Judge dismisses NC farm labor rule dispute as moot

A federal judge has dismissed a lawsuit from North Carolina farmers challenging Biden administration changes to the H-2A visa program. The judge accepted the federal government’s argument that a ruling in a Louisiana case made the North Carolina dispute moot.

“For the reasons stated in the Defendants’ Motion, and for cause shown, the Court will grant the Motion and dismiss this action without prejudice,” Chief US District Judge Martin Reidinger wrote Monday.

US Justice Department lawyers filed a court document on Sept. 22 asking Reidinger to dismiss the North Carolina case, USA Farm Labor v. Chavez-Deremer.

A group of farm owners working with the Waynesville-based group USA Farm Labor sued over the Labor Department’s 2023 changes to “adverse effect wage rates,” minimum hourly wages for both H-2A workers and their “domestic counterparts.” Those rates are tied to federal law’s requirement that farm owners’ use of the H-2A program “does not depress the wages of domestic workers,” according to a federal Appeals Court decision in the case.

Critics had warned that the Biden administration changes would inflate farmers’ costs and drive some toward hiring illegal immigrants.

“The Final Rule was also challenged in litigation in the Western District of Louisiana,” Justice Department lawyers wrote last week. “The court in the Louisiana litigation entered a preliminary injunction in September 2024 based upon the plaintiffs’ claims that the Final Rule violated the Administrative Procedure Act.”

Plaintiffs in the Louisiana case filed an “unopposed motion” on Aug. 22 for an entry of final judgment. The plaintiffs requested a “judgment of vacatur” against the rule. The judge in the case agreed on Aug. 26, entering the “final judgment and universal vacatur.” That means the court order nullified the challenged rule.

That Louisiana decision should end the North Carolina dispute, Justice Department lawyers argued. “It awards Plaintiffs the relief they sought, including an injunction, a declaration that the rule is invalid under the APA, and vacatur of the rule. Because they’ve received all of the relief requested, and there is nothing else this court can provide, the case is moot.”

“Defendants believe this case is moot and should be dismissed without prejudice,” Justice Department lawyers concluded.

The 4th US Circuit Court of Appeals had ruled against the North Carolina farm owners in February. An unpublished opinion upheld Reidinger’s decision not to grant an injunction against the rule change that took effect in 2023.

“As the district court recognized, enjoining the Rule would harm H-2A workers, domestic workers, and certain employers,” wrote Judge Nicole Berner for a unanimous three-judge 4th Circuit panel. “The district court explained: ‘The requested injunction could cause at least as much harm to these third-party workers, who would be deprived of wages that they are entitled to under the Rule, as a denial would harm the Plaintiffs, who would potentially avoid having to pay these wages.’”

Before the rule change, the Labor Department set one adverse effect wage rate for a geographic region. Under the Biden administration rule, federal officials set multiple rates based on occupation and region. “The DOL expects wages of workers who perform specialized jobs such as logging and truck driving will increase under the Rule,” Berner explained.

“In 2023, the DOL adopted the Rule because it believed its former AEWR methodology was failing to adequately protect U.S. workers’ wages,” the appellate opinion continued. “In particular, the DOL was concerned that employers were taking advantage of the H-2A program to hire specialized workers at artificially low wage rates.”

“Because the DOL’s previous methodology set a single AEWR for all workers in a geographic region, regardless of occupation, employers used the H-2A program to hire specialized workers — including truck drivers, mechanics, supervisors, loggers, and construction workers — at salaries reflective of the prevailing wage rates for less-specialized farm work like crop picking,” Berner wrote. “The DOL believed this loophole threatened the wages of U.S. workers.”

Reidinger did not abuse his discretion by rejecting an injunction against the rule, Berner wrote.

“We agree with the district court’s reasoning,” Berner explained. “Foreign workers who entered the United States under H-2A visas did so with an expectation that the Rule would determine their wages. Without those expected wages, some may feel compelled to depart the country or seek other employment.”

“Enjoining the rule ‘would inject a degree of uncertainty into the H-2A program’ that could injure some employers,” she wrote. “Even if employers promised to maintain H-2A workers’ existing wage rates, workers might view such promises as less reliable than the guarantee of an AEWR set by the Rule. The inability to retain a full workforce would inflict hardship on farm owners.”

The rule change also helped domestic workers, Berner argued.

“If the Rule has indeed resulted in higher AEWRs for certain domestic farm workers, as both parties projected it would, those workers are among the Rule’s direct beneficiaries,” she wrote. “Some, no doubt, have taken certain farm jobs in part because of the promise of these higher wage rates. Domestic workers in specialized occupations like logging and construction are also among the Rule’s beneficiaries.”

“Domestic workers in specialized fields and the businesses that employ them benefit from the Rule because they are no longer forced to compete with companies that underpay workers by taking advantage of regulatory gaps,” Berner added.

Critics argued that the new rule “would impose unreasonable costs on employers.” Some “alleged that these increased wage costs would compel farm owners to avoid the H-2A program entirely and instead hire undocumented workers,” Berner wrote.

The 4th Circuit rejected the farm owners’ arguments that they were likely to win the case. “Employers’ circular reasoning — that the program is against the public interest because it is unlawful — is nothing more than a restatement of their likelihood of success argument,” Berner wrote.

Former President Joe Biden appointed Berner. Judges DeAndrea Gist Benjamin, a fellow Biden appointee, and Robert Bruce King, appointed by former President Bill Clinton, joined Berner’s opinion.