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Rami Fakhoury on IT Immigration

The Fight Back Book: Introduction Part A, B

Rating: 32 votes, 5.00 average.

Rami Fakhoury and Mark Levey


Copyright@2010 Fakhoury Law Group/ Rami Fakhoury


I.    INTRODUCTION : Part A and Part B


 



  1. A.     BACKGROUND: Business Immigration - "Casciate Ogni Speranza Voi Che Entrate"?


1. About This Book


This volume of the ILW publishers practice guides offers a practical step-by-step approach to overcoming a wide range of appellate issues encountered in business immigration today.


If you employ or represent H-1B Specialty Workers, L-1 Intracompany Transferees, or have filed a PERM labor certification you already know the system is gamed by its administrators to deter access, and how difficult and costly it has become to obtain approvals and visas.  For some categories of petitioners, particularly companies that place sponsored employees at client sites, U.S. immigration often defeats all but the most determined and well-prepared.   Under the guise of national security, DHS has usurped the Labor Department's statutory enforcement role over wage and hour matters, and imposes an often impossibly high burden of proof upon outsourcing firms to establish a notional standard of employer "control" over H-1B workers.


But, there are strategies for success, even in this challenging environment.  Lawyers and their clients must now be prepared to confront U.S. agencies head-on, and if necessary appeal and litigate cases to obtain a just result. 


But, there are legal strategies for survival and, maybe, even hope of making the U.S. business immigration system work according to Rule of Law principles, again.


 


 


 


For those who have struggled with USCIS adjudications, and found the process to be arbitrary and capricious, and the results contrary to law, it may now finally be time to try the courts.  The Labor Department's administration of the PERM program has become equally if not more irregular, prone to delay, and inconsistent with law.  Both agencies practice a kind of results- driven rulemaking through adjudication, and have attempted to kill outsourcing by administrative means while Congress has refused thus far to do so by statute.  


Neither agency follows the "publish-and-comment" requirement of the Administrative Procedures Act (APA).  Instead, they impose sudden changes in policy by edict, unannounced and with retroactive effect.  This system has become unpredictable, inconsistent with published regulations, and without support in statute.  The courts have held that agencies may not impose "de facto rules and binding norms"[1] -- bureaucrats do not have Czar-like powers to dictate rulings by "ukase"[2] --  and neither "USCIS nor AAO may unilaterally impose novel substantive or evidentiary requirements beyond those set forth"[3] at regulation.  That is simply not permitted under American administrative law, and it need not be allowed to continue. Congress seems to have taken notice, as both versions of the 2010 Comprehensive Immigration Reform (CIR) Bills contain provisions that would legalize some of these ad hoc USCIS practices for H-1B.  But, CIR appears to be unlikely to pass in the particularly polarized environment of the 111th Congress.  So, a window may be opening in which litigation is now possible for those who act quickly.


 This book will give you an overview of case preparation tips and strategies needed for successfully overcoming arbitrary denials, and provides a legal guide and brief citations and extracts for litigation against common types of agency abuses in H-1B, L-1 and PERM adjudications, along with appellate strategies for several alternative categories, including National Interest Waivers, E-3, and Trade North America (TN) visas.


 


***


This volume is directed at the reader who already has an understanding of basic visa processes and the law, either as an attorney or as a company manager who deals frequently with immigration issues.  It is intended to provide litigation tools for lawyers and their clients, as well as an in-depth discussion of legal issues that must be understood and taken into account prior to filing an appeal with an agency or going to federal court.    


But, this book is not just a how-to of appellate citations, administrative procedures, regulations and practices.  It is also about how the law operates as a reflection of shifting politics and economic interests, and provides insight into navigating through the political barriers and minefields being thrown up to market entry of some industries in the United States.  An understanding of this context will go a long way toward informing any decision to litigate.


There is not a great amount of quality cross-disciplinary material written for legal professionals who want to understand how legislative politics, trade economics and national security policy impact the practice of immigration law.  Even less is written for business professionals about administrative appeals.  Articles in the professional journals tend to be perhaps too esoteric or technical in approach, and may not be particularly assessable and user-friendly to many non-specialists.  This book is intended to address that underserved need in the literature.


 


2. The Real World Context of Changing Immigration Law


By most measures, 2009 was a disastrous year for international trade in services, and U.S. immigration in particular.  The Wall Street Journal reported that the volume of overall world trade declined by 9 percent from the previous year, amidst a global slowdown and also in part due to a rise in protectionism.[4]  For the first time in several years, the annual H-1B lottery did not result in applications being received for the full allotment of 65,000 available visa numbers for specialty workers until the last days of the calendar year.  The number of non-immigrant worker admissions was down substantially from previous years in the H-1B, L-1, and E-1 Investor classes across the board.[5] 


Employment-based immigrant visa filings also dropped sharply.  Businesses filing to sponsor foreign nationals for PERM labor certification encountered a wall of audits resulting in huge delays in processing by the U.S. Department of Labor.  That story is reflected in the Department's quarterly reports, which illustrate the rising barriers at the front end of the employment-based immigration process.  In the first half of 2009, PERM case completions dropped to a level of less than 15 percent of the previous year, the result of a sharp increase in case audits and other "integrity activities" [6]:


PERM program performance has risen slightly from 11 percent in the previous quarter to 17 percent. - The overall decrease in this measure from one year ago is due to the impact of increasing integrity activities in light of the declining economy and continued filings for positions where there are US workers. (Increased integrity activities are being implemented to protect U.S. workers and satisfy statutory responsibilities and require additional processing time.) - The Office of Foreign Labor Certification has developed an enhanced PERM performance measure and a new PERM integrity measure. These measures are scheduled for approval and implementation at the beginning of FY 2010.


   


 By the end of 2009, the rate of PERM completions within nine months of filing dropped to a mere 4 percent, according to the latest data, with implementation of yet another layer of audits of completed applications.[7]


 2010 is shaping up to be little improved for business immigration.  Again, the H-1B quota has not been taken in the months after the initial filing date.  This follows publication of the Neufeld memo, a policy guidance to USCIS Service Centers, which lays out categories of H-1B petitions that will not be approved - including self-employed executives and so-called Job Shops - and imposes a vast range of new documentary requirements on petitioners which place H-1B workers at third-party sites.  There has been little or no apparent movement toward the promised PERM backlog reduction by the Department of Labor.  When asked at a stakeholder's meeting to clarify the percentage of approved cases selected for additional post-completion "integrity review", the DOL refused to provide additional information about the new audits beyond the fact that USDOL expects that fully 40 percent of approved cases will eventually be denied after an additional post-completion audit.[8]


On the other hand, one finds some hope in the fact that certain officials in the Obama Administration are avowedly more willing than their predecessors to work with the Immigration Bar and other stakeholders at resolving issues.  A new USCIS General Counsel, Roxanna Bacon - herself, a prominent immigration lawyer -- indicated at a meeting with AILA shortly after her appointment last year that she intends to at least bring back a measure of regularity and predictability to the process.   [See, INTRODUCTION, Sec. 6]


This does not mean, however, that the practitioner will find that USCIS and the Labor Department are turning back the clock to a simpler, easier time when the chances were that any case that passed a quick sniff test was likely to be approved on first try.  One should instead be prepared for the prospect that, in the coming years, cases will continue to be scrutinized closely, the weight of documentation demanded will remain heavy, and that it will not again be easy to obtain business immigration benefits.  But, that's not the real problem.  The issue the Immigration Bar is confronted with is an essential lawlessness and bias that has intruded into adjudications, which this Administration does not yet seem willing to fix on its own initiative.


 



  1. 1.      DHS Has Exploited Judicial Review Limitations to Impose Arbitrary and Capricious Rulings


Behind the heavy-handed restrictions imposed by USCIS is the fact that Congress, while it has repeatedly resisted past efforts to enact an outright ban on H-1B outsourcing, has given the agency a restrictive tool that, in effect, has been almost as effective.  That is the series of "court-stripping" measures including the REAL-ID Act of 2005.  That law clarified and amended several statutes passed in the 1990s that limited judicial review over deportation matters and, as most courts have found, Congress extended the preclusion to review to discretionary decisions over business immigration matters, including H-1B, L-1, B-1, and I-140 petitions.  That narrows the issues involving visa petitions that can be brought before the courts to "questions of law and constitutional claims."[9] 


Conducting itself as largely unfettered by judicial oversight of abuse of discretion issues, USCIS has become increasingly arbitrary and capricious in adjudications and rulemaking.  In recent years, DHS has refused to publish regulations as required by the Administrative Procedure Act (APA) to reflect substantial changes in the rules by which it adjudicates non-immigrant visa petitions.  The agency's methods and standards employed are now unabashedly unfounded in statutory authority and openly deny due process to certain targeted groups of benefits seekers, particularly companies in the IT consulting industry.        


This fact was driven home by issuance in January 2010 of the Neufeld memo[10], a directive from USCIS Central Office to Service Centers, specifying the types of petitions - including those filed by so-called job shops, self-employed executives, and independent contractors -- to be denied for lack of documentation of employer "control," which the memo locates in common law doctrine rather than the agency's own enabling statute or regulations.  The broader implications of that memo will be discussed at length in this book, as will the agency's adoption of the common law definition of "control" as a basis to deny several categories of nonimmigrant visa petitions.  Previous to the memo, USCIS was, in effect, carrying out much the same policy, but was not as open and specific about the practice and had not publicly acknowledged that the basis for the Neufeld rules cannot be found either in the Immigration & Nationality Act (INA) or in Department of Homeland Security (DHS) regulations governing USCIS.  With this acknowledgment, USCIS may have finally painted itself into a legal corner, where it is truly vulnerable to individual or class action suits -- if Congress does not amend the Act -- as the following sections explain.  


The essential issue for litigation is that USCIS has imposed informal measures - "de facto rules and binding norms" -- that discriminate against companies that place non-immigrant workers at client sites.  The agency imposes a prohibitively elevated burden of evidence upon this category of petitioners to establish "control", with the effect of improperly denying and delaying visas, and has done so without lawful authorization in statute or regulation.   This is clearly contrary to APA requirements for rulemaking at Sec. 553[11], which mandates "publish-and-comment" for all substantive rulemaking. [Secs. 551-557, 701-706, reproduced at Appendix]


Furthermore, USCIS treats all H-1B filers who place employees at client sites as de facto "willful violators" or "H-1B dependent employers," imposing a heightened burden of evidence, subjecting them to "random audits" and special scrutiny that the INA states should be reserved for those found by a USDOL administrative hearing to be willful violators and H-1B dependent employers.  [8 USC 1182(n)(1)(G)(i)] [See, INTRODUCTION, C. The Litigation Option, Sec. 16, below] That violates the agency's own regulations as well as APA standards for hearings along with standards for adjudications. This, in total, presents an open challenge: what is the Immigration Bar to do about it? 


