Taco Especial cases combined

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION

No. 10-1517

UNITED STATES COURT OF APPEALSFOR THE SIXTH CIRCUIT

TACO ESPECIAL; PROSPERO GALEANA,

Plaintiffs-Appellants,

v.

JANET NAPOLITANO, Secretary ofHomeland Security; ALEJANDROMAYORKAS, Director, U.S. Citizenship andImmigration Services,

Defendants-Appellees.

))))))))))))

ON APPEAL FROM THE UNITEDSTATES DISTRICT COURT FORTHE EASTERN DISTRICT OFMICHIGAN

O R D E R

Before: DAUGHTREY, CLAY, and STRANCH, Circuit Judges.

The plaintiffs, Taco Especial and Prospero Galeana, appeal from a grant of summary

judgment in favor of the defendants in this action challenging the administrative denial of an

Immigrant Petition for Alien Worker as a Skilled Worker or Professional, filed under 8 U.S.C.

§ 1153(b)(3). The parties have waived oral argument, and this panel unanimously agrees that oral

argument is not needed. Fed. R. App. P. 34(a).

Taco Especial is a Mexican restaurant located in Ecorse, Michigan. Galeana, a Mexican

citizen, began working for Taco Especial as a dishwasher in the 1990s. In 2001, Taco Especial filed

an Application for Permanent Employment Certification with the United States Department of Labor

(DOL), seeking to employ Galeana permanently as a chef in the United States. The proffered wage

was $25.00 per hour, or $52,000 per year. In 2005, upon finding that there were no qualified, able,

Case: 10-1517 Document: 006111126756 Filed: 11/10/2011 Page: 1 (1 of 5)

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Contents: Pages 1.) 6th Circuit Dismissal 1-5 2.) E.D. Michigan Dismissal 6-20 3.) USCIS Brief to 6th Cir. 21-59 3.) AAO Dismissal 60-78

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and willing United States workers to fill the chef position and that employing an alien would not

have an adverse impact on American workers, the DOL granted Taco Especial’s application.

In 2006, Taco Especial filed an Immigrant Petition for Alien Worker with the United States

Citizenship and Immigration Services (USCIS). The USCIS denied the petition on the ground that

Taco Especial failed to show an ability to pay the proffered wage. Specifically, the USCIS

determined that the proffered wage exceeded both Taco Especial’s net income for the tax years in

question, 2001-2005, and the difference between Taco Especial’s current assets and liabilities for

each of the tax years. Taco Especial appealed, and the Administrative Appeals Office (AAO)

dismissed the appeal. This lawsuit followed.

After the suit was filed, the AAO reopened the administrative case sua sponte and gave Taco

Especial 30 days to submit additional evidence concerning its ability to pay the proffered wage. The

AAO also directed Taco Especial to address the applicability of Matter of Sonegawa, 12 I. & N.

Dec. 612 (BIA 1967), to its petition. Again, the AAO dismissed Taco Especial’s appeal.

The parties then moved for summary judgment in the district court case. The district court

granted the defendants’ motion.

We review a district court’s grant of summary judgment de novo. Ziegler v. Aukerman, 512

F.3d 777, 781 (6th Cir. 2008). When the district court’s decision concerns an administrative

agency’s final decision under the Administrative Procedures Act, 5 U.S.C. §§ 551–559; 701–706,

we review the summary judgment de novo and review the agency’s decision under the arbitrary-and-

capricious standard. Coal. for Gov’t Procurement v. Fed. Prison Indus., Inc., 365 F.3d 435, 457 (6th

Cir. 2004). Under this standard, we will set aside the agency’s decision “only if it is arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with the law.” Sierra Club v.

Slater, 120 F.3d 623, 632 (6th Cir. 1997).

The plaintiffs first argue, citing Construction & Design Co. v. United States Citizenship &

Immigration Services, 563 F.3d 593 (7th Cir. 2009), that the AAO erred in relying on net income to

determine Taco Especial’s ability to pay the proffered wage. They point out that many profitable

corporations show no taxable income because they transfer their profits into other accounting


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No. 10-1517- 3 -

categories, such as salaries. Thus, the plaintiffs maintain, gross income is more indicative of cash

flow.

Although the court in Construction & Design Co. agreed that income tax returns are not a

reliable basis for determining whether a company can pay a proffered wage, the court also noted that

the Department of Homeland Security looks at other factors when the income tax returns and balance

sheet fail to make clear that the alien’s salary will not imperil the company’s solvency. Id. at 596.

Here, the district court considered Construction & Design Co. and concluded that the AAO’s

decision was not arbitrary and capricious because it based its decision on other factors besides Taco

Especial’s income tax returns. Specifically, the AAO addressed Taco Especial’s argument that

depreciation should be added back to net income. Next, the AAO considered that the total wages

paid by Taco Especial during the relevant time period was $69,000. Additionally, the officer’s

compensation ranged from $26,200 to $67,750 and was less than $52,000 in all but two of the

relevant years. Thus, the AAO concluded that a salary of $52,000 was unrealistic. Finally, the

district court noted that the AAO rejected Taco Especial’s argument about gross profits because they

tend to overstate an employer’s ability to pay.

Taco Especial cites no authority for its proposition that the AAO should have relied on gross

profits. Moreover, although the plaintiffs insist that Taco Especial’s gross profits were in the

hundreds of thousands of dollars for the relevant tax years, they do not offer evidence of

expenditures other than salaries. Therefore, gross profits are, indeed, an incomplete financial

assessment. The AAO considered other factors in addition to the income tax returns, and we cannot

say that the AAO’s decision was arbitrary or capricious or an abuse of discretion.

The plaintiffs also argue that the AAO misapplied Sonegawa. In that case, an immigration

official rejected an alien-worker petition filed by the owner of an oriental dress boutique on the

ground that the proffered wage, $6,240, exceeded the petitioner’s net business profit of $280 for the

1966 tax year. The BIA reversed, concluding that the petitioner had a reasonable expectation of

future profits. 12 I. & N. Dec. at 615. The BIA noted that 1966 was a particularly bad year for the

petitioner and that her financial statement showed a net profit of $4,774 from January 1, 1967, to


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May 31, 1967. Id. at 614. The BIA also noted that the petitioner’s shop was well-recognized in

Pasadena, California, and was the subject of a news article in a fashion magazine. Id. Additionally,

the BIA noted that the petitioner’s designs had been published in Time and Look magazines, that her

clients included movie actresses and society matrons, that she was in demand as a designer, and that

she received appearance fees that were not included in the store’s income. Id. at 614–15.

In distinguishing Sonegawa from the plaintiffs’ case, the AAO explained that the newspaper

articles submitted by the plaintiffs in support of Galeana’s reputation mainly addressed the plaintiffs’

lawsuit, rather than Galeana’s culinary skills or reputation in the community. The AAO also noted

that the plaintiffs’ reliance on difficult economic conditions in the Detroit metropolitan area–based

on United States Bureau of Labor Statistics for June 3, 2009–failed to show how Taco Especial was

affected, in light of the restaurant’s history of declining gross profits from the year 2000 onward.

We agree with the district court that the AAO provided a reasoned comparison of the plaintiffs’ case

to Sonegawa and that its decision was neither arbitrary nor capricious.

We have considered the plaintiffs’ remaining arguments and find that they lack merit or are

too cursory to permit meaningful review. We conclude that the district court did not err in granting

summary judgment to the defendants and, therefore, we affirm the district court’s order.

ENTERED BY ORDER OF THE COURT

Clerk


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UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

Leonard Green Clerk

100 EAST FIFTH STREET, ROOM 540 POTTER STEWART U.S. COURTHOUSE

CINCINNATI, OHIO 45202-3988 Tel. (513) 564-7000

www.ca6.uscourts.gov

Filed: November 10, 2011

Ms. Caridad Pastor Cardinale Pastor & Associates 525 E. Big Beaver Road Suite 206 Troy, MI 48083

Re: Case No. 10-1517, Taco Especial, et al v. Janet Napolitano, et al Originating Case No. : 09-10625

Dear Sir or Madam,

The Court issued the enclosed (Order/Opinion) today in this case.

Sincerely yours,

s/Bryant L. Crutcher Case Manager Direct Dial No. 513-564-7013

cc: Mr. William Charles Silvis Ms. Derri T. Thomas Mr. David J. Weaver Enclosure

Mandate to issue


09-UNITED STATES DISTRICT COURTEASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

TACO ESPECIAL and PROSPERO GALEANA,

Plaintiffs,Case No. 09-10625

-vs- Hon: AVERN COHN

JANET NAPOLITANO, Secretary of HomelandSecurity; andALEJANDRO MAYORKAS, Director, U.S.Citizenship and Immigration Services,

Defendants._____________________________________/

MEMORANDUM AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARYJUDGMENT AND DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

AND DISMISSING CASE

I. INTRODUCTION

This is an Administrative Procedures Act (APA) case arising out of the United States

Citizenship and Immigration Services’s (USCIS) denial of an Immigrant Petition for Alien

Worker. Plaintiff Taco Especial is a Mexican restaurant located in Ecorse, Michigan. It is

registered as a C-corporation. Taco Especial filed a Form I-140, Immigrant Petition for

Alien Worker, on behalf of Prospero Galeana (Galeana), an illegal immigrant who it sought

to employ as a chef. The petition was denied by the USCIS. Defendant Janet Napolitano

is the Secretary of the Department of Homeland Security, the agency in which the USCIS

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March 15, 2010

1Because Napolitano and Mayorkas have been sued in their official capacities,the Court will refer to the defendants collectively as “the government.” Mayorkas hasbeen substituted for Michael Aytes pursuant to FED. R. CIV. P. 25(d)

2La Cabana del Pescador has since changed its name to La Cabana de YeyoS.A. de C.V.

3There is some ambiguity as to the beginning of the business relationshipbetween Galeana and Taco Especial. Taco Especial has produced a W2 for Galeanafor 1992. However, Taco Especial was not incorporated until 1999. In any event,Galeana was employed by Taco Especial before it began any process with USCIS.

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is housed. Alejandro Mayorkas is the director of the USCIS.1 Taco Especial has appealed

the USCIS decision on grounds that it was arbitrary and capricious in violation of the APA.

Now before the Court are the parties’ cross-motions for summary judgment. For the

reasons that follow, the government’s motion for summary judgment will be granted and

Taco Especial’s motion for summary judgment will be denied.

II. FACTS

The following facts are taken from the Administrative Record.

Galeana is a Mexican citizen who entered the United States illegally in 1989. Prior

to entering the United States, Galeana worked at La Cabana del Pescador,2 a restaurant

in Mexico. His former employer stated that he “worked in the kitchen area providing

support in activities related to this department as a cook.” Galeana began working at Taco

Especial in 1992.3

On April 16, 2001 Taco Especial filed a Form ETA-750 – Application for Permanent

Employment Certification – with the United States Department of Labor (DOL) for the

position of Chef. This position required 3.8 years of experience as a chef. The proffered

wage was $25.00 per hour or $52,000 per year (based on a 40-hour work week). After

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4The 2007 Federal Income Tax Returns were submitted on June 2009 after TacoEspecial’s petition was reopened by the AAO.

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finding that there were no qualified, able, and willing US workers to fill the position and that

employing an alien would not have an adverse impact on American workers, the DOL

granted Taco Especial’s application on May 25, 2005.

On July 18, 2006 Taco Especial filed a Form I-140 – Immigrant Petition for Alien

Worker – with the USCIS on behalf of Galeana.

On August 23, 2006 the USCIS sent a request for evidence (RFE) to Taco Especial

asking for the restaurant’s annual reports, prepared federal income tax returns, and/or

audited financial statements for the years 2001-05. It also asked for W2s evidencing

wages earned by Galeana while working for Taco Especial. Taco Especial responded by

providing federal income tax returns with the following information:4

Year Gross Income ($)

Net Income ($)

Net CurrentAssets ($)

SalariesPaid ($)

Officer’s Salary ($)

2001 240,677 -12,727 7,416 95,835 67,750

2002 226,977 -5,627 7,780 81,985 57,200

2003 206,010 5,118 10,006 82,515 37,075

2004 194,646 -6,529 6,485 69,732 42,400

2005 198,613 -3,595 6,723 85,145 28,500

2007 191,673 -3,819 N/A 81,320 26,200

Taco Especial also included Galeana’s W2 forms for the following years: 1992

($5,9982.27), 1997 ($13,412.03), 2000 ($18,173.28), and 2001 ($17,450.00).

On January 30, 2007 USCIS denied Taco Especial’s Form I-140 petition on grounds

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that Taco Especial failed to show an ability to pay the proffered wage of $25.00 per hour.

Specifically, the USCIS found that (1) Taco Especial did not currently pay Galeana the

proffered wage, (2) the proffered wage exceeded Taco Especial’s net income for each year

in question, and (3) the proffered wage exceeded the difference between Taco Especial’s

current assets and liabilities for each of the years in question.

On February 27, 2007 Taco Especial appealed the USCIS decision to the

Administrative Appeals Office (AAO). It asserted that it could demonstrate the ability to pay

the proffered wage if the correct accounting principles were used. Taco Especial included

a report from an accountant to who stated that (1) depreciation should be added back into

Taco Especial’s net income, (2) because Taco Especial was a C-corporation and was

subject to double taxation, it was unlikely to ever show a profit, and (3) in his opinion, Taco

Especial was a viable business. The AAO affirmed the USCIS decision, finding that Taco

Especial had not proved an ability to pay the proffered wage.

On January 22, 2009 Taco Especial and Galeana (collectively plaintiffs) filed this

action claiming that the denial of the Form I-140 petition violated the APA. The plaintiffs

alleged that the government erroneously applied the regulation requiring proof of ability to

pay the proffered wage.

On April 27, 2009 the AAO reopened Taco Especial’s Form I-140 petition on its own

motion. Taco Especial was given 30 days to submit additional evidence concerning its

ability to pay the proffered wage and of the applicability of Matter of Sonegawa, 12 I&N

Dec. 612 (BIA 1967) to its petition. Taco Especial submitted its 2007 Federal Income Tax

Return in support of its ability to pay the proffered wage. In support of its argument

regarding the applicability of Sonegawa, Taco Especial submitted a 2009 employment

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summary for the metro Detroit area, evidence of the prevailing wage for “cooks” in metro

Detroit, and news articles purporting to show that Galeana was well-known as a Mexican

chef and that his services were integral to Taco Especial’s continued viability.

