Little business fighting 'devastating fines' from federal bureaucrats


A small Oklahoma company is challenging a punishment, a destructive fine of $31,000 for alleged paperwork errors in their business, that is being imposed by federal bureaucrats.

Those bureaucrats, according to a report on the fight from the Institute for Justice, set themselves up as prosecutor, judge and jury, and simply leveled the punishment.

“Danny and Diana [Barbee] face devastating fines for alleged paperwork errors. The Constitution says they have the right to defend themselves against those fines in a real court—one with an independent judge and the right to a jury,” explained IJ lawyer Bob Belden.

“But small businesses like ProCraft instead face years of costly and unconstitutional administrative proceedings where employees in federal law enforcement agencies like the Department of Justice act as investigator, prosecutor, judge, and jury.”

Their situation is that they run ProCraft Masonry, and were accused of paperwork errors.

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Now the government is demanding payment of fines of more than $31,000, without ever giving the company an opportunity to have the case heard in federal court.

“And it may never get to present its case to a jury,” the IJ warned.

The Barbees are teaming with the Institute for Justice, a nonprofit, public interest law firm, to challenge the constitutionality of an agency court system that acts as prosecutor, judge, and jury.

Danny Barbee opened ProCraft in 2010 and Diana has worked for ProCraft since those early days and runs the front office.

IJ reports, “The company focuses on residential projects and employs 11 people. The company’s problems began in 2020 when an investigator from the Department of Homeland Security showed up at their office asking to look at their employees’ I-9 forms. The I-9 form verifies the identity and employment authorization of individuals hired for employment in the U.S.”

The DHS alleged there were “technical violations” on those forms, and imposed a fine of $31,325.70.

But the fines are being imposed without benefit of any court ruling.

“Instead, the case would be decided by agency employees in the Department of Justice’s (DOJ) Office of the Chief Administrative Hearing Officer, a costly and time-consuming process where the deck is stacked in the government’s favor,” IJ reported.

Since January 2022, not including settlements between DHS and employers, DOJ’s agency judges have ruled in favor of DHS at in all 11 cases alleging employer errors on Form I-9. The fines in those cases totaled over $2.4 million, the legal team explained.

“I worked hard to build my business and now I could lose it without ever getting a chance to have a judge and jury hear the case,” said Danny. “If I got a speeding ticket, I would get a court date. But with my livelihood on the line, it could be years before we even get a final decision from bureaucrats.”

IJ said it’s one of several similar cases it is working, including ones involving a family-owned farm in New Jersey and a landscaping company in Maryland.

This new case comes just as the Supreme Court is set to hear oral arguments in SEC v. Jarkesy, a case where the 5th U.S. Circuit Court of Appeals held that the Securities and Exchange Commission’s similar use of in-house agency judges violates the Seventh Amendment.

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