Reply Brief — Signet Builders, Inc., Petitioner v. Jose Ageo Luna Vanegas

No. 22-869

In the

Supreme Court of the United States

________________

SIGNET BUILDERS, INC.,

v.

Petitioner,

JOSE AGEO LUNA VANEGAS,

________________

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the

Seventh Circuit

________________

REPLY BRIEF

________________

ANN MARGARET POINTER PAUL D. CLEMENT

JOSHUA H. VIAU

Counsel of Record

EDWARD N. BOEHM, JR. MATTHEW D. ROWEN*

FISHER &

CHADWICK J. HARPER*

PHILLIPS, LLP

CLEMENT & MURPHY, PLLC

1230 Peachtree St. NE

706 Duke Street

Suite 3300

Alexandria, VA 22314

Atlanta GA 30309

(202) 742-8900

(404) 231-1400

paul.clement@clementmurphy.com

*Supervised by principals of the

firm who are members of the

Virginia bar

Counsel for Petitioner

June 28, 2023

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................... ii

REPLY BRIEF ............................................................ 1

I.

The Decision Below Openly Defies Encino

And Other Precedents Of This Court ................. 2

II. The Decision Below Creates Conflicts With

Other Circuits And Between The FLSA And

The H-2A Visa Program ...................................... 5

III. The Questions Presented Are Important, And

This Is A Clean Vehicle ..................................... 10

CONCLUSION ......................................................... 13

ii

TABLE OF AUTHORITIES

Cases

Alexander v. Sandoval,

532 U.S. 275 (2001).................................................. 8

Bills v. Cactus Fam. Farms, LLC,

5 F.4th 844 (8th Cir. 2021) ...................................... 6

BP P.L.C.

v. Mayor & City Council of Baltimore,

141 S.Ct. 1532 (2021)............................................... 2

Christopher v. SmithKline Beecham Corp.,

567 U.S. 142 (2012).................................................. 9

City of Tahlequah v. Bond,

142 S.Ct. 9 (2021)................................................... 12

Encino Motorcars, LLC v. Navarro,

138 S.Ct. 1134 (2018)....................................... 1, 2, 4

Food Mktg. Inst. v. Argus Leader Media,

139 S.Ct. 2356 (2019)............................................... 2

Holly Farms Corp. v. NLRB,

517 U.S. 392 (1996).................................................. 8

MOAC Mall Holdings LLC

v. Transform Holdco LLC,

143 S.Ct. 927 (2023)............................................... 12

Nat’l Cas. Co. v. White Mountains

Reinsurance Co. of Am.,

735 F.3d 549 (7th Cir. 2013).................................. 12

Nat’l Pork Producers Council v. Ross,

143 S.Ct. 1142 (2023)............................................. 11

Raley v. State of Ohio,

360 U.S. 423 (1959).................................................. 9

iii

Ramirez

v. Statewide Harvesting & Hauling, LLC,

997 F.3d 1356 (11th Cir. 2021)................................ 5

Regulations

20 C.F.R. §655.141...................................................... 9

29 C.F.R. §780.145...................................................... 6

29 C.F.R. §780.2.................................................. 1, 3, 4

REPLY BRIEF

Luna-Vanegas scarcely tries to defend the

Seventh Circuit’s declaration that, “[l]ike all FLSA

exemptions, the agricultural exemption must be

‘narrowly construed against the employer seeking to

assert [it].’” App.7 (quoting 29 C.F.R. §780.2). For

good reason—it is indefensible in a system that relies

on vertical stare decisis. Luna-Vanegas nonetheless

insists the Seventh Circuit did not mean what it said,

and that despite invoking the narrow-construction

rule “at the outset” of its analysis, App.7, the decision’s

starting point was unrelated to its end. In reality, the

narrow-construction rule clearly tainted the balance of

the opinion, including its dismissal of DOL’s practice

of approving H-2A visa applications from companies

like Signet that make plain that foreign workers will

work more than 40 hours a week in secondary

agriculture without receiving overtime—approvals

that are inexplicable unless on-farm construction of

livestock facilities falls within the agriculture

exemption. The panel’s decision ignored that reality

as clearly as it ignored this Court’s precedent in

Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134

(2018). As amici from across the country attest, that

not only brazenly disregards this Court’s precedent

but threatens a program that has proven critical to

American agriculture and provides a path to lawful

U.S. employment for many guestworkers like LunaVanegas. Through summary reversal or plenary

review, this Court should make clear that it meant

what it said in Encino and that lower courts have no

more license to disregard that decision than they do to

construe FLSA exemptions narrowly.

