Sun Valley Orchards, LLC v. U.s. Department of Labor

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 23-2608
____________
SUN VALLEY ORCHARDS, LLC,
Appellant
v.
U.S. DEPARTMENT OF LABOR; UNITED STATES
SECRETARY OF LABOR
____________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 1:21-cv-16625)
District Judge: Hon. Joseph H. Rodriguez
__________
Argued on April 10, 2025
Before: HARDIMAN, PORTER, and SMITH, Circuit
Judges.
(Filed: July 29, 2025)
Robert M. Belden
Institute for Justice

-- 1 of 20 --

2
901 N. Glebe Road
Suite 900
Arlington, VA 22203
Robert E. Johnson [Argued]
Institute for Justice
16781 Chagrin Boulevard
Suite 256
Shaker Heights, OH 44120
Counsel for Appellant
Daniel J. Aguilar [Argued]
U.S. Department of Justice
Civil Division
950 Pennsylvania Avenue NW
Room 7266
Washington, D.C. 20530
Counsel for Appellees
Adina H. Rosenbaum
Nicolas A. Sansone
Allison M. Zieve
Public Citizen Litigation Group
1600 20th Street NW
Washington, D.C. 20009
Counsel for Amicus Curiae Public Citizen in
Support of Appellees

-- 2 of 20 --

3
___________
OPINION OF THE COURT
____________
HARDIMAN, Circuit Judge.
The United States Department of Labor (DOL) alleged
that Sun Valley Orchards, a New Jersey farm, breached an
employment agreement formed under the H-2A nonimmigrant
visa program. Instead of pursuing its case in a federal district
court, DOL imposed hundreds of thousands of dollars in civil
penalties and back wages through in-house administrative
proceedings. Sun Valley challenged this order under the
Administrative Procedure Act, but the District Court dismissed
its claims. Following the Supreme Court’s recent decision in
SEC v. Jarkesy, 603 U.S. 109 (2024), we hold that Sun Valley
was entitled to have its case decided by an Article III court. We
will reverse.
I
A
Under the H-2A nonimmigrant visa program, domestic
employers may temporarily hire foreign laborers to perform
seasonal agricultural work. See 8 U.S.C.
§ 1101(a)(15)(H)(ii)(a). Because the program exists at the
intersection of labor and immigration law, it is administered
jointly by DOL and the Department of Homeland Security
(DHS). Prospective H-2A employers must obtain two forms of
authorization: a labor certification from DOL and a visa
petition approval from DHS. See id. § 1188(a).

-- 3 of 20 --

4
This case arises from regulations under the labor
certification process. The Immigration and Nationality Act
(INA) requires prospective H-2A employers to demonstrate
that:
(A) there are not sufficient workers who are able,
willing, and qualified, and who will be available
at the time and place needed, to perform the labor
or services involved in the petition, and
(B) the employment of the alien in such labor or
services will not adversely affect the wages and
working conditions of workers in the United
States similarly employed.
Id. § 1188(a)(1).
To satisfy that statutory requirement, employers must
first attempt to recruit U.S. workers. See id. § 1188(b)(4); 20
C.F.R. § 655.121(f). To that end, employers must offer U.S.
workers “no less than the same benefits, wages, and working
conditions” that the employer offers H-2A workers. 20 C.F.R.
§ 655.122(a). Regulations dictate what benefits H-2A
workers—and therefore, corresponding U.S. workers—must
receive. See generally id. § 655.122. Relevant here, employers
must provide no-cost housing, see id. § 655.122(d)(1), access
to a kitchen or meal plan, see id. § 655.122(g), and
transportation to the work site, see id. § 655.122(h). These
conditions are incorporated into a “job order,” which is posted
domestically before it is circulated to foreign workers. Id.
§ 655.121(f).
The job order functions as a work contract absent a
written agreement, and DOL may enforce its terms. See id.

