In 1866 a man named Gideon Tucker made an observation that has become legendary: “No man’s life, liberty or property are safe while the Legislature is in session.”
Today it is even more true that your life, liberty and property are not only not safe when the agencies of the executive branch are on duty but they are positively in jeopardy. At RedState we have covered the travesty of civil forfeiture laws (here) and the IRS’s ability to seize your money for “structuring violations” (here). As it turns out there is another tool available to the federal government to shake you down for money absent any criminal or civil violation: hot goods orders.
Like the road to Hell, this process is full of good intentions. The idea is that for wage and hour laws to be enforceable the Department of Labor must be able to seize goods produced in violation of the law. This is presumably because the whole evidence and trial and legal defense thing is just too untidy. Unfortunately, in the hands of Obama’s Labor Department it is a cudgel used to bludgeon companies into coughing up money just because.
The case started in 2012 when the Labor Department told three Oregon farms it didn’t think the piecework rate system they used, which paid workers for pounds picked, resulted in high enough pay for field workers. Without spelling out exactly how it had arrived at this conclusion — an omission that would raise questions later — it obtained a hot-goods order against them, labeling an estimated $5 million worth of fresh blueberries as contraband forbidden to enter the channels of commerce for supermarket sale, processing, or any other use. And then it offered the growers a deal: if they wanted Washington to release their crop, they would have to not only fork over a demanded cash settlement but — this is the kicker — agree not to appeal.
It’s coercive enough to deploy the hot-goods power against a maker of steel ingots or knitted garments. But blueberries are a highly perishable crop that begins to lose value at once if not shipped. Indeed, no one could remember a case until the Obama years in which the hot-goods power had been used against agricultural produce at all, let alone one with a shelf life measured in days.
For the growers, of course, the proffered choice was no choice at all: rather than lose crops worth millions, they took the deal and agreed to pay $240,000.
As the Queen of Hearts says in Alice in Wonderland: verdict first, trial afterwards. More details via Salon:
At that point, the Labor Department turned to its hot goods authority, and the growers quickly settled.
Bernasek, the lawyer for the farms, had seen hot goods cases before but this one had an important distinction. In previous cases, the money farmers paid went into escrow, so that workers would be paid only if violations were proved. This time, however, the escrow option wasn’t offered, and if the farmers fought back, they feared that they would lose their harvest. “If you’re walking down a dark alley at night and someone puts a gun to your head and says, ‘Give me you wallet,” you can decide not to give them your wallet, but you’re going to get shot,” Bernasek said.
[David Weil, the head of the department’s Wage and Hour Division] declined comment except to say that the agency decides whether to hold money in escrow based on the facts of each case. According to a court transcript from last December, Jeremiah Miller, a Labor Department lawyer, said the money was not put into escrow because the agency was “driving a hard bargain.”
No clear allegation was made. No calculation of damages was provided to the accused. Instead of holding the money in escrow pending adjudication, as usual, the government demanded payment of a fine. And the growers had to agree not to appeal the fine. This sounds like America, right?
Fortunately for the growers, the Oregon Farm Bureau took up their cause and he case went to court.
Last year, two federal judges said the Department of Labor unfairly used the “hot goods” provision. Subsequently, the agency partially reimbursed the growers for the consent orders and fines.
“I think the clients are relieved to have it over,” said Tim Bernasek, the farmers’ attorney. “They appreciate of the farming community’s support during the two-plus years this has been going on.”
It is rare when an administrative agency is this thoroughly repudiated.
Congressman [mc_name name=’Rep. Kurt Schrader (D-OR)’ chamber=’house’ mcid=’S001180′ ] is introducing legislation to severely curtail the ability of Department of Labor to seize goods and coerce businesses into settlements. It would be a great gesture of bipartisanship if the House GOP leadership made this a priority.