Over the past few decades, several features of the administrative state have been subject to heated constitutional challenge. One of them is agency adjudication: the practice of resolving disputes “in-house” within administrative agencies instead of addressing these disputes directly in a court. Of late, the Supreme Court has applied a “history-and-tradition” methodology to assess the constitutionality of agency adjudication. But that methodology confronts the challenge of how to select from among multiple competing traditions the one that should carry the day. On Nov. 10, the court will hear a case, Department of Labor v. Sun Valley Orchards, that underscores the difficulties of carrying out its history-and-tradition methodology – difficulties that apply across many areas of law.
By way of background, the basic constitutional issue regarding administrative adjudication is as follows. Article III of the Constitution vests the “judicial power of the United States” in the Supreme Court and lower federal courts. From the founding and onward, however, disputes that fall within the jurisdiction of Article III courts have been heard in tribunals belonging to the other federal branches, such as territorial courts, military tribunals, bankruptcy courts, magistrate judges, and most pertinent for current purposes, administrative tribunals – for instance, by administrative law judges.
Agency adjudication of, say, Social Security and veterans’ benefits claims is an integral part of the administrative state. It provides a streamlined way of handling these claims and avoids clogging up the Article III courts. Although there is usually a right to appeal administrative determinations at some point to Article III courts, these courts apply a deferential standard of review.
The question arises whether administrative adjudication is compatible with the judicial scheme laid out in Article III of the Constitution. This is a practically significant issue; agency dispute resolution has substantial effects on individuals and companies, who can face considerable fines or penalties. To what extent, then, is agency adjudication outside Article III courts justified? And what kinds of limitations should be placed on it?
In the past few decades, the Supreme Court has turned to “history and tradition” to answer these questions. History and tradition as methods of constitutional interpretation are likely most familiar from cases on hot-button social issues, such as Dobbs (holding that there was no “history and tradition” of a right to have an abortion) and Bruen (holding that there was no “history and tradition” of requiring certain types of licenses to carry firearms outside the home). But the court has also drawn on history and tradition to shape the scope of federal judicial power, in contexts ranging from Article III standing to equitable remedies. One such setting is the division of labor between Article III courts and agency adjudicative bodies.
History and tradition play a dual role in the law of adjudication outside Article III courts. This pattern was on display in the Supreme Court’s 2024 case Securities and Exchange Commission v. Jarkesy, which addressed the constitutionality of agency adjudication of certain claims involving securities fraud. First, tradition provides a justification for non-Article III (including agency) adjudication of a limited class of claims deemed to involve “public rights,” that is, matters which historically “could have been determined exclusively by [the executive and legislative] branches.” In Jarkesy, the court listed “the collection of revenue,” “immigration,” “tariffs,” “relations with Indian tribes,” “the administration of public lands,” and “the granting of public benefits such as payments to veterans, pensions, and patent rights” as members of this class of claims. Since these matters, the court explained, historically could have been adjudicated outside Article III courts, they may be heard by non-Article III tribunals today.
Second, tradition provides a reason that claims involving “private” rather than “public” rights must be brought before Article III courts instead of administrative tribunals. A hallmark of a private-rights suit that belongs before an Article III court, the Jarkesy court stated, is being “made of the stuff of the traditional actions at common law tried by the courts at Westminster in 1789.”
In Jarkesy, the court decided that the securities fraud claim at issue resembled common-law fraud, a traditional common-law claim and so a private right requiring an Article III tribunal. (The court also emphasized that the remedy the SEC was pursuing – civil penalties – was historically enforceable in courts of law; accordingly, the SEC was bringing a suit “at common law” to which the Seventh Amendment jury trial right attached. Jarkesy thus revolved substantially around the jury trial right, which is not a question directly presented in Sun Valley.)
Tradition, then, helps to demarcate the boundary between claims that must be adjudicated by Article III courts (private rights) and claims that may be resolved before other courts, including administrative agencies (public rights). But how should the court decide whether a present-day claim fits into a tradition of private rights or public rights? In particular, what should the court do when there are multiple traditions into which a present-day claim might fit?
