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Peri & Sons Farms, Inc. v. Acosta

United States District Court, District of Columbia

March 18, 2019

PERI & SONS FARMS, INC., et al., Plaintiffs,
v.
R. ALEXANDER ACOSTA, et al., Defendants.

          MEMORANDUM OPINION

          TIMOTHY J. KELLY UNITED STATES DISTRICT JUDGE.

         This case is about the H-2A temporary agricultural labor program, which permits agricultural employers that face a shortage of domestic workers to meet their labor needs by hiring foreign workers on a temporary or seasonal basis (“H-2A workers”). To ensure that the employment of temporary foreign workers under this program does not adversely affect the wages of similarly employed domestic workers, the Department of Labor (the “Department”) must publish an annual notice setting forth the next year's Adverse Effect Wage Rates (AEWRs). AEWRs set a wage floor that employers participating in the H-2A program must pay to all agricultural workers.

         Peri & Sons Farms, Inc., and the National Council of Agricultural Employers (NCAE) (collectively, “Plaintiffs”) have sued the Secretary of Labor and two Department officials (“Defendants”), alleging that the Department violated the Administrative Procedure Act (APA) in two ways. First, Plaintiffs contend that the Department lacked statutory authority to promulgate AEWRs without first making a finding on whether the employment of H-2A workers adversely effected the wages of domestic agricultural workers. Second, Plaintiffs allege that the Department acted arbitrarily and capriciously when it disregarded certain factors, such as differences in workers' geographic area, occupation, skills, and experience, in assessing any such adverse effect.

         Before the Court is Plaintiffs' motion for a preliminary injunction. The parties have agreed to consolidate that motion with the merits, and to allow the Court to rule on the merits based on the current briefing and record. Defendants argue in their opposition that the Court does not have subject-matter jurisdiction over Plaintiffs' claims. As explained in more detail below, the Court agrees. Plaintiffs' claims present challenges to the 2010 regulation that established the methodology for determining AEWRs. Thus, because they fall outside the statute of limitations set forth in 5 U.S.C. § 2401(a), and because Plaintiffs have not shown that a narrow exception to that statute applies, the Court must dismiss the case for lack of subject-matter jurisdiction.[1]

         I. Background

         A. Statutory and Regulatory Background

         The H-2A visa program was created by the Immigration and Nationality Act of 1952 (INA) and amended by the Immigration Reform and Control Act of 1986. 8 U.S.C. § 1101 et seq. Under the program, employers seeking to hire H-2A workers must first receive certification from the Department that (1) there are insufficient domestic workers available to perform the needed labor or services and (2) the employment of the H-2A workers “will not adversely affect the wages and working conditions of workers in the United States similarly employed.” 8 U.S.C. § 1188(a)(1). To meet the second requirement, the Department sets annual AEWRs-wage floors for workers employed by an H-2A participating employer. 20 C.F.R. § 655.120. The stated purpose of the AEWR is “to neutralize any ‘adverse effect' resultant from the influx of temporary foreign workers.” See Labor Certification Process for the Temporary Employment of Aliens in Agriculture and Logging in the United States, 52 Fed. Reg. 20496-01, 20502 (June 1, 1987) (quoting Williams v. Usery, 531 F.2d 305, 306 (5th Cir. 1976)).

         The Department last updated the methodology by which it calculates AEWRs through notice-and-comment rulemaking in February 2010. See Temporary Agricultural Employment of H-2A Aliens in the United States; Final Rule, 75 Fed.Reg. 6884 (Feb. 12, 2010) (“2010 Rule”). Under the 2010 Rule, the Department determined that AEWRs are to be set at the “annual weighted average hourly wage for field and livestock workers, ” depending on the relevant state or region, based on the Department of Agriculture's “quarterly wage survey” (“USDA Average Wage”). 29 C.F.R. § 655.103(b). In accordance with § 655.120(c), the Department publishes annual notices in the Federal Register setting forth the upcoming year's AEWRs for each state. The Department published the AEWRs for 2019 through a notice in the Federal Register on December 26, 2018 (“2019 AEWR Notice”). See 83 Fed. Reg. 66306-01 (Dec. 26, 2018). On January 9, 2019, it went into effect. Id.

         B. The Parties

         Peri & Sons is a farming operation with about 15, 000 acres in and around Yerington, Nevada, where it grows onions and leafy greens. Compl., Ex. 4 ¶ 3. Peri & Sons participates in the H-2A program to meet its need for agricultural laborers. Id., Ex 4 ¶ 5. During its growing season in 2018, Peri & Sons employed 1, 768 H-2A workers. Id., Ex. 4 ¶ 6. When Peri & Sons filed its complaint, it employed 240 H-2A workers. Id., Ex. 4 ¶ 7. As an H-2A participating employer, Peri & Sons is subject to the 2019 AEWR Notice, which set the 2019 AEWR for Nevada at $13.13 per hour. Id., Ex. 4 ¶ 13. This rate for Nevada represented a 23% increase above the 2018 AEWR of $10.69 per hour. Id., Ex. 4 ¶¶ 10, 13. And in compliance with H-2A regulations, Peri & Sons pays additional expenses for its H-2A workers, including transportation and subsistence costs, as well as the cost of housing for the workers. Id., Ex. 4 ¶ 12. Peri & Sons estimates that the costs of housing and transportation for its H-2A workers adds $2.15 in costs for each hour worked, which, it asserts, “translates to an effective hourly wage of $15.28 per hour” for 2019. Id., Ex. 4 ¶¶ 12-13. By its own estimations, Peri & Sons predicts that the 2019 AEWR will cause its labor costs to increase from approximately $45 million to $49 million, which will cause it to experience a net loss of around $3 million, compared to receiving net profits of $974, 755 in 2018. Pls.' Supp. PI Br., Ex. 1 ¶ 7.

