Marshall v. Jerrico, Inc.

RESPONDENT: Jerrico, Inc.
LOCATION: University of California Medical School at Davis

DOCKET NO.: 79-253
DECIDED BY: Burger Court (1975-1981)

CITATION: 446 US 238 (1980)
ARGUED: Mar 19, 1980
DECIDED: Apr 28, 1980

Kenneth Steven Geller - for appellants
Thomas W. Power - for appellee

Facts of the case


Media for Marshall v. Jerrico, Inc.

Audio Transcription for Oral Argument - March 19, 1980 in Marshall v. Jerrico, Inc.

Warren E. Burger:

We'll hear arguments first this morning in Number 79-253, Marshall, the Secretary of Labor against Jerrico, Incorporated.

Mr. Geller, I think you may proceed whenever you are ready.

Kenneth Steven Geller:

Thank you, Mr. Chief Justice.

May it please the Court.

This case is here on direct appeal from the District Court here in the District of Columbia because a single judge of that Court has declared unconstitutional and enjoined the Secretary of Labor from enforcing the civil penalty provisions of the child labor statute.

Specifically, Judge Gasch found that the Due Process Clause of the Fifth Amendment is violated by the last sentence of Section 16 (e) of the child labor statute, which provides that the sums collected by the Secretary as civil penalties may be applied towards reimbursement of the cost of determining child labor violations.

The facts of this case may be briefly stated.

Appellee runs a chain of restaurants in the southeastern United States.

In 1969, 1973 and again in 1974, Department of Labor compliance officers found that appellee had employed a number of busboys and waitresses in violation of the federal child labor laws.

When two more such instances came to light in March 1975, the Department ordered an investigation into the hiring practices in all of appellee's restaurants.

Thereafter, the Assistant Regional Administrator of the Employment Standards Administration, which is the part of the Department of Labor that enforces the child labor laws, cited appellee for 169 separate child labor violations and assessed the civil penalty of $103,000.

This sum represented a penalty of $300 each for unlawfully implying -- employing seven persons under the age of 14, plus a penalty of $100 each for unlawfully employing 162 persons under the age of 16.

In addition, the Assistant Regional Administrator assessed the penalty of $500 for each of the 169 children, or a total of $84,500, because he believed that the history of child labor violations in appellee's restaurants stretching back to 1969, showed that appellee had been aware of the child labor violations but had done nothing to correct them.

Now, appellee filed an exception to this citation.

And after a hearing, the Administrative Law Judge found that the existence of the child labor violations was clearly established, but he disagreed with the Assistant Regional Administrator on whether these violations were willful.

The Administrative Law Judge therefore struck the $84,500 assessment and reduced the civil penalty to $18,500.

Now, appellee did not seek judicial review of this decision.

Instead, several months later, it began these lawsuits seeking a declaratory judgment that Section 16 (e) is unconstitutional and an injunction prohibiting its enforcement.

Warren E. Burger:

Is there any reason why he couldn't raise that on a -- at an earlier stage in -- within the framework of this case?

Kenneth Steven Geller:

Appellee could, we believe, have sought judicial review of the Administrative Law Judge's assessment of the $18,500 and raised this constitutional objection as well as any other objections --

Warren E. Burger:

Without having raised it before the Administrative Law Judge.

Kenneth Steven Geller:

It -- it was raised -- I don't believe it was raised before the Administrative Law Judge, although the Administrative Law Judge could not have given relief on that ground, so I'm not sure that that precludes raising it.

Warren E. Burger:

For the first time, he could've raised, it would've been on --

Kenneth Steven Geller:

On --

Warren E. Burger:

-- review in an Article III court?

Kenneth Steven Geller:

That -- well, that's -- he could've raised it earlier, but I think the first time he could have had -- it could have had any expectation of relief was in an Article III court.

That's -- that's right.

Now, as I mentioned a moment ago, the District Court agreed with appellee's contentions, relying on a line of cases beginning with Tumey against Ohio.

Judge Gasch held that the reimbursement provision of Section 16 (e), and I quote, “Creates a situation in which bias may creep into the decisions of the regional office -- officials who impose civil penalties, that the statute is therefore invalid under the Due Process Clause.”

Now, it's the Government's position that the injunction entered by the District Court is erroneous for three separate reasons.