Just Bagels Mfg., Inc. v. Mayorkas

• Decision Date: 24 October 2012
• Docket Number: No. 12 Civ. 1358(JLC).,12 Civ. 1358(JLC).
• Citation: 900 F.Supp.2d 363
• Parties: JUST BAGELS MANUFACTURING, INC., Plaintiff, v. Alejandro N. MAYORKAS, Director, U.S. Citizenship and Immigration Services, Defendant.
• Court: U.S. District Court — Southern District of New York

900 F.Supp.2d 363

JUST BAGELS MANUFACTURING, INC., Plaintiff,

v.Alejandro N. MAYORKAS, Director, U.S. Citizenship and Immigration Services, Defendant.

No. 12 Civ. 1358(JLC).

United States District Court, S.D. New York.

Oct. 24, 2012.

Howard L. Baker, Wilens & Baker, New York, NY, for Plaintiff.

Natasha Oeltjen, New York, NY, for Defendant.

OPINION AND ORDER

JAMES L. COTT, United States Magistrate Judge.

Plaintiff Just Bagels Manufacturing, Inc. (“Just Bagels”) seeks judicial review of a final decision of the United States Citizenship and Immigration Services (“CIS” or “the Government”) denying Just Bagels' petition to sponsor alien worker Manuel Chimbaina Morocho (“Chimbaina”) for an employment visa in the United States. The parties have consented to have me preside over this case for all purposes and have now cross-moved for summary judgment. For the reasons stated below, CIS's motion is GRANTED and Just Bagels' cross-motion is DENIED.

I. BACKGROUND¹

CIS is a division of the United States Department of Homeland Security, a governmentagency that oversees immigration to the United States and the naturalization of aliens. See8 U.S.C. § 1103; 8 C.F.R. §§ 1.1, 2.1. Alejandro Mayorkas is CIS's current director. (Answer dated May 23, 2012 at 1 (Dkt. No. 5)). Just Bagels is a wholesale bagel bakery located in the Bronx that seeks to sponsor Chimbaina, an Ecuadorian national, for a “skilled worker” employment visa in the United States. (CAR 165–66).

A. Regulatory Framework

CIS regulations govern the process by which an employer such as Just Bagels may petition CIS to sponsor an alien worker or “beneficiary,” such as Chimbaina, for a United States work visa. To petition for a “skilled worker” visa, an employer must first file an Application for Alien Employment Certification (“Form ETA–750” or “labor certification”) with the Department of Labor (“DOL”) and obtain DOL certification of two preconditions to the visa's issuance: (1) that there are insufficient persons in the United States “able, willing, qualified ... and available” to perform the position for which sponsorship is sought; and (2) that the alien's employment in such position will “not adversely affect the wages and working conditions of workers in the United States similarly employed.” See8 C.F.R. § 204.5( l )(3)(i); 8 U.S.C. § 1182(a)(5)(A)(i); 20 C.F.R. § 656.1(a).

After DOL certifies that these conditions are met, the employer must file an employment-based immigrant visa petition (“I–140 petition” or “petition”) with CIS. 8 C.F.R. § 204.5(c). In the petition, the “employer bears the burden of showing that the job offer to the beneficiary is a realistic one.” Taiyang Foods Inc. v. U.S. Citizenship & Immigration Servs., No. C10 Civ. 0109(JLR), 2010 WL 3732193, at *2 (W.D.Wash. Sept. 20, 2010); see also8 C.F.R. § 204.5(g). Thus, the petition and supporting evidence must establish that, at all times from the date DOL accepted the Form ETA–750 for processing (the “priority date”), continuing until the beneficiary obtains lawful permanent residence in the United States, the employer was financially able to pay the employee's wage, as specified in the Form ETA–750 (the “proffered wage”). 8 C.F.R. § 204.5(g)(2). “Evidence of this ability shall be either in the form of copies of annual reports, federal tax returns, or audited financial statements.” Id. However, “[i]n appropriate cases, additional evidence, such as profit/loss statements, bank account records, or personnel records, may be submitted by the petitioner or requested by [CIS].” Id. The petition must also “be accompanied by evidence that the alien meets the educational, training or experience, and any other requirements of the individual labor certification,” and that the beneficiary has at least two years of training or experience in the relevant trade. 8 C.F.R. § 204.5( l ) (3)(ii)(B).

B. Just Bagels' Petition

In 2001, Just Bagels filed a Form ETA–750 with DOL seeking to certify Chimbaina's employment for the position of “bagel maker.” (CAR 171). DOL accepted the Form ETA–750 for processing on April 30, 2001, marking the “priority date” for Just Bagels' later-submitted petition. (CAR 170). However, the Form ETA–750 in the record is what appears to be a corrected version signed by Just Bagels' Chief Executive Officer, Charles Contreras, almost five years later, on February 2, 2006. (CAR 172, 174). ² The form states that Just Bagels had employed Chimbaina as a bagel maker from August 1997 through the “Present,” and describes his job as a full-time position earning an hourly wage of $11.91. ( See CAR 171, 174). DOL certified the form on August 25, 2006. (CAR 170).

