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A Preliminary Analysis of the Fifth Circuit Oral Argument on the Application for Stay in Texas v. United States

4/21/2015

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by David Isaacson, Associate with ABIL member, Cyrus D. Mehta
The Insightful Immigration Blog


On Friday, April 17, 2015, the U.S. Court of Appeals for the Fifth Circuit heard oral arguments on the motion by the United States for a stay pending appeal of the preliminary injunction issued by Judge Andrew Hanen of the U.S. District Court for the Southern District of Texas in Texas v. U.S., which currently prevents implementation of the DAPA and expanded DACA programs set out in a November 20, 2014 Memorandum of Secretary of Homeland Security Jeh Johnson.  The decision on the motion for stay will not be the last word with respect to the preliminary injunction, which is the subject of a pending expedited appeal with briefing scheduled to be completed by mid-May and oral argument possible over the summer.  However, the decision on the motion for stay will determine whether implementation of DAPA and expanded DACA can resume immediately.

In a previous blog post, I provided some initial reaction to the Memorandum and Order in which Judge Hanen issued his injunction.  Having listened to the recording of the oral argument that is available online, it seemed appropriate to provide some initial reactions to the oral argument as well.  Nicholas Espiritu of the National Immigration Law Center, who was actually present at the argument, provided his own recap in a blog post that I would urge readers to review, but I think it is possible that reviewing the recording may make it possible to pick up some things that were less obvious in person—although since a recording still has some disadvantages relative to a transcript, it is also possible that the below may contain errors, for which I apologize in advance.

As background, the three Fifth Circuit judges on the panel hearing the motion for stay were Judge Jerry E. Smith, appointed to the Fifth Circuit by Ronald Reagan in 1987; Judge Jennifer W. Elrod, appointed to the Fifth Circuit by George W. Bush in 2007; and Judge Stephen A. Higginson, appointed to the Fifth Circuit by President Obama in 2011.  Texas was represented by state solicitor general Scott A. Keller, and the United States by Acting Assistant Attorney General Scott A. Mizer.

Near the beginning of the argument, Judge Elrod offered an extensive hypothetical regarding the question of reviewability: would the states be able to sue, she asked, if the administration gave something like DAPA to all of the aliens present without authorization?  What about if the administration gave that same population voting rights?  The goverment’s attorney, AAG Mizer, responded that the states wouldn't have standing in the hypothetical case of DAPA being greatly expanded, although there might be competitor standing by other workers.  In the voting hypothetical, however, he indicated that the states would probably have standing because the Voting Rights Act has provisions giving special rights and thus standing to states.

On the topic of reviewability, Judge Higginson asked whether expanding deferred action and thereby vastly expanding the class of people eligible for employment authorization might be reviewable, despite the existence of the longstanding regulations regarding employment authorization for deferred action recipients, if employment authorization through deferred action had previously been available to a smaller class of people.

Judge Elrod raised the issue of the district court’s factual finding that there is not an actual exercise of discretion by USCIS, and whether it is necessary to overcome a clear-error standard of review in order for the government to prevail with regard to that finding—a point that she revisited later in the argument.  The argument was based on the agency’s alleged practices in adjudicating applications for the original DACA program, as instituted in 2012 by then-Secretary of Homeland Security Janet Napolitano, which was not challenged by the plaintiff States and is not affected by the injunction; Judge Hanen effectively found that DHS had not exercised discretion in the 2012 DACA program and so would not exercise discretion with DAPA and expanded DACA.  Judge Higginson, in response, made an interesting point about how the fact the agency is removing more people than ever before may rebut the suggestion that DHS is being pretextual in claiming that they are exercising discretion.

Judge Elrod then raised the issue of whether the government has been disingenuous in the litigation, and whether that influences a credibility determination.  (On the question of whether the attorneys for the government indeed had breached any ethical obligations, I would refer the reader to an AILA Leadership Blog post by Cyrus D. Mehta in his capacity as Chair of the AILA Ethics Committee, and the related more comprehensive paper from the AILA Ethics Committee, “Judge Hanen’s Troubling Accusations of Unethical Conduct in Texas v. United States of America”.)  The district court, AAG Mizner pointed out in response, considered “public safety” denials of the original 2012 DACA as not being discretionary, which is not really fair, since protecting public safety is a major discretionary factor.

Judge Higginson pointed out, with regard to the question of alleged disingenuousness and credibility, that the district court doesn’t actually seem to have made any credibility finding regarding the competing affidavits of USCIS union official Kenneth Palinkas and USCIS Associate Director for Service Center Operations Donald Neufeld, who had offered vastly different accounts of how applications are processed.  That goes to Judge Elrod’s earlier point regarding the finding of fact, since it would seem to be error to make such a finding while simply ignoring a contrary affidavit and without having held an evidentiary hearing to resolve any credibility issues.

Returning to the question of standing and reviewability, the government noted that “Texas has been here before” in terms of trying to sue the US government about immigration policy, in 1997, and lost.  AAG Mizner further pointed out that 8 U.S.C. 1252(g), and the Supreme Court’s decision in Reno v. American-Arab Anti-Discrimination Committee, 525 U.S. 471 (1999), interpreting that section, argue against anybody being able to sue regarding prosecutorial discretion—if even disappointed aliens can’t sue regarding the exercise of such discretion, then why would states, who have no role in immigration, be able to do so?

Continuing with the standing discussion, Judge Smith directed AAG Mizer to the Supreme Court’s decision in Massachusetts v. EPA, 549 U.S. 497 (2007), which he considered to be a key case on the standing issue.  Mizer responded, first, that there isn’t a territorial effect in this case as in Massachusetts, where the state’s territory was being affected (by rising sea levels resulting from global warming).  Also, the specific statute in Massachusetts v. EPA gave a specific right to sue, while the INA, Mizer argued, “is not enacted to protect the states”.

Mizer moved on to an interesting hypothetical about the problem with Texas’s standing argument.  Take the case of thousands of paroled Cubans, for example, who then became eligible to adjust status (under the Cuban Adjustment Act).  On Texas’s theory, if the paroled aliens moved to Texas, then Texas would have a judicially cognizable harm.  But to find standing for Texas under such circumstances, Mizer said, would be inconsistent with the FAIR v. Reno decision of the D.C. Circuit, which rejected a challenge to an agreement between the US and Cuba that would have such an effect.  Indeed, if Texas is right, Mizer argued, then they would be able to challenge an individual decision to grant a single person asylum, because if that person then gets a Texas driver’s license, it’s a harm to Texas.

Judge Elrod asked about why the US didn’t address the constitutional arguments made by the plaintiffs below (and not passed upon by the District Court).  Given the burden is on the government, she suggested that this might mean the government would lose at the stay stage.  Between this, the earlier noted questions from Judge Elrod, and a question soon thereafter in which Judge Elrod relied on President Obama’s comments at a press conference, rather as Judge Hanen had below, it seemed that Judge Elrod might be leaning in favor of denying a stay, although reading the proverbial “tea leaves” from an oral argument is always tricky.

Judge Higginson next returned to a variant of his point about the potential significance of DHS’s high number of removals, noting that the “abdication” theory propounded by Judge Hanen doesn’t make sense given that high number.