The litigation strategies that can end these sorts of abuses must be tailored to the limits of curtailed jurisdiction over discretionary decisions imposed by amendments to the INA, so most of this book deals with "questions of law and constitutional claims" that Congress preserved for review.  The bulk of this volume will examine the practical range of an employer's right to seek jurisdiction in the federal courts, along with procedural issues, legal standards, and a review of case law in the circuits that present particular barriers to court review and will also review those decisions that take a more permissive view.  The book examines how various courts have ruled on a variety of jurisdictional and procedural issues, and suggests litigation approaches by which plaintiffs can best protect their due process rights to obtain benefits unlawfully denied by USCIS or USDOL.      


 



  1. 1.   USCIS Reliance Upon Common Law Doctrine Not Owed Judicial Deference


For several years previous to release of the Neufeld memo, USCIS adopted a 5th Circuit decision, Defensor v Meissner (2000, CA5 Miss) 201 F3d 384 , citing that case in many hundreds of H-1B and some L-1 decisions by the Service Centers.  Defensor was the principal legal support of the bureau's requirement for an extraordinary burden of additional documentation in excess of requirements stated in regulation for outsourcing companies.  Although that decision had limited application in the Fifth Circuit, it was nonetheless the authority cited nationwide for a new, nationwide evidentiary standard of "control" imposed upon employers that place H-1B workers at third-party sites.   The Defensor decision is still cited, after Neufeld, as common law authority in many Service Center notices and denials bearing on the issue of employer control, so we will also discuss approaches to responding to denials that cite and rely upon Defensor.


The reason the agency has fallen back on common law authority is that the Immigration and Nationality Act (INA) does not define the "employee-employer" relationship to require control and says nothing about any additional requirement for documenting "control" over workers at third-party sites.  The regulations are also ambiguous about the element of control, and instead present the employer with the ability to establish the "employer-employee relationship" by an overall showing involving six enumerated factors, only one of which is "control".  A valid H-1B employment relationship is "indicated by the fact that it may hire, fire, supervise, or otherwise control the work of the employee." [emphasis added].  The last element of "control" may be read as an alternative factor, one among six.  Even read as an inclusive element, it allows for a showing of control by any variety of other alternative factors.  It is not an overriding or exclusive consideration, as interpreted by USCIS.  The existing regulation at Title 8 Code of Federal Regulations actually states: 


Pursuant to 8 C.F.R. 214.2(h)(4)(ii), United States employer means a person, firm, corporation, contractor, or other association, or organization in the United States which:


(1)               Engages a person to work within the United States; 


(2)               Has an employer- employee relationship with respect to employees under this part, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee; and


(3)               Has an Internal Revenue Service Tax identification number.


The existing regulatory definition of employer, above, is consistent with what a line of leading U.S. Supreme Court decisions say it should be: inclusive and not to stress any one particular element to the exclusion of the others.  The Court's Clackamas[12] decision observes: "Rather, the answer to whether a shareholder-director is an employee depends on " 'all of the incidents of the relationship ... with no one factor being decisive.' "[ 503 U.S., at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. 254, 258 (1968)].


 But, Associate Director Neufeld is not, in fact, satisfied with such an inclusive, open-ended definition of control, and his memo imposes as a new eligibility requirement a list of 38 documents in eight separate categories in order to establish the common-law element of "control" that is nowhere to be found in the Act.  This is a substantial (and dubious) reinterpretation of the regulations, one that, in addition, contradicts the letter and spirit of the Supreme Court decisions the memo cites for authority.


 In the Neufeld memo, USCIS has essentially conceded that its own interpretation on a range of related issues, including evidentiary requirements, are not based in statute or regulations.   The memo acknowledges[13]:


 To date, USCIS has relied on common law principles and two leading Supreme Court cases in determining what constitutes an employer-employee relationship.  The lack of guidance clearly defining what constitutes a valid employer-employee relationship as required by 8 C.F.R. 214.2(h)(4)(ii) has raised problems.


In order to establish common law "control," nonetheless, the January 8, 2010 memo imposes new requirements for several dozen documents upon initial petitions for H-1B status, and a number more for renewals. [Memo Reproduced at Appendix]  It does this despite the fact that existing regulations may not require any sort of documentation of "control" if the petitioner clearly shows it will "hire, fire and supervise" the H-1B beneficiary.  The memo goes on to state that no petitions will be approved, regardless, unless the USCIS's newest and very specific and novel interpretation of control - departing from existing agency regulation and long-accepted interpretation and practices - are met.  In order to satisfy that novel interpretation, the memo demands production of a long, detailed list of mandatory documents, a requirement that is binding upon USCIS Service Center examiners and places new obligations for evidence upon the public. 


 To carry out this rulemaking, USCIS has issued what is effectively an ukase, an edict in memo form, authored by the Associate Director for Service Center Operations.  That memo commands, orders and imposes new obligations beyond those and in contradiction to existing regulation without citing any law or regulation for this change.   The ukase is binding on Service Center examiners and imposes new obligations for production of documents upon petitioners.  The substance of the memo has not been published in the Federal Register, and the public has been given no opportunity to comment or respond in any meaningful fashion to which the agency is obligated to answer.  


An informal approach to rulemaking may be acceptable for some interpretative matters, but not for substantive rulemaking actions that disturb existing regulatory requirements. [Shalala v. Guerney Mem'l Hosp., 514 U.S. 87, 100 (1995)]   Substantive rulemaking impacts the interests of the public or create new obligations.  [Croplife America v. Environmental Protection Agency 329 F3d 876 (D.C.Cir.2003)]  They also substantially deviate from existing definitive interpretation. [Alaska Professional Hunters ***'n, Inc. v. FAA, 177 F.3d 1030, 1035 (D.C. Cir. 1999)]  That makes Neufeld a substantive rulemaking, which under the APA must be published in the Federal Register before it can take effect, regardless of the authority cited for the new rule if not found in statute or Congressional intent.[ US. Chamber of Commerce v USDOL - OSHA, 174 F.3d 206 (D.C. Cir. Apr. 9, 1999]  USCIS has not met its "publication-and-comment" requirement. [APA Sec. 553]


 










 [C]ourts approach administrative interpretations not only by looking to the formal or informal character of a rule, but also by examining the authority under which the rule is made. Three different "levels" of deference can apply. These standards are not so much levels, at least not in the same sense as rational, intermediate, and strict levels of judicial review, but are rather rules that dictate whether the action should be accorded binding or persuasive weight. First, Chevron deference applies to agency actions which carry out an express or implied delegation by Congress to the agency to interpret an ambiguous statute through rules carrying the force of law. The Chevron standard is extremely deferential--an interpretation owed Chevron deference is binding unless it is unreasonable. Second, deference under Auer v. Robbins, 519 U.S. 452 (1997), applies to agency interpretations of its own ambiguous regulations. The Auer standard is analogous to Chevron and is also highly deferential--interpretations under Auer are binding unless they are plainly erroneous or inconsistent with the regulation. Third, if a regulation does not warrant deference under Chevron or Auer, deference under Skidmore v. Swift, 323 U.S. 134 (1944), applies. Under Skidmore, agency interpretations are not binding, but may receive varying amounts of weight according to their power to persuade.



 





[NOTE: It might be helpful to the reader at this point to note the distinction between various standards of deference that the courts apply to agency rules.  There are basically three standards that are applied, and have been usefully summarized in the side-bar, at left.[14]]


The Syllabus[15]  in the Clackamas decision by Justice Stevens states that when the statute is ambiguous about the definition of control, the common law definition of master-servant relationship may be used to "fill the statutory text's gap" in formal rulemaking.  Specifically, that reading of the decision states, "the common law's definition of the master-servant relationship provides helpful guidance: the focus on the master's control over the servant."  


The Court did not say, however, that agencies can concoct their own eccentric reading of common law and apply it in place of published regulations.  The Neufeld memo cites for its authority a pair of cases[16] that dealt with the common law definition of employee,[17] only one of which, Clackamas, is an administrative law case.   That decision dealt with the question of an agency's interpretation of statute, finding it acceptable that a "gap" in the statute's definition of employee could be filled by common law meaning of the term "employer".   The published source the agency relied upon in that case is the EEOC's Compliance Manual that a number of circuits have held is owed Skidmore deference, but does not hold the force of law.[18]  


While they have some similarity as informal interpretation, the Neufeld memo would not be accorded the same level of deference as the EEOC Manual.   No issue was addressed in the Clackamas decision as to the propriety, in substance or in the way it was promulgated, with the EEOC Manual.  The same certainly cannot be claimed for the Neufeld memo.  Thus, in both its content and the way it has been imposed, the Neufeld memo cannot be viewed as having comparable status as "authoritative" agency interpretation. 


Common law principles may be applied to "fill" gaps in statute, but they may not be used in lieu of legislative change in contradiction of existing statute or regulation.   The courts have long and consistently found that agency interpretation based in common law are owed less judicial deference than rules that are firmly based in the agency's own enabling statute and regulations.[19]  Common law is not viewed as adequate support for agency rules because, fundamentally, the Supreme Court ruled long ago there is no general federal common law to apply. [Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938)]  It is also well-established that common law is not to be applied as the sole determining factor in agency rulemaking, and is limited by the context of the overall facts in any agency determination. [NLRB V. HEARST PUBLICATIONS, INC., 322 U. S. 111 (1944)]  In cases where there is any apparent conflict in agency interpretation of its own standards between the common law and the APA, the Court has more recently held that legal standards based in the APA trump regulatory standards found in common law. [DICKINSON V. ZURKO, 119 S.Ct. 1816 (1999); cites, Darby v. Cisneros, 509 U.S. 137 (1993)]     


Furthermore, the Neufeld memo is not really a comparable forms of agency interpretation, and they are substantially dissimilar.  The Neufeld memo and the changes to the Examiner's Handbook it announces are binding on agency adjudicators, but are not binding on the AAO.  It is therefore not the same sort of authoritative, binding agency interpretation as the EEOC Manual.  The Neufeld memo is, instead, de facto rulemaking, which the Supreme Court has never condoned, and the Neufeld memo, unlike the EEOC Manual, would not pass a Skidmore test for deference.  


