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Permanent Injunction Issued

In a decision dated March 25, 2024, Chief Judge Randall Hall of the Southern District of Georgia, issued an Order permanently enjoining the U.S. Department of Justice, Office of the Chief Administrative Hearing Officer (OCAHO), from directly or indirectly adjudicating claims of I-9 violations brought against Walmart, Inc. by Immigration and Customs Enforcement (ICE), a division of the Department of Homeland Security. The court ruled that the legislative scheme establishing OCAHO violated Article II of the Constitution, inasmuch as the administrative law judges who adjudicate complaints of violations of the employer sanctions and anti-discrimination provisions of the Immigration Reform and Control Act of 1986 are executive officers not subject to at-will removal by the President. (ALJs have historically be insulated from political influence under the Merit System Protection Act which otherwise requires proof of incompetence or malfeasance as cause for removal.) ICE had levied a proposed fine of $24 million against Walmart for alleged violations of the I-9 electronic retention requirements. The Government is expected to appeal the decision to the U.S. Court of Appeals for the Eleventh Circuit.

Chief Judge Hall’s decision follows a earlier, successful attack on OCAHO jurisdiction lodged by Space Exploration Technologies of America Corp. d/b/a SpaceX in the Sourthern District of Texas. Before OCAHO, the Immigrant and Employer Rights Section (IER) of the U.S. Department of Justice had charged SpaceX with engaging in a pattern or practice of unlawful citizenship status discrimination against asylees and refugees in recruitment and hire. When IER filed the complaint, SpaceX sued in federal court to enjoin the OCAHO proceedings as violative of Article II of the Constitution because the administrative law judge could be removed by the President at-will. Following briefing and hearing, District Judge Rolando Olvera agreed and issued a preliminary injunction staying prosecution against SpaceX. SpaceX is pursuing a permanent injunction in the case and the parties are currently briefing cross motions for summary judgment.

The future viability of lawsuits challenging the constitutionality of the OCAHO administrative law judges is very much linked to the outcome of a case currently pending decision by the U.S. Supreme Court. In Securities and Exchange Commission (SEC) v. Jarkesy, which was argued on November 27, 2023, the SEC is seeking to overturn a decision by the U.S. Court of Appeals for the Fifth Circuit holding the prosecution of security law violations and attendant civil penalties before SEC administrative law judges to violate Article II as well as Article VII of the Constitution. At oral argument, several justices expressed concern that a ruling in the defendant’s favor could invalidate administrative adjudications in immigration cases in particular – a prescient observation that has now been realized in the SpaceX and Walmart cases. A decision in the SEC case is due before the end of the current term which ends in June 2024.

Despite the foregoing jurisdictional challenges, it is business as usual at OCAHO. Complaints continue to be filed by ICE and IER, and the court continues to hear motions and conduct hearings involving other employers throughout the country.