Judge Higginson followed up with an interesting hypothetical question about what would happen if the next administration flipped the priorities and went after DAPA recipients. AAG Mizer responded that DHS hasn’t bound itself not to change its mind.  Secretary Johnson may have bound his subordinates, but he has not bound the agency.

Returning to the question of standing, Judge Smith asked about the “special solicitude” that Massachusetts v. EPA says is afforded to the states.  Mizer says the immigration context is different than that case, because the Supreme Court has said in Arizona v. United States that the states can’t enact laws to conflict with federal immigration policy; why should the states be able to file a lawsuit to the same end?

Judge Elrod then asked AAG Mizer about whether “lawful status” is a benefit and about the difference between this and the Watt case, that is, Watt v. Energy Action Education Foundation, 454 U.S. 151 (1981).  Regarding Watt, Mizer’s response was to point out that California actually had a statutory interest in sharing the revenues from the program at issue in that case.  Regarding “legal status”, Mizer stated that deferred action is not a lawful status, just lawful presence. There followed a somewhat confused discussion of what exactly lawful presence is.  AAG Mizer ultimately pointed out that it doesn’t matter a great deal as a practical matter if one has lawful presence under DAPA, because DAPA beneficiaries already had more than a year of unlawful presence to begin with, and would thus already have sufficient unlawful presence to trigger the 10-year bar (that is, INA §212(a)(9)(B)(i)(II)).


The states’ lawyer, Texas Solicitor General Keller (TSG Keller for short), near the beginning of his argument, tried to pick up the thread regarding lawful presence versus lawful status and make the case that granting “lawful presence” is affirmative government action different than prosecutorial discretion. He couldn’t answer a question whether past deferred action grantees had lawful presence, but suggested that they might not have.  He also seemed near the beginning of is argument to concede that the scale of the program is not “pertinent to the legal doctrines”, though he then said that it “colors whether it is a substantive rule”.

Judge Higginson, picking up on the earlier discussion of lawful presence and lawful status, cited to Arizona v. United States and other case law to say that allowed presence from deferred action is different from lawful status.

TSG Keller moved on to talk about the double deference afforded in this stay posture.  He returned again later in the argument to a discussion of the “stay posture” and the record compiled on an expedited basis.  I found this interesting because to the extent the decision on the motion to stay relies on deference factors unique to the stay context, that suggests that any unfavorable decision on the motion to stay should not be given much deference by the panel that subsequently considers the appeal of the preliminary injunction.

One of the more notable aggressive moments of TSG Keller’s argument was when he claimed that 8 U.S.C. §1324a(h)(3) is only a “definitional” provision, and that the existing regulations regarding employment authorization may not be legal.  Judge Hanen, as I had pointed out in my prior post on this blog, had seemed to ignore that statute and the portion of the regulations, 8 C.F.R. §274a.12(c)(14), authorizing the grant of employment authorization to deferred action recipients.  Suggesting that the statutory provision is nearly meaningless and the regulations potentially invalid is, I suppose, an interesting alternative analytical route, but the argument strikes me as unconvincing, and would have far-reaching and problematic consequences if it did succeed.  This argument by TSG Keller would imply that the courts should read the statute to invalidate, for example, all employment authorization given to applicants for adjustment of status pursuant to 8 C.F.R. §274a.12(c)(9), just because the powers given to the Secretary of Homeland Security (formerly the Attorney General) by the statute to confer such employment authorization happen to be bestowed in the form of a definitional provision.

Another somewhat rocky moment in TSG Keller’s argument pertained to the “abdication” theory of Article III standing mentioned by Judge Hanen, regarding which even Judge Elrod appeared to be skeptical.  Judge Elrod was able to get TSG Keller to clarify that the states would still need to show Article III injury in order to proceed on such a theory of standing.  As examples of such injury, TSG Keller pointed to driver’s licenses, health care and education benefits.

On the question of whether discretion was actually exercised in adjudicating applications under the 2012 DACA program, Judge Higginson pointed out that because of “self-selection bias”, you’d expect a high approval rate.  That is, given that it is up to each applicant whether to seek the benefit, people who aren’t going to qualify for the benefit won’t tend to apply for it.  This seemed a compelling point to me, and Judge Higginson returned to it repeatedly.  This discussion of discretion led to a further discussion of the data, or lack thereof, regarding reasons for refusal and so on in DACA 2012, and why the government didn’t, or couldn’t, provide evidence of discretionary refusals—evidently DHS had not kept track of such discretionary denials separately from other denials.

Also with respect to discretion, Judge Higginson had what I thought was a very interesting point about the perverse incentive that would be created by adopting the states’ viewpoint on what evidences a proper exercise of discretion.  If a high approval rate for those applicants meeting the written policy criteria is evidence of a lack of discretion, does that mean that executive agencies need to be careful not to comply with their written policies too well?  He came back to this again later in the argument.  This too struck me as a compelling point, because the implication of the states’ argument is that executive-branch policies not meant to confer enforceable rights on the public may only be defensible if the administration is careful to be arbitrary and unpredictable, allowing lower-level officers to make decisions without any meaningful guidance from their superiors—which would be a very strange way to run the executive branch, and a very strange policy to mandate as a matter of administrative law.

Judge Higginson also pointed out that in one of the cases the states have cited, the remedy for an agency supposedly not exercising the discretion that it claimed to be exercising was remand to the agency.  But he seemed potentially convinced by TSG Keller’s response that this possibility would be more relevant to the merits than to the stay.

In an interesting exchange towards the end of TSG Keller’s argument, both he and Judge Elrod seemed to say that if it were “just deferred action” this would be a very different case.  It seems to me, however, that the difference is not so clear, because once you get “just deferred action” you are eligible for an EAD under the existing regulations, as I have explained previously.

In his rebuttal argument, AAG Mizer argued that deferred action has always conferred lawful presence, and that Congress has acknowledged that.

Judge Elrod pressed AAG Mizner during his rebuttal regarding what scheme Texas could use to decide whom to give driver’s licenses to, that would not necessarily result in the grant of licenses to DAPA recipients, as the U.S.’s argument had seemed to suggest was possible.  AAG Mizer indicated that Texas could come up with a classification scheme not relying on employment authorization, as long as there was a legitimate state reason for that classification scheme.

Judge Higginson followed up with an interesting question about whether Congressional appropriations sufficient to remove all 11 million unauthorized aliens would mandate that this be done.  AAG Mizer responded there would be an impoundment problem with the funds not being utilized for their intended purpose in that hypothetical, but that the government would still have some residual discretion to consider foreign policy and humanitarian concerns and so on.

Regarding the “status quo” standard for a stay, Mizer points them to Justice O’Connor’s stay opinion in INS v. Legalization Assistance Project, 510 U.S. 1301 (1993) (O’Connor, J., in chambers), regarding the injury that the federal government suffers when the judicial branch interferes in its internal processes.

At the end of the argument, Judge Elrod pushed AAG Mizer regarding whether there would be significant benefits granted during a period after any lifting of the stay that would be difficult to unwind if the preliminary injunction were ultimately affirmed.  She did not seem convinced by his response.

