Up Next At High Court: Pipeline Takings & H-2A Fines

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The U.S. Supreme Court will wrap up its November sitting by hearing disputes over whether federal or state law should control how much compensation landowners receive for private condemnations under the Natural Gas Act and if the U.S. Department of Labor can use in-house courts to issue civil penalties for violations of its temporary agricultural worker program. 

The justices will also weigh in on a dispute that seeks to extend a little-used 1971 precedent to allow a former Hawaiian federal prisoner to hold prison staff responsible for allegedly failing to provide adequate medical care. 

Additionally, the court will issue orders Monday. The court will be closed Wednesday for Veterans Day. 

Here, Law360 previews this week's oral arguments.

Prisoner Lawsuits

On Monday, the justices will consider whether to expand a 1971 precedent to a suit that seeks to hold prison officials responsible for allegedly failing to provide adequate medical care to an injured prisoner.

Francis Nielsen, a paramedic at a Hawaii federal prison, has asked the high court to overturn a Ninth Circuit decision to revive a former prisoner's lawsuit seeking $3 million in damages for improper medical treatment. The former prisoner, Kekai Watanabe, claims Nielsen and other prison staff violated his Eighth Amendment rights by rejecting his requests to be taken to a hospital for what was later diagnosed as a fractured tailbone. 

In September 2024, a 2-1 Ninth Circuit panel reversed a district court's dismissal of Watanabe's lawsuit, finding his claims were identical to those the Supreme Court had allowed to proceed in a 1980 case involving an inmate's death due to improper medical treatment. The panel found the lower court had incorrectly found Watanabe's claims barred under the test used to determine whether a claim can move forward under the high court's 1971 decision in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics because Watanabe hadn't died from his injury and he had access to administrative remedies.

Nielsen contends that Watanabe's case differs significantly enough from the 1980 case, Carlson v. Green, to prevent it from being recognized as an allowable so-called Bivens claim. In the 55 years since the Supreme Court decided Bivens, the court has established a strict test that has effectively barred the expansion of the 1971 ruling to new contexts, and that, when applied in this case, should bar Watanabe's claims, Nielsen said. The test prohibits Bivens from being expanded to new contexts, a low bar that Nielsen argued is easily satisfied in this case by the difference in severity of the injuries and the type of relief Watanabe had available compared to the prisoner in Carlson. Federal statutes commonly treat injuries differently based on their severity, he argued, noting that a wrongful-death suit entitles a plaintiff to seek remedies other than those available to a plaintiff who survived their injuries.

The Bureau of Prisons' administrative remedies program, which was enacted after Carlson, additionally allowed Watanabe to seek injunctive relief, which he did unsuccessfully, Nielsen said. The availability of alternative remedies is another common factor in determining whether a Bivens claim would be expanded into a new context, he added.

The federal government, which will argue in favor of Nielsen, added the high court's ruling in Carlson has become "obsolete" because every new prisoner lawsuit will raise new questions about the separation of powers, statutory backdrop and alternative remedies. Among other things, the Supreme Court has held that courts are ill-equipped to oversee the administration of prisons, which many cases filed under Bivens seek to do. Creating a new or expanded type of damages for prisoner claims involves complex policy judgments that should be weighed by Congress, not the courts, the government argued. 

Watanabe, on the other hand, claims his lawsuit can proceed under Carlson. The difference in severity of his injuries, which he said he still suffers from today, and the prisoner's death in Carlson isn't substantial enough to require the justices to extend Bivens to a new context. What matters, he argued, is that the lawsuits involve the same Eighth Amendment rights and same type of defendants. The severity of his injury, Watanabe added, will determine the damages he is entitled to, but doesn't have any effect on whether he can sue in the first place.  Additionally, although Congress has enacted administrative remedies for injured prisoners, those remedies are only meant to be prerequisites to lawsuits, not a bar to them. Since he has tried and failed to seek administrative remedies, Watanabe claims he's entitled to sue Nielsen and others in federal court under Carlson.

MoloLamken LLP attorney Lucas M. Walker will argue for Nielsen, Vivek Suri, of the U.S. Solicitor General's Office, will argue for the federal government as amicus in favor of Nielsen, and Weil Gotshal & Manges LLP partner Joshua M. Wesneski will argue for Watanabe. 

The case is Nielsen v. Watanabe, case number 25-417. 

Pipeline Takings

Also Monday, the Supreme Court will hear arguments over whether state or federal law determines how much compensation landowners receive in takings cases under the Natural Gas Act.

A group of North Dakota landowners, led by Leonard Hoffmann, has petitioned the justices to reverse an Eighth Circuit holding that they aren't entitled to attorney fees related to an eminent domain compensation case with pipeline owner WBI Energy Transmission Inc. The landowners claim that state law applies to their case and entitles them to receive attorney fees on top of compensation for the land taken by WBI. 

But a unanimous Eighth Circuit panel held in March 2025 that the Natural Gas Act, which authorized WBI to take the landowners' property through eminent domain, required the pipeline owner to only provide minimum compensation for the land's value under the Fifth Amendment. Because WBI was effectively acting as the federal government through NGA's delegation of the eminent domain power, the company was only required to pay what the federal government itself would pay under the Fifth Amendment, the panel said. 