On July 10, 2009 the AAO again denied Taco Especial’s petition. It gave the

following reasons for the denial: (1) Taco Especial failed to show its ability to pay the

proffered wage, (2) Taco Especial could not show an ability to pay the proffered wage

based on its Federal Income Tax Returns, (3) based on River Street Donuts, LLC v.

Napolitano, 558 F.3d 111 (1st Cir. 2009), the USCIS did not err in refusing to take

depreciation into account in calculating net income, (4) that Sonegawa was not applicable

in this case, and (5) Taco Especial could not alter the Form I-140 by changing the position

from “chef” to “cook.”

III. STANDARD OF REVIEW

The motions before the Court are styled as motions for summary judgment. The

Court notes the concerns expressed by the Sixth Circuit in Alexander v. Merit Systems

Protection Board, 165 F.3d 474, 480-81 (6th Cir. 1999). In that case, it “suggested that the

use of summary judgment is inappropriate for judicial review of an administrative action

under the Administrative Procedure Act.” Donaldson v. United States, 109 Fed. App’x 37,

39-40 (6th Cir. 2004). The primary concern is that review of agency decisions via motions

for summary judgment “invites improper consideration of evidence outside the

administrative record and reliance upon post hoc rationalizations for the agency’s action.”

Alexander, 165 F.3d at 480. The Court believes that a motion to affirm would be more

appropriate. However, a district court may enter judgment in response to a motion for

summary judgment so long as the proper standard of review is used. See id. at 480-81.

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Under the APA, a court must set aside an agency decision if it is “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §

706(2)(A). Review under the APA is deferential and a court must not “substitute its

judgment for that of the agency.” Motor Vehicle Manufacturer’s Association v. State Farm

Mutual Auto Insurance Co., 463 U.S. 29, 43 (1983).

Judicial review is limited to the administrative record that was before the agency at

the time of its decision. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,

419-20 (1971). Based on the record before it, an agency is required to “articulate a

satisfactory explanation for its action including a rational connection between the facts

found and the choice made.” Motor Vehicle Manufacturer’s Association, 463 U.S. at 43

(internal quotation omitted). Therefore, a party challenging an agency action is required

to “show that the action had no rational basis or that it involved a clear and prejudicial

violation of the applicable statutes or regulations.” McDonald Welding v. Webb, 829 F.2d

593, 595 (6th Cir. 1987). Moreover, a court must give an agency’s interpretation of its own

regulations “controlling weight unless it is plainly erroneous or inconsistent with the

regulation.” Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994) (internal

quotations omitted).

IV. ANALYSIS

A. The Law

1.

The Immigration and Nationality Act (INA) governs the issuance of visas to

immigrant aliens seeking admission to the United States after receiving permanent job

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5 In 2005, the DOL instituted a new labor certification program using Form ETA-9089. See 69 Fed. Reg. 77326, 77392 (Dec. 27, 2004) (codified at 20 C.F.R. §656.17(a)). Because Taco Especial labor certification application was filed in 2001, itutilized Form ETA-750. Therefore, the Court will refer to this outdated form in thismemorandum and order.

68 C.F.R. § 204.5(g)(2) states:Any petition filed by or for an employment-based immigrantwhich requires an offer of employment must be accompaniedby evidence that the prospective United States employer hasthe ability to pay the proffered wage. The petitioner mustdemonstrate this ability at the time the priority date is

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offers as skilled or professional workers. 8 U.S.C. § 1153(b)(3)(A). Authority to administer

this statute has been delegated to the Secretary of Homeland Security and sub-delegated

to the USCIS. 8 U.S.C. § 1103(a)(1); 8 C.F.R. § 2.1.

Before obtaining a visa for permanent employment, an alien’s prospective employer

must obtain a certification from the DOL stating that there are no qualified, able, and willing

U.S. workers who can fill the position. 8 U.S.C. 1182(a)(5)(A)(i)(I). This certification is

obtained by filing and obtaining approval for a Form ETA-750. 20 C.F.R. § 565.21(a)

(2004).5

2.

Once an employer obtains approval of a Form ETA-750, it can petition the USCIS

to classify a specific alien beneficiary as an employment-based immigrant using a Form I-

140. See 8 C.F.R. § 204.5©. An employer bears the burden of showing that the job offer

to the beneficiary is a realistic one. Thus the employer must show that the prospective

employee meets the minimum job requirements specified in the Form ETA-750, 8 C.F.R.

§ 205.(1)(3)(ii), and that the employer has the ability to pay the wage specified in the Form

ETA-750, 8 C.F.R. § 204(g)(2).6

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established and continuing until the beneficiary obtains lawfulpermanent residence. Evidence of this ability shall be either inthe form of copies of annual reports, federal tax returns, oraudited financial statements. In a case where the prospectiveUnited States employer employs 100 or more workers, thedirector may accept a statement from a financial officer of theorganization which establishes the prospective employer’sability to pay the proffered wage. In appropriate cases,additional evidence, such as profit/loss statements, bankaccount records, or personnel records, may be submitted bythe petitioner or requested by the Service.

7Net current assets are defined as the difference between current assets andcurrent liabilities.

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a.

An employer must demonstrate the ability to pay the proffered wage beginning at

the time the ETA-750 was approved and continuing until the petition to hire an alien is

approved. 8 C.F.R. § 204.5(g)(2). USCIS has established three primary methods by which

an employer can conclusively establish the ability to pay the proffered wage. First, an

employer can show that he is already employing the alien beneficiary at a wage equal to

that specified in the Form ETA-750. USCIS Memorandum, Determination of Ability to Pay

under 8 CFR 204.5(g)(2), (May 4, 2004). Second, an employer can show that its yearly net

income exceeds the expected yearly wage specified in the Form ETA-750. Id. Finally, an

employer can show that its net current assets7 exceed the expected yearly wage specified

in the Form ETA-750. Id. Even if an employer fails to meet any of the three criteria, the

USCIS has the discretion to consider any other evidence provided by the petitioner and

may use it to find that an employer has the ability to pay the proffered wage.

b.

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Even if an employer cannot establish the ability to pay the proffered wage at all times

since approval of the ETA-750, it can still gain approval of its Form I-140 petition by

establishing a reasonable expectation of future profits sufficient to pay the proffered wage

based on a totality of the circumstances. See In re matter of Sonegawa, 12 I&N Dec. 612

(BIA 1967). In Sonegawa an employer’s petition to hire an alien worker was denied

because its net income in 1966 ($280) was less than the proffered wage of $6,240 per

year.

The denial was reversed by the Board of Immigration Appeals (BIA) after a fact-

specific analysis of the employer’s financial condition. The BIA first noted that the small

profit in 1966 was due to unique conditions that were not likely to be repeated. In 1966 the

employer changed locations and was required to pay double rent for five months and was

unable to conduct any business for a period of time while the actual move took place.

Sonegawa, 12 I&N at 614. In the following year, the employer’s business rebounded and

showed a net profit of $4,774 for the first five months of 1967. Id. The BIA also noted that

the employer enjoyed a national reputation as a dress-maker as evidenced by articles

published in popular fashion magazines. Id. at 615. Based on this evidence, the BIA found

that the employer’s “expectations of continued increase in business and increasing profits

are reasonable expectations and that it has been established that she has the ability to pay

the beneficiary the stipulated wages.” Id. Under the reasoning of Sonegawa, an employer

who has experienced and recovered from an isolated period of economic duress can rely

on its renewed profitability in demonstrating its ability to pay a proffered wage.

3.

If the USCIS denies a Form I-140 application, an employer may appeal the decision

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to the USCIS AAO. 8 C.F.R. §§ 103.3(a)(1)(iv), 204.5(n)(2). The AAO has de novo

authority to hear appeals of denials of immigration petitions and may address issues not

raised in the initial application. See, e.g., Soltane v. United States Department of Justice,

381 F.3d 143, 145-46 (3rd Cir. 2004). The AAO also has jurisdiction reopen or reconsider

a prior AAO decision and may do so on its own motion if it provides the parties with thirty

days to submit a brief in response. 8 C.F.R. § 103.5.

B. DISCUSSION

1. Ability to Pay Proffered Wage

The plaintiffs claim that the AAO’s denial of the I-140 petition based on Taco

Especial’s failure to show an ability to pay the proffered wage was arbitrary and capricious

because it focused solely on Taco Especial’s net income. Taco Especial says that, as a

C-corporation, it is subject to double taxation and has an incentive to minimize its net

income for tax purposes. It asserts that the AAO should utilize gross income rather than

net income when determining ability to pay. It further asserts that the AAO should consider

accounting practices whereby a corporation’s real profits are shifted into depreciation or

officer’s salary to avoid the effect of double taxation.

The plaintiffs are correct to assert that net income is a poor indicator of ability to pay

because corporations have an incentive to minimize tax liability through accounting

practices that shift profits into other places. In Construction & Design Co. v. United States

Citizenship and Immigration Services, 563 F.3d 593 (7th Cir. 2009), Judge Posner found

that net income may not accurately reflect a corporation’s ability to pay a proffered wage.

He specifically noted that a profitable company may still show no taxable income because

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8At the rehearing before the AAO, Taco Especial asserted that it paid Galeana$17 per hour, but provided no evidence to support that assertion.

9The AAO has been criticized for failing to exercise its discretion to considerother relevant evidence submitted by employers. See Posting of Dagmar Butte to AILALeadership Blog, http://ailaleadership.blogspot.com/2009/04/ability-to-pay.html (April 30,2009) (criticizing the USCIS for refusing to consider secondary evidence submitted byemployers to demonstrate their ability to pay).

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corporate profit is transferred into salaries. Id. at 596. Instead, he stated that the

government should focus on cash flow. Id. at 595 (“If the firm has enough cash flow, either

existing or anticipated, to be able to pay the salary of a new employee along with its other

expenses, it can ‘afford’ that salary.”). However, he also emphasized that the employer

bears the burden of proof in establishing ability to pay and must show where “the extra

money . . . would be coming from.” Id. at 596.

In this case, the AAO acted in a rational manner by first reviewing the Federal

Income Tax Returns and W2 statements submitted by Taco Especial. It first assessed

whether Taco Especial currently paid Galeana the proffered wage and noted that Taco

Especial submitted no documentary evidence of the wages currently paid to Galeana.8 The

AAO then assessed Taco Especial’s net income and net current assets and found that both

were insufficient to support the proffered wage of $52,000 per year. Had the AAO based

its decision solely on these three metrics, its decision may well have been arbitrary and

capricious.9 However, the AAO went on to consider the other evidence and arguments

asserted by Taco Especial.

First it addressed and rejected Taco Especial’s assertion that depreciation should

be added back to net income to determine ability to pay. The AAO relied on a decision by

the United States Court of Appeals for the First Circuit which held that “a depreciation

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deduction is a systematic allocation of the cost of a tangible long-term asset” and is a “real

expense.” River Street Donuts LLC v. Napolitano, 558 F.3d 111, 118 (1st Cir. 2009). That

court went on to state that “even though amounts deducted for depreciation do not

represent current use of cash, neither does it represent amounts available to pay wages.”

Id.

Next the AAO considered whether the other evidence offered by Taco Especial

supported a finding that it could pay Galeana a wage of $52,000 per year. It considered

the total wages paid by Taco Especial during the relevant time period and noted that in

2004 Taco Especial paid a total of $69,000 in wages. It also noted that the officer’s

compensation varied from $26,200 to $67,750 and was less than $52,000 in all but two

years. Based on this analysis, the AAO found that a job offer promising the payment of an

additional $52,000 in wages was not realistic.

The AAO also rejected Taco Especial’s argument that ability to pay should be based

solely on gross profits. Just as net profits understate an employer’s ability to pay as a

result of tax incentives, gross profits overstate an employer’s ability to pay because it

ignores other necessary expenses. Plaintiffs’ reliance on Matter of X, EAC 01-018-50413

(AAO January 31, 2003) is misplaced due to important factual differences. Although the

AAO did state that net profits were not controlling, it found an ability to pay based on (1)

pay stubs showing that the employer was currently paying the employee a salary in excess

of the proffered wage and (2) an owner’s salary of more than $200,000 per year which

could be reduced “without impair[ing] the owner’s own ability to earn a living.” Id. In

contrast, Taco Especial produced no evidence of Galeana’s current wage and the owner’s

salary dropped as low as $26,2000 per year. In other words, Taco Especial did not

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produce alternative evidence that was superior to net income and demonstrated an ability

to pay. Moreover, it cites no authority for the proposition that gross profits, standing alone,

can demonstrate the ability to pay additional salary. Without consideration of overhead,

supplies, rent, payroll and the other necessary expenses which are deducted from gross

profits, it is impossible to determine whether there is any “air” in Taco Especial’s gross

income statement. See Construction & Design Co., 563 F.3d at 596-97.

Based on a review of the record, there is nothing to suggest that the AAO’s decision

was arbitrary and capricious. The AAO not only considered the primary factors included

in the USCIS memo, but also considered the secondary evidence supplied by Taco

Especial. Taco Especial bore the burden of proof in establishing an ability to pay the

proffered wage. It was given two opportunities to submit evidence demonstrating an ability

to pay. In light of its failure to produce any additional documentary evidence supporting its

ability to pay, the conclusory assertion that gross income is the proper measure of ability

to pay is not persuasive. The AAO carefully considered the evidence before it and reached

a rational conclusion based on that evidence. In light of these facts, the AAO’s decision

was neither arbitrary nor capricious.

2. Applicability of Sonegawa

Plaintiffs further assert that, even if Taco Especial cannot show an ability to pay the

proffered wage, it should be excused based on the reasoning in Matter of Sonegawa. The

AAO considered the evidence proffered by Taco Especial and distinguished Sonegawa.

This decision was neither arbitrary nor capricious.

First, Taco Especial relies on 2009 unemployment data for metro Detroit to prove

adverse economic conditions. However, the AAO found that Taco Especial had been

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10In addition, in Sonegawa, the employer demonstrated that the adverseeconomic conditions had ended and that it had returned to profitability. Taco Especialcan make no such assertion with respect to the economic climate in Detroit.

14

unable to pay the proffered wage since 2001 – long before the arrival of the adverse

economic conditions it referenced.10 Second, Taco Especial asserts that it has a strong

reputation in the community and that Galeana is essential to its future success. The AAO

discounted the articles submitted to support this assertion because they were focused

almost exclusively on the ongoing litigation in this case, made only a brief mention of Taco

Especial’s reputation as a restaurant, and made no mention of Galeana.