-- 4 of 20 --

5
§ 655.122(q). Federal law authorizes the Secretary of Labor “to
take such actions, including imposing appropriate penalties
and seeking appropriate injunctive relief and specific
performance of contractual obligations, as may be necessary to
assure employer compliance with terms and conditions of
employment under” the H-2A program. 8 U.S.C. § 1188(g)(2).
Relying on that language, DOL has promulgated regulations
authorizing its Wage and Hour Division to impose civil
penalties and back wages on participating employers.1 See 29
C.F.R. § 501.16; 20 C.F.R. § 655.101(b).
An employer targeted for enforcement may request a
hearing before an Administrative Law Judge (ALJ). See 29
C.F.R. § 501.33. ALJs are removeable by the Secretary of
Labor for cause, see 5 U.S.C. § 7521(a), and the Federal Rules
of Evidence do not apply to their proceedings, see 29 C.F.R.
§ 501.34. ALJ decisions become final unless review is taken
by the Administrative Review Board. See id. § 501.42.
B
Sun Valley is a farm in New Jersey. The farm grows
fruits and vegetables, including asparagus, zucchini,
1 DOL may enforce contractual obligations on behalf of both
H-2A workers and workers in “corresponding employment,”
which can include U.S. workers. 29 C.F.R. § 501.0; see also
20 C.F.R. § 655.103(b) (defining “corresponding
employment”). This “ensure[s] that foreign workers will not
appear more attractive to the ‘employer’ than domestic
workers, thus avoiding any adverse effects for domestic
workers.” Garcia-Celestino v. Ruiz Harvesting, Inc., 843 F.3d
1276, 1285 (11th Cir. 2016).

-- 5 of 20 --

6
cucumber, eggplant, peppers, and peaches. Sun Valley relies
on seasonal workers hired through the H-2A program.
Sun Valley first participated in the program in 2015,
hiring 96 foreign workers and 51 corresponding domestic
workers. Through a job order, Sun Valley promised at least
forty hours of work per week for twenty-six weeks of
employment. Consistent with applicable regulations, Sun
Valley guaranteed employment for “the hourly equivalent of
3/4” of the hours contemplated by the agreement. App. 203. It
offered no-cost housing and free transportation to the worksite.
And it promised to “furnish free cooking and kitchen facilities
to those workers who are entitled to live in the employers’
housing so that workers may prepare their own meals” and to
provide “free transportation” to the closest grocery store. App.
193.
According to DOL, Sun Valley did not keep those
promises. After spending time at the farm in 2015, agency
investigators identified several job order violations. DOL
confirmed those violations in a letter to Sun Valley, assessing
hundreds of thousands of dollars in civil penalties and back
wages.
DOL first identified violations concerning housing. Sun
Valley’s job order had promised its employees no-cost housing
satisfying “the full set of DOL Occupational Safety and Health
Administration (OSHA) standards.” App. 193; see also 20
C.F.R. § 655.122(d)(1). But the investigation found that “the
housing facility provided for workers was missing window
screens and had screen doors not in good repair,” which
contributed to an “insect infestation throughout the camp.”
App. 154. The investigation also revealed that “[s]everal
bathroom sinks did not have hot water, refuse containers

-- 6 of 20 --

7
throughout [the] facility were missing fly tight lids and
multiple mattresses used by occupants for sleeping purposes
were directly on the floor without a bed frame.” Id. DOL
assessed $3,600 in civil penalties for these alleged violations.
DOL also found violations related to Sun Valley’s meal
plan. Sun Valley’s job order had not mentioned a meal plan,
instead promising to “furnish free cooking and kitchen
facilities . . . so that workers may prepare their own meals” and
to provide “free transportation” to nearby grocery stores. App.
193. The investigation revealed, however, that Sun Valley had
failed to provide meaningful kitchen access in violation of the
job order, instead deciding to charge workers for meals without
notice. The investigator also found that a supervisor regularly
charged workers for drinks. Because Sun Valley did not
provide kitchen access, failed to give notice of its alternative
meal plan, and sold drinks at a profit, DOL assessed $198,450
in penalties and $234,079.28 in back wages.
DOL identified a violation related to transportation, as
well. H-2A employers must provide workers with
transportation to the job site that “compl[ies] with all
applicable local, State, or Federal laws and regulations,”
including those governing “transportation safety standards,
driver’s licensure, and vehicle insurance.” 20 C.F.R.
§ 655.122(h)(4)(i). Consistent with that requirement, Sun
Valley promised its employees “free transportation” from the
“housing facility both to and from the daily work site.” App.
205. But DOL’s investigation revealed that “three of the five
vehicles used to transport workers had insufficient tread on the
tires for safe operation and one had a non-functioning rear
directional.” App. 154–55. The investigation also revealed that
“the five vehicles used to transport H-2A and corresponding
[domestic] workers were operated by drivers who failed to

