Marshall v. Jerrico, Inc

In Marshall v. Jerrico, Inc. (1980) 446 U.S. 238, the United States Supreme Court considered whether a statutory scheme violated due process where civil penalties imposed by the Secretary of Labor for violations of child labor laws were returned to the agency as reimbursement of the enforcement program. It was claimed that the prospect for reimbursement created an "impermissible risk and appearance of bias" (id. at p. 241) on the part of the prosecuting official. The Supreme Court rejected this contention. (Id. at p. 252.) The United States Supreme Court considered a due process challenge to a provision of the federal Fair Labor Standards Act (the Act) (29 U.S.C. 212), which directed that sums collected as civil penalties for violation of child labor laws go toward reimbursing the United States Department of Labor's Employment Standards Administration (ESA) for the costs of determining violations and assessing penalties. (Marshall, at p. 239.) The challenger asserted that the ESA's pecuniary interest in the penalty proceeds "created an impermissible risk and appearance of bias by encouraging the assistant regional administrator to make unduly numerous and large assessments of civil penalties." (Id. at p. 241.) While recognizing that the appearance of neutrality is an essential aspect of due process in both civil and criminal proceedings (Marshall, supra, 446 U.S. at p. 242), the high court held that the pecuniary interest of the administrator "whose functions resemble those of a prosecutor more closely than those of a judge," was too remote and insubstantial to violate constitutional restraints. (Id. at p. 243.) The high court noted that the amount of funds earned in this manner amounted to less than 1 percent of the ESA's budget and that "no governmental official stands to profit economically from vigorous enforcement of the child labor provisions of the Act." (Id. at p. 250.) The Supreme Court rejected a due process challenge to section 16 of the Fair Labor Standards Act which provides for the return of sums collected as civil penalties for violations of the child labor laws to the Employment Standards Administration (ESA) as reimbursement for the costs of determining violations and assessing penalties. (Marshall, supra, 446 U.S. 238.) The court found that this reimbursement provision of the Labor Act did not violate due process by "creating an impermissible risk of bias in the enforcement and administration of the Act" (ibid.) because the biasing influence of the reimbursement provision was "too remote and insubstantial to violate the constitutional constraints applicable to the decisions of an administrator performing prosecutorial functions." (Id. at pp. 243-244.) In reaching its decision, the Marshall court underscored that the due process requirements of strict neutrality in adjudicative proceedings, which preserves both the appearance and reality of fairness, " are not applicable to those acting in a prosecutorial or plaintiff-like capacity." (Marshall, supra, 446 U.S. at p. 248.) As the court explained: "Our legal system has traditionally accorded wide discretion to criminal prosecutors in the enforcement process, , and similar considerations have been found applicable to administrative prosecutors as well, . Prosecutors need not be entirely 'neutral and detached, ' . In an adversary system, they are necessarily permitted to be zealous in their enforcement of the law. The constitutional interests in accurate finding of facts and application of law, and in preserving a fair and open process for decision, are not to the same degree implicated if it is the prosecutor, and not the judge, who is offered an incentive for securing civil penalties. The distinction between judicial and nonjudicial officers was explicitly made in Tumey v. Ohio (1927) 273 U.S. 510, 535, where the Court noted that a state legislature 'may, and often ought to, stimulate prosecutions for crime by offering to those who shall initiate and carry on such prosecutions rewards for thus acting in the interest of the state and the people.' " (Id. at pp. 248-249.) The Marshall court recognized that, although the neutrality requirements applicable to adjudicators do not apply to administrative prosecutors, prosecutors are public officials charged with serving the public interest and due process does impose some limits on prosecutorial discretion. Specifically, the court observed that "a scheme injecting a personal interest, financial or otherwise, into the enforcement process may bring irrelevant or impermissible factors into the prosecutorial decision and in some contexts raise serious constitutional questions. " (Marshall, supra, 446 U.S at pp. 249-250.) When evaluated against this standard, the alleged biasing influence of the reimbursement provision of the Labor Act was simply too remote to violate due process. Since the salary of the assistant regional administrator of the ESA was fixed by law, there was no possibility that a governmental official could personally benefit from vigorous enforcement of the child labor laws. Further, the court found there was no "realistic possibility that the assistant regional administrator's judgment will be distorted by the prospect of institutional gain as a result of zealous enforcement efforts." (Id. at p. 250.) For example, the record showed that penalties reimbursed to the ESA accounted for less than 1% of its budget and that it was not financially dependent on the maintenance of a high level of penalties. (Id. at pp. 250-251.) The court also considered the method by which reimbursements were allocated to regional offices and ESA's overall administration of the Labor Act provisions in determining that the potential for bias arising out of the reimbursement statute was simply too remote to offend due process. (Id. at pp. 251-252.) Marshall shows that a return of penalties to a prosecuting agency does not automatically offend due process. Rather, due process is offended only if the statutory scheme injects a personal interest, financial or otherwise, into the enforcement process which impermissibly affects prosecutorial discretion.