The AAO provided Taco Especial with an opportunity to show that the reasoning

used in Sonegawa should be applied in this case. It also provided a reasoned comparison

between Taco Especial’s condition to that in Sonegawa and found that Sonegawa should

not be applied. Because the AAO provided a rational and reasoned comparison, the Court

will not substitute its judgment for that of the AAO.

3.

To the extent that plaintiffs’ arguments are based on Taco Especial’s ability to hire

Galeana as a cook and to employ him at the prevailing wage for cooks, they are

inapplicable. The Form 1-140 petition filed by Taco Especial was directed toward an

approved Form ETA-750 which was directed to the position of chef and stated a wage of

$25.00 per hour. If Taco Especial wishes to employ Galeana as a cook, it must obtain

approval of a new Form ETA-750 for the position of cook and then file a new I-140 petition.

It cannot change the proposed position and wage midstream in an effort to demonstrate

an ability to pay a proffered wage.

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V. CONCLUSION

For the reasons stated above, the government’s motion is GRANTED and

plaintiffs’ motion is DENIED. This case is DISMISSED.

SO ORDERED.

S/Avern Cohn AVERN COHNUNITED STATES DISTRICT JUDGE

Dated: March 15, 2010

I hereby certify that a copy of the foregoing document was mailed to theattorneys of record on this date, March 15, 2010, by electronic and/or ordinary mail.

S/Julie Owens Case Manager, (313) 234-5160

No. 10-1517_______________________________________________

IN THE UNITED STATES COURT OF APPEALSFOR THE SIXTH CIRCUIT

_______________________________________________


Plaintiffs - Appellants

v.

JANET NAPOLITANO, Secretary of Homeland Security; ALEJANDROMAYORKAS, Director, U.S. Citizenship And Immigration Services,

Defendants - Appellees._________________________________________________________

ON APPEAL FROM A FINAL JUDGMENTOF THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGANCIVIL ACTION NO. 09-10625

________________________________________________________

APPELLEES’ BRIEF ________________________________________________________

TONY WESTAssistant Attorney GeneralCivil Division

DAVID J. KLINEDirectorOffice of Immigration LitigationDistrict Court Section

J. MAX WEINTRAUBSenior Litigation Counsel

WILLIAM C. SILVISTrial AttorneyUnited States Department of JusticeCivil DivisionOffice of Immigration LitigationDistrict Court SectionP.O. Box 868, Ben Franklin StationWashington, D.C. 20044(202) 307-4693

Attorneys for Defendants-Appellees

Case: 10-1517 Document: 006110736661 Filed: 09/20/2010 Page: 1

STATEMENT REGARDING ORAL ARGUMENT

Pursuant to Sixth Circuit Rule 34(a), Defendants-Appellees believe that the

issues presented can be determined upon the record and that oral argument would

not benefit the panel. Should the Court consider oral argument appropriate,

counsel for Appellees will attend and present Appellees’ position.


TABLE OF CONTENTS

STATEMENT OF JURISDICTION. ....................................................................... 1

STATEMENT OF THE ISSUES. ............................................................................ 2

STATEMENT OF THE CASE AND RELEVANT FACTS. .................................. 2

I. Taco Especial files an application for labor certification for the position of chef.. ....................................................................... 3

II. Taco Especial files a petition with USCIS to classify Galeana for an employment-based visa.............................................................. 4

III. USCIS denies Taco Especial’s Petition because the restaurant failed to demonstrate that it could pay Galeana the proffered wage.. ................................................................................................... 6

IV. Taco Especial files a complaint in the district court, arguing that the AAO’s denial of its Petition was arbitrary and capricious and violated the APA.. ......................................................................... 8

V. The AAO reopens Taco Especial’s Petition and again concludes thatthe restaurant failed to demonstrate that it could pay the profferedwage.. ................................................................................................... 8

VI. The district court grants Defendants’ motion for summary judgment. . .......................................................................... 10

i


SUMMARY OF ARGUMENT. ............................................................................. 13

ARGUMENT.......................................................................................................... 15

I. Standard of review.. ........................................................................... 15

II. The AAO’s determination that Taco Especial failed to demonstrate that it had the ability to pay Galeana the proffered wage is supported by substantial evidence in the record. ..................................................................................... 16

III. The AAO’s determination that the reasoning in Matter of Sonegawa did not excuse Taco Especial from having to demonstrate its ability to pay the proffered wage was not arbitrary and capricious. .............................. 25

CONCLUSION....................................................................................................... 28

ADDENDUM

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF FILING AND SERVICE

ii


TABLE OF AUTHORITIESCASES

Ben Hamida v. Gonzales,478 F.3d 734 (6th Cir. 2007). ....................................................................... 16

Coalition for Government Procurement v. Federal Prison Industries,365 F.3d 435 (6th Cir. 2004). ....................................................................... 15

Conley v. National Mines Corp.,595 F.3d 297 (6th Cir. 2010). ................................................................. 16, 22

Construction & Design Co. v. USCIS,563 F.3d 593 (7th Cir. 2009). ....................................................................... 24

Dor v. INS,891 F.2d 997 (2d Cir. 1989). .......................................................................... 6

Farm Labor Org. Comm. v. Ohio State Highway Patrol,308 F.3d 523 (6th Cir. 2002). ....................................................................... 23

Matter of Ho,19 I&N Dec. 582 (BIA 1988). ...................................................................... 20

INS v. Elias-Zacarias,502 U.S. 478 (1992). .............................................................................. 16, 22

River Street Donuts, LLC v. Napolitano,558 F.3d 111 (1st Cir. 2009). ......................................................................... 9

Soltane v. U.S. Dept. of Justice,381 F.3d 143 (3d Cir. 2004). .......................................................................... 6

Matter of Sonegawa,12 I&N Dec. 612 (BIA 1967). ............................................................ 2,passim

Thomas Jefferson Univ. v. Shalala,512 U.S. 504 (1994). .................................................................................... 18

iii


STATUTES

8 U.S.C. § 1103(a)(1)................................................................................................ 4

8 U.S.C. § 1182(a)(5)(A)(i)(I). ................................................................................. 3

8 U.S.C. § 1182(a)(5)(A)(i)(II) . ............................................................................. 3

8 U.S.C. § 1361.................................................................................................... 5,16

28 U.S.C. § 1291....................................................................................................... 2

REGULATIONS

8 C.F.R. § 2.1. .......................................................................................................... 4

8 C.F.R. § 103.2(b)(14)........................................................................................... 20

8 C.F.R. § 103.3(a)(1)(iv). ........................................................................................ 6

8 C.F.R. § 103.5(a)(1)(ii). ......................................................................................... 6

8 C.F.R. § 103.5(a)(5)(ii). ......................................................................................... 8

8 C.F.R. § 204.5(c).................................................................................................... 4

8 C.F.R. § 204.5(g)(2).................................................................................. 5, passim

8 C.F.R. § 204.5(l)(3)(ii)......................................................................................... 5

20 C.F.R. § 656.21(a)................................................................................................ 3

iv


No. 10-1517_______________________________________________

IN THE UNITED STATES COURT OF APPEALSFOR THE SIXTH CIRCUIT

_______________________________________________


Plaintiffs - Appellants

v.

JANET NAPOLITANO, Secretary of Homeland Security; ALEJANDROMAYORKAS, Director, U.S. Citizenship And Immigration Services,

Defendants - Appellees._______________________________________________________

APPELLEES’ BRIEF ________________________________________________________

STATEMENT OF JURISDICTION

This is an immigration case in which Plaintiffs-Appellants Taco Especial

and Prospero Galeana seek review of a final judgment of the United States District

Court for the Eastern District of Michigan entered on March 15, 2010. Record

Entry No. 19 (“R.E.”), the district court’s judgment. The district court ruled that1

the Administrative Appeals Office of the United States Citizenship and

Immigration Services (“AAO”) did not violate the Administrative Procedure Act

The district court’s opinion is reported at 696 F. Supp. 2d 873 (E.D. Mich1

2010).


(“APA”), 5 U.S.C. § 701, et seq., when it denied the employment-based visa

petition at issue in this case. On April 12, 2010, Appellants filed a timely notice

of appeal of the district court’s decision. R.E. 20, notice of appeal; see also App.

R. 4(a)(1)(B). Thus, this Court has jurisdiction to review the final judgment of the

district court pursuant to 28 U.S.C. § 1291.

STATEMENT OF THE ISSUES

1. Whether the district court correctly ruled that the AAO’s denial of the

employment-based visa petition was not arbitrary or capricious, where substantial

evidence supported the AAO’s finding that Taco Especial had not met its burden

of showing it could pay Galeana the proffered wage.

2. Whether the district court correctly ruled that the AAO did not act

arbitrarily or capriciously in finding that the reasoning in Matter of Sonegawa, 12

I&N Dec. 612 (BIA 1967), did not excuse Taco Especial’s failure to demonstrate

that it had the ability to pay Galeana the proffered wage, where the AAO provided

a reasoned basis for distinguishing the reasoning in Sonegawa from this case.

STATEMENT OF THE CASE AND RELEVANT FACTS

This case involves the efforts of Taco Especial, a Mexican restaurant in

Ecorse, Michigan, to secure an employment-based visa for Prospero Galeana, a

citizen of Mexico, to allow him to work in the United States on a permanent basis.

2


I. Taco Especial files an application for labor certification for the positionof chef.

Before Taco Especial could file an employment-based visa petition on

Galeana’s behalf, the restaurant first had to obtain a certification from the

Department of Labor (“DOL”) stating that there were no qualified, able and

willing United States workers available to fill the position, and that Taco

Especial’s employment of an alien would not adversely affect the wages and

worker conditions of workers in the United States similarly employed. See

8 U.S.C. §§ 1182(a)(5)(A)(i)(I) & (II). On April 16, 2001, Taco Especial applied

for this certification by filing a Form ETA-750, Application for Permanent

Employment Certification, with the DOL. R.E. 10, administrative record at 157-

60 (Taco Especial’s Form ETA-750); see also 20 C.F.R. § 656.21(a) (2004). 2

Taco Especial stated in its Form ETA-750 that it was seeking to employ a

chef at a proffered wage of $25.00 per hour, based on a 40-hour work week (or

$52,000 per year). R.E. 10, administrative record at 157-60 (Taco Especial’s

Form ETA-750). On May 25, 2005, after DOL was satisfied that Taco Especial

Since March 28, 2005, DOL has operated under a new labor certification2

program, which requires employers to file an electronic Form ETA-9089. See 69Fed. Reg. 77326, 77392 (DOL) (Dec. 27, 2004) (codified at 20 C.F.R.§ 656.17(a)). Taco Especial filed its labor certification application under thepredecessor regulation, so references in this case will be made to DOL’s legacyForm ETA-750.

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had demonstrated that there were no workers in the United States willing and

qualified to fill the position, and that Taco Especial’s employment of an alien

would not adversely affect the wages of other similar workers, DOL certified Taco

Especial’s Form ETA-750, with a priority date of April 16, 2001. R.E. 10,

administrative record at 157 (Taco Especial’s Form ETA-750).

II. Taco Especial files a petition with USCIS to classify Galeana for anemployment-based visa.

On July 18, 2006, Taco Especial filed a Form I-140, Immigrant Petition for

Alien Worker (“Petition”) with United States Citizenship and Immigration

Services (“USCIS”), to secure a permanent employment-based classification for3

Galeana. R.E. 10, administrative record at 153-55 (Taco Especial’s Petition); see

8 C.F.R. § 204.5(c). This filing required Taco Especial to show that Galeana had

the requisite experience for the position, as well as that Taco Especial had the

ability to pay the proffered wage stated on the certified Form ETA-750. See

The INA delegates to the Secretary of Homeland Security the determination of3

whether an employer’s job opportunity qualifies under the statute for the purposeof hiring an employment-based immigrant, see 8 U.S.C. § 1103(a)(1), and theSecretary has sub-delegated that determination to USCIS, see 8 C.F.R. § 2.1; seealso Secretary of Homeland Security’s Delegation Order No. 0150.1, § 2(W) (Mar.1, 2003). The Homeland Security Act of 2002 abolished the Immigration andNaturalization Service (“INS”) and transferred the adjudication of immigrantpetitions from the Commissioner of INS (and the Attorney General) to the Directorof USCIS, an agency within the Department of Homeland Security. See Pub. LawNo. 107-296, §§ 451(b)(1), 471 (Nov. 25, 2002).

4


8 C.F.R. §§ 204.5(g)(2), (l)(3)(ii). Taco Especial and Galeana had the burden of

proof on these issues and continue to have that burden. See 8 U.S.C. § 1361.

On August 23, 2006, USCIS sent a Request for Evidence (“RFE”) to Taco

Especial, stating that it was unable to complete processing of the Petition without

additional information. R.E. 10, administrative record at 173-74 (RFE to Taco

Especial). Citing 8 C.F.R. § 204.5(g)(2), USCIS informed Taco Especial that the

restaurant had the burden of showing that it had the ability to pay the wage

proffered in the Form ETA-750 from the priority date, April 16, 2001, through the

date that Galeana adjusted his status to a lawful permanent resident. Id. To that

end, USCIS requested Taco Especial’s annual reports, its prepared federal income

tax returns, and its audited financial statements from 2001-05. Id. USCIS also

requested all W-2s evidencing wages Taco Especial paid to Galeana. Id.

Taco Especial responded to the RFE on October 27, 2006. R.E. 10,

administrative record at 178-207. The restaurant’s response included its federal

tax returns for the years 2001-04, various pay stubs for wages paid to Galeana

(with dates ranging from April 1992 to September 2000), and Galeana’s W-2s for

his employment at Taco Especial for the years 1992, 1997, 2000, and 2001. Id.

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III. USCIS denies Taco Especial’s Petition because the restaurant failed todemonstrate that it could pay Galeana the proffered wage.

On January 30, 2007, USCIS denied Taco Especial’s Petition. R.E. 10,

administrative record at 148-51. Citing 8 C.F.R. § 204.5(g)(2) as its ground for

denial, USCIS found that Taco Especial had failed to show that the restaurant

could pay Galeana the $25.00 hourly wage proffered in the Form ETA-750. Id.

