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Stellar IT Solutions, Inc. v. United States Citizenship & Immigration Services

United States District Court, District of Columbia

November 19, 2018

STELLAR IT SOLUTIONS, INC. and KARTIK KRISHNAMURTHY, Plaintiffs,
v.
UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, Defendant.

          MEMORANDUM OPINION GRANTING IN PART PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

          RUDOLPH CONTRERAS UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         Plaintiff Kartik Krishnamurthy, a citizen of India, has lived in the United States legally since 2011 as the holder of an H-1B visa, a status granted to foreign citizens employed in “specialty occupation[s].” 8 U.S.C. § 1101(a)(15)(H)(i)(b). Last year, Mr. Krishnamurthy's employer, Plaintiff Stellar IT Solutions, Inc., submitted a petition on his behalf for an extension of his visa based on a change in his previously approved employment. After Defendant, the United States Citizenship and Immigration Services (“USCIS”), denied the petition, Stellar IT filed an appeal with USCIS's Administrative Appeals Office (“AAO”). But while he awaits a decision from the AAO, Mr. Krishnamurthy is left without lawful immigration status, and if he does not leave the country by November 27, 2018, he risks being deemed inadmissible for the next three years. Mr. Krishnamurthy and Stellar IT therefore initiated this lawsuit, asking the Court to ultimately set aside USCIS's denial of the H-1B petition as “arbitrary” and “capricious” under the Administrative Procedure Act (“APA”). 5 U.S.C. § 706(2)(A). Presently before the Court, however, is solely their motion for a preliminary injunction that would postpone the effectiveness of USCIS's decision and allow Mr. Krishnamurthy to remain in the United States while the lawsuit is pending.

         There are multiple reasons to approach this request with caution: a preliminary injunction is considered an extraordinary form of relief; judicial intervention is generally disfavored when administrative remedies have not been exhausted; and arbitrary and capricious review under the APA is highly deferential to agency decisions. Yet, for the reasons provided below, the Court concludes that it has jurisdiction to provide relief in this case and that limited judicial intervention is warranted. Plaintiffs have shown a strong likelihood of success on the merits, as USCIS's reasoning for denying the H-1B petition is squarely contradicted by the record and ignores critical evidence. Meanwhile, if the Court takes no action, Mr. Krishnamurthy is likely to suffer irreparable harm in that he will be forced to leave the country for an indefinite period of time.

         Accordingly, the Court grants Plaintiffs' motion in part, and enters an order staying the effectiveness of USCIS's denial of the visa petition while Stellar IT's administrative appeal is pending. The Court's order applies retroactively to the date Mr. Krishnamurthy lost lawful immigration status, and as a result, Mr. Krishnamurthy will retain lawful H-1B status pursuant to 8 C.F.R. § 214.2(h)(2)(i)(H). It bears emphasis, however, that the relief the Court orders is narrow. The Court takes no position on the ultimate merits of the H-1B petition; it merely finds that USCIS's articulated reasoning for denying the petition likely does not comply with the APA. The ordered relief is also limited in duration. The parties are directed to file a joint status report with the Court within fifteen days of the AAO's disposition of the administrative appeal. At that juncture, the Court may reconsider whether judicial relief remains appropriate.

         II. BACKGROUND

         H-1B visas are a form of legal nonimmigrant status, meaning the visa holder is in the United States temporarily for a particular purpose, like tourism or to attend school. The purpose of the H-1B program is to permit American employers to temporarily hire foreign citizens to work in “specialty occupation[s], ” 8 U.S.C. § 1101(a)(15)(H)(i)(B), which the Immigration and Nationality Act (“INA”) defines as those requiring “theoretical and practical application of a body of highly specialized knowledge, and . . . attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States, ” id. § 1184(h)(i)(1)(A)-(B).

         After they choose to participate in the H-1B program and find a foreign worker they intend to hire, employers must complete a two-step process. First, they must submit to the Department of Labor (“DOL”) a Labor Condition Application (“LCA”) identifying the specialty occupation job being offered and verifying that they will comply with the requirements of the program, including paying the worker the mandated wage rate. See 8 U.S.C. § 1182(n)(1). Among other things, the LCA must also state the start and end dates of the foreign worker's employment, as well as the “place of employment, ” defined as “the worksite or physical location where the work actually [will be] performed by the H-1B . . . nonimmigrant, ” 20 C.F.R. § 655.715; id. § 655.730(c)(4)(iv)-(v).