USCIS has misinterpreted the meaning of Supreme Court decisions cited in yet another way.  These cases say that an agency may look to common law "right of control" as one of a number of elements which in the totality must be weighed in deciding whether a bona fide employment arrangement exists.  Yet, USCIS does something quite different.  The Associate Director has taken this as a mandate to require a definitive showing of "actual control", and that has been applied as the decisive factor in agency adjudications.   


The bulk of documentation required by the Neufeld memo go to actual control not the "right of control", which is the proper standard under common law.  The Neufeld memo concerns itself primarily with third-party relationships, rather than the validity of the employer-employee relationship and the right of control, which is largely an issue that involves consideration of the validity of the employment contract as it has been interpreted under the common law of torts and liability.  A review of the common law related to employment contracts and the Law of Agency in the sections below show that the USCIS approach is inconsistent with the way the courts and other agencies have dealt with the same issues. [See,H-1 Chap., Secs. (B)10-20, and (C)]     


Plaintiffs do not contest the requirement to produce employment contracts, as this has been a traditional and long-term requirement for H-1B.  The category of documents that are found most egregious in Neufeld are confidential third-party documents - contracts between the petitioner and its clients -- that are largely extraneous to a valid employment contract.  Many third-parties are averse to disclosure of this type of document, for reasons that will be explained below, and refuse to produce them.  This places H-1B employers at a grave competitive disadvantage in tendering bids for service contracts with such third-parties.  Enforcement of demands for third-party documents as a de facto rule of adjudications has to date resulted in large losses in revenue to H-1B employers as well as other substantial damages.


The Neufeld memo is an unreasonable interpretation of the statute, existing regulations, and the bulk of federal case law and administrative decision on the subject of what constitutes a valid employment relationship, and how that should be documented.  The agency's existing regulations (and Court decisions) are apparently unsatisfactory to Mr. Neufeld because they expressly permit a number of alternative factors to establish the "employer-employee relationship," as well as a mandate that no one factor will determine the outcome.   USCIS demands third-party contracts, and will not approve this type of case without them.  The reason for this is that the agency seeks a predetermined outcome to the adjudications process, which is to deny petitions and restrict the business operations of technical consulting companies that place their foreign workers at third-party sites.     


 The Associate Director is asserting his imperative to interpret regulation so as to reduce "problems", he writes, but in a way that defies the letter and spirit of these Supreme Court decisions and clearly violates the APA.  An agency cannot change its evidentiary standards set in regulation and practice without promulgating proper regulations that meet the "publication-and-comment" requirement.  USCIS also cannot demand sensitive third-party documents to establish actual "control" by the petitioner over H-1B workers when this is not required by statute and regulation.  USCIS is in effect requiring documentation of actual control, and will not accept alternative documentation, such as the employment contract and other materials establishing the right to "hire, fire, and supervise" that establish the petitioner's "right of control", which is the actual regulatory standard.  While the common law definition of "control" is "relevant" but not decisive, the Clackamas Opinion states it is only one of many factors that must be taken into consideration in determining whether the employer-employee relationship exists[20].  It bears repeating:


Rather, as was true in applying common law rules to the independent-contractor-versus-employee issue confronted in Darden, the answer to whether a shareholder-director is an employee depends on " 'all of the incidents of the relationship ... with no one factor being decisive.' " 503 U.S., at 324 (quoting NLRB v. United Ins. Co. of America, 390 U.S. 254, 258 (1968)).


That opinion is clearly mirrored in the existing regulation at 8 C.F.R. 214.2(h)(4)(ii) that lays out a range of elements that indicate a valid employment relationship.  The requirement that the agency consider the full range of factual elements, and that common law definitions are not alone adequate to determine valid employment, follows the reasoning in a line of Supreme Court decisions going back to the 1944 NLRB v Hearst decision, as will be discussed at length below.  The Neufeld memo fixation on the element of control is in stark contrast to actual U.S. Supreme Court holdings on the subject of how a legal employer-employee relationship is to be determined.


In formulating the memo, the Associate Director may not have looked at the case law closely enough.  These cases dealt with formal interpretation carrying the "weight of law", but the Nuefeld memo is perhaps the least formal of all forms of agency interpretation, de facto rulemaking without basis in either statute or regulations.   The Glackamas decision cites Skidmore, a significant pre-APA case that laid down a test for determining when an agency's interpretation of its own regulations deserves deference by a reviewing court.  Glackamas also cites Skidmore for its application of six-part test of the employer-employee relationship, which is reflected in the existing regulation[21]:


We are persuaded by the EEOC's focus on the common-law touchstone of control, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944),9 and specifically by its submission that each of the following six factors is relevant to the inquiry whether a shareholder-director is an employee:


"Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work


"Whether and, if so, to what extent the organization supervises the individual's work


"Whether the individual reports to someone higher in the organization


"Whether and, if so, to what extent the individual is able to influence the organization


"Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts


"Whether the individual shares in the profits, losses, and liabilities of the organization." EEOC Compliance Manual 605:0009.10


It is ironic and notable that the Neufeld memo should appeal to this particular line of cases[22] for a common law definition of control, because they actually state APA principles that in a larger sense forbid what USCIS is trying to do.  Skidmore is better known as the namesake of a four-part test the Supreme Court later cited in Justice Souter's decision in the 2000 Mead case.[23]  That decision held that under the APA, unpublished agency rules do not carry "the force of law," and are owed a lower level of deference by the courts than formal, published rules that receive Chevron-level deference.  Mead dealt with question of whether Customs classification rulings should be accorded force of law and Chevron-style deference.  Justice Souter's decision  instructs us as follows[24]:


The fair measure of deference to an agency administering its own statute has been understood to vary with circumstances, and courts have looked to the degree of the agency's care,7 its consistency,8 formality,9 and relative expertness,10 and to the persuasiveness of the agency's position, see Skidmore, supra, at 139--140. The approach has produced a spectrum of judicial responses, from great respect at one end, see, e.g., Aluminum Co. of America v. Central Lincoln Peoples' Util. Dist., 467 U.S. 380, 389--390 (1984) (" 'substantial deference' " to administrative construction), to near indifference at the other, see, e.g., Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 212--213 (1988) (interpretation advanced for the first time in a litigation brief). Justice Jackson summed things up in Skidmore v. Swift & Co.:


"The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." 323 U.S., at 140.


[ . . .]


[C]lassification rulings are best treated like "interpretations contained in policy statements, agency manuals, and enforcement guidelines." Christensen, 529 U.S., at 587. They are beyond the Chevron pale.


Justice Souter concludes by explaining why the majority in this 8-1 case was rejecting the dissent offered by Justice Scalia:


Although we all accept the position that the Judiciary should defer to at least some of this multifarious administrative action, we have to decide how to take account of the great range of its variety. If the primary objective is to simplify the judicial process of giving or withholding deference, then the diversity of statutes authorizing discretionary administrative action must be declared irrelevant or minimized. If, on the other hand, it is simply implausible that Congress intended such a broad range of statutory authority to produce only two varieties of administrative action, demanding either Chevron deference or none at all, then the breadth of the spectrum of possible agency action must be taken into account. Justice Scalia's first priority over the years has been to limit and simplify. The Court's choice has been to tailor deference to variety.17 This acceptance of the range of statutory variation has led the Court to recognize more than one variety of judicial deference, just as the Court has recognized a variety of indicators that Congress would expect Chevron deference.18


***


The Neufeld memo is so irregular in form and inconsistent with existing statute and regulation that it would not garner deference, even if published.  The memo imposes evidentiary requirements that are substantially different from existing regulation governing eligibility for H-1B status, and cites the common law doctrine of "control" as authority to raise those requirements.   The agency has, in effect, abandoned its existing regulation and substituted common law interpretation, conducting substantial rulemaking without publication in violation of the APA. No court is going to show such an unlawful agency construction any particular deference - instead the Neufeld memo is likely to be struck down under the Skidmore standard, along with a large number of USCIS decisions based upon it and its predecessor interpretation, the Defensor dicta.


The courts have long and consistently found that agency interpretation based in common law[25] are owed less judicial deference than rules that are firmly based in the agency's own enabling statute or regulations.[26]  Furthermore, when there is a conflict between the common law and the APA over which standard governs agency regulation, the courts have held that APA standards trump regulatory standards found in common law.[27]  


Furthermore, agencies are held by some courts to have lesser expertise interpreting their enabling statutes than their own regulations.  USCIS cannot even find support for such heightened evidentiary requirements in its own existing regulations, so it has fallen back on "common law" decisions that have no direct binding power over the agencies or the public, and which do not independently provide "legal authority" for regulation. [APA  553(b)(2)] Finally, unable to promulgate a regulation of its own mandating "control" - there is no basis in the statute to do so - USCIS further acknowledges in the memo that it has borrowed its interpretation from another agency, and relies upon USDOL interpretation of common law[28]:


USCIS has also relied on the Department of Labor definition found at 20 C.F.R. 655.715 which states: Employed, employed by the employer, or employment relationship means the employment relationship as determined under the common law, under which the key determinant is the putative employer's right to control the means and manner in which the work is performed.


Administrative common law, however, is not an entirely bad thing, as far as it also protects the status quo and the interests of the public who rely upon a regular and predictable system of benefits adjudications.  When unpublished practices remain in place long enough and gain consensus acceptance, some courts have held they become "definitive interpretations" that constitute an "administrative common law", which agencies may not significantly revise without first meeting the Sec. 553 publication requirement.  The implications of this are discussed, below [see, INTRODUCTION, USCIS Violates APA Rulemaking Requirements; also, see, H-1B Section] 


 



  1. 2.   USCIS Rulemaking Not Based In Enabling Statute or Regulation


That's a problematic and vulnerable position for any agency to take.  Normally, agency rules must be based in regulations derived from the agency's own enabling statute.   Sometimes, agencies can get along temporarily (if not challenged) by "borrowing" doctrines from other agencies.  But, such second-hand rules had better conform with accepted policies and interpretations, otherwise they are vulnerable to being overturned in court.  The USCIS reference to the two U.S. Supreme Court decisions[29] for authority is peculiar, particularly as they do not provide firm legal foundation for the policy, and in fact, they hold that the agency's interpretation will not be given much deference by the courts.   


