Tag Archive for: Chevron deference

Cyrus Mehta

The Potential Impact of SEC v. Jarkesy on Immigration Law and EB-5 Lawyers

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By Cyrus D. Mehta and Kaitlyn Box*

On November 29, 2023, the Supreme Court heard oral argument in Securities and Exchange Commission v. Jarkesy, a case that involves several key questions: whether the statues allowing the Securities and Exchange Commission (SEC) to bring administrative enforcement proceedings that impose civil penalties violate the Seventh Amendment right to a jury trial, whether the statute allowing the SEC to enforce securities laws through agency adjudication rather than in federal court violates the nondelegation doctrine, and whether the Congress’ decision to allow Administrative Law Judges (ALJs) to be removed only for “good cause” violates Article II of the Constitution, which commands the President to “take Care that the Laws be faithfully executed.” Oral argument focused primarily on whether the SEC’s enforcement system deprives those charged with SEC violations of the right to a jury trial. Jarkesy argued that an SEC adjudication triggers a right to a jury trial because it is more akin to a civil fraud lawsuit imposing monetary penalties than a proceeding involving a “public right”, where agency adjudication is appropriate.

An ALJ found Jarkesy, an investment advisor, guilty of violating securities law by fraudulently overvaluing the investments he oversaw, and making misrepresentations to investors about the management of the funds. He was fined $300,000, barred from securities industry activities, and his firm was ordered to repay investors. Jarkesy challenged the SEC’s enforcement action at the 5th Circuit, arguing that he was deprived of his constitutional right to a jury trial, that “Congress unconstitutionally delegated legislative power to the SEC by failing to provide it with an intelligible principle by which to exercise the delegated power”, and that restrictions on the removal of ALJs violate Article II. The Fifth Circuit agreed, holding that the SEC’s choice of enforcing securities violation through agency adjudication violates the Seventh Amendment, and that Congress’ open-ended grant of authority to the SEC to determine whether to initiate enforcement proceedings for securities fraud is impermissible under the Constitution. Further, the court held that “for-cause” removal protections for ALJs violates the “take care” clause of the Constitution by impermissibly insulating them from removal by the President.

The outcome of Jarkesy could have significant impacts on immigration law. The same arguments that could invalidate the authority of ALJs in Jarkesy could also be applied to Immigration Judges (IJs), potentially depriving them of the ability to hear cases. Because IJs are non-ALJ adjudicators, their authority could be even more vulnerable to the challenges issued by Jarkesy. Additionally, if the Supreme Court’s holding eliminates ALJs at the SEC, lawsuits challenging the authority of ALJs at other agencies are likely to follow, meaning that the Department of Labor, for example, could be hindered from holding hearings to address an employer’s failure to comply with a Labor Condition Application (LCA). During the oral argument, which only focused on the right to a jury trial under the Seventh Amendment, Justices Kagan and Sotomayor expressed concerns that Jarkesy could result in radical changes to the immigration court system. If the Supreme Court’s holding brings about the evisceration of the immigration courts, Congress could be forced to create an independent immigration court system under Article I of the Constitution as a replacement. An Article 1 court would ensure that IJs are independent from political interference as they are currently under the purview of the Attorney General within the Department of Justice.

S. Michael McColloch, counsel for Jarkesy, argued that the court should hold that when the government brings a case with the “same essential function” as a traditional lawsuit for claims such as fraud, it should have to bring the case in federal court, where a jury trial right would apply. However, when pressed further he emphasized that Jarkesy should not apply to adjudicating government benefits and debts and that  the authority of IJs should not be impacted by the outcome of the case.

A broad Supreme Court ruling in  Jarkesy  affirming all the three aspects of the Fifth Circuit decision could have disastrous consequences for the immigration court system while also providing immigration lawyers charged with SEC violations with an interesting means of challenging the administrative proceedings. The SEC often initiates enforcement actions against immigration lawyers arising from their work with the EB-5 program, which affords noncitizen investors a path to lawful permanent residence. The SEC has initiated these actions against immigration lawyers who it claimed, for example, offered investments without registering as a broker or received commissions from their clients’ investments. As in the enforcement action at issue in Jarkesy, the SEC often imposes monetary sanctions on immigration lawyers found to have committed a securities violation. Jarkesy could provide immigration lawyers accused of securities fraud with a template for challenging the enforcement proceedings brought against them by the SEC on the grounds that they are entitled to a jury trial or asserting a Constitutional challenge to the authority of ALJs. Jarkesy also argued that the statutory provision which allows the SEC to bring agency enforcement actions rather than enforcing securities law in federal court offends the Constitution’s nondelegation doctrine. This argument too could be advanced by immigration lawyers facing an SEC administrative proceeding. The SEC does not always initiate agency enforcement proceedings against immigration lawyers for securities violations, however, sometimes suing in federal court instead (see here and here). Immigration lawyers facing a jury trial in federal court will find it more difficult to make use of the arguments laid out in Jarkesy.

Our blog on Jarkesy is part of a series of blogs analyzing forthcoming Supreme Court cases that may eviscerate Chevron deference,  curb the power of federal government agencies in interpreting statutes and regulations, and broaden the statute of limitations to challenge regulations under the Administrative Procedure Act.  Although these challenges are being made by plaintiffs  before sympathetic conservative justices whose objective it is to dismantle the administrative state, we have tried to also find a silver lining in each of these cases that might benefit immigrants or their attorneys.

*Kaitlyn Box is a Senior Associate at Cyrus D. Mehta & Partners PLLC.

Cyrus Mehta

How Corner Post Along with the Demise of Chevron Deference  Can Open Up Immigration Regulations to Challenges

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On February 20, 2024,  the Supreme Court  heard oral argument in Corner Post, Inc. v. Board of Governors of the Federal Reserve System. This case could potentially expand the six year statute of limitations to challenge a regulation under the Administrative Procedure Act (APA).   § 702 of the APA provides that “]a] person suffering legal wrong because of an agency action, or adversely affected or aggrieved by agency action” may seek judicial review. § 2401(a) of the United States Code generally requires that the complaint to commence such an action must be “filed within six-years after the right of action accrues.”

 In Corner Post, the plaintiffs asserted that the six year statute of limitations under the APA first begins to accrue when the plaintiff has suffered a “legal wrong” or been “adversely affected or aggrieved” rather from when the agency issues a rule. The Board of Governors of the Federal Reserve issued Regulation II in 2011, which capped the interchange fees paid on debit-card transactions.  The North Dakota Retail Association and others challenged this regulation under the APA. The Board moved to dismiss arguing that the statute of limitations had run out.  They added Corner Post, which was incorporated in 2017 and began operating in 2018. The Board again moved to dismiss, and the district court granted the motion holding that the statute of limitations under Section 702 began running when Regulation II was published in 2011. The Eight Circuit affirmed rejecting the argument that the six year statute of limitations began running only when Corner Post opened in 2018. Corner Post sought review by the Supreme Court.

If plaintiffs prevail, Corner Post would open the door to many challenges to government regulations  even beyond the six year date from when they were issued. Moreover, on January 17, 2024,   the Supreme Court also heard oral argument on January 17, 2024 in Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo whether to eliminate or restrict the deference that courts give to an agency’s interpretation of an ambiguous statute under Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). This is known as Chevron deference, which has insulated the government from challenges to its interpretation of a statutory provision.

 One can see how the evisceration of Chevron deference in Loper Bright and Relentless,  along with Corner Post relaxing the six year deadline for APA challenges,  can result in challenges to immigration regulations even though they were promulgated more than six years ago. For instance, in  Wash Tech v. DHS the F-1 Optional Practical Training (OPT) and STEM OPT rule promulgate in 2016 were both upheld by the First Circuit under Chevron deference. If Corner Post broadens the six year limitation to challenge a rule, and if Chevron deference is eliminated, plaintiffs who claim they were aggrieved because they may have lost their job to an F-1 nonimmigrant under the OPT rule, can again try to challenge the rule even though more than 6 years have passed.

As background, the Washington Alliance of Technology Workers (Wash Tech) challenged the Optional Practical Training (OPT) and the STEM Optional Practical Training (OPT). DHS allows eligible students in STEM fields an additional 24 month OPT extension beyond the usual 12 month OPT period. The 2016 Rule restarted the clock to challenge the statutory authority for the OPT program as a whole along with the new, STEM-specific extension.

Wash Tech argued that “the statutory definition of the F-1 visa class precludes the Secretary from exercising the time-and conditions authority to allow F-1 students to remain for school recommended practical training after they complete their coursework”. Wash Tech read INA § 101(a)(15)(F)(i) as authorizing DHS to allow F-1 students to remain in the U.S. only until they have completed their course of study, as the provision does not specifically mention post-graduation practical training. The court affirmed a district court judgment that upheld DHS’ current OPT rules. The court reasoned that the STEM OPT extension is a valid exercise of DHS’ authority under in INA § 214(a)(1) to promulgate regulations that authorize an F-1 student’s stay in the U.S. beyond graduation. The court further noted that “practical training not only enhances the educational worth of a degree program, but often is essential to students’ ability to correctly use what they have learned when they return to their home countries. That is especially so in STEM fields, where hands-on work is critical for understanding fast-moving technological and scientific developments.” Judge Pillard, who authored the opinion, noted that the concept of post-coursework practical training for foreign students predates the Immigration and Nationality Act of 1952, pointing to a 1947 rule which “allowed foreign students ‘admitted temporarily to the United States . . . for the purpose of pursuing a definite course of study’ to remain here for up to eighteen months following completion of coursework for ‘employment for practical training’ as required or recommended by their school”. Under Lorillard v. Pons, 434 U.S. 575, 580 (1978), Congress is presumed to be aware of an administrative interpretation of a statute and to adopt that interpretation when it reenacts its statutes without change. Practical training has been authorized even prior to the enactment of the INA in 1952.  In previous blogs, we have discussed Congressional authority for OPT at length, see here, here, here, and here.

In addition, the court paid deference under Chevron  to the agency’s interpretation of 101(a)(15)(F)(i)  by asserting that “OPT’s nexus to an F-1 student’s course of study, together with the student’s application to the school for approval and the school’s reporting responsibilities to DHS, ensure that the additional time and practical training opportunities available through the program help F-1 students to cement the knowledge acquired in their coursework consistent with legal limits.”

If  the Supreme Court in Loper Bright and Relentless eliminate Chevron deference, and if Corner Post broadens the six year statute of limitations, a different  plaintiff can again challenge the OPT rule all over again. The rule may most likely withstand attack because it is not entirely based on Chevron deference as it was also upheld under Lorillard v. Pons. So even if Chevron deference is eliminated, under  the doctrine established in Lorillard it can be presumed that Congress was aware of the government’s interpretation of F-1 status as encompassing practical training each time it has amended the INA. It can also be argued that the DC Circuit’s reliance on Chevron was either an alternate holding or dicta. The following extract from the decision indicates that the DC Circuit relied on the plain meaning of INA 214(a)(1); 8 USC 1184(a)(1) rather than paying Chevron deference to the DHS’s interpretation of those provisions:

The 2016 Rule is within DHS’s statutory authority. Section 1184(a)(1)’s time-and-conditions provision is the source of that authority, and the F-1 visa class definition guides its use. Because the 2016 Rule regulates the “time” and “conditions” of admission for F-1 visa-holders, and because it is reasonably related to the distinct composition and purpose of that visa class, as defined in the F-1 provision, the Secretary had authority to promulgate it.

50 F.4th at 177.

The most straightforward reading of the INA is that it authorizes DHS to apply to admitted F-1 students the additional “time” and “conditions” that enable them to remain here while participating in OPT recommended and overseen by their respective academic institutions. But at a minimum, even if it is ambiguous on the point, the statute may reasonably be understood as the Department has read it in support of the 2016 OPT Rule. That interpretation thus merits our deference. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).

 

Id. at 192.

At oral argument in Corner Post the justices questioned what impact it may have if parties were allowed to bring facial challenges more than six years after a final agency action. Justice Jackson asked whether this could risk destabilizing industry and noted that “we have settled rules that govern all sorts of industries, the healthcare industry, the finance industry, and people have adjusted themselves around them.” It appears that  the justices know that Chevron deference is on the chopping block, and perhaps there is already a draft opinion circulating among them suggesting that Chevron deference may be no more. In an exchange with counsel for Corner Post, Justice Jackson raised the potential impact of the rulings in Corner Post, Relentless, and Loper Bright.  Justice Elena Kagan also raised the risk of retroactive impacts scrambling long-established law.   If plaintiffs prevail in Corner Post, it would open up challenges to well settled immigration rules such as the F-1 OPT and STEM OPT rule, as well as the H-4 employment authorization rule,  which  can destabilize and upend the lives of real people rather than just industries.