On November 7, 2006, Just Bagels filed an I–140 petition with CIS. (CAR 165). As evidence of its ability to pay Chimbaina's proffered wage at all times between 2001 (when it filed its labor certification) and the date of its petition, Just Bagels submitted copies of its 2001–2005 tax returns. (CAR 169). The tax returns demonstrated sufficient financial resources to pay the proffered wage from 2002–2005, but the 2001 tax return reported a net income of -$86,308 and net current assets of -$30,251. (CAR 5–6; see also CAR 178, 283).³ Presumably foreseeing that these figures might cause CIS to doubt whether the company had sufficient resources to pay Chimbaina in 2001, Just Bagels also submitted additional evidence of its financial condition in 2001, which included: (1) six monthly bank statement summaries of Just Bagels' combined business accounts dated between March 2001 and January 2002 (CAR 272–77); (2) lists purporting to be payroll records for 2001 and 2002 (CAR 169, 278–82); and (3) an October 11, 2006 letter from Contreras “attest[ing] to [the] company's ability to cover the weekly salary of $476.40 or $24,772.80 per annum to Mr. Chimbaina.” (CAR 283–84). Contreras' letter noted that the 2001 tax return reflected a $213,083 deduction for capital depreciation and pointed to the monthly bank statements—each reflecting a positive cash balance—as evidence that the company had “enough cash available to cover the wages for the alien beneficiary” in 2001. (CAR 283, 272–77). Contreras also claimed that “[i]n order to cover the wages for the alien we will used [sic] the wages freed up by the absence of employees working for us during 2001 and no longer in our employ[,]” a sum he reported to be “$75,260; sufficient to cover the wages for Mr. Chimbaina.” ( Id.). Finally, Contreras asked CIS to “keep in mind that the events of September 11, 2001 caused a drastic reduction in business and an increase in liabilities that year,” and noted that Just Bagels' “ability to cover the wages improved drastically during the following years.” ( Id.).

C. The Request for Evidence

Based on the negative net income and net assets reported on Just Bagels' 2001 tax return, CIS determined that the initial documentation submitted by Just Bagels was “not sufficient to warrant favorable consideration of [the] petition/application.” (CAR 163). Accordingly, on October 5, 2007, CIS issued a Request for Evidence (“RFE”) directing Just Bagels to submit further evidence, including: (1) “Chimbaina's Forms W–2 or 1099–Mise for 2001 through 2006”; (2) a more detailed explanation of how Just Bagels' business and financial liabilities were affected by the events of September 11, 2001; (3) Just Bagels' 2000 tax return; and (4) “any additional evidence [Just Bagels] may have to demonstrate the reduction in business and increase in liabilities for 2001.” (CAR 164).

In response, Just Bagels submitted: (1) a second letter from Contreras dated November 12, 2007 (CAR 49–50); (2) a letter from the company's accountant dated October 6, 2006 (CAR 75); (3) a two-page report of the New York City Comptroller entitled One Year Later: The Fiscal Impact of 9/11 on New York City (“ One Year Later Report”) (CAR 76–77); and (4) monthly bank statement summaries dated from January through December 2001, several of which were duplicative of the statements previously submitted (CAR 78–89).⁴ The second letter from Contreras provided virtually no specific detail regarding how the September 11 attacks had impacted Just Bagels' business, stating only that “[s]ince tourism in New York City and the country dropped, our business was affected due to lack of sales. People ... did not go out or spend money on travel as in the past.” (CAR 74). The letter emphasized that Just Bagels' business had “survived and grown” since 2001. ( Id.). Contreras stressed that the company's reported net loss in 2001 was driven by a $213,083 deduction for capital depreciation, and that “[s]ince depreciation is only a paper deduction for tax purposes and not a cash outlay, [Just Bagels] had, in actuality, a Net Income of $119,028, which is greater than the [proffered] wage of $24,772.80.” (CAR 73). The letter from the company's accountant likewise explained that Just Bagels' business is “capital intensive” and “therefore, will always have a significant amount of depreciation,” but that capital depreciation is “not a cash flow item. This deduction needs to be added back to net income to determine the actual amount of cash available to the operation.” (CAR 75).⁵

Just Bagels did not submit its 2000 tax return or any Forms W–2 or 1099 for Chimbaina, as expressly requested by the RFE. In explaining the company's failure to submit these items, its counsel asserted that the company was “not able to obtain the 2000 Corporate Tax Returns ... since they were filed seven years ago,” and that “the Beneficiary did not work for the Petitioner during the years 2001–2006,” the years for which CIS sought Chimbaina's Forms W–2 or 1099. (CAR 72).

D. The CIS Director's Decision

On February 12, 2008, CIS Director F. Gerard Heinauer issued a decision denying Just Bagels' petition. He explained that in determining a petitioner's ability to pay a proffered wage during a given period, CIS “will first examine whether the petitioner employed and...