USCIS's reliance upon common law doctrine to support the Neufeld memo is idiosyncratic and the courts need not show it deference.  The memo amounts to substantial and binding changes to long-established USCIS eligibility and evidentiary rules for H-1B, but imposes these new rules without publishing new regulations.  This violates APA Sec. 553.  That failure to follow the "publish-and-comment" requirement is certainly unjustified by reference to common law, which is the sole authority cited in the document for the rule changes.   


More fundamentally, common law, with nothing more, is a suspect basis for agency interpretation of statute. In 1938, the Supreme Court ruled in the Erie Railroad decision that "there is no general federal common law" that federal agencies or courts might apply.  Six years later, in the Hearst case the Court ruled that the common law doctrine of control, alone, is an inadequate basis for statutory interpretation.  The Court also held in that 1944 decision that common law precedent is not binding in employer-employee law, and that courts may consider fact circumstances.  That decision also marked the Court's departure from the "pure question of law" doctrine that had once bound judicial review of employer-employee relationships to common law precedent.  Later, in the milestone 1978 Chevron decision, the Supreme Court all but threw out consideration of common law approach and "mixed question of law and fact" procedural issues in favor of the now almost universally accepted "two-step" approach that is the contemporary accepted method for determining judicial deference to agency interpretation of statute in formal rulemaking.  


Most recently, the Supreme Court ruled in the 2001 Mead case[30] that where an agency rule is not published, it is not owed Chevron-style deference, and instead should be subjected to a Skidmore test, which examines the rule more closely for "(1) the thoroughness of the agency's investigation; (2) the validity of its reasoning; (3) the consistency of its interpretation over time; and (4) other persuasive powers of the agency."[31]   Skidmore is a less deferential standard of review, cited in Clackamas, which is one of the Supreme Court cases USCIS references in the Neufeld memo.


Even if an agency interpretation is permitted to fill in a gap in the statute with reference to "the common law doctrine of control," the APA 553 publication requirement still applies, and no court need give any deference to an unpublished agency interpretation that aggrieves or otherwise negatively affects the interests of the public.  The publication requirement applies even if it merely impacts the interests of any party.  The Court in Clackamas was clear that such informal agency rulemaking is not controlling [ftn. 9]:


[T]he EEOC's Compliance Manual is not controlling-even though it may constitute a "body of experience and informed judgment" to which we may resort for guidance. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944); see also Christensen v. Harris County, 529 U.S. 576, 587 (2000) (holding that agency interpretations contained in "policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law[,] do not warrant Chevron-style deference").     


Glackamas also cites Skidmore for its application of six-part test of the employer-employee relationship:


We are persuaded by the EEOC's focus on the common-law touchstone of control, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944),9 and specifically by its submission that each of the following six factors is relevant to the inquiry whether a shareholder-director is an employee:


"Whether the organization can hire or fire the individual or set the rules and regulations of the individual's work


"Whether and, if so, to what extent the organization supervises the individual's work


"Whether the individual reports to someone higher in the organization


"Whether and, if so, to what extent the individual is able to influence the organization


"Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts


"Whether the individual shares in the profits, losses, and liabilities of the organization." EEOC Compliance Manual 605:0009.10


Yet, the Neufeld memo contains a demand list of documents that does even vaguely resemble the six-factor test in Skidmore endorsed in Clackamas.  It, instead, fixates upon the common law element of control, to the exclusion of the others, imposing new demands for documentation that go to the issue of actual control of H-1B workers at third-party sites, not the "right of control" by the petitioner, the actual common law standard.  Case law on the subject, discussed later in this book, establishes that the issue of the "right of control" focuses on the validity of the employment contract, not on third-party arrangements, which are held under the Rule of Privity to be largely extraneous to contractual employer-employee relationships.  [See, H-1B, SAMPLE RFE RESPONSE or AAO APPEAL LANGUAGE, Secs. 9-20]


There is yet another major issue that disfavors the DHS construction of its new rules for nonimmigrant visa petitions and the system of compliance checking it has devised.  As this book shows, with passage of the 1990, 1998, and 2004 amendments to the INA, Congress has intentionally limited and separated the powers of legacy INS (later USCIS) and USDOL over administration and enforcement of H-1B.  Authority over workplace practices and violations attendant to Labor Condition Attestations (LCAs) remain legally reserved to USDOL, with USCIS barred by statute from policing wage and hour provisions that the original 1990 law vested solely with the Labor Department Wage and Hour Division. [See, INTRODUCTION, C. THE LITIGATION OPTION, Secs. 14-19]


 Subsequent amendments did not broadly extend jurisdiction over this subject matter to the legacy Immigration & Naturalization Service or to DHS.  Inasmuch as the current USCIS policy is not based in its own enabling act and conflicts with statute, it cannot be formulated as a valid regulation.  A policy that operates outside of a regulation and contrary to statute would likely be overturned, if challenged by a competent litigant with a solid cause of action.   


Nonetheless, despite its lack of subject-matter jurisdiction, after INS was absorbed by the Department of Homeland Security, DHS assumed law enforcement powers to investigate and enforce LCA wage and hour provisions with regard to H-1B employers, assigning much of the investigatory function to USCIS.  Since 2006, DHS has operated a new investigations branch inside USCIS called the Fraud Detection and National Security - Data System (FDNS-DS).   That system, described in detail in the last volume of this ILW Publishers series by these authors[32], is essentially a giant data-mining engine that collects and organizes information from immigration applications and the millions of widely related documents scanned into the DHS system.  After a petition is approved, auditors and field investigators working for FDNS conduct worksite inspections - audit teams visited hundreds of H-1B worksites last year, with thousands more scheduled for 2010 -- reviewing records, collecting documents, interviewing US employees, green card holders, along with non-immigrants, alike, probing to detect any unauthorized off-site employment or violations of terms of petitions.


 The creation and operation of FDNS-DS, as its name suggests, was justified by a perceived threat to national security that sophisticated terrorists would fraudulently use the H-1B and L-1 programs to plan and carry out attacks upon the U.S.  After an investment of hundreds of millions of dollars, and massive adverse impact upon benefits seekers, proof of the existence of such a threat has not been validated.  


What has actually occurred is the USCIS has morphed itself into a quasi-law enforcement and intelligence collection agency and now conducts investigations, a role for which it has no statutory authority, one which it has usurped from the US Department of Labor and the Bureau of Immigration and Customs Enforcement (ICE).  FDNS auditor teams regularly check where H-1B workers are working, what work they perform and by whom they are paid, and the hours they work -- in other words, wage and hour provisions -- and then feed their findings back into the Data System (DS), a distributed computer network and data-mining system that scores these results and shares them with USDOL and 16 other federal law enforcement and intelligence agencies.  That is not a casual encroachment upon another agency's turf - it is a massive undertaking by DHS involving hundreds of federal employees and contractors, and its operations are entirely without statutory basis and perform functions given (in a more restrictive form) to DOL.   FDNS-DS worksite compliance usurps wage and hour compliance powers reserved by law exclusively to the Labor Department - which was restricted by statute from initiating similar field investigations of most H-1B employers.   DOL may not initiate investigations of most H-1B petitioners on the basis of information provide by USCIS from petitions received triggering further DOL enforcement activities.


To justify the worksite inspections and data-mining operations of FDNS-DS, along with the imposition of a heightened burden of evidence than allowed under present law and regulations, USCIS has concocted a requirement that employers document actual legal "control" over offsite H-1B employment.  This in turn creates a pretext and the means to investigate and limit the operations of outsourcing companies - a restriction that is entirely without basis in law. 


The doctrine of H-1B control, furthermore, is without basis in DHS enabling law or in the agency's regulations, and the system of USCIS compliance checking also operates outside the agency's statutory authority.  FDNS-DS is not a straightforward system of inspections exempt from rules for adjudications under APA Sec. 554(a)(3), but is instead part of a larger enforcement regime operating without regulatory authority that impacts heavily the interests of petitioners.  In the US Chamber of Commerce decision (1999), the DC Circuit lays out the standard by which it distinguishes acceptable procedural rules from improper, unpublished substantive rules in the context of agency inspections and enforcement schemes [12-13]:


A procedural rule is one that does not itself "alter the rights or interests of parties, although it may alter the manner in which the parties present themselves or their viewpoints to the agency." Batterton v. Marshall, 648 F.2d 694, 707 (D.C.Cir.1980). A substantive rule, in contrast, has a "substantial impact" upon private parties and "puts a stamp of [agency] approval or disapproval on a given type of behavior." American Hosp. ***'n v. Bowen, 834 F.2d 1037, 1047 (D.C.Cir.1987).


[. . .]


[T]he Directive imposes upon employers more than "the incidental inconveniences of complying with an enforcement scheme," Bowen, 834 F.2d at 1051; it has a substantive component. [15]


Under these standards, therefore, FDNS is the instrument of an altogether improper unpublished rule and lawless enforcement regime.  In its operation of FDNS-DS, the USCIS is in flagrant violation of the INA and the Administrative Procedure Act (APA), as this book shows at length.


The reason this blatantly unlawful system has been allowed to rise up and operate thus far without challenge - there have been no major industry law suits filed - is because of fear and politics.  Some of this has to do with lingering post-911 hysteria about security threats.  Much of the permissiveness toward informal DHS policies, undoubtedly, is also a function of the near-collapse of the U.S. financial and trade systems last year, and continuing high rates of unemployment in the IT sector.   U.S. unemployment in technical occupations remains at unprecedented levels, double the rates prior to 2009, affecting tens of thousands of highly-skilled (and vocal) workers who formerly enjoyed job security in the same industries which use H-1B non-immigrant workers.  As a result, there is a well-founded fear in the IT consulting industry that a successful court challenge to H-1B outsourcing restrictions and FDNS might result in something worse - an outright legislative ban on H-1B and other severe statutory restrictions on business immigration.  This is a real but publicly unspoken threat.  The politics of H-1B have become so poisoned, amidst joblessness in the IT industry and continued off-shoring by U.S. business, that a critical mass might finally be reached.  The House and Senate versions of the Comprehensive Immigration Reform (CIR) Bill both contain measures that come close to an effective ban on H-1B. 


