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Walker Macy LLC v. United States Citizenship and Immigration Services

United States District Court, D. Oregon

March 17, 2017

WALKER MACY LLC and XIAOYANG ZHU, Plaintiffs,
v.
UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES and LORI SCIALABBA, Acting Director, U.S. Citizenship and Immigration Services, Defendants.

          Brent W. Renison, Parrilli Renison LLC, Of Attorneys for Plaintiffs.

          Benjamin C. Mizer, Principal Deputy Assistant Attorney General; William C. Peachey, Director; Glenn M. Girdharry, Assistant Director; and Joshua S. Press, Trial Attorney, United States Department of Justice, Of Attorneys for Defendants.

          OPINION AND ORDER

          MICHAEL H. SIMON, UNITED STATES DISTRICT JUDGE

         Plaintiffs Walker Macy LLC (“Walker Macy”) and Xiaoyang Zhu[1] bring this putative class action against U.S. Citizenship and Immigration Services (“USCIS”) and its Acting Director, Lori Scialabba, in her official capacity.[2] Plaintiffs allege that USCIS improperly administers its H-1B specialty occupation nonimmigrant visa worker program in violation of federal law.[3] The parties cross-move for summary judgment. For the reasons discussed below, Plaintiffs' motion for summary judgment is denied, and Defendants' motion for summary judgment is granted.

         LEGAL STANDARDS

         A. Administrative Procedure Act

         Plaintiffs bring their claims under the Administrative Procedure Act (“APA”).[4] Under the APA, “an agency action must be upheld on review unless it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'” San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 601 (9th Cir. 2014) (quoting 5 U.S.C. § 706(2)(A)). A reviewing court “must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Id. (quotation marks and citation omitted). The reviewing court's inquiry must be “thorough, ” but “the standard of review is highly deferential; the agency's decision is entitled to a presumption of regularity, and [the court] may not substitute [its] judgment for that of the agency.” Id. (quotation marks and citation omitted). Although a court's review is deferential, the court “must engage in a careful, searching review to ensure that the agency has made a rational analysis and decision on the record before it.” Nat'l Wildlife Fed. v. Nat'l Marine Fisheries Serv., 524 F.3d 917, 927 (9th Cir. 2007).

         B. Summary Judgment

         A party is entitled to summary judgment if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment, ” the “mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

         Where parties file cross-motions for summary judgment, the court “evaluate[s] each motion separately, giving the nonmoving party in each instance the benefit of all reasonable inferences.” A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006) (quotation marks and citation omitted); see also Pintos v. Pac. Creditors Ass'n, 605 F.3d 665, 674 (9th Cir. 2010) (“Cross-motions for summary judgment are evaluated separately under [the] same standard.”). In evaluating the motions, “the court must consider each party's evidence, regardless under which motion the evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). “Where the non-moving party bears the burden of proof at trial, the moving party need only prove that there is an absence of evidence to support the non-moving party's case.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). Thereafter, the non-moving party bears the burden of designating “specific facts demonstrating the existence of genuine issues for trial.” Id. “This burden is not a light one.” Id. The Supreme Court has directed that in such a situation, the non-moving party must do more than raise a “metaphysical doubt” as to the material facts at issue. Matsushita, 475 U.S. at 586.

         C. Principles of Statutory Interpretation

         “The purpose of statutory construction is to discern the intent of Congress in enacting a particular statute.” Robinson v. United States, 586 F.3d 683, 686 (9th Cir. 2009) (quotation marks omitted). “When interpreting a statute, the court begins with the statutory text and interprets statutory terms in accordance with their ordinary meaning, unless the statute clearly expresses an intention to the contrary.” I.R. ex rel. E.N. v. Los Angeles Unified Sch. Dist., 805 F.3d 1164, 1167 (9th Cir. 2015) (quotation marks omitted). The plain meaning of the statute controls, unless such a reading would result in unreasonable or impracticable results. Robinson, 586 F.3d at 687.