While we have addressed how the F-1 OPT rule might be vulnerable, it may be possible for noncitizen plaintiffs to attack other rules more than six years after they were issued. For instance, 8 CFR  245.1(d)(2)(i) implements the technical exception under INA 245(c)(2), which precludes one to file an I-485 application for adjustment of status who has failed to maintain lawful status  “other than through no fault of his own or for technical reasons.” 8 CFR 245.1(d)(2)(i) provides a very narrow reading of the exception under INA 245(c)(2) by only allowing one whose status was jeopardized due to inaction by the government or by an organization or individual authorized to act on behalf of he individual such as a designated student officer in a school.  The Ninth Circuit in Peters v. Barr recently held that the regulation should cover situations where the applicant fell out of status due to ineffective assistance of counsel but did not invalidate the regulation.  Although the rule was promulgated in 1989, Corner Post could allow one who got injured through the denial of an I-485 application to challenge the rule even today, and the elimination of Chevron deference may allow a court to hold that the regulation does not faithfully interpret the exception in INA 245(c) without regard to whether the government’s interpretation of the statute is reasonable or not. One caveat is that the plaintiff may have to get over the jurisdictional bar as set forth in Patel v. Garland when seeking judicial review of a denied I-485 application.

Corner Post along with the elimination of Chevron deference can open up other possibilities. It may be possible for a plaintiff to challenge the regulation implementing the foreign labor certification program at 20 CFR 656. Under INA §212(a)(5), an alien is deemed “inadmissible unless the Secretary of Labor” certifies, inter alia, that “there are not sufficient workers who are able, willing, qualified…and available at the time of application” among the U.S. workforce. A plain reading of INA §212(a)(5) does not in any way suggest that an employer must seek to recruit U.S. workers in order for the Secretary of Labor to certify that there is a lack of U.S. workers who are qualified and willing at the time of the application. Although the PERM rule was promulgated in 2005, Corner Post can extend the 6 year limitation if an employer was subject to injury in the last six years. Moreover, if Chevron has been eliminated a court may not give deference to the DOL’s interpretation of INA § 212(a)(5) as set forth in 20 CFR 656, which requires onerous recruitment steps including two Sunday print ads and  which requires employers to justify supposedly restrictive requirements through business necessity among many other burdens that have no bearing with an employer’s real world recruitment practices.

There will  be  both winners and losers in a post Chevron world if the plaintiffs are victorious in Corner Post, Loper Bright and Relentless.

 

 

 

 

 

 

 

 

 

Cyrus Mehta

Board of Immigration Appeals in Matter of Aguilar Hernandez Provides Glimpse of How Statutes and Regulations Will Be Interpreted Without Deference to Government

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By Cyrus D. Mehta and Kaitlyn Box*

On January 31, 2024, the Board of Immigration Appeals (BIA) issued a decision in Matter of Aguilar Hernandez.

Mr. Aguilar Hernandez, a noncitizen from Mexico, had been served a Notice to Appear (NTA) in 2019 that did not list the date and time of his individual hearing. He objected that this NTA was defective at both his individual hearing and moved to terminate the removal proceedings against him, but the Immigration Judge denied his motion. In October 2022, Mr. Aguilar Hernandez again moved to terminate the removal proceedings due to the defective NTA. The Department of Homeland Security objected, arguing that the IJ had the discretion to allow it to cure the defective NTA rather than terminating removal proceedings. DHS filed a Form I-261 containing the date and time of the next hearing, and also listing the date and time of the original hearing, and served this form on Mr. Aguilar Hernandez. Over Mr. Aguilar Hernandez’s objections, the IJ denied his motion to terminate once again, without issuing a decision concerning DHS’ submission of the Form I-261. Mr. Aguilar Hernandez then appealed to the BIA.

The BIA held that “DHS cannot remedy a notice to appear that lacks the date and time of the initial hearing before the Immigration Judge by filing a Form I-261 because this remedy is contrary to the plain text of 8 C.F.R. § 1003.30 and inconsistent with the Supreme Court’s decision in Niz-Chavez.” In Niz-Chavez v. Garland, 593 U.S. 155, 160-62 (2021), the Supreme Court held that DHS cannot cure a defective NTA by issuing a hearing notice that contains the date and time of the initial hearing in removal proceedings. The BIA also cited to Pereira v. Sessions, 138 S. Ct. 2015 (2018), in which the Supreme Court held that the “stop-time rule” at INA 240A(d)(1) is not triggered by an NTA that does not contain the time and place of a hearing in removal proceedings. The BIA reasoned that “The plain text of 8 C.F.R. § 1003.30 does not support DHS’ argument, because it does not allow amendment of the date and time on the notice to appear by using a Form I-261. See, e.g., Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019) (requiring agencies to follow the plain language of a regulation).” The BIA noted that the Supreme Court had held that INA 239(a)(1) requires one “single document” in Niz-Chavez, and rejected the idea that DHS could provide adequate notice by issuing multiple successive documents containing the relevant information. See Niz-Chavez, 593 U.S. at 160-61.

Matter of Aguilar Hernandez is a victory for noncitizens seeking to terminate removal proceedings on the basis of a defective NTA, but it is interesting for another reason, as well – it represents one of the rare instances in which the BIA has cited Kisor v. Wilkie. As prior blogs have noted (here, here, and here) Kisor v. Wilkie laid out a three-step test for how it would view an agency’s interpretation of its own  genuinely ambiguous regulation.. Under this test,  the court must determine (i) that the regulation is “genuinely ambiguous” — the court should reach this conclusion after exhausting all the “traditional tools” of construction; (ii) if the regulation is genuinely ambiguous, whether the agency’s interpretation is reasonable; and (iii) even if it is a reasonable interpretation, whether it meets the “minimum threshold” to grant Auer deference, requiring the court to conduct an “independent inquiry” into whether (a) it is an authoritative or official position of the agency; (b) it reflects the agency’s substantive expertise; and (c) the agency’s interpretation of the rule reflects “its fair and considered judgment.” In Kisor, the Supreme Court narrowed the previous standard set forth in Auer v. Robbins, which held that courts would give deference to an agency’s interpretation of its own ambiguous regulation.  In Aguilar Hernandez it does not appear that the BIA thought that 8 C.F.R. § 1003.30 was ambiguous, and so it did not even need to defer to the government’s interpretation of this regulation even under the narrower standard as set forth in Kisor v. Wilkie. The plain language of 8 C.F.R. § 1003.30 did not support an expansive reading that would allow the government to cure a defective NTA by amending it through the submission of an I-261. An I-261 under 8 C.F.R. § 1003.30 only allows the government to add or substitute charges in an NTA or to add or substitute factual allegations.

The requirement that the government interprets the plain meaning of the regulation is part of a trend. The “Auer deference” standard as modified by Kisor v. Wilkie is quite similar to “Chevron deference”, which holds that courts will give deference to a federal agency’s interpretation of an ambiguous federal statute. Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). However, when a statute is not ambiguous, the court does not need to even rely on Chevron deference and can side step the analysis all together.  While requiring an agency to adhere to the plain meaning of a statute or regulation helped the respondent in Aguilar Hernandez, it may not always come to the aid of plaintiffs. For instance,  the DC Circuit Court of Appeals in Wang v. Blinken  held that it was clear that INA 203(d) required the counting of both the principal and derivative beneficiaries in the employment-based fifth preference. Indeed, the Court in Wang v. Blinken also rejected the government’s argument that it was entitled to Chevron deference in interpreting INA 203(d) by counting derivatives as INA 203(d) was not ambiguous in the first place.

Two upcoming Supreme Court cases –  Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo –  may narrow Chevron or even eviscerate it altogether. If the Supreme Court’s holdings in Relentless and Loper Bright deprive agencies of the ability to interpret ambiguous statutes without explicit Congressional authorization, it may result in both good and bad outcomes in the immigration context. According to the Think Immigration Blog: “For example, in removal cases, Chevron deference hurts those seeking review of immigration judge or Board of Immigration Appeals decisions. It can also hurt employers seeking to obtain a favorable interpretation of a statute granting H-1B or L visa classification to a noncitizen worker.   However, Chevron deference can help when the immigration agency seeks to give employment authorization benefits, such as with the Deferred Action for Childhood Arrivals program or with F-1 optional practical training.”

At present, courts also rely on the “major questions” doctrine in West Virginia v. EPA, 142 S. Ct. 2587 (2022) to side step Chevron deference even if a statute is ambiguous. Here the Supreme Court held that “in certain extraordinary cases” where it is unclear whether an agency action was authorized by Congress, “given both separation of powers principles and a practical understanding of legislative intent, the agency must point to ‘clear congressional authorization’ for the authority it claims”.  Such extraordinary cases where the “major questions” doctrine is invoked have vast economic and political significance. The dissent in Washington Alliance of Technology Workers v. the U.S. Department of Homeland Security (“Washtech v. DHS”), for example, argued that the issue of whether DHS’ 2016 OPT Rule exceeds its statutory authority was a “major question”. Similarly, in a footnote, the court in Texas v. USA cited West Virginia v. EPA in holding that DHS had no Congressional authority to implement the DACA program. The standard articulated in West Virginia v. EPA requires agencies to assert clear Congressional authorization when implementing a new policy of major significance, while Chevron imposes an almost opposite standard by saying that if the court cannot identify clear congressional authority disapproving what the agency proposes to do, the court should uphold the agency action if it is reasonable.  The Supreme Court’s decisions in Relentless and Loper Bright could help to resolve this discrepancy. If Chevron deference is eliminated, courts need not even need to go into the “major questions” doctrine.

Matter of Aguilar Hernandez gives us a taste of how courts will interpret INA provisions and regulations in a post Chevron world although it remains to be seen whether the end result will always be beneficial.

 

*Kaitlyn Box is a Senior Associate at Cyrus D. Mehta & Partners PLLC.

 

 

Cyrus Mehta

Musings On Brand X As a Force for Good Ahead of the Supreme Court’s Ruling on Chevron Deference

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By Cyrus D. Mehta and Kaitlyn Box

The Supreme Court on January 17, 2024 heard arguments in two cases – Relentless, Inc. v. Department of Commerce and Loper Bright Enterprises v. Raimondo  – that may determine whether courts will continue to give deference to a federal agency’s interpretation of an ambiguous federal statute as held in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984).

Chevron deference also applies to ambiguous provisions under the INA. It is currently disfavored by  the conservative majority in the Supreme Court because it gives too much power to a federal agency to decide what the law is. It is also disfavored because deciding whether a statute is ambiguous, and thus becomes subject to deference,  is also a subjective determination based on the administration’s political ideology at any given moment in time. There is thus a great likelihood that Chevron will either be overturned or narrowed. As Brian Green and Stephen Yale-Loehr have astutely observed in their blog on Think Immigration:

Not all immigration practitioners and their clients will feel the impact if Chevron is narrowed or overruled. There will be winners and losers, and some unintended consequences may occur in limiting previously afforded deference to federal agency decision making. For example, in removal cases, Chevron deference hurts those seeking review of immigration judge or Board of Immigration Appeals decisions. It can also hurt employers seeking to obtain a favorable interpretation of a statute granting H-1B or L visa classification to a noncitizen worker.   However, Chevron deference can help when the immigration agency seeks to give employment authorization benefits, such as with the Deferred Action for Childhood Arrivals program or with F-1 optional practical training.

If the Supreme Court retains but limits Chevron, efforts will be made to argue that Chevron deference should not apply in BIA adjudications. Many case decisions have held that BIA adjudications receive Chevron deference, but there may be room to argue for a reversal of that precedent, depending on how the Court rules in Relentless and Loper.

If the Supreme Court’s holdings in Relentless and Loper Bright deprive agencies of the ability to interpret ambiguous statutes without explicit Congressional authorization, other precedent beyond Chevron could be eviscerated as well. In National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967 (2005), the Supreme Court held that an agency’s interpretation of an ambiguous statute may still be afforded deference even if a circuit court has interpreted the statute in a conflicting way. The Court’s holding in Brand X is a double edged sword – it can empower agencies to interpret statutes in a way that will be detrimental to immigrants, or in a beneficial way, even in light of problematic circuit court precedent. One example of an agency using Brand X to the benefit of an immigrant may be found in Matter of Douglas, 26 I&N Dec. 197 (BIA 2013), discussed at length by David Isaacson in a prior blog. Matter of Douglas involved an individual, Mr. Douglas, who was born in Jamaica and seeking to establish citizenship under former INA §321(a). His mother had naturalized in 1988, and subsequently gained legal custody of Mr. Douglas when his parents divorced.

Case law in the Third Circuit required that an applicant under former INA §321(a)(3) demonstrate that his custodial parent naturalized after legal separation from the other parent. See Jordon v. Att’y Gen., 424 F.3d 320, 330 (3d Cir. 2005) (quoting Bagot v. Ashcroft, 398 F.3d 252, 257 (3d Cir. 2005)). The BIA, however, had previously held that one may demonstrate citizenship under former INA §321(a) regardless of whether his parent gained legal custody before or after naturalizing. See Matter of Baires, 24 I&N Dec. 467 (BIA 2008). Relying on Brand X, the Board of Immigration Appeals chose to follow its own precedent and hold that Mr. Douglas was a U.S. citizen, circuit court case law notwithstanding.