However, there is another, largely unrecognized interest that militates strongly against shutting down H-1B and other business immigration programs, one that is only tangentially related to law, international trade and commerce.  All that collection of documents about foreign companies, processes, technologies, finances, employee backgrounds, and webs of ownership and connections with foreign states, banks, companies, agencies, military, and its analysis, has a far greater value to certain U.S. agencies than anything having to do with law enforcement, trade regulation or immigration control.  FDNS-DS acts as a giant vacuum cleaner for information connected to the flow of international commerce that goes to many places of great interest that might not otherwise be so assessable and forthcoming with sensitive commercial information.  Given the value of this information access, it is unlikely that the U.S. Government will ever truly close off the flow of business immigration.  Nonetheless, if the restrictive measures in the CIR Bill are passed, one should expect that many U.S. companies in the global IT consulting field will simply close their doors and move the remainder of their operations offshore.


By the same token, it is unlikely that DHS would voluntarily ease baseline documentary requirements for immigration benefits.  The collection of documents, and surveillance and data mining of employers of foreign workers, appears to have become the major raison d'etre for USCIS.   But, Immigration lawyers have an unseen ally, of a sort, against the complete closure of the golden door, a factor that needs to be taken into consideration in how industry approaches the problem of litigating and negotiating the removal of unreasonable restrictions on business immigration.  Whatever specific legal and regulatory reforms industry pushes for, it must bear in mind the overriding mission of DHS, which administers immigration, is national security.


 The Obama Administration does not seem to view the basic mission of DHS as having changed or threats as having subsided; since January 2009, DHS has maintained most of the programs and policies related to FDNS-DS expansion and automation of information gathering, analysis, and verification initiated in recent years without substantial change.[33] Demands for documentation are more systematic, but no more legal (supported by statute or regulation) than under the Bush Administration.  FDNS-DS Worksite compliance audits are expanding, and will be carried out by the tens of thousands in 2010.  It has become practically impossible for some firms - particularly smaller, newer IT consulting companies that don't have their own proprietary processes and expansive in-house product development programs - to get the visas they need in order to do business in the U.S. Language in the Neufeld memo suggests that USCIS is now trying to apply the same heightened requirements for proprietary knowledge required in L-1B to H-1B, despite there being no statutory or regulatory basis for doing so.    Because of the mounting restrictions and costs of compliance, many of these firms have been forced to move their operations in whole or greater part offshore. This sort of wholesale discrimination against some categories of employers by DHS and USDOL started during the Bush years has not subsided.  Things haven't changed much since 01/20/2009, and industry has been forced up against the wall and to reassert its rights to business survival through the courts.


 



  1. 3.   Improving Prospects for Successful Litigation of Business Immigration Cases


Under the Obama Administration, adjudications promises to be more regular and consistent with administrative law norms.  But, the agency has also signaled by issuance of the Neufeld memo its intention to maintain a hard-line on outsourcing issues and the practitioner will still have to litigate; in particular, USCIS has continued to dig in and tries to fortify its legal position on the issue of H-1B employer "control" over workers assigned to third-party sites, requiring a much higher burden of evidence of those firms that provide third-party consulting services.  The networked, dual-tier business model is now well-established in global knowledge-based industries, but USCIS as well as USDOL continue to insist that only "brick and mortar" companies are going to get visas.  This seems to present a choice to global companies and their lawyers.  They can change their business model or comply, or they can fight.  So, better get used to being excluded from the U.S. market, or prepare yourself - the practice of Immigration Law is becoming a litigator's game, and those lawyers who can't likely won't be able to handle complicated immigration cases for multinational corporate clients.  


Frankly, there are many Immigration lawyers who have little or no recent appellate experience in the federal courts, and fewer who have had much success.  With some notable exceptions, the courts have historically been highly deferential to agency discretion in immigration cases.   This should not be the least bit surprising, given the complex subject matter and relatively limited rights normally recognized and accorded to non-U.S. persons.  The deck is further stacked against non-immigrant litigants by the draconian jurisdiction-stripping provisions of the 2005 REAL-ID Act that followed and made more severe laws of the mid-1990s, AEDPA and IIRIRA, which restricted immigration court appeals to the federal courts.  Those laws, taken together, say the courts can't even entertain suits challenging abuses of discretion in most cases rendered by Immigration Judges, the USCIS Service Centers, and the Administrative Appeals Office (AAO).


That, alone, has been a high enough barrier to have deterred most potential plaintiffs, who may have had a limited understanding of how these jurisdiction stripping measures are actually interpreted in the federal courts.  But, things are not that grim.   The District Courts have shown a surprising independence recently, however, ruling that they retain jurisdiction over a wide variety of issues of law and constitutional claims.


Case law shows there are wide exceptions and firm limits to jurisdictional barriers; even under the decidedly anti-immigrant legislation passed during the last 15 years, Congress expressly made allowances so the Courts of Appeal could hear cases where constitutional issues or agency error in law are shown. [See, H-1B Litigation Issues: Appeals to the AAO and Federal Courts, below]  In addition, as summarized in this Introduction and explained at length in the subchapter, there are the protections still afforded by the Administrative Procedure Act (APA).  The APA affords a generic cause of action to practically any litigant who can show that it was "adversely affected or aggrieved" by a government agency.  There is a presumption of reviewability under the APA.   Given that the APA imposes rules about how agencies can make rules and conduct adjudications - and, USCIS and DOL procedures are increasingly based in unpublished agency policies that are glaringly inconsistent with statute, regulations and Congressional intent - the courts indeed retain substantial subject matter jurisdiction, and there is a compelling case for reversal of a number of restrictive and discriminatory agency policies, as outlined in the following chapters. 


Finally, the grievances of business that might be heard under the Administrative Procedure Act are more than ripe for hearing, and civil cases against the government must be filed within six years, and in some cases four years, of the date of final agency action.   The clock is ticking, so we should indeed expect to soon see a new wave of business immigration cases against DHS in the federal courts.


 



  1. 4.   Recent Decisions Show Courts Affording Closer Review of USCIS Rules and Decisions  


Why should one think the courts might now be receptive to reversing business immigration cases?    Because the Executive Branch went too far in the last decade imposing its own de facto powers to restrict certain kinds of immigration, way beyond the limits intended and authorized by Congress and normally permitted by the courts.  Specific approaches to litigation, along with legal strategies, are detailed below in chapters dealing with H-1B, L-1, PERM and National Interest Waivers. 


After a period in which the courts have permitted the Executive excessive leeway on national security grounds, that permissiveness has begun to give way to a healthy skepticism, a reassertion of judicial independence, and a willingness to reign in unfettered and abusive executive power.  We started to see that turn in 2005 with the Supreme Court's HAMDAN v. RUMSFELD ruling and other war on terrorism detainee decisions; that decision reaffirmed that habeas power of the courts, following the 2001 INS v. ST. CYR decision that reasserted the courts retain a broad scope of review despite Congressional efforts to bar the bench from overturning discretionary decisions affecting aliens.    The Court, today, continues to reassert basic constitutional protections afforded in judicial proceedings to aliens, reaffirming a right to effective assistance to counsel where there is a collateral impact resulting in initiation of deportation proceedings.  See, Padilla v. Kentucky, slip op., (US Sup. Ct., No. 08-651 (03/31/2010).[34] The Supreme Court remains highly protective of the fundamental rights and interests of the private sector and of international business, in particular, as demonstrated recently by Citizens United v. Federal Election Comm'n (01/21/10).  That case reaffirms that due process clauses apply to "legal persons" (that is, corporate personhood) as well as to individuals, a decision that generated an energetic dissent as it has also outraged popular nationalist sentiment.


 


USCIS Violates APA Rulemaking Requirements


USCIS is currently operating its worksite verification system and document collections operations without issuing a published regulation.  It does this because there's no statutory basis for these programs that adversely affect much of the IT consulting industry.  It would take a change in law, but the political process appears for the time being to be deadlocked along partisan and ideological lines.  The courts have long-established that substantial deviation from existing regulation requires "notice-and-comment" rulemaking under Sec. 553 of the APA.  Exemptions to notice-and-comment are to be "narrowly construed and only reluctantly countenanced." [Am. Fed'n Gov't Employees v. Block, 655 F.2d 1153, 1156 (D.C. Cir. 1981)]  An interpretive rule cannot amend a prior legislative rule. [Am. Mining Cong. v. Mine Safety & Health Admin., 995 F.2d 1106, 1109 (D.C. Cir. 1993)]  A federal agency must use notice-and-comment rulemaking to amend or reverse a legislative rule. [Id.]  More recently, the courts have expanded the American Mining test to require notice-and-comment for interpretive rules that amend or reverse "definitive interpretations". [Shell Offshore Inc. v. Babbitt, 238 F.3d 622, 629 (5th Cir. 2001); Alaska Prof'l Hunters ***'n v. FAA, 177 F.3d 1030, 1035-36 (D.C. Cir. 1999).]   These "definitive interpretations" have been held to constitute "administrative common law", which agencies may not significantly revise without first meeting the Sec. 553 publication requirement.


As the United States Supreme Court has also noted, APA rulemaking is required if an interpretation  "adopt[s] a new position inconsistent with ... existing regulations." Shalala v. Guerney Mem'l Hosp., 514 U.S. 87, 100 (1995). In Alaska Prof'l Hunters ***'n v. FAA, 177 F.3d 1030 (D.C. Cir. 1999), [the D.C. Circuit] held that "[w]hen an agency has given its regulation a definitive interpretation, and later significantly revises that interpretation, the agency has in effect amended its rule, which requires notice and comment." Id. at 1034 (citation omitted) (emphasis added); the Alaska Hunters decision also significantly equates "definitive interpretation" with "administrative common law", according both deference; see, also Paralyzed Veterans, 117 F.3d at 586 (agency violates APA if it makes a "fundamental change in its interpretation of a substantive regulation without notice and comment"). [Air Trans Assn Amer v FAA, (DC Cir., 2002), http://laws.findlaw.com/dc/011027a.html]


In its decision to overturn a USDOL occupational safety and health Directive, the DC Circuit expressed its standards for review of substantive versus interpretative agency rules.  In US Chamber of Commerce v. USDOL OSHA, 174 F.3d 206 (D.C. Cir. Apr. 9, 1999), the circuit instructed:


We examine how the rule affects not only the "rights" of aggrieved parties, but their "interests" as well. Batterton, 648 F.2d at 707; see also Bowen, 834 F.2d at 1045 ("Substantive rules are ones which grant rights, impose obligations, or produce other significant effects on private interests"). Of course, whether a rule has the force of law often will bear upon its proper classification as substantive or procedural. See, e.g., Chrysler Corp. v. Brown, 441 U.S. 281, 301-02, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979) (that agency rule is backed by the force of law suggests it is substantive).** It will not necessarily be controlling, however. Here, for example, the Directive will affect employers' interests in the same way that a plainly substantive rule mandating a comprehensive safety program would affect their rights; that it so operates without having the force of law is therefore of little, if any, significance. In practical terms, the Directive places the burden of inspection upon those employers that fail to adopt a [Comprehensive Safery & Health Plan] CSHP, and will have a substantial impact upon all employers within its purview--including those that acquiesce in the agency's use of "leverage" against them. Consequently, we conclude that the Directive is a substantive rather than a procedural rule.