         “‘A statute is ambiguous if it gives rise to more than one reasonable interpretation.'” Woods v. Carey, 722 F.3d 1177, 1181 (9th Cir. 2013) (quoting DeGeorge v. U.S. Dist. Ct. for Cent. Dist. of Cal., 219 F.3d 930, 939 (9th Cir. 2000)). “‘The plainness or ambiguity of statutory language is determined [not only] by reference to the language itself, [but also by] the specific context in which that language is used, and the broader context of the statute as a whole.'” Yates v. United States, 135 S.Ct. 1074, 1081-82 (2015) (noting that courts cannot rely on dictionary definitions alone) (alterations in original) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997)). A court should “not [be] guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.” Dole v. United Steelworkers of Am., 494 U.S. 26, 35 (1990) (quotation marks omitted). Moreover, “[i]t is a cardinal canon of statutory construction that statutes should be interpreted harmoniously with their dominant legislative purpose.” Valladolid v. Pac. Operations Offshore, LLP, 604 F.3d 1126, 1133 (9th Cir. 2010) (quoting United States v. Gallenardo, 579 F.3d 1076, 1085 (9th Cir. 2009)); see also Bob Jones Univ. v. United States, 461 U.S. 574, 586 (1983) (“It is a well-established canon of statutory construction that a court should go beyond the literal language of a statute if reliance on that language would defeat the plain purpose of the statute.”); I.R., 805 F.3d at 1167 (“[W]e must read the words [of a statute] in their context and with a view to their place in the overall statutory scheme. Particular phrases must be construed in light of the overall purpose and structure of the whole statutory scheme.” (quotation marks omitted; alterations in original)). In construing an ambiguous statute or term, a court may also look to legislative history to illuminate the intent of Congress. See Woods, 722 F.3d at 1181.

         BACKGROUND

         A. H-1B Visa Program and Associated Legislative Actions

         Employers in the United States may petition for a nonimmigrant work visa under the H-1B program when they seek to employ foreign workers in specialty occupations that require theoretical or practical application of a body of highly specialized knowledge, including but not limited to architecture, engineering, medicine, law, and other fields that require the attainment of a bachelor's degree or higher. 8 U.S.C. §§ 1101(a)(15)(H)(i)(b), 1184(i)(1); 8 C.F.R. § 214.2(h)(4)(ii). To petition for an H-1B visa, the employer must submit a Form I-129, Petition for Nonimmigrant Worker. The employer also must file a Labor Condition Application that has been certified by the Department of Labor (“DOL”). See 8 C.F.R. § 214.2(h)(4)(i)(B)(1).

         Congress has limited the number of H-1B visa petitions that may be granted in any given fiscal year (or “FY”).[5] This is commonly referred to as the H-1B “cap.” The current annual limit for H-1B visa petitions subject to the cap is 85, 000. Of these, 65, 000 visa petitions are subject to the “regular cap, ” with an exemption for the first 20, 000 workers who have earned a master's or higher degree from a United States institution of higher education (the “master's cap”). See 8 U.S.C. § 1184(g).[6]

         The H-1B visa is a temporary visa with a maximum duration of six years. See 8 U.S.C. § 1184(g)(4). It is designed so that U.S. companies can employ citizens of another country. This is in comparison to employer-sponsored “immigrant” visas, which allow persons to come and work in the United States as permanent residents.

         “H” visas have existed since 1952. The Immigration Reform and Control Act of 1986 (“IRCA”) subdivided the H visa category into: (1) H-1 visas for persons of “distinguished merit and ability, ” such as professionals, artists, athletes, entertainers, and prominent business people who lack professional credentials; (2) H-2A for temporary workers performing agricultural labor or services; (3) H-2B for temporary workers performing nonagricultural labor or services for which no U.S. workers could be found; and (4) H-3 for foreign trainees. Labor unions were concerned about the H-1 classification not having any requirement for determining the availability of qualified U.S. workers. Of particular concern were foreign nurses and entertainers, who constituted approximately half of all H-1 admissions.

         Congress partially responded to these concerns with the Immigration Nursing Relief Act of 1989 (“INRA”), which placed foreign nurses into a new H-1A category for a five-year period, while other H-1 visa recipients were classified as H-1B. The INRA also required employers to attest that hiring foreign nurses would not adversely affect the wages and working conditions of U.S. nurses and that the foreign nurses would be paid at the same rate as U.S. nurses. The INRA program ended in 1997 and was replaced by 8 U.S.C. § 1101(a)(15)(H)(i)(c), but some of the provisions from the program now apply to other H visas.

