Guam Contractors Association v. Sessions

• Court: District Court, D. Guam
• Decided: January 27, 2021
• Docket: 1:16-cv-00075
• Status: Unknown

Opinion

6 THE DISTRICT COURT OF GUAM 7 GUAM CONTRACTORS ASSOCIATION, CIVIL CASE NO. 16-00075 8 et al.,

9 Plaintiffs, ORDER DENYING DEFENDANTS’ MOTION TO DISMISS 10 vs.

11 MONTY WILKINSON, Attorney General of the United States (Acting), et al., 12 Defendants. 13 This matter is before the court on Defendants’ motion to dismiss. ECF Nos. 147, 148. 14 Plaintiffs have also asked the court to take judicial notice of a legal proceeding before the 15 Administrative Appeals Office (AAO). ECF No. 151. The court heard argument on these issues 16 December 9, 2020. ECF No. 155. For the reasons stated below, the court DENIES Defendants’ 17 motion to dismiss and DENIES AS MOOT Plaintiffs’ motion for judicial notice. 18 I. PROCEDURAL AND FACTUAL BACKGROUND 19 This class action relates to the “H-2B” work visa program. The H-2B work visa program 20 allows employers to bring certain foreign nonimmigrant workers to the United States to fill 21 temporary nonagricultural jobs. See 8 U.S.C. § 1101(a)(15)(H)(ii)(b). However, the program 22 only provides visas for workers involved in “temporary service[s] or labor.” Id. Consequently, an 23 employer must file an application with United States Citizenship and Immigration Services 24 (USCIS) to explain the temporary nature of the work and to set forth the specific period of need 1 for which the foreign worker will be present in the United States. See 8 C.F.R. § 214.2(h). The 2 temporary nature of the work is subject to review by USCIS. Id. at § 214.2(h)(ii)(D). 3 In this case, Plaintiffs are numerous business that regularly used the H-2B work visa 4 program to employ foreign labor in a variety of industries. ECF No. 23 at ¶ 1. However, starting 5 in 2015, USCIS began to routinely deny Plaintiffs’ H-2B applications for failing to meet the 6 “temporary services” requirement. Id. at ¶ 5. Plaintiffs subsequently filed this class action, 7 alleging that Defendants violated the notice and comment procedures of the Administrative 8 Procedures Act (APA) by improperly changing the interpretation and application of the

9 “temporary service” requirement. 10 Defendants have now filed a motion to dismiss, arguing that Plaintiffs no longer have 11 standing. ECF Nos. 147, 148. 12 II. DISCUSSION 13 This is not the first time the court has considered the issue of Plaintiffs’ standing in this 14 case. Defendants raised similar arguments in their first motion to dismiss (ECF No. 31) and 15 while contesting class certification (ECF No. 90). The court’s rejection of those arguments 16 previews the court’s ruling today. 17 a. Defendants’ First Motion to Dismiss and Plaintiffs’ Motion for Class Certification

18 In their first motion to dismiss, Defendants argued that Plaintiffs’ claims regarding H-2B 19 petition denials were insufficient to establish standing. ECF No. 31. The complaint referenced H- 20 2B work visa petitions not been yet adjudicated or even filed; consequently, Defendants argued 21 Plaintiffs had no injury-in-fact and thus the court lacked jurisdiction to hear the case. 22 The court rejected those arguments. ECF No. 81. Even though Plaintiffs referenced 23 pending and future H-2B visa petitions, the court found the allegations established a “pattern or 24 practice of mistaken or erroneous adjudication” that would “largely dictate the result for any 1 forthcoming petitions…”. Id. at 7-8. In line with other courts analyzing pattern-or-practice 2 claims, the court reasoned the claims here “may well offer a possibility of relief even for 3 submissions not yet adjudicated.” Id. at 8. Furthermore, “incurable ripe problems” did not exist 4 because the allegations identified specific petition denials in the past which “surely had effect on 5 the employers” and which “continue[] to threaten, immediate and real effects (and has already 6 proved capable of repetition, yet evading review).” Id. at 9. 7 When Plaintiffs sought class certification, Defendants again raised standing issues and 8 argued Plaintiffs’ claims were moot, unripe, or both. ECF No. 90. The periods of need for which

9 Plaintiffs’ had originally submitted work visa petitions had expired, and thus Defendants argued 10 retroactively granting the petitions would provide no real remedy to Plaintiffs. Also, Plaintiffs 11 could not prove that any future petition would be denied, and thus any claim of injury was 12 speculative and hypothetical. 13 The court rejected these arguments as well. ECF No. 92. While the original periods of 14 need for the petitions had expired, the court reasoned that the time between a denial of an H-2B 15 petition and the expiration of the work period was “too short” for an employer to seek and 16 receive injunctive relief, and thus presented an “easy exception[] to the mootness doctrine, 17 because the challenged conduct or policy is capable of repetition yet evading review…”. Id. at 4- 18 5.