This is, of course, entirely relevant to the comprehensive system of Fraud Detection & National Security (FDNS) examinations and worksite audits that the USCIS General Counsel asserts is "voluntary" for companies that file several categories of non-immigrant visa petitions. [See, p. 140]


In another decision, the D.C. Circuit further identifies "de facto rules or binding agency norms," interpretative rules having binding effect that must be published.  The circuit in  Center for Auto Safety v. NHTSA, 452 F.3d 798 , 806 (D.C. Cir., 2006)] holds that informal (unpublished) agency rules become a violation of the APA when they contradict previously published regulations or become a binding practice that is uniformly imposed through adjudications.  "An agency cannot escape its responsibility to present evidence and reasoning supporting its substantive rules by announcing binding precedent in the form of a general statement of policy. This principle may apply even when an agency merely threatens enforcement of a guideline, if the guideline is binding on its face or in practice."[Ibid.]  Such de facto rules or binding norms, the D.C. Circuit further states, may "not properly be promulgated absent the notice-and-comment rulemaking required by 553 of the APA." [Id.]  Agency law decisions rendered by the D.C. Circuit is followed by a number of other circuits, and is a logical venue for appeal of this sort of case.


In the immigration visa petition context, there have been several recent direct challenges to arbitrary and capricious USCIS and AAO decision-making.  The 9th Circuit Court of Appeals has ruled that the agency may not make up evidentiary standards that are inconsistent with its published regulations, and has recently overturned denials of immigrant visa petitions on that basis: "Neither USCIS nor AAO may unilaterally impose novel substantive or evidentiary requirements beyond those set forth at 8 C.F.R. 204.5 (EB-1 eligibility)."  Kazarian v USCIS, No. 07-56774 (9th Cir., March 4, 2010)[35]; cites, Love Korean Church v. Chertoff, 549 F.3d 749, 758 (9th Cir. 2008)(R-1 Special Immigrant).   These cases build upon a long-established line of cases from that circuit holding that legacy INS could not apply unpublished eligibility requirements that were developed in informal proceedings.  The Ruangswang and Patel [36]cases, discussed in detail below, found abuse of discretion when INS imposed I-140 eligibility requirements gleaned from Proposed Rules that were never published as Final Regulation, as is the case with certain rules imposed by the Neufeld memo.  DHS has again resorted to practices forbidden thirty years ago, and the Ninth Circuit would likely prove a receptive forum for this line of argument. 


This book looks at those decisions, and further develops the principles they reaffirm consistent with judicial doctrine drawn from other circuits and relevant rulings of the U.S. Supreme Court.  We find in the DC Circuit and other circuits, as in the Court's decisions, a general prohibition against "de facto rules or binding norms" that contradict published regulations or that are imposed to disadvantage identifiable groups, as discussed below.  [Center for Auto Safety v. NHTSA, 452 F.3d 798 , 806 (D.C. Cir., 2006)]  The Court has similarly held that while agencies may deviate in interpretive decisions, when they do not observe established rules, procedural norms or make rules arbitrarily these actions may be reviewed as substantive rulemaking for abuse of discretion under the APA].  Finally, the courts need not give Chevron-style deference to unpublished rules that lack "the force of law."   [UNITED STATES V. MEAD CORP., 533 U.S. 218 (2001) 185 F.3d 1304; cites, Skidmore v. Swift & Co., 323 U.S. 134 (1944).]


 



  1. 5.   Economic Factors and Due Process Concerns Spark Renewed Judicial Intervention


And, there is another broad factor that favors judicial intervention.  Reform may be sorely needed for pragmatic economic reasons.  Business Immigration, with H-1B in particular, has turned into a domestic political football, and the game appears to have become stacked by administrative calls against foreign firms trying to do business here.  This has amounted to an imposition of barriers to international trade, market entry, and national origins discrimination against business.  The erection of new barriers to trade and investment in the United States threatens to derail a fragile economic recovery.   As at no time since the Civil War, the United States is dependent upon a free flow of foreign investment.    The erection of even higher barriers to global capital and trade in services could have disastrous effects of further isolating the United States from the rest of the world economy, to the detriment of all.  


Because the wartime environment that bred these restrictions has begun to dissipate, and enormous economic interests are now clearly at stake, the authors conclude that the post-9/11 legal climate will shift, and that the courts may finally be ready to strike down some of the most abusive agency practices and business immigration restrictions on due process grounds.  In the midst of the Global War on Terrorism, the extreme measures of federal agencies dealing with foreign nationals and border security usually got a pass from the courts.  The worst sort of paranoia about foreign terrorism appears to have lifted, but the barriers to market access it created remain; under these circumstances, the courts may be ready to acknowledge that the arbitrary rules DHS created have become bad public policy, and that constitutional, legal and procedural norms and balances need to be restored.  Under these circumstances, we should expect the federal judiciary will again exercise their power to correct administrative abuses and ad hoc agency practices that aggrieve international business and block cross-border trade in services. 


Also, the selective denial of the right to do business deeply offends some very old and rugged traditions of law in America, particularly enduring concerns about the Fifth Amendment Due Process clause, and the right of all to operate a business without undue and discriminatory barriers to licensing.  Those proud conservative principles were enshrined in the U.S. Supreme Court's decision in the so-called Chinese Laundry Case of 1886. [See, H-1B Litigation Issues - Non-Discretion Grounds of Appeal] In Yick Wo v. Hopkins, 118 US 356 , the Supreme Court ruled that a jurisdiction regulating business simply can't discriminate by ordinance, even one that is race-neutral on its face but administered in a prejudicial manner.  That case held that discrimination in licensing flunks the "rational basis" test, and is an impermissible infringement of Due Process.  The arbitrary and capricious denial of H-1B, L-1 and PERM cases -- particularly when the targets are shown to be companies from a particular country, or group of countries, operating according to a specific business model -- today present essentially the same fact and legal issues settled in the late 19th Century. 


Finally, In today's global business and regulatory environment, barriers to market entry, regulatory measures with the effect of  discrimination based upon national origin , and regulatory measures that restrict market access regardless of intent, also violate the core rules of an increasingly important organization and set of treaties the United States helped found, and to which it is inextricably bound, the World Trade Organization (WTO) and the General Agreement on Trade in Services (GATS), which forbid the sort of restrictive measures against foreign service providers in the U.S. of the type we have increasingly experienced in recent years, and all can attest to.


 


B.THE LEGISLATIVE OPTION


 



  1. 1.              Comprehensive Immigration Reform (CIR) Appears Unlikely to Pass in the 2009-10 Congress, but Restrictive Amendments Still Present a Threat    


 


While efforts are still being made to push CIR as part of the agenda of this Congressional session, it now appears unlikely that such a Bill will pass both the House and the Senate this year.   With the loss of the Democratic supermajority in January, a CIR Bill cannot pass the Senate without GOP support; bipartisanship seems beyond the 111th Congress.


 


In the present environment of high U.S. economic insecurity and structural unemployment, legislation dealing with immigration issues presents perhaps a greater risk than potential benefit to many businesses.  The threat of further restriction on H-1B is very real.   Even with prospects for CIR fading, particularly in the Senate, industry still needs to take proactive measures to protect the non-immigrant programs they depend upon to globally recruit and hire world-class workers.


 


While some effort has gone into trying to craft compromise legislation, both the Senate and the House are presently considering extremely restrictive measures, proposed legislation that pose existential threats to the international IT consulting industry.  The House and the draft Senate CIR Bill mirror the most severe legislative restrictions sought by the perennial H-1B and L-1 Visa Reform Act, reintroduced in April 2009 by Sen. Dick Durbin (IL) and Sen. Chuck Grassley (IA).  That piece of legislation, and the House CIR Bill that resembles it, would basically wipe out the global IT consulting industry in the United States.  


 


Many analysts worry that these Bills would kill hundreds of U.S. affiliates of firms in the global IT consulting field that utilize international workforces along with several service industries that support them.  This sector has already been under severe stress, and has struggled trying to adapt to increasingly restrictive U.S. administrative and enforcement measures intended to force the genie of IT industry outsourcing back into the bottle.  While these restrictive measures have achieved substantial results in reducing L-1 and H-1B utilization, the pace of off-shoring during this recession has not slackened.  Contrary to H-1B critics, the two are not directly related.  What has in fact happened is that as the regulatory environment in the U.S. has driven up the costs and compliance risks of doing business here, global companies have simply moved more of their operations, and jobs, offshore.

As has happened for several Congressional sessions, Senators Durbin and Grassley reintroduced their H-1B and L-1 Visa Reform Act of 2009, S. 887. That bill includes the following provisions:


 



  • U.S. employers who want to hire an H-1B worker would first have to carry out a labor market test to recruit a qualified American worker.

  • Employers would be prohibited from hiring additional H-1B and L-1 workers if more than 50% of their employees are H-1B and L-1 visa holders.  

  • Employers would be prohibited from hiring H-1B visa holders if a U.S. worker might be displaced or a U.S. worker had been laid off.

  • Employers would be prohibited from using "H-1B only" ads.

  • Employers would be prohibited from hiring additional H-1B and L-1 workers if more than 50% of their employees are H-1B and L-1 visa holders.

  • Authorizes DOL to initiate investigations without a complaint and without the Labor Secretary's personal authorization, as is at present the case.

  • Authorizes DOL to review the Labor Condition Attestations attached to H-1B applications for fraud; present law allows only a review for completeness and accuracy.

  • Authorizes DOL to conduct random audits of any company that uses the H-1B program, not just "H-1B dependent firms" and those found to be 'willful violators".

  • Requires DOL to conduct annual audits of larger H-1B dependent companies.