Taco Especial appealed the denial of its Petition to USCIS’s Administrative

Appeals Office (“AAO”) on February 27, 2007, and submitted its brief to the4

AAO on March 20, 2007. R.E. 10, administrative record at 140 (Form I-290B,

Notice of Appeal to the AAO), and at 133-34 (Taco Especial’s appeal brief to the

AAO). In its appeal, Taco Especial argued that it had “demonstrated ability to pay

and the USCIS erroneously used an accounting basis which demonstrates

otherwise. If the correct accounting basis were used, then the ability to pay is

The AAO is an appellate body located within its own division of USCIS,4

separate from the adjudication arm of the agency. See 8 C.F.R. § 103.3(a)(1)(iv). Federal courts have recognized that the AAO retains de novo authority to hearappeals from denied immigration petitions and that the AAO may address issuesnot raised below by the immigration service officers. See Dor v. INS, 891 F.2d997, 1002 n.9 (2d Cir. 1989); Soltane v. U.S. Dept. of Justice, 381 F.3d 143,145-46 (3d Cir. 2004). The AAO also has jurisdiction to reopen or reconsider aprior AAO decision, see 8 C.F.R. § 103.5(a)(1)(ii), and it may reopen orreconsider a decision on its own motion as long as it provides the affected party atleast thirty days to submit a brief in response to the motion, see id. at§ 103.5(a)(5)(ii).

6


clearly shown.” R.E. 10, administrative record at 140. In support of its brief,

Taco Especial offered a letter from an accountant opining that if depreciation had

been added back into Taco Especial’s federal tax returns for 2002-05, the

restaurant would have shown a profit for this period. R.E. 10, administrative

record at 135. Moreover, the accountant opined that because depreciation is only

a paper loss, it did not have an impact on Taco Especial’s cash flow. Id. Finally,

the accountant stated that, in his opinion, Taco Especial was a viable business. Id.

On January 22, 2009, the AAO denied Taco Especial’s appeal. R.E. 10,

administrative record at 126-32 (AAO decision dated January 22, 2009). In its

decision, the AAO agreed that “[a]s set forth in the director’s January 30, 2007

denial, the primary issue in this case is whether or not the petitioner has the ability

to pay the proffered wage as of the priority date and continuing until the

beneficiary obtains lawful permanent residence.” Id. at 127. After reviewing

Taco Especial’s federal tax returns and W-2s, the AAO found that the restaurant

had failed to meet its burden of showing that it had the continuing ability to pay

Galeana the proffered wage. Id. at 132.

7


IV. Taco Especial files a complaint in the district court, arguing that theAAO’s denial of its Petition was arbitrary and capricious and violatedthe APA.

On January 19, 2009, Taco Especial and Galeana filed a complaint with the

United States District Court for the Eastern District of Michigan, alleging that

USCIS’s denial of Taco Especial’s Petition violated the Administrative Procedure

Act. R.E. 1, complaint at ¶ 15. The complaint alleges that USCIS based its

decision to deny the Petition solely on Taco Especial’s net income, that the

restaurant satisfied all the requirements in 8 C.F.R. 204.5(g)(2) to show the ability

to pay the proffered wage, and that USCIS erroneously applied this regulation. Id.

By request of the parties, the Court agreed to hold the case in abeyance to allow

the AAO to reopen Taco Especial’s Petition.

V. The AAO reopens Taco Especial’s Petition and again concludes that therestaurant failed to demonstrate that it could pay the proffered wage.

On April 27, 2009, the AAO reopened Taco Especial’s Petition on its own

motion for the purpose of entering a new decision, affording Taco Especial 30

days to submit additional evidence concerning several issues, including the

restaurant’s ability to pay the proffered wage. R.E. 10, administrative record at

142-47; 8 C.F.R. § 103.5(a)(5)(ii). Taco Especial responded on June 8, 2009, by

filing a letter brief with the AAO. R.E. 10, administrative record at 21-25. The

8


letter brief included evidence attempting to show that USCIS should consider

Taco Especial’s ability to pay the proffered wage in light of current economic

situation in the Metro Detroit area, and, therefore, that USCIS must apply the

agency’s decision in Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967). Id.

On July 10, 2009, the AAO denied Taco Especial’s reopened Petition. R.E.

10, administrative record at 1-19 (AAO decision dated July 10, 2009). The AAO

found, among other things: (1) that Taco Especial again failed to show its ability

to pay the proffered wage based on payment of prior wages to Galeana; (2) that

Taco Especial failed to establish its ability to pay the proffered wage based on its

net income from 2000-07; (3) that, based on the decision in River Street Donuts,

LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009), USCIS’s refusal to account for

depreciation in calculating Taco Especial’s net income was in accordance with the

law; (4) that Taco Especial was not entitled to show its ability to pay the proffered

wage based on the totality of circumstances under Sonegawa; and (5) that Taco

Especial could not materially alter its Petition by changing the position from

“chef” to “cook” at a substantially lower wage. The AAO found that each of the

above grounds, and several others, represented an independent and alternative

ground for denial of Taco Especial’s Petition. R.E. 10, administrative record at 1-

19.

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The attempt to "materially alter" noted above is similar to what was prohibited in Matters of Katigbak, Izummi, and Bardoullie. On the other hand, the generous sua sponte reopening and additional briefing as to the potential applicability of Sonegawa were broad applications of principles from Matters of Soriano, and Obaigbena.

VI. The district court grants Defendants’ motion for summary judgment.

On October 19, 2009, Defendants filed a motion for summary judgment.

R.E. 13, Defendants’ motion for summary judgment. On March 15, 2010, the

district court granted the motion and ruled that the AAO’s denial of the Petition5

was not arbitrary or capricious. R.E. 18, district court’s opinion dated March 15,

2010, at 13-15. Accordingly, the court granted summary judgment in favor of

Defendants.

The district court first ruled that the AAO’s finding that Taco Especial had

failed to demonstrate that it had the ability to pay the proffered wage was not

arbitrary or capricious. R.E. 18, district court’s opinion dated March 15, 2010, at

13. The district court noted that, in accordance with USCIS policy, the AAO first

reviewed evidence of the wages that Taco Especial paid to Galeana, which

evidence included pay stubs and W-2s. Id. at 11. The court further noted that,

because Taco Especial failed to demonstrate that it had ever paid Galeana the

proffered wage of $25 per hour, it was not improper for the AAO, again in

The parties do not dispute that USCIS AAO’s decision on July 10, 2009, is the5

final agency action at issue in this case or that Secretary of Homeland Security hasdelegated her authority to adjudicate employment-based visa petitions to theDirector of USCIS. See fn 3, supra. Thus, to facilitate this Court’s review,Appellees will simply refer to themselves as the “AAO” in this brief whendiscussing the actions of USCIS, unless the context requires a more specificidentification.

10


accordance with USCIS policy, to next look at Taco Especial’s net income and net

current assets to determine whether Taco Especial had sufficient resources to pay

the wage. Id. Taco Especial’s federal tax returns, however, showed that its net

income and net current assets were insufficient to cover the amount that the

restaurant was supposedly going to pay to Galeana. Id. The district court also

noted that the AAO did not deny the Petition solely on this evidence, but instead

allowed Taco Especial to submit additional evidence of its ability to pay. Id.

The district court was unpersuaded, however, by Taco Especial’s argument

that it demonstrated its ability to pay the proffered wage based on its gross

income. R.E. 18, district court’s opinion dated March 15, 2010, at 12-13. The

district court found that there was no legal support for Taco Especial’s argument

that it was entitled to show the ability to pay based on gross income, and further

found that gross income failed to account for the necessary expenses that Taco

Especial must necessarily incur as a part of doing business and are thus

unavailable to pay Galeana’s wages. Id. at 13. Additionally, the district court

rejected Taco Especial’s argument that the amounts that it deducted for

depreciation should be considered in its ability to pay the proffered wage, because

even though these amounts did not represent a current use of cash, they were

nonetheless not available to pay wages. Id. Thus, the district court found that the

11


AAO had carefully considered the evidence before it and reached a rational

conclusion based on that evidence. Id. Accordingly, the district court ruled that

the AAO’s decision that Taco Especial had failed to meet its burden of showing

that it had the ability to pay the proffered wage was not arbitrary or capricious. Id.

The district court also rejected Taco Especial’s argument that the court

should apply the reasoning in Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967).

R.E. 18, district court’s opinion dated March 15, 2010, at 13-14. Taco Especial

argued that it should have been excused from having to show the ability to pay the

proffered wage based on the reasoning in Sonegawa and that the AAO’s decision

to the contrary was arbitrary and capricious. Id. The district court found,

however, that the AAO had properly distinguished the circumstances underlying

the reasoning in Sonegawa from the facts underling Taco Especial’s inability to

pay the proffered wage. Id. at 13. Specifically, USCIS found that, unlike the

petitioner in Sonegawa, where the ability to pay the proffered wage was based on

a temporary setback, Taco Especial had not provided any evidence that it had ever

had the ability to pay the proffered wage or that it was likely to be able to do so in

the near future given the economic climate in Detroit. Id. at 14. Because the AAO

provided a reasoned comparison between the facts in this case and those in

12


Sonegawa, the district court found that USCIS’s decision that the case is

inapplicable was not arbitrary and capricious. Id. at 14.

Finally, the district court rejected Taco Especial’s arguments concerning its

ability to pay the proffered wage for a cook. Id. DOL approved the Form

ETA-750 that Taco Especial filed seeking to employ a chef at $25 per hour, and

Taco Especial filed the Petition on Galeana’s behalf for the position of chef. Thus,

the district court ruled that if Taco Especial wanted to employ him as a cook, it

would have to file a new ETA-750 for the position of cook and, if it were

approved, then file a new Petition. Id. Thus, the district court ruled that Taco

Especial’s purported ability to pay the proffered wage for a cook was inapplicable

to the issue in this case. Id.

On April 12, 2010, Taco Especial and Galeana filed their notice of appeal of

the district court’s decision. R.E. 20, notice of appeal.

SUMMARY OF ARGUMENT

The AAO’s decision denying Taco Especial’s Petition was neither arbitrary

nor capricious. Taco Especial’s primary argument is that the AAO’s decision was

arbitrary and capricious because the AAO only considered the restaurant’s net

income in determining its ability to pay the proffered wage. Taco Especial argues

that if the AAO had properly considered the restaurant’s “gross income minus the

13


operating expenses such as rent and salaries, any reasonable person would

conclude that Taco Especial had demonstrated its ability to pay.” Appeal at 10.

The district court correctly recognized, however, that the AAO did not rely solely

on net income. Pursuant to USCIS policy, the AAO considered the past wages

Taco Especial had paid to Galeana, as well as Taco Especial’s net current assets.

Additionally, the AAO allowed Taco Especial to submit additional evidence of its

purported ability to pay. Because Taco Especial failed to demonstrate its ability to

pay under methods set forth by USCIS policy and based on the additional evidence

that the restaurant submitted, the AAO denied the Petition. Accordingly, the

district court correctly ruled that the AAO’s decision was not arbitrary and

capricious because it was based on substantial evidence in the record.

Similarly, the AAO’s determination that Taco Especial could not be

excused from having to demonstrate its ability to pay the proffered wage, based on

the reasoning in Sonegawa, was not arbitrary and capricious. As the district court

correctly ruled, the AAO found that the circumstances present in the Sonegawa

case were distinguishable from circumstances in Taco Especial’s case.

Specifically, in Sonegawa, the business had suffered a temporary financial

setback, but provided sufficient evidence that its fortunes were improving and that

it would have the ability to pay the wage of a designer it was sponsoring from

14


Japan. In contrast, Taco Especial has never produced any evidence to show that

its inability to pay Galeana the proffered wage is due to a temporary financial

setback. In fact, Taco Especial failed to demonstrate that it had the ability to pay

the proffered wage even before the economic downturn in the metropolitan Detroit

area. Accordingly, the district court correctly ruled that the AAO’s decision that

the reasoning in Sonegawa did not excuse Taco Especial from its failure to

demonstrate the ability to pay was not arbitrary and capricious.

Because the district court correctly ruled that the AAO did not violate the

APA when it denied Taco Especial’s Petition, Defendants-Appellees respectfully

request that this Court affirm the decision of the district court.

ARGUMENT

I. Standard of review.

This case involves the review of an administrative agency’s final decision

under the Administrate Procedure Act. Accordingly, this Court reviews the

district court’s summary judgment decision de novo, and it reviews the agency’s

decision under the arbitrary and capricious standard. See Coalition for

Government Procurement v. Federal Prison Industries, 365 F.3d 435, 457 (6th

Cir. 2004) (internal citation omitted). “Thus, the agency’s decision will be set

aside only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in

15


accordance with the law.” Id. (citations omitted). The Court must uphold the

agency’s factual determinations if they are supported by substantial evidence in

the administrative record. See Conley v. National Mines Corp., 595 F.3d 297, 301

(6th Cir. 2010). “The substantial evidence standard of review does not entitle a

reviewing court to reverse . . . simply because it is convinced that it would have

decided the case differently.” Ben Hamida v. Gonzales, 478 F.3d 734, 736 (6th

Cir. 2007). In other words, for this Court to disturb the agency’s factual

determinations, Taco Especial must show that “the evidence not only supports

[reversal] but compels it.” INS v. Elias-Zacarias, 502 U.S. 478, 481 n.1 (1992)

(emphasis in original).

II. The AAO’s determination that Taco Especial failed to demonstrate thatit had the ability to pay Galeana the proffered wage is supported bysubstantial evidence in the record.

This Court should affirm the district court’s ruling that the AAO did not

violate the APA, because substantial evidence supports the AAO’s determination

that Taco Especial failed to demonstrate that it could pay Galeana the proffered

wage. Taco Especial filed the Petition at issue in this case so that Galeana could

receive an employment-based visa. See 8 C.F.R. 204.5(c). As the applicant, Taco

Especial had the burden of showing that Galeana was eligible to receive the visa,

and that burden has never shifted. See 8 U.S.C. 1361. Furthermore, because this

16


is an employment-based visa, the pertinent regulation required Taco Especial to

provide evidence demonstrating that it had the ability to pay Galeana the wage

proffered on the certified Form ETA-750 and to pay that wage until Galeana

acquired permanent resident status. See 8 C.F.R. § 204.5(g)(2). The regulation

does not provide a specific methodology for determining the employer’s ability to

pay, but it does provide that the “initial evidence” of the employer’s ability “shall

be either in the form of copies of annual reports, federal tax returns, or audited

financial statements.” Id. The regulation also permits employers to submit, or

USCIS to request, additional evidence in “appropriate cases,” but it does not

define this term. Id.