Hoffmann and the landowners argue the Eighth Circuit is wrong. The NGA, they said, is silent about whether state or federal law dictates the compensation owed to property owners, and that, without an express statement otherwise, state law should fill that gap. If Congress intended to give private parties the power to disregard state law compensation provisions, it was required to say so, the landowners said. Since the NGA is silent on that aspect, prior Supreme Court rulings provide the justices with guidelines on how to fill in that gap. In this case, applying state law is proper because it wouldn't hinder the government's administration of the NGA or conflict with its objectives, and applying federal law would upset local commercial expectations since North Dakota landowners expect to receive compensation for attorney fees in eminent domain disputes. 

However, WBI contends the same gap in the NGA implies Congress wanted federal law to apply in instances like this. The NGA was adopted in part to replace what had become a patchwork of state compensation laws that often hindered interstate infrastructure projects like pipelines, the company argued. The law includes a "categorical" delegation of eminent domain power to companies, which allows them to act on behalf of the federal government when taking property, WBI said. Because the companies act on behalf of the federal government under the NGA, they are also subject to the same constraints established by the Fifth Amendment when it comes to compensating property owners, WBI argued. 

The federal government, which will argue in favor of WBI, added that the Supreme Court has already established that the NGA's delegation of eminent domain power is categorical in its 2021 ruling in PennEast Pipeline Co. v. New Jersey. Under that determination, federal law is the default standard that applies unless Congress says otherwise. While states are free to authorize additional compensation when their own governments take property from landowners, they are not entitled to apply those limits to the federal government or entities acting in its place, the federal government said. 

Robert J. McNamara, the Institute for Justice's deputy litigation director, will argue for Hoffmann and the landowners, McDermott Will & Schulte LLP partner Paul W. Hughes will argue for WBI, and Zoe A. Jacoby of the U.S. Solicitor General's Office will argue for the federal government as amicus in favor of WBI. 

The case is Hoffmann et al. v. WBI Energy Transmission Inc., case number 25-159.

H-2A Fines

On Tuesday, the justices will debate whether the Department of Labor can use in-house courts to issue civil fines against parties that violate the conditions of agency programs.

The DOL has asked the high court to overturn a Third Circuit decision that found the department's in-house adjudication of civil fines against New Jersey farm Sun Valley Orchards LLC for alleged H-2A visa violations unconstitutional. The department ordered Sun Valley to pay $211,800 in civil penalties and more than $344,000 in back wages to temporary agricultural workers it had hired in 2015 after an administrative law judge found the farm had violated several program requirements related to housing and working conditions.

A unanimous three-judge panel wiped out the civil penalties and back wages awards in July 2025 after finding the DOL's in-house court system violated Article III of the U.S. Constitution. The claims brought against Sun Valley were akin to common law breach-of-contract claims and were therefore required to be adjudicated by a federal court, the panel said.

The DOL argues the Third Circuit's ruling contradicts both the Constitution and Title 8 Section 1182(g)(2) of the U.S. Code, which authorizes the secretary of labor to impose penalties when an H-2A employer fails to comply with the program's terms and conditions. The department has read the statute since its enactment in 1986 to authorize in-house court proceedings like the one Sun Valley was subject to and no Supreme Court decision undermines the DOL's interpretation, the department argued. In fact, the justices' 2024 decision in Securities and Exchange Commission v. Jarkesy most recently reiterated the idea that Congress can enact statutes that empower executive officers, such as the labor secretary, to impose monetary remedies for violations of program conditions.

Additionally, Article III requires only cases involving private rights to be adjudicated in courts, the DOL said. Cases involving government benefits and government programs have historically been adjudicated by agencies. The H-2A program, which gives third parties the right to bring migrant workers to the U.S. for temporary work, is a stereotypical government program, the DOL said. 

Meanwhile, Sun Valley claims its case belonged in federal court. While Article III and federal statutes might allow the DOL to adjudicate some disputes in-house, that authority is limited to cases that involve the department's initial decision to authorize an employer to participate in the H-2A program, for example. Once that decision has been made, any efforts to enforce the employer's compliance with the government program are breach-of-contract claims that must be brought in federal court. Section 1182(g)(2), which also authorizes the labor secretary to seek injunctive relief for violations, says nothing about the proper forum for seeking civil penalties or other remedies, Sun Valley said. And the Supreme Court in its decision earlier this year in Federal Communications Commission v. AT&T Inc. affirmed that agency authorized to impose penalties can still be required to adjudicate those penalties in court, the farm argued. 

Sarah M. Harris, of the U.S. Solicitor General's Office, will argue for the DOL, while Robert E. Johnson, an Institute for Justice senior attorney, will argue for Sun Valley. 

The case is Department of Labor et al. v. Sun Valley Orchards LLC, case number 25-966.

--Editing by Kelly Duncan.


For a reprint of this article, please contact reprints@law360.com.

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