         Second, once the DOL certifies the LCA, the employer must then submit the LCA to USCIS with a Form I-129 petition requesting that the foreign worker-sometimes referred to as the petition's “beneficiary”-be classified as an H-1B nonimmigrant worker. See 8 C.F.R. § 214.2(h)(4). In this petition, the employer must establish that it has “an employer-employee relationship” with the beneficiary, “as indicated by the fact that [the employer] may hire, pay, fire, supervise, or otherwise control the work of” the beneficiary. Id. § 214.2(h)(4)(ii). The employer also has the burden of establishing that the position offered to the beneficiary is in fact a “specialty occupation.” To carry that burden, the employer must show that the position satisfies at least one of four prerequisites:

(1) A baccalaureate or higher degree or its equivalent is normally the minimum requirement for entry into the particular position;
(2) The degree requirement is common to the industry in parallel positions among similar organizations or, in the alternative, an employer may show that its particular position is so complex or unique that it can be performed only by an individual with a degree;
(3) The employer normally requires a degree or its equivalent for the position; or
(4) The nature of the specific duties are so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or higher degree.

Id. § 214.2(h)(4)(iii)(A).

         If USCIS grants the petition, the H-1B status is generally valid for three years, but it may be extended for an additional three years, for a statutory maximum of six years. See Save Jobs USA v. U.S. Dep't of Homeland Sec., 105 F.Supp.3d 108, 111 (D.D.C. 2015); 8 U.S.C. § 1184(g)(4). This default statutory maximum is subject to exceptions, however, one of which applies to foreign workers whose Form I-140 Petitions for permanent residency have been pending for more than 365 days. See Sage IT, Inc. v. Cissna, 314 F.Supp.3d 203, 205 (D.D.C. 2018) (citing 21st C. Dep't of Justice Appropriations Authorizations Act (“DOJ-21”), Pub L. No. 107-273, § 11030A (2002) (codified at 8 U.S.C. § 1884 note)). Those individuals may seek recurring one-year extensions of their H-1B status until “a final decision is made” regarding their pending permanent residency petitions. Id. at 205-06 (quoting 8 U.S.C. § 1884 note).

         Mr. Krishnamurthy has sought to avail himself of this exception in the H-1B petition at the center of this case. As alluded to above, before USCIS denied the present petition, Mr. Krishnamurthy held H-1B status from 2011 to 2017, hitting the six-year maximum. But the present petition indicates that Mr. Krishnamurthy filed a labor certification application to support an I-140 permanent residency petition in 2012, and that a final decision on the application remains pending. See Compl., Ex. A at 14, ECF No. 1-5. He and Stellar IT therefore contend that he is eligible for at least one additional year of H-1B status. USCIS does not appear to take issue with this contention, as it did not mention the statutory time cap in its decision denying the H-1B petition or in its memorandum in opposition to Plaintiffs' motion before this Court.

         The present H-1B petition is more than a mere request for an extension of status, though. The petition reflects no change in Mr. Krishnamurthy's employer, but it does indicate a change in the previously approved employment, meaning he and Stellar IT wish for him to serve in a different role with the company. Id. at 8. Mr. Krishnamurthy's new position, the petition and supporting documents explain, would be “Senior Project Manager Information Technology, ” to be performed on-site at Honda North America, for whom Stellar IT would provide services as a sub-contractor.[1] See, e.g., id. at 88, 95. The position's responsibilities would include “[e]stablish[ing] and implementing project management processes and methodologies for the IT community;” “work[ing] closely across business and IT teams to drive effective selection of delivery and solutions partners;” and “[d]riv[ing] insightful businesses and financial analytics to ensure that technology investments are aligned to key company priorities.” Id. at 95.