USCIS created a policy memorandum to provide guidance to its

adjudicators on how to review the evidence provided by employers to determine

the ability to pay under 8 C.F.R. § 204.5(g)(2). R.E. 13-2, USCIS Memorandum,

Determination of Ability to Pay under 8 CFR 204.5(g)(2), HQOPRD 90/16.45,

dated May 4, 2004, p. 2. Pursuant to this policy memorandum, adjudicators are to

consider past wages paid to the beneficiary, as well as the employer’s net income

and net current assets, to see if they can make a positive ability to pay

determination. Id. If the employer’s initial evidence fails to demonstrate its

ability to pay under any of these three methods, the adjudicator may deny the

17


petition. Id. at 3. The adjudicator has discretion to accept additional evidence

from the employer. Id. This evidence, however, must clearly establish the

employer’s ability to pay. Id. Because USCIS is charged with deciding whether a

petitioner has shown the ability to pay the proffered wage under 8 C.F.R.

§ 204.5(g)(2), this Court must defer to USCIS’s interpretation of how to

implement the regulation unless that interpretation is “plainly erroneous or

inconsistent with the regulation.” See Thomas Jefferson Univ. v. Shalala, 512

U.S. 504, 512 (1994) (“We must give substantial deference to an agency’s

interpretation of its own regulations . . . . Our task is not to decide which among

several competing interpretations best serves the regulatory purpose. Rather, the

agency’s interpretation must be given controlling weight unless it is plainly

erroneous or inconsistent with the regulation.”).

To demonstrate that it had the ability to pay, Taco Especial submitted its

federal tax returns from 2001 through 2007 (excluding 2006, which Taco Especial

did not submit), various pay stubs for wages paid to Galeana (ranging from April

1992 to September 2000), and four W-2s evidencing Galeana’s employment with

Taco Especial. R.E. 10, administrative record at 41-71, 201-07. Additionally,

Taco Especial submitted a letter from an accountant opining that: (1) Taco

Especial had a profit if depreciation were added back into the restaurant’s federal

18


tax returns for 2002-05; (2) because Taco Especial is a C corporation, it is

disadvantageous to show a profit, otherwise it would be subject to double taxation;

and (3) Taco Especial was a viable business. R.E. 10, administrative record at 135

(Letter from Manuel Alfonso dated March 22, 2007). Taco Especial also

submitted evidence of the standard wage for a “cook” in the metropolitan Detroit

area. R.E. 10, administrative record at 34.

In considering Taco Especial’s appeal, the AAO first reviewed the

documentary evidence that the restaurant had submitted to see whether it had ever

employed Galeana at a salary equal to or greater than the proffered wage. R.E. 10,

administrative record at 1-19 (USCIS decision dated July 10, 2009), and at

126-32, 148-51. Shortly after Taco Especial filed its Petition, USCIS had

requested all W-2s evidencing wages that the restaurant had paid to Galeana. R.E.

10, administrative record at 173-74 (RFE to Taco Especial). Despite the fact that

Taco Especial’s Form ETA-750 (which both Plaintiffs signed on July 25, 2005)

indicated that Galeana had worked for Taco Especial since 1992, Taco Especial

provided only four W-2 statements. R.E. 10, administrative record at 178-207.

Those W-2s show only that Taco Especial employed Galeana in 1992, 1997, 2000,

19


and 2001. Id. Galeana’s wages, tips, and other compensation from Taco Especial6

as evidenced by the W-2s totaled $5,982.49 in 1992, $13,412.03 in 1997,

$18,173.28 in 2000, and $17,450.00 in 2001. Id. Because not a single W-2

statement established that Taco Especial employed Galeana at a salary equal to or

greater than the proffered wage of $52,000, the AAO correctly found that Taco

Especial failed to establish prima facie proof that it could pay the proffered wage.

R.E. 10, administrative record at 4-5, 148-51.

The AAO next examined the net income figure reflected on Taco Especial’s

federal tax returns to determine whether the restaurant’s net income equaled, or

exceeded, the proffered wage. R.E. 10, administrative record at 5-6. Under

USCIS policy, if a petitioner’s federal tax returns indicate that the petitioner’s net

income is equal to or greater than the proffered wage, USCIS can make a positive

ability to pay determination. R.E. 13-2, USCIS Memo at p. 2. Reviewing Taco

Galeana stated on Form ETA 750 that he has been working for Taco Especial6

since March 1992, despite the fact that Taco Especial stated on its Form I-140 itwas formed in 1999. Neither Appellant has provided any reason for thisdiscrepancy. It is incumbent on the petitioner to resolve any inconsistencies in therecord by independent objective evidence, and attempts to explain or reconcilesuch inconsistencies, absent competent objective evidence pointing to where thetruth, in fact, lies, will not suffice. Matter of Ho, 19 I&N Dec. 582, 591-592 (BIA1988). Furthermore Taco Especial's failure to provide the additional W-2statements afford USCIS with an additional ground for denying the Form I-140. 8 C.F.R. § 103.2(b)(14).

20


Especial’s net income from its 2001-07 federal income tax returns, however,

USCIS found that the restaurant’s net income was consistently less than the

proffered wage. R.E. 10, administrative record at 6. In fact, the tax returns

showed that Taco Especial had experienced a net loss in every year between 2001

and 2007, except for 2003 and 2006 (Taco Especial had not submitted a 2006

federal tax return). Id. In 2003, Taco Especial’s net income was $5,118. Id.

Even after USCIS extrapolated the $17,450.00 that it paid to Galeana in wages in

2001 to the subsequent years (which USCIS was not required to do considering

the restaurant's failure to provide W-2s after 2001), Taco Especial’s net income,

plus Galeana’s wage, was lower than the proffered wage of $52,000 in every year.

Id. Accordingly, it was not arbitrary and capricious for the AAO to conclude that,

based on the evidence submitted by Taco Especial, the restaurant had failed to

demonstrate its ability to pay the proffered wage based on its net income.

Finally, the AAO examined Taco Especial’s net current assets. R.E. 10,

administrative record at 6. Net current assets are defined as the difference

between a petitioner’s current assets (which include cash on hand, inventories, and

receivables expected to be converted to cash within one year) and that petitioner’s

current liabilities (which are obligations typically payable within one year, such as

accounts payable, short-term notes payable, and accrued expenses, such as taxes

21


and salaries). Id. at 6-7. Under USCIS policy, if a petitioner’s federal tax returns

show net current assets equal to or greater than the proffered wage, USCIS can

make a positive ability to pay determination. R.E. 13-2, USCIS Memo at p. 2.

Here, however, the AAO found that Taco Especial’s federal tax returns did not

demonstrate that the restaurant had the ability to pay the proffered wage from its

net current assets in 2001-07, even if the wages Taco Especial paid to Galeana in

2001 were added to the restaurant’s net current assets. R.E. 10, administrative

record at 7. Thus, the AAO correctly found that, based on the evidence that Taco

Especial submitted, the restaurant had failed to demonstrate its ability to pay the

proffered wage based on its net current assets.

Because the evidence the Taco Especial submitted failed to show that the

restaurant had the ability to pay the proffered wage as required under 8 C.F.R.

§ 204.5(g)(2), the AAO’s denial of the Petition is supported by substantial

evidence and, thus, is not arbitrary and capricious. See Conley, 595 F.3d at 301.

Likewise, Taco Especial cannot plausibly argue that the evidence it submitted

compels the conclusion that it had the ability to pay Galeana the proffered wage.

See Elias-Zacarias, 502 U.S. at 481 n.1.

Taco Especial did not allege in its complaint, nor did it argue in the

underlying proceedings or in its appeal brief, that the AAO abused its discretion,

22


or acted arbitrarily, in considering the evidence of the wages that Taco Especial

paid to Galeana, or in considering the restaurant’s net income or net current assets.

Instead, it argued that the pertinent regulation, 8 C.F.R. § 204.5(g)(2), does not

specifically dictate how the employer must demonstrate its ability to pay. Taco

Especial argues that this means it can demonstrate its ability to pay based on its

gross income, or “cash flow.” Appeal at 8-9. As the district court correctly ruled,

however, the AAO did not abuse its discretion by rejecting this argument. R.E.

18, district court’s opinion dated March 15, 2009 at 12-13. 7

First, Taco Especial failed to provide any authority for its position that it

can demonstrate the ability to pay based solely on gross income. As the district

court correctly found, “[w]ithout consideration of overhead, supplies, rent, payroll

In the proceedings below, Taco Especial argued that the AAO should have7

considered the amounts that the restaurant had taken in depreciation indetermining its ability to pay the proffered wage. See, e.g., R.E. 15, Plaintiffs’cross-motion for summary judgment, at 4-5. The AAO refused to consider thoseamounts, because they do not represent assets that are available to pay to Galeanaas wages. Taco Especial has not raised this issue in its appeal brief, and thus haswaived any argument that the AAO abused its discretion on that basis. See FarmLabor Org. Comm. v. Ohio State Highway Patrol, 308 F.3d 523, 544 n. 8 (6th Cir.2002) (“It is well established that an issue not raised in a party’s briefs may bedeemed waived.”). To the extent that this Court considers this argument, however,the AAO incorporates by reference the arguments it made in its memoranda insupport of summary judgment. R.E. 13, Defendants’ motion for summaryjudgment, at 15-16; R.E. 16, Defendants’ opposition to Plaintiffs’ cross-motionfor summary judgment, at 4-5.

23


and the other necessary expenses which are deducted from gross profits, it is

impossible to determine whether there is any air in Taco Especial’s gross income

statement.” R.E. 18, district court’s opinion dated March 15, 2009 at 13 (citing

Construction & Design Co. v. USCIS, 563 F.3d 593, 596-97 (7th Cir. 2009).

Second, despite the several opportunities that USCIS provided to Taco Especial to

do so, and that fact that Taco Especial had the burden of proof, the restaurant

never produced any alternative evidence that demonstrated its ability to pay

Galeana. Id. Third, as the district court correctly noted, the AAO did not simply

consider the ability to pay criteria in the USCIS Memo, but also considered the

secondary evidence that Taco Especial submitted. Id. Thus, as the district court

correctly ruled, the AAO’s decision was not arbitrary and capricious because it

“carefully considered the evidence before it and reached a rational conclusion

based on that evidence.” Id. Accordingly, this Court should affirm the district

court’s decision, because substantial evidence supports the AAO’s denial of Taco

Especial’s Petition. Elias-Zacarias, 502 U.S. at 481 n.1.8

Taco Especial also argues that Section 204.5(g)(2) applies unfairly to small8

businesses, because it allows businesses with more than 100 employees “to simplysubmit a letter” to demonstrate their ability to pay. Appeal at 10. Taco Especialdoes not explain, however, how this alleged unfairness impacts its ability todemonstrate that it can pay Galeana the proffered wage. In any event, TacoEspecial’s argument lacks merit. The regulation does not absolve businesses withmore than 100 employees from demonstrating the ability to pay the proffered wage

24


III. The AAO’s determination that the reasoning in Matter of Sonegawa didnot excuse Taco Especial from having to demonstrate its ability to paythe proffered wage was not arbitrary and capricious.

In addition to finding that Taco Especial had failed to establish its ability to

pay the proffered wage, the AAO found that the Board of Immigration Appeals

decision in Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), was inapplicable

to Taco Especial’s Form I-140. R.E. 10, administrative record at 8-10. In

Sonegawa, the Board held that USCIS could excuse a petitioner from its inability

to pay the proffered wage based on temporary business hardships if, based on the

totality of circumstances, the petitioner proffers sufficient evidence that it

otherwise has the ability to pay. 12 I&N at 612.

In Sonegawa, the petitioner provided evidence that it moved locations

during the year in which it filed its petition, and that, as a result of the move, the

based on annual reports, federal tax returns, or audited financial statements, whichthe regulation defines as “initial evidence.” See 8 C.F.R. § 204.5(g)(2). Rather,for these larger businesses, the regulation grants USCIS discretion to accept astatement from a financial officer of the organization that establishes thecompany’s ability to pay the proffered wage. Id. USCIS’s policy clearly indicatesthat the adjudicator is not required to accept a statement of a financial offer andmay deny the petition if the company fails to provide sufficient initial evidence. R.E. 13-1, USCIS Memo, at p. 3 (“Under 8 CFR 204.5(g)(2), CIS adjudicators arenot required to accept, request, or RFE for a financial statement from U.S.employers who employ 100 or more workers to establish ability to pay.”). Moreover, Taco Especial cannot plausibly dispute that the AAO allowed it tosubmit additional evidence and that the AAO did, in fact, consider the additionalevidence in reaching its decision.

25


Joey

Highlight

petitioner sustained large moving costs, was unable to conduct business for a

period of time, and had to pay rent on two locations for five months. 12 I&N at

614. The petitioner in Sonegawa further provided evidence that it was well known

for its designs and fashions and that its business had actually increased after the

move. 12 I&N at 615. The Board in Sonegawa held that the petitioner’s inability

to pay the proffered wage in that single year did not preclude it from showing it

could pay the proffered wage in the future, based on this evidence of petitioner’s

increased business. Id.

In its letter brief to the AAO, Taco Especial argued that its Petition merited

consideration under Sonegawa, due to the harsh economic climate in metropolitan

Detroit and its corresponding impact on the restaurant’s business. R.E. 10,

administrative record at 23-25. Additionally, Taco Especial argued that it had a

strong reputation in the community and that Galeana possessed excellent skills

that had kept the restaurant in business. Id. at 24. Finally, Taco Especial argued

that its tax returns demonstrated that it had the ability to pay Galeana the wages of

a full-time cook, even if could not pay a chef’s wages. Id.

The AAO considered Taco Especial’s arguments, but found, nonetheless,

that those arguments failed to establish that the reasoning in Sonegawa should

apply to excuse the restaurant’s inability to pay the proffered wage to Galeana.

26


R.E. 10, administrative record at 9-13. Significantly, the AAO noted that the

economic downtown in metropolitan Detroit did not show that the negative impact

on Taco Especial’s business would soon come to an end, as it had in Sonegawa.

Id. The AAO further found that news articles that Taco Especial had submitted

about the restaurant and about Galeana failed to establish reputations akin to the

reviews of the business in Sonegawa. Id. Finally, the AAO found that Taco

Especial’s contention that it had the ability to pay Galeana the wages of a full-time

cook was flawed because its Form ETA-750 was not for the position of cook, but,

rather, for the position of chef. Id. The AAO therefore found that Sonegawa was

inapplicable, based on the factual distinctions between Taco Especial and the

petitioner in Sonegawa, and because Taco Especial has not demonstrated that it

has the ability to pay Galeana the proffered wage for the position of chef in any

year.