-- 7 of 20 --

8
possess valid, unexpired driver’s licenses.” App. 155. DOL
assessed $7,500 in civil penalties for this violation.
Finally, DOL claimed that Sun Valley violated the
“three-fourths guarantee.” Id. Consistent with regulations, Sun
Valley had guaranteed employment for “the hourly equivalent
of 3/4” of the workdays contemplated by the job order. App.
203; see also 20 C.F.R. § 655.122(i). But DOL’s investigation
revealed that, following a dispute between workers and
management, Sun Valley “constructively forced [some
employees] to return home prior to the end of the contract
period,” coercing them to “sign a form . . . stating that they
were leaving early for ‘personal reasons.’” App. 155–56. This
action, DOL alleged, violated both Sun Valley’s job order and
a regulation prohibiting employers from “seek[ing] to have an
H-2A worker . . . waive any rights conferred under” laws and
regulations governing the program. 29 C.F.R. § 501.5. DOL
assessed $2,700 in penalties and $135,623.94 in back wages
for these violations.
All told, Sun Valley was assessed $212,250 in civil
penalties and $369,703.22 in back wages, payable directly to
DOL. DOL notified Sun Valley of its “right to request a
hearing” before an ALJ to contest the assessment. App. 150;
see also 29 C.F.R. § 501.33. But if the farm failed to request a
hearing within thirty days, DOL’s findings would become “the
final and unappealable Order of the Secretary.” App. 150.
C
Sun Valley timely requested a hearing before an ALJ.
The ALJ affirmed in part and modified in part DOL’s findings.
In a lengthy written opinion, the ALJ agreed with DOL that
Sun Valley violated a host of job order provisions. The ALJ

-- 8 of 20 --

9
parted with DOL’s view only as to the amount of civil penalties
and back wages owed, modifying those figures to $211,800
and $344,945.80, respectively. Sun Valley petitioned the
Administrative Review Board for review, which affirmed the
ALJ’s decision in its entirety.
Sun Valley challenged DOL’s decision in the District
Court, seeking declaratory and injunctive relief under the
Administrative Procedure Act. It alleged several statutory and
constitutional defects in DOL’s order, including that: (1) it
adjudicated private rights in violation of Article III of the
Constitution, (2) the ALJ presiding over the case was
appointed and insulated from removal in violation of Article II
of the Constitution, (3) the penalties and back wages assessed
by the order were excessive in violation of the Eighth
Amendment, and (4) DOL lacked statutory authority to impose
civil penalties and back wages through administrative
proceedings.2 DOL moved to dismiss, and both parties cross-
moved for summary judgment.
The District Court granted DOL’s motion to dismiss all
of Sun Valley’s claims. The Court first addressed Sun Valley’s
Article III claim, holding that agency adjudication was
appropriate because DOL’s action fit within the “public-rights
doctrine.” Sun Valley Orchards, LLC v. Dep’t of Lab., 2023
WL 4784204, at *6 (D.N.J. July 27, 2023). The Court next
rejected Sun Valley’s claim that DOL lacked statutory
authority to impose civil penalties and award back wages in-
2 Sun Valley also alleged that DOL’s order was “not supported
by substantial evidence,” “an abuse of discretion,” or
“otherwise not in accordance with law.” App. 136. The District
Court dismissed that claim as well, but Sun Valley does not
raise it on appeal.

-- 9 of 20 --

10
house, reasoning that the “clear language of the statute” vested
DOL with that authority. Id. at *7, 10–11. As for its Article II
claims, the Court concluded that Sun Valley failed to exhaust
the issue before the agency and dismissed on that basis. But it
also explained that ratification cured any Appointments Clause
defect, and that ALJs are shielded from removal by only one
level of good-cause protection. Finally, the Court held that the
civil penalty award did not violate the Excessive Fines Clause,
explaining that it was “not grossly disproportionate to Sun
Valley’s offenses.” Id. at *11. Sun Valley filed this appeal.
II
The District Court had jurisdiction under 28 U.S.C.
§ 1331, and we have jurisdiction under 28 U.S.C. § 1291. “A
district court’s order dismissing a complaint is subject to
plenary review.” Pension Ben. Guar. Corp. v. White Consol.
Indus., Inc., 998 F.2d 1192, 1197 (3d Cir. 1993). Under the
Administrative Procedure Act, we must “hold unlawful and set
aside” DOL’s action if we find it to be, among other things,
“arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law”; “contrary to constitutional right,
power, privilege, or immunity”; or “in excess of statutory
jurisdiction, authority, or limitations, or short of statutory
right.” 5 U.S.C. § 706(2).
III
We begin and end with Sun Valley’s Article III
argument. The Constitution vests “[t]he judicial Power of the
United States . . . in one supreme Court, and in such inferior
Courts as the Congress may from time to time ordain and
establish.” U.S. Const. art. 3, § 1. The judges of those courts
enjoy life tenure and salary protection, attributes that preserve

