GB Int'l v. Crandall

Decision Date22 August 2019
Docket NumberCase No. 2:18-cv-227-RAJ
Citation403 F.Supp.3d 927
CourtU.S. District Court — Western District of Washington
Parties GB INTERNATIONAL, et al., Plaintiffs, v. Kristine R. CRANDALL, et al., Defendants.

Paul Soreff, Soreff Law, Robert Pauw, Gibbs Houston Pauw, Seattle, WA, for Plaintiffs.

Sophie Kaiser, Victor M. Mercado-Santana, US Department of Justice, Washington, DC, for Defendants.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
The Honorable Richard A. Jones, United States District Judge
I. INTRODUCTION

This matter comes before the Court on the parties' cross-motions for summary judgment. Dkt. ##18, 22. For the reasons below, the Court GRANTS Defendants' motion and DENIES Plaintiffs' motion.

II. BACKGROUND

In 2007, Plaintiff Dong Choel Park established GB International, Inc. (GBI), a Washington company that procures products and services relating to offshore drilling, shipbuilding, military defense, and building infrastructure for companies based in South Korea. Dkt. # 13 at 78; Dkt. # 14 at 85.1 Several years later, in December 2011, Park established GBI Korea, an affiliate company based in Busan, South Korea. Dkt. # 13 at 78. He is the President and CEO of both companies. Id. at 82. According to Park, GBI grew substantially between 2013 and 2015 primarily because he was able to cultivate business relationships with several South Korean companies and procure specialized equipment for GBI's customers. Dkt. # 18 at 3. During these two years, GBI grew from a company of four employees to seven employees. Dkt. # 14 at 129-31.

From April 2013 to April 2014, Park performed his job duties primarily from abroad. Dkt. # 13 at 466-67. In addition to establishing relationships with South Korean companies, Park claims he attended industry events, negotiated contracts for the purchase and sale of new products, and reviewed reports from subordinate employees on various topics, including regulatory conditions and currency fluctuations. Id. at 466-71. Park also claims that he conducted meetings with subordinate employees to formulate corporate goals and policies. Id. Although Park had a manager in the United States, he desired to spend more face-to-face time with his U.S.-based suppliers and employees. Id. at 83. In April 2014, Park entered the United States on an E-1 visa along with his wife and child who came as derivative family members. Dkt. # 18 at 6. They are also plaintiffs in this action.

On December 23, 2015, GBI filed a Petition for Alien Worker (Form I-140) for Park's benefit, classifying him as a "multinational executive or manager" of GBI. Id. at 78. Park and each of his derivative family members concurrently filed an Application for Adjustment of Status (Form I-485) based on GBI's I-140 petition. Dkt. 13 at 2; Dkt. # 15 at 2; Dkt. # 16 at 2. While the I-140 petition and the I-485 applications were pending, Park's E-1 visa expired on July 28, 2017. Dkt. # 22-1. On December 8, 2017, U.S. Citizenship and Immigration Services (USCIS) denied GBI's I-140 petition, finding GBI failed to establish that Park was employed in an "executive capacity" from April 2013 to April 2014. Dkt. # 13 at 78. On January 9, 2018, GBI and Park filed a motion to reopen and reconsider the I-140 petition, which was granted. Dkt. # 13 at 78; Dkt. # 14 at 102. On or about August 7, 2018, USCIS again denied GBI's I-140 petition. Id. Having again denied the underlying I-140 petition, USCIS subsequently denied the Parks' I-485 applications. Dkt. # 13 at 2; Dkt. # 15 at 2; Dkt. # 16 at 2.

On February 2018, Plaintiffs filed this Complaint against Defendants United States of America, Kristine R. Crandall, L. Francis Cissna, and Kirstjen Nielsen alleging USCIS's denial of the I-140 petition violated the Administrative Procedures Act (APA). Dkt. # 1. After the administrative records were certified, Plaintiffs moved for summary judgment and a preliminary injunction on November 27, 2018. Dkt. ## 18, 19. On January 7, 2019, Defendants filed a response and cross-motion for summary judgment. Dkt. # 22. On January 29, 2019, the Court denied Plaintiffs' motion for a preliminary injunction. Dkt. # 24. The parties' motions for summary judgment are now before the Court.2