2

I.

The Decision Below Openly Defies Encino

And Other Precedents Of This Court.

This Court has been clear: “[T]he principle that

exemptions to the FLSA should be construed

narrowly” is no longer “a useful guidepost for

interpreting the FLSA.” Encino, 138 S.Ct. at 1142.

Leaving no room for doubt, this Court has reiterated

that courts “normally have no license to give statutory

exemptions anything but a fair reading,” Food Mktg.

Inst. v. Argus Leader Media, 139 S.Ct. 2356, 2366

(2019) (alterations omitted) (citing Encino), as

“[e]xceptions and exemptions are no less part of

Congress’s work than its rules and standards—and all

are worthy of a court’s respect,” BP P.L.C. v. Mayor &

City Council of Baltimore, 141 S.Ct. 1532, 1539 (2021)

(citing Encino).

But that clear teaching appears to have eluded

the Seventh Circuit and DOL. Instead, the Seventh

Circuit, invoking regulations DOL has not bothered to

update, resolved this case on the premise that “the

agricultural exemption must be ‘narrowly construed

against the employer seeking to assert it.’” App.7.

From

that

errant

beginning,

the

court

(unsurprisingly) concluded that Signet had not shown

that its former employee, Luna-Vanegas, came within

the narrowly construed agriculture exemption.

App.15. None of that is reconcilable with Encino and

its progeny.

Luna-Vanegas does not really argue otherwise or

try to defend the Seventh Circuit’s defiance of Encino.

Nor could he. There is no defense of a decision that is

unashamedly premised on a substantive canon this

Court has specifically interred and that conflicts with

3

this Court’s precedents and the decisions of every

circuit that has faithfully followed them. Pet.16-27.

And the invocation of anachronistic DOL regulations

only makes matters worse. If agencies want to claim

that their regulations have the force of law, they are

duty-bound to revisit them when this Court changes

the landscape. If they decline to do so even in the wake

of a momentous change like Encino, errors are bound

to multiply.

Luna-Vanegas tries to avoid the natural

consequence of a court-of-appeals decision openly

defying this Court—summary reversal or plenary

review—through a strategy of denial. According to

Luna-Vanegas, the holding below somehow is

uncontaminated by the court’s application of the

narrow-construction rule, despite the fact that a fair

construction of the exemption would have compelled

the opposite result. BIO.20. Rather, he says, the

holding was simply about invoking an affirmative

defense at the motion-to-dismiss stage. BIO.23.

That half-hearted defense does not withstand

scrutiny and ignores the procedural posture and basic

premise of Encino. The panel kicked off its analysis

by pairing the burden Signet had to carry with the

purported narrowness of the agriculture exemption:

In approaching that question, we must recall

at the outset that Signet bears the burden of

proving that the agricultural exemption

applies. See 29 C.F.R. §780.2. Like all FLSA

exemptions, the agricultural exemption must

be “narrowly construed against the employer

seeking to assert [it]” and “limited to those

4

who come plainly and unmistakably within

[its] terms and spirit.” Id.

App.7.

Given that narrow-construction rule (and plainand-unmistakable eligibility for an exception to boot),

it is little wonder that the Seventh Circuit reversed

the district court, which was unburdened with any

misguided narrow-construction rule and, not

coincidentally, granted Signet’s motion to dismiss.

The connection between the narrow-construction rule

and the fate of Signet’s dismissal motion is

unmistakable and inevitable. Qualified immunity is

an affirmative defense, and if it were subject to a

narrow-construction rule rather than a clearlyestablished-law requirement, it would rarely be

granted. Having posited the narrow-construction

principle rejected by Encino as “a guidepost for

interpreting the FLSA,” the rejection of Signet’s

motion to dismiss followed as a matter of course.

More generally, any effort to separate the

methodological narrow-construction error from the

underlying substantive error is unfaithful to Encino

itself. Encino corrected the Ninth Circuit’s reliance on

the narrow-construction principle as part and parcel

of its rejection of the Ninth Circuit’s refusal to give the

FLSA exemption its full scope. See 138 S.Ct. at 1142.

