Axalta Coating Systems LLC v. FEDERAL AVIATION ADMINISTRATION On Petition for Review of a Decision

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 23-2376
_____________
AXALTA COATING SYSTEMS LLC,
Petitioner
v.
FEDERAL AVIATION ADMINISTRATION
____________
On Petition for Review of a Decision and Order of the
Administrator of the Federal Aviation Administration
(Dkt. No. FAA-2020-0958)
____________
Argued: February 20, 2025
___________
Before: CHAGARES, Chief Judge, BIBAS and FISHER,
Circuit Judges
(Opinion filed: July 15, 2025)

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Jerry W. Cox, Esq. [ARGUED]
14561 Sterling Oak Drive
Naples, FL 34110
Counsel for Petitioner
Kara M. Rollins, Esq.
New Civil Liberties Alliance
4250 N Fairfax Drive
Suite 300
Arlington, VA 22203
Counsel for Amicus Curiae New Civil Liberties Alliance
Daniel J. Aguilar, Esq. [ARGUED]
United States Department of Justice, Civil Division
Room 7266
950 Pennsylvania Avenue NW
Washington, DC 20530
Taneesha D. Marshall, Esq.
Federal Aviation Administration
Office of the Regional Administrator
1701 Columbia Avenue
College Park, GA 30337

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____________
OPINION OF THE COURT
____________
CHAGARES, Chief Judge.
Axalta Coating Systems LLC (“Axalta”), a paint
supplier, provided a can of flammable paint to FedEx for
shipment by air. The paint spilled during shipment when the
lid to the can came loose. The Federal Aviation Administration
(“FAA”) filed an administrative complaint alleging that Axalta
failed to package the paint as required by the Hazardous
Materials Regulations (“HMR”), 49 C.F.R. § 171 et seq. After
a hearing, an Administrative Law Judge (“ALJ”) concluded
that Axalta violated the HMR and assessed a civil penalty of
$1,900. The Administrator of the FAA affirmed the ALJ’s
penalty assessment. Axalta now petitions us to vacate the
Administrator’s order, arguing, inter alia, that the
administrative adjudication of the FAA’s complaint
contravened the Seventh Amendment’s jury trial guarantee, as
the Supreme Court recently interpreted it in SEC v. Jarkesy,
603 U.S. 109 (2024). Because the administrative adjudication
did not violate the Seventh Amendment, and Axalta has not
otherwise identified any viable basis for relief, we will deny
Axalta’s petition.
I.
Axalta delivered a four-liter metal can of paint to FedEx
for shipment by air on January 10, 2017. Axalta packaged the
paint in a metal can fitted with a “friction lid . . . secured by
metal retaining clips.” Joint Appendix (“J.A.”) 131. It then

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covered the can with a plastic bag and placed it in a fiberboard
box. FedEx transported the package by cargo airplane to a
sorting center, where a FedEx employee discovered that it was
leaking paint. Michael Hoysler, a Senior Safety Specialist
employed by FedEx, inspected the package and prepared a
“Hazardous Materials Incident Report” for submission to the
Department of Transportation. J.A. 139; see also id. 139–43.
Hoysler stated in the report that the can was not fitted with “the
ring lock required for air shipments” and opined that the spill
occurred because “[p]ressure in the aircraft forced the lid off
the can.” J.A. 142.
Counsel for the FAA filed an administrative complaint1
alleging that Axalta failed to package the paint in a manner
consistent with three provisions of the HMR: (1) 49 C.F.R. §
171.2(e), which requires a party offering a package for
shipping to comply with the HMR; (2) 49 C.F.R. § 173.24(b),
which requires a party offering a package for shipping to use
packaging that withstands “conditions normally incident to
transportation”; and (3) 49 C.F.R. § 173.173(b), which
specifies acceptable combinations of packaging materials.
Axalta moved to dismiss the complaint, arguing, inter alia, that
the FAA failed to allege that Axalta acted with the requisite
scienter. The ALJ denied the motion. Axalta then filed a
1 Under 14 C.F.R. § 13.16(f)–(g), a party served by the
FAA with notice of a proposed civil penalty may request an
administrative hearing. Counsel for the FAA must file a
complaint on the FAA hearing docket within 20 days of
receiving the respondent’s request for a hearing. Id. §
13.208(a). Axalta filed a request for hearing on March 3, 2021,
and counsel for the FAA timely filed an administrative
complaint on March 9, 2021.

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motion to disqualify the ALJ on the grounds that his
appointment violated the Appointments Clause of the
Constitution and that he was unconstitutionally protected from
presidential removal. The ALJ also denied this motion.
The parties proceeded to a hearing, which took place on
September 20, 2022. The FAA offered the testimony of a
single witness, Wayne Knight, an FAA investigator. It also
introduced into evidence the Hazardous Materials Incident
Report prepared by Hoysler, the FedEx employee who
investigated the spill. The ALJ issued an Initial Decision on
October 17, 2022. He concluded that Axalta violated 49 C.F.R.
§ 171.2(e) and 49 C.F.R. § 173.24(b)(1) and assessed a penalty
of $1,900. Axalta filed an administrative appeal pursuant to 14
C.F.R. § 13.233(a). The FAA filed a cross-appeal seeking
revision of the penalty amount to $9,500. The Administrator
affirmed the ALJ’s disposition by a Decision and Order entered
on June 7, 2023. Axalta timely petitioned this court for review
of the Administrator’s order.
II.
We have jurisdiction to review the Administrator’s
order pursuant to 49 U.S.C. § 5127. The Administrative
Procedure Act (“APA”), 5 U.S.C. § 701 et seq., supplies the
standards that govern our review. The APA provides, in
particular, that a “reviewing court shall . . . hold unlawful and
set aside agency action, findings, and conclusions” if they are
“(A) arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law; (B) contrary to constitutional right
. . . (C) in excess of statutory jurisdiction . . . (D) without
observance of procedure required by law . . . (E) unsupported
by substantial evidence . . . or (F) unwarranted by the facts to

