Canal A Media Holding, LLC v. U.S. Citizenship and Immigration Services

369 F. Supp. 3d 1312
CourtDistrict Court, S.D. Florida
DecidedMarch 27, 2019
DocketCASE NO. 18-24027-CIV-ALTONAGA/Goodman
StatusPublished
Cited by1 cases

This text of 369 F. Supp. 3d 1312 (Canal A Media Holding, LLC v. U.S. Citizenship and Immigration Services) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Canal A Media Holding, LLC v. U.S. Citizenship and Immigration Services, 369 F. Supp. 3d 1312 (S.D. Fla. 2019).

Opinion

CECILIA M. ALTONAGA, UNITED STATES DISTRICT JUDGE

THIS CAUSE came before the Court on Defendants, United States Citizenship and Immigration Services ("USCIS"), the Department of Homeland Security ("DHS"), USCIS Director L. Francis Cissna, DHS Secretary Kirstjen Nielsen, and USCIS California Service Center Director Kathy A. Baran's Motion to Dismiss [ECF No. 37]. The Court has carefully reviewed Plaintiffs, Canal A. Media Holding, LLC ("Canal Media") and Erick Archila's ("Archila['s]") First Amended Complaint [ECF No. 36] ("FAC" or "Amended Complaint"); Plaintiffs' Response in Opposition [ECF No. 38] ("Pls.' Resp."); Defendants' Reply Memorandum [ECF No. 47] ("Defs.' Reply"); Plaintiffs' Surreply in Opposition [ECF No. 54] ("Pls.' Surreply"); Defendants' Sur-Reply to Plaintiffs' Surreply [ECF No. 56] ("Defs.' Surreply"); exhibits [ECF Nos. 37-1, 37-2, 47-1, 55-1]; and applicable *1315law. For the following reasons, the Motion is granted.

I. BACKGROUND

A. The Amended Complaint

This case concerns the USCIS's decision to deny an L-1A petition filed by Canal Media, a U.S. subsidiary of Guatemalan news and entertainment media company Canal Antigua, S.A. ("Canal Antigua"), at the behest of the parent company, which sought to transfer the parent company's president, Mr. Archila, to Canal Media. (See FAC ¶ 2). Canal Media sought to employ Mr. Archila as its president to oversee the company's expansion into the U.S. broadcasting and media market, but the USCIS denied the L-1A petition because Canal Media was not Canal Antigua's subsidiary. (See id. ). The USCIS's conclusion is an abrupt shift in the agency's adjudicatory criteria for L-1A petitions. (See id. ¶ 3).

Under 8 C.F.R. section 214.2(l)(ii)(K), defining "subsidiary," a U.S. company is a qualifying subsidiary if it is owned and controlled by a foreign company. (See id. ). Plaintiffs allege Canal Media satisfies the ownership and control prong of the "subsidiary" test. (See id. ¶ 4). Nevertheless, the USCIS concluded Canal Media is not Canal Antigua's subsidiary because the latter never made a capital contribution in exchange for its ownership interest. (See id. ¶ 5). Plaintiffs assert no statute, regulation, or precedent supports the USCIS's "capital contribution" requirement. (See id. ¶ 6). This new "capital contribution" rule contravenes the agency's published rule, constitutes an impermissible retroactive application of a new adjudicatory policy, and violates Canal Media's due process of law. (See id. ¶ 8). Plaintiffs state the "Court should reverse USCIS's unlawful actions." (Id. ).

The Amended Complaint goes on to detail the statutory and regulatory framework governing L-1A non-immigrant petitions, including working for a foreign company with a qualifying relationship to a U.S. employer for at least one year in the preceding three years, and the intention the person will work in an executive or managerial capacity. (See id. ¶ 9 (citations omitted); see also ¶¶ 10-12). Plaintiffs describe the corporate relationship between Canal Antigua and Canal Media. (See id. ¶¶ 13-15). On November 25, 2016, Canal Media filed an I-129 petition to secure L-1A status for Mr. Archila, Canal Antigua's former president. (See id. ¶ 16). At the time, Mr. Archila was in the United States on a B-2 tourist status. (See id. ¶ 18).

Plaintiffs devote several paragraphs of the Amended Complaint describing how the visa adjudication policy has made an abrupt shift following the 2016 presidential election. (See id. ¶¶ 19-26). Plaintiffs return to their charge the USCIS denied the L-1A petition based on a novel "capital contribution" requirement, notwithstanding Canal Antigua has complete ownership and control over Canal Media. (See id. ¶¶ 27-33). Plaintiffs attach to the Amended Complaint the USCIS's July 24, 2017 denial of the I-129 petition. (See id. ¶ 30 (citing Ex. A) ). On "information and belief," Plaintiffs allege:

USCIS's insistence that Canal A Media present proof that it received a "capital contribution" from its Guatemalan parent corporation to establish that it is a "subsidiary" results from an internal policy directive within USCIS, adopted in furtherance of the President's "Buy American and Hire American" Executive Order and the Trump Administration's broader agenda to curtail lawful immigration to the United States.

(Id. ¶ 33).

Plaintiffs state the Court has federal question subject matter jurisdiction under *131628 U.S.C. section 1331 because the case arises under the laws of the United States; the Immigration and Nationality Act ("INA"), related agency regulations, and the Administrative Procedure Act ("APA"), 5 U.S.C. section 701. (See id. ¶ 41).1 Plaintiffs allege the USCIS issued its decision denying Canal Media's L-1A petition on July 24, 2017, and Plaintiffs have exhausted administrative remedies. (See id. ¶ 42). They assert the APA allows judicial review of agency decisions when, as here, no law or regulation requires interagency review before seeking judicial review. (See id. ).

Plaintiffs state four claims for relief. The first claim is titled, "Arbitrary and Capricious Agency Action in Violation of the APA and the INA," in which Plaintiffs allege the USCIS's denial of the petition should be set aside under 5 U.S.C. section 706(s)(A). (Id. 13-14). The second claim is titled, "Failure to Follow Notice and Comment Procedures," alleging the USCIS's retroactive application of its new "capital contribution" rule violates the APA's requirement agencies post notice of proposed rulemaking in the Federal Register and allow public comment. (Id. 14-15). The third claim is titled, "Impermissible Retroactive Application of Agency's New Rule," raising allegations similar to the second claim. (Id. 15-16).

The fourth claim is titled, "Violation of Canal A Media's Right to Due Process" (id. 16), in which Plaintiffs allege:

USCIS Director Francis Cissna and members of the Trump Administration ... caused USCIS to adopt adjudicatory policies specifically implemented to increase the denial rate of L-1A petitions without regard to actual eligibility under the statute and regulations. These policy changes were responsible for USCIS's denial of Canal A Media's L-1A petition ....

(Id. ¶ 60 (alteration added) ). The due process claim also relies on allegations about the retroactive application of a new requirement for establishing a subsidiary relationship, which according to Plaintiffs, the USCIS has used as a "cover for the denial of otherwise approvable petitions ...." (Id. ¶ 61 (alteration added) ).

Plaintiffs ask the Court to declare the USCIS's denial of the L-1A petition as unlawful; enjoin the USCIS from deciding cases based on Buy American and Hire American or other pronouncements of the White House; enjoin U.S.

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Bluebook (online)
369 F. Supp. 3d 1312, Counsel Stack Legal Research, https://law.counselstack.com/opinion/canal-a-media-holding-llc-v-us-citizenship-and-immigration-services-flsd-2019.