-- 10 of 20 --

11
an “independent spirit” that is “essential to the faithful
performance” of their duty. The Federalist No. 78, p. 469 (C.
Rossiter ed. 1961) (A. Hamilton). Because non-Article III
tribunals lack these important qualities, Congress may not
“withdraw from judicial cognizance any matter which, from its
nature, is the subject of a suit at the common law, or in equity,
or admiralty.” Murray’s Lessee v. Hoboken Land &
Improvement Co., 59 U.S. (18 How.) 272, 284 (1855).
On top of that rule, the Supreme Court has explained
that certain “public rights” cases may be adjudicated outside
Article III. Id. Because the public rights exception “has no
textual basis in the Constitution,” it must “derive instead from
background legal principles.” Jarkesy, 603 U.S. at 131. History
therefore looms large in the public rights analysis, requiring
courts to pay “close attention to the basis for each asserted
application of the doctrine.” Id. In evaluating whether a given
case fits within the public rights exception, we look for “a
serious and unbroken” history of non-Article-III resolution. Id.
at 153 (Gorsuch, J., concurring).
With these principles in mind, we turn to Sun Valley’s
Article III challenge. The farm contends that DOL violated
Article III by adjudicating its private rights through in-house
proceedings. To resolve this claim, we must decide (1) whether
DOL’s action concerns private rights (that is, whether it is in
the nature of a common law suit), (2) whether DOL’s action
fits within the public rights exception, and (3) whether Sun
Valley waived its right to Article III adjudication.3
3 Sun Valley argues on appeal that DOL’s adjudication violates
“Article III and, by extension, the Seventh Amendment.” Sun

-- 11 of 20 --

12
A
We first consider whether DOL’s enforcement concerns
private rights, asking if it “is made of the stuff of the traditional
actions at common law tried by the courts at Westminster in
1789.” Id. at 128 (majority opinion) (citation modified). As the
Supreme Court’s recent decision in Jarkesy explains, a party
challenging enforcement under Article III need not match the
agency’s action to an exact historical comparator. Id. at 134.
Jarkesy considered whether the SEC could, consistent with
Article III and the Seventh Amendment, enforce federal
antifraud statutes through in-house civil penalty proceedings.
Id. at 120. The Court said no. Id. at 121. The SEC sought civil
penalties, which traditionally “could only be enforced in courts
of law.” Id. at 134 (citation modified). And its action, though
based on federal law, “target[ed] the same basic conduct as
common law fraud, employ[ed] the same terms of art, and
operate[d] pursuant to similar legal principles.” Id. Because
both the action and the remedies that the SEC pursued could
be traced to English common law, Jarkesy’s case
presumptively “involve[d] a matter of private rather than
public right.” Id. (citation modified).
Those same considerations require Article III
adjudication here. Start with the nature of DOL’s claim. While
regulations require H-2A employers to provide housing, meals,
Valley Br. 3. The Supreme Court has long recognized the close
relationship between Article III and the Seventh Amendment.
See Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53–54
(1989). And in Jarkesy, the Court appeared to confirm their
analytical similarity. See 603 U.S. at 134. But because Sun
Valley’s complaint did not allege a violation of the Seventh
Amendment, we consider only its challenge under Article III.