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the extent that the facts are subject to trial de novo by the
reviewing court.” Id. § 706.
Our review of whether an agency action is in
accordance with federal statute and the Constitution is de novo.
See Loper Bright Enters. v. Raimondo, 603 U.S. 369, 392
(2024) (“Under the APA, it . . . ‘remains the responsibility of
the court to decide whether the law means what the agency
says.’” (quoting Perez v. Mortg. Bankers Ass’n, 575 U.S. 92,
109 (2015) (Scalia, J., concurring in the judgment))). But we
must accept an agency’s factual findings as conclusive “if they
are ‘supported by substantial evidence given the record as a
whole.’” Crozer-Chester Med. Ctr. v. NLRB, 976 F.3d 276,
283–84 (3d Cir. 2020) (quoting Hertz Corp. v. NLRB, 105 F.3d
868, 872 (3d Cir. 1997)). Substantial evidence is “more than a
mere scintilla,” id. at 284 (quoting Consol. Edison Co. of N.Y.
v. NLRB, 305 U.S. 197, 229 (1938)), and must be such that “a
reasonable mind might accept [it] as adequate to support a
conclusion,” Lusingo v. Gonzales, 420 F.3d 193, 199 (3d Cir.
2005) (quoting NLRB v. Columbian Enameling & Stamping
Co., 306 U.S. 292, 300 (1939)).
III.
Axalta’s principal argument is that the Seventh
Amendment, as the Supreme Court interpreted it in Jarkesy,
prohibits the adjudication of the FAA’s action for civil
penalties in an administrative forum in which no jury is
available. The enforcement action at issue here, Axalta
suggests, is in all relevant respects the same as the enforcement
action at issue in Jarkesy. We are unpersuaded, however, that
the enforcement action before us is meaningfully analogous to
the enforcement action considered by the Court in Jarkesy. We

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therefore see no basis on which to conclude that Axalta is
entitled to relief from the Administrator’s order under the
Seventh Amendment.
The Seventh Amendment provides that “[i]n Suits at
common law . . . the right of trial by jury shall be preserved.”
U.S. Const. amend. VII. In Jarkesy, the Court addressed “a
straightforward question: whether the Seventh Amendment
entitles a defendant to a jury trial when the SEC seeks civil
penalties against him for securities fraud.” 603 U.S. at 120.
Jarkesy, the defendant, was an investment fund manager
alleged by the Securities and Exchange Commission (“SEC”
or “Commission”) to have violated several statutory
prohibitions against securities fraud. Id. at 118–19. After
proceedings on these charges before an ALJ employed by the
Commission, the SEC imposed a civil penalty of $300,000. Id.
at 119. Jarkesy petitioned the courts for relief from the
Commission’s order, arguing that the adjudication of the
SEC’s enforcement action in a jury-less administrative forum
deprived him of his right under the Seventh Amendment to a
trial by jury. Id.
The Court addressed Jarkesy’s claim by conducting a
two-part analysis. See id. at 119–20. It first considered the
“threshold issue” of “whether th[e] action implicates the
Seventh Amendment.” Id. at 120. The Court answered this
“threshold” question in the affirmative because the “SEC’s
antifraud provisions replicate[d] common law fraud,” id., and
because the SEC had sought “civil penalties,” a “prototypical
common law remedy,” id. at 123. The Court then
“consider[ed] whether the ‘public rights’ exception . . .
applie[d].” Id. at 120. As the Court explained, under the public
rights exception, Congress may in some circumstances “assign

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[a] matter for decision to an agency without a jury,” even when
the matter implicates the Seventh Amendment. Id. at 127.
The Court acknowledged the tendency of the public
rights jurisprudence to produce “arcane distinctions and
confusing precedents,” id. at 130 (quoting Thomas v. Union
Carbide Agric. Prods. Co., 473 U.S. 568, 583 (1985)), but
resolved the public rights question in Jarkesy in a notably
uncomplicated way: by analogizing the SEC’s enforcement
action to the action at issue in one public rights precedent —
Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989) — and
distinguishing it from the enforcement action at issue in
another — Atlas Roofing Co. v. Occupational Safety & Health
Review Commission, 430 U.S. 442 (1977). In Granfinanciera,
the Court held that Congress could not, consistent with the
Seventh Amendment, assign the adjudication of a fraudulent
conveyance action brought by the trustee of a bankruptcy estate
to a bankruptcy court, a non-Article III forum where trial by
jury was unavailable. 492 U.S. at 36. “The decisive point” for
the Court in Granfinanciera was that, by authorizing
bankruptcy judges to adjudicate fraudulent conveyance
actions, Congress did not “creat[e] a new cause of action . . .
unknown to the common law,” id. at 60 (alteration in original)
(quoting Atlas Roofing, 430 U.S. at 461), but “simply
reclassified a pre-existing, common-law cause of action that
was not integrally related to the reformation of debtor-creditor
relations,” id. Such a “purely taxonomic change” could not
make a private right public. Id. at 61. “Congress cannot
eliminate a party’s Seventh Amendment right to a jury trial,”
the Court emphasized, “merely by relabeling the cause of
action to which it attaches and placing exclusive jurisdiction in
an administrative agency.” Id.