Based on this oral argument, the most difficult prediction appears to me to be what view Judge Smith will take on the merits.  Although it seemed from Judge Smith’s questions regarding Massachusetts v. EPA that he was inclined to find in favor of the plaintiff states with regard to standing, his questions did not reveal his view of the merits to the extent that Judge Elrod’s did.  Judge Higginson was also a bit harder to read than Judge Elrod, but on balance it seems from the oral argument that he is more likely to favor the federal government’s position.  Even if Judge Smith and Judge Elrod were both to agree that the plaintiff states had standing, however, a stay could still be granted if Judge Smith were to agree with Judge Higginson’s apparent view of the federal government’s likelihood of prevailing on the merits.  While I am not sure how likely such an outcome is, it is not a possibility that I would entirely rule out based solely on the oral argument.
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AAO Firmly Tethers H-1B Workers to an LCA Like a Dog is to a Leash

4/12/2015

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by Cyrus D. Mehta, ABIL Lawyer
The Insightful Immigration Blog


In Matter of Simeio Solutions, LLC, 26 I&N Dec. 542 (AAO 2015), the AAO affirmed the Service Center Director's decision and revoked the petition's approval. Among other things, the Director had concluded that changes in the beneficiary's places of employment constituted a material change to the terms and conditions of employment as specified in the original petition. The changes included different metropolitan statistical areas from the original place of employment, which USCIS agents were unable to find. The AAO found that the petitioner should have filed an amended Form I-129 H-1B petition corresponding to a new labor condition application (LCA) that reflected these changes, but the petitioner failed to do so. The AAO noted that petitioners must immediately notify USCIS of any changes in the terms and conditions of employment of a beneficiary that may affect eligibility for H−1B status

In affirming the Director's decision, the AAO noted:
(1) A change in the place of employment of a beneficiary to a geographical area requiring a corresponding Labor Condition Application for Nonimmigrant Workers (LCA) be certified to the U.S. Department of Homeland Security with respect to that beneficiary may affect eligibility for H-1B status; it is therefore a material change for purposes of 8 CFR §§ 214.2(h)(2)(i)(E) and (11)(i)(A) (2014).

(2) When there is a material change in the terms and conditions of employment, the petitioner must file an amended or new H−1B petition with the corresponding LCA.
In the not too distant past, employers relied on informal USCIS guidance indicating that so long as a new LCA was obtained prior to placing an H-1B worker at a new worksite, an amended H-1B petition was not required. See Letter from Efren Hernandez III, Dir., Bus. And Trade Branch, USCIS, to Lynn Shotwell, Am. Council on int’l Pers., Inc. (October 23, 2003). The AAO has now explicitly stated in Simeio Solutions, footnote 7, that the Hernandez guidance has been superseded. Even prior to the guidance being formally superseded, employers were filing amended H-1B petitions as consular officers were recommending to the USCIS that the H-1B petition be revoked if a new LCA was obtained without an amendment of the H-1B petition. According to the AAO, “[i]f an employer does not submit the LCA to USCIS in support of a new or amended H-1B petition, the process is incomplete and the LCA is not certified to the Secretary of Homeland Security.” The AAO cites INA 101(a)(15)(H)(i)(b), 8 CFR 214.2(h)(4)(i)B)(1) and 20 CFR 655.700(b) to support its position, but none of these provisions seem to suggest that an LCA obtained after an H-1B petition has already been submitted is not valid if it is “not certified to the Secretary of Homeland Security.”   The DOL certifies the LCA. There is no separate process where the DOL also has to certify the LCA to the Secretary of Homeland Security.

It is not so much the cost that troubles employers with respect to filing an amended H-1B petition. The USCIS has made it extremely onerous for employers to obtain H-1B petitions especially when an H-1B worker will be assigned to third party client sites. This is a legitimate business model that American companies across the board rely on to meet their IT needs, but the USICS requires an onerous demonstration that the petitioning company will still have a right to control the H-1B worker’s employment. Each time the employer files an amendment, the USCIS will again make the employer demonstrate the employer-employee relationship through the issuance of a humongous Request for Evidence (RFE). The employer will thus risk a denial upon seeking an amendment, even though it received an H-1B approval initially on virtually the same facts.

H-1B workers in other industries such as healthcare also get re-assigned to different locations, such as physicians, nurses and physical therapists. They too will be over burdened by the need to file amended H-1B petitions each time they move to a new work location. One may also have to await the approval of the amendment before the H-1B worker can move to the new job location. The portability provision at INA 214(n) seems to apply only when an H-1B worker is accepting “new employment” by a “prospective employer of a new petition.”

Arguably, if an H-1B worker is being moved to a new job location within the same area of intended employment, a new LCA is not required and nor will an H-1B amendment be required. The original LCA should still be posted in the new work location within the same area of intended employment.

20 CFR 655.17 defines “area of intended employment”:
Area of intended employment means the area within normal commuting distance of the place (address) of employment where the H-1B nonimmigrant is or will be employed. There is no rigid measure of distance which constitutes a normal commuting distance or normal commuting area, because there may be widely varying factual circumstances among different areas (e.g., normal commuting distances might be 20, 30, or 50 miles). If the place of employment is within a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA), any place within the MSA or PMSA is deemed to be within normal commuting distance of the place of employment; however, all locations within a Consolidated Metropolitan Statistical Area (CMSA) will not automatically be deemed to be within normal commuting distance. The borders of MSAs and PMSAs are not controlling with regard to the identification of the normal commuting area; a location outside of an MSA or PMSA (or a CMSA) may be within normal commuting distance of a location that is inside (e.g., near the border of) the MSA or PMSA (or CMSA).
So a move to a new job location within New York City would not trigger a new LCA, although the previously obtained LCA would need to be posted at the new work location. This could happen if an entire office moved from one location to another within NYC, or even if the H-1B worker moved from one client site to another within NYC.

The  DOL Wage and Hour Division Fact Sheet # 62J at http://www.dol.gov/whd/regs/compliance/FactSheet62/whdfs62j.htm also confirms this:
If the employer requires the H-1B worker to move from one worksite to another worksite within a geographic area of intended employment, must the employer obtain an LCA for each worksite within that area of intended employment?

No. The employer need not obtain a new LCA for another worksite within the geographic area of intended employment where the employer already has an existing LCA for that area. However, while the prevailing wage on the existing LCA applies to any worksite within the geographic area of intended employment, the notice to workers must be posted at each individual worksite, and the strike/lockout prohibition also applies to each individual worksite.
The AAO decision in Simeio Solutions further over regulates the H-1B visa, which is already subject to the most hyper-technical scrutiny. This in turn will deprive American companies of an efficient business model that has provided reliability to companies in the United States and throughout the industrialized world to obtain top-drawer talent quickly with flexibility and at affordable prices and scale that benefit end consumers and promote diversity of product development. This is what the oft-criticized “job shop” readily provides. By making possible a source of expertise that can be modified and redirected in response to changing demand, uncertain budgets, shifting corporate priorities and unpredictable fluctuations in the business cycle itself, the pejorative reference to them as “job shop” is, in reality, the engine of technological ingenuity on which progress in the global information age largely depends.  Such a business model is also consistent with free trade, which the US promotes vehemently to other countries, but seems to restrict when it applies to service industries located in countries such as India that desire to do business in the US through their skilled personnel

