GB International, Inc v. Crandall

• Court: District Court, W.D. Washington
• Decided: August 22, 2019
• Docket: 2:18-cv-00227
• Status: Unknown

Opinion

HONORABLE RICHARD A. JONES 1

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 GB INTERNATIONAL, et al., 9

Plaintiffs, 10 Case No. 2:18-cv-227-RAJ v. 11 ORDER GRANTING DEFENDANTS’ MOTION FOR KRISTINE R. CRANDALL, et al., 12 SUMMARY JUDGMENT AND DENYING PLAINTIFFS’ Defendants. 13 MOTION FOR SUMMARY JUDGMENT 14

15 I. INTRODUCTION 16 This matter comes before the Court on the parties’ cross-motions for summary 17 judgment. Dkt. ##18, 22. For the reasons below, the Court GRANTS Defendants’ motion 18 and DENIES Plaintiffs’ motion. 19 II. BACKGROUND 20 In 2007, Plaintiff Dong Choel Park established GB International, Inc. (GBI), a 21 Washington company that procures products and services relating to offshore drilling, 22 shipbuilding, military defense, and building infrastructure for companies based in South 23 Korea. Dkt. # 13 at 78; Dkt. # 14 at 85.1 Several years later, in December 2011, Park 24 established GBI Korea, an affiliate company based in Busan, South Korea. Dkt. # 13 at 25