         In the Immigration Act of 1990 (“IMMACT”), Congress enacted major revisions to the Immigration and Nationality Act (“INA”) for employment-based immigration. The IMMACT divided the H-1B visa category into several categories. Foreign nationals with “extraordinary ability” in the sciences, arts, education, business, or athletics were moved to a new “O” nonimmigrant visa category. Performing artists, entertainers, and internationally recognized athletes were moved to a new “P” category. This narrowed the applicability of H-1B visas to professionals. The IMMACT also added the requirement of an attestation regarding the pay of foreign workers and the effect on U.S. workers, similar to the INRA requirement for the hiring of foreign nurses. The IMMACT also capped the annual number of new cap-subject H-1B petition approvals to 65, 000 per fiscal year. (As discussed further below, there were progressively increasing caps in the late 1990s and early 2000s, but from FY 2004 forward the cap of 65, 000 applies).

         Controversy continued relating to the H visas. In the American Competitiveness and Workforce Improvement Act of 1998, Congress added a fee required to sponsor H-1B workers, with funds going to scholarships to help U.S. workers close skills gaps. This law also temporarily increased the H-1B cap in FYs 1999-2001 because the cap was continuously being met, or exhausted. This law also improved protections for both American and nonimmigrant workers, adding requirements for “H-1B dependent” employers and requiring additional attestations that U.S. employers will not displace American workers and that such employers unsuccessfully had attempted to recruit American workers. It also enhanced penalties for certain violations by employers.

         In the American Competitiveness in the Twenty-First Century Act of 2000, Congress again temporarily increased the H-1B cap, for FYs 2001-2003. This law also exempted universities and nonprofit research institutions from the H-1B cap and increased the filing fee.

         The H-1B Visa Reform Act of 2004 added the “master's cap” exemption, creating 20, 000 additional H-1B visas for persons with master's degrees or higher. It also increased the fee charged to large companies, decreased the fee charged to smaller companies, and expanded the DOL's investigative authority over the required labor certifications.

         The statutory cap has been met (or exhausted) before the end of each fiscal year since 1997, although only more recently has the cap been met during the first few days in which applications are accepted. Since December 1991, regulations have required that USCIS (and the Immigration and Naturalization Service (“INS”) before it)[7] reject and return applications received after the numerical limit has been met. See Temporary Alien Workers Seeking Classification Under the Immigration and Nationality Act, 56 Fed. Reg. 61111 (Dec. 2. 1991) (codified at former 8 C.F.R. § 214.2(h)(8)(ii)(E) (Jan. 1, 1992)) (“If the total numbers available in a fiscal year are used, new petitions and the accompanying fee shall be rejected and returned with a notice that numbers are unavailable for the particular nonimmigrant classification until the beginning of the next fiscal year.”). None of the legislative changes made after 1991 altered this procedure of rejecting and returning petitions filed after the statutory cap had been met.

         After the temporary cap increases expired (in FY 2004 and thereafter), the H-1B annual caps began getting reached earlier and earlier. In 2005, USCIS adopted rules changing its procedures for accepting and processing H-1B petitions. Among other things, the new rules authorized, if needed, the use of a random computer selection process. See Allocation of Additional H-1B Visas Created by the H-1B Visa Reform Act of 2004, 70 Fed. Reg. 23775, 23778, 23783 (May 5, 2005) (codified at former 8 C.F.R. § 214.2(h)(8)(ii)(B) (Jan. 1, 2006)). Under these procedures, USCIS estimated the number of petitions it would need to fill the 85, 000 slots, monitored the number of petitions received, and notified the public of the date that USCIS had received the necessary number of petitions (the “final receipt date”). Only applications received by the final receipt date were part of the random computer selection, unless the final receipt date was the very first day that applications could be received, in which case applications on both the first and second days were part of the random selection process. For FY 2007, this limit was reached in the first two months. For FY 2008 the limit was reached on the first day. After that experience, USCIS changed the regulation.