         Stellar IT completed the first step of the approval process for this change in employment: it obtained DOL certification of the LCA form. See Id. at 27-29. When it submitted the Form I-129 petition to USCIS, however, the agency responded by issuing a Request for Evidence (“RFE”) that asked for additional information regarding the nature of the position and Stellar IT's employer-employee relationship with Mr. Krishnamurthy-specifically its right to control him while he was on-site at Honda. Compl., Ex. B at 2-5, ECF No. 1-6. The RFE, which is dated January 23, 2018, indicated that Stellar IT had until April 17, 2018 to produce this information, id. at 1, but on March 20, before Stellar IT had replied to the RFE, USCIS went ahead and denied the petition outright, see Compl., Ex. C, ECF No. 1-7. The agency's written decision concluded that Stellar IT had not proven that an employment relationship existed and that the company had failed to show that the position constituted a specialty occupation. Id. at 3, 5-6.

         Stellar IT then filed a motion with USCIS to reopen and reconsider the decision on April 13. See Compl., Ex. D, ECF No. 1-8. With this motion, the company also submitted new evidence, including contractor agreements, a Q&A document completed by Stellar IT's president in response to the RFE, a Stellar IT performance review of Mr. Krishnamurthy, and a letter from Honda providing additional information about Mr. Krishnamurthy's position. See id., at 27-33, 39-56, 78-80. The Q&A document stated that Stellar IT would have “the ability, as well as the legal right, to control the manner and means in which [Mr. Krishnamurthy's] work [wa]s performed, ” and it said that the Stellar IT president would supervise Mr. Krishnamurthy's performance by holding weekly phone calls with him. Id. at 28-29.

         The letter from Honda confirmed that Stellar IT would be Mr. Krishnamurthy's employer and would have the legal right to control and assign his work, as well as the right to fire him if it so chose. See Id. at 33. The letter also stated that Mr. Krishnamurthy's position would be related to a project called “Interactive Network (iN) Redesign, ” a revamp of “a suite of portals allowing two way communication between Honda and [its] dealerships. Id. at 32. Mr. Krishnamurthy, the letter explained, would be “[t]he Senior Project Manager . . . charged with all aspects of managing this crucial initiative, ” a role that “resides within the Information Services Division” and

involves understanding several parameters in the context of technology for organizational efficiency, information flows and management, project management discipline, ability to understand statistical reports, financial forecast and variance analysis, familiarity with Sarbanes Oxley for IT compliance, understanding of U.S. Generally Accepted Accounting Principles to review software and other contractual arrangements in accordance with U.S. GAAP to identify language that may require non-standard accounting treatment, understanding of supply chain and procurement, with all of the above in the context of large scale Information Technology Project Management.

Id. The letter further noted that the position “requires a Bachelor's degree at a minimum or a Master's degree with course work in Information Technology, Accounting/Finance and Business Management.” Id.

         Despite this new evidence, USCIS again denied Stellar IT's petition on May 31, 2018, on the same grounds provided in its March 20 decision-that an employment relationship had not been proven, and that the position had not been shown to be a specialty occupation. Compl., Ex. E, ECF No. 1-9. The agency reasoned that, “[w]hile evidence, such as an employment agreement and performance review form, indicate[d] that [Stellar IT] may be responsible for [Mr. Krishnamurthy's] salary and benefits, [it] did not appear to otherwise have the right or ability to assign, control, review, or supervise [his] work.” Id. at 3. And “[w]ithout a statement of work detailing the project's outline description, duration, role and [Mr. Krishnamurthy's] duties to demonstrate the end-client will actually use computer occupations for daily assignments, ” the agency concluded that Stellar IT “ha[d] not established that the final duties of the proffered position [we]re those of a specialty occupation.” Id. at 5. Nor had Stellar IT proven that its “client . . . required that the degree . . . be in a specific specialty.” Id. USCIS's decision, by its own terms, made it so Mr. Krishnamurthy was “without lawful status” and left him “present in the United States in violation of the law.” Compl., Ex. F at 1.

         One month later, on June 28, Stellar IT filed an administrative appeal with USCIS's AAO. See Def.'s Opp'n to Pl.'s Mot. for Prelim. Inj. (“Def.'s Opp'n”), Ex. A, ECF No. 11-1. But with the AAO's decision still pending in late August, Stellar IT and Mr. Krishnamurthy together filed their complaint in this case, asking this Court to set aside USCIS's denial of the H-1B petition. The same day, they filed their Motion for Preliminary Injunction, requesting that the Court stay ...


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