Equally unavailing is Luna-Vanegas’ attempt to

fault Signet for moving to dismiss rather than waiting

to defend itself on summary judgment. BIO.2, 11, 15;

see also App.4 (doing same). Luna-Vanegas put the

agriculture exemption at issue in his complaint. See

Pet.9-10, 34. There is nothing improper about relying

on a defense the complaint itself put in play, as

5

evidenced by the district court’s grant of the motion.

Indeed, Encino itself was decided in the exact same

posture: an appeal from the employer’s successful

motion to dismiss raising an FLSA exemption as an

affirmative defense. As for the Seventh Circuit’s

paean to Rule 8, see BIO.20, that only makes its failure

to follow Encino all the more glaring, as Signet’s

motion to dismiss emphasized precisely what the court

missed:

“Encino … rejected the notion that

exemptions to the Fair Labor Standards Act … should

be narrowly construed.” Dist.Ct.Dkt.29 at 9.

The Seventh Circuit ignored Encino and its place

in the federal judicial system. Its invocation of

outdated DOL regulations provides no excuse, and in

fact underscores the need for this Court’s intervention.

The decision below cannot be allowed to stand.

II. The Decision Below Creates Conflicts With

Other Circuits And Between The FLSA And

The H-2A Visa Program.

Unsurprisingly in a system premised on vertical

stare decisis, the Seventh Circuit’s defiance of this

Court puts it squarely at odds with the decisions of

multiple other circuits. Courts across the country

have recognized what the panel below (and DOL)

missed: Encino laid the narrow-construction rule to

rest. See, e.g., Ramirez v. Statewide Harvesting &

Hauling, LLC, 997 F.3d 1356, 1359 (11th Cir. 2021).

Luna-Vanegas insists that the decision below

created no circuit split. But his argument is not that

other circuits have demonstrated equivalent

recalcitrance; he claims that other circuits’ postEncino opinions are distinguishable because they

reviewed decisions at different procedural stages.

6

BIO.24. But that is a distinction without a difference.

Encino was a decision about statutory construction,

not motions practice or pleading standards. Indeed,

Encino itself was decided at the motion-to-dismiss

stage. The rule that FLSA exceptions must be given a

fair construction, not a narrow one, is fundamental; it

does not kick in only at the summary-judgment stage.

Thus, the cases faithfully applying that principle at

later stages of the case are in square conflict with the

decision below.

After striving to explain away all contrary cases,

Luna-Vanegas next tries to embrace the cases on the

other side of the split. For instance, he notes that Bills

v. Cactus Fam. Farms, LLC, 5 F.4th 844 (8th Cir.

2021), cited regulatory language about the holistic

nature of the agriculture-exemption inquiry. BIO.2526; see 5 F.4th at 848-49 (discussing 29 C.F.R.

§780.145). But he ignores what the Eighth Circuit

went on to clarify: “Regardless” of the regulations, the

nature of Bills’ work was such that “the statutory

language unambiguously applies here,” and so “the

regulations’ interpretation of the statute is not

controlling.” Id. at 849 (emphasis added). Had the

Seventh Circuit given the statute a fair reading here,

it would have reached the same conclusion. Pet.24-25.

That Luna-Vanegas had no contact with animals, or

that the buildings he constructed would only later

house animals, BIO.25, is immaterial. “Regardless,”

as Bills explained, 5 F.4th at 848, and the district

court rightly observed too, App.24-25, such factors

make exactly zero difference under the statutory text.

Unable to deny the split or that the decision below

defies Encino, Luna-Vanegas makes the remarkable

7

suggestion that Encino is irrelevant here. BIO.21.

Asserting that “the circumstances in which Encino

rejected the narrow construction rule are

substantially different than the circumstances here,”

Luna-Vanegas contends that “Encino says nothing

casting doubt on the agricultural exemption

regulations at issue here.” BIO.21-22. That is double

nonsense. First, nothing in Encino is limited to

service advisors, that particular FLSA exemption, or

even the FLSA. Second, as Bills explained, the

atextual regulatory factors on which Luna-Vanegas

would focus in lieu of Encino only have purchase if one

construes the statutory exemption narrowly, rather

than fairly according to its plain text.

Turning to yet another example of how the

interred narrow-construction principle fundamentally

distorted the Seventh Circuit’s analysis, the decision

below not only split with other circuits, but ignored

DOL’s own longstanding practice of approving

clearance orders that expressly promise more than 40

hours of on-farm construction work and no overtime

pay.

See App.16-17.