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The Court in Jarkesy considered Granfinanciera
dispositive of its public rights analysis. 603 U.S. at 134
(determining that “Granfinanciera effectively decides th[e]
case”). Like the fraudulent conveyance action considered in
Granfinanciera, the Court explained, the statutory fraud
provisions at issue in Jarkesy “target[ed] the same basic
conduct as” a longstanding common law counterpart —
common law fraud — “employ[ed] the same terms of art, and
operate[d] pursuant to similar legal principles.” Id. Because
the statutory fraud provisions the SEC sought to enforce
against Jarkesy were in essence creatures of the common law,
the Court reasoned, the public rights doctrine was inapplicable,
and the Seventh Amendment required that any action arising
under those provisions be tried before a jury. See id.
The Court in Jarkesy distinguished another public rights
precedent, Atlas Roofing, in which it had held that the Seventh
Amendment did not prohibit the administrative adjudication of
a civil penalty action for alleged violations of the Occupational
Safety and Health Act of 1970 (“OSH Act”). See Atlas
Roofing, 430 U.S. at 461. In Atlas Roofing, the Occupational
Safety and Health Review Commission imposed civil penalties
on two employers after determining that they had violated
safety regulations promulgated by the Secretary of Labor under
the authority of the OSH Act. Id. at 447–48. The employers
sought relief from the penalties in federal court, arguing that
the administrative adjudication of their alleged violations
contravened the Seventh Amendment. Id. at 448. The
Supreme Court disagreed. The safety standards created by the
OSH Act and related regulations, the Court determined, were
“unknown to the common law.” Id. at 461. The Court
therefore concluded that the standards were “new statutory
‘public rights’” that Congress could “assign [for] adjudication

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to an administrative agency with which a jury trial would be
incompatible, without violating the Seventh Amendment’s”
jury trial guarantee. Id. at 455.
In Jarkesy, the Court explained that the provisions of the
OSH Act were meaningfully distinct from the fraudulent
conveyance cause of action at issue in Granfinanciera and the
statutory fraud provisions at issue in Jarkesy because, unlike
the statutes in those cases, “the OSH Act did not borrow its
cause of action from the common law.” Jarkesy, 603 U.S. at
136. The safety standards established by the OSH Act and
related regulations brought “no common law soil with them.”
Id. at 137. They did not “reiterate common law terms of art,”
the Court observed, but “instead resembled a detailed building
code.” Id. The Court further explained that Congress’s
purpose in enacting the OSH Act “was not to enable the
Federal Government to bring or adjudicate claims [in an
administrative forum] that traced their ancestry to the common
law.” Id. Rather, “[i]n both concept and execution, the Act
was self-consciously novel.” Id. The Court found these
attributes of a public right missing from the statutory fraud
action against Jarkesy, which was “‘in the nature of’ a common
law suit.” Id. at 138 (quoting Atlas Roofing, 430 U.S. at 453)
(quotation marks omitted). The Court therefore concluded that
its holding in Atlas Roofing “d[id] not control” its analysis of
the SEC’s enforcement action against Jarkesy. Id.
We draw several conclusions from the Court’s opinion
in Jarkesy. First, the Court in Jarkesy applied, but did not
abrogate, the public rights doctrine. Second, the Court
distinguished, but did not overrule, its holding in Atlas
Roofing. And, third, the Court’s opinion in Jarkesy confirmed
that a claim under the Seventh Amendment for relief from an

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administrative adjudication is subject to a two-part analysis. A
court first considers the “threshold” question whether the
“action implicates the Seventh Amendment” because of its
common law ancestry or the common-law nature of the remedy
sought. Id. at 120. But even if a “case does implicate the
Seventh Amendment,” the court must “next consider whether
the ‘public rights’ exception” applies. Id. This inquiry, the
Court in Jarkesy suggested, is a matter of ascertaining whether
an action more closely resembles the essentially common law
action in Granfinanciera, in which case the public rights
doctrine does not apply, or, instead, the action in Atlas
Roofing, in which case an administrative adjudication does not
violate the Seventh Amendment. See id. at 132–40.
The FAA acknowledges that a civil monetary penalty
such as that imposed on Axalta is a “prototypical common law
remedy.” FAA Br. 19 (quoting Jarkesy, 603 U.S. at 123). The
FAA therefore concedes, with respect to the first part of the
analysis from Granfinanciera and Jarkesy, that the
Administrator’s order “implicates the Seventh Amendment.”
Id. (quoting Jarkesy, 603 U.S. at 120). Given this concession,
we confine our inquiry to the second part of the Jarkesy
analysis: whether the public rights doctrine justifies the
administrative adjudication of the FAA’s enforcement action.2
2 Axalta identifies the Supreme Court’s opinion in Tull
v. United States, 481 U.S. 412 (1987), as support for its
position. In Tull, the Supreme Court held that the Seventh
Amendment guaranteed a jury trial to the respondent in an
action by the government seeking, in district court, a civil
penalty for an alleged violation of the Clean Water Act, 33
U.S.C. § 1251, et seq. Tull, 481 U.S. at 414, 427. Because the
action in Tull occurred in district court, the public rights

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See Jarkesy, 603 U.S. at 120. Because we are persuaded that
the FAA’s enforcement action cannot be distinguished from
the enforcement action considered in Atlas Roofing, we are
constrained to answer this question affirmatively.
The FAA’s authority to seek a civil penalty for a
violation of the HMR arises under 49 U.S.C. § 5123(a)(1),
which provides that a “person that knowingly violates this
chapter [Chapter 51 of Title 49 to the United States Code] or a
regulation, order, special permit, or approval issued under this
chapter is liable to the United States Government for a civil
penalty of not more than $75,000 for each violation.” Under
this provision, “[a] person acts knowingly when . . . the person
has actual knowledge of the facts giving rise to the violation;
or . . . a reasonable person acting in the circumstances and
exercising reasonable care would have that knowledge.” Id. A
separate provision specifies that the Secretary may find a
violation and impose a civil penalty through administrative
process. See id. § 5123(b) (providing that the Secretary “may
find that a person has violated” the HMR “after notice and an
opportunity for a hearing,” and shall thereafter “impose a
penalty . . . by giving the person written notice of the amount
of the penalty”).
The Secretary of Transportation promulgates the HMR
pursuant to 49 U.S.C. § 5103(b), which provides, in part, that
doctrine was not at issue. So although the opinion in Tull is
relevant to the “threshold” question of whether a civil penalty
“implicates the Seventh Amendment” — a question not in
dispute, given the FAA’s concession that the remedy sought is
legal in nature — the opinion is not relevant to our assessment
of the public rights doctrine. Jarkesy, 603 U.S. at 120.