         In 2008, H-1B processing procedures were changed with the adoption of new rules. See Petitions Filed on Behalf of H-1B Temporary Workers Subject to or Exempt from the Annual Numerical Limitation, 73 Fed. Reg. 15389 (Mar. 24, 2008) (codified at 8 C.F.R. § 214.2(h)(8)(ii)(B)). USCIS had found that stopping consideration of petitions received after the final receipt date caused employers to spend significant effort and money to send petitions by overnight delivery for receipt by USCIS on the first allowable date. Id. at 15, 391. This also caused problems for overnight delivery carriers and for USCIS offices receiving petitions. Id. Thus, USCIS changed the procedure to include in the computer selection process all petitions received within the first five business days. Id. at 15, 392 (“This will eliminate filing problems resulting from a rush of filings made on the first day on which employers may file petitions for the upcoming fiscal year. USCIS has determined that a filing period of five business days is sufficient to account for a wider range of mail delivery times offered by the various mail delivery providers available to the public.” (citation omitted)).

         In FY 2010 and 2011, applications decreased due to the recession, and it took longer to reach the quota. In FY 2013, the limit was reached in the first week, and random selection was used for all of the applications. For FY 2014 and after, the cap was reached in the first week.

         Congress has considered and rejected bills that would, among other things, eliminate the random selection system. These include the “Immigration Driving Entrepreneurship in America Act of 2011, ” the “Border Security, Economic Opportunity, and Immigration Modernization Act of 2013, ” and the “Immigration Innovation Act of 2013.” There have been additional bills considered, although none made it out of committee. These included the “H-1B and L-1 Visa Reform Act of 2015, ” “American Jobs First Act of 2015, ” “Protecting American Jobs Act, ” and “Immigration Innovation Act of 2015.” Although these bills eliminated random selection in favor of prioritization based on other factors (e.g., beneficiary's education, wage being offered), none of them required that USCIS change its policy of rejecting petitions after the statutory cap of visas is reached.

         B. Relevant Statutory and Regulatory Provisions

         Plaintiffs argue that in processing H-1B visa petitions, Defendants are violating Congress's directive in 8 U.S.C. § 1184(g)(3). That provision states: “Aliens who are subject to the numerical limitations of paragraph (1) shall be issued visas (or otherwise provided nonimmigrant status) in the order in which petitions are filed for such visas or status.” (emphasis added). Specifically, Plaintiffs argue that Defendants' regulation establishing the procedures for processing petitions is improper and invalid.

         The challenged regulation provides:

When necessary to ensure the fair and orderly allocation of numbers in a particular classification subject to a numerical limitation or the exemption under section 214(g)(5)(C) of the Act, USCIS may randomly select from among the petitions received on the final receipt date the remaining number of petitions deemed necessary to generate the numerical limit of approvals. This random selection will be made via computer-generated selection as validated by the Office of Immigration Statistics. Petitions subject to a numerical limitation not randomly selected or that were received after the final receipt date will be rejected. Petitions filed on behalf of aliens otherwise eligible for the exemption under section 214(g)(5)(C) of the Act not randomly selected or that were received after the final receipt date will be rejected if the numerical limitation under 214(g)(1) of the Act has been reached for that fiscal year. . . . If the final receipt date is any of the first five business days on which petitions subject to the applicable numerical limit may be received (i.e., if the numerical limit is reached on any one of the first five business days that filings can be made), USCIS will randomly apply all of the numbers among the petitions received on any of those five business days, conducting the random selection among the petitions subject to the exemption under section 214(g)(5)(C) of the Act first.

8 C.F.R. § 214.2(h)(8)(ii)(B).

         Additionally, both sides argue that various portions of 8 U.S.C. § 1153 relating to immigrant visas supporting their respective positions. This statute provides, in relevant part:

(e) Order of consideration
(1) Immigrant visas made available under subsection (a) or (b) of this section shall be issued to eligible immigrants in the order in which a petition in behalf of each such immigrant is filed with the Attorney General (or in the case of special immigrants under section 1101(a)(27)(D) of this title, ...

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