26 1 There are three certified administrative records (CAR) in this action, one each for Plaintiffs Dong C. Park, Hyojin Kim, and minor Y-P-. Dkt. # 13 (CAR 1, Part 1) (Park); 27 Dkt. # 14 (CAR 1, Part 2); Dkt. # 15 (CAR 2) (Kim); Dkt. # 16 (CAR 3) (Y-P-). 1 78. He is the President and CEO of both companies. Id. at 82. According to Park, GBI 2 grew substantially between 2013 and 2015 primarily because he was able to cultivate 3 business relationships with several South Korean companies and procure specialized 4 equipment for GBI’s customers. Dkt. # 18 at 3. During these two years, GBI grew from a 5 company of four employees to seven employees. Dkt. # 14 at 129-31. 6 From April 2013 to April 2014, Park performed his job duties primarily from 7 abroad. Dkt. # 13 at 466-67. In addition to establishing relationships with South Korean 8 companies, Park claims he attended industry events, negotiated contracts for the purchase 9 and sale of new products, and reviewed reports from subordinate employees on various 10 topics, including regulatory conditions and currency fluctuations. Id. at 466-71. Park also 11 claims that he conducted meetings with subordinate employees to formulate corporate 12 goals and policies. Id. Although Park had a manager in the United States, he desired to 13 spend more face-to-face time with his U.S.-based suppliers and employees. Id. at 83. In 14 April 2014, Park entered the United States on an E-1 visa along with his wife and child 15 who came as derivative family members. Dkt. # 18 at 6. They are also plaintiffs in this 16 action. 17 On December 23, 2015, GBI filed a Petition for Alien Worker (Form I-140) for 18 Park’s benefit, classifying him as a “multinational executive or manager” of GBI. Id. at 19 78. Park and each of his derivative family members concurrently filed an Application for 20 Adjustment of Status (Form I-485) based on GBI’s I-140 petition. Dkt. # 13 at 2; Dkt. # 21 15 at 2; Dkt. # 16 at 2. While the I-140 petition and the I-485 applications were pending, 22 Park’s E-1 visa expired on July 28, 2017. Dkt. # 22-1. On December 8, 2017, U.S. 23 Citizenship and Immigration Services (USCIS) denied GBI’s I-140 petition, finding GBI 24 failed to establish that Park was employed in an “executive capacity” from April 2013 to 25 April 2014. Dkt. # 13 at 78. On January 9, 2018, GBI and Park filed a motion to reopen 26 and reconsider the I-140 petition, which was granted. Dkt. # 13 at 78; Dkt. # 14 at 102. 27 On or about August 7, 2018, USCIS again denied GBI’s I-140 petition. Id. Having again 1 denied the underlying I-140 petition, USCIS subsequently denied the Parks’ I-485 2 applications. Dkt. # 13 at 2; Dkt. # 15 at 2; Dkt. # 16 at 2. 3 On February 2018, Plaintiffs filed this Complaint against Defendants United States 4 of America, Kristine R. Crandall, L. Francis Cissna, and Kirstjen Nielsen alleging USCIS’s 5 denial of the I-140 petition violated the Administrative Procedures Act (APA). Dkt. # 1. 6 After the administrative records were certified, Plaintiffs moved for summary judgment 7 and a preliminary injunction on November 27, 2018. Dkt. ## 18, 19. On January 7, 2019, 8 Defendants filed a response and cross-motion for summary judgment. Dkt. # 22. On 9 January 29, 2019, the Court denied Plaintiffs’ motion for a preliminary injunction. Dkt. # 10 24. The parties’ motions for summary judgment are now before the Court.2 11 III. LEGAL STANDARD 12 The Administrative Procedures Act (APA) permits judicial review of a “final 13 agency action for which there is no other adequate remedy in court.” 5. U.S.C. § 704. The 14 Court may only set aside the underlying agency decision if it is “arbitrary, capricious, an 15 abuse of discretion, or otherwise not in accordance with law.” Id. § 706(2)(A). Thus, the 16 Court does not, as it would in ruling on an ordinary summary judgment motion, determine 17 whether there is any genuine dispute of material fact. See Occidental Eng’g Co. v. I.N.S., 18 753 F.2d 766, 769 (9th Cir. 1985); Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 19 (1985). Instead, summary judgment serves as a mechanism for deciding, as a matter of 20 law, whether the agency action passes muster under the APA. Nw. Motorcycle Ass’n v. 21 U.S. Dep’t Agric., 18 F.3d 1468, 1471-72 (9th Cir. 1994); Occidental Eng’g, 753 F.2d at 22 769-70. Accordingly, the Court reviews the evidence included in the administrative record 23 to determine whether, as a matter of law, the evidence permitted the agency to make the 24 decision it did. Id. Although the Court’s review of the evidence is to be “searching and 25 2 Under the Local Rules, surreplies are “strictly limited” to requests to strike material 26 contained in or attached to a reply brief. “Extraneous argument or a surreply filed for any other reason will not be considered.” W.D. Wash. L.R. 7(g). Given this authority, the 27 Court will not consider Plaintiffs’ surreply (Dkt. # 34) when considering the motions. 1 careful,” it is “not empowered to substitute [its] judgment for that of the agency.” Citizens 2 to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971). 3 IV. DISCUSSION 4 The Immigration and Nationality Act (INA) provides for preference visas to 5 “[c]ertain multinational executives and managers” who come to the United States to serve 6 “in a capacity that is managerial or executive.” 