Isaacson’s blog also points to other instances where the BIA previously rejected Court of Appeals case law that it thought to be incorrect in favor of a more immigrant-friendly approach but not as explicitly as in Matter of Douglas. In Matter of F-P-R-, 24 I&N Dec. 681 (BIA 2008), for example, the BIA declined to follow the Second Circuit’s decision in Joaquin-Porras v. Gonzales, 435 F.3d 172 (2d Cir 2006), and held that the one-year period in which a timely application for asylum may be made runs from the applicant’s literal “last arrival” even when that last arrival followed a relatively brief trip outside the United States pursuant to advance parole granted by immigration authorities (which the Second Circuit had held would not restart the one-year clock). Isaacson also astutely points to a  footnote in the BIA’s acclaimed decision in Matter of Arrabally and Yerrabelly, 25 I&N Dec. 771 (BIA 2012) (regarding travel on advance parole by one who has accrued unlawful presence) that could be read as pointing in this direction, the BIA in Arrabally made much of the fact that it was addressing an aspect of the law that the petitioner in the Third Circuit’s previous decision in Cheruku v. Att’y Gen., 662 F.3d 198 (3d Cir. 2011), had not challenged, see Matter of Arrabally, 25 I&N Dec. at 775 n.6.

Brand X can also provide hope when even the Supreme Court may have ostensibly shut the door. If a court’s decision is based on deference to an agency’s interpretation of a statute, a subsequent administration may interpret the statute differently notwithstanding the court’s decision. In Scialabba v. Cuellar de Osorio, the Supreme Court ruled that the BIA’s previous interpretation of the Child Status Protection Act (CSPA), as set out in Matter of Wang, 25 I&N Dec. 28 (BIA 2009), was a reasonable interpretation of an ambiguous statute.  In particular, the Court deferred to the BIA’s narrow interpretation of INA §203(h)(3), 8 U.S.C. §1153(h)(3), severely limiting which derivative beneficiaries of visa petitions could retain their parents’ priority dates.  This is a disappointing decision, but the details of the opinions in Cuellar de Osorio do leave room for some hope. When a statue is ambiguous in that way, Brand X makes clear that the BIA could reverse its position. So too could the Attorney General go against Matter of Wang and adopt a broader interpretation of INA §203(h)(3). If Brand X falls by the wayside like Chevron, there will be no room for a future administration to reinterpret this CSPA provision that could provide ameliorative relief for hundreds of thousands of children.

The demise of Brand X would deprive a future administration that might be bolder and kinder on immigration, a potentially important tool to implement immigration reform in the face of Congressional polarization and inaction. As we have noted in prior blogs, Brand X could be used by that administration to, for example, count derivative family members together with the principal applicant in both the employment-based (EB) and family based (FB) visa preference categories under INA § 203(d). There is nothing in §203(d) that requires the separate counting of derivatives even though the administration has been separately counting them since the enactment of this provision.  Although the Court of Appeals for the D.C. Circuit held that derivative family members must be counted separately in the EB-5 context in Wang v. Blinken, No. 20-5076 (D.C. Cir. 2021), Brand X could provide the Biden administration with a way to nonetheless change this interpretation by deeming INA 203(d) ambiguous and issuing a rule or  policy memo overruling Wang v. Blinken everywhere in the country except in the D.C. Circuit. Other Court of Appeals decisions have similarly limited the Biden administration’s ability to use Brand X to the advantage of immigrants.

Matter of Castro-Tum, a Trump era decision holding that Immigration Judges (IJs) and the Board of Immigration Appeals (BIA) do not have the authority to administratively close cases was rejected by several Circuit Court decisions and ultimately overturned it its entirely by Attorney General Garland’s 2021 decision in Matter of Cruz-Valdez. Nevertheless, the Second Circuit upheld the BIA’s decision not to grant administrative closure under Matter of Castro-Tum in Garcia v. Garland, a 2023 decision, despite the fact that the Biden administration had already, through Garland’s decision, reinstated the prior rule under Matter of Avetisyan, which permitted IJs and the BIA to administratively close removal proceedings, even if a party opposes. Although the Second Circuit’s decision was disappointing,  the case leaves open some interesting possibilities. In Garcia v. Garland the Second Circuit held that that agency’s interpretation on administrative closure was valid because Matter of Castro-Tum was valid and applicable at the time of the agency’s decision. Thus, if an IJ or the BIA grant administrative closure in reliance on Matter of Cruz-Valdez, that decision should be upheld even if a less immigrant-friendly administration overrules the decision in future. The same logic could apply to other Biden administration policies should they be challenged in future. Further, the decision in Garcia v. Garland asserts that principle that different administrations may reinterpret ambiguous statutory provisions.

Of course, if Loper Bright Enterprises and Relentless overrule Chevron, Brand X too will fall along with its potential for be a force for good for immigrants. There is a possibility that Chevron may be narrowed rather than completely overruled. Green and Steve Yale Loehr suggest that the Supreme Court may cabin Chevron as it did for Auer deference. The Supreme Court in Kisor v. Wilkie provided no new radical test of how it would view an agency’s interpretation of its own regulation. It essentially “cabined the scope” of Auer deference, and set forth a three-step approach under Kisor. Under this test,  the court must determine (i) that the regulation is “genuinely ambiguous” — the court should reach this conclusion after exhausting all the “traditional tools” of construction; (ii) if the regulation is genuinely ambiguous, whether the agency’s interpretation is reasonable; and (iii) even if it is a reasonable interpretation, whether it meets the “minimum threshold” to grant Auer deference, requiring the court to conduct an “independent inquiry” into whether (a) it is an authoritative or official position of the agency; (b) it reflects the agency’s substantive expertise; and (c) the agency’s interpretation of the rule reflects “its fair and considered judgment.”

If the Supreme Court similarly narrows Chevron as it did with Auer deference, then Brand X will also be narrowed and survive.  But if Chevron falls, so will Brand X rendering it harder for a future immigrant friendly administration to implement broad based immigration reform.

Kaitlyn Box is a Senior Associate at Cyrus D. Mehta & Partners PLLC

 

Cyrus Mehta

A Tale of Two Cases – Washtech v. DHS and Texas v. USA: To What Extent can the Executive Branch Allow Noncitizens to Remain and Work in the US

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By Cyrus D. Mehta and Kaitlyn Box*

To what extent can the Executive Branch allow noncitizens to remain and work in the US when there is no explicit provision in the Immigration and Nationality Act (INA) covering these categories of noncitizens? Two courts of appeals have ruled differently in recent decisions. One court found authority while the other court did not. The D.C. Circuit addressed the question of F-1 students and whether they could remain in the U.S. after graduation for practical training. Citing DHS’ authority under INA § 214(a)(1) and the long history of post-graduation practical training, the court upheld OPT. The Fifth Circuit confronted a different issue – that of young people who came to the U.S. and whether they could remain in the country through deferred action. Finding that DACA exceeds DHS’ inherent authority to exercise prosecutorial discretion, the court struck down the program, though deferred action is a well-established practice like OPT.

On October 4, 2022, the U.S. Court of Appeals for the D.C. Circuit issued its opinion in Washington Alliance of Technology Workers v. the U.S. Department of Homeland Security (“Washtech v. DHS”). The case involved a challenge to the STEM Optional Practical Training (OPT) rules by the Washington Alliance of Technology Workers (Washtech), a union representing tech workers. DHS allows eligible students in STEM fields an additional 24 month OPT extension beyond the usual 12 month OPT period. Washtech argued that “the statutory definition of the F-1 visa class precludes the Secretary from exercising the time-and conditions authority to allow F-1 students to remain for school recommended practical training after they complete their coursework”. Washtech read INA § 101(a)(15)(F)(i) as authorizing DHS to allow F-1 students to remain in the U.S. only until they have completed their course of study, as the provision does not specifically mention post-graduation practical training. The court affirmed a district court judgment that upheld DHS’ current OPT rules. The court reasoned that the STEM OPT extension is a valid exercise of DHS’ authority under in INA § 214(a)(1) to promulgate regulations that authorize an F-1 student’s stay in the U.S. beyond graduation. The court further noted that “practical training not only enhances the educational worth of a degree program, but often is essential to students’ ability to correctly use what they have learned when they return to their home countries. That is especially so in STEM fields, where hands-on work is critical for understanding fast-moving technological and scientific developments.” Judge Pillard, who authored the opinion, noted that the concept of post-coursework practical training for foreign students predates the Immigration and Nationality Act of 1952, pointing to a 1947 rule which “allowed foreign students ‘admitted temporarily to the United States . . . for the purpose of pursuing a definite course of study’ to remain here for up to eighteen months following completion of coursework for ‘employment for practical training’ as required or recommended by their school”. Under Lorillard v. Pons, 434 U.S. 575, 580 (1978), Congress is presumed to be aware of an administrative interpretation of a statute and to adopt that interpretation when it reenacts its statutes without change. Practical training has been authorized even prior to the enactment of the INA in 1952.  In previous blogs, we have discussed Congressional authority for OPT at length, see here, here, here, and here.

In Texas v. U.S., decided on October 5, 2022, the U.S. Court of Appeals for the Fifth Circuit ruled that the Deferred Action for Childhood Arrivals (DACA) program is unlawful, upholding an earlier decision by Judge Andrew Hanen of the United States District Court for the Southern District of Texas. Although the practice of deferred action, of which the DACA program is a form, has also existed for decades, the Fifth Circuit’s decision was much less favorable than that of the D.C. Circuit. The court reasoned that the DACA program exceeds DHS’ inherent authority to exercise prosecutorial discretion, as “declining to prosecute does not transform presence deemed unlawful by Congress into lawful presence and confer eligibility for otherwise unavailable benefits based on that change”. Further, the court found that there is no “clear congressional authorization” for DACA. In light of a recent regulation promulgated by the Biden administration to “preserve and fortify” DACA, the case was remanded to the U.S. District Court for the Southern District of Texas. Although DACA lives for now, it remains on the respirator as both the district court and the Fifth Circuit have consistently held that DACA is not authorized by the INA, and notwithstanding the new regulation, may still be held to be unlawful.

Though the courts in these cases arrived at few different outcomes, the two decisions share at least one commonality – both made reference to the “major question” doctrine recently introduced in West Virginia v. EPA, 142 S. Ct. 2587 (2022). There the Supreme Court held that “in certain extraordinary cases” where it is unclear whether an agency action was authorized by Congress, “given both separation of powers principles and a practical understanding of legislative intent, the agency must point to ‘clear congressional authorization’ for the authority it claims”.  Such extraordinary cases where the “major questions” doctrine is invoked have vast economic and political significance.  Interestingly, the dissent in Washtech indicated that the issue of whether DHS’ 2016 OPT Rule exceeds its statutory authority is a “major question”. Finding that the major questions doctrine applied, the dissent in Washtech directed the district court upon remand to examine whether DHS had the authority to issue OPT regulations under this principle.

In footnote 206, the court in Texas v. USA cited West Virginia v. EPA in holding that DHS had no Congressional authority to implement DACA. The court also held that DACA did not pass the first step of the Chevron test, which asks “whether Congress has ‘directly addressed the precise question at issue.’” Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). The court in Washtech analyzed the OPT rule under the lens of Chevron also, but gave DHS’ interpretation of INA § 214(a)(1) deference.

If the major questions doctrine is implemented in this way, it could result in fewer agency actions receiving Chevron deference. Chevron gives the Biden administration the ability to interpret the INA by implementing OPT and DACA programs, so it is hoped that the major questions doctrine does not impede the application of this longstanding precedent. Moreover, immigration decisions unlike environmental cases ought not to be cases involving vast economic and political significance.  The majority decision in Washtech involved challenges to the INA provisions that provide the authority for noncitizens to remain in the U.S. The court gave due deference under Chevron to the executive’s interpretation of INA § 214(a)(1) and upheld OPT. The majority did not reference the “major questions” doctrine in Virginia v. EPA.  The Fifth Circuit, on the other hand, held that  DHS cannot rely on INA § 103(a)(3) as a basis for implementing DACA, and cited Virginia v. EPA. This provision states that the DHS Secretary “shall establish such regulations; prescribe such forms of bond, reports, entries, and other papers; issue such instructions; and perform such other acts as he deems necessary for carrying out his authority under the provisions of the Act.” This provision is comparable to INA § 214(a)(1), which the First Circuit held provided the basis for F-1 OPT. INA § 214(a)(1) provides that “[t]he admission to the United States of any alien as a nonimmigrant shall be for such time and under such conditions as the Attorney General may by regulations prescribe…….”

Although the Washtech case dealt with students, the D.C. Circuit’s decision can serve as a template for the Supreme Court to uphold the authority for other categories of noncitizens to remain in the U.S., including DACA recipients. The same deference that the D.C. Circuit afforded to the executive’s authorization of OPT ought to also be given to the government’s interpretation of INA § 103(a)(3) and 6 USC § 202(5) so that the DACA program is upheld.

Another interesting issue discussed in both cases is whether the Executive Branch can issue work authorization to noncitizens. The court in Washtech upheld the authority of the executive to grant employment authorization documents (EADs) under INA § 274(a)(h)(3), which has long provided authority for the Executive Branch to provide employment authorization to broad categories of noncitizens. The executive’s authority to grant EADs under this provision had been soundly rejected by the Fifth Circuit in the earlier DAPA decision and Judge Hanen’s lower court decision in Texas v. U.S. In footnote 37, Hanen’s decision makes reference to INA §274a(h)(3) as a definitional miscellaneous provision, which cannot provide the basis for DACA and the grant of EADs, while the First Circuit relied on the same provision as a statutory basis for OPT EAD.