-- 12 of 20 --

13
transportation, and guaranteed work, employee benefits are
formalized in an employer’s “job order.” See generally 20
C.F.R. § 655.122. Where, as here, the employer does not pen
another agreement with its employees, the job order functions
as a “work contract” between them. Id. § 655.122(q). It is the
violation of the terms of that work contract, rather than the
regulations that shape it, that supports H-2A enforcement
actions. See 29 C.F.R. § 501.0 (authorizing “the enforcement
of all contractual obligations . . . applicable to the employment
of H-2A workers and workers in corresponding
employment”).4
Consistent with that scheme, DOL framed its
enforcement action against Sun Valley in contractual terms.
For instance, DOL told the ALJ that “Sun Valley’s assurances
formed part of the farm’s contract with H-2A workers.” A.R.
145. It then alleged that Sun Valley “violat[ed]” those
“contractual obligations.” Id. The ALJ’s decision, too, sounded
partially in contract. For example, the decision found that Sun
4 This contractual framing distinguishes the enforcement action
here from the one we recently considered in Axalta Coating
Systems LLC v. FAA, --- F.4th ---, 2025 WL 1934352 (3d Cir.
July 15, 2025). That case considered whether the Seventh
Amendment permitted the Federal Aviation Administration to
seek civil penalties from a paint supplier through in-house
proceedings. Id. at *1. The action there involved “technical”
hazardous materials regulations with no common law origins,
which made it relevantly similar to the Supreme Court’s
decision in Atlas Roofing Co. v. Occupational Safety & Health
Review Commission, 430 U.S. 442 (1977). Axalta, 2025 WL
1934352, at *5. The enforcement action in this case, by
contrast, resembles common law breach of contract, so Atlas
Roofing does not control.

-- 13 of 20 --

14
Valley “breached a material term of the job order” when it
failed to provide employees with kitchen access. App. 83–84.
And it ordered penalties and back wages for Sun Valley’s
decision to terminate workers “before they worked the
guaranteed three-fourths of the hours promised in their
contracts.” App. 92. DOL’s action was therefore litigated like
a suit for breach of contract, which would have traditionally
been heard in common law courts. See N. Pipeline Constr. Co.
v. Marathon Pipe Line Co., 458 U.S. 50, 90 (1982) (Rehnquist,
J., concurring in the judgment) (recognizing “breach of
contract” as “the stuff of the traditional actions at common law
tried by the courts at Westminster in 1789”).
We also think it significant that DOL sought common
law remedies: civil penalties and back wages. The Supreme
Court has long maintained that “[a] civil penalty was a type of
remedy at common law that could only be enforced in courts
of law.” Tull v. United States, 481 U.S. 412, 422 (1987); see
also Jarkesy, 603 U.S. at 123. And to the extent that back
wages are designed “to punish or deter the wrongdoer,” they,
too, are legal in nature. Jarkesy, 603 U.S. at 123 (citation
modified). The ALJ here assessed back wages at least in part
“[t]o deter such harm from occurring in the future.” App. 88.
The Administrative Review Board likewise cited the need to
“deter other H-2A employers” when upholding the award.5
App. 42. That DOL sought punitive remedies therefore only
confirms that its action was “made of the stuff of the traditional
5 In a different context, we recently described back wages as
an equitable remedy. See NLRB v. Starbucks Corp., 125 F.4th
78, 96 (3d Cir. 2024). But because the back wages here were
imposed to deter wrongdoers, rather than solely to provide
restitution, they are properly characterized as legal. See
Jarkesy, 603 U.S. at 123.

-- 14 of 20 --

15
actions at common law,” presumptively entitling Sun Valley to
adjudication before an Article III court. Jarkesy, 603 U.S. at
128 (citation modified).
B
DOL resists this conclusion. Despite the appearance of
a common law contract action, it contends that this case is
really about immigration. And because immigration is
traditionally a matter of public rights, DOL insists that Sun
Valley was not entitled to adjudication by an Article III court.
We are unpersuaded. While history does sanction non-Article
III adjudication for certain immigration-related matters, this
case falls well outside the heartland of that tradition.
The political branches have long asserted control over
the Nation’s borders. While the President has possessed some
authority to remove aliens since the founding, see Dep’t of
State v. Munoz, 602 U.S. 899, 912 (2024), Congress first
enacted general restrictions on immigration during the late
nineteenth century, see Kleindienst v. Mandel, 408 U.S. 753,
761 (1972). From the beginning, these statutes empowered
executive branch officials to adjudicate issues surrounding
admission and exclusion. See Dep’t of Homeland Sec. v.
Thuraissigiam, 591 U.S. 103, 129–30 (2020) (collecting
statutes).
Recognizing the political branches’ “plenary power”
over immigration, the Supreme Court largely endorsed this
regime of administrative enforcement. See Castro v. United
States Dep’t of Homeland Sec., 835 F.3d 422, 439–41 (3d Cir.
2016) (citing Chae Chan Ping v. United States, 130 U.S. 581
(1889); Nishimura Ekiu v. United States, 142 U.S. 651 (1892);
Fong Yue Ting v. United States, 149 U.S. 698 (1893)). The

