Ore. farmers win in Hot Goods ‘Fraud’ case

From Wall Street Journal Editorial 9-2-14

Some rare good news from the Obama -era regulatory wars: Those two Oregon blueberry growers who took on the U.S. Labor Department in a now-famous “hot goods” dispute are winning in court.

Earlier this year we told the story of Pan-American Berry Growers, B&G Ditchen and E&S Farms, which were accused in 2012 of suspected wage-law violations. The Labor Department threatened to seize the farmers’ blueberry crops until they settled and signed away their right to appeal (“Labor’s Blueberry Police,” March 18). With crops rotting, the farmers settled, agreeing to pay Labor more than $240,000. Then two of them sued.

Any past, current or future victims of overreaching by federal enforcers will appreciate the theme running through a succession of court defeats for Labor: By using the threat of rotting crops as coercion, the feds trampled due process. In January, Magistrate Judge Thomas Coffin ruled Labor had prevented defendants from having “their day in court.” The growers weren’t challenging the hot goods power itself; they were challenging the way it was implemented.

In February, Labor asked U.S. District Judge Michael McShane to review Judge Coffin’s decision. Judge McShane agreed with the original ruling, noting the growers had challenged “unique circumstances” involving “a highly perishable product at peak harvest.” Labor then asked Judge McShane for permission to appeal to the Ninth Circuit Court of Appeals. Last week he denied that request, calling Labor’s actions “fraud.”

Despite these legal knockdowns, Labor isn’t apologizing. David Weil, who runs the Wage and Hour Division, told a House subcommittee in July: “There is no statutory exception for agricultural or perishable goods to the hot goods provision.” But if it isn’t explicitly in the law, that is because no one anticipated that bureaucrats would beat fines out of private employers with the fear of seeing their products destroyed if they didn’t cave.

Labor even managed to produce bipartisan outrage. Rep. Kurt Schrader, a Democrat from Oregon, has introduced a bill “to exempt certain perishable agricultural commodities” from the hot goods provision. We commend the blueberry growers, who fought back, but a better bill would protect all businesses from such tactics.

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