19 b. The Current Motion to Dismiss (ECF Nos. 147, 148) 20 With this background, the court turns to the present motion. Defendants seek dismissal 21 for reasons not unlike those previously presented to the court, albeit with a new twist. That twist 22 is the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (“NDAA FY 23 19”), Pub. L. No. 115-232, 132 Stat. 1045 (2018). Section 1045 of NDAA FY 19 removed the 24 “temporary service or labor” requirement for employers working on military construction 1 projects through the end of 2023. As the “temporary service” requirement is the foundation of 2 Plaintiffs’ claims, Defendants argue the issue is now moot. 3 However, NDAA FY 19 is limited in scope. It only applies to contractors and 4 subcontractors engaged in military-related construction projects through 2023. Consequently, 5 Plaintiffs seeking to staff non-military construction projects or other non-construction businesses 6 with foreign labor are unable to use the exemption. 7 Nonetheless, Defendants point out that Plaintiffs have been using the NDAA FY 19 8 exemption to receive work visas; furthermore, Plaintiffs have not recently filed regular H-2B

9 visas, and the periods of need for all filed H-2B work petitions have long since expired. 10 According to Defendants, this indicates that Plaintiffs have “made the decision on their own to 11 no longer file H-2B petitions” because they no longer need H-2B visas; therefore, Plaintiffs are 12 not suffering any current harm. ECF No. 152 at 13. Moreover, the number of foreign H-2B 13 workers on Guam has now returned to “pre-denial crisis numbers” which evidences that the 14 NDAA FY 19 exemption has alleviated any labor shortage caused by H-2B petition denials. ECF 15 No. 148 at 7. 16 With respect to the impact of NDAA FY 19, the court agrees that the claims relating to 17 military construction projects are moot, at least through the year 2023. Plaintiffs’ claims relate to 18 the interpretation of the “temporary services” requirement, and thus NDAA FY 19 has remedied

19 the harm alleged in those claims by removing that requirement for military contractors. 20 However, NDAA FY 19 does nothing for employers seeking labor for non-military 21 construction projects or non-construction businesses. And while the number of approved H-2B 22 work visas may be returning to normal levels, Plaintiffs have indicated that one hundred percent 23 of these visas were issued under the NDAA FY 19 exemption. ECF No. 150-1. In other words, 24 NDAA FY 19 has not remedied all injuries alleged by all class members. 1 Furthermore, Defendants’ arguments overlook the reason behind Plaintiffs’ so-called 2 “choice” to use the NDAA exemption and fail to account for the ongoing nature of the alleged 3 harm. The court recognizes that all periods of need for the petitions in question have expired, and 4 that Plaintiffs have not filed any more petitions. Nonetheless, Plaintiffs are still suffering a 5 cognizable injury. According to the record presently before the court, Defendants have 6 essentially denied all regular H-2B petitions since 2015. Plaintiffs have represented this has 7 created a “chilling” effect that indicates any future petition would be “futile and a waste of 8 resources.” ECF No. 150, Exhibits 1-8. The court agreed with this position in denying

9 Defendants’ first motion to dismiss: 10 [T]he adjudications already made final have surely had effect on the employers, and the alleged policy or interpretive change governing those adjudications has had, and 11 continues to threaten, immediate and real effects (and has already proved capable of repetition yet evading review). 12 ECF No. 81 at 9-10. Standing does not require Plaintiffs to continually file hopeless 13 petitions, wasting time and money, when a pattern of past denials indicates that future 14 petitions will be denied, especially absent any indication that such efforts would be 15 successful.1 And in analyzing mootness concerns related to expired periods of need, the 16 court reasoned in its class certification order that 17 [t]he time elapsing between the [] denial and expiration of the period of need— 18 sometimes a matter of a few months, typically no more than a year—has proven too short for any particular employer to seek and crucially, to receive, any 19 effective injunctive relief from the courts….Various courts, faced with similar situations, have concluded these kinds of claims present easy exceptions to the 20 mootness doctrine, because the challenged conduct or policy is capable of repetition yet evading review….”. 21 ECF No. 92 at 4-5. The court finds this exception equally applicable here. 22 1 As noted by the court previously, Defendants have now effectively conceded they may have been 23 “rubberstamping” past H-2B applications, and thus past petitions were granted with “insufficient evidence rather than meeting some previous set of now-abandoned criteria.” ECF No. 135 at 9. However, the court finds, as it did 24 before, that the “adequacy of such an explanation” for purposes of APA compliance cannot be determined on the “present state of the parties’ briefing” and thus declines to dismiss the entire action on this basis. Id. at 7. 1 The caselaw cited by the parties supports these conclusions. In Alpha K9 Pet Servs. v. 2 Johnson, an employer filed suit after several of its H-2B petitions were denied. 171 F. Supp. 3d 3 568, 580–81 (S.D. Tex. 2016). However, the denial period was finite – it only lasted for fifteen 4 days, after which the employer began to receive approved petitions. Id. at 580. Absent any 5 indication the visas would be routinely denied in the future, the court explicitly held that the 6 claims did not “fall under the capable of repetition, yet evading review’ exception to mootness” 7 and dismissed them. Id. Furthermore, in Hong Kong Entm’t (Overseas) Investments Ltd. v. 8 USCIS, the court explicitly found that the plaintiff failed to allege a “repeatable, systemic

