal procedures apply when “Congress has required orders

be made upon [a record developed at] a hearing” or a variation thereof.

The statutory hearing implies a record and a decision upon that record.282

This understanding of not attaching significance to the words “on the record”

carries throughout the course of the congressional debates leading up to the APA’s

passage. Subsequent explanations, as the draft language worked through the House

and Senate in 1945 and 1946 and received further input from agencies and

interested parties, yields the same explanation.

In a section-by-section analysis of a November 1945 draft of S. 7, Senator

McCarran described the gatekeeper test of Section 5:

The various subsequent provisions of section 5 relating to

adjudications apply only where the case is otherwise

required by statute to be determined upon an

Id. at 21-22; see also id. at 22 (further references in explanation and suggestions

affirming that the test is “required by statute to be made after hearing”); id. at 23

(regarding subsection (a) “notice” provision of Section 5, the Committee explained

“Since this section, and thereby sections 7 and 8 relating to hearings and decisions, applies

only where statutes require a hearing, notice of hearing is an obvious and

indispensable requisite.”); see also id. at 28 (in re Section 7 on hearings, the Committee

explained that Section 7 is “not designed to require hearings where Congress has

not already done so by statute.”); id. at 79 (House Judiciary Committee Hearings June

1945) (“[formal adjudication] shall [not] apply to any case unless Congress has

specifically

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