Commonwealth Utilities Corp. v. Johnson

• Decision Date: 13 March 2017
• Docket Number: Case No.: 16–cv–00020
• Parties: COMMONWEALTH UTILITIES CORPORATION, Ismael Cuenco, Eric Tmase, Ruel Apura, Peter Deppas, Marvin Marchadesch, Carlito Marquez, Rosito R. Palad, Gilbert S. Gatmaitan, Joel B. Dupra, Angelito V. Abitong, Lourd A. San Antonio, Samuel C. Apostol, Jr., Jasper Monreal., Plaintiffs, v. Jeh Charles JOHNSON, et al., Defendants.
• Court: U.S. District Court — Northern Mariana Islands

245 F.Supp.3d 1239

COMMONWEALTH UTILITIES CORPORATION, Ismael Cuenco, Eric Tmase, Ruel Apura, Peter Deppas, Marvin Marchadesch, Carlito Marquez, Rosito R. Palad, Gilbert S. Gatmaitan, Joel B. Dupra, Angelito V. Abitong, Lourd A. San Antonio, Samuel C. Apostol, Jr., Jasper Monreal., Plaintiffs,

v.Jeh Charles JOHNSON, et al., Defendants.

Case No.: 16–cv–00020

District Court for the Northern Mariana Islands.

Signed March 13, 2017

James S. Sirok, Commonwealth Utilities Corporation, Saipan, MP, for Plaintiffs.

Glenn M. Girdharry, Kathryne M. Gray, U.S. Department of Justice, Washington, DC, Jessica F. Wessling, U.S. Attorney's Office, Hagatna, GU, for Defendants.

DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT

Ramona V. Manglona, Chief Judge

I. INTRODUCTION

Presently before the Court is Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint ("FAC") (ECF No. 38) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Plaintiffs, the Commonwealth Utilities Corporation ("CUC") and 13 of its alien contract workers employed under the federal Commonwealth-only transitional worker program, seek to challenge the Department of Homeland Security's ("DHS's") administration of the annual numerical limitation ("cap") for CNMI-only transitional workers in the Commonwealth of the Northern Mariana Islands ("CNMI"). Having considered the papers and arguments of counsel, the Court GRANTS Defendants' motion to dismiss the FAC, for the reasons set forth below.

II. BACKGROUND

A. Factual Summary

On May 8, 2008, the Consolidated Natural Resources Act of 2008 ("CNRA") became law. See Pub. L. No. 110–229, 122 Stat. 754 (2008). Title VII of the CNRA provides that the immigration laws of the United States will displace those of the CNMI effective November 28, 2009. Id. § 6(a)(2). To minimize any potential disruption during this transition, the CNRA authorized DHS to create a temporary CNMI-only transitional worker nonimmigrant ("CW–1") classification to allow certain alien workers to transition from the former CNMI foreign worker permit system to the U.S. immigration system for a period ending December 31, 2014. Id. The CNRA directed the Secretary of Homeland Security to "establish, administer, and enforce a system for allocating and determining the number, terms, and conditions of permits to be issued to prospective employers for each such nonimmigrant worker" who would not otherwise be eligible to enter, remain, or lawfully work in the CNMI under the terms of the Immigration and Nationality Act ("INA"), 8 U.S.C. § 1101 et seq. Id. § 6(d)(2). The CNRA also directed the Secretary of Labor to determine, not later than 180 days before the end of the transition period, whether an extension of the CW program for an additional period of up to five years is necessary, and further provided the Secretary of Labor with the authority to grant such an extension through notice in the Federal Register. See CNRA § 1806(d)(5). On June 3, 2014, the Secretary of Labor extended the CW–1 program for five years to end on December 31, 2019 based on the eight factors set out in the CNRA. 79 Fed. Reg. 31988. Six months later, Congress amended the CNRA. See Consolidated and Further Continuing Appropriations Act of 2015, Pub. L. 113–235, § 10, 128 Stat. 2130, 2134 (Dec. 16, 2014) (amending 48 U.S.C. § 1806(d) ). In the amendment, Congress eliminated the Secretary of Labor's authority to provide for future extensions of the CW–1 program and set the expiration date of the program to December 31, 2019, thereby ending the CW–1 program on that date. See Id. Congress also eliminated the eight factors to be considered by the Secretary of Labor when determining whether alien workers are necessary to ensure an adequate number of workers for legitimate businesses in the Commonwealth, and if so, the number of such workers that are necessary. Id. These amendments took effect prior to the beginning of Fiscal Year (FY) 2016.