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the “Secretary shall prescribe regulations for the safe
transportation, including security, of hazardous material in
intrastate, interstate, and foreign commerce.” As previously
noted, the Administrator determined that Axalta violated two
provisions of the HMR: 49 C.F.R. § 171.2(e), which prohibits
a person from “offer[ing] or accept[ing] a hazardous material
for transportation in commerce unless” it is packaged
consistent with the provisions of the HMR, and 49 C.F.R.
§ 173.24(b), which requires that “[e]ach package used for the
shipment of hazardous materials . . . be designed, constructed,
maintained, filled, its contents so limited, and closed, so that
under conditions normally incident to transportation . . . there
will be no identifiable . . . release of hazardous materials to the
environment.” The Administrator concluded that Axalta
violated the general mandate of compliance codified at 49
C.F.R. § 171.2(e) insofar as it failed to comply with 49 C.F.R.
§ 173.27(d), which provides, in part, that “[t]he body and
closure of any packaging must be constructed to be able to
adequately resist the effects of temperature and vibration
occurring in conditions normally incident to air
transportation.”
We do not consider the “standards” established by the
HMR to “bring . . . common law soil with them.” Jarkesy, 603
U.S. at 137. Instead, like the regulations at issue in Atlas
Roofing, they consist of technical prescriptions for engaging in
the regulated activity. One of the HMR provisions Axalta was
found to have violated — 49 C.F.R. § 173.27(d), as
incorporated by 49 C.F.R. § 171.2(e) — requires that “[i]nner
packaging or receptacle closures of combination packages
containing liquids . . . be held securely, tightly and effectively
in place by secondary means,” such as “[a]dhesive tape,

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friction sleeves, welding or soldering, locking wires, locking
rings, induction heat seals, and child-resistant closures.”
The other provision Axalta was found to have violated,
although uncomplicated on its face, establishes even more
technical compliance standards. See id. § 173.24(b). As noted,
this provision requires that “[e]ach package used for the
shipment of hazardous materials” be constructed and closed so
that no leakage occurs during “conditions normally incident to
transportation.” Id. The HMR elsewhere provide the technical
parameters of conditions considered normal in various modes
of transportation. See, e.g., id. § 173.27(c). So, for example,
the provision governing the transportation of hazardous
materials by aircraft specifies that
packagings for which retention of liquid is a
basic function must be capable of withstanding
without leakage the greater of . . . [a]n internal
pressure which produces a gauge pressure of not
less than 75kPa (11 psig) for liquids in Packing
Group III of Class 3 or Division 6.1; or 95 kPa
(14 psig) for other liquids; or . . . [a] pressure
related to the vapor pressure of the liquid to be
conveyed, determined by one of [three specified
methods].
Id. § 173.27(c)(2). Technical standards such as these are
“unknown to the common law.” Jarkesy, 603 U.S. at 137
(quoting Atlas Roofing, 430 U.S. at 461). The controlling
precedent is therefore Atlas Roofing, not Granfinanciera.
Axalta and its supporting amicus curiae the New Civil
Liberties Alliance attempt to avoid this conclusion by

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suggesting that the common law terms found in one of two
definitions of “knowingly” provided at 49 U.S.C. §
5123(a)(1)(B) mean that any action to enforce the HMR is, in
essence, a common law negligence action. We are
unpersuaded. These common law terms — “reasonable
person” and “reasonable care” — do not define the
circumstances under which a person “violates” the HMR. See
49 U.S.C. § 5123(a)(1)(B). They tell us, instead, when a
person “knowing[ly]” violates the HMR’s standards of conduct
— standards that descend in no way from the common law. Cf.
Jarkesy, 603 U.S. at 134 (noting that the statutory fraud
prohibition and common law fraud “target the same basic
conduct”). So, for example, we may determine, without any
resort to common law concepts, that a person who offers a
package for shipment by air that cannot withstand the pressures
specified at 49 C.F.R. § 173.27(c)(2) has “violated” the HMR.
The common law terms at 49 U.S.C. § 5123(a)(1)(B) are
relevant only to the question whether the violating party knew
of the violation. It remains that the HMR’s technical
“standards bring no common law soil with them” — even if
Congress necessarily drew upon the common law when
defining the circumstances under which a person has
knowledge that he violated these standards. Jarkesy, 603 U.S.
at 137.
In sum, the FAA’s right to enforce the HMR is closely
analogous to the right considered by the Court in Atlas
Roofing. And it is markedly different from the fraud cause of
action considered in Granfinanciera and Jarkesy. Reasoning
by analogy compels us to conclude that FAA’s right to enforce
the HMR by obtaining a civil monetary penalty against a
violator is a public right that Congress may assign to the

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executive branch for adjudication without offense to the
Seventh Amendment.3
IV.
Axalta argues that it is entitled to relief on six additional
grounds. It argues that (1) the FAA’s decision to pursue the
enforcement action in an administrative rather than judicial
forum was an unconstitutional exercise of the legislative power
by the executive branch; (2) the ALJ’s appointment is
unconstitutional because it was not sufficiently publicized; (3)
the ALJ’s appointment is unconstitutional because the ALJ
enjoys multiple levels of for-cause removal protection; (4) the
applicable statute of limitations bars the FAA’s action against
Axalta; (5) the Administrator failed to give effect to the
scienter requirement established by the relevant statute; and (6)
the Administrator erred by finding Axalta liable for a
regulatory violation not charged by the FAA. We address each
argument in turn and conclude that none provides a viable basis
for relief.
3 Axalta separately argues that the administrative
adjudication was inconsistent with the vesting clause of Article
III of the Constitution insofar as it was an exercise of the
judicial power by the executive branch. But because matters
involving public rights may be assigned to the executive
branch for adjudication without offense to Article III, our
conclusion that the FAA’s enforcement action is within the
scope of the public rights doctrine necessarily resolves
Axalta’s argument that the adjudication violated Article III.
See Granfinanciera, 492 U.S. at 53–54.