Charles Dickens opened his A Tale of Two Cities with the following famous line: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.” Like London and Paris in Dickens’ novel, Washtech and Texas are comparable in some respects and very different in others. Though Texas may represent the worst of times and the age of foolishness, Washtech ushers in an age of wisdom and the best of times for foreign students hoping to gain practical training in the U.S.

(This blog is for informational purposes and should not be viewed as a substitute for legal advice).

*Kaitlyn Box graduated with a JD from Penn State Law in 2020, and is an Associate at Cyrus D. Mehta & Partners PLLC.

 

Cyrus Mehta

The Beneficial Impact of the Supreme Court’s Decision in Kisor v. Wilkie on H-1B Denials

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By Cyrus D. Mehta and Sonal Sharma*

In June 2019, when the Supreme Court handed down a decision in Kisor v Wilkie, it was yet to be seen what impact this decision would have on federal court challenges to H-1B denials. Prior to Kisor, federal courts adopted a deferential standard of the government’s interpretation of its own regulations. This deferential standard was governed by an earlier Supreme Court decision, Auer v. Robbins, which held that courts would give deference to an agency’s interpretation of its own ambiguous regulation. The Auer standard was similar to the standard set forth in Chevron USA v. Natural Resources Defense Council regarding how a federal court would give deference to an agency’s interpretation of a statute. Under Chevron deference, if a statute is ambiguous, a court will give deference to the agency’s interpretation, even if it does not agree with the outcome, so long as it is based on a permissible construction of the statute.

The Supreme Court in Kisor provided no new radical test of how it would view an agency’s interpretation of its own regulation. It essentially “cabined the scope” of Auer deference, and set forth a three-step approach under Kisor. Under this test,  the court must determine (i) that the regulation is “genuinely ambiguous” — the court should reach this conclusion after exhausting all the “traditional tools” of construction; (ii) if the regulation is genuinely ambiguous, whether the agency’s interpretation is reasonable; and (iii) even if it is a reasonable interpretation, whether it meets the “minimum threshold” to grant Auer deference, requiring the court to conduct an “independent inquiry” into whether (a) it is an authoritative or official position of the agency; (b) it reflects the agency’s substantive expertise; and (c) the agency’s interpretation of the rule reflects “its fair and considered judgment.”

In our prior blog in December 2019, there were few decided cases involving challenges over H-1B visa denials that had applied the Kisor standard. We analyzed how the courts ought to apply the new Auer deference standard set forth in Kisor. Most H-1B visa adjudications are guided by regulations and policies rather than by the statute, and prior to Kisor courts have mostly been paying deference to the USCIS’s interpretation of its regulations.   Since December 2019,  courts have applied the  Kisor standard in challenges to denials of H-1B petitions, and have overturned denials as well as burdensome  H-1B policy. This is indeed a welcome change!

H-1B denials resulted from the implementation of recent policy memos shifting the USCIS’s position that was not aligned with its prior statements, memos, and opinions. One example of such a shift is the memo issued in February 2018 relating to contracts and itineraries with third-party clients.  This new policy has enabled USCIS to play havoc to H-1B petitions filed by employers who place H-1B workers at third party client sites. If the third party client is unable to or refuses to provide documentation explaining the length of the assignment, and even if the employer provides evidence of its ability to employ the H-1B worker for the duration of the validity period, the USCIS has either denied the petition or shortened the validity period.  The USCIS issued this memo to be read as supplementary guidance to the employer-employee memo of 2010. Even this 2010 memo has been used to trouble employers of H-1B workers. While 8 CFR 214.2(h)(4)(ii) defines an employer-employee relationship as including “hire, pay, fire, supervise, or otherwise control the work of any such employee”, the USCIS has  focused only on the employer’s ability to control the H-1B worker and disregarded the other indicia of the employer-employee relationship.

In this blog, we analyze recent court decisions that have applied the Kisor standard or been influenced by it, and not paid deference to the USCIS’s interpretation of its regulations or of policy memos stemming from these regulations.

ITServe Aliance v. Cissna

In ITServe Alliance v. Cissna, the U.S. District Court of the District of Columbia on March 10, 2020 invalidated the USCIS policy defining an employer-employee relationship for employers of H-1B workers  as well as the 2018 policy and 1991 regulation requiring that IT firms provide a detailed itinerary and contracts for potential H-1B workers for the entire three years of their visa stay. Judge Collyer held that the current USCIS interpretation of the employer-employee relationship requirement is inconsistent with its regulation, was announced and applied without rulemaking, and cannot be enforced. Moreover, the USCIS requirements that employers (i) provide proof of non-speculative work assignments (ii) for the duration of the visa period is not supported by the statute or regulation and is arbitrary and capricious as applied to Plaintiffs’ visa petitions. These requirements were also announced and applied without rulemaking and cannot be enforced. Finally, the court held USCIS’s itinerary requirement was superseded by a later statute that permits employers to place H-1B visa holders in non-productive status and is, therefore, no longer enforceable.

Although the court did not cite Kisor, it did not pay deference to USCIS’s interpretation of its regulations even under the traditional Auer standard. Judge Collyer conducted an independent inquiry to determine if the USCIS 2018 memo is a legislative rule or a mere interpretive rule. We provide a detailed analysis of the ITServe Alliance decision.

While noting USCIS’s effort to mask the memo as mere guidance to its adjudicators, Judge Collyer concluded that the 2018 memo is indeed a legislative rule with an attempt to impose legally binding obligations on regulated parties. The court also noted that the 2018 memo in essence (i) adopted a new definition of an employer; (ii) added substantive requirements to prove the employer-employee relationship; (iii) added additional requirements to describe the work with evidence that it will be available for the duration of the visa; and (iv) burdens petitioners to provide detailed itineraries on the risk of denial on failure to comply with the new requirements.

The 2010 employer-employee memo is based on the definition of an employer pursuant to  8 C.F.R. §214.2(h)(4)(ii), but the memo still indicates that the regulation does not provide enough guidance on the definition of the employer-employee relationship. The employer-employee memo invoked the common-law as touch stone of employer’s control. Judge Collyer hollered at the USCIS from deviating from 8 C.F.R. §214.2(h)(4)(ii) specifically noting that it adopted the definition of employer under this rule which was identical to the one crafted by the Department of Labor in 1991, and to this date no amendments have been made to that definition by the USCIS. The court noted that USCIS’s sole focus on “control” over everything else, if evaluated under Auer deference, is in clear conflict with the regulations itself and hence warrants no deference. The court pointed out that the USCIS has been claiming that the term “employer-employee relationship” is not defined in the regulations, but noted that 8 C.F.R. 214.2(h)(4)(ii) clearly defines the term as:

(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

Given this, Judge Collyer noted that the USCIS’s reliance on the common-law doctrine of “control” is contradictory to the clear definition provided under the regulations. It also noted that “[t]he common law may be a useful touchstone but cannot contradict or limit a clear regulation that has been applied with no objection or correction for almost three decades” and hence is not worthy of any deference.

The court steered a remarkable analysis of the plain text of the regulations specifically the wordings may hire, pay, fire, supervise, or otherwise control the work of [the] employee. In its analysis, the court noted that “[t]he use of “or” distinctly informs regulated employers that a single listed factor can establish the requisite “control” to demonstrate an employer-employee relationship. This formulation makes evident that there are multiple ways to demonstrate employer control, that is, by hiring or paying or firing or supervising or “otherwise” showing control. In context, “otherwise” anticipates additional, not fewer, examples of employer control.”

Judge Collyer further observed that through the 2018 memo, the USCIS attempted to substitute the unambiguous text of the regulations.

The court also analyzed if through the 2018 memo, that USCIS fundamentally conflated the requirement of employment in a specialty occupation with requiring evidence of non-speculative work assignments for the duration of the visa. To assess the legitimacy of requiring such evidence as a requirement of establishing a specialty occupation under the regulations, the court made a noteworthy distinction between “occupation” and “jobs”. It affirmed that Congress enacted a definition of occupation and an occupation consists of various levels requiring varied job duties. Hence, as long as the employment is in the specialty occupation, there is no requirement in the definition to prove that the daily assignments will be part of the specialty occupation.

The USCIS argued that the requirement is based on its interpretation of its own regulation, i.e the fourth prong of the specialty occupation definition  at 8 CFR  214.2(h)(4)(ii)(4) which justifies their new requirement to satisfy that the day to day assignments qualify as specialty occupation rather than satisfying that the occupation qualifies as a specialty occupation:

(4) The nature of the specific duties [is] so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or higher degree.

Judge Collyer noted that first, all the four prongs are in alternative to each other, and secondly, the wording “nature of specific duties” in the fourth prong does not in any way change the requirement of a bachelor’s degree in other three prongs. Hence, the court noted that the fourth prong provides a situation where despite the foreign worker not having a bachelor’s degree, the position can qualify as a specialty occupation. It also noted that the USCIS cannot extend it as a policy to all H-1B visa holders requiring the description of the assignments for the whole duration and such interpretation of the fourth prong of the specialty occupation of its own regulation is “plainly erroneous”.

As to itineraries in case of placement at more than one location, 8 C.F.R. §214.2(h)(2)(i)(B) reads as follows:

Service or training in more than one location. A petition which requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with the Service office which has jurisdiction over I-129H petitions in the area where the petitioner is located. The address which the petitioner specifies as its location on the I-129H petition shall be where the petitioner is located for purposes of this paragraph.

While interpreting the above-mentioned regulation, the itinerary memo of 1995 was issued which clearly stated that “the regulation does not require that the employer provide the Service with the exact dates and places of employment” and that the “[t]he itinerary does not have to be so specific as to list each and every day of the alien’s employment in the United States”.

The former Immigration and Naturalization Service  followed this interpretation of the regulation for more than two decades. Precipitously, in February 2018, the USCIS issued the above-mentioned new policy memorandum superseding the 1995 memo. Interestingly, the new February 2018 memo also interprets the same regulations quoted above and notes that “[t]here is no exemption from this regulatory requirement. An itinerary with the dates and locations of the services to be provided must be included in all petitions that require services to be performed in more than one location, such as multiple third-party worksites. The itinerary should detail when and where the beneficiary will be performing services”. (Emphasis added)

Plaintiffs in IT Serve Alliance v. Cissna raised the itinerary question and the court agreed with plaintiffs’ contention that the concern regarding non-availability of the work for the duration of the visa has already been addressed by the Congress through ACWIA 1998 which authorizes employers to place H-1B holders in the paid non-productive state. While referring to §212(n)(2)(C)(vii)(III), the Court concluded, “therefore, the itinerary requirement in the INS 1991 Regulation, as adopted by INS and now enforced by CIS pursuant to its 2018 Policy Memorandum, has been superseded by statute and may not be applied to H-1B visa applicants.”

As to the USCIS’s authority to issue approvals for less than three years, the court in ITServe Alliance v. Cissna  interpreted the plain text of the regulation to mean that the regulations (i) do not require USCIS to deny or grant the petition in its entirety; (ii) “up to three years” allows USCIS to approve petitions for a lesser duration. However, the court noted that USCIS has been following a practice to issue approvals for full three years and now if it will grant the approval for less period, it has to be supported with a “legitimate reason”.

More recently, a settlement was reached between the USCIS and plaintiffs of ITServe Alliance which invalidates the 2018 policy. Under this settlement, firstly, USCIS is required to rescind “in its entirety within 90 days” the 2018 Contract and Itinerary Memorandum. Secondly, USCIS agreed to “re-open and adjudicate” individual agency decisions on H-1B adjudications that were the subject of the ITServe Alliance lawsuit against USCIS (i.e., primarily the cases of its members). Thirdly, in deciding the cases again, “USCIS agrees that it will not apply the interpretation of the current regulatory language . . . defining ‘United States employer’ to require an analysis of employer-employee relationship under common law, and USCIS agrees to comply with Judge Collyer’s March 10, 2020, decision in ITServe Alliance, Inc. v. Cissna.” Fourthly, in adjudicating the cases again, “USCIS will not issue approvals for H-1B petitions with validity periods shorter than the time period requested by the H-1B petitioner, unless such decisions include or are accompanied by a brief explanation as to why the validity period has been limited and in compliance with Judge Collyer’s March 10, 2020, decision in ITServe Alliance, Inc. v. Cissna.”

Serenity Info Tech, Inc. v. USCIS

Serenity Info Tech, Inc. v USCIS is the most recent case, where the court specifically deployed Kisor analysis. The plaintiffs in this case are information technology consulting services companies. The USCIS denied the H-1B petition filed by Serenity Info Tech on two grounds:  (i) that the plaintiff failed to meet the definition of the “employer” under the regulations, and (ii) that the plaintiff failed to show specific and non-speculative qualifying assignments in a specialty occupation for the entire time requested on the petition. The issues in this case, similar to ITServe Alliance, hinged upon the USCIS’s interpretation of the term “employer-employee relationship” and the term “itinerary” as provided in the regulations and as applied by the USCIS.

The court analyzed the litany of policy memo issued by the USCIS since 1995 including the 2010 employer-employee memo up until the 2018 contracts and itinerary memorandum. The court noted that the 2010 memo listed numerous documents that could be used to demonstrate the employer-employee relationship. However, the memo also specifically clarified that while requesting additional evidence, the adjudicator should not request a specific type of evidence unless required by the regulations. As discussed earlier, the 2018 memo did not rescind the Employer-Employee memo but was intended to be read together with it.