That practice would be

inexplicable unless the FLSA agriculture exemption

applies to on-farm construction work. See Pet.28. But

to the Seventh Circuit, DOL’s practice was

meaningless, because “[t]he current regulations define

agricultural labor for purposes of the H-2A program to

include” not just “‘agricultural labor’ as defined in

FLSA,” but also “‘agricultural labor’ as defined (more

broadly) in the Tax Code.” App.16 (emphasis added).

Given that the two provisions are materially similar,

see Pet.27-28, that distinction makes sense only on the

misguided assumption that the FLSA exemption gets

read narrowly, and the tax code definition gets read

8

fairly. Otherwise, there is no basis for reading

comparable statutory text to have substantially

different coverage.

Luna-Vanegas asserts a broader sweep for the tax

code by invoking a footnote from Holly Farms Corp. v.

NLRB, 517 U.S. 392, 399 n.6 (1996), that itself relied

on snippets of legislative history in comparing the

FLSA’s definition of agriculture to the definition of

“agricultural labor” found in the Social Security Act

Amendments of 1939—which is akin to the tax code’s

definition.

See BIO.31-32.

That is doubly

anachronistic.

Not only is this Court far less

impressed by legislative history, but Holly Farms

itself is a product of the pre-Encino regime. Thus,

even on the unlikely assumption that DOL viewed the

tax code definition as broader than the FLSA

definition based on a footnote in Holly Farms, that

would be a reason in favor of this Court granting

review to clear up the confusion. A DOL official giving

FLSA exemptions unduly narrow constructions based

on penumbras from pre-Encino footnotes is scarcely

better than an appellate court continuing to give

narrow constructions based on a never-updated DOL

regulation. Either way, the effort to have one last

taste of the fruits of the ancien régime demands

correction. Cf. Alexander v. Sandoval, 532 U.S. 275

(2001).

Furthermore, and like the Seventh Circuit before

him, Luna-Vanegas turns a blind eye to what it means

for DOL to have consistently signed off on job orders

that promise more than 40 hours a week of work and

no overtime pay. Signet’s openly declared practice is

hardly unique. See Ag.Installers.Amicus.6, 21-22.

9

Luna-Vanegas suggests that DOL is stretched too thin

to enforce the law. BIO.29-30, 33-34. That is an

unlikely explanation for years of nonenforcement

related to an open and notorious practice. Pet.28-29.

Rather, “the more plausible hypothesis is that the

Department did not think the industry’s practice was

unlawful.” Christopher v. SmithKline Beecham Corp.,

567 U.S. 142, 158 (2012) (quotation marks omitted).

And, tellingly, Luna-Vanegas still has not pointed to a

single enforcement action against agricultural

construction firms like Signet for failing to pay

overtime. If a watchdog never barks, that is powerful

evidence that there has been no trespass.

Luna-Venegas asserts that

Signet’s job

description did not give DOL enough information to do

its job. BIO.29-20. But DOL has a specific remedy

when it lacks necessary information: It must provide

a Notice of Deficiency if it thinks a job order “is

incomplete, [or] contains errors or inaccuracies.” 20

C.F.R. §655.141(a). It could hardly be otherwise. If

DOL simply rubberstamped applications without

considering their legality, it would be blessing

rampant lawlessness and an employer who relied on

the Executive’s approval could then find itself subject

to expensive litigation and potentially crushing

liability. No one should lightly assume that DOL

negligently lays a trap for employers going to great

lengths to facilitate the lawful employment of foreign

workers. Cf. Raley v. State of Ohio, 360 U.S. 423, 438

(1959) (“convicting a citizen for exercising a privilege

which the State clearly had told him was available to

him” is “the most indefensible sort of entrapment”).

10

In sum, the Seventh Circuit’s decision pits it

against every circuit in the country that has faithfully

followed Encino and conflicts with DOL’s longrunning and widespread practice of approving job

orders for this sort of on-farm construction work as

overtime exempt. That precedent-defying, circuitsplitting error cries out for reversal.

III. The Questions Presented Are Important,

And This Is A Clean Vehicle.

Whether Encino remains the law of the land even

in Chicago and at DOL and how the agriculture

exemption applies to on-farm construction work are

both crucial questions, as numerous amici attest.

That an appellate court in America’s agricultural

heartland has gotten both questions wrong only

heightens the stakes.