The Hernandez guidance provided flexibility to employers whose H-1B workers frequently moved between client locations, while ensuring the integrity of the H-1B visa program. Employers were still required to obtain new LCAs based on the prevailing wage in the new area of employment, and also notify US workers. However, they were not required to file onerous H-1B amendments each time there was a move, and risk further arbitrary and capricious scrutiny. The AAO has removed this flexibility, and has further regulated the H-1B to such an extent that the LCA must now always firmly and securely tether an H-1B worker through an amended petition just like a dog is to his leash, although the latter may still be occasionally let loose to enjoy more freedom than an H-1B!
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Immigration Howling, Hope, Hype and Hodgepodge: USCIS’s New L-1B Memo

4/8/2015

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by Angelo Paparelli, Past ABIL President
Nation of Immigrators

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Social media flamed with expressions of outrage, relief and tepid optimism ever since President Obama announced on March 23, 2015 the release of long-awaited  policy guidance on a key temporary worker visa category:

Today, I’m pleased to announce a new action I’m also taking to make it easier for global companies who are present here today to launch and invest in the U.S.  My administration is going to reform the L-1B visa category, which allows corporations to temporarily move workers from a foreign office to a U.S. office in a faster, simpler way.  And this could benefit hundreds of thousands of nonimmigrant workers and their employers; that, in turn, will benefit our entire economy and spur additional investment.  (Applause.) [Bolding added.]

For visual learners, here he is on a video for streaming to one’s smartphone or browser (the passage above begins at 9:40):

Released the next day by U.S. Citizenship and Immigration Services (USCIS), the L-1B policy guidance, published in draft form with a request for feedback accepted until May 8, will take effect on August 31.

Outrage burned from the usual quarters, namely, folks on the right who oppose every immigration initiative the President has floated, including NumbersUSA (“American Tech Workers Would Compete With Hundreds of Thousands of New Guest Workers Under Obama’s L-1B Visa Proposal“); Freedom Outpost (“Obama Continues Loosening the Reins on Illegal Aliens in the US“); Byron York, Chief Political Correspondent for the Washington Examiner, a Fox News contributor, and author of The Vast Left Wing Conspiracy (“Did you know Obama just took new executive action on immigration?”); and the Daily Caller (“Obama Announces Unilateral Action To Bring In More Guest Workers“).

Others heaved sighs of relief or cautious optimism — the American Immigration Lawyers Association (“Welcome Changes to Business Visas but Implementation Means Everything” and “the memo’s guidance may ‘be solid ground work for consistency in adjudications,'” quoting Robert Deasy, AILA’s Deputy Director of Programs, as reported in an otherwise oppositionist article by Patrick Thibodeau of Computerworld); the Council for Global Immigration, through Justin Storch, its Manager of Agency Liaison (“We are hopeful that the memo will provide some clarification for both employers and adjudicators so the denial rates will decrease“), and the U.S. Chamber of Commerce, through Randel K. Johnson, its Senior Vice President of Labor, Immigration, and Employee Benefits (“We are particularly pleased to see the guidance proposal reiterate that the burden of proof is the preponderance of the evidence standard and that the agency must give deference to its prior decisions“).

Frankly, after waiting years for new guidance on L-1B eligibility, I’m deeply disappointed.  Here’s my take on this poorly reasoned, and inartfully articulated rehash of long-accepted principles now burdened with a perverse array of contradictory, extra-legal and impractical notions:

  • Cherry-Picked Definitions of “Special Knowledge” and “Advanced Knowledge or Expertise.”

The phrase, “specialized knowledge” is defined virtually identically in the Immigration and Nationality Act and USCIS regulations as “special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or, an advanced level of knowledge or expertise in the organization’s processes and procedures (bolding added).” The L-1B guidance memo purports to adopt dictionary definitions of the words, “special” and “advanced,” but then contorts the adopted definitions to make them more onerous than common parlance would require.

According to the guidance , dictionaries define “special” as  “surpassing the usual,” “distinct among others of a kind,” “distinguished by some unusual quality,” “uncommon,” or “noteworthy.”  The memo then adopts its own definition of “special knowledge” as “knowledge of the petitioning employer’s product, service, research, equipment, techniques, management, or other interests and its applications in international markets that is demonstrably distinct or uncommon in comparison to that generally found in the particular industry or within the petitioning employer (bolding and italics in original, underlining added).”  USCIS does not explain the insertion of the word, “demonstrably.”  The word is gratuitous, given that elsewhere the memo confirms that the standard of proof on the petitioning employer is by the “preponderance of the evidence” or a “more probable than not” standard.  The only reason for sticking “demonstrably” before “distinct or uncommon” is to give adjudicators with a mind to issue a Request for Evidence (RFE) or deny the L-1B petition a chance to continue with that proclivity (I can foresee it now, “Petitioner’s evidence was distinct and uncommon, but not demonstrably so”).

Moreover, the agency does not explain the justification for using the more difficult definition of “advanced” knowledge or expertise — which, as USCIS notes in the memo, dictionaries variously define. One of the linked definitions of “advanced” is “being beyond the elementary or introductory.”  Given that the President expects the new guidance memo to “benefit hundreds of thousands of nonimmigrant workers,” adoption of  the easier standard, “being beyond the elementary or introductory,” would best satisfy this presidential expectation.

Also troublesome, the memo provides an inconsistent, alternative definition of “advanced”: “greatly developed or further along in progress, complexity and understanding.”  “Further along” (which likewise would better comport with the President’s expectations) seems a less difficult standard to prove than “greatly developed.” Moreover, USCIS should treat knowledge that is further along in any one of the three alternative requirements “progress,” “complexity” or “understanding.”  Here too the agency may give unsympathetic or “just say no” adjudicators a way of denying the L-1B petition by emphasizing that the advanced knowledge is not “greatly developed” or “further along in progress, complexity and understanding.” (Bolding added.)

  • A Mandate to Make Irrelevant, Impossible or Unnecessarily Strict Comparisons.
The policy memo ignores the statutory definition of “special” knowledge by instructing adjudicators to compare the beneficiary not only with other workers in the same L-1 qualifying organization (which is proper because the category, after all, is expressly dubbed the “intracompany transferee”) but also a comparison of other workers in the same industry.  The memo  states:
Demonstrating whether knowledge is “special” or “advanced” inherently requires a comparison of the beneficiary’s knowledge against that of others. The petitioner bears the burden of establishing such a favorable comparison. Because “special knowledge” concerns knowledge of the petitioning organization’s products or services and its application in international markets, the petitioner may meet its burden through evidence that the beneficiary has knowledge that is demonstrably distinct or uncommon in comparison to the knowledge of other similarly employed workers in the particular industry or within the petitioning organization. Alternatively, because “advanced knowledge” concerns knowledge of a company’s processes and procedures, the petitioner may meet its burden through evidence that the beneficiary has knowledge or expertise that is greatly developed or more complex in comparison to other workers in the petitioning employer’s operations. (Bolding added.)
The only reference in the statutory definition of “special knowledge” to actions outside the company  is the allusion to knowledge of the petitioning employer’s product, service, research, equipment, techniques, management, or other interests and its applications in international markets.” (Bolding added.)  Nothing in this definition makes it “inherent” that USCIS must compare workers in the particular industry.  Rather, requiring a comparison of workers in the same industry will merely saddle petitioners with the nearly impossible challenge of providing inaccessible or nonexistent evidence.  How can one company in an industry (the petitioner)  gain access to data about the level of knowledge held by its competitors’ employees of the petitioner’s  “product, service, research, equipment, techniques, management, or other interests.”  Any company with valuable trade secrets or intellectual property will take affirmative steps to make sure that no outsider has access to such highly coveted and valuable documents or data.  Companies routinely require all employees to sign non-disclosure/non-use agreements at the outset of employment, and keep their prized IP under wraps.  There is no way in virtually all cases that others in the same industry could possibly access it.   This is a fool’s errand, and USCIS has no business forcing L-1B petitioners to chase the nonexistent or unattainable.
  • One Hand Giveth, While the Other Taketh Away.
The USCIS memo offers the welcome reaffirmation of prior policy that specialized knowledge need not be proprietary, subject to patent or copyright protection, or “narrowly held” within the petitioner’s organization.  It also seems to debunk the myth (bereft of support in statute, regulation or legislation) perpetrated by the State Department that “[If] everyone is specialized, then no one is.”  Readers of the memo are warmed by the following excerpt:

Multiple employees within a company may have obtained the experience, training, or education necessary to possess the same type of specialized knowledge. Some companies may use technologies or techniques that are so advanced or complex that nearly all employees working on the relevant products or services possess specialized knowledge. The mere existence of other employees with similar knowledge should not, in and of itself, be a ground for denial.
That warmth quickly turns into a chill, however, when in the very next paragraph the memo authorizes adjudicators to consider irrelevant factors which flatly contradict and neuter the “not-necessarily-narrowly-held” acknowledgement.  These   factors (bolded below) are extra-legal and clearly beyond the reach of permissible interpretation of statute, regulations, and legislative history:
[O]fficers generally should carefully consider the organization’s need to transfer the beneficiary to the United States. The officer may consider, for example, the need for another individual with similar specialized knowledge in the organization’s U.S. operations and the difficulty in transferring or teaching the relevant knowledge to an individual other than the beneficiary. The officer should also consider . . .whether the salary to be paid to the beneficiary is comparable to similarly situated peers in such U.S. operations. Where many employees within the organization’s U.S. operations share the beneficiary’s knowledge, yet the beneficiary will be paid substantially less than those similarly situated employees, this may indicate that the beneficiary lacks the requisite specialized knowledge. As described infra, however, there may be valid business reasons for the wage discrepancy, but justification for the [wage] variance generally should be evaluated in light of the skills, experience, and other factors pertinent to the entire spectrum of employees in the U.S. operations who possess the requisite specialized knowledge. (Bolding supplied.)
The “need” of the petitioner to transfer a specialized-knowledge worker is a factor that can only be interpreted subjectively.  Which business needs are to be considered worthy and which must be rejected as unnecessary?  In a hotly competitive industry where customer loyalty is hard to achieve and maintain, is a customer’s emphatic preference for speedier fulfillment of a contract a sufficient “need” to transfer another L-1B worker? Is greater profit? Is avoidance of staff burnout? Is the obligation to cut payroll to avoid bankruptcy a sufficient need? The memo doesn’t say.  Instead it leaves the decision to the unguided discretion of adjudicators who would be authorized to tell businesses that their needs are not meritorious.

Likewise, unworkable and unlawful is the requirement in the memo that adjudicators compare the wages of “similarly situated peers” with the proposed wage of the L-1B beneficiary.  How much of a wage variance is required to be “substantial” and how “similar” must other peers be to the L-1B transferee in knowledge, expertise, duties, seniority, performance rating or other factors of subjectively perceived similarity?  Again the guidance doesn’t say — but leaves a door wide open for adjudicators to apply inconsistent, subjective standards to reject L-1B petitions at their individual whim (for we all know that there is virtually no supervisory review of draft denials).

Moreover, unlike the H-1B work visa category and its mandate that employers pay the “required wage” (the local prevailing or actual wage at the job site, whichever is higher), there is no legal basis under the L-1 category for USCIS to require submission of evidence of wages paid (indeed, the memo acknowledges that high salaries are not required) or to evaluate their sufficiency.  These  subjectively determined dictates considered in relation to other workers — the business’s need for the L-1B worker, and the adequacy of wages paid —  will force petitioners down rabbit holes of burden, delay, cost and distraction.  USCIS should delete these factors.
  • Confounded Conflation.
The USCIS memo provides a laundry list of evidence that may be submitted to establish specialized knowledge.  The list is illustrative but not exhaustive.  Unfortunately, it does not distinguish which items on the list would constitute proof of the alternative forms of specialized knowledge, i.e., “special knowledge” or an “advanced level of knowledge or expertise”).  By conflating the two alternative definitions, the agency blurs the adjudicator’s field of vision.  For example, conflation occurs in the following excerpt, the memo’s ill-advised definition of “special knowledge,” which (as noted above) requires a comparison of the knowledge held by other workers in the same company AND in the particular industry, whereas “advanced knowledge or expertise” quite properly requires no such comparison to others in the same industry:

Evidence that the alien is qualified to contribute to the U.S. operation’s knowledge of foreign operating conditions as a result of knowledge not generally found in the industry or the petitioning organization’s U.S. operations. (Bolding added.)
This incautious wording raises the specter that adjudicators when considering the “advanced,” alternative definition of specialized knowledge will require a comparison of workers in the same industry, even though such a demand cannot be not supported by the definition of that term in the memo.
  • May Morphs into Must.
One of the most disturbing aspects of memo is the USCIS’s list of factors to prove specialized knowledge and the evidence the memo suggests might be probative. For example, as my colleague, Austin Fragomen, observed in a recent webinar hosted by the Council for Global Immigration, “how do you show that the beneficiary’s work is particularly relevant to the company’s competitiveness in the marketplace? . . . [Why do we need] a microeconomic analysis of the impact of that one employee”?  He’s right:  The only part of the statutory and regulatory definition of specialized knowledge that refers to external factors is the sub-definition for “special” knowledge, but that only asks essentially whether the beneficiary has special knowledge of the petitioner’s “product, service offering or ‘secret sauce’ [my phrasing]” and “its application in international markets.”   Even more troubling is the daunting list of types of allegedly probative evidence that a petitioner may be asked to submit.  Imagine the forest of trees converted to paper that will be consumed in assembling initially to accompany the L-1B petition or responding to an adjudicator’s RFE that may (but likely now must) include:

  • Documentation of training, work experience, or education establishing the number of years the individual has been utilizing or developing the claimed specialized knowledge as an employee of the organization or in the industry;
  • Evidence of the impact, if any, the transfer of the individual would have on the organization’s U.S. operations;
  • Evidence that the alien is qualified to contribute to the U.S. operation’s knowledge of foreign operating conditions as a result of knowledge not generally found in the industry or the petitioning organization’s U.S. operations;
  • Contracts, statements of work, or other documentation that shows that the beneficiary possesses knowledge that is particularly beneficial to the organization’s competitiveness in the marketplace;
  • Evidence, such as correspondence or reports, establishing that the beneficiary has been employed abroad in a capacity involving assignments that have significantly enhanced the organization’s productivity, competitiveness, image, or financial position;
  • Personnel or in-house training records that establish that the beneficiary’s claimed specialized knowledge normally can be gained only through prior experience or training with that employer;
  • Curricula and training manuals for internal training courses, financial documents, or other evidence that may demonstrate that the beneficiary possesses knowledge of a product or process that cannot be transferred or taught to another individual without significant economic cost or inconvenience;
  • Evidence of patents, trademarks, licenses, or contracts awarded to the organization based on the beneficiary’s work, or similar evidence that the beneficiary has knowledge of a process or a product that either is sophisticated or complex, or of a highly technical nature, although not necessarily proprietary or unique to the petitioning organization; and
  • Payroll documents, federal or state wage statements, resumes, organizational charts, or similar evidence documenting the positions held and the wages paid to the beneficiary and parallel employees in the organization.
How will this list — which seems likely to require concurrent violations of the spirit if not the letter of the Environmental Protection Act and the Paperwork Reduction Act — fulfill the President’s March 23rd description of the L-1B category as allowing “corporations to temporarily move workers from a foreign office to a U.S. office in a faster, simpler way (bolding supplied)”?  Simply put, the memo’s laundry list makes an L-1B petition neither fast nor simple. Instead, it gives adjudicators a license to prolong the dreadful status quo.
  • Show Us, Don’t Just Tell Us. 
The existing policy guidance on specialized knowledge, the 1994 Puleo Memo, which the new L-1B memo expressly revokes, offered helpful examples of  quotidian fact patterns:
A specific example of a situation involving specialized knowledge would be if a foreign firm in the business of purchasing used automobiles for the purpose of repairing and reselling them, some for export to the United States, petitions for an alien to come to the United States as a staff officer. The beneficiary has knowledge of the firm’s operational procedures, e.g., knowledge of the expenses the firm would entail in order to repair the car as well in selling the car. The beneficiary has knowledge of the firm’s cost structure for various activities which serves as a basis for determining the proper price to be paid for the vehicle. The beneficiary also has knowledge of various United States customs laws and EPA regulations in order to determine what modifications must be made to import the vehicles into the United States. In this case it can be concluded that the alien has advanced knowledge of the firm’s procedures because a substantial amount of time would be required for the foreign or United States employer to teach another employee the firm’s procedures. Although it can be argued that a good portion of what the beneficiary knows is general knowledge, i.e., customs and EPA regulations, the combination of the procedures which the beneficiary has knowledge of renders him essential to the firm. Specifically, the firm would have a difficult time training another employee to assume these duties because of the interrelationship of the beneficiary’s general knowledge with the firm’s method of doing business. The beneficiary therefore possess[es] specialized knowledge. . . .

A specific example of [specialized knowledge] is if a firm involved in processing certain shellfish desires to petition for a beneficiary to work in the United States in order to catch and process the shellfish. The beneficiary learned the process from his employment from an unrelated firm but has been utilizing that knowledge for the foreign firm for the past year. However, the knowledge required to process the shellfish is unknown in the United States. In this instance, the beneficiary possesses specialized knowledge since his knowledge of processing the shellfish must be considered advanced.

The common theme which runs through these examples is that the knowledge which the beneficiary possesses, whether it is knowledge of a process or a product, would be difficult to impart to another individual without significant economic inconvenience to the United States or foreign firm. The knowledge-is not generally known and is of some complexity.
Regrettably, the L-1B draft memo is prolix in its verbiage but devoid of any helpful  examples by which to guide adjudicators and stakeholders in understanding what constitutes specialized knowledge in the real world.
  • Where Are Your Compatriots?  
The new L-1B memo creates a measure of predictability and reliability when petitioners seek to extend the status of a foreign worker whom USCIS previously found to satisfy the requirements for specialized knowledge.  In the following prescribed situation the memo declares that USCIS officers should not readjudicate the previously established underlying facts unless gross error in the prior determination or material changes  are identified:

In matters relating to an extension of L-1B status involving the same parties (i.e., the same petitioning organization and beneficiary employee) and the same underlying facts, USCIS officers should give deference to the prior determination by USCIS approving L-1B classification [except in cases involving work at third-party locations].
The memo offers no indication that USCIS has consulted and achieved buy-in on the memo’s pronouncements from  the two other federal agencies which must decide whether specialized knowledge has been proven in a particular case, whether in a previously approved petition or a new request, namely, the U.S. Department of State (when deciding blanket L-1B visa applications) and U.S. Customs & Border Protection (when considering applications for admission to the U.S. in L-1B status).  Presumably, the three deciders of L-1B eligibility ought to have engaged in interagency discussions of the subject before the memo’s release.  In any case, when the memo is released in final form, USCIS should expressly note that all three units are in agreement with the ultimate product.
  • No Disparate Treatment or Impact Tolerated. 
Another glaring omission is a much-needed admonition by USCIS that all L-1B petitions must be decided impartially, i.e., without regard to the national origin or citizenship status of the beneficiary or the country of corporate headquarters or incorporation.  Sadly, a recent study published by the National Foundation For American Policy reveals that the denial rate for Indian citizens topped out at 56% in 2014 although the denial rate for beneficiaries hailing from all other countries was a mere 13%. Indeed, given the gravity and proliferation of the problem of anti-Indian bias, an admonition is not enough.  USCIS should make clear that adjudicators’ L-1B decisions (grants, denials, RFEs and revocations) will be individually tabulated, not only by the country of the beneficiary’s nationality but also by the degree to which their adverse decisions reflect non-compliance with whatever USCIS headquarters’ interpretation of L-1B eligibility criteria, standard of proof or degree of boilerplate, kitchen-sink demands for additional evidence. Reprobate behavior must then be the subject of discipline, including termination of employment for the most recalcitrant and unrepenting.

On that score, notwithstanding the President’s lofty expectations concerning the “hundreds of thousands” of L-1B visa holders who will achieve temporary work visa status “in a faster, simpler way,” the leadership of DHS and USCIS must make sure these laudable expectations are not sabotaged by “get to no” adjudicators who “grouse” (my word) or “whine” (Sen. Harry Reid’s phrasing) to Sen. Chuck Grassley, as they did in their unjust effort to smear the good name and reputation of former Director of USCIS, Alejandro Mayorkas (now, Deputy Secretary of Homeland Security), as depicted in the recent hatchet job of a DHS Office of Inspector General report on a small number of EB-5 case adjudications.  Without constant oversight, these USCIS first-line adjudicators will remain as obstreperous as ever, much like the insubordinate U.S. Immigration and Customs agents who sued the Obama Administration over its deferred-action and prosecutorial-discretion policies but who’ve justly received their comeuppance from the Fifth Circuit Federal Court of Appeals.
* * *
So that’s my take on the USCIS’s draft L-1B policy memo.  Be sure to share your view, not just in the comments section below. Submit your timely your feedback to USCIS at Public.Engagement@uscis.dhs.gov.
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New L-1B Visa Guidance: Will There be Fewer Denials or More of the Same?