The plaintiffs argued that the 2018 memo essentially departed from the 2010 employer-employee memo as it insists on a demonstration of not just “right to control” but “actual and exclusive control” over the day to day activities which is ultra vires the regulations. The suit also challenged the detailed itineraries requirement established under the 2018 memo.

While deciding if the 2018 memo is a legislative rule or mere interpretative rule, the court distinguished from Judge Collyer’s reasoning in ITServe v Cissna. Judge Collyer in ITServe ruled that the 2018 memo indeed is a legislative rule as “it attempted to impose legally binding obligations on regulated entities”. The Serenity court held that the 2018 memo is only an interpretive rule as it rescinded the 1995 memo which was an interpretive rule.

The court condensed the issue to a narrower ground of agency’s interpretation of “employer” and “itinerary” provided under the regulation and as applied by the USCIS in the cases before the court and if it warrants any deference under Auer.

The court applied Kisor to decide if the agency’s interpretation of the regulations deserves any deference and delved into an independent inquiry starting with if the regulations are ambiguous. Since the court in Serenity InfoTech held that the 2018 policy was an interpretive rather than a legislative rule, Kisor analysis was needed to determine whether the 2018 policy deserved deference or not.  The court discarded  USCIS’s argument that even though the term “employer” is defined in the regulations, the terms “employee”, “employed”, “employment” or “employer-employee relationship” are not defined. Rather, the court clarified that the absence of definition does not amount to ambiguity. The regulations provide “ample guidance” to determine if the employer-employee relationship exists.

The court pointed out that the fundamental flaw with the USCIS’s interpretation is that it obliterates all the other criteria mentioned in the regulations to establish an employer-employee relationship and focuses only on the “control” criteria. The court stated that USCIS’s focus on “control” elevates that one factor above other factors. Doing so goes against the rule of construction “ejusdem generis” which requires that the following words in a statutory formation should be defined by reference to the preceding words. Thus, the court noted that the interpretation that emphasizes one criterion to the derogation of others is in contradiction of plain language of the regulations and therefore is “not worthy of deference”.

The court further noted that even though the 2010 employer- employee memo incorporates common law, it specified that “all of the incidents of the relationship must be assessed and weighed with no one factor being decisive”. In fact, the 2010 employer- employee memo provides guidance to evaluate the factors enumerated using a totality-of-the-circumstances test while determining if the employer established the “right to control” over beneficiary’s employment. Therefore, the agency’s fixation with the “ability to control manner and means in which the work product of the beneficiary is accomplished” is just one factor even under the 2010 employer-employee memo.

The USCIS in Serenity Info Tech argued that the detailed itinerary requirement under the 2018 memo is more in alliance with the plain language of the regulation than the guidance under the 1995 memo which interpreted that the plain language of the regulation allows accepting a general statement regarding proposed employment. The court ruled that as the regulations unambiguously list what the itinerary must include, the agency’s itinerary interpretation also fails at the first step of Kisor analysis because there is nothing to interpret.

Further, the USCIS contended that the agency gets the regulatory basis to request a detailed itinerary from the fact that this information is imperative to demonstrate (i) non-speculative employment; and (ii) that the employees will be serving in a “specialty occupation”.

The court noted that by requesting day to day activities, the agency is conflating “non-speculative employment with non-speculative work assignments” and there is no such requirement in the statute or the regulations to request day to day assignments. And as to the USCIS’s reliance on the fourth prong as the regulatory basis to require detailed itinerary as evidence of specialty occupation, the court agreed in essence with Judge Collyer’s decision in ITServe Alliance specifically noting the distinction drawn between “occupation” and “job”.

It further noted that even though it is the “agency’s prerogative to ascertain generally whether the beneficiary will actually be serving in the purported specialty occupation but does not extend to micro-managing every aspect of the occupation’s duties.” The court also acknowledged the impracticability of expecting US employers to be able to “identify and prove daily assignments for the future three years for professionals in specialty occupation.”

In conclusion, the court decided that the regulations are clear and there is no basis in the statute or the regulations to submit day to day specific work requirements for the duration of the visa requested. Hence, the agency’s interpretation of the unambiguous regulations owed no deference.

We now analyze court cases that have relied on Kisor  to overturn “specialty occupation” denials.

Inspectionexpert Corporation v. USCIS

Inspectionxpert Corporation v. USCIS is a fine example of how Kisor has limited the scope of Auer deference. At issue was the interpretation of the provision 8 C.F.R §214.2(h)(4)(iii)(A) (referred to as “the Provision” in the decision). This provision states the four criteria under which an employer can establish that the occupation qualifies as a specialty occupation for H-1B purposes. The key question was whether the USCIS’s requirements of a degree in one singular subspecialty warranted deference. In this case, the petitioner challenged the denial of the H-1B petition based on the education requirements of the petition for the proffered position of a Quality Engineer. The requirements for the position were “a bachelor’s degree in Mechanical Engineering, Computer Science or a related technical or engineering field”. The USCIS denied the petition noting that:

the field of engineering is a broad category that covers numerous and various specialties, some of which are only related through the basic principles of science and mathematics, e.g nuclear engineering and aerospace engineering. Thus, a general degree in engineering or one of its other subspecialties, such as civil engineering or industrial engineering, is not closely related to mechanical engineering.

The issue at hand was USCIS’s reliance on the interpretation of the Provision to conclude that “a general degree in engineering or one of its subspecialties” as required by the position does not qualify as a specialty occupation under the Provision. The court relied on the Kisor test to decide if the USCIS interpretation requires deference. The petitioner argued that the plain language of the Provision suggests that reference to the bachelor’s degree implies a generic degree requirement. The court delved into the legislative history of the immigration statutes spanning over thirteen (13) pages before making an analysis on the issue and concluding why the USCIS’s interpretation does not warrant deference. The court disagreed with petitioner’s argument noting that it is in contravention of the “history and structure of the H-1B regulations” and affirmed that the “statutory and regulatory framework compels USCIS’s reading under which ‘the position at issue must require the attainment of a bachelor’s or higher degree in a specific specialty”.

However, the court still ruled in favor of the petitioner, and  specifically pointed to the 1990 Rule where the former INS specifically mentioned that:

The Service’s interpretation over the years has been that the common denominator for determining that an occupation is a profession is the requirement of at least a baccalaureate degree awarded for academic study in a specific discipline or narrow range of disciplines.

Citing to the above, the court noted that the historical administrative practice of the agency clearly shows that the interpretation followed by the USCIS in this decision does not reflect its “authoritative” or “official position”. The USCIS tried to backtrack its position on which the denial was based by emphasizing that the USCIS does not impose the one-degree rule. It only maintains that it cannot be a general degree. The court noted that concluding an engineering degree requirement as a generalized degree confirms the unreasonableness of the interpretation relied upon by the USCIS in the decision. The court noted that the INA defines professions (later substituted for specialty occupation) at a categorical level such as lawyers. It does not specify the specialty occupation as a “tax lawyer”. More importantly, it specifically includes “engineers”. The court also emphasized on the USCIS’s reasoning of not including “liberal arts degree” as its broadness whereas engineering was specifically noted and included as a profession/specialty occupation.

The court concluded that a denial on the basis that an engineering degree is a generalized requirement is tenacious and “contrary to the statute and the Agency’s past practices”.

Besides, there have been multiple other recent decisions that reflect a trend of successfully challenging USCIS’s denials of specialty occupation in broad violation of the statutory and regulatory text and also in contradiction of its own practice even if Kisor has not been specifically invoked. Below are two examples.

India House Inc. v. USCIS

In  India House v. USCIS, the court held that a General Operations Manager position requiring a bachelor’s degree in Hospitality Management or a directly related field qualifies as a specialty occupation. The court distinguished this case from Royal Siam Corp. v. Chertoff, 484 F.3d 139 (1st Cir. 2007) which established that a general-purpose degree such as a business administration degree is not a specific degree. The court noted that the requirement of a degree in Hospitality Management is a specific degree as the curriculum is dedicated specifically to food services and hospitality management which unlike a generic business administration degree cannot be used for any other institutional management The court also emphasized that even though the USCIS is not bound by its prior approvals, it is worth noting that it approved the petition twice in the past for the same position for the same petitioner and the beneficiary. Hence, as there is no change in the law or regulations and the USCIS has not accepted that the issuance of the prior H-1B visas was erroneous, there is no explanation as to how a position that was a specialty occupation in the past suddenly does not qualify to be so now and would constitute abuse of discretion.

Taylor Made Software Inc. v. USCIS

Taylor Made Software Inc v. USCIS  involved a position of Computer Systems Analyst where the USCIS denied the petition relying on OOH that many Computer Systems Analysts have a liberal arts degree and hence the occupation does not require a bachelor’s level training in a specific specialty. The court disagreed and noted that the regulatory criterion is not that a bachelor’s degree or its equivalent in a specific field is “always” required rather it states that bachelor’s degree or its equivalent is “normally” the minimum requirement for entry into the occupation. Therefore, the OOH language that “most” computer systems analysts have a bachelor’s degree in a specific field is the typical baseline.

In conclusion, the Supreme Court’s decision in Kisor has proved to be more potent than originally envisaged, where the courts are no longer paying traditional Auer deference and are instead reversing H-1B denials based on the USCIS’s erroneous interpretation of its own regulations. In addition to Kisor, the authors also acknowledge the brilliance and perseverance of ace litigators Jonathan Wasden and Bradley Banias who tenaciously fought many of these cases that brought down the house of cards that the government has stealthily built on shaky foundations with the sole purpose of obstructing meritorious and legitimate H-1B cases.

 *Guest author Sonal Sharma is a Senior Attorney at Jethmalani & Nallaseth PLLC in New York. Her practice involves both temporary nonimmigrant visa and permanent employment cases. She represents and advises clients – medium to large multinational corporate entities – from a wide variety of industries on intricate and comprehensive immigration matters.

 

 

Cyrus Mehta

What Kisor v. Wilkie Means For Auer Deference and USCIS’s Interpretation of its Regulations Relating to H-1B Visa Petitions

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By Cyrus D. Mehta and Sonal Sharma*

In Wilkie v. Kisor, the Supreme Court issued a significant decision regarding whether courts should still be paying deference to the government’s interpretation of its own regulations. Here’s some background on how we got to this deference standard.

Over 35 years ago, the Supreme Court established a two-step analysis in Chevron USA Inc. v. Natural Resources Defense Council for evaluating whether an agency’s interpretation of a statute it is entrusted to administer is lawful. Under Step One, the court must determine whether Congress has clearly spoken to the precise question at issue in the plain terms of the statute. If that is the case, there is no need for the reviewing court to delve any further.  Under Step Two, if the statute is silent or ambiguous, the reviewing court must determine whether the agency’s interpretation is based on a permissible construction of the statute.  A permissible interpretation of the statute need not be the best interpretation or even the interpretation that the reviewing court would adopt. Step Two is commonly known as Chevron deference where the reviewing court grants deference to the agency’s permissible interpretation of an ambiguous statute.

In Auer v. Robins, the Supreme Court held that the same Chevron type of deference applies to the agency’s interpretation of its own regulations. However, even under the Auer concept of deference, which gives federal agencies the right to interpret their own regulations.

It was thought that Kisor would strike the death knell for the Auer deference, but instead, the plurality provided more guidance on how to apply Auer and under what circumstances may a court not pay deference to the agency’s interpretation of its regulations notwithstanding Auer.  The Kisor court opinion holds that the Auer doctrine “is potent in its place, but cabined in its scope”. Specifically, Justice Kagan noted that “this Court has cabined Auer’s scope in varied and critical ways-in exactly that measure, has maintained a strong judicial role in interpreting rule.” During oral arguments, Justice Gorsuch identified concerns of particular regulated classes such as “immigration lawyers” because it allows agencies to adopt binding interpretations without prior notice to the regulated entities. Justice Gorsuch touched the point at the heart of the opposition of Auer deference by noting that it comes in the way of courts performing their duty entrusted upon them under the Administrative Procedure Act (APA) “to ‘decide all relevant questions of law’ and ‘set aside agency action’”. Despite the doubts, the Court decided that Auer deference is not “unworkable” and hence not required to be abolished entirely. However, it is required to be confined in its application.

The question before the Supreme Court was how much weight courts should give to an agency’s interpretation of its regulations. Auer deference rests on the presumption that even though not explicitly assigned, Congress intended that government agencies interpret  regulations that have been crafted to implement the statute.

What happens when such a regulation itself is ambiguous? Who gets to decide what it means. For long, it has been established under Auer that administrative agencies are better suited to interpret such ambiguous gaps in their own regulations based on their “substantive expertise in the subject matter”.

In Kisor, Justice Kagan noted that the Supreme Court in Seminole Rock (which later became Auer deference) declared that “ [w]hen the meaning of [a regulation] is in doubt,” the agency’s interpretation “becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.”. Justice Gorsuch concurring in the opinion noted that  under the APA, the courts are directed to “determine the meaning of the any relevant agency action including any rule issued by the agency”. He further noted that under Auer deference, a court “adopts something other than the best reading of a regulation”. Critics of  Auer deference have said that it takes away the fundamental authority of the court to decide what the actual interpretation of the law is. Under Kisor, the Supreme Court announced that Auer deference is now a “general rule” which will need analysis and scrutiny before it applies in a case.