Accordingly, because the AAO conducted a reasoned comparison between

Taco Especial’s condition and that of the petitioner in Sonegawa and concluded

that the reasoning in Sonegawa did not apply to this case, this Court should affirm

the district court’s ruling that the AAO’s refusal to excuse Taco Especial’s

inability to pay on this basis was not arbitrary or capricious. Even if this Court

27


would have reached a different conclusion, the evidence that was before the AAO

did not compel a contrary result. Elias-Zacarias, 502 U.S. at 481 n.1.

CONCLUSION

Because the AAO did not act arbitrarily and capriciously in denying Taco

Especial’s Petition, this Court should affirm the ruling of the district court

granting summary judgment in favor of Defendants-Appellees.

28


Respectfully submitted,

TONY WESTAssistant Attorney GeneralCivil Division

DAVID J. KLINEDirectorOffice of Immigration LitigationDistrict Court Section

J. MAX WEINTRAUBSenior Litigation Counsel

/s/ William C. Silvis WILLIAM C. SILVISTrial AttorneyUnited States Department of JusticeCivil DivisionOffice of Immigration LitigationDistrict Court SectionP.O. Box 868, Ben Franklin StationWashington, D.C. 20044(202) [email protected]

Dated: September 20, 2010 Attorneys for Defendants - Appellees

29


mailto:[email protected]

ADDENDUM


Appellees, pursuant to 6 Cir. R. 28 and 30, respectfully designate the

following documents cited in their brief from the action styled as Taco Especial v.

Department of Homeland Security, et al., in the Eastern District of Michigan, Case

No. 09-10625.

Document RecordEntry

Complaint 1

Administrative record 10

Defendants-Appellees’ motion for summary judgment 13

USCIS Memorandum, Determination of Ability to Pay under 8CFR 204.5(g)(2), HQOPRD 90/16.45, dated May 4, 2004

13-2

Plaintiffs-Appellants’ cross-motion for summary judgment 15

The district court’s opinion granting summary judgment in favorof defendants-appellees, dated March 15, 2010

18

The district court’s judgment in favor of defendants-appellees,dated March 15, 2010

19

Notice of appeal 20


CERTIFICATE OF COMPLIANCE

I certify that pursuant to Federal Rule of Appellate Procedure 32(a)(7)(C) and

6th Cir. R. 32, the attached Appellees’ Brief has been prepared using fourteen-

point, proportionally-spaced, Times New Roman typeface, and it contains 6,885

words. This brief was prepared using WordPerfect X4.




CERTIFICATE OF FILING AND SERVICE

I hereby certify that on this 20th day of September 2010, I electronically

filed the foregoing APPELLEES’ BRIEF with the Clerk of the Court for the

United States Court of Appeals for the Sixth Circuit by using the appellate

CM/ECF system.

I certify that all participants in the case are registered CM/ECF users and

that service will be accomplished by the appellate CM/ECF system.




• •f ino data deleted to ldentLY- o I , "'warranted

t ..-\e?rty L\11

prcven "' ':. •. . , \ privacy invasion ot pelsona

Office: TEXAS SERVICE CENTER SRC 06 225 50765

In re: Petitioner: Beneficiary:

U.S. Department of Homeland Security U. S. Citizenship and Immigration Services Office of Administrative Appeals MS 2090 Washington, DC 20529-2090

U.S. Citizenship and Immigration Services

Date: JUL 1 O 2009

PETITION: Immigrant petition for Alien Worker as a Skilled Worker or Professional pursuant to section 203(b)(3) ofthe Immigration and Nationality Act, 8 U.S.C. § 1153(b)(3)

ON BEHALF OF PETITIONER:

INSTRUCTIONS: This is the decision of the Administrative Appeals Office in your case. All documents have been returned to the office that originally decided your case. Any further inquiry must be made to that office.

If you believe the Jaw was inappropriately applied or you have additional information that you wish to have considered, you may file a motion to reconsider or a motion to reopen. Please refer to 8 C.F.R. § 103.5 for the specific requirements. All motions must be submitted to the office that originally decided your case by filing a Form I-290B, Notice of Appeal or Motion, with a fee of $585. Any motion must be filed within 30 days of the decision that the motion seeks to reconsider or reopen, as required by 8 C.F.R. § 1 03.5(a)(l)(i).

~~ John F. Grissom, Acting Chief, Administrative Appeals Office

www.uscis.gov

DISCUSSION: The Director, Texas Service Center ("director"), denied the immigrant visa petition. The petitioner appealed. The Administrative Appeals Office ("AAO") dismissed the appeal. The AAO reopened its decision sua sponte and issued a Notice of Intent to Deny. The reopened appeal will be dismissed.

The petitioner is a Mexican restaurant and seeks to employ the beneficiary permanently in the United States as a che£ As required by statute, the petition filed was submitted with Form ETA 750, Application for Alien Employment Certification, approved by the Department of Labor ("DOL"). As set forth in the director's January 30, 2007 decision, the petition was denied based on the petitioner's failure to demonstrate that it could pay the beneficiary the proffered wage from the time of the priority date until the beneficiary obtains permanent residence.

The AAO takes a de novo look at issues raised in the denial of this petition. See Dar v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989) (noting that the AAO reviews appeals on a de novo basis). The AAO considers all pertinent evidence in the record, including new evidence properly submitted upon appeal. 1

The record shows that the appeal is properly filed, timely and makes a specific allegation of error in law or fact. The procedural history in this case is documented by the record and incorporated into the decision. Further elaboration of the procedural history will be made only as necessary.

The petitioner has filed to obtain permanent residence and classify the beneficiary as a skilled worker. The regulation at 8 C.F.R. § 204.5(1)(2) and section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b )(3)(A)(i), provides for the granting of preference classification to qualified immigrants who are capable, at the time of petitioning for classification under this paragraph, of performing skilled labor (requiring at least two years training or experience), not of a temporary nature, for which qualified workers are not available in the United States. See also 8 C.F.R. § 204.5(1)(3)(ii)(b).

The petitioner must establish that its ETA 750 job offer to the beneficiary is a realistic one. A petitioner's filing of an ETA 750 labor certification application establishes a priority date for any immigrant petition later filed based on the approved ETA 750. The priority date is the date that Form ETA 750 Application for Alien Employment Certification was accepted for processing by any office within the employment service system of the Department of Labor. See 8 CFR § 204.5( d). Therefore, the petitioner must establish that the job offer was realistic as of the priority date, and that the offer remained realistic for each year thereafter, until the beneficiary obtains lawful permanent residence. The petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. § 204.5(g)(2).

1 The submission of additional evidence on appeal is allowed by the instructions to the Form I-290B, which are incorporated into the regulations by the regulation at 8 C.F.R. § 1 03.2(a)(l ). The record in the instant case provides no reason to preclude consideration of any of the documents newly submitted on appeal. See Matter of Soriano, 19 I&N Dec. 764 (BIA 1988).

Page 3

The regulation 8 C.F.R. § 204.5(g)(2) states in pertinent part:

Ability of prospective employer to pay wage. Any petition filed by or for an employment-based immigrant which requires an offer of employment must be accompanied by evidence that the prospective United States employer has the ability to pay the proffered wage. The petitioner must demonstrate this ability at the time the priority date is established and continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability shall be either in the form of copies of annual reports, federal tax returns, or audited financial statements.

In the case at hand, the petitioner filed Form ETA 750 with the relevant state workforce agency on April 16, 2001. The proffered wage as stated on Form ETA 750 is $25.00 per hour, based on a 40 hour work week, which is equivalent to $52,000 per year. The labor certification was approved on May 25, 2005, and the petitioner filed the 1-140 on the beneficiary's behalf on July 18, 2006.2 The petitioner listed the following information on the 1-140 petition: date established: May 1, 1999; gross annual income: $369,000; net annual income: not listed; and current number of employees: 6.

On August 23, 2006, the director issued a Request for Evidence ("RFE"), for the petitioner to provide further evidence related to its ability to pay from 2001 onward, including either the petitioner's federal tax returns, audited financial statements or annual reports. The RFE also sought Forms W-2 issued to the beneficiary if employed, and Forms 941 to reflect quarterly wages paid. Additionally, the director requested that the petitioner submit evidence that the beneficiary had the required three years and ten months of prior experience to qualify for the position offered to include letters from prior employers along with corroborating evidence of employment such as original pay statements, earnings statements, and or tax returns. The petitioner responded. On January 30, 2007, the director denied the petition finding that the petitioner did not establish its ability to pay the beneficiary the proffered wage from the priority date until the beneficiary obtained permanent residence. The petitioner appealed to the AAO.

On January 22, 2009, the AAO dismissed the petitioner's appeal. Following consideration of the petitioner's tax returns, wages paid, net income, and net current assets, and additional information submitted on appeal, the AAO determined that the petitioner failed to establish its continuing ability to pay the proffered wage beginning on the priority date.

2 The petitioner filed two prior 1-140 petitions on behalf of the beneficiary. In its first petition, the petitioner sought to classify the beneficiary as an "alien of extraordinary ability" for the position of a chef. That petition was denied on August 28, 2001, as the petitioner failed to establish that the beneficiary met the criteria for this classification. The second 1-140 petition that the petitioner filed on the beneficiary's behalf was denied on June 13, 2003 based on "abandonment" as the petitioner failed to respond to a Request for Evidence for the petitioner to submit an original Form ETA 750 in support of the petition. The petitioner had filed the second 1-140 petition prior to obtaining the labor certification underlying the present 1-140 petition.

Page4

On April 27, 2009, the AAO reopened the matter sua sponte and issued a Notice of Intent to Deny ("NOID"). The NOID allowed the petitioner to address and submit evidence related to the following issues: ability to pay; whether Matter of Sonegawa, 12 I&N Dec. 612 (BIA 1967), would appropriately apply in the instant matter; whether the petitioner adequately documented that the beneficiary had the experience required for the position; whether the job offer was realistic; and whether the petitioner intended to employ the beneficiary in the position offered. The petitioner responded. We will address each of the foregoing points respectively.

First, we will address the basis for the petition's denial, the petitioner's continuing ability to pay the proffered wage beginning on the priority date. If the petitioner establishes by documentary evidence that it employed the beneficiary at a salary equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the petitioner's ability to pay the proffered wage. In the instant case, on the Form ETA 750B, signed by the beneficiary on July 25, 2005, the beneficiary represented that he has been employed with the petitioner from March 1992 to the present (date of signature). 3

The petitioner submitted the following evidence of prior wage payment to the beneficiary:

Year 2007 2006 2005 2004 2003 2002 2001

W-2 Wages Paid No W-2 or wage documentation submitted No W-2 or wage documentation submitted No W-2 or wage documentation submitted No W -2 or wage documentation submitted No W-2 or wage documentation submitted No W-2 or wage documentation submitted $17,450.00

Difference between wages paid and the proffered wage $52,000.00 $52,000.00 $52,000.00 $52,000.00 $52,000.00 $52,000.00 $34,550.00

The following W-2 statements account for time before the priority date:

2000 $18,173.28 1997 $13,412.02

3 On Form G-325A, Biographic Information, filed with the beneficiary's Form I-485 Application to Register Permanent Residence or Adjust Status, signed on May 22, 2006, the beneficiary represented that he was employed with the petitioner since 1995. The beneficiary stated on Form ETA 750 that he has been working for the petitioner since March 1992. However, the Form I-140 clearly states that the petitioner was formed in 1999. The reason for these differences is unclear.

It is incumbent on the petitioner to resolve any inconsistencies in the record by independent objective evidence, and attempts to explain or reconcile such inconsistencies, absent competent objective evidence pointing to where the truth, in fact, lies, will not suffice. Matter of Ho, 19 I&N Dec. 582, 591-592 (BIA 1988).

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1992 $5,982.494

The priority date is April16, 2001, so that the wages paid prior to 2001 would not demonstrate the petitioner's ability to pay after that date, but will be given general consideration. The petitioner asserts that it currently employs and pays the beneficiary, however, the petitioner failed to submit any subsequent W-2 statements after 2001, and did not offer any explanation for the lack of subsequent W -2 statements. Specifically, counsel in his brief on appeal states that as of March 2007 the petitioner paid the beneficiary $17 an hour. However, the petitioner does not submit any documentation to support this claim, either with its appeal brief, or in response to the AAO's RFE. Going on record without supporting documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings. Matter of Soffici, 22 I&N Dec. 158, 165 (Comm. 1998) (citing Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm. 1972)). Without documentary evidence to support the claim, the assertions of counsel will not satisfy the petitioner's burden of proof. The assertions of counsel do not constitute evidence. Matter of Obaigbena, 19 I&N Dec. 533, 534 (BIA 1988); Matter Of Laureano, 19 I&N Dec. 1 (BIA 1983); Matter of Ramirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980). Additionally, the purpose of the request for evidence is to elicit further information that clarifies whether eligibility for the benefit sought has been established, as of the time the petition is filed. See 8 C.F.R. §§ 103.2(b)(8) and (12). The failure to submit requested evidence that precludes a material line of inquiry shall be grounds for denying the petition. 8 C.F.R. § 103.2(b)(14).

The amount that the petitioner paid the beneficiary in each year is less than the proffered wage. Therefore, the petitioner is unable to establish its ability to pay the beneficiary the proffered wage based on prior wage payment alone. The petitioner must establish that it can pay the difference between the proffered wage and the wages already paid in 2001 and the full proffered wage in subsequent years.

If the petitioner does not establish that it employed and paid the beneficiary an amount at least equal to the proffered wage during that period, USCIS will next examine the net income figure reflected on the petitioner's federal income tax return, without consideration of depreciation or other expenses. River Street Donuts, LLC v. Napolitano, 558 F.3d 111 (1st Cir. 2009). Reliance on federal income tax returns as a basis for determining a petitioner's ability to pay the proffered wage is well established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F. Supp. 1049, 1054 (S.D.N.Y. 1986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. Feldman, 736 F.2d 1305 (9th Cir. 1984)); see also Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989); K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982), ajf'd, 703 F.2d 571 (7th Cir. 1983). Reliance on the petitioner's gross receipts and wage expense is misplaced. Showing that the petitioner's gross receipts exceeded the proffered wage is

4 The petitioner additionally submitted partial copies ofpaystubs for the dates prior to the April2001 priority date. The partial pay statements reflect amounts paid ranging from $65 dollars to a high of $313. It is unclear whether these statements reflect weekly wages, or bi-monthly pay. The reason for the variance in pay is also unclear. As the pay is for the time period before the priority date, these wages do not need to be considered further.