4/5/2015

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by Cyrus D. Mehta, ABIL Lawyer and Gary Endelman
The Insightful Immigration Blog


If there is one visa uniquely suited to advance America’s competitive position in the global marketplace, it is the L-1B intra-company transferee visa for specialized knowledge employees.  In an increasingly specialized economy where expertise should trump nationality, the notion of “specialized knowledge” as it affects L-1B adjudications has become increasingly contentious. For many years, the L-1B visa, created in 1970 as Congress warmed to the realization that American business had become international, sailed along in tranquil waters unburdened by controversy. In recent years, much as its companion H-1B visa has become embroiled in bitter dispute, immigration restrictionists have tended to focus on the L-1B visa as a threat to domestic employment, thus ensuring that the climate of adjudications would become rigid and restrictive. In response to the resulting criticism from business and immigrant advocates, the Administration promised a new and improved philosophy to guide L-1B adjudicators. U.S. Citizenship and Immigration Services (USCIS) issued interim policy guidance on L-1B "specialized knowledge" adjudications that supersedes and rescinds certain prior L-1B memoranda. USCIS said it is issuing this memorandum now for public review and feedback. USCIS will finalize the guidance effective August 31, 2015. It provides guidance on how L-1B petitioners may demonstrate that an employee has specialized knowledge. In the case of off-site employment, it also clarifies how to comply with the requirements of the L-1 Visa (Intracompany Transferee) Reform Act of 2004. The question is whether this new guidance will bring clarity and common sense into the morass of L-1B jurisprudence or simply result in more of the same excessive inconsistency that has so plagued it in the recent past.

When President Obama announced his executive actions on November 20, 2014, there was acknowledgment in the memo entitled “Policies Supporting U.S. High Skilled Business and Workers” that the “L-1B visa program for ‘intracompany transferees’ is critically important to multinational companies.”  It was recognized as “an essential tool for managing a global workforce as companies choose where to establish new or expanded operations, research centers, or product lines, all of which stand to benefit the U.S. economy.” The memo, however, acknowledged that there was “vague guidance and inconsistent interpretation of the term “specialized knowledge” in adjudicating L-1B visa petitions created uncertainty for these companies.”  As the applicable L-1B regulation defining “specialized knowledge”, 8 CFR 214.2(l)(1)(ii)(D),  dates back to implementation of the Immigration Act of 1990, and merely parrots the statute,  the lack of updated regulatory guidance in the face of constantly changing business practices has created a vacuum that the USCIS has attempted to fill with a series of memoranda promulgated without the notice and comment opportunity afforded by the Administrative Procedures Act. The law has not changed, Congress remains silent, but the legal standards applied by the USCIS evolve according to its own initiative.

Contrary to what critics may say, the L-1B visa guidance is not some new allegedly unconstitutional program that will allow hundreds of thousands to immigrate to the United States via the backdoor. The absence of an artificial numerical cap seized upon by L-1B visa critics ignores the basic yet universal reality, noted below, that all L-1B beneficiaries are existing international employees of the same corporate group or organization and it is the perceived business needs of these companies, completely divorced from immigration considerations, that explains the interest in L-1B sponsorship. When the commercial realities change, the desire to retain or attract L-1B employees also changes. What critics of the L-1B visa do not seem to realize or appreciate is that L-1 petitions are a business decision. The L-1B visa guidance only seeks to clarify the statutory definition of “specialized knowledge:
[A]n alien is considered to be serving in a capacity involving specialized knowledge with respect to a company if the alien has a special knowledge of the company product and its application in international markets or has an advanced level of knowledge of processes and procedures of the company
See Immigration and Nationality Act (INA) 214(c)(2)(B).

The L-1B visa guidance starts off by reminding USCIS adjudicators the very basics, which is that a petitioner seeking L-1B classification must establish that it meets the “preponderance of the evidence” standard. This is a lower standard than the “clear and convincing evidence” or the “beyond a reasonable doubt” standard. Under the “preponderance of the evidence” standard, even if an examiner has some doubt about the claim, the petitioner would have satisfied this standard if after presenting all the evidence it leads to the conclusion that the claim is “more likely than not” or “probably” true. Ever too often examiners have had the tendency to apply the “beyond a reasonable doubt” standard, which is the standard that the prosecution has to meet in a criminal case to prove the guilt of a defendant. There is no place for such an onerous standard in an administrative law setting relating to L-1B visa petition adjudications. USCIS adjudicators do not have to be “convinced” of the specialized knowledge claim; it should be enough that a reasonable basis for this claim exists. Preponderance does not require nor should it be conditioned upon a showing of absolute truth or complete faith.

Among other things, the L-1B visa guidance notes that a beneficiary must possess either special or advanced knowledge, or both. Determining whether a beneficiary has "special knowledge" requires review of the beneficiary's knowledge of how the company manufactures, produces, or develops its products, services, research, equipment, techniques, management, or other interests. Determinations concerning "advanced knowledge," on the other hand, require review of the beneficiary's knowledge of the specific employing company's processes and procedures, the L-1B visa guidance states. While the beneficiary may have general knowledge of processes and procedures common to the industry, USCIS's focus is primarily on the processes and procedures used specifically by the beneficiary's employer. With respect to either special or advanced knowledge, the petitioner ordinarily must demonstrate that the beneficiary's knowledge is not commonly held throughout the particular industry or within the petitioning employer. As discussed in detail in the L-1B visa guidance, however, such knowledge need not be proprietary in nature or narrowly held within the employer's organization.

The L-1B visa guidance notes the following non-exhaustive list of factors USCIS may consider when determining whether a beneficiary's knowledge is specialized:
  • The beneficiary is qualified to contribute to the U.S. operation's knowledge of foreign operating conditions as a result of knowledge not generally found in the industry or the petitioning organization's U.S. operations.
  • The beneficiary possesses knowledge that is particularly beneficial to the employer's competitiveness in the marketplace.
  • The beneficiary has been employed abroad in a capacity involving assignments that have significantly enhanced the employer's productivity, competitiveness, image, or financial position.
  • The beneficiary's claimed specialized knowledge normally can be gained only through prior experience with that employer.
  • The beneficiary possesses knowledge of a product or process that cannot be easily transferred or taught to another individual without significant economic cost or inconvenience (because, for example, such knowledge may require substantial training, work experience, or education).
  • The beneficiary has knowledge of a process or a product that either is sophisticated or complex, or of a highly technical nature, although not necessarily unique to the firm.

The L-1B visa guidance notes that specialized knowledge cannot be easily imparted to other individuals.


The L-1B visa guidance sets broad and flexible parameters to establish specialized knowledge, and comes as a breath of fresh air a few days after the release of a study issued by the National Foundation For American Policy, which confirmed that Indian nationals face the highest refusal rates in the L-1B visa program. The L-1B visa facilitates the transfer of a specialized knowledge employee from an overseas entity to a related US entity. This visa should allow US companies to quickly transfer employees in order to remain globally competitive. Instead, the overall denial rate, according to NFAP report, was 35%. Prior to 2008, the overall denial rate was under 10%. Alarmingly, the denial rate for employees coming from India was 56% in 2014 while the denial rate for employees transferred from all other countries was only 13%. As expressed in Cyrus Mehta’s blog,  The Real Reason For L-1B Visa Denial Rates Being Higher For Indian Nationals, the NFAP report is a damming indictment of USCIS’s discriminatory adjudicatory practices towards Indian national applicants. How does it advance US national interests to frustrate the controlled migration of human capital across national boundaries from an increasingly important trading partner precisely at a time when we seek to create more enlarged and reliable channels of transmission for all other forms of capital? Presumably it does not, yet it seems equally obvious that this is not the USCIS’ concern since this new guidance, like its predecessors, focuses far more on what should be allowed than what can be made possible. External opportunities are subordinated to domestic anxieties. Immigration in the L1B context is or should be aligned with our overall economic strategies as they affect our key bilateral relationships. If trade and investment between the US and India are to benefit both countries, as surely they are intended to and must do, then US immigration policies must treat Indian nationals on an equal footing and not employ a double standard animated by a climate of suspicion and a predisposition to deny.

