gh Package Product Testing and Consulting, Inc. v. Peter M. Buttigieg, Tristan Brown, and U.S. Department of Transportation

CASE SUMMARY

DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) launched an administrative enforcement proceeding in November against NCLA’s client, gh Package Product Testing and Consulting, Inc., which tests packages used to safely transport hazardous materials. PHMSA claimed the company submitted test reports with minor inaccuracies that violated DOT regulations. PHMSA did not claim the company knew or should have known about the alleged inaccuracies, despite civil penalties only applying to “knowing” violations.

DOT’s in-house administrative adjudicators are illegitimate under the Constitution’s Article II, as they are civil servants not appointed by the President or DOT Secretary and shielded from presidential removal. Agency officials act as both judges and prosecutors in these tribunals and do not disclose evidence that would exonerate defendants, despite long-standing Supreme Court precedent mandating that the government disclose exculpatory evidence in criminal cases. DOT’s in-house proceedings also lack jury trials on questions of fact, running afoul of the Seventh Amendment right to a jury trial for civil cases.

NCLA requested a preliminary injunction in August 2023 to stop the unconstitutional proceeding against gh. Just days before PHMSA was to file its final brief opposing such injunction, it withdrew its notice accusing the company of probable wrongdoing, thus ending the unlawful proceeding as NCLA requested. NCLA vindicated its client in this successful case against an abuse of power by the DOT.

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CASE STATUS: Closed

CASE START DATE: June 26, 2023

COURT: U.S. District Court for the Southern District of Ohio

CASE DOCUMENTS

December 19, 2023 | Stipulated Dismissal
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October 26, 2023 | Plaintiff’s Opposition to Defendants’ Motion to Dismiss and Reply in Support of Plaintiff’s Motion for Preliminary Injunction
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August 28, 2023 | Plaintiffs’ Combined Motion for a Preliminary Injunction and Memorandum in Support of the Motion
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June 26, 2023 | Complaint for Declaratory and Injunctive Relief
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PRESS RELEASES

December 19, 2023 | In NCLA Victory, Dep’t of Transportation Scraps Illegitimate Administrative Proceeding vs. gh Package

Washington, DC (December 19, 2023) – Today, the New Civil Liberties Alliance agreed to a stipulated dismissal of its gh Package v. Buttigieg lawsuit challenging the Department of Transportation’s unconstitutional and abusive administrative enforcement regime. NCLA’s federal-court lawsuit successfully pressured DOT to dismiss with prejudice its case against a family-run company, gh Package Product Testing and Consulting, Inc., which tests packages used to transport hazardous chemicals safely. The stipulated dismissal follows DOT’s dismissal of its administrative proceeding against gh Package with prejudice. NCLA celebrates this great victory for its client.

DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) launched the enforcement proceeding against gh last year, claiming the company submitted test reports with minor inaccuracies that violated DOT regulations. DOT hauled gh into its in-house tribunal, where agency officials violate the due process of law by acting as both prosecutor and adjudicator and by depriving defendants of jury trials. DOT’s in-house adjudicators are illegitimate under Article II of the Constitution because neither the President nor the Secretary of Transportation appoints them and they enjoy improper protection from presidential removal. Rather than defend against these constitutional defects on the merits in a real federal court, DOT decided to dismiss its enforcement proceeding.

As a result of NCLA’s recent Supreme Court victory in Michelle Cochran’s fight against the Securities and Exchange Commission, gh was able to challenge DOT’s unlawful tribunal directly in district court before having to endure the entire administrative proceeding. NCLA requested a preliminary injunction in August to stop the unconstitutional proceeding against gh. Just days before PHMSA was to file its final brief opposing that injunction, it withdrew its notice accusing gh of probable wrongdoing, thus ending the unlawful proceeding as NCLA requested. The Administrative Law Judge who oversaw the enforcement proceeding ultimately dismissed it, declaring that “[b]y its decision to take no further action on the allegations,” PHMSA had “in effect failed to meet its burden” to prove its accusations. NCLA is pleased to have vindicated its client in this successful case against DOT’s unlawful enforcement regime, and we hope that defendants in similar proceedings will take note.

NCLA released the following statements:

“For decades, DOT has dragged small businesses through administrative proceedings that violate basic constitutional rights such as due process and the right to a jury trial. Thanks to NCLA’s Cochran victory, family-owned businesses like gh can now fight back by challenging those illegitimate proceedings in federal court. Rather than attempt to defend its unlawful practices, DOT dropped the charges against gh. This is a winning formula that NCLA hopes other small businesses will emulate when they are subject to DOT’s unlawful enforcement actions.”
— Sheng Li, Litigation Counsel, NCLA

“DOT put the ‘gh’ in Grinch when it brought this enforcement action against our client in its unlawful in-house tribunal. Happily, NCLA’s good work kept the Grinch from stealing gh Package’s civil liberties this Christmas.”
— Mark Chenoweth, President and General Counsel, NCLA

For more information visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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August 28, 2023 | NCLA Asks Federal Court to Halt Illegitimate U.S. Dep’t of Transportation Administrative Proceeding

Washington, DC (August 28, 2023) – Today, the New Civil Liberties Alliance asked the U.S. District Court for the Southern District of Ohio in gh Package Product Testing and Consulting, Inc. v. Buttigieg to preliminarily enjoin an abusive Department of Transportation (DOT) enforcement effort against a family-run company.

DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) launched an administrative enforcement proceeding last November against NCLA’s client, gh Package Product Testing and Consulting, Inc. (“gh Testing”), which tests packages used to safely transport hazardous materials. PHMSA claims the company submitted test reports with minor inaccuracies that violate DOT regulations.

DOT has hauled gh Testing into its in-house tribunals, where agency officials violate the due process of law by acting as both prosecutor and adjudicator. DOT’s in-house administrative adjudicators are further illegitimate under Article II of the Constitution because they are not appointed by the President or DOT Secretary and are improperly shielded from presidential removal. Such tribunals cannot exercise judicial power to adjudicate DOT’s claims because Article III of the Constitution vests such power exclusively in federal courts. Finally, DOT’s in-house proceedings run afoul of the Seventh Amendment by depriving gh Testing of its right to a jury trial.

NCLA has established a strong track record fighting unconstitutional adjudication regimes within the Administrative State, including at DOT. In January, the U.S. Court of Appeals for the Sixth Circuit vacated a PHMSA-imposed civil penalty against another NCLA client, Polyweave Packaging, Inc., after the agency admitted its chief adjudicator was not constitutionally appointed. PHMSA ultimately dismissed its case against Polyweave in May. That decision did not erase the harm caused by the agency’s profound disregard for the Constitution, a pattern that currently threatens gh Testing.

NCLA released the following statement:

“Suppose you are accused of breaking a law and are prosecuted. But instead of a judge and jury, the chief of police presides over your trial and decides your fate. Americans would rightly recognize such an affair to be profoundly unjust and an affront to the Constitution. Yet, DOT and other administrative agencies routinely act as prosecutor, judge, and jury against Americans whom they accuse of breaking the law. That must stop now.”
—Sheng Li, Litigation Counsel, NCLA

For more information visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Download the full document

June 28, 2023 | NCLA Suit Aims to Take Down Unconstitutional Enforcement Regime at the U.S. Dep’t of Transportation

Washington, DC (June 28, 2023) – The Department of Transportation (DOT) is flexing its muscles against a small, family-owned and operated company, ignoring the federal law that only allows civil penalties when a company “knowingly violates” a regulation. So, the New Civil Liberties Alliance has filed a Complaint in the U.S. District Court for the Southern District of Ohio, challenging the legitimacy of DOT’s adjudicatory structure and the abusive enforcement effort that could end up unjustly costing the company $24,000 in civil penalties.

DOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) launched an administrative enforcement proceeding in November against NCLA’s client, gh Package Product Testing and Consulting, Inc., which tests packages used to safely transport hazardous materials. PHMSA claims the company submitted test reports with minor inaccuracies that violate DOT regulations. PHMSA did not claim the company knew or should have known about the alleged inaccuracies, despite civil penalties only applying to “knowing” violations.

NCLA’s lawsuit exposes the fact that DOT’s in-house administrative adjudicators are illegitimate under the Constitution’s Article II, as they are civil servants not appointed by the President or DOT Secretary and shielded from presidential removal. Agency officials act as both judges and prosecutors in these tribunals and do not disclose evidence that would exonerate defendants, despite long-standing Supreme Court precedent mandating that the government disclose exculpatory evidence in criminal cases. DOT’s in-house proceedings also lack jury trials on questions of fact, running afoul of the Seventh Amendment right to a jury trial for civil cases.

Since its founding in 2017, NCLA has built a strong track record fighting unconstitutional adjudication regimes within the Administrative State, at the U.S. Securities and Exchange Commission, Consumer Financial Protection Bureau, and DOT. In January, the U.S. Court of Appeals for the Sixth Circuit vacated a PHMSA-imposed civil penalty against another NCLA client, Polyweave Packaging, Inc., which the agency had also pursued without proving the company knowingly violated a regulation. PHMSA ultimately dismissed its case against Polyweave in May, a decision that does not erase the harm caused by the agency’s profound disregard for the Constitution.

NCLA released the following statements:

“The Department of Transportation has a long history of dragging small businesses before its own in-house tribunals, where democratically unaccountable agency officials act as prosecutor, judge, and jury. Even though the underlying allegations are meritless, the businesses are bullied into paying fines because they cannot afford years of futile litigation in these hopelessly biased tribunals. It’s high time for federal courts to put an end to DOT’s unconstitutional adjudication scheme.”

— Sheng Li, Litigation Counsel, NCLA 

“Every day it becomes increasingly apparent just how deeply problematic federal agency adjudication systems and practices are. The Department of Transportation is no exception. Its adjudicatory apparatus has deprived our client of constitutionally guaranteed rights, including the right to a trial by jury, the opportunity to be heard by an unbiased adjudicator, and the right to due process of law under the Fifth Amendment. We look forward to having a federal court scrutinize DOT’s multiple violations of our client’s civil liberties.”

— Kara Rollins, Litigation Counsel, NCLA

For more information visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Download the full document

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