The Supreme Court essentially “cabined the scope” of Auer deference, and set forth a  three-step approach under Kisor. The court must determine that (i) the regulation is “genuinely ambiguous”- the court should reach this conclusion after exhausting all the “traditional tools” of construction; (ii) if the regulation is in fact genuinely ambiguous, whether the agency’s interpretation is reasonable; and (iii) even if it is a reasonable interpretation, does it meet the “minimum threshold” to grant the Auer deference requiring the court to conduct an “an independent inquiry” into if (a) it is an authoritative or official position of the agency; (b) it reflects its substantive expertise; (c) if the agency’s interpretation of the rule reflects “its fair and considered judgment”.

What kind of impact will Kisor have on challenges to recent USCIS denials?

There has been a surge in denials of H-1B petitions mostly on the basis that either the position doesn’t qualify as a specialty occupation or there is no employer-employee relationship because the beneficiary is placed at the third-party client location. AILA had filed an amicus curie brief in Kisor highlighting how Auer deference allows the agency to “circumvent the critical requirements of APA” especially by just changing the standards of review or interpretation of the regulations without public notice and comments. It also brought to the attention of the Court that Auer deference has been followed by courts, challenging the agency’s arbitrary decisions, so liberally that the courts deferred to the agency interpretation “based on nothing more than a brief filed in court, a letter posted on a website, or an internal memorandum sent to agency staff.”  USCIS has been adopting a new interpretation of the regulations by just issuing internal memos and under the earlier deference standard, the courts have been allowing and accepting such interpretations.

Under the new Auer deference standard set forth in Kisor, a federal court will need to assess if that is the authoritative/official position of the agency. Because of these recent developments, it will be interesting to see how the agency will respond to the question regarding what has been their official position in approving these H-1B petitions for decades and how it has now changed without any change in the statute or regulations. All the recent policy memos shifting the USCIS’s position are not aligned with its prior statements, memos, and opinions. One example of such a shift is the memo issued in February 2018 relating to third-party worksites placements. The policy has been analyzed in detail in an earlier blog post here. With the issuance of this memo, USCIS rescinded three earlier memos, which provided guidance relating to supporting documents for H-1B petitions and also the itinerary requirements for the petitions involving more than one location. The USCIS issued this memo to be read as a supplementary guidance to the Employer-Employee Memo of 2010.

As to itineraries in case of placement at a location more than one, 8 CFR 214.2(h)(2)(i)(B) reads as follows:

Service or training in more than one location. A petition which requires services to be performed or training to be received in more than one location must include an itinerary with the dates and locations of the services or training and must be filed with the Service office which has jurisdiction over I-129H petitions in the area where the petitioner is located. The address which the petitioner specifies as its location on the I-129H petition shall be where the petitioner is located for purposes of this paragraph.

While interpreting the above mentioned regulation, the Itinerary memo of 1995 was issued which clearly stated that “since the regulation does not require that the employer provide the Service with the exact dates and places of employment” and that the “[t]he itinerary does not have to be so specific as to list each and every day of the alien’s employment in the United States”.

The Service followed this interpretation of the regulations for more than two decades. Precipitously, in February 2018, the USCIS issued the above mentioned new policy memorandum superseding the 1995 memo. Interestingly, the new February 2018 memo also interprets the same regulations quoted above and notes that “[t]here is no exemption from this regulatory requirement. An itinerary with the dates and locations of the services to be provided must be included in all petitions that require services to be performed in more than one location, such as multiple third-party worksites. The itinerary should detail when and where the beneficiary will be performing services”. (Emphasis added)

There is clearly a stark difference in the approach of the two memos interpreting the same regulations. The 2018 memo has already been challenged in court. See IT Serve Alliance v USCIS. It will be noteworthy if the Service would rely on Auer deference on this issue. Apparently, in their supplemental response brief in this litigation, the USCIS raised an argument of argumentum ad antiquitatem which means “this is right because we’ve always done it this way”. Does it mean that the USCIS essentially invoked the Auer deference (even if not in clear terms) arguing that this is agency practice to interpret its own regulations even if it is in contrast to its previous interpretation? Under the new standard, the court will have to make an independent inquiry as to reasonableness of the interpretation especially in this case when under the garb of it being an interpretive rule, the agency has tried to promulgate a legislative rule, which amends and adopts a new position inconsistent with the existing regulations. Under the new Kisor standard, the court will be equipped to delve into these inquiries and make a determinative finding if the deference is warranted.

With the surge in H-1B denials, there is also a rise in federal litigation challenging USCIS’s arbitrary interpretation of the regulations. One such case is Flexera Global Inc. v. USCIS, in which the plaintiff has sued USCIS after receiving multiple short-term approvals. USCIS has been rigidly enforcing an itinerary requirement relying on the February 2018 memo to issue approvals ranging from only a few months or weeks to even a few days (as short as one (1) day), despite requesting a full three-year validity period as allowed under the regulations. USCIS filed a motion to dismiss in this case asking the court to rule if under the regulations USCIS has the authority to issue short-term H-1B approvals and whether it needs to explain itself when doing so. USCIS has relied on 8 C.F.R. § 214.2(h)(9)(iii)(A)(1), which authorizes the agency to approve a petition for “up to three years”. The regulation reads as follows:

H-1B petition in a specialty occupation. An approved petition classified under section 101(a)(15)(H)(i)(b) of the Act for an alien in a specialty occupation shall be valid for a period of up to three years but may not exceed the validity period of the labor condition application.

USCIS has argued that when reasonably interpreting “up to three years” in the regulations, it has the authority to issue approval less than three years based on the evidence submitted by the petitioner as to period of the specific work assignments.

The plaintiff in response to a motion to dismiss has argued that the plain language of the regulations requires the agency to approve the petition for full three years. It can only be less than three years when granting three years will exceed the validity of the labor condition application. In 1998, USCIS proposed a rule, Petitioning Requirements for H Nonimmigrant Classification, 63 Fed. Reg. 30419, in an attempt to codify the prohibition on speculative/non-productive status through notice and comments rulemaking. It abandoned the proposed rule when Congress essentially denied its regulatory approach by passing the American Competitiveness and Workforce Improvement Act of 1998 (“ACWIA”), Title IV, Pub. L. 105-277 (October 21, 1998) codified at INA 212(n)(2)(C)(vii)(III).

Plaintiff has also argued that the requirement of demonstrating a specific work assignment for the requested validity is contradictory to INA 212(n)(2)(C)(vii)(III), which fixed the benching problem by expressly requiring employers to pay the prevailing wage to workers whether or not they are in productive status. Congress unequivocally entrusted DOL with the authority enforce the non-productive status provision through enforcement actions against employers.

The response to motion to dismiss also highlights a practical problem these short approvals are creating for the families of the H1-B beneficiaries which definitely was not the intention of the Congress. So, requesting specific work assignment evidence for a specific duration defies the Congressional mandate acknowledging the non-productive periods and DOL’s authority to regulate it.

Hence, USCIS practically has requested the court to defer to its interpretation of the above referenced regulation. However, under Kisor now, the court will delve into three-prong test explained earlier in the post.

There are numerous examples where USCIS has either have issued policy memos contradictory to its earlier position or have attributed a new interpretation to the regulations, which is inconsistent with its long-standing practice. Another example is “employer-employee relationship” issue.

The 2010 Employer-Employee memo referred to 8 CFR 214.2(h)(4)(ii) noting that the regulations do not provide enough guidance on definition of employer-employee relationship. It is worth noting here that the regulations does provide a regulatory definition of an “Employer” at 8 C.F.R. 214.2(h)(4)(ii). The memo also specifically states that USCIS interprets it to be “conventional master-servant relationship as understood by common-law agency doctrine”. Despite the clear definition in the regulations and the agency’s official position that the common law standard applies, the agency has been interpreting the regulations much more restrictively and has been issuing the denials based on the lack of evidence of employer employee relationship even when it meets the standard mentioned in the regulations and common law. If USCIS will raise the Auer deference for the restrictive interpretation of the regulatory definition of “employer”, the court will have to go into a deep analysis of the regulations first to see if the definition of “employer” is ambiguous. Given the fact that the regulations recognize the possibility of employment at more than one location, argument that it is ambiguous as to the third party placement would not fly.

Under the new framework applicable for Auer deference, “Agency consistency” will play an important role. It will be hard for USCIS to explain how it has been changing its long-standing position and interpretation of the regulation without any statutory basis.

The regulated entities such as employers of H-1B workers have been deeply impacted by the earlier approach as it takes away the transparency from the process and deprives them of regulatory stability to plan for their business activities. For example, an H-1B holder has been working with a company for the last 10 years as software developer, which USCIS has long considered a specialty occupation. Suddenly, without any change in the statue or regulations and in blatant contrast to its earlier interpretation of the regulations under which it has approved multiple petitions for this candidate establishing that position of software developer qualifies as a specialty occupation, denies the petition declaring it not a specialty occupation. If that decision is challenged before the court and USCIS raises the Auer deference, the court now will first look at the definition of the “Specialty Occupation” and the criteria laid down in the regulations. At first step itself, the USCIS will have a challenge explaining the denial because the USCIS Adjudicator’s Field Manual (“AFM”) 31.3 (g) provides:

[A]lthough the definition of specialty occupation is included in the statute itself and the regulations are specific regarding the criteria for determining what qualifies as a specialty occupation…

Keeping this in mind coupled with the earlier decisions approving the same position as the specialty occupation, the court will now assess that if the statue and the regulations are not “genuinely ambiguous” then it should be interpreted “as is”. Even if USCIS can pass muster at the first step and second step of reasonableness, it will be troublesome for USCIS to justify the third step of the analysis, where the a court will take into consideration if it is an authoritative or official position of the agency; (b) it reflects it substantive expertise; (c) if the agency’s interpretation of the rule reflects “its fair and considered judgment”. As discussed in a prior blog, 8 C.F.R. § 214.2(h)(4)(iii)(A) combined with INA 214(i)(1) clearly provides a broader definition of specialty occupation. The definition and requirements for qualification as specialty occupation has been analyzed by the courts in multiple cases such as Tapis International v INS, 94 F. Supp. 2d 172 and Residential Finance Corp. v. USCIS, 839 F. Supp.2d. 985(S.D. Ohio 2012). Despite the fact that the four criteria’s are in alternative, USCIS has been interpreting and applying the regulations in an erroneous way. The regulations nowhere mention that a bachelor’s degree in a specific specialty is a “must”. Rather, the regulations specifically mention that it is “normally” required or is a “common” requirement. If the USCIS were to raise Auer deference as to their interpretation of regulatory language “normally” or “common” to mean, “must”, the court will not defer to the agency’s interpretation of their own language. In most likelihood, under the first step of the Kisor analysis, the court will be able to establish the regulations are not ambiguous. It is as clear as it can be. Under the second step, it will be stimulating to see how the Service will justify the reasonableness of inventing a new meaning of simple words that gives away the legislative intent with the plain dictionary meaning.

A great example of a federal court applying Kisor in an immigration case is the recent Fourth Circuit decision Romero v Barr. The court in Romero overturned Matter of Castro-Tum where the Attorney General had issued an opinion that the IJ’s and BIA do not have the authority under the regulations to close the cases administratively. The court  first held the plain language of 8 C.F.R. §§ 1003.10(b) and 1003.1(d)(1)(ii) unambiguously confers upon IJs and the BIA the general authority to administratively close cases such that an Auer deference assessment is not warranted. Even if these regulations are ambiguous, the court citing Kisor noted that Auer deference cannot be granted when the new interpretation results in “unfair surprise” to regulated parties especially when agency’s current “construction “conflict[ing] with a prior” one.” The Romero court further identified that “an agency may—instead of issuing a new interpretation that conflicts with an older one—set forth an interpretation for the first time that is contrary to an established practice to which the agency has never objected.” Romero v Barr is a great example of how and to what extent Kisor has narrowed the Auer deference restoring the authority of the court to analyze in detail if deference is warranted to agency interpretation. Specifically towards the “Agency Consistency” the court noted, “numerous petitioners have relied on this long-established procedural mechanism to proceed through the immigration process. To suddenly change this interpretation of the regulation undermines the significant reliance interests such petitioners have developed”.

Another case where the court has cited Kisor standard is Sagarwala v L Francis Cissna,. The court seemed to have dived straight into the second step of reasonableness deciding that such interpretation is “typically entitled to judicial deference” citing Auer v Robins. It appears that the court deferred to agency interpretation because it was not “plainly erroneous or inconsistent” with the regulations. Eventually, the court cited Kisor and agreed that the agency decision is “fair and considered judgment” under Kisor standard. The court noted “both the statutory and regulatory definitions of “specialty occupation” state that the position at issue must require the “attainment of a bachelor’s or higher degree in [a] specific specialty.” It is important to note that the complete text in INA is attainment of a bachelor’s or higher degree in a specific specialty or its equivalent. We have previously analyzed here that how USCIS does not consider the interpretation of “or its equivalent” as interpreted by the courts. At core of this case was whether the education requirements of the position were too broad. Perhaps, the plaintiff could not justify the requirements, which led the court to decide that USCIS reading is a reasonable one. Even if the result would have been same, it appears that the court did not conduct a comprehensive inquiry into the issue as required by the Kisor standard.

