“If the court were to say civil penalties always have to be in Article III courts, that’s kind of the nuclear option,” Deputy Solicitor General Sarah Harris warned on Tuesday at the Supreme Court, as NPR reported.
During the November 10, 2026 session, the justices seemed split on a dispute that threatens the ability of many federal regulatory agencies to assess financial penalties against businesses breaking federal rules.
What’s at Stake for Federal Agencies
- The Supreme Court heard oral arguments on Tuesday in a high-stakes challenge regarding the Department of Labor’s enforcement powers under federal agricultural immigration programs.
- New Jersey-based Sun Valley Orchards is disputing a half-million-dollar penalty for workplace violations, arguing that administrative fines deny companies their right to a jury trial.
- Government attorneys cautioned that restricting civil penalties exclusively to federal courts would trigger widespread administrative disruption across Medicare, Medicaid, and student loan programs.
The Labor Department Penalty That Triggered a Constitutional Showdown
For decades, agricultural operators have utilized federal immigration frameworks to hire temporary migrant workers for seasonal crop harvesting. To protect domestic labor markets, the Department of Labor actively polices these arrangements, requiring farm owners to furnish proper wages alongside basic necessities like water and housing, as gpb.org reported.
Citing poor conditions such as unsafe drinking water, broken sinks, 20-bunk quarters, and unpaid wages, the agency penalized Sun Valley Orchards to the tune of a half-million dollars.
Sun Valley disputed the charges and contended that the Department of Labor imposing monetary fines based on its administrative proceedings is unconstitutional. Legal counsel for the orchard argued that while federal statutes outline financial penalties, the governing text fails to specify where those penalties must be legally adjudicated. Chief Justice John Roberts sharply questioned the government’s stance during Tuesday’s proceedings.
“It seems to me you’re just trying to leverage … the broad authority [of the executive branch] beyond the justification for its application,” Roberts told Harris, as noted by npr.org. Justice Sonia Sotomayor questioned the level of disruption that would occur if federal courts took over law enforcement from the appointed agency.
Weighing the Nuclear Option Against Regulatory Chaos
Harris outlined the consequences of requiring every civil penalty case to move into federal courts. “I think it would be catastrophic,” Harris responded when Justice Elena Kagan asked why the government cannot simply bring every enforcement action directly to court.
Government lawyers emphasized that forcing federal agencies into Article III courts would cause massive under-enforcement due to limited resources. Meanwhile, Justice Brett Kavanaugh voiced reservations about the proposals from Sun Valley’s lawyer, stating, “What you’re proposing is really at war with clarity,” adding, “I think that’s not great systematically going forward.”
Justice Samuel Alito remarked that the arguments presented sounded somewhat like a piecemeal viewpoint, bringing laughter from the courtroom audience before Justice Kagan chimed in, “Not ever us!” Justice Ketanji Brown Jackson pushed back against Sun Valley’s defense strategy.
Jackson noted that the challengers appeared to be “fighting the reality of … what Congress was trying to do … in ensuring that we don’t have farm workers coming in and undercutting domestic workers,” as reported by npr.org.
| Case Participant | Affiliation | Primary Stance on Penalties |
|---|---|---|
| Sarah Harris | Deputy Solicitor General | Defended agency fines, warning that a ruling against them would create a mess and disrupt other programs. |
| Robert Johnson | Counsel for Sun Valley Orchards | Argued administrative fines lack clear statutory backing for adjudication and bypass jury trials. |
| Chief Justice John Roberts | U.S. Supreme Court | Expressed concern that executive agencies have overextended their authority beyond original justifications. |
Congressional Intervention on the Horizon
As arguments concluded, the gravity of a potential adverse ruling became apparent. Harris offered a candid assessment of the fallout facing other federal programs. “It would be a big deal for the government to lose, but an even bigger deal would be to have a mess,” Harris stated, adding that numerous statutory regimes would land on the “cutting-room floor,” as reported by npr.org.
Raising her voice, she urged clarity from the bench so the administration could engage Legislative Affairs if needed, warning that the administrative fallout would snowball.