-- 15 of 20 --

16
Court observed long ago that exclusion was an “incident of
sovereignty belonging to the government,” so that issue was
generally not appropriate “for judicial determination.” Chae
Chan Ping, 130 U.S. at 609. The “plenary power” doctrine has
undergone changes since then, see Castro, 835 F.3d at 441–44,
but the Supreme Court has consistently “recognized that the
admission and exclusion of foreign nationals is a fundamental
sovereign attribute exercised by the Government’s political
departments largely immune from judicial control,” Trump v.
Hawaii, 585 U.S. 667, 702 (2018) (citation modified).
This history provides the foundation for an immigration
exception to Article III adjudication. See Jarkesy, 603 U.S. at
128–30 (listing “immigration” as an example of “public
rights”). But it also suggests limitations. The public rights
exception captures only matters that “historically could have
been determined exclusively by the executive and legislative
branches.” Id. at 128 (citation modified). And the above
historical discussion suggests that non-Article III adjudication
was traditionally appropriate in cases closely related to the
admission and exclusion of aliens.
The Supreme Court’s decision in Oceanic Steam
Navigation Co. v. Stranahan exemplifies this limitation. 214
U.S. 320 (1909). The plaintiff there, a steamship operator, was
sanctioned under a statute authorizing the Secretaries of Labor
and Commerce to impose penalties for “bringing into the
United States alien immigrants afflicted with ‘loathsome or
dangerous contagious diseases.’” Id. at 332. The operator
claimed that this order violated Article III, but the Court
disagreed. Congress had “plenary power . . . as to the
admission of aliens,” so it could authorize executive branch
officials to impose a penalty without Article III adjudication.
Id. at 343. Oceanic Steam, the Court would later explain,

-- 16 of 20 --

17
stands for the proposition that Congress may “prohibit
immigration by certain classes of persons and enforce those
prohibitions with administrative penalties assessed without” an
independent judge or jury. Jarkesy, 603 U.S. at 129. So
Oceanic Steam related closely to the admission and exclusion
of aliens. See Lloyd Sabaudo Societa Anonima Per Azioni v.
Elting, 287 U.S. 329, 335 (1932) (observing that Oceanic
Steam concerned the federal government’s “plenary power to
control the admission of aliens”).
Sun Valley’s case falls outside the immigration
exception and the tradition that shaped it. Although the H-2A
program facilitates temporary migration, its labor certification
regulations do not directly address the admission and exclusion
of aliens. Instead, the labor certification process is designed to
vindicate the domestic national policy goal of preserving “the
wages and working conditions of workers in the United
States.” 8 U.S.C. § 1188(a)(1)(B). Rules about worker hours,
housing, cooking, and transportation regard employment law,
not “Congress’ plenary authority to control immigration.”
Dep’t Br. 36. This is especially true considering that H-2A
labor certification rules apply to foreign and domestic workers
alike. See 29 C.F.R. § 501.0. So while H-2A labor certification
regulations may ultimately serve immigration-related goals,
extending Oceanic Steam to reach this case would allow “the
exception [to] swallow the rule.” Jarkesy, 603 U.S. at 131.
DOL disagrees. In its view, the H-2A program
implicates “a variety of foreign-policy concerns” that situate it
comfortably within the public rights exception. Dep’t Br. 33.
For example, the Secretaries of State and Homeland Security
“determine which countries are eligible to participate in the
program,” using participation as leverage to achieve foreign
and domestic policy objectives. Dep’t Br. 8. Because of these