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A.
Axalta argues that Congress improperly delegated its
legislative power to the FAA by allowing the Administrator, in
an unlimited exercise of his discretion, to bring an enforcement
action either in federal court or in an administrative forum. The
FAA responds that we cannot consider the argument because
Axalta failed to present it at any point in the administrative
proceedings. Our review of the administrative record confirms
that Axalta never presented the argument during the
administrative proceedings. As a result, neither the ALJ in the
first instance, nor the Administrator on appeal, had occasion to
consider the nondelegation question.
The applicable rule of issue preservation is supplied by
statute. Section 5127(d) of Title 49 of the United States Code
provides that, “[i]n reviewing a final action under this section,
the court may consider an objection to a final action of the
Secretary only if the objection was made in the course of a
proceeding . . . or if there was a reasonable ground for not
making the objection in the proceeding.” Axalta suggests that
there was a reasonable ground for not making the
nondelegation argument because presenting the argument to
the ALJ or the Administrator “would have been futile.” Reply
Br. 15. In particular, Axalta observes that the Administrator
declined to consider its Appointments Clause and Seventh
Amendment objections on the basis that the Administrator was
not competent to review the constitutionality of an act of
Congress. The Administrator did, however, consider Axalta’s
arguments that the ALJ’s appointment was not accompanied
by sufficient ceremony and that the administrative adjudication
deprived Axalta of due process. The Administrator reasoned
that these constitutional arguments were susceptible of

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administrative determination because they concerned acts of
the agency, not Congress.
We assume without deciding that the Administrator
would have declined to entertain Axalta’s nondelegation
argument and, therefore, that there was a reasonable ground for
not presenting this argument during the administrative
proceeding. We nevertheless conclude that Axalta’s
nondelegation argument is without merit. The only authority
Axalta cites in support of its theory is an opinion issued by a
divided panel of the Court of Appeals for the Fifth Circuit in
Jarkesy v. SEC, 34 F.4th 446, 461 (5th Cir. 2022), aff’d on
other grounds, 603 U.S. 109 (2024). We decline, however, to
adopt the panel majority’s theory as our own. The panel
majority in Jarkesy asserted “that the power to assign disputes
to agency adjudication is ‘peculiarly within the authority of the
legislative department.’” Id. (quoting Oceanic Steam
Navigation Co. v. Stranahan, 214 U.S. 320, 339 (1909)). The
panel majority appeared to reason that if the power to assign
agency adjudication were peculiarly — that is, exclusively —
within the authority of Congress, then Congress could not
authorize the executive to choose in which forum to bring an
action. See id. In fact, however, the Court in Oceanic Steam
did not describe “the power to assign disputes to agency
adjudication” as “peculiarly within the authority of the
legislative department.” Id. (quoting Oceanic Steam, 214 U.S.
at 339). As the sentence preceding that quoted by the panel
majority makes clear, the Court in Oceanic Steam indicated,
instead, that matters relating “to tariff, . . . internal revenue,
[and] taxation” were “subjects peculiarly within the authority
of the legislative department.” Id.

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To the extent that there is authority directly addressing
the permissible extent of the executive’s discretion when
enforcing the law, it speaks against Axalta’s nondelegation
theory. In United States v. Batchelder, 442 U.S. 114 (1979),
the Supreme Court held that Congress, by enacting two
criminal statutes with identical elements but different
penalties, had not impermissibly delegated to the executive the
legislative prerogative of defining criminal penalties. Id. at
125–26. A prosecutor’s discretion to choose which offense to
charge, and therefore what penalty to seek, was, the Court
explained, “no broader than the authority [a prosecutor]
routinely exercise[s] in enforcing the criminal laws.” Id. at
126. The Supreme Court has recognized that an agency’s
discretion in deciding the manner of enforcing the laws is
comparable to that exercised by a prosecutor. See SEC v.
Chenery Corp., 332 U.S. 194, 203 (1947) (observing that “the
choice made between proceeding by general rule or by
individual, ad hoc litigation is one that lies primarily in the
informed discretion of the administrative agency”). In our
view, the FAA’s discretion to choose the forum in which to
pursue the civil penalty action against Axalta is, like a
prosecutor’s charging discretion, an incident of executive
rather than legislative power.
We have recognized that “the non-delegation doctrine
applies only to delegations by Congress of legislative power”
but “has no application to exercises of executive power.”
United States v. Bruce, 950 F.3d 173, 175 (3d Cir. 2020).
Because the choice of where to bring an enforcement action is
part of the executive rather than legislative power, Congress
may leave this choice to agencies without offense to the
nondelegation doctrine.

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20
B.
Axalta argues that the administrative adjudication was
constitutionally defective in another respect: the ALJ, Axalta
contends, was protected by two levels of for-cause removal
protection, an arrangement that the Supreme Court has
recognized as an unconstitutional impairment of the
President’s power to execute the law.4 See Free Enter. Fund v.
Pub. Co. Acct. Oversight Bd., 561 U.S. 477, 492 (2010). The
FAA does not defend the constitutionality of the ALJ’s
removal protections. It argues, nevertheless, that Axalta is not
entitled to relief because it failed to allege or demonstrate that
the allegedly unconstitutional removal restriction caused
Axalta compensable harm.
We agree with the FAA. In Collins v. Yellen, 594 U.S.
220 (2021), the Supreme Court concluded that the Director of
the Federal Housing Finance Agency was unconstitutionally
protected from removal by the President, but held that this
constitutional defect did not deprive the Director of authority
to act. Id. at 257–59. The mere fact of being subject to the
Director’s authority, the Court explained, was not a
compensable harm warranting relief. Id. at 258–60. Instead,
as we have explained when discussing Collins, “a challenger
[to an allegedly unconstitutional removal protection] must
show that the constitutional infirmity actually caused harm.”
4 Under 5 U.S.C. § 7521(a), “[a]n action [such as
removal] may be taken against an [ALJ] . . . only for good
cause established and determined by the Merit Systems
Protection Board on the record after opportunity for hearing
before the Board.”