 


Industry should redouble work with Congressional leaders to insure that unwanted provisions, such as those above that have migrated into the House and Senate CIR Bills from the Durbin-Grassley Bill, do not end up as free-standing amendments attached to other legislation, as has occurred several times with related measures in recent years.   The ban on L-1B outsourcing, for instance, was attached to the 2004 Omnibus Spending Bill, and the court-stripping provisions of the 2005 REAL ID Act, which was not originally conceived as primarily an immigration Bill,[37] ended up as a rider to an Iraq war funding measure.    Recall, also, these restrictive measures passed despite the failure of the 2006 and 2007 CIR efforts.  This session, one should expect efforts to attach a broad anti-H-1B measures to a Jobs Bill or similar economic stimulus measure, as occurred in a more limited fashion last year with the American Recovery and Reinvestment Act of 2009 (ARRA, "stimulus bill"), Public Law 111-5.  Section 1661 of the ARRA incorporates the Employ American Workers Act ("EAWA") by Senators Sanders (I-Vt.) and Grassley (R-Iowa) to limit banks and other financial institutions that took TARP money from hiring H-1B workers unless they had offered positions to equally- or better-qualified US workers, and to prevent banks from hiring H-1B workers in occupations in which they had laid-off US workers.


Instead of legislative initiatives, industry efforts to achieve regulatory reform might better be directed to the policy office of the Department of Homeland Security (DHS) along with the USCIS Office of the General Counsel, as well as to other potential allies and reform champions within the Obama Administration.  Achieving regulatory reform, as opposed to legislative gains, may ultimately prove to be a more productive focus for industry outreach resources.  


 



  1. 2.      CIR Compared to Other Legislative Initiatives


In the 2009-10 Congress, there are two competing Comprehensive Immigration Reform (CIR) measures.   The first is a draft measure promoted by Senators Schumer (D-NY) and Graham (R-SC)  and the other is the House Bill, H.R. 4321 introduced last  December by Rep. Luis Gutierrez (D-IL) with 94 Democratic co-sponsors.  Unlike past  CIR initiatives, neither of these Bills have more than a fig leaf of bi-partisan support provided by Sen. Graham, who is the sole returning Republican in Congress to have publicly come out in favor of CIR this session. Neither Bill seems to have a strong chance of passage this session. 


The Senate Bill was initially expected to be introduced in February, 2010 but has been delayed after a second Republican co-sponsor could not be found.  As the cherry blossoms bloomed and were scattered to the winds in Washington, CIR still has not been formally introduced in the Senate.  As initially proposed late last year, the Schumer Bill was to have been a package containing "seven pillars," including an expansion of business-based immigration.    That package has been since stripped down to four pillars.    The surviving Senate blueprint, which is now being pushed in the wake of the difficult passage of the Health Care Reform law, contains the following major proposals[38]:



  • "requiring biometric Social Security cards to ensure that illegal workers cannot get jobs;

  •  fulfilling and strengthening our commitments on border security and interior enforcement;

  • creating a process for admitting temporary workers;

  • and implementing a tough but fair path to legalization for those already here."


However, in late April several pillars - of greatest concern to business immigration groups - were added back in, including provisions to require recruitment for H-1B positions.  According to a fact sheet issued by Senate supporters, the revised proposal will also include the following measures [18-19][39]:


(1) revise wage determination requirements; (2) require Internet posting and description of employment positions; (3) lengthen U.S. worker displacement protection: (4) apply certain requirements to all H-1B employers rather than only to H-1B dependent employers; (5) prohibit employer advertising that makes a position available only to, or gives priority to, H-1B nonimmigrants; and (6) limit the number of H-1B and L-1 employees that an employer of 50 or more workers in the United States may hire. The proposal also authorizes the Department of Labor (DOL) to: (1) investigate applications for fraud; and (2) conduct H-1B compliance audits. DOL will also be required to conduct annual audits of companies with large numbers of H-1B workers and initiate H-1B employer application investigations. Penalties for employers who violate the law will be increased.


For L-1 visas, the proposal prohibits, with a specified waiver by the Secretary of Homeland Security, an employer from hiring an L-1 nonimmigrant for more than one year who will: (1) serve in a capacity involving specialized knowledge; and (2) be stationed primarily at the worksite of an employer other than the petitioning employer. The proposal also specifies L-1: (1) employer petition requirements for employment at a new office; (2) wage rates and working conditions; and (3) employer penalties. DHS will be authorized to initiate investigations of L-1 employers suspected of being non-compliant with the law.


 From a litigation standpoint, there are some preemptive components in the revised Senate Bill that would, if passed, like Sec. 543 of the House Bill, eliminates some existing grounds for suits against USCIS.  In particular, "(4) apply certain requirements to all H-1B employers rather than only to H-1B dependent employers" appears to be an acknowledgement that the de facto approach to FDNS investigations taken by USCIS is outside present statutory authority, and is an effort to plug that gap.


 


****


Under the game-plan laid out earlier with Senate Majority Leader Reid, the Senate was to act first on CIR with the House to follow.  As with other aspects of this effort, the process has not proceeded according to plan.  Instead, the sponsors of the House CIR Bill introduced their version last December, as no official action had yet been taken to launch the measure in the Senate.  Meanwhile, the White House has not been very visible in pushing CIR, focusing instead on the drawn-out process of getting a health insurance reform package passed. [40]  


Indeed, repeated attempts at passage of comprehensive immigration law reform in recent years have all failed.  Legalization and so-called guest worker provisions (low-wage workers, also known as "future flow") were the most visible hot wire issues that short-circuited recent CIR efforts.  In the current political and economic environments, most observers agree the chances for such a measure containing legalization, guest workers or a significant increase in new visa numbers seem even more doubtful and difficult today.   What actually emerged from the CIR impasse was a series of "enforcement-only" laws passed in recent years attached to unrelated Bills. These contained restrictive provisions which, amongst other things, banned most outsourcing by L-1B workers and stripped the jurisdiction of the courts over discretionary denials of non-immigrant visa petitions, including H-1B and L-1. 


The enormous difficulties that the Obama Administration had in passage of what turned out to be a centrist insurance reform Bill by a divided Democratic Congress do not bode well for the chances they will, indeed, pass CIR in 2010. 


It seems improbable after the bitter experience of the Health Care Bill that Congress will move another broad, controversial package of legislation by party-line vote.  Immigration, in particular, has been proven to be a divisive issue, even within the Democratic Party, and few Democrats relish another bruising internal fight this session.   The Democrats will likely play it safe, and while giving lip service to immigration issues, are unlikely to attempt another dramatic partisan legislative campaign, particularly so late in the session.  Nonetheless, Sen. Schumer has attempted to sound upbeat about the chances for CIR passage in 2010.[41]    


Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) unveiled their bipartisan blueprint for comprehensive immigration reform Thursday, a move hailed by President Barack Obama as progress on an issue for which he has been criticized for ignoring.


The House CIR Bill which in revised form is similar to the H-1B compared to the Senate CIR proposal, has so-far received little public support from the White House.    That might change if the Administration were to turn against business immigration, or a wild-fire of grass-roots pressure reignites the issue. Bills with H-1B curbs could appear almost spontaneously if employment figures do not improve or the economy takes another steep dive, or some other political factor, such as a political sea-change and shake-up of the leadership following the November Congressional elections leads the White House and lawmakers to hunt for low-hanging fruit to appease populist anger.  H-1B may appear an enticing target within easy reach in the lower branches.


Significant and ominous changes were made in late April to the draft Senate CIR measure, so that it now closely resembles the House Bill, while it still as of the time of writing has not been committed in the Senate.  Now dubbed the REPAIR Bill ("Real Enforcement and Practical Answers for Immigration Reform"), the revised proposal picked up several key Democratic co-sponsors, including Majority Leader Reid, Judiciary Committee Chair Patrick Leahy (D-VT), Sen. Menendez (D-NJ), and Sen. Feinstein (D-CA).[42]  Shortly thereafter, passage of a draconian Arizona state immigration law attracted some attention to the subject.  The Bill contains a federal exclusivity provision.  By most assessments, however, the chances for a broad-spectrum CIR still remain dim for passage this session.  Both President Obama and Republican leaders signaled that they thought passage of such a Bill seemed remote.  GOP House Minority Leader John Boehner (R-OH) was quoted as saying, ""There is not a chance that immigration is going to move through the Congress," Boehner said. "You cannot do a serious piece of legislation of this size, with this difficulty, in this environment." [43]   Meanwhile, Senate Democratic Whip Dick Durbin echoed that, pointing to the political environment, "It's unlikely we'll get to it this year," Durbin said in an interview as the '10 Congressional summer recess neared.[44]   


 


 



  1. 3.      The CIR Problem:  Proposals for H-1B "Reform" Still Pose an Existential Threat to Global IT Firms


 


There are several provisions of the 2009 House Comprehensive Reform (CIR) Bill reviewed at the Appendix, below, that may be viewed as a "poisoned pill" by many in the IT industry, specifically Chapter 1, Subchapter A, Sec. 531(e) and Sec. 543, which would effectively ban outsourcing of H-1B workers.  That section provides for the possibility of a waiver issued by the Secretary of the U.S. Department of Labor.  However, such a waiver would be contingent upon a showing that there have been no layoffs for 180 days prior to placement of the H-1B worker at a client site, and that outplacement would not result in the displacement of a U.S. worker for 180 days thereafter. 


 


Under Sec. 543, H-1B petitioners would also be required by law for the first time to demonstrate that they control and supervise their workers at client sites, and that the outplacement is not primarily an arrangement for hire, a bar similar to the ban on L-1B outplacement put in place by a late night addition to the 2004 Omnibus Spending Bill.  If passed into law, this language would effectively nullify many of the grounds for a law suit against USCIS for Neufeld memo interpretations that are contrary to current statute and regulation.   The biggest threat that such provisions might pass, if not managed closely with Congressional leadership, could come packaged as part of a "must pass" jobs, revenue or national security Bill. 


 


Other parts of the House Bill also seriously threaten the industry, including a ban at proposed Sec. 532 on issuances of new Labor Condition Attestations (LCAs) for firms that employ more than 50 percent H-1B and L-1 workers.  Another dreaded change would be a requirement for national advertising of H-1B positions at Sec. 551 (as referenced at Sec. 532)  imposes what would be, in effect, a labor market test and burden upon petitioners to establish that there were no willing, able, and qualified U.S. workers for the position offered.  The certainty of complaints by U.S. workers who apply but are not hired add an expanded element of potential liability to H-1B hiring firms, particularly given the regulatory bar at Sec. to Sec. 532 to any advertising that "indicates" a priority or preference for H-1B workers, without reference to whether that advertising took place domestically or abroad. 