8 U.S.C. § 1153(b)(1)(C). USCIS claims 7 that its decision to deny GBI’s I-140 petition based on 8 C.F.R. §204.5(j)(2) was neither 8 arbitrary or capricious, and thus must be upheld by this Court. Dkt. # 22. Plaintiffs argue 9 there are several reasons to support finding that USCIS’s decision was arbitrary, capricious, 10 and otherwise not in accordance with the law. 11 First, Plaintiffs contend that 8 C.F.R. §204.5(j)(2) is an ultra vires regulation. Dkt. 12 # 19 at 10. Where, as here, a I-140 petition classifies a beneficiary as a “multinational 13 executive or manager,” USCIS requires the beneficiary to be employed in “managerial or 14 executive” capacity in the year preceding his or her entry to the United States. See 8 C.F.R. 15 §204.5(j)(2). Plaintiffs claim, however, that the plain language of the INA does not require 16 a beneficiary to be employed in a “managerial or executive” capacity before entering the 17 United States, and in fact only requires that the beneficiary be “employed for at least one 18 year by a firm or corporation or other legal entity” related to the U.S. company. Dkt. # 30 19 at 6. 20 Second, Plaintiffs claim that to the extent 8 C.F.R. §204.5(j)(2) is valid regulation, 21 USCIS’s denial of the I-140 petition was based on a legally incorrect interpretation of the 22 term “executive capacity.” Id. at 9. To be an individual to be employed in an “executive 23 capacity,” Plaintiffs claim that USCIS improperly requires an organization to have 24 subordinate managerial employees who focus on the broad goals and policies of the 25 organization. Id. at 10-11 (claiming USCIS disregarded the differences between 26 “managerial capacity” and “executive capacity” as defined in 8 C.F.R. §204.5(j)(2)). 27 Moreover, Plaintiffs claim that USCIS improperly rejected evidence regarding Park’s 1 weekly activities and job activities. Id. at 9-11. According to Plaintiffs’ USCIS’s failure 2 to accept this evidence renders its decision arbitrary and capricious. 3 Third, Plaintiffs contend that USCIS failed to comply with 8 U.S.C. 4 §1101(a)(44)(C), which states that if staffing levels are used in determining whether an 5 individual is acting in an executive capacity, then USCIS “shall take into account the 6 reasonable needs of the organization, component, or function in light of the overall purpose 7 and stage of development of the organization, component, or function.” Plaintiffs argue 8 that USCIS failed entirely to comply with 8 U.S.C. §1101(a)(44)(C) in evaluating GBI’s 9 I-140 petition. Dkt. # 18 at 15; Dkt. # 30 at 11. Specifically, Plaintiffs claim that USCIS 10 failed to consider that GBI Korea did not have an organizational need for subordinate 11 employees or secretarial services in early 2013. Dkt. # 18 at 16. 12 The Court addresses each argument below. 13 A. Whether 8 C.F.R. §204.5(j)(2) is Ultra Vires to the INA 14 The Court reviews whether 8 C.F.R. §204.5(j)(2) conflicts with the INA under the 15 two-part test set out in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 16 467 U.S. 837 (1984). Under the first part of the Chevron analysis, the Court must ask 17 whether Congress has spoken to question at issue or “has explicitly left a gap for the agency 18 to fill.” 467 U.S. at 843–44. If Congress has spoken to the issue unambiguously, then the 19 Court must accept that statement as controlling. Id.; Ruiz–Diaz v. United States, 618 F.3d 20 1055, 1060 (9th Cir. 2010). However, if the statute at issue is either silent or ambiguous, 21 the Court must proceed to part two and consider whether the agency’s interpretation is a 22 reasonable and permissible construction of the statute. Id. at 1060. Where the agency’s 23 interpretation is reasonable, the Court must defer to the agency. Id. 24 Section 203(b)(1)(C) of the INA, the provision concerning immigrant visas for 25 multinational executives, reads as follows: 26 An alien is described in this subparagraph if the alien, in the 3 years preceding the time of the alien’s application for 27 classification and admission into the United States under this subparagraph, has been employed for at least 1 year by a firm 1 or corporation or other legal entity or an affiliate or subsidiary 2 thereof and the alien seeks to enter the United States in order to continue to render services to the same employer or to a 3 subsidiary or affiliate thereof in a capacity that is managerial or executive. 4 8 U.S.C. § 1153(b)(1)(C). 5 The Court cannot conclude, as Plaintiffs do, that the INA’s statutory language 6 conflicts with 8 C.F.R. §204.5(j)(2). At best, Plaintiffs could argue that the statute is silent 7 on the executive capacity requirement in the qualifying year, which then requires the Court 8 to look the agency’s interpretation of the statute. Chevron, 467 U.S. at 843–44. As USCIS 9 notes, its precursor, INS, considered Congress’s statement that “the need of multinational 10 business to transfer key personnel around the world as nonimmigrants is parallel in this 11 category to allow a basis upon which these individuals may immigrate.” 56 Fed. Reg. 12 30703-01, 1991 WL 295759 (July 5, 1991) (explaining its interpretation of this INA 13 provision as applying to only those executive and managers who have previously worked 14 for the business entity, or an affiliate or subsidiary of that entity, and are coming to the 15 United States to work for the same entity, or its affiliate or subsidiary). Accordingly, INS 16 implemented a regulation that “follows criteria long in place for the adjudication of 17 petitions for nonimmigrant intra-company transferees, and immigrant petitions under 18 [Department of Labor’s] current Schedule A/Group IV, for such managers and executives.” 19 Id. The Department of Labor’s Schedule A/Group IV at the time required the transferee’s 20 qualifying year be in a managerial or executive capacity. Id. Because the agency’s 21 interpretation of the INA is reasonable, the Court finds that 8 C.F.R. §204.5(j)(2) is not 22 ultra vires. Chevron, 467 U.S. at 842–43. 