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Federal Court Review of Denial of Employment-Based Petitions: When Exhaustion Is Not Required

 

Your employment-based nonimmigrant or immigrant petition has been denied. You have a right to appeal to the USCIS Administrative Appeals Office (“AAO”), but you know two things.

The appeal processing time will be very lengthy, and the appeal will likely be unsuccessful. Your best chance of success is in federal court. Can you go directly to federal court and forego the administrative appeal?

The answer is maybe. Although the law is undeveloped, there are arguments that the petitioner’s counsel can make to significantly enhance the chances of a federal court accepting the case rather than dismissing it for failure to exhaust the administrative remedy of an AAO appeal. This practice advisory discusses how best to maximize the chances of surviving the government’s motion to dismiss.

First, it is important to know the law. Darby v. Cisneros1 states four requirements that must all be met in order for the petitioner to be exempt from the requirement that all administrative remedies be exhausted:

  • The federal court action must be pursuant to the Administrative Procedures Act (APA). 5 U.S.C. §702 is the APA section that provides for judicial review for a party who has been “adversely affected or aggrieved” by agency action;
  • There is no statute that mandates an administrative appeal. In fact, there is no statutory requirement for an AAO appeal. Jurisdiction for AAO appeals is found in the regulations, which allows the AAO to hear appeals on denials or revocations of employment-based immigrant or special immigrant petitions, denials or revocations of nonimmigrant petitions, denials of waivers of inadmissibility, and denials of re-entry permits or refugee travel documents, among several other categories of appeals;
  • Either there is no regulation that mandates an administrative appeal or, if there is such a regulation, it does not stay the agency decision pending the administrative appeal. This must be examined separately for each regulatory section and for each type of petition; and
  • The adverse agency decision is final for purposes of the APA. Generally, a denial of an employment-based petition is final unless an appeal has been initiated and is pending.

If all of these criteria are met, there is no jurisdictional bar to the federal court accepting jurisdiction. The government, however, may argue that as a matter of judicial discretion, the court should dismiss the case for failure to exhaust administrative remedies. Counsel should argue that Darby prohibits the court from declining to accept jurisdiction if the federal court action is pursuant to the APA and there is no statutory or regulatory requirement to exhaust all administrative remedies.2

Despite the Darby decision, a federal court still may dismiss the case under a judicially-created and discretionarily applied concept of exhaustion of administrative remedies. Various reasons have been given for the judicially-created requirement to exhaust administrative remedies prior to seeking federal court review. At the same time, various judicially-created exceptions to the requirement to exhaust administrative remedies also have been created. Petitioner’s counsel would be well advised to explain to the court why the judicially-created reasons for exhaustion do not apply and why the exceptions to the requirement to exhaust do apply.

The following have been cited by various courts both inside and outside the field of immigration to justify dismissing a federal court action for failure to exhaust an administrative remedy:

  • Give the agency an opportunity to correct its mistake before the federal court does so;
  • Promote judicial efficiency and economy;
  • Prohibit premature judicial interference with an agency’s interpretive process;
  • Get the benefit of an agency’s practical expertise;
  • Develop a factual record that will facilitate later judicial review; and
  • Protect administrative agency authority in the substantive area.

All of these factors are balanced against the petitioner’s interest in immediate judicial review.
So what arguments should the petitioner’s counsel make to the district court judge to enhance the chances that the judge will accept jurisdiction even though the petitioner has chosen not to seek a non-mandatory AAO appeal?

Petitioner’s counsel should consider making the following arguments, where applicable:

  1. The factual record has been fully developed, and no evidentiary disputes remain. The only issue is a legal issue. No new evidence can be developed during the administrative appeal.
  2. An administrative appeal would be futile. For example, if there is a precedent AAO decision directly on point, there is no genuine doubt regarding the result. If many AAO appeals have already decided the legal issue in other cases, the result is preordained; and the appeal is futile.
  3. The AAO does not have the power to resolve the particular issue involved in the litigation. For example, if the litigation is challenging a regulation as ultra vires, the AAO does not have the power to overturn the regulation.
  4. If an appeal would involve excessive delay, which would cause irreparable harm to the petitioner, exhaustion may be inappropriate. For example, an appeal involving an H-1B petition may be moot because the petition validity, and the labor condition application, may expire before an appeal is decided at the AAO. Similarly, a challenge to a DV lottery application may be moot if not resolved by September 30. The various federal courts outside of the immigration context have found exhaustion of administrative remedies to be unnecessary where the administrative appeal involves an unreasonable or indefinite timeframe. Importantly, many AAO appeals take more than two years under current processing times.
  5. If the administrative agency can be shown to be biased against the petitioner, exhaustion may be inappropriate.3
  6. If the government has failed to comply with its own procedures, a federal court may consider accepting jurisdiction. For example, consider the DOL regulation requiring that the Certifying Officer send a denied labor certification application to BALCA “immediately”. If many months have passed and the Certifying Officer has still not sent the appeal to BALCA, a federal court might consider dispensing with the requirement of exhaustion of the BALCA appeal remedy.