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21
NLRB v. Starbucks Corp., 125 F.4th 78, 88 (3d Cir. 2024).
The only harm that Axalta asserts is the fact of having been
made to appear before an ALJ who benefited from allegedly
unconstitutional removal protections. Under Collins and
Starbucks, this asserted harm cannot provide a basis for
granting relief to Axalta. We therefore decline to disturb the
Administrator’s order based on the alleged unconstitutionality
of the ALJ’s protections from removal.5
C.
Axalta’s three remaining arguments for relief are also
without merit. Axalta first asserts that the Administrator’s
penalty assessment was untimely under 28 U.S.C. § 2462,
which provides in relevant part that “an action, suit or
proceeding for the enforcement of any civil fine, penalty, or
forfeiture . . . shall not be entertained unless commenced within
five years from the date when the claim first accrued.” The
spill occurred on January 10, 2017, the FAA commenced an
administrative proceeding against Axalta by filing an
5 Axalta’s separate argument that the Appointments
Clause requires ALJs to be appointed in a public ceremony
with some unspecified degree of formality is unsupported by
any relevant authority and, we conclude, without merit. The
Appointments Clause requires that officers like ALJs be
appointed by the President, unless (as relevant here) “Congress
. . . vest[s] the[ir] Appointment . . . in the Heads of
Departments.” U.S. Const. art. II, § 2, cl. 2. Here, that textual
requirement was satisfied: Congress vested the appointment
of the Department of Transportation’s ALJs in the Secretary of
Transportation, who duly appointed the ALJ who adjudicated
this action. 5 U.S.C. § 3105.

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22
administrative complaint on March 9, 2021, and the
Administrator entered a final order disposing of the
administrative complaint on June 7, 2023. Axalta does not
dispute that the FAA commenced the administrative
proceeding within five years of the spill. Axalta nevertheless
posits that the limitations statute required the Administrator to
conclude the administrative proceeding within five years of the
alleged violation. We see no basis in the limitations statute for
Axalta’s position. The statute concerns the time in which an
administrative proceeding may be “commenced” — not the
time in which an already commenced administrative
proceeding must be resolved. And the FAA timely
commenced the administrative proceeding by filing an
administrative complaint against Axalta on March 9, 2021, less
than five years after the spill occurred on January 10, 2017. 6
Axalta next argues that the ALJ erred by (1) declining
to dismiss the FAA’s administrative complaint for failure to
allege the requisite scienter and (2) concluding that the FAA
met its burden of proving the requisite scienter. Section
5123(a) of Title 49 to the United States Code provides that a
“person who knowingly violates” the HMR “is liable to the
United States Government for a civil penalty of not more than
$75,000 for each violation.” The law further provides that a
6 The limitations period established by 28 U.S.C. § 2462
also governs the time during which the Government may file
in district court a civil action to collect a penalty assessed after
an administrative proceeding. See United States v. Meyer, 808
F.2d 912, 914 (1st Cir. 1987). Because Axalta does not assert
that the Government filed an untimely civil action to collect the
Administrator’s penalty, we confine our review to the
timeliness of the administrative proceeding itself.

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23
“person acts knowingly when . . . (A) the person has actual
knowledge of the facts giving rise to the violation; or (B) a
reasonable person acting in the circumstances and exercising
reasonable care would have that knowledge.” 49 U.S.C. §
5123(a)(1).
We are satisfied that the FAA sufficiently alleged, and
then met its burden of proving, that Axalta acted with the
requisite scienter. The FAA alleged in its administrative
complaint that Axalta offered the paint for shipment by FedEx
“when the material was not properly . . . packaged” or “in the
proper condition for shipment.” J.A. 16, ¶ 5. This allegation
allows the reasonable inference that Axalta had knowledge of
the facts giving rise to the alleged violation or that Axalta
would have known of these facts if it had exercised reasonable
care.
We are satisfied as well that the ALJ’s conclusion that
the FAA proved the requisite scienter at the hearing is
supported by substantial evidence. Axalta does not dispute that
it packed the paint. And the FAA presented evidence that the
paint was not packed in such a way to withstand “conditions
normally incident to transportation” under 49 C.F.R. §
173.24(b). In particular, the FAA elicited testimony from
Wayne Knight, an agency investigator, that one of the
“retaining clips” used to secure the lid to the paint can had
failed, J.A. 223–24, and that, as far as Knight was aware, there
was no evidence that the clip failure was due to “a handling
problem” attributable to FedEx, J.A. 240. A reasonable
factfinder could conclude on the basis of this evidence that
Axalta knew or should have known of the facts giving rise to
the violations found by the ALJ. See Lusingo, 420 F.3d at 199
(defining “substantial evidence” as “such relevant evidence as

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24
a reasonable mind might accept as adequate to support a
conclusion” (quoting Columbian Enameling & Stamping Co.,
306 U.S. at 300)).7
Axalta argues, finally, that the Administrator deprived
Axalta of due process by finding it liable for violating a
regulatory provision, 49 C.F.R. § 173.27(d), that the FAA did
not specifically identify in its administrative complaint. The
regulation codified at 49 C.F.R. § 173.27(d) provides, in part,
that “[t]he body and closure of any packaging must be
constructed to be able to adequately resist the effects of
temperature and vibration occurring in conditions normally
incident to air transportation.” It further provides that “[i]nner
packaging or receptacle closures of combination packages
containing liquids must be held securely, tightly and
effectively in place by secondary means,” such as “locking
rings.” Id.
7 Citing an opinion issued by the Court of Appeals for
the Seventh Circuit in National Power Corp. v. FAA, 864 F.3d
529 (7th Cir. 2017), Axalta suggests that the FAA was required
under 49 U.S.C. § 5123(a)(1) to “establish that Axalta knew
(or should have known) [that] it failed to comply with the
applicable regulation.” Axalta Br. 30. But the court held the
opposite: the court observed that in contrast to the prohibition
against “willful” violation of the HMR codified at 49 U.S.C. §
5124(c), which requires “knowledge of the facts giving rise to
a violation and knowledge that the conduct was unlawful,” the
prohibition against “knowing” violation of the HMR codified
at 49 U.S.C. § 5123(a)(1) “does not require a deliberate or
intentional violation of the law.” Nat’l Power Corp., 864 F.3d
at 533.