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insufficient. Similarly, showing that the petitioner paid wages in excess of the proffered wage is insufficient.

In K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. at 1084, the court held that the Immigration and Naturalization Service, now USCIS, had properly relied on the petitioner's net income figure, as stated on the petitioner's corporate income tax returns, rather than the petitioner's gross income. The court specifically rejected the argument that the Service should have considered income before expenses were paid rather than net income.

The record demonstrates that the petitioner is a C corporation. For a C corporation, USCIS considers net income to be the figure shown on line 28, taxable income before net operating loss deduction and special deductions, ofForm 1120 U.S. Corporation Income Tax Return, or the equivalent figure on line 24 of the Form 1120-A U.S. Corporation Short Form Tax Return. Line 28 demonstrates the following concerning the petitioner's ability to pay the proffered wage:

Tax year5

2007 2006 2005 2004 2003 2002 2001 2000

Net income or (loss) -$3,819 not submitted -$3,595 -$6,529 $5,118 -$5,627 -$12,727 $10,535

Based on the foregoing, the petitioner cannot establish its ability to pay the beneficiary the proffered wage in any of the foregoing years, even ifwe added the 2001 calendar W-2 wages to the 2001 tax year net income. However, the petitioner did not provide any regulatory prescribed evidence for the year 2006 to demonstrate its ability to pay the proffered wage in that year.6 Additionally, we note that the petitioner's tax returns reflect declining net income from the year 2000 to 2007.

As an alternative means of determining the petitioner's ability to pay the proffered wages, USCIS may review the petitioner's net current assets. Net current assets are the difference between the petitioner's current assets and current liabilities.7 Current assets include cash on hand, inventories,

5 The petitioner files its taxes based on a tax year rather than a calendar year. The petitioner's tax year runs from November 1 to October 31, so that the petitioner's 2000 federal tax return reflects the time period from November 1, 2000 to October 31, 2001, and would be relevant to analyzing ability to pay from April 2001 onward. 6 The petitioner states in its letter that it submitted its 2006 federal tax return, however it was not attached to the filed response. 7 According to Barron's Dictionary of Accounting Terms 117 (3rd ed. 2000), "current assets" consist of items having (in most cases) a life of one year or less, such as cash, marketable securities, inventory and prepaid expenses. "Current liabilities" are obligations payable (in most cases) within one year, such

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and receivables expected to be converted to cash within one year. A corporation's current assets are shown on Schedule L, lines 1 through 6. Its current liabilities are shown on lines 16 through 18, or, if filed on Form 1120-A, on Part III. If a corporation's net current assets are equal to or greater than the proffered wage, the petitioner is expected to be able to pay the proffered wage out of those net current assets, and, thus, would evidence the petitioner's ability to pay. The net current assets, if available, would be converted to cash as the proffered wage becomes due.

Tax year 2007 2006 2005 2004 2003 2002 2001 2000

Net current assets no schedule L submitted no tax return submitted $6,723 $6,485 $10,006 $7,780 $7,416 $16,378

The petitioner cannot demonstrate its ability to pay the proffered wage from its net current assets in any of the foregoing years, even if the wages paid to the beneficiary in 2001 were added to the petitioner's net current assets. Similarly, the petitioner's tax returns reflect an overall decline in net current assets between the years 2000 to 2005.

Additionally, the AAO notes the following information from the petitioner's tax returns:

Tax year Gross Recei~ts Salaries Paid Officer's Com~ensation 2007 $320,576 $81,320 $26,200 2006 not submitted not submitted not submitted 2005 $323,323 $85,145 $28,500 2004 $326,996 $69,732 $42,400 2003 $348,280 $82,515 $37,075 2002 $352,252 $81,985 $57,200 2001 $379,623 $95,835 $67,750 2000 $424,228 $105,442 $46,800

On appeal, the petitioner had submitted a letter from its accountant, dated March 22, 2007, which cited to the business's status as a C corporation, and that it was, "very doubtful that it will ever show a profit ... [and that] most likely any profits will be wiped out by additional salaries to the owner or members of the family." The accountant also asserted that depreciation might be considered, and that in his opinion, the business was "viable."

accounts payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 118.

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Depreciation as a tax concept is a measure of the decline in the value of a business asset over time. See Internal Revenue Service, Instructions for Form 4562, Depreciation and Amortization (Including Information on Listed Property) (2004), at 1-2, available at http://www.irs.gov/pub/irs-pd£'i4562.pdf, (accessed July 2, 2009). The depreciation argument has previously been addressed by courts.

With respect to depreciation, the court in River Street Donuts noted:

The AAO recognized that a depreciation deduction is a systematic allocation of the cost of a tangible long-term asset and does not represent a specific cash expenditure during the year claimed. Furthermore, the AAO indicated that the allocation of the depreciation of a long-term asset could be spread out over the years or concentrated into a few depending on the petitioner's choice of accounting and depreciation methods. Nonetheless, the AAO explained that depreciation represents an actual cost of doing business, which could represent either the diminution in value of buildings and equipment or the accumulation of funds necessary to replace perishable equipment and buildings. Accordingly, the AAO stressed that even though amounts deducted for depreciation do not represent current use of cash, neither does it represent amounts available to pay wages.

We find that the AAO has a rational explanation for its policy of not adding depreciation back to net income. Namely, that the amount spent on a long term tangible asset is a "real" expense.

River Street Donuts at 116. "[USCIS] and judicial precedent support the use of tax returns and the net income figures in determining petitioner's ability to pay. Plaintiffs' argument that these figures should be revised by the court by adding back depreciation is without support." Chi-Feng Chang v. Thornburgh, 719 F. Supp. 532 (N.D. Texas 1989). Therefore, the accountant's assertion that depreciation should be considered in determining the petitioner's ability to pay will not be accepted.

The AAO requested that the petitioner submit additional evidence related to its ability to pay the proffered wage. Counsel asserts that the petitioner has established that it is facing difficult economic times, particularly in the Detroit metro area, and that such circumstances would warrant favorable consideration under Matter ofSonegawa, 12 I&N Dec. 612 (BIA 1967).

Matter of Sonegawa, 12 I&N Dec. at 612 relates to petitions filed during uncharacteristically unprofitable or difficult years, but must be viewed in comparison to a petitioner's prior profitable or successful years. The petitioning entity in Sonegawa had been in business for over eleven years, and during that time period had routinely earned a gross annual income of approximately $100,000. During the year in which the petition was filed in that case, the petitioner changed business locations. The petitioner provided evidence to show that as a result of the move, that the petitioner had sustained significant expenses in one year related to the relocation, including an increase in rent, as the company paid rent on both the old and new locations for five months. The petitioner also sustained large moving costs. Further, the petitioner was unable to do regular business for a period

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of time. All of the foregoing factors accounted for the petitioner's decrease in ability to pay the required wages. The petitioner was a fashion designer whose work had been featured in Time and Look magazines. The articles provided helped to establish the petitioner's reputation, and potential future growth, particularly when viewed against the company's prior performance.

Here, counsel cites to U.S. Bureau of Labor Statistics for June 3, 2009, and asserts that the unemployment rate in the Detroit area has reached "an all time high of 14.6 percent." Counsel asserts that the petitioner remains in business based on its reputation. He asserts that the petitioner continues to pay a consistent amount in salaries and that the owner has reduced his compensation. Further, he asserts that the wage for a high level cook in the Detroit area is now $25,875 per year.

The AAO will address each point individually. With respect to the claim that the Detroit metro area is suffering high unemployment in 2009, this claim would fail to show how the business was negatively impacted for a short time period, in light of the petitioner's history of declining gross receipts from the year 2000 onward. Between 2000 and 2007, the petitioner's tax returns reflect a steady decline of over $100,000 even prior to the current recession and unemployment. 8

Regarding the petitioner's reputation, counsel submits two articles placed in the local press. The articles were printed subsequent to the date that the AAO issued the RFE on April27, 2009 in the instant matter requesting evidence of how the petitioner met the standard in Sonegawa. Both articles are the same; the second article reflects the same substance reprinted after issuance of the first article.

The first article is dated May 16, 2009 and appears at http://www.daily-jeff.com/news/articl~ which online is listed as located in Cambridge, Ohio, and not in Michigan. The article discusses the beneficiary's initial role as a dishwasher. The petitioner's owner states that the beneficiary, "came up with chunky beef," which he describes as a dish, "cook[ ed] for two hours, add green peppers and onions. No powdered garlic- fresh garlic. It's delicious." The majority of the article discusses the petitioner's lawsuit against users seeking to qualify the beneficiary for a skilled worker visa, rather than the beneficiary's cooking, or the petitioner's reputation in the area. The owner states his frustration with the process, "What the heck does the government want."9 The only other comment related to the restaurant is from one customer that he did not need a menu to order, that he ordered, "Enchiladas -beef, cheese and onions," that the food was, "very authentic . . . you get in, get out and get back to work." The same article was reprinted at ·

The article only contains the petitioner's statement regarding one dish the beneficiary makes, and fails to elaborate how this dish is significantly different from, or an innovation from standard Mexican

8 Additionally, if the Detroit area suffers from such high unemployment, the issue is then whether the petitioner truly needs to hire a foreign worker. The purpose of the instant visa category is to provide employers with foreign workers to fill positions for which U.S. workers are unavailable. If the Detroit metro area indeed suffers from unemployment at a rate of 14.6%, then it would seem likely that a U.S. worker would be available to fill the current position. 9 Part of this frustration may be a result of the petitioner's initial misfiling, and the abandonment of its second petition.

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cuisine, or that the chunky beef dish attracts regular customers and that the business has formed its reputation around the chunky beef dish or other innovative entrees. In fact, the only testimony from a customer is that he orders the standard enchiladas and appreciates the quick service. The majority of the article addresses points, which form the basis for the lawsuit. In light of the foregoing, we would not conclude that this article establishes the petitioner's reputation akin to the circumstances in Sonegawa, or that the petitioner could establish its ability to pay the beneficiary the proffered wage based on a totality of the circumstances.

Counsel asserts that the petitioner has paid a consistent amount in salaries to each worker. In general, wages already paid to others are not available to prove the ability to pay the wage proffered to the beneficiary at the priority date of the petition and continuing to the present. Wages paid to the beneficiary were considered above, and in connection with the petitioner's net income and net current assets. The petitioner did not submit any documentation to establish the specific wages paid to the beneficiary since 2001, either in the form of W-2 statements, or paystubs. Additionally, the petitioner states on Form 1-140 that it employs six workers. Whether that number includes the petitioner's owner in addition is unclear. If we examined the wages paid to each worker, taking the petitioner's highest year of wages paid: 2000, wages in the amount of $105,442, and divided that number by 5 (excluding the petitioner's owner), that would account for wages of $21,088.40 per worker, which is significantly less than the beneficiary's proffered wage of $52,000. Additionally, in only two years did the officer's compensation exceed $52,000. In most years, officer compensation was significantly less. The petitioner would have us believe that it intends to pay the beneficiary more than the corporate officer earns. The petitioner must establish that its ETA 750 job offer to the beneficiary is a realistic one from the time of the priority date, and that the offer remained realistic for each year thereafter, until the beneficiary obtains lawful permanent residence. The petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. § 204.5(g)(2).

Counsel next asserts that the wage for a high level cook in the Detroit area is now $25,875 per year and cites to a U.S. Department of Labor wage survey.

Counsel's argument is flawed. The petitioner filed Form ETA 750 for the position of a "chef' and not a "cook." The current level four wage10 for a chef in the Wayne County, Detroit area, which

10 See http://www.foreignlaborcert.doleta.gov/fagsanswers.cfrn, (accessed June 17, 2009).

Why did the prevailing wage two tier skill level structure change to four levels?

Congress enacted the Consolidated Appropriations Act of 2005 amending the hnmigration and Naturalization Act (Section 212(p), 8 U.S.C. 1182(p)) to provide: "Where the Secretary of Labor uses, or makes available to employers, a governmental survey to determine the prevailing wage, such survey shall provide at least 4 levels of wages commensurate with experience, education, and the level of supervision. Where an

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includes the petitioner's location in Ecorse, Michigan, is $26.37 hour, or $54,850 year. 11 The position of chef has a "Job Zone" of Level Three:

JobZone Three: Medium Preparation Needed

Experience: Previous work-related skill, knowledge, or experience is required for these occupations. For example, an electrician must have completed three or four years of apprenticeship or several years of vocational training, and often must have passed a licensing exam m order to perform the job.

Education: Most occupations in this zone require training in vocational schools, onthe-job experience, or an associate's degree. Some may require a bachelor's degree.

Job Training: Employees in these occupations usually need one or two years of training involving both on-the-job experience and informal training with experienced workers.

Examples: These occupations usually involve using communication and organizational skills to coordinate, supervise, manage, or train others to accomplish goals. Examples include funeral directors, electricians, forest and conservation technicians, legal secretaries, interviewers, and msurance sales agents.

SVP Range: 6.0 < 7.0

As the petitioner required three years and ten months of experience, which exceeds the category's allowed training, the position would likely be assigned the highest wage level.

Alternatively, the wage that counsel cites to is for a "cook" in the Detroit area. 12 A cook is encompassed within a different "Job Zone," Job Zone 2, and accordingly reflects a lower wage.

existing government survey has only 2 levels, 2 intermediate levels may be created by dividing by 3, the difference between the two levels offered, adding the quotient thus obtained to the first level and subtracting that quotient from the second level."

11 See http://www.flcdatacenter.com/, the Foreign Labor Certification Data Center, Online Wage Library; specifically http://www .flcdatacenter.com/OesQuickResults.aspx?area= 19804&code=35-10ll.OO&year=lO&source=l, (accessed July 2, 2009). 12 The level 4 wage for a cook in the Detroit area for the time period July 2008 to June 2009 was $25,875 annually. See http://www.flcdatacenter.com/OesQuickResults.aspx?area=19804&code=35-2014.00&year=9&source=l, (accessed July 2, 2009). The assessed level 4 wage for a cook in the Detroit area increased to $26,749 for the time period July 2009 to June 2010. See http:/ /www.flcdatacenter.com/OesQuickResults.aspx?area= 19804&code=35-20 14.00&year= 1 O&source= 1, (accessed July 2, 2009).