9 problem with the agency’s procedures” and thus dismissed the action as moot. 1:16-CV-00009, 10 2017 WL 4369475, at *1 (D. N. Mar. I. Oct. 1, 2017), aff'd sub nom. Hong Kong Entertainment 11 (Overseas) Investment, Ltd. v. USCIS, 753 Fed. Appx. 447 (9th Cir. 2019). And in Zixiang Li v. 12 Kerry, the plaintiffs did not “challenge the process by which [defendants] allocates [application] 13 numbers” but merely were attempting to “recapture [application] numbers from previous fiscal 14 years.” 710 F.3d 995, 1001 (9th Cir. 2013). “Since courts are not time machines” the court could 15 not force the agency “to go back in time and not do something it already did…”. Id. at 1002. 16 Here, the allegations are different. Plaintiffs can point to specific denials that have already 17 occurred, and while the time periods for those applications may have expired, the nature and 18 extent of those denials shows a reoccurring pattern capable of repeating itself.

19 c. The Effect of NDAA FY 2021 20 During the pendency of this motion to dismiss, Congress enacted the William M. (Mac) 21 Thornberry National Defense Authorization Act for Fiscal Year 2021 (“NDAA FY 21”), Pub. L. 22 No. 116-283, __ Stat. __ (2021). ECF No. 156. In Section 9502 of the NDAA FY 21, Congress 23 extended the NDAA FY 19 “temporary services” exemption to certain types of civilian 24 employment that operate under a “contract or subcontract” as long as the civilian project is 1 “adversely affected” by the “military realignment occurring on Guam” but with “priority given 2 to federally funded military projects.” The court ordered supplemental briefing on its 3 applicability to this case. ECF No. 156. 4 After considering the additional briefing and arguments supplied by the parties, the court 5 concludes that while the NDAA FY 21 may moot additional claims in this case, it does not 6 remedy all the harm alleged by all the Plaintiffs. As the parties point out, the final text of the 7 public law is yet to be released, and USCIS has yet to release any kind of guidance of how 8 NDAA FY 21 will be applied. Moreover, the statutory language limits the applicability of the

9 exemption to certain employers in certain situations, the contours of which are not sufficiently 10 clear enough at this stage to dismiss this case. Thus, in interpreting the evidence in a light most 11 favorable to Plaintiffs, the court finds that NDAA FY 21 does not moot all of Plaintiffs’ claims. 12 d. Plaintiffs’ Motion for Judicial Notice (ECF Nos. 151, 154) 13 Plaintiffs have asked the court to take judicial notice of an administrative proceeding 14 concerning an H-2B work visa petition filed by Plaintiff 5M Construction2 that purportedly 15 shows there is a live, justiciable controversy in this case such that dismissing the action for lack 16 of standing would be improper. ECF No. 151. As the court has ruled on Defendants’ motion to 17 dismiss without reference to this proceeding, the court denies Plaintiffs’ motion as moot. 18 III. CONCLUSION

19 While portions of Plaintiffs’ claims are likely rendered moot by NDAA FY 19 and 20 NDAA FY 21, the court does not find the legislation completely remedies all of Plaintiffs’ 21 alleged injury-in-fact. Additionally, the harm alleged is capable of repetition yet evading review, 22 2 Plaintiff 5M Construction filed an H-2B application on September 26, 2016, which Defendants denied on April 12, 23 2017. ECF No. 154-1. 5M appealed that decision to the Administrative Appeals Office (AAO). Id. The AAO remanded the case back to USCIS when this court issued a preliminary injunction relating to the H-2B application 24 process. The USCIS denied 5M’s petition for a second time, ruling that 5M had failed to meet the “temporary service or labor requirement.” ECF No. 154-1 at 5-7. 8 of 8 1 || and thus the claims provides an exception to the mootness doctrine. Accordingly, the court 2 || DENIES Defendants’ motion to dismiss and DENIES Plaintiffs’ motion seeking judicial notice 3 || of the AAO proceeding as MOOT. 4 SO ORDERED. 5 Oa /s/ Frances M. Tydingco-Gatewood ‘ as iv, Dated: Jan 2021

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