While the L-1B visa guidance endeavors to clarify how a petitioner can establish specialized knowledge on behalf of an employee in various ways, it is hoped that it is implemented fairly. It is certainly salutary that the guidance insists that eligibility for other classifications like the H-1B visa should not preclude one from classifying for the L-1B visa. Critics have often tried to unjustifiably portray the L-1B visa as an end run around the H-1B cap, and thus falsely portray an employer’s use of the L-1B visa after the H-1B cap has been met as an example of visa abuse. The L-1B visa guidance recognizes that “[o]fficers should only consider the requirements for the classification sought in the petition, without considering eligibility requirements for other classifications.” Id. at 11.  The USCIS should look for ways to approve L-1B petitions that merit approval, not for ways to deny those whose claims are not accepted.

On the other hand, despite its positive features, there is enough ambiguity in the guidance that would allow an examiner who is in the habit of saying “No” to an L-1B request to continue to continue to say “No.” For example, even the earlier 1994 Puleo memo listed as a factor that the beneficiary is qualified to contribute to the U.S, operation’s knowledge of foreign operating conditions as a result of knowledge not found in the industry. However, the most recent memo goes on to add that such knowledge must also not be found in “the petitioning organization’s U.S operations.” Id. at 8. This may be an impossible standard to meet if there are other employees who also possess similar specialized knowledge. Indeed, in a business climate where almost all projects rely upon a pooling of talent, a cadre of expertise must be built up for meaningful work on a substantial scale to be accomplished with great planning and significant expense. While the guidance appropriately cautions that the specialized knowledge need not be narrowly held within the petitioning organization, it provides the following ammunition to an examiner who is already predisposed to denying the L-1B visa petition:
However, in cases where there are already many employees in the U.S. organization with the same specialized knowledge as that of the beneficiary, officers generally should carefully consider the organization’s need to transfer the beneficiary to the United States.
Id. at 10.

One wonders where this standard comes from. If this is what Congress intended, USCIS’ references to it in the legislative history of the L-1B seem conspicuously absent. If, as seems to be the case, Congress did not mandate or even suggest the adoption or such criteria, or even endorse its relevance, whether directly or by implication, where and why does the USCIS find justification for its inclusion? Indeed, this is all too typical of the USCIS approach to the L-1B, and other work visas as well, whereby a standard is announced and becomes justified largely because of its repeated invocation. This indeed is the heart of the matter, namely that L-1 adjudicatory standards change not when external realities or Congressional dictat require such a change but when the USCIS for its own reasons shielded from public information and discussion decides to make a change. As the L-1B becomes more distant from the economic facts that gave rise to it in the first place, the value of the visa diminishes just as the degree of difficulty in gaining an approval rises. When a work visa such as the L-1B ceases to function the way the economy functions, the underlying logic behind the visa becomes increasingly cloudy and subject to challenge.

Other language that has been introduced in this memo, which was not in the Puleo memo, is the demonstration that that the knowledge cannot be easily transferred to or taught to an individual. The Puleo memo stopped there, but the new guidance adds that such transfer of knowledge cannot be done “without significant economic cost or inconvenience (because, for exampl.e, such knowledge may require substantial training, work experience, or education).”

While on first brush, showing economic inconvenience in the transfer of knowledge may seem more onerous, the logic behind may be derived from the recent decision from the DC Circuit Court of Appeals reversing an L-1B visa denial  of a Brazilian gaucho chef.  Fogo De Chao (Holdings) Inc. v. DHS, 769 F.3d 1127, 1142 (D.C. Cir. 2014). Noteworthy in Fogo  was  the government’s  dismissal of  the relevance of the economic hardship the restaurant  would suffer if it had to train another employee to perform the gaucho chef’s proposed duties. The Fogo Court disagreed, emphasizing that economic inconvenience is sometimes the most concrete evidence that can be used to determine whether knowledge is specialized. According to the Fogo Court: “Consideration of evidence of this type provides some predictability to a comparative analysis otherwise relatively devoid of settled guideposts….That specialized knowledge may ultimately be a ‘relative and empty idea which cannot have plain meaning’...is not a feature to be celebrated and certainly not a license for the government to apply a sliding scale of specialness that varies from petition to petition without explanation. Suddenly departing from policy guidance and rejecting outright the relevance of Fogo de Chao’s evidence of economic inconvenience threatens just that.” Id. at 28 (citations omitted).

It is further noted that some language on page 14 of the guidance could still snare L-1Bs working at third-party clients, and this will continue to plague Indian-heritage IT companies. While offsite employment is not prohibited, INA 214(c)(2)(F)(i) requires the petitioner to ultimately exercise control over the beneficiary’s employment and this can be best demonstrated if L-1B workers at third-party sites must be implementing the specialized knowledge of the petitioner's unique products or services. But the guidance adds that specialized knowledge derived from customized products or services rendered to the client may complement but cannot substitute for specialized knowledge of the petitioner's products, services, or methodologies. Sometimes the specialized knowledge is intertwined. For example, the petitioner customized the product or application for the client, and the L-1B is being sent to the United States to upgrade it. Even though the product or application was rendered to the client, the beneficiary possesses specialized knowledge of the product that was customized for the client. This fact pattern could potentially cause problems. If the petitioner has customized a product for a third party client, the employee should still be considered to possess specialized knowledge of the petitioning company’s product, especially if the business model of the petitioning company is to provide customized products or solutions for third party clients.

We do hope that the L-1B visa guidance is implemented in a spirit that is consistent in the way it was intended, which is to provide more clarity on the definition of “specialized knowledge” pursuant to INA 214(c)(2)(B).  Indeed, the guidance can be improved to reflect the view of the DC Circuit Court in Fogo that scolded the USCIS for applying a rather wooden interpretation of specialized knowledge. The Fogo Court held that there was nothing in INA section 214(c)(2)(B) which precludes culturally acquired knowledge as a form of specialized knowledge for a Brazilian goucho chef. Although Fogo applied to a chef of a particular ethnic cuisine, it can arguably be applied to other occupations involving specialized knowledge. Skills gained through certain cultural practices may be relevant in determining specialized knowledge in other settings, such as Japanese management techniques. Similarly, acquiring deep knowledge in a particular software application through another employer can equip the L-1B visa applicant with specialized knowledge that can stand out in comparison to others.

The L-1B visa should indeed be encouraged to make US corporations more globally competitive in the face of Congress not taking any action to increase the H-1B cap. Even if there is no requirement for the payment of a prevailing wage to an L-1B visa holder as distinct to the H-1B visa, that does not justify the unfounded criticisms against the L-1B visa as it is a completely different creature. Only employees who have been working for a related overseas entity of the US company for 1 or more years, and who possess specialized knowledge, can be admitted on the L-1B visa to enhance the employer’s competitiveness. A visa system that imposes artificial limitations on H-1B visa numbers is already flying on one engine and is in distress. If we abruptly shut down the L-1B visa too, the plane will crash. This guidance ought to come as a life saver for US companies in order to remain globally competitive. Let’s keep our fingers crossed!
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