Cedar lumber used for fencing (non-structural grades) commonly includes defects from powder post beetles, carpenter ants and other pests that affected these trees prior to harvest. This does not affect the suitability of the wood for fencing. Most cedar is kiln dried which kills the pests that may have caused this damage. You would have a basis for complaint only if you specified clear cedar in your contract agreement.
The presence of these defects should not be a cause for concern and does not indicate an active infestation. If the damage is so severe at to threaten the use of the wood for the intended purpose, it should be discarded or replaced. In other words, a judgement call.