The court’s upcoming case Sun Valley provides an example of the problem of “too many traditions.” Sun Valley involves a nonimmigrant visa program, administered jointly by the Department of Labor and the Department of Homeland Security, that permits American employers to hire foreign laborers to perform temporary or seasonal agricultural work. As a condition of participating in the program, employers agree to provide certain workplace arrangements to both foreign and domestic workers. DOL found that Sun Valley, a New Jersey farm, had failed to provide these arrangements, and the agency assessed hundreds of thousands of dollars in civil penalties and back wages against Sun Valley. Sun Valley was required to contest these penalties before an administrative law judge, with deferential review by an Article III court. Sun Valley challenged the administrative-adjudication requirement as a violation of Article III, and the U.S. Court of Appeals for the 3rd Circuit agreed with Sun Valley.
In Supreme Court briefing, the government and Sun Valley both appeal to the history-and-tradition methodology of Jarkesy, but they sharply disagree about which tradition is relevant. The government emphasizes traditions related to immigration. According to the government, its enforcement action fits within two historical categories of public rights adjudication that did not require Article III courts: rights “belonging to the sovereign, such as the right to determine whether to allow aliens into the country,” and “privileges conferred by the government, such as public benefits granted under government programs.” In the government’s view, Sun Valley violated the conditions of bringing foreign workers to the United States through an immigration program that offered the farm a benefit. The pertinent tradition is hence the history of adjudicating immigration- and benefits- related claims outside Article III courts.
Sun Valley, by contrast, casts its claim as akin to common-law breach of contract – a traditional private right requiring an Article III tribunal. DOL’s allegation, Sun Valley observes, was that Sun Valley had violated its agreement to provide certain working conditions to foreign and domestic workers. That allegation, Sun Valley contends, is simply a charge that Sun Valley breached a contract. Sun Valley further argues that DOL sought common-law remedies and in particular civil penalties – more evidence that the claim at issue involves a private right. To Sun Valley, the case is located outside the historical tradition of immigration adjudication because it is based on conditions of employment rather than immigration status. Consequently, it was unconstitutional for DOL to adjudicate Sun Valley’s dispute in-house.
Which party is right about the tradition into which the dispute over Sun Valley’s working conditions falls? Plausibly, the answer is “both.” Yes, the government is alleging that Sun Valley violated an agreement; but the agreement in question was concluded as part of an immigration program allowing Sun Valley to hire foreign workers.
So what are courts to do when, as here, they are faced with “too many traditions” – that is, traditions with different implications for the constitutional question at hand?
One possible response is to conclude that history-and-tradition analysis is hopelessly indeterminate and to reject this methodology. While many methods of constitutional interpretation fail to yield a single right answer, “history and tradition” is often justified precisely by its promise to produce constraint and fixity. Breaking this promise might be viewed as grounds for abandoning the history-and-tradition approach.
Complete repudiation of history and tradition, however, would be unwarranted. Historical practice has played an important role in both upholding and limiting non-Article III adjudication; it is a tool in judges’ toolbox and should not be thrown away.
Another option is to supplement history-and-tradition methodology, when it does not produce a clear result, with other modes of constitutional analysis. Earlier cases on non-Article III adjudication, for instance, appealed openly to practical considerations of government efficiency.
A third option would be to draw on other “modalities” of constitutional interpretation to inform the choice of which strand of tradition to emphasize. One such modality is precedent. Jarkesy did not directly confront a program like the DOL’s in Sun Valley, so it is not controlling precedent. But Jarkesy did seem to treat Congress’ broad power over immigration as a reason to uphold agency adjudication in immigration-related cases. Perhaps this suggests that DOL’s enforcement action fits better into a traditional public-rights than private-rights category.
The court may also decide to avoid the problem of too many traditions by taking a statutory “out.” When it took the case, the court added a question regarding DOL’s statutory authority to impose civil penalties and back wages on Sun Valley. The court may decide that DOL lacks such statutory authority, potentially by appealing to constitutional avoidance (in other words, construing the statute to grant DOL such authority would raise serious questions about the constitutionality of agency adjudication, which should be avoided unless necessary to decide). But the statutory question is not straightforward, and resolving it may well have ramifications for a wide array of agency-imposed penalties. At any rate, one or more of the justices can be expected to opine on Article III in Sun Valley, and the Article III issue is bound to recur.
Overall, the problem of “too many traditions” is by no means unique to the context of non-Article III adjudication. The Supreme Court faces challenging questions about how to apply history-and-tradition methodology when a present-day practice could plausibly fit into multiple traditions. The court’s response to these questions may have an important impact not only on the future of agency adjudication, but also on the trajectory of historically driven interpretation across a variety of pressing constitutional debates.
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[ H/T SCOTUSblog ]