23 B. Whether USCIS’s Decision Was Otherwise Arbitrary and Capricious 24 Plaintiffs’ two remaining contentions concern USCIS’s specific handling of GBI’s 25 petition. First, Plaintiffs claim that USCIS not only relied on an improper understanding 26 of “executive capacity” in denying GBI’s I-140 petition, but also wrongly discounted 27 1 evidence showing Park to be employed in such a capacity. The Court disagrees. USCIS 2 explicitly relied on a definition of “executive capacity” that recognizes the executive’s 3 ability to direct “major components” or “functions” of the organization. Dkt. # 13 at 87 4 (citing to INA § 101(a)(44)(B)). USCIS also noted that the classification “requires that the 5 duties of a position be ‘primarily’ executive in nature,” as required by the INA, and further 6 explains that, “[w]hether the broad duties attributed to the beneficiary qualify as executive 7 in nature depends in large part on whether the petitioner established that he would have 8 sufficient subordinate staff to supervise and perform the day-to-day company activities he 9 is claimed to oversee or direct.” Dkt. # 13 at 87. While Plaintiffs contend that the INA 10 does not require a petitioning organization to have subordinate managerial employees for 11 a beneficiary to qualify as an executive, there is nothing in the plain language that keeps 12 USCIS from considering whether an organization has reached the level of sophistication 13 where an individual could devote primary attention to executive duties as opposed to 14 operational ones. See Brazil Quality Stones, Inc. v. Chertoff, 531 F.3d 1063, 1070 (9th Cir. 15 2008) (affirming visa denial where agency concluded that the president’s direct 16 involvement in the corporation’s daily operations was necessary for its success and that 17 such fact precluded him from qualifying as a managerial employee); Family Inc. v. USCIS, 18 469 F.3d 1313, 1316 (9th Cir. 2006). In GBI’s case, USCIS found the lack of other 19 employees serving as managers and team members likely meant that Park was not relieved 20 from significant involvement in the operational tasks required to operate the business. See 21 Family Inc., 469 F.3d at 1313 (record did not compel the conclusion that beneficiary was 22 primarily engaged in managerial duties, as opposed to ordinary operational activities 23 alongside the corporation’s five other employees). 24 Plaintiffs also claim that USCIS doubted evidence concerning Park’s weekly 25 activities and job activities “without justification.” Dkt. # 30 at 14. But the record shows 26 that USCIS noted several inconsistencies regarding Parks’ duties and GBI’s operations in 27 coming to its conclusion. Dkt. # 13 at 87-88. For instance, USCIS found work descriptions 1 referencing other employees at GBI Korea lacked credibility since other evidence showed 2 that Park was the sole employee there from April 2013 to March 2014. Id. (concluding 3 that the descriptions of Park’s duties referencing teams, managers, key employees, and 4 departments did not match the state of the business in 2013). Similarly, USCIS questioned 5 descriptions referencing meetings with GBI’s “Board of Directors,” as other evidence 6 showed neither GBI or GBI Korea had such a board. Id. USCIS also found inconsistencies 7 in the work descriptions of those individuals who claimed to be assisting Park with 8 administrative needs. Id. at 85 (explaining that nothing in employee’s job description as a 9 “Purchasing Agent” indicated she performed administrative duties for Park or other staff); 10 id. at 86 (noting that letter submitted in support of the petition lacked details sufficient to 11 determine whether Park was relieved of non-executive functions). In denying GBI’s 12 petition, USCIS stated that these discrepancies had not resolved by independent, objective 13 evidence, and that the declarations and opinions filed by Park and others were either 14 conclusory, self-interested, or irrelevant. While “[t]estimony should not be disregarded 15 merely because it is uncorroborated and in the individual’s own interest,” Murphy v. INS, 16 54 F.3d 605, 612 (9th Cir. 1995), the record suggests that USCIS simply accorded these 17 declarations and opinions less weight rather than dismissing them altogether. See, e.g., 18 Dkt. # 13 at 86-88. 19 Lastly, Plaintiffs argue that USCIS failed to consider the reasonable needs of the 20 organization. This too falls short. Ninth Circuit has explained that USCIS cannot use an 21 employer’s small size, standing alone, to justify that an employee is not operating in a 22 managerial or executive capacity. See Family Inc, 469 F.2d at 1316. The record show, 23 however, that USCIS did in fact consider the reasonable needs of the organization in 24 rendering its decision. Dkt. # 13 at 84. Specifically, USCIS took note of the fact that Park 25 was the only employee in Korea until March 2014, that he was likely facilitating 26 transactions, and that the corporation generally lacked individuals who would perform non- 27 managerial or non-executive tasks. Id. at 84-87. USCIS can properly consider an 1 organization’s small size as one factor in assessing whether its operations are substantial 2 enough to support a manager or executive. See Family Inc., 469 F.3d at 1316. Therefore, 3 the Court considers this contention to be without merit. 4 Ultimately, USCIS’s finding that Park was not engaged primarily in executive 5 duties is supported by substantial evidence. Therefore, its denial of the petition was neither 6 arbitrary or capricious, nor an abuse of discretion. The Court grants summary judgment in 7 USCIS’s favor. 8 V. CONCLUSION 9 For the reasons stated above, the Court GRANTS Defendants’ motion (Dkt. # 22) 10 and DENIES Plaintiffs’ motion (Dkt. # 18).

11 DATED this 22nd day of August, 2019. 12 A 13 14 The Honorable Richard A. Jones 15 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27