Further, the court in Sagarwala just assumed that the agency has the “substantive expertise”. It would have been true under Auer deference; however, we believe that Kisor changes that notion. Now, if the court has to delve into specific inquiry about the ambiguity of the regulations and the reasonableness of the interpretation, we believe that it also will be under court’s purview to assess if the agency truly has the substantive expertise, not generally as the regulating agency but on the specific technical requirements of the position to determine if the position is “complex enough” under one of the specialty occupation criteria especially when the agency always resort to discretion on a case to case basis.

We believe that under the Kisor standard, it will be hard for USCIS to argue that it has the substantive expertise over an opinion of an expert – in most cases a professor who has decades of experience in teaching and consulting in the specific field. In most cases, the USCIS wrongly disregards the opinion of a well-established expert with expertise through decades of years of demonstrated relevant experience, research, and study in contravention of the AAO decision in Matter of Skirball Cultural Center, ID 3752, 25 I&N Dec. 799 (AAO 2012), where it held that uncontroverted testimony of an expert is reliable, relevant and probative as to the specific facts of the issue. In fact, it does so without providing a cogent reason to reach the conclusion that the expert’s review of the duties of the position was “limited”. Often times, USCIS while disregarding the Expert Opinion relies on that the fact because the Expert did not visit the location and has only relied on the materials provided by the employer, the opinion is not credible enough. Under the Federal Rules of Evidence, Rule 702, a witness who is qualified as an expert by knowledge, skill, experience, training or education may testify in the form of an opinion or otherwise if:

  1. The expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
  2. The testimony is based on sufficient facts or data;
  3. The testimony is the product of reliable principles and methods; and
  4. The expert has reliably applied the principles and methods to the facts of the case.

It is interesting to note that under these federal rules, an expert may base his/her opinions on facts or data that he has been made aware of (like providing detailed job duties to the expert for H-1B petitions) or upon using reliable principles and methods (like an expert’s extensive knowledge and experience in the field). According to the USCIS that is not a good enough standard for an expert professor to opine on whether the duties and job responsibilities of the position would require having the knowledge that is generally imparted through a bachelor’s degree in a specific field. Under the Kisor standard, the court should be able to analyze whether the expert opinion based on the detailed information provided by the employer is credible and sufficient to rule that the Expert has the substantive expertise on the matter than the agency where the adjudicating officer might not have the technical background to assess whether the duties are complex enough to meet the statutory and regulatory requirements.

Further, how will it justify the “fair and considered judgment” prong in Kisor when the agency blatantly disregard all the evidence presented under all the four regulatory prongs at 8 CFR 214.2(h)(4)(iii)(A) that establish a specialty occupation even though only one of the four criteria need to be met?

Under the ‘Buy American Hire American’ Executive Order, USCIS has been issuing new policies, based upon their current interpretation of regulations. The common denominator in challenging all these policy memos is that the regulations have not changed. Another example of a policy shift despite no change in statue or regulations is the new RFE and NOID memo. 8 CFR 103.2(b)(8) provides discretion to the adjudicating officer to issue RFEs and NOIDs in appropriate circumstances, OR to issue a denial without first issuing an RFE or a NOID in some circumstances. It is significant to note that the regulations (8 CFR 103.3(a)(i)) specifically mention that the discretion is not unfettered and the officer shall explain in writing the specific reasons for the denial. The regulations mention that the applicant or petitioner has to demonstrate the eligibility of the requested immigration benefit and demonstrating eligibility means each benefit request must be properly completed and filed with all initial evidence required by applicable regulations and other USCIS instructions. It also clarifies that the Burden of Proof lies with the applicant/petitioner to prove qualification for the requested benefit.

In June 2013, after the OIG published report requesting clarification as to when an RFE has to be issued, USCIS issued a memo clarifying to issue RFE or NOID unless denial is warranted by the statute. Under the 2013 memo, the emphasis was- an RFE is not to be avoided; it is to be used when the facts and the law warrant- to ask for more information and as to standard of discretion, it clarified that if totality of the evidence submitted does not meet the applicable standard– the officer should issue an RFE unless he or she determines there is no possibility that additional evidence available to the individual might cure the deficiency. The effect of the policy memo was only statutory denials could be issued without RFE. In July 2018, USCIS issued a new policy memo governing these issues, which superseded all earlier memos. The major turnaround on the policy under this memo was to restore the full discretion of the adjudicating officer to deny the cases not only when warranted statutorily but also due to a lack of initial evidence. It will be rousing to see if challenged in court how would USCIS defy that they have been reading and applying the regulations in a certain way and then suddenly decide to interpret it in a more restrictive way.

It is clear that the USCIS has been trying to override the legislative power of creating the law through expansive and erroneous interpretations of its own regulations rather than the delegated authority of implementing the law passed by the Congress. Multiple cases have been filed on grounds that USCIS has abused its discretion and the authority under the Auer deference by issuing inconsistent guidance and raising the evidentiary standards. If the agency will rely on the Auer deference in future H-1B litigation, plaintiffs who challenge denials should definitely invoke Kisor, which hopefully will create an uphill battle for the agency to fight and justify the change in its interpretation of a regulation as not just reasonable but also official, consistent, fair and considered. Our blog has provided potential plaintiffs with an overview on how to invoke Kisor in limiting Auer deference when seeking review in federal court over arbitrary H-1B denials.

 

* Guest author Sonal Sharma is a Senior Attorney at Jethmalani & Nallaseth PLLC in New York. Her practice involves both temporary nonimmigrant visa and permanent employment cases. She represents and advises clients – medium to large multinational corporate entities – from a wide variety of industries on intricate and comprehensive immigration matters.

 

Cyrus Mehta

Save Optional Practical Training for Foreign Students

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DHS promulgated the F-1 STEM optional practical training (OPT) benefit, with the publication of the “24-month STEM OPT Rule” that became effective on May 10, 2016. See 81 FR 13039. This rule has been the subject of contentious litigation.  The Washington Alliance of Technology Workers (WashTech) filed suit against both the 24-month STEM OPT rule and the standard 12-month post-completion OPT rule in the U.S. District Court for the District of Columbia. A summary of the progress of the litigation is available on this page on NAFSA’s website.

On July 1, 2019, the federal district court in DC in Washington Alliance of Technology Workers v. DHS issued an important decision holding that the 12-month Optional Practical Training program regulation finalized in 1992 had been reopened by the 24-month STEM OPT Rule, which raises the issue of whether DHS has authority to administer a practical training program after an F-1 student completes the underlying degree. The court found that the 24-month STEM OPT rulemaking also had the legal effect of reopening the legacy INS 12-month post-completion OPT regulation that had been finalized in 1992. This means that the court no longer considers a challenge to DHS’s statutory authority to implement standard post-completion OPT to be outside the statute of limitations, and that the WashTech plaintiffs can challenge DHS’s underlying statutory authority to establish not only STEM OPT but standard post-completion OPT as well. There will be briefing and an ultimate court decision on whether DHS has authority to administer both the 12-month OPT and STEM OPT extension programs.

In the same July 1, 2019 decision, the federal district court further held  that organizations seeking to be intervenors had standing to do so, despite opposition by both plaintiffs WashTech and defendant DHS. This means that the Information Technology Industry Council (ITI), National Association of Manufacturers (NAM), and US Chamber of Commerce will be carrying the important load of making the key arguments defending DHS’s authority, which is made most critical because it is not clear that DHS under the Trump administration, presently beholden to Buy American Hire American,  will zealously argue and defend its own authority.

If WashTech prevails, and OPT is eliminated, the result would be catastrophic.  After foreign students graduate from a US school, they can apply for one year of OPT. Those who graduate in STEM fields can pursue an additional 24 months of OPT.  The lawsuit claims that DHS has no authority under the Immigration and Nationality Act to issue employment authorization to foreign students. The ability to pursue practical training following graduation is one of the main attractions for foreign students seeking to study in the US.

Although the DHS formally opposes WashTech, there are forces in the administration that would probably want the plaintiffs to prevail. Hence, the role of the intervenor organizations is crucial to ensure that OPT remains available for foreign students. Otherwise, foreign students would have to immediately leave the US upon graduation. A victory for the plaintiffs here would virtually eliminate the ability for foreign graduates to easily seek employment, which they can now do during the OPT period, and then apply for H-1B visas and other employment-based immigration options.

The provision pertaining to F-1 students at INA 101(a)(15)(F)(i) is admittedly ambiguous. It prescribes the eligibility criterion for a student to enter the United States, but does not indicate what a student may do after they have completed the educational program. For over 50 years, the government has allowed students to engage in practical training after the completion of their studies, which Congress has never altered.  Thus, a court should be more inclined to give deference to the Administration’s interpretation of INA 101(a)(15)(F)(i).  DHS is entitled to deference under Chevron USA, Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984). Under the oft quoted Chevron doctrine, courts will pay deference to the regulatory interpretation of the agency charged with executing the laws of the United States when there is ambiguity in the statute. The courts will step in only when the agency’s interpretation is irrational or in error. The Chevron doctrine has two parts: Step 1 requires an examination of whether Congress has directly spoken to the precise question at issue. If Congress had clearly spoken, then that is the end of the matter and the agency and the court must give effect to the unambiguous intent of the statute. Step 2 applies when Congress has not clearly spoken, then the agency’s interpretation is given deference if it is based on a permissible construction of the statute, and the court will defer to this interpretation even if it does not agree with it. Similarly, the Supreme Court in Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005), while affirming Chevron, held that if there is an ambiguous statute requiring agency deference under Chevron Step 2, the agency’s interpretation will also trump a judicial decision interpreting the same statute.

The court in the WashTech litigation ought to uphold the ability of DHS to grant OPT to foreign students under Step 2 of the Chevron analysis. The DHS’s interpretation of INA 101(a)(15)(F)(i) should be given deference. Even if there is a judicial decision interpreting 101(a)(15)(F)(i) differently, the DHS’s interpretation ought to prevail under Brand X. In addition to Chevron deference, there is yet another doctrine that can uphold OPT. In Lorillard v. Pons, 434 U.S. 575, 580 (1978), the Supreme Court held that Congress is presumed to be aware of an administrative interpretation of a statute and to adopt that interpretation when it reenacts its statutes without change. Practical training has existed even prior to 1952, and since the enactment of the INA in 1952, and during the overhaul in 1990, Congress and has not enacted any provision that would eliminate student practical training. There are old Board of Immigration Appeals decisions recognizing practical training such as Matter of T-, 1 I&N Dec. 682 (BIA 1958), which noted that the “length of authorized practical training should be reasonably proportionate to the period of formal study in the subject which has been completed by the student” and only in “unusual circumstances” would “practical training…be authorized before the beginning of or during a period of formal study.”

There are many good arguments that can be made to preserve OPT in the WashTech litigation. In addition to the legal arguments addressed above, imagine the damage that would befall US schools if they were not able to attract foreign students. US schools would suffer both financially and in terms of reputation to academic institutions in other countries. Those who come to the US to study also understand America more deeply, and would be able to promote American values when they return and assume important positions in their own countries. Hence, every effort should be made to uphold OPT that has been an integral part of the US immigration system for over 50 years. One effective way to do this is for employers, business organizations, foreign student associations, think tanks, bar associations and other interested organizations to file amicus briefs in the court case. Outside the courtroom, there is also need to convince the American people about the benefits that foreign students bring to the US, and that the elimination of OPT will encourage foreign students to pursue their newly acquired skills in other countries that will compete against America. The OPT program ought not to be viewed as a source for cheap labor, as some critics contend, as the program is temporary and allows a foreign student educated in the US to gain meaningful experience, and preventing that would harm the US economy. Another study states that the OPT allows employers to hire STEM graduates who are in short supply, and provides a bridge for students with badly needed skills to ultimately secure a chance under the H-1B visa lottery.    In the unlikely event that the courts agree with the plaintiffs, Congress would need to step in to enact provisions in the INA that uphold the OPT programs for foreign students as presently enshrined in the regulations. There is too much at stake for America to allow OPT to die just like that.

Cyrus Mehta

Opportunity Knocks in Disappointing Decision Vacating Stem Optional Practical Training Rule for Foreign Students

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Adversity is the mother of progress

Mahatma Gandhi

I was at first greatly disappointed to find out that a federal district court judge vacated the 2008 STEM Optional Practical Training rule that extended practical training to F-1 students by an additional 17 months. However, if one reads Washington Alliance of Technology Workers (WashTech) v. DHS closely, the decision does not look so bad and provides an opportunity for the Obama administration to further expand STEM practical training, as promised in the November 20, 2015 executive actions for skilled workers.

Foreign students can receive up to 12 months of OPT upon graduation. In 2008, the Department of Homeland Security under President Bush’s administration published regulations authorizing an additional 17-months extension of the OPT period for foreign students who graduated in STEM (Science, Technology, Engineering and Mathematical) fields. Plaintiffs WashTech challenged both the 12 month OPT and the STEM OPT. The challenge to the original 12 month OPT rule was dismissed, but on August 12, 2015, U.S. District Judge Ellen Segal Huvelle vacated the rule that extended OPT by 17 months for a total period of 29 months for STEM graduates. The 2008 rule was published without notice and comment, and the court agreeing with the plaintiffs ruled that the DHS had not shown that it faced a true emergency situation that allowed the agency to issue the rule without notice and comment.