-- 17 of 20 --

18
quintessentially public interests, it says, adjudications under
the H-2A program need not take place in an Article III court.
This argument proves too much. It is true that portions
of the sprawling H-2A program implicate the President’s
unique power over foreign affairs. But at best, that shows that
some H-2A-related actions may proceed in agency tribunals.
For example, DOL could use agency proceedings to bar Sun
Valley from the program or to remove ineligible foreign
workers from its employ. See 20 C.F.R. § 655.182. Those
actions, to the extent they vindicate the federal government’s
critical interest in border control, likely fall within the
immigration exception. But the fact that DOL has some
authority to proceed in a non-Article III tribunal does not give
it carte blanche to do so for all violations. Such a rule would
eviscerate Jarkesy’s instruction that we “evaluate[] the legal
basis for [DOL’s] assertion [of the public rights] doctrine with
care.” 603 U.S. at 131.
In short, because the H-2A labor certification
regulations mainly concern the federal government’s local
interest in domestic wages, DOL’s action does not fit within
the public rights exception to Article III adjudication.
C
DOL’s last-ditch argument is that Sun Valley did not
preserve its Article III objection during administrative
proceedings. By failing to raise this issue before the ALJ, DOL
says, Sun Valley “either waived any Article III claim [] or
failed to exhaust it.” Dep’t Br. 41. We disagree.
For its waiver argument, DOL relies on Wellness
International Network, Ltd. v. Sharif, 575 U.S. 665 (2015).

-- 18 of 20 --

19
That case addressed whether Article III permitted bankruptcy
courts to hear non-core proceedings “with the consent of all the
parties to the proceeding.” Id. at 671 (quoting 28 U.S.C.
§ 157(c)(2)). The Supreme Court answered yes, holding that
“Article III is not violated when the parties knowingly and
voluntarily consent to adjudication by a bankruptcy judge.” Id.
at 669. Although knowing and voluntary consent could be
implied, the Court explained, “the key inquiry [was] whether
the litigant or counsel was made aware of the need for consent
and the right to refuse it, and still voluntarily appeared to try
the case before the non-Article III adjudicator.” Id. at 685
(citation modified).
These preconditions for implied consent are not present
here. DOL points to no evidence that Sun Valley “was made
aware of the need for consent and the right to refuse it.” Id.
(citation modified). To the contrary, DOL’s letter assessing
civil penalties provided that “the determination of the
Administrator shall become the final and unappealable Order
of the Secretary” if “a request for a hearing [before an ALJ] is
not received within the time specified.” App. 150. So Sun
Valley lacked any real choice about where it could challenge
DOL’s action, meaning that it “did not truly consent to”
adjudication before an ALJ. Wellness Int’l Network, 575 U.S.
at 681 (citation modified).
We also reject DOL’s exhaustion argument. It is true
that a party sometimes must exhaust issues it intends to raise
during administrative, and later, judicial proceedings. See Carr
v. Saul, 593 U.S. 83, 88 (2021). But even assuming Sun Valley
failed to exhaust its Article III claim before the agency, we may
still consider it here. That’s because a “nonjurisdictional,
mandatory exhaustion requirement functions as an affirmative
defense, and thus can be waived or forfeited by the

-- 19 of 20 --

20
government’s failure to raise it.” Fleming v. United States
Dep’t of Agric., 987 F.3d 1093, 1099 (D.C. Cir. 2021); see also
Santos-Zacaria v. Garland, 598 U.S. 411, 417 (2023)
(explaining that “[e]xhaustion is typically nonjurisdictional”).
Because DOL did not raise a failure-to-exhaust defense before
the District Court, we will “treat that argument as forfeited.”
Simko v. United States Steel Corp., 992 F.3d 198, 205 (3d Cir.
2021). DOL has not offered any exceptional circumstances to
excuse this forfeiture, so we will not address its exhaustion
argument. Cf. Freeman v. Pittsburgh Glass Works, LLC, 709
F.3d 240, 250 (3d Cir. 2013) (“The doctrine of appellate waiver
is not somehow exempt from itself. This means that a party can
waive a waiver argument by not making the argument below
or in its briefs.” (citation omitted)).6
* * *
An administrative tribunal ordered Sun Valley to pay
civil penalties and back wages for breaching contractual
obligations under the H-2A nonimmigrant visa program.
Because Article III required the Department of Labor to instead
proceed before a federal district court, we will reverse and
remand with instruction to enter judgment in favor of Sun
Valley.
6 Because we hold that DOL’s enforcement action violated
Article III, we need not reach Sun Valley’s alternative
statutory, Article II, and Eighth Amendment arguments.

-- 20 of 20 --