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25
Axalta is correct that the FAA did not specifically
identify 49 C.F.R. § 173.27(d) as a source of liability in the
administrative complaint. See J.A. 16. Instead, counsel for the
FAA first specifically identified the provision as a potential
source of liability during his closing argument, in response to
a question posed by the ALJ.
Nevertheless, this omission did not deprive Axalta of
due process. The FAA alleged in the complaint that Axalta
violated 49 C.F.R. § 171.2(e), which provides generally that
“[n]o person may offer . . . a hazardous material for
transportation in commerce unless the hazardous material is
properly . . . packaged . . . as required or authorized by [the]
applicable requirements of” the HMR. See J.A. 16, ¶ 8(a). The
requirements applicable to a package transported by air are
those set forth at 49 C.F.R. § 173.27. See 49 C.F.R. §
173.27(a) (“The requirements of this section . . . apply to
packages offered or intended for transportation aboard
aircraft.”). The FAA’s complaint made clear that Axalta’s
alleged violation concerned the improper packaging of a parcel
shipped by air. Axalta therefore received adequate notice of
the FAA’s claim that it had violated the HMR provisions
governing packages offered for air transportation, namely,
those codified at 49 C.F.R. § 173.27.
V.
For the foregoing reasons, we will deny Axalta’s
petition for review.

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1
BIBAS, Circuit Judge, concurring.
I join the Court’s thoughtful opinion in full. As the majority
explains, Atlas Roofing binds us. And under its rule, this case
involves public rights.
I write separately to point out a defect in the public-rights
caselaw, which spans both Article III and the Seventh Amend-
ment. Scholars have long argued that Atlas Roofing’s expan-
sive view of public rights is wrong. See, e.g., Roger W. Kirst,
Administrative Penalties and the Civil Jury: The Supreme
Court’s Assault on the Seventh Amendment, 126 U. Pa. L. Rev.
1281 (1978). But after Jarkesy, the caselaw is also at war with
itself. Atlas Roofing and its progeny created a test for public
rights that dragged the doctrine far from the Constitution’s
original meaning. Jarkesy then announced a return to first prin-
ciples that put the law on sounder footing theoretically—but it
preserved a test for public rights that directly conflicts with
those principles. I do not fault the Jarkesy Court, which
showed commendable restraint by deciding the case without
gratuitously overruling precedent. But the result has left us
with a theoretical scramble: a public-rights exception that the
Founders understood narrowly but that precedents force us to
construe broadly.
I.
JARKESY ’S PRINCIPLES CONFLICT WITH
THE
ATLAS ROOFING LINE OF CASES
Article III entitles Americans to a trial before an independ-
ent court. As Jarkesy recognized, this rule and the Seventh
Amendment contain a limited exception, based in historical
practice, for public rights. Yet Jarkesy’s stated return to

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2
historical first principles conflicts with the test still required by
older precedents that Jarkesy left on the books. So we are left
with principles pointing one way and a legal test pointing the
other.
A. First principles: Public rights are exceptional,
rooted in history
Jarkesy announced that “[t]he public rights exception”
must remain “an exception.” SEC v. Jarkesy, 603 U.S. 109, 131
(2024). That is because it “has no textual basis in the Constitu-
tion.” Id. Instead, the Constitution’s text vests “[t]he judicial
Power of the United States” in Article III courts and declares
that it “shall extend to all Cases” within those courts’ jurisdic-
tion. U.S. Const. art. III, §§ 1–2.
Despite that textual vesting of power, Congress has assigned
public-rights disputes to non–Article III officials since the
Founding. Richard H. Fallon, Jr., Of Legislative Courts, Admin-
istrative Agencies, and Article III, 101 Harv. L. Rev. 915, 918–
19 (1988). The Founders thus understood that those officials
could decide certain cases involving what came to be known
as “public rights.” See Murray’s Lessee v. Hoboken Land &
Improvement Co., 59 U.S. (18 How.) 272, 284 (1856) (using
this phrase). But that exception must not “swallow the rule.”
Jarkesy, 603 U.S. at 131. “The presumption is in favor of Arti-
cle III courts”—that is, in favor of private rights. Id. at 132.
Put the text and the history together, and public rights today
should be an exception that “derive[s] … from background le-
gal principles” that informed the original public understanding
of Article III’s Vesting Clause. Id. at 131. Though Jarkesy did
not expressly limit public rights to the kinds recognized at the

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3
Founding, its analysis implied as much. And it hinted that they
might be limited to “historic[al] categories” often found in
“centuries-old rules.” Id. at 130–31; see also id. at 153 (Gor-
such, J., concurring) (“Whatever their roots, traditionally rec-
ognized public rights have at least one feature in common: a
serious and unbroken historical pedigree.”).
To implement these principles, a court would (1) presume
that a cause of action does not involve public rights, unless (2)
it fits within the public-rights categories that existed when Ar-
ticle III was ratified.
B. Atlas Roofing defaults to public rights, untethered
from history
But precedent tells us to presume the opposite. The problem
starts with Atlas Roofing, which held that whenever Congress
creates “new statutory obligations,” imposes “civil penalties
for their violation,” and tasks the sovereign with enforcing
them, the public-rights exception applies. Atlas Roofing v. Oc-
cupational Safety & Health Rev. Comm’n, 430 U.S. 442, 450
(1977). So any time Congress creates a cause of action en-
forced by the government, Atlas Roofing presumes that it in-
volves a public right.
The Court has since pared back that sweeping rule. First, it
carved out an exception in Granfinanciera, holding that stat-
utes still involve private rights if they just codify the common
law. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 60–61
(1989). Then, Jarkesy widened the carveout, holding that it ap-
plies even when a cause of action does not exactly duplicate
the common law. 603 U.S. at 126. If a suit “resembles” or is