 


Some industry concessions, such as a voluntary Level 2 wage floor for H-1B, negotiated with DHS in lieu of such a ban might be considered a worthwhile bargain, and industry must now make certain crucial decisions about how to best to negotiate such a deal. 


 


If some semblance of balance is not somehow brought back into business immigration, the costs and risks associated with compliance with U.S. regulatory environment will become so great that many global IT firms will simply move their entire remaining operations off-shore. 







[1] See, Center for Auto Safety v. NHTSA, 452 F.3d 798 , 806 (D.C. Cir., 2006).




[2] See, Appalachian Power Company v. EPA , 341 U.S. App. D.C. 46, 208 F.3d 1015, 1019 (D.C. Cir. 2000).




[3] See, Kazarian v USCIS , No. 07-56774 (9th Cir., March 4, 2010).




[4] See, John W. Miller, WSJ, "Blame Goes Global at WTO", December 3, 2009,  http://online.wsj.com/article/SB125979173263473539.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop




[5] See, (2009 Nonimmigrant Flow Report, DHS Office of Immigration Statistics (April, 2010)), Table 2, http://www.ilw.com/immigrationdaily/news/2010,0430-nonimmigrant.pdf 






[8] See, Minutes of DOL Stakeholders Telephone Conference (March 25, 2010), American Immigration Lawyers Assoc., Q. 8, http://www.aila.org/content/default.aspx?docid=31689




[9] While the scope of judicial review has been narrowed over USCIS interpretation of facts in any particular case, it is not altogether foreclosed.  Mary Kenney takes the view that the courts will still hear the bulk of issues presented in an APA case, and that the court's own ability to make a final determination that actions of USCIS or AAO amount to an "abuse of discretion" under the APA Sec. 704 standard is not curtailed. See, Mary Kenney, AILF Practice Guide, IMMIGRATION LAWSUITS AND THE APA:THE BASICS OF A DISTRICT COURT ACTION, (May 9, 2007),  http://www.aila.org/content/default.aspx?bc=1016%7C6715%7C20852%7C24587%7C22301; also, see, Aaron G. Liederman, Columbia Law Review, "PRESERVING THE CONSTITUTION'S MOST IMPORTANT HUMAN RIGHT: Judicial Review of Mixed Questions Under the REAL ID Act,  http://www.columbialawreview.org/assets/pdfs/106/6/Leiderman.pdf: "[C]ourts should interpret REAL ID's restoration of jurisdiction over "questions of law" to include many mixed questions of law and fact for statutory, constitutional, and  practical reasons. It then proposes a mixed standard of review, requiring circuit courts to defer to agency findings of historical facts, but to engage in de novo review of determinations of ultimate fact."




[10] See, Donald Neufeld, Associate Director, Service Center Operations, DHS, USCIS, HQ 70/6.2.8, AD10.24,  Memorandum for Service Center Directors, "Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements";Additions to Officer's Field Manual (AFM) Chapter 31.3(g)(15)(AFM Update AD 10-24)(Jan. 08, 2010) (hereafter, "Neufeld memo").






[13] Neufeld memo, Ibid., at 1.




[14] Sidebar:  See, David Borgen and Jennifer Liu, SIGNIFICANT LEGAL DEVELOPMENTS IN WAGE & HOUR LAW: DEFERENCE STANDARDS, National Employment Law Association (Presentation Paper, National Conference, October 19, 2007), http://www.gdblegal.com/documents/ArticlesAmicus_Briefs/NELA_Paper_final.pdf  





[16] Nationwide Mutual Ins. Co. v. Darden, 503 U.S. 318, 322-323 (1992) (hereinafter Darden) and Clackamas Gastroenterology Assoc. v. Wells, 538 U.S.A40 (2003) (hereinafter Clackamas).




[17]  Clackamas concerned itself with interpretation of statute, which is formal rulemaking, while Darden was a private suit of an insurance agent, Darden, against United Insurance Co., that did not concern itself with APA requirements. 




[18] See, Garland's Digest on Unemployment & Discrimination Law, http://www.garlands-digest.com/treatise/06/06720.html, cites, e.g., Noviello v. City of Boston, 398 F.3d 76, ___ n. 3 (1st Cir. 2005), the court explained:  "We emphasize that we refer here only to Skidmore deference. Compare Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), with Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). After all, statements in the EEOC's Compliance Manual are neither adjudicatory nor the product of notice-and-comment rulemaking. See United States v. City of New York, 359 F.3d 83, 93 (2d Cir. 2004); cf. Navarro v. Pfizer Corp., 261 F.3d 90, 99 (1st Cir. 2001). They are, therefore, entitled to deference only to the extent that they have the power to persuade. See Christensen v. Harris County, 529 U.S. 576, 587 (2000)"; also, see, 2nd, 6th, and 10th Circuit cases on this subject digested therein.




[19] The Court ruled in NLRB V. HEARST PUBLICATIONS, INC., 322 U. S. 111 (1944)  that employment law issues are not pure common law questions, and that consideration of the factual context is a necessary part of any review.  In Hearst, the Court did not defer to agency interpretation.  That decision also stressed the importance of de novo review of agency interpretations of statute and common law.  Finally, and contrary to the USCIS statement that its interpretation of the "common law" is binding on the issue of "employer-employee" relationships, the Court found that the issue is subject to judicial interpretation, even though it is a "mixed question" of law and fact.





[21] Clackamas, Opinion, Id.




[22] Darden actually was a private suit brought by an insurance broker, Darden, against United, an insurance company, for which the former sold policies.  It was not an administrative law case that involved application of APA requirements.




[23] See, See, UNITED STATES V. MEAD CORP., 533 U.S. 218 (2001) 185 F.3d 1304; cites, Skidmore v. Swift & Co., 323 U.S. 134 (1944).





[25] See, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938) held that neither Congress nor the federal courts can create a federal common law.  "There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a state whether they be local in their nature or 'general,' be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts." While Congress continues to make law and the federal courts continue to create precedent that must be given deference by lower courts, of course, the federal common law has no general binding authority over the agencies.  There is no general federal common law to apply by the agencies.  While it may be a factor taken into consideration in rulemaking, common law may not be applied without basis in statute or judicial order or established regulation from which an agency can draw "definitive interpretation".  The weight of common law interpretation is secondary to statutory construction and legislative rules.  This is apparent from the lead case on "administrative common law", Alaska Prof'l Hunters ***'n v. FAA, 177 F.3d 1030 (D.C. Cir. 1999).




[26] The Court ruled in NLRB V. HEARST PUBLICATIONS, INC., 322 U. S. 111 (1944)  that employment law issues are not pure common law questions, and that consideration of the factual context is a necessary part of any review.  In Hearst, the Court did not defer to agency interpretation.  That decision also stressed the importance of de novo review of agency interpretations of statute and common law.  Finally, and contrary to the USCIS statement that its interpretation of the "common law" is binding on the issue of "employer-employee" relationships, the Court found that the issue is subject to judicial interpretation, even though it is a "mixed question" of law and fact.




[27]  The primacy of APA standards has also been found to apply to the availability of appeals to the federal courts despite an agency regulation founded in common law specifying that an administrative appeal must first be exhausted. See, DICKINSON V. ZURKO, 119 S.Ct. 1816 (1999); op cit., Darby v. Cisneros, 509 U.S. 137 (1993).




[28] See, Neufeld memo, Ibid., ftn. 1.





 


[30] See, UNITED STATES V. MEAD CORP., 533 U.S. 218 (2001) 185 F.3d 1304; cites, Skidmore v. Swift & Co., 323 U.S. 134 (1944).




[31]    See, CHRISTENSEN V. HARRIS COUNTY, 529 U.S. 576 (2000); cited by Mead, Ibid..




[32] See, Rami Fakhoury, Mark Levey, et al., The Consular Posts Book, (ILW Publishers, 2009).




[33] FDNS-DS activities continue to expand in 2009 and 2010.  Related DHS data-mining and surveillance programs permitted under the 2008 FISA Amendment continue unabated.  Immigration enforcement efforts, in general, have shifted toward compliance and fraud detection.  After long delay in the courts, mandatory e-verify requirements are now in effect for federal contractors.  In August, 2009, the Federal District Court for the Southern District of Maryland ruled in favor of general implementation of a pilot program originally proposed in 1995 by IIRIRA and initiated by Executive Order by President Bush, but opposed by industry.  The Obama Administration Justice Department adopted the litigation position of its predecessor without change, and prevailed over industry litigation and appeal.  See, Chamber of Commerce v Napolitano, AW-08-3444,  http://www.aila.org/content/default.aspx?docid=29882, AILA InfoNet document 09082661 (posted August 26, 2009);  also, see, 4th Circuit dismissal of emergency injunction, Fourth Circuit Denial Decision on the Motion for Injunction on E-Verify FAR Ruling.






[36]  See, Patel v. Immigration & Naturalization Service, 638 F.2d 1199, 1980 U.S. App. LEXIS 12970 (9th Cir. 1980).    




[37] The REAL ID Act was attached to the "Emergency Supplemental Appropriation for Defense, the Global War on Terror, and Tsunami Relief, 2005" (H.R. 1268, P.L. 109-13).




[38]  See, Sens. Charles Schumer and Lindsay Graham, The Washington Post, Op-ed, "The Right Way to Mend Immigration", (March 17, 2010), http://www.washingtonpost.com/wp-dyn/content/article/2010/03/17/AR2010031703115.html ; also, see, David Gray, Huffington Post, "Now Onto Immigration," (March 23, 2010),  http://www.huffingtonpost.com/david-gray/now-onto-immigration_b_509182.html





[40]  See, Trish Turner, Fox Business News, "Immigration Reform Effort Reemerges with New Senate Bill", (March 10, 2010),  http://www.overoll.com/Article/www.foxnews.com/Immigration-Reform-Effort-Re-Emerges-With-New-Senate-Bill/199244/1890638.newsalso, see, Jennifer Bendery and Jessica Brady, Rollcall.com, "Schumer, Graham Unveil Immigration Reform Blueprint"


 




[41]  See, Jennifer Bendery and Jessica Brady, Rollcall.com, "Schumer, Graham Unveil Immigration Reform Blueprint," March 18, 2010,  http://www.rollcall.com/news/44375-1.html






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