‘Hot goods’ case heading for court
Oral arguments over the validity of settlement deal struck between two Oregon farms and the U.S. Labor Department have been scheduled for next month.
The two farms — Pan-American Berry Growers and B&G Ditchen — claim the agency coerced them into paying nearly $220,000 last year to settle allegations of minimum wage law violations.
The growers plan to ask Magistrate Judge Thomas Coffin to vacate the consent decrees during oral arguments scheduled for Oct. 21 in Eugene, Ore.
Tim Bernasek, attorney for the farms, said consent decrees can be voided if they were made under duress, according to the federal rules of civil procedure.
“There really was no consent,” he said. “There is precedent for it, but it is an unusual proceeding.”
In most cases that consent decrees are voided or modified, there has been a fundamental change in circumstances since the deal was signed, said David Schoenbrud, a law professor at New York Law School who has studied the issue.
“In general, it’s very difficult for a private defendant to get a consent decree changed,” he said.
Settlements can also be overturned if they’re based on an unconstitutional law or a statute that has been applied unconstitutionally, Schoenbrud said.
However, getting a consent decree vacated on these grounds is less common, he said.
In a statement, the Labor Department said it’s still in the process of responding to the farms’ allegations.
The use of the “hot goods” provision “has been long recognized and supported by court precedent,” including a case against Mississippi vegetable packers in 1946, which was one of the earliest “hot goods” cases, the agency said.
According to court documents filed by the farms, the agency threatened to invoke the “hot goods” provision of labor law against the farms.
The provision allows the Labor Department to halt shipments of goods produced in violation of labor laws.
The Labor Department notified the farms’ customers of the “hot goods” objection, which effectively blocked them from selling their crops, the documents say.
The farms believed the allegations were based on a faulty methodology but agreed to pay the settlements rather than having their crops spoil, the documents say.