Limiting Collateral Attacks on Administrative Final Orders: Distinguishing Subject-Matter Jurisdiction from Jurisdictional Errors

Introduction

Commissioner of Labor, State of Vermont v. American Empire General Contracting Corp. (No. 24-AP-207, April 4, 2025) arose from the Vermont Department of Labor’s effort to collect unpaid wages on behalf of a former employee. In March 2022 the Department issued a written determination and order for collection, concluding American Empire owed $66,580.31 in unpaid wages. After losing administrative appeals and this Court’s prior unpublished affirmance, the Commissioner filed suit in December 2023 under 21 V.S.A. § 342a(g) to enforce the final order. The Superior Court granted summary judgment to the Department, and American Empire appealed. The principal issue on appeal was whether the contractor could collaterally challenge the Department’s subject-matter jurisdiction in an enforcement proceeding. The Supreme Court of Vermont affirmed.

Summary of the Judgment

The Superior Court deemed the Department’s statement of undisputed material facts admitted when American Empire failed to comply with V.R.C.P. 56(c)(2) in opposing summary judgment.
The trial court held that the March 2022 order was a “final judgment” not subject to collateral attack except for a jurisdictional defect.
American Empire’s contention—that Vermont lacked subject-matter jurisdiction because its former employee lived and worked outside Vermont—was characterized as an error in the exercise of jurisdiction, not a lack of jurisdiction over the general class of wage-collection cases.
Because subject-matter jurisdiction extends to all § 342a cases and any case-specific errors must have been raised in the direct appeal, the collateral attack was barred. The Superior Court’s grant of summary judgment was affirmed.

Analysis

Precedents Cited

Town of Pawlet v. Banyai, 2024 VT 13, ¶ 8 – Defines a “final judgment” as one that conclusively determines the parties’ rights and leaves nothing for further adjudication.
Bennett Est. v. Travelers Ins. Co., 140 Vt. 339, 343 (1981) – Recognizes collateral attacks on final judgments are permissible only when the rendering court lacked subject-matter jurisdiction.
Nat. Res. Bd. Land Use Panel v. Dorr, 2015 VT 1, ¶ 14 – Clarifies the distinction between an agency’s general jurisdiction and errors in exercising that jurisdiction.
State v. Washburn, 2024 VT 45, ¶ 11 – Adopts the test that subject-matter jurisdiction concerns the power to hear a general category of cases, not correctness in a specific case.
Gilwee v. Town of Barre, 138 Vt. 109, 111 (1980) – Holds that an appellate court will affirm if any legal ground in the record supports the judgment, even if the trial court overlooked it.
V.R.C.P. 56(e) – Provides that undisputed facts properly asserted may be deemed admitted when an opposing party fails to comply with Rule 56(c).
Vasseur v. State, 2021 VT 53, ¶ 15 – Bars issues raised for the first time in a reply brief from appellate consideration.

Legal Reasoning

The Court first reaffirmed that administrative orders under 21 V.S.A. § 342a(c) become final when an employee fails to timely appeal, and the Employment Security Board upholds the agency decision. A party seeking to enforce such a final order in Superior Court under § 342a(g) may not relitigate the underlying determination except by properly invoked collateral-attack exceptions.

Drawing on Bennett Estate, the Court reiterated that the sole collateral-attack exception is lack of subject-matter jurisdiction. But Vermont jurisprudence refines “subject-matter jurisdiction” to mean a tribunal’s power to decide a general category of cases (Washburn; Dorr). Here the Department indisputably has authority over wage-claim investigations and to issue collection orders. American Empire’s argument—that the Department misapplied its jurisdiction because the employee allegedly performed work outside Vermont—attacks an exercise-of-jurisdiction error. Such errors must be raised in the administrative proceedings or direct appeals, not in an enforcement action.

The trial court also applied V.R.C.P. 56 to treat the Department’s factual allegations as undisputed. American Empire did not properly controvert those facts or preserve its Rule 56(c)(6) and judicial-notice arguments. The Supreme Court held those points forfeited.

Impact

This decision cements the finality of administrative wage-collection orders in Vermont. It clarifies that:

Collateral attacks on agency determinations are limited to challenges that the agency lacked general subject-matter jurisdiction under the enabling statute.
Disputes over how the agency exercised its jurisdiction (for example, fact-bound misapplications) must be raised within the administrative process or direct appeal, not deferred to enforcement proceedings.
Parties must diligently comply with Rule 56 when opposing summary judgment or risk having facts deemed admitted.

Future litigants will be on notice that any jurisdictional challenge concerning administrative orders must be asserted at the administrative or appellate level, or else be forfeited.

Complex Concepts Simplified

Final Judgment: A decision that conclusively settles all claims between the parties, leaving only execution of the judgment.
Collateral Attack: An attempt to challenge the validity of a final judgment outside of its original proceeding, except via authorized procedures (e.g., direct appeal, motion to vacate).
Subject-Matter Jurisdiction: The authority of a tribunal to hear cases of a particular class as defined by statute or constitution, not correctness in every decision it makes.
Jurisdictional Error: An incorrect application of law to facts by an otherwise properly empowered tribunal. Such errors do not negate the tribunal’s general authority.
Summary Judgment (V.R.C.P. 56): Disposition without trial when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.

Conclusion

Commissioner of Labor v. American Empire General Contracting Corp. underscores the finality of administrative wage-collection orders and the narrow scope of permissible collateral attacks. By distinguishing true subject-matter jurisdiction defects from errors in exercising jurisdiction, the Vermont Supreme Court ensures that enforcement proceedings remain efficient and focused on execution rather than re-litigation of underlying merits. Practitioners and parties will be reminded to assert any jurisdictional or factual challenges timely within the administrative or appellate process and to adhere strictly to procedural rules governing summary judgment.