It is disappointing that Judge Huvelle granted plaintiffs standing in the first place on the flimsy ground that they were currently employed as computer programmers, who were a subset of the STEM market. [Contrast this with the DC Circuit Court of Appeals ruling in Arpaio v. Obama  two days later dismissing Sherriff Arpaio’s standing claim on the spurious grounds that the executive actions would serve as a magnet for attracting more undocumented immigrants to Arizona and fewer people would be deported as a result of these executive actions.] Although the plaintiffs in WashTech were not unemployed, Judge Huvelle speculated that “[a]n influx of OPT computer programmers would increase the labor supply, which is likely to depress plaintiffs’ members’ wages and threaten their job security, even if they remained employed.” It is also somewhat amusing that the judge found the F-1 and H-1B interrelated in order to justify that plaintiffs also had standing under the “zone of interests” doctrine. Without considering that the F-1 visa requires a non-immigrant intent while the H-1B allows for dual intent, the judge held that “F-1 and H-1B perform the interlocking task of recruiting students to pursue a course of study in the United States and retaining at least a portion of those individuals to work in the American economy.”

While this is the bad part of WashTech, the good news is that Judge Huvelle left intact the legal basis for the OPT rule on the ground that the DHS is entitled to deference under Chevron USA, Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984). Pursuant to the oft quoted Chevrondoctrine, courts will pay deference to the regulatory interpretation of the agency charged with executing the laws of the United States when there is ambiguity in the statute. The courts will step in only when the agency’s interpretation is irrational or in error. The Chevron doctrine has two parts. Step 1 requires an examination of whether Congress has directly spoken to the precise question at issue. If Congress had clearly spoken, then that is the end of the matter and the agency and the court must give effect to the unambiguous intent of the statute. Step 2 applies when Congress has not clearly spoken, then the agency’s interpretation is given deference if it is based on a permissible construction of the statute, and the court will defer to this interpretation even if it does not agree with it.

Judge Huvelle in WashTech agreed that under Step 1 of Chevron, the provision pertaining to F-1 students at INA 101(a)(15)(F)(i) is  ambiguous and that Congress has not clarified the word “student”. It prescribes the eligibility criterion for a student to enter the United States, but does not indicate what a student may do after he or she has completed the educational program. Under Step 2 on Chevron, the 2008 rule was held to be a reasonable interpretation of the ambiguous statutory provision.  For over 50 years, Judge Huvelle acknowledged, the government has allowed students to engage in practical training relating to their field of studies, which Congress has never altered. Indeed, in the Immigration Act of 1990, Congress included a three-year pilot program authorizing F-1 student employment for positions that were “unrelated to their field of study.” Congress would only do this, Judge Huvelle reasoned, because Congress recognized that practical training regulations long existed that allowed students to engage in employment in fields related to their studies. The decision goes into fascinating detail describing the history of practical training from at least 1947. Even after Congress overhauled the law in 1952, practical training continued, and still continued even after the Immigration Act of 1990 overhauled the H-1B visa by setting a numerical limit and imposing various labor protections. The decision also cites old Board of Immigration Appeals decisions recognizing practical training such as Matter of T-, 1 I&N Dec. 682 (BIA 1958), which noted that the “length of authorized practical training should be reasonably proportionate to the period of formal study in the subject which has been completed by the student” and only in “unusual circumstances” would “practical training…be authorized before the beginning of or during a period of formal study.”

Judge Huvelle finally and unfortunately, agreeing with the plaintiffs,  held that there was no emergency to justify the promulgation of the 2008 rule without notice and comment. H-1B oversubscription as a reason for the emergency in 2008 was “old hat” as the government conceded that the H-1B program has been consistently oversubscribed since 2004. Fortunately, Judge Huvelle sensibly realized that vacating the rule immediately would force “thousands of foreign students with work authorizations…to scramble to depart the United States.” Hence, the court stayed vacatur till February 12, 2016 during which time the DHS can submit the 2008 rule for proper notice and comment.  In the meantime, foreign students in STEM OPT have some respite, and those who are eligible for STEM OPT should be able to apply for a 17 month extension so long as they do so before February 12, 2016, although we need some affirmative guidance from the USCIS on this.

The DHS now has a golden opportunity to expand practical training through notice and comment even beyond a total of 29 months, and must do so on or before February 12, 2016 in compliance with the WashTech decision. Despite the protestations of Senator Grassley, who like WashTecstridently opposes the notion of foreign student practical training, Judge Huvelle’s decision has blessed the legal authority of the DHS to implement practical training under Chevrondeference. As discussed in my prior blog, Senator Grassley in his angry missive to the DHS had leaked that the DHS was  moving on new regulations to allow foreign students with degrees in STEM fields to receive up to a 24 month extension beyond the original 12 month OPT period even prior to the final Washtech decision.  If a student obtains a new degree, he or she can again seek a 24 month extension after the original 12 month OPT period. The proposed regulations would further authorize foreign graduates of non-STEM  degree programs to receive the 24-month extension of the OPT period, even if the STEM degree upon which the extension is based is an earlier degree and not for the program from which the student is currently graduating (e.g. student has a bachelor’s in chemistry and is graduating from an M.B.A. program).

While this will put tremendous pressure on the DHS to propose a rule for notice and comment before February 12, 2016, it would be well worth it before all talented foreign students who would otherwise benefit the United States are forced to leave. As a result of the H-1B cap, it is the STEM OPT that has allowed foreign students to be employed in the United States. The prospect of no STEM OPT combined with the limited number of H-1B visas annually would be devastating not only for the tech sector, but for American universities, foreign students and for the overall competitiveness of the United States.  WashTech may have successfully been able to obtain a vacatur of the 2008 rule effective February 12, 2016, but theirs is only a Pyrrhic victory since the court has essentially endorsed the legality of both the 12 month practical training periods and any extensions beyond that.

Cyrus Mehta

Extension of STEM Optional Practical Training for Foreign Students Under President Obama’s Executive Actions?

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Senator Grassley’s latest angry missive to the DHS protests the proposed increase of F-1 student Optional Practical Training (OPT), which was part of President Obama’s  executive actions of November 20, 2014.  While the Senator’s rant against any beneficial immigration proposal is nothing unusual, it reveals for the first time DHS plans to unveil an OPT  extension regulation relating to its promise to retain skilled foreign talent. It is also refreshing that the Obama Administration is endeavoring to implement a key executive action, especially after a  noted immigration blogger justifiably began to wonder whether the Obama Administration was fulfilling its promise or not.

According to Senator Grassley’s letter dated June 8, 2015, the DHS is moving forward with new regulations on OPT

– allowing foreign students with degrees in STEM fields to receive up to two 24-month extensions beyond the original 12-month period provided under OPT regulations, for a total of up to six years of post-graduation employment in student status; and

– authorizing foreign graduates of non-STEM U.S. degree programs to receive the 24-month extension of the OPT period, even if the STEM degree upon which the extension is based is an earlier degree and not for the program from which the student is currently graduating (e.g. student has a bachelor’s in chemistry and is graduating from an M.B.A. program).

Presently, students can receive up to 12 months of OPT upon graduation. In 2008, the DHS published regulations authorizing an additional 17-months extension of the OPT period for foreign students who graduated in STEM (Science, Technology, Engineering and Mathematical) fields. The Senator’s letter also seems to suggest that the agency is considering that employers will certify that they have not displaced US workers.  The STEM OPT extension is presently subject to a legal challenge by the  Washington Alliance of Technology Workers (Washtech). See Washington Alliance of Technology Workers v. DHS, Civil Action No. 1:14-cv-529.   Plaintiffs have alleged that the OPT STEM extension period is a deliberate circumvention of the H-1B visa cap in violation of Congressional intent, and have also been granted competitor standing, which recognizes that a party suffers injury when a government agency lifts regulatory restrictions on competitors or allows increased competition.

Notwithstanding Senator Grassley’s protest and the lawsuit, this is good news for foreign students, especially those who were not selected in the H-1B visa lottery for FY2016.  While the current lawsuit could potentially thwart the  efforts of the administration to extend STEM OPT especially in the face of mounting law suits,  we can also take comfort in an earlier failed legal challenge against STEM OPT.

Soon after the DHS extended OPT from twelve months to twenty-nine months for STEM students, the Programmers Guild sued DHS. in Programmers Guild v. Chertoff, 08-cv-2666 (D.N.J. 2008), challenging the regulation, and initially seeking an injunction, on the ground that DHS. had invented its own guest worker program without Congressional authorization. The court dismissed the suit for injunction on the ground that DHS was entitled to deference under Chevron USA, Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984). Under the oft quoted Chevrondoctrine, courts will pay deference to the regulatory interpretation of the agency charged with executing the laws of the United States when there is ambiguity in the statute. The courts will step in only when the agency’s interpretation is irrational or in error. The Chevron doctrine has two parts: Step 1 requires an examination of whether Congress has directly spoken to the precise question at issue. If Congress had clearly spoken, then that is the end of the matter and the agency and the court must give effect to the unambiguous intent of the statute. Step 2 applies when Congress has not clearly spoken, then the agency’s interpretation is given deference if it is based on a permissible construction of the statute, and the court will defer to this interpretation even if it does not agree with it. Similarly, the Supreme Court in Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005), while affirming Chevron, held that if there is an ambiguous statute requiring agency deference under Chevron Step 2, the agency’s interpretation will also trump a judicial decision interpreting the same statute. Brand Xinvolved a judicial review of an FCC ruling exempting broadband Internet carrier from mandatory regulation under a statute. The Supreme Court observed that the Commission’s interpretation involved a “subject matter that is technical, complex, and dynamic;” therefore, the Court concluded that the Commission is in a far better position to address these questions than the Court because nothing in the Communications Act or the Administrative Procedure Act, according to the Court, made unlawful the Commission’s use of its expert policy judgment to resolve these difficult questions.

The District Court in dismissing the Programmers Guild lawsuit discussed the rulings in Chevron and Brand X to uphold the DHS’s ability to extend the student F-1 OPT regulation. Programmers Guild appealed and the Third Circuit also dismissed the lawsuit based on the fact that the Plaintiffs did not have standing. Programmers Guild, Inc. v. Chertoff, 338 Fed. Appx. 239 (3rd Cir. 2009), petition for cert. filed, (U.S. Nov. 13, 2009) (No. 09-590). While the Third Circuit did not address Chevronor Brand X – there was no need to – it interestingly cited Lorillard v. Pons, 434 U.S. 575, 580 (1978), which held that Congress is presumed to be aware of an administrative interpretation of a statute and to adopt that interpretation when it reenacts its statutes without change. Here, the F-1 practical training regulation was devoid of any reference to the displacement of domestic labor, and Congress chose not to enact any such reference, which is why the Programmers Guild lacked standing.

So, why is Washtech again challenging the STEM OPT extension after another challenger had previously failed? This is because the DC Circuit is a favorable court to get standing, which it has already been granted. Even if plaintiffs ultimately prevail on their competitor standing theory, which requires them to show that they are direct and current competitors to F-1 students, plaintiffs still have an uphill task. The plaintiffs rely on International Bricklayers Union v. Meese (another reason why they have commenced legal action in the DC Circuit),  which struck down an INS Operating Instruction that allowed foreign laborers to come to the US on B-1 visas to install equipment or machinery after it had been purchased from an overseas seller. The court in International Bricklayers agreed with the plaintiffs that the laborers were not properly in the United States on a B-1 business visa, which under INA 101(a)(15)(B) precluded one from “performing skilled or unskilled labor.” In fact, Congress had enacted the H-2B visa for this sort of labor pursuant to INA 101(a)(15)(H)(ii)(b).

On the other hand, the provision pertaining to F-1 students at INA 101(a)(15)(F)(i) is more ambiguous. It prescribes the eligibility criterion for a student to enter the United States, but does not indicate what a student may do after he or she has completed the educational program. For over 50 years, the government has allowed students to engage in practical training after the completion of their studies, which Congress has never altered.  Thus, a court should be more inclined to give deference to the Administration’s interpretation of INA 101(a)(15)(F)(i) under Chevron and Brand X even if it expanded STEM OPT beyond the maximum available  period of 29 months. From a policy perspective, the Administration should be given room to expand STEM OPT in order to retain skilled talent in the United States. Global competition for STEM students has increased dramatically, and many countries have reformed their immigration systems to attract such students. American innovation will fall behind global competitors  if we cannot find ways to attract foreign talent especially after they have been educated at American universities.

Senator Grassley’s misgivings about extending STEM OPT  are misplaced, and it is fervently hoped that the Administration will not pay heed to his letter and cynically scrap the program after putting up a show that it had tried it’s best. If extended STEM OPT is implemented, it will provide the impetus for the implementation of other key executive actions such as allowing entrepreneurs to be paroled into the United States and permitting beneficiaries of approved I-140 petitions to work and enjoy job mobilityeven if their priority dates have not become current. Each and every action will surely get challenged, but the Administration should fight on and prevail, like it did when the motion to preliminarily enjoin the granting of work authorization to H-4 dependent spouses failed.