In this case, DHS and U.S. Citizenship and Immigration Services ("USCIS") rejected CUC's renewal petitions for the 13 individual Plaintiffs for Fiscal Year 2016. The CW–1 cap for FY 2016, which ran from October 1, 2015 through September 30, 2016, was set at 12,999. (Pl. Ex. 3, ECF No. 7–7.) Sometime after May 5, 2016, but before the expiration of their current CW–1 permits, CUC submitted renewal petitions to USCIS for the 13 individual Plaintiffs. (FAC ¶ 30.) The individual Plaintiffs' permits expired on various dates during the months of June, July, August, and September 2016. (Id. ) In a letter dated June 8, 2016, DHS and USCIS notified CUC that all 13 renewal petitions had been rejected due to the following reasons: (1) USCIS had received a sufficient number of petitions to reach the CW–1 cap for FY 2016, (2) May 5, 2016 was the final receipt date for CW–1 worker petitions requesting an employment start date before October 1, 2016, and (3) the petitions arrived at the California Service Center after May 5, 2016, and did not qualify for exemption from the CW–1 cap. (FAC ¶ 61; Attachment A; ECF No. 1–1.) Three weeks after receiving notice of the rejection, Plaintiffs filed this action.

B. Procedural History

Plaintiffs filed their FAC on October 21, 2016. (FAC, ECF No. 35.) In the FAC, Plaintiffs assert four causes of action. Plaintiffs allege that the failure of USCIS to make a determination on Plaintiffs' renewal petitions violates the APA and 8 C.F.R. § 274a.12(b)(20) (Id. ¶¶ 53–66); that the manner and procedure utilized to publish the annual CW–1 caps for FYs 2013 through 2017 violate Section 553 of the APA (Id. ¶¶ 67–74); that they have suffered a legal wrong because of Defendants' conduct in setting the annual CW–1 caps for FYs 2013 through 2017 (Id. ¶¶ 75–88); and that the manner and method utilized by Defendants related to the filing of renewal petitions operating in combination with enforcement of the CW–1 cap violate the constitutional due process and equal protection rights of Plaintiffs. (Id. ¶¶ 89–96.) Plaintiffs seek declaratory judgment that DHS's administration of the annual CW–1 cap for FYs 2013 through 2017 is (1) arbitrary, capricious, and an abuse of discretion, or otherwise not in accordance with law; (2) contrary to Plaintiffs' constitutional rights; and (3) without observance of the procedure required by the APA and CNRA. (Id. ¶ 101.) They also seek injunctive relief to stop the Defendants from enforcing the cap and from preventing the individual Plaintiffs from continuing to work in the CNMI. (Id. )

Defendants move to dismiss the FAC under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim for relief. (Mot. to Dismiss FAC, ECF No. 38.) The matter came before the Court for oral argument on December 13, 2016 and the Court took the motion under advisement. (Minute Entry, ECF No. 42.) At the March 7, 2017 status conference, the Court announced its decision granting Defendants' motion to dismiss all of Plaintiffs' claims. This order sets forth the basis for the decision.

III. LEGAL STANDARD

A. Federal Rule of Civil Procedure 12(b)(1)

Under Fed. R. Civ. P. 12(b)(1), a defendant may challenge a plaintiff's jurisdictional allegations by either: (1) a "facial" attack that accepts the truth of a plaintiff's allegations but asserts that they are insufficient to invoke federal jurisdiction, or (2) a "factual" attack that contests the truth of a plaintiff's factual allegations, usually by introducing evidence outside the pleadings. Leite v. Crane Co. , 749 F.3d 1117, 1121–22 (9th Cir. 2014). The district court resolves a facial attack on its subject matter jurisdiction as it would a motion to dismiss under Rule 12(b)(6), by accepting plaintiff's allegations as true and drawing all reasonable inferences in plaintiff's favor, and determining whether the allegations are sufficient to invoke the court's jurisdiction. Pride v. Correa , 719 F.3d 1130, 1133 (9th Cir. 2013). In resolving a factual attack on subject matter jurisdiction, a court may review affidavits or other evidence properly before the court without converting the motion to dismiss into a motion for summary judgment. Savage v. Glendale Union High Sch. , 343 F.3d 1036, 1039 n.2 (9th Cir. 2003) ; see also McCarthy v. U.S. , 850 F.2d 558, 560 (9th Cir. 1988) ("the district court is not restricted to the face of the pleadings, but may review any evidence, such as affidavits and testimony, to resolve factual disputes concerning the existence of jurisdiction"). When a moving party "has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction." Savage v. Glendale Union High Sch. , 343 F.3d at 1039 n.2. Here, Defendants are making a facial attack on this Court's jurisdiction based on the CNRA and the regulations promulgated thereto. In either case, the party alleging subject matter jurisdiction has the burden of establishing it. Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994).

B. Federal Rule of Civil Procedure 12(b)(6)

A motion to dismiss under Fed. R. Civ. P. 12(b)(6) challenges the sufficiency of the allegations set forth in the complaint. A plaintiff must allege "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim has facial plausibility "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. The plausibility standard "asks for more than a sheer possibility that a defendant has...