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4
“akin to” common-law claims, Jarkesy explained, it still in-
volves private rights. Id. at 135, 139.
Together, these cases hold that (1) when Congress creates
a cause of action enforced by the government as sovereign,
then it involves public rights, unless (2) it resembles a preex-
isting action at common law.
Consider Jarkesy. Whatever it said about general princi-
ples, the Court did not ask whether the statute addressed anything
that looked like a long-recognized public right. Instead, apply-
ing Granfinanciera, it asked whether the statutory scheme
looked like a historical action at common law. Jarkesy, 603
U.S. at 134. After finding that the anti-fraud laws affirmatively
“target the same basic conduct as common law fraud, employ
the same terms of art, and operate pursuant to similar legal
principles,” the Court was satisfied that they involved private
rights. Id. Yet that reasoning implies that if the anti-fraud laws
had not mirrored a traditional common-law action, then they
would have involved public rights—whether or not they
looked anything like the public rights known at the Founding.
This approach flips the first principles that Jarkesy pur-
ported to embrace upside down: It presumes that a cause of
action involves public rights. To rebut that presumption, the
challenger must show that a statutory cause of action affirma-
tively resembles a historical action at common law. If he can-
not, then into the public-rights bucket it goes. That makes pub-
lic rights the rule and private rights the exception.
This approach also expands public rights far beyond their
historical limits. If anything, it confines private rights to his-
torical bounds. To involve private rights, a statutory cause of

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5
action enforced by the government must resemble something
on the finite list of traditional common-law actions: fraud, neg-
ligence, conversion, and so on. By contrast, the list of novel
actions that Congress might create is infinite, from violations
of an agency’s workplace-safety rules to fines for improperly
shipping cans of paint. If Congress enacts anything in the
boundless universe of novel actions, the flipped presumption
deems it to involve public rights—even if it lies far afield from
historical public-rights actions. If we keep presuming, in effect,
that every new action involves public rights, we will stretch
this exception far beyond the “background legal principles”
that Jarkesy says should limit it. 603 U.S. at 131.
To be sure, the Court was able to decide Jarkesy without
cleaning all this up. The Jarkesy statute resembled common-
law fraud, so Granfinanciera “effectively decide[d] th[e]
case.” Id. at 134. Yet Jarkesy never flipped the presumption
back in favor of private rights. So when cases do not fit so
neatly within Granfinanciera, like the case we decide today,
Atlas Roofing’s topsy-turvy framework still controls. In this
case and others like it, the caselaw forces us to follow a rule
that contradicts Jarkesy’s principles.
Jarkesy’s incrementalism is understandable because the
Court decided that case under the Seventh Amendment, not Ar-
ticle III. Id. at 115. While there is only one public-rights test
across both provisions, the troubling presumption that Jarkesy
preserved is much easier to square with the Seventh Amend-
ment. That Amendment requires only that “the right to trial by
jury” as it existed in 1791 “shall be preserved,” which is argu-
ably consistent with assigning all causes of action that did not
exist in 1791 to juryless forums. U.S. Const. amend. VII;

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6
Markman v. Westview Instruments, 517 U.S. 370, 376 (1996).
But Article III vests “all Cases” within the federal judicial
power in independent courts. U.S. Const. art. III, § 2. That
phrasing is absolute, making an exception for any novel action
far harder to defend.
II. UNDER THE PROPER FRAMEWORK,
THIS CASE INVOLVES A PRIVATE RIGHT
The majority correctly applies the law on the books. But if
we were not constrained by precedent, I would take Jarkesy’s
first principles seriously: Public rights are a limited exception
rooted in history. That would mean starting with the presump-
tion that our case involves private rights and thus belongs in an
Article III court. To remove it from Article III, the government
would bear the burden of showing that this statutory cause of
action resembles a public-rights exception known at the
Founding, such as a dispute over government benefits, a claim
against the public treasury, or a challenge to how the govern-
ment disposes of its own property. Jarkesy, 603 U.S. at 130;
Caleb Nelson, Adjudication in the Political Branches, 107
Colum. L. Rev. 559, 567–68, 582 (2007); John Harrison, Pub-
lic Rights, Private Privileges, and Article III, 54 Ga. L. Rev.
143, 163–64 (2019).
This case is nothing like any of those historical public-
rights exceptions. In fact, the Founding generation insisted that
any time the government deprived someone of life, liberty, or
property, it was depriving him of private rights. As a rule, it
had to do so through an Article III court. Nelson at 566–69,
626–27. The government is trying to hit Axalta with a hefty
civil penalty, depriving it of its property. That does not fall

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7
within a historical public-rights exception, so it should require
an Article III court.
Still, I join the majority opinion because Atlas Roofing
binds my hands.
* * * * *
Taking Article III seriously requires restoring the proper
default rule: “[T]he presumption is in favor of Article III
courts.” Jarkesy, 603 U.S. at 132 (internal quotation marks
omitted). The government should thus bear the burden of
showing that a new cause of action resembles the closed list of
historically recognized public rights. Though we must apply the
misguided Atlas Roofing–Granfinanciera line of cases today,
I hope that the Supreme Court will soon take this accreted jum-
ble and order it into a rule that is coherent, consistent, and true
to the Constitution’s original safeguards.

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