Case law involving failure to exhaust the remedy of an AAO appeal is scarce. Referencing 8 CFR §103.4(a)(1), which states that a case “may” be certified to the AAO, the District Court for the District of Columbia held that an AAO appeal of the denial of an H-1B is not mandatory under the regulations and accepted jurisdiction.4 Likewise, the District Court for the District of Massachusetts agreed to hear the appeal of a denial of an L-1A petition that was not appealed to the AAO following a finding that such an appeal was not mandatory.5

In each of these cases, the district courts analyzed the exhaustion requirement under the Darby standard to determine if an appeal to the AAO was made mandatory either by statute or the regulations. The judicially-created and discretionarily-applied concept of exhaustion of administrative remedies was not at issue in these cases.6 Instead, the courts focused on the language “may appeal” in 8 CFR §§103.3 and 103.4 to hold that an appeal under the agency’s rules was not required. Counsel should take note that other regulations follow this same language. The regulations for H, L, O, P, R nonimmigrants all use the permissive language that denials or revocations “may” be appealed to the AAO.7 For immigrant petition denials, the regulation at 8 CFR § 204.5(n)(2) provides that denials “shall be appealable” to the AAO, thus instructing that Petitioners “may” file an appeal under 8 CFR §103.3. Likewise, appeals of waivers of inadmissibility under INA §212(h) or (i) and/or INA §212(a)(9)(B) “shall be appealable” to the AAO under 8 CFR §212.7(a)(3) and “may” be appealed under 8 CFR §103.3. Counsel should cite to all available permissive language in the complaint and when responding to a motion to dismiss to prove that an AAO appeal is not required by the agency’s regulations, and therefore the court must accept jurisdiction under Darby.

Multiple cases also have held that the potential remedy of a motion to reopen is not a remedy that must be exhausted.8 These courts have determined that motions to reopen are discretionary decisions and are not an “appeal of right” that can be considered an adequate administrative remedy.

If counsel will be requesting direct judicial review in a case where an administrative appeal is available but not mandatory, the authors suggest based on experience that counsel keep in mind that a federal court judge is generally not applying any of these judicially-created concepts in isolation. Especially where exhaustion may be an issue, counsel should tell a detailed story in the complaint that would help convince a federal court judge that equity is on the side of accepting jurisdiction over the case and that justice would not be done by dismissing the case.

In the end, counsel must walk a tightrope in recommending a course of action to a client and ultimately choosing whether to forego an available administrative appeal. The risks are high. Counsel will not know in advance whether the federal court judge will or will not accept jurisdiction. By the time he finds out that a judge does not accept jurisdiction, the appeal period will have expired. The client must be made to understand this risk, which must be balanced against the feasibility that an administrative appeal may accomplish the desired result. Certainly in some cases, the client may decide that, by the time the AAO gets around to making a decision, the need for the beneficiary of the petition may be long gone. In those cases, and others, the risk of seeking direct federal court review may be one worth taking.

Unfortunately, it is not possible for counsel and the petitioner to hedge their bets. Once an appeal is filed and pending, there is almost no chance that a federal court will exercise jurisdiction. In such a case, counsel risks denial of the federal court action not only for reason of failure to exhaust the administrative remedy but also because the pending appeal renders the administrative decision to be a non-final order.9

Given the current trends of restrictive adjudications in employment-based immigrant and nonimmigrant petitions, the lengthening of the AAO appeal processing time, and the increasing number rubber of stamped denials, counsel needs to include the possibility of direct federal court review in his arsenal of possible options. However, in doing so, counsel must be aware of the risks, the likely government defenses, and how best to maximize the chances that the federal court will agree to hear the appeal. Hopefully, this practice pointer will be helpful in providing counsel with some strategies for maximizing the chances of being successful in pursuing that strategy.


1 509 U.S. 137 (1993).
2 In fact, the Supreme Court in Darby states that, “While federal courts may be free to apply, where appropriate, other prudential doctrines of judicial administration to limit the scope and timing of judicial review, §10(c) [of the APA], by its very terms, has limited the availability of the doctrine of exhaustion of administrative remedies to that which the statute or rule clearly mandates.” Id. at 146.
3 One federal court has found that the AAO is not biased because it “is not bound by prior INS decisions, has the power to overrule INS decisions and can create binding precedent.” Mercy Catholic Medical Ctr. v. Reno, 1994 U.S. Dist. LEXIS 17743 (EDPA 1994). However, federal courts have found other administrative agencies to be biased in decisions. See e.g., Association of National Advertisers, Inc. v. FTC, 627 F.2d 1151, 1156-1157 (1979) (bias of Federal Trade Commission chairman), cert. denied, 447 U.S. 921 (1980). This is a fact specific inquiry that counsel should make based on the record before the Service. The bias argument is often coupled with the argument that the legal argument is preordained before the AAO because of precedent decisions on point.
4 RCM Technologies, Inc. v. DHS, 614 F.Supp. 2d 39, 45 (D.D.C. 2009). It should be noted that the Department of Homeland Security (“DHS”) conceded during the hearing on the motion for preliminary injunction that an appeal of an H-1B petition to the AAO is discretionary under the regulations. Id. at 45 (“as defendants pointed out at the motions hearing, appeals to the AAO are discretionary [under 8 CFR §103.4(a)(1)].”
5 Olamide Olorunniyo Ore v. Clinton, 675 F.Supp. 2d 217, 223-24 (D.Mass 2009). See also EG Enterprises, Inc. v. DHS, 467 F.Supp. 2d 728, 732-33 (E.D. Mich 2006).
6 However, counsel should be prepared to argue why the judicially-created reasons for exhaustion do not apply should the government raise those issues in a motion to dismiss.
7 See 8 CFR §214.2(h)(12); 8 CFR §214.2(l)(10); 8 CFR §214.2(o)(9); 8 CFR §214.2(p)(11); and 8 CFR §214.2(r)(17).
8 See, e.g., Louis-Martin v. Ridge, 322 F.Supp.2d 556, 558-59 (M.D.Pa. 2004); Zhang v. Reno, 27 F.Supp. 2d 476, 477 (S.D.N.Y. 1998).
9 See e.g., Ma v. Reno, 114 F.3d 128, 130-131 (9th Cir. 1997); Acura of Bellevue v. Reich, 90 F.3d 1403, 1407-1408 (9th Cir. 1996).

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