         NCAE is a national association founded in 1964 that represents the interests of agricultural employers before Congress and federal agencies, with an exclusive focus on labor issues. Compl., Ex. 5 ¶ 3. NCAE's membership comprises around 85% of all employers in the United States that participate in the H-2A program. Id., Ex. 5 ¶ 4. At the peak of growing season, NCAE's members employ about 204, 000 H-2A workers. Id., Ex. 5 ¶ 6. NCAE brings its claims on behalf of its H-2A participating employers and the H-2A participating employers of its member associations. Id. Ex. 5 ¶ 9. Those employers, NCAE contends, face millions of dollars in increased labor costs because of the 2019 AEWRs, which will threaten the viability of some of its member farms. Id., Ex. 5 ¶ 14. For example, Cedar Farms in Idaho-an NCAE member participating in the H-2A program-declared that the 2019 AEWR increase is “catastrophic” to its operations and threatens the “sustainability and continued longevity” of the company. Pls.' Supp. PI Br., Ex. 7 ¶ 8. Similarly, Petrocco Farms in Colorado contends that the 2019 AEWR increase will cause it to “suffer significant harm” and lead to “unsustainable” losses that will force it “to cease operations.” Id., Ex. 3.

         United Farm Workers (UFW), which joined this action as a Defendant-Intervenor, is the largest farmworkers' union in the United States with a membership of over 9, 000 in 2018, including both domestic and H-2A workers. 1st Mot. to Intv., Romero Decl. ¶¶ 2, 6. UFW is headquartered in California and represents farmworkers in over 30 states. Id., Romero Decl. ¶¶ 3, 4. UFW seeks to protect the rights and interests of farmworkers by advocating for higher wages and greater workplace safety protections. Id., Romero Decl. ¶ 5. UFW contends that the enjoinment of the 2019 AEWRs would harm its members, many of whom would be paid at lower wage rates and would face difficulty recovering earned backpay if the 2019 AEWRs were to be reinstated at a later date. Id., Romero Decl. ¶¶ 11-13.

         Three individual farmworkers also joined this action as Defendant-Intervenors. Arnoldo Charles is an experienced farmworker and U.S. citizen who has worked at farms in Ohio, Indiana, and Mississippi from 2009 through 2015. 2d Mot. to Intv., Ex. 1 ¶ 5. When he moved to intervene, Charles was prepared to accept seasonal agricultural work in Ohio and Indiana over the course of 2019. Id., Ex. 1 ¶ 7. Olegario Lopez is also an experienced farmworker and a lawful permanent resident of the U.S. who has performed agricultural work in Illinois, Michigan, Nebraska, and the southeastern U.S. since 2001. Id., Ex. 2 ¶¶ 4, 5. When he moved to intervene, Lopez planned to perform agricultural work in Illinois and in the southeastern U.S. in 2019. Id., Ex. 2 ¶¶ 5, 10. Michael Cortez is a U.S. citizen residing in Harlingen, Texas. Id., Ex. 3 ¶¶ 2, 3. He plans to seek agricultural work in 2019 with an H-2A employer in Texas. Id., Ex. 3 ¶ 10. All three individual intervenors assert an interest in preventing the enjoinment of the 2019 AEWRs because of the higher wages they expect to be paid under those rates. Id., Ex. 1 ¶ 8; id., Ex. 2 ¶ 11; id., Ex. 3 ¶ 10.

         C. Procedural Background

         On January 7, 2019, Plaintiffs filed their complaint, as well as a motion for a temporary restraining order and preliminary injunction. Plaintiffs bring two counts under the APA. Compl. ¶¶ 39-46. First, Plaintiffs allege that in setting the 2019 AEWRs, Defendants acted “not in accordance with law” and “in excess of statutory jurisdiction, authority, or limitations” by increasing the rates without finding that the use of H-2A workers had an “adverse effect” on the wages of U.S. workers. Id. ¶¶ 39-42 (quoting 5 U.S.C. § 706(2)). Second, Plaintiffs allege that Defendants acted arbitrarily and capriciously when it did not assess any potential “adverse effect” without considering “differences in geographic areas, occupation, skills, or experience” or the additional costs of H-2A employment, such as housing and transportation for H-2A workers. Id. ¶¶ 43-46. Plaintiffs' motion sought relief in the form of a temporary restraining order and preliminary injunction that would enjoin Defendants from (1) implementing the 2019 AEWR Notice; (2) issuing any further notices without including “a finding of actual ‘adverse effect' or that do not consider geographic areas, occupation, skills, or experience;” (3) and enforcing the 2019 AEWRs against any H-2A employer. Id. ¶ 46; see Pls.' Mot. at 4-5.

         On January 8, 2019, the Court held a telephonic hearing on Plaintiffs' motion for a temporary restraining order. The Court denied that motion because Plaintiffs had not shown that they faced imminent and irreparable harm between that time and when Plaintiffs' motion for preliminary injunction could be resolved. See Docket, Civ. No. 19-34 (January 9, 2019 Order). On January 9 and 15, respectively, UFW and Michael Cortez, Arnoldo Charles, and Olegario Lopez filed motions to intervene as Defendants. 1st Mot. to Intv.; 2d Mot. to Intv. On January 14, Plaintiffs filed a supplemental memorandum and declarations in ...


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