III. LEGAL STANDARD

The Administrative Procedures Act (APA) permits judicial review of a "final agency action for which there is no other adequate remedy in court." 5. U.S.C. § 704. The Court may only set aside the underlying agency decision if it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. § 706(2)(A). Thus, the Court does not, as it would in ruling on an ordinary summary judgment motion, determine whether there is any genuine dispute of material fact. See Occidental Eng'g Co. v. I.N.S. , 753 F.2d 766, 769 (9th Cir. 1985) ; Fla. Power & Light Co. v. Lorion , 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985). Instead, summary judgment serves as a mechanism for deciding, as a matter of law, whether the agency action passes muster under the APA. Nw. Motorcycle Ass'n v. U.S. Dep't Agric. , 18 F.3d 1468, 1471-72 (9th Cir. 1994) ; Occidental Eng'g , 753 F.2d at 769-70. Accordingly, the Court reviews the evidence included in the administrative record to determine whether, as a matter of law, the evidence permitted the agency to make the decision it did. Id. Although the Court's review of the evidence is to be "searching and careful," it is "not empowered to substitute [its] judgment for that of the agency." Citizens to Preserve Overton Park, Inc. v. Volpe , 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).

IV. DISCUSSION

The Immigration and Nationality Act (INA) provides for preference visas to "[c]ertain multinational executives and managers" who come to the United States to serve "in a capacity that is managerial or executive." 8 U.S.C. § 1153(b)(1)(C). USCIS claims that its decision to deny GBI's I-140 petition based on 8 C.F.R. § 204.5(j)(2) was neither arbitrary or capricious, and thus must be upheld by this Court. Dkt. # 22. Plaintiffs argue there are several reasons to support finding that USCIS's decision was arbitrary, capricious, and otherwise not in accordance with the law.

First, Plaintiffs contend that 8 C.F.R. § 204.5(j)(2) is an ultra vires regulation. Dkt. # 19 at 10. Where, as here, a I-140 petition classifies a beneficiary as a "multinational executive or manager," USCIS requires the beneficiary to be employed in "managerial or executive" capacity in the year preceding his or her entry to the United States. See 8 C.F.R. § 204.5(j)(2). Plaintiffs claim, however, that the plain language of the INA does not require a beneficiary to be employed in a "managerial or executive" capacity before entering the United States, and in fact only requires that the beneficiary be "employed for at least one year by a firm or corporation or other legal entity" related to the U.S. company. Dkt. # 30 at 6.

Second, Plaintiffs claim that to the extent 8 C.F.R. § 204.5(j)(2) is valid regulation, USCIS's denial of the I-140 petition was based on a legally incorrect interpretation of the term "executive capacity." Id. at 9. To be an individual to be employed in an "executive capacity," Plaintiffs claim that USCIS improperly requires an organization to have subordinate managerial employees who focus on the broad goals and policies of the organization. Id. at 10-11 (claiming USCIS disregarded the differences between "managerial capacity" and "executive capacity" as defined in 8 C.F.R. § 204.5(j)(2) ). Moreover, Plaintiffs claim that USCIS improperly rejected evidence regarding Park's weekly activities and job activities. Id. at 9-11. According to Plaintiffs' USCIS's failure to accept this evidence renders its decision arbitrary and capricious.

Third, Plaintiffs contend that USCIS failed to comply with 8 U.S.C. § 1101(a)(44)(C), which states that if staffing levels are used in determining whether an individual is acting in an executive capacity, then USCIS "shall take into account the reasonable needs of the organization, component, or function in light of the overall purpose and stage of development of the organization, component, or function." Plaintiffs argue that USCIS failed entirely to comply with 8 U.S.C. § 1101(a)(44)(C) in evaluating GBI's I-140 petition. Dkt. # 18 at 15; Dkt. # 30 at 11. Specifically, Plaintiffs claim that USCIS failed to consider that GBI Korea did not have an organizational need for subordinate employees or secretarial services in early 2013. Dkt. # 18 at 16.

The Court addresses each argument below.

A. Whether 8 C.F.R. § 204.5(j)(2) is Ultra Vires to the INA

The Court reviews whether 8 C.F.R. § 204.5(j)(2) conflicts with the INA under the two-part test set out in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under the first part of the Chevron analysis, the Court must ask whether Congress has spoken to question at issue or "has explicitly left a gap for the agency to fill." 467 U.S. at 843–44, 104 S.Ct. 2778. If Congress has spoken to the issue unambiguously, then the Court must accept that statement as controlling. Id. ; Ruiz–Diaz v. United States , 618 F.3d 1055, 1060 (9th Cir. 2010). However, if the statute at issue is either silent or ambiguous, the Court must proceed to part two and consider whether the agency's interpretation is a reasonable and permissible construction of the statute. Id. at 1060. Where the agency's interpretation is reasonable, the Court must defer to the agency. Id.

Section 203(b)(1)(C) of the INA, the provision concerning immigrant visas for multinational executives, reads as follows:

An alien is described in this subparagraph if the alien, in the 3 years preceding the time of the alien's application for classification and admission into the United States under this subparagraph, has been employed for at least 1 year by a firm or corporation or other legal entity
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