At minimum, the Court should summarily reverse

and remand for further proceedings consistent with

Encino. But it should go further, as the decision below

has significant implications for American agriculture

and foreign guestworkers. As amici point out, DOL

has long treated on-farm agricultural construction

work as exempt from the overtime requirements of the

FLSA. See Ag.Installers.Amicus.7. That makes

sense:

The nature and timing of agricultural

construction must move with the seasons and sync up

with farmers’ needs, and as a result, it calls for long

days of hard work that do not fit the 40-hour

workweek FLSA envisions. Ag.Installers.Amicus.1518. And the H-2A program provides nonimmigrant

workers a way to attain gainful and lawful

employment in the United States. That, in turn, helps

11

American farmers feed the nation and the world.

NPPC.Amicus.17.

And the need for agricultural construction firms

with specialized skills has never been greater.

Consumer demand (and California law) has shifted,

prioritizing animal welfare in ways that require more

sophisticated confinement facilities. Cf. Nat’l Pork

Producers Council v. Ross, 143 S.Ct. 1142 (2023).

While earlier farmers could have rallied the

community to help them build a standard barn, these

sophisticated modern structures practically require

specialist ag-construction firms like Signet. Pet.32-33.

The Seventh Circuit’s narrowly construed vision of

agriculture—which makes it nearly impossible for

independent contractors like Signet to fit the bill, see,

e.g., Texas.Cattle.Feeders.Amicus.20 (“It would be

difficult to identify work more completely meeting the

definition of ‘as an incident to or in conjunction with

the raising of livestock.’”)—thus flouts economic

reality along with Encino and the FLSA’s plain text.

Against all of that, Luna-Vanegas invokes

purported vehicle problems. None has merit. For

instance, Luna-Vanegas claims that Signet forfeited

reliance on the clear statutory text because it argued

that the regulations supported its position below.

BIO.18. The premise is false: Signet argued that the

statute should control and that Luna-Vanegas’

arguments (which the Seventh Circuit embraced)

misunderstood the regulations.

CA7.Resp.Br.8-9.

Nor can Signet be faulted for not invoking Encino by

name in its panel-stage briefing. Luna-Vanegas did

not invoke the narrow-construction rule, and Signet

cannot be blamed for failing to anticipate the Seventh

12

Circuit’s sua sponte resurrection of the narrowconstruction principle. Indeed, when Signet made

Encino the centerpiece of its rehearing motion, it

received only a prompt denial.

Luna-Vanegas also insists that goings-on in the

district court will soon render this petition moot.

BIO.35. But unless and until it is vacated, the

decision below will arguably be law of the case. See

Nat’l Cas. Co. v. White Mountains Reinsurance Co. of

Am., 735 F.3d 549, 554 (7th Cir. 2013). Summarily

reversing—at least as to its anti-Encino declaration

about how the agricultural exemption should be

construed—would grant Signet “effectual relief” on a

going-forward basis. MOAC Mall Holdings LLC v.

Transform Holdco LLC, 143 S.Ct. 927, 934 (2023).

Finally, the plainness of the Seventh Circuit’s

error is, in this way (and this way alone), a virtue

rather than a vice: It makes correcting it all the

simpler. To whatever extent there might be some

dispute about the facts or relevant allegations, there

can be no real dispute that the Seventh Circuit was

wrong to resurrect the narrow-construction rule that

this Court has repeatedly interred. In this context, the

strong medicine of summary reversal is more than

warranted. See, e.g., City of Tahlequah v. Bond, 142

S.Ct. 9, 11 (2021) (per curiam) (summarily reversing a

court of appeals decision that failed to heed this

Court’s “repeated[]” admonitions “not to define clearly

established law at too high a level of generality”). But

given the importance of the agricultural exemption—

and the importance of vindicating exemptions at the

motion-to-dismiss stage, as in Encino itself—the

13

better course is to grant plenary review, give the

agriculture exemption a fair reading, and reverse.

CONCLUSION

This Court should grant the petition.

Respectfully submitted,

ANN MARGARET POINTER PAUL D. CLEMENT

JOSHUA H. VIAU

Counsel of Record

EDWARD N. BOEHM, JR. MATTHEW D. ROWEN*

FISHER & PHILLIPS, CHADWICK J. HARPER*

LLP

CLEMENT & MURPHY, PLLC

1230 Peachtree St. NE 706 Duke Street

Suite 3300

Alexandria, VA 22314

Atlanta, GA 30309

(202) 742-8900

paul.clement@clementmurphy.com

(404) 231-1400

*Supervised by principals of the

firm who are members of the

Virginia bar

Counsel for Petitioner

June 28, 2023