JobZone Two: Some Preparation Needed

Experience: Some previous work-related skill, knowledge, or experience may be helpful in these occupations, but usually is not needed. For example, a teller might benefit from experience working with the public, but an inexperienced person could still learn to be an teller [sic] with little difficulty.

Education: These occupations usually require a high school diploma and may require some vocational training or job-related course work. In some cases, an associate's or bachelor's degree could be needed.

Job Training: Employees in these occupations need anywhere from a few months to one year of working with experienced employees.

Examples: These occupations often involve using your knowledge and skills to help others. Examples include sheet metal workers, forest fire fighters, customer service representatives, pharmacy technicians, salespersons (retail), and tellers.

SVP Range: 4.0 to < 6.0

Additionally, we note that the petitioner listed the wage of $25 per hour on Form ETA 750, and listed the position title as a chef. The petitioner also listed that the job required three years and ten months of experience. DOL did not require the petitioner to change, amend or increase the wage prior to certification. DOL also did not require the petitioner to change or amend either the job title, or the amount of experience required prior to certification. The petitioner cannot now assert that the position should be classified as a cook and not a chef, so that the petitioner can establish its ability to pay the proffered wage. A petitioner may not make material changes to a petition in an effort to make a deficient petition conform to USCIS requirements. See Matter of Izummi, 22 I&N Dec. 169, 176 (Assoc. Comm. 1988). A petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971). If the petitioner wants to employ the beneficiary as a "cook" rather than a "chef' at the lower wage of $25,875, there is no bar to the employer filing a new labor certification for the different position at the lesser wage. However, related to the instant matter, the petitioner must pay the wage as stated and certified on Form ETA 750. USCIS must look to the job offer portion of the labor certification to determine the requirements for the position. USCIS may not ignore a term of the labor certification, nor may it impose additional requirements. See Matter of Silver Dragon Chinese Restaurant, 19 I&N Dec. 401, 406 (Comm. 1986). See also, Mandany v. Smith, 696 F.2d 1008, (D.C. Cir. 1983); K.R.K. Irvine, Inc. v. Landon, 699 F.2d 1006 (9th Cir. 1983); Stewart Infra-Red Commissary of Massachusetts, Inc. v. Coomey, 661 F.2d 1 (1st Cir. 1981).

In consideration of wages paid to the beneficiary, the petitioner's net income, net current assets, and the totality of the circumstances based on Matter of Sonegawa, 12 I&N Dec. 612, the petitioner has

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not established its ability to pay the proffered wage from the time of the priority date until the beneficiary obtains permanent residence.

Next, we will address the additional issues raised in the AAO's NOID. An application or petition that fails to comply with the technical requirements of the law may be denied by the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See Spencer Enterprises, Inc. v. United States, 299 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), affd. 345 F.3d 683 (9th Cir. 2003); see also Dar v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews appeals on a de novo basis).

The petitioner failed to adequately document that the beneficiary had the required three years and ten months of prior experience as a chef. In evaluating the beneficiary's qualifications, USCIS must look to the job offer portion of the alien labor certification to determine the required qualifications for the position. USCIS may not ignore a term of the labor certification, nor may it impose additional requirements. See Matter of Silver Dragon Chinese Restaurant, 19 I&N Dec. 401, 406 (Comm. 1986). See also, Mandany v. Smith, 696 F.2d 1008 (D.C. Cir. 1983); K.R.K. Irvine, Inc. v. Landon, 699 F.2d 1006 (9th Cir. 1983); Stewart Infra-Red Commissary of Massachusetts, Inc. v. Coomey, 661 F.2d 1 (1st Cir. 1981). A labor certification is an integral part of this petition, but the issuance of a Form ETA 750 does not mandate the approval of the relating petition. To be eligible for approval, a beneficiary must have all the education, training, and experience specified on the labor certification as of the petition's priority date. 8 C.P.R. § 103.2(b)(l), (12). See Matter of Wing's Tea House, 16 I&N Dec. 158, 159 (Acting Reg. Comm. 1977); Matter of Katigbak, 14 I. & N. Dec. 45, 49 (Reg. Comm. 1971).

On the Form ETA 750A, the "job offer" position description provides:

The duties and responsibilities included preparing specialized Mexican dishes including special enchilada sauces, special sauces for meats, meat pies and our regular signature dish green sauce ribs, teaching the cooks to prepare Mexican recipes, developing new Mexican dishes for the menu and co-ordinating [sic] with the staff on serving suggestions.

The job offered listed that the position required prior experience of: three years and ten months in the job offered, chef. The petitioner did not list that an individual could qualify for the position through experience in any alternate related occupations, or list any other special requirements.

On the Form ETA 750B, the beneficiary represented his relevant experience as: (1) La Cabana del Pescador, Ocotlon, Jalisco, Mexico, from August 1983 to March 1988, position, chef; and (2) the petitioner, March 1992 to the present (date of signature July 25, 2005), as chef.

To document a beneficiary's qualifications, the petitioner must provide evidence in accordance with 8 C.P.R. § 204.5(1)(3):

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(A) General. Any requirements of training or experience for skilled workers, professionals, or other workers must be supported by letters from trainers or employers giving the name, address, and title of the trainer or employer, and a description of the training received or the experience of the alien.

(B) Skilled workers. If the petition is for a skilled worker, the petition must be accompanied by evidence that the alien meets the educational, training or experience, and any other requirements of the individual labor certification, meets the requirements for Schedule A designation, or meets the requirements for the Labor Market Information Pilot Program occupation designation. The minimum requirements for this classification are at least two years of training or expenence.

To document the beneficiary's experience, the petitioner submitted the following letter:

Letter La Cabana del Pescador, June 4, 2003; Position title: unstated; Dates of employment: August 1983 to March 1988; Description of duties: "he worked in the kitchen area providing support in activities related to this department as a cook, we acknowledge his interest and enthusiasm, as well as the responsible manner in which he behaved."

In response to the director's RFE, the petitioner submitted a second letter:

Letter from undated; Position title: unstated; Dates of employment: August 1983 to March 1988;

La Cabana de Yeyo S.A. de C.V.,

Description of duties: "he worked in the kitchen area providing support in activities related to this department as a cook, preparing entrees, salads and all of the specialties of the house. We acknowledge his interest and enthusiasm, as well as the responsible manner in which he behaved." She continues, "his pay was in cash during said period and there is no evidence that we have to send to the government."

The first letter fails to provide sufficient the beneficiary's training and experience received. The second letter, signed failed to indicate whether the beneficiary's experience was on a full-time or a part-time basis. From the letters, it is unclear whether the beneficiary was employed full-time as a cook, or whether he performed duties to assist other cooks. Neither of the letters state that the beneficiary had three years and ten months of experience in "preparing specialized Mexican dishes including special enchilada sauces, special sauces for meats, meat pies and our regular signature dish green sauce ribs," or in "teaching the cooks to prepare Mexican recipes, developing new Mexican dishes for the menu and co-ordinating [sic] with the staff on serving suggestions." The second letter only references preparation of salads and unspecified "specialties of the house."

In response to the AAO's NOID, the petitioner submitted the following:

Letter from La Cabana de Yeyo S.A. de C.V., dated May 29, 2009; Position title: full-time cook; Dates of employment: August 1983 to March 1988; Description of duties: "he worked in the kitchen area providing support in activities related to this Department as a cook, preparing entrees, salads and all of the specialties of the house. We acknowledge his interest and enthusiasm, as well as the responsible manner in which he behaved." Further, "Shortly [the beneficiary] invented his own culinary recipes that we used in our restaurant." The letter reiterates, "his payments were in cash during that period and there is no evidence that we have to send to the government."

does explain the name change between the first letter issued and the second letter: "Our restaurant was called "La Cabana del pescador" but due to the death of my husband we changed the restaurant's name to La Cabana De Yeyo, S.A. De C.V."

While this letter provides some additional detail, the letter does not reflect that the beneficiary has three years and ten months of experience in the specific position offered as a chef or that he has experience in "preparing specialized Mexican dishes including special enchilada sauces, special sauces for meats, meat pies and our regular signature dish green sauce ribs," or in "teaching the cooks to prepare Mexican recipes, developing new Mexican dishes for the menu and co-ordinating [sic] with the staff on serving suggestions." The third letter does not address what "culinary recipes" the beneficiary developed, how many recipes, or state any information related to the invented recipes. None of the letters designate the food type prepared, and whether it was Mexican food as the specific position petitioned for requires. The labor certification did not designate that the beneficiary could qualify for the position based on any other related occupation such as, "cook, food preparer, or any related restaurant position."

The letter from emphasizes the beneficiary's experience as a cook. However, we note that DOL's Dictionary of Occupational Titles ("DOT"), now encompassed by O*NET, which DOL used at the time of filing the instant labor certification to determine skill levels required for occupations, distinguishes between the position of a chef and a cook.

A chef is defined in the DOT as:

CHEF (hotel & rest.) alternate titles: cook, chief; kitchen chef

Supervises, coordinates, and participates in activities of cooks and other kitchen personnel engaged in preparing and cooking foods in hotel, restaurant, cafeteria, or other establishment: Estimates food consumption, and requisitions or purchases foodstuffs. Receives and examines foodstuffs and supplies to ensure quality and

quantity meet established standards and specifications. Selects and develops recipes based on type of food to be prepared and applying personal knowledge and experience in food preparation. Supervises personnel engaged in preparing, cooking, and serving meats, sauces, vegetables, soups, and other foods. Cooks or otherwise prepares food according to recipe [COOK (hotel & rest.) 313.361-014]. Cuts, trims, and bones meats and poultry for cooking. Porti-ons cooked foods, or gives instructions to workers as to size of portions and methods of garnishing. Carves meats. May employ, train, and discharge workers. May maintain time and payroll records. May plan menus. May supervise kitchen staff, plan menus, purchase foodstuffs, and not prepare and cook foods [EXECUTIVE CHEF (hotel & rest.) 187.167-010]. May be designated according to cuisine specialty as Chef, French (hotel & rest.); Chef, German (hotel & rest.); Chef, Italian (hotel & rest.); or according to food specialty as Chef, Broiler Or Fry (hotel & rest.); Chef, Saucier (hotel & rest.). May supervise worker preparing food for banquet and be designated Banquet Chef (hotel & rest.).

ONET CROSSWALK: 61099A Chefs and Head Cooks

A cook is defined in the DOT as:

COOK (hotel & rest.) alternate titles: cook, restaurant

Prepares, seasons, and cooks soups, meats, vegetables, desserts, and other foodstuffs for consumption in eating establishments: Reads menu to estimate food requirements and orders food from supplier or procures food from storage. Adjusts thermostat controls to regulate temperature of ovens, broilers, grills, roasters, and steam kettles. Measures and mixes ingredients according to recipe, using variety of kitchen utensils and equipment, such as blenders, mixers, grinders, slicers, and tenderizers, to prepare soups, salads, gravies, desserts, sauces, and casseroles. Bakes, roasts, broils, and steams meats, fish, vegetables, and other foods. Adds seasoning to foods during mixing or cooking, according to personal judgment and experience. Observes and tests foods being cooked by tasting, smelling, and piercing with fork to determine that it is cooked. Carves meats, portions food on serving plates, adds gravies and sauces, and garnishes servings to fill orders. May supervise other cooks and kitchen employees. May wash, peel, cut, and shred vegetables and fruits to prepare them for use. May butcher chickens, fish, and shellfish. May cut, trim, and bone meat prior to cooking. May bake bread, rolls, cakes, and pastry [BAKER (hotel & rest.) 313.381-010]. May price items on menu. May be designated according to meal cooked or shift worked as Cook, Dinner (hotel & rest.); Cook, Morning (hotel & rest.); or according to food item prepared as Cook, Roast (hotel & rest.); or according to method of cooking as Cook, Broiler (hotel & rest.). May substitute for and relieve or assist other cooks during emergencies or rush periods and be designated Cook, Relief (hotel & rest.). May prepare and cook meals for institutionalized patients requiring special diets and be designated Food-Service Worker (hotel & rest.). May be designated: Cook, Dessert (hotel & rest.); Cook, Fry (hotel & rest.); Cook, Night (hotel & rest.);

Cook, Sauce (hotel & rest.); Cook, Soup (hotel & rest.); Cook, Special Diet (hotel & rest.); Cook, Vegetable (hotel & rest.). May oversee work of patients assigned to kitchen for work therapy purposes when working in psychiatric hospital.

ONET CROSSWALK: 65026 Cooks, Restaurant

Similarly, in the revised O*NET, chefs are defined differently then cooks. Generally, a chef, or a head cook has more responsibility for supervising, and coordinating the work of other cooks. A chef may also train other workers, and instruct other workers on the proper preparation of menu items, whereas both the DOT and ONET distinguish that a cook is more generally involved in the actual preparation and cooking activities. Accordingly, as the positions require different skills, the petitioner would need to document that the beneficiary has the required prior experience in the position offered as a chef, and not as a cook.

In response to the AAO's NOID, counsel asserts that the beneficiary does have the required three years and ten months of experience as evidenced from the letters addressed above, and that this evidence alone would be sufficient. Counsel states that a manager, "who was not fully aware of all the duties and responsibilities of the beneficiary" signed the second letter and "just provided general information and employment dates based on their human resource records."

The letters do not demonstrate that the beneficiary has three years and ten months of experience in the position offered as a chef. Further, the director in her RFE had requested corroboration of the beneficiary's experience set forth in the initial letter, and in response the prior employer stated that, "his pay was in cash during said period and there is no evidence that we have to send to the government." We note that none of the employers' "human resource records" were submitted to corroborate the beneficiary's employment.

While the petitioner did submit prior W -2 statements for the beneficiary, the petitioner has not stated for what time period it employed the beneficiary, or that the beneficiary worked on a full-time basis for the petitioner as a chef. One letter that the petitioner signed, dated April 11, 2002, indicated that the beneficiary "supervises and manages" the business, and not that he is, or was employed as a fulltime chef. Additionally, counsel in response to the AAO's NOID specifically states that, "The fact that W-2's submitted for the Beneficiary were submitted to demonstrate that the Beneficiary has worked for the employer for several years but they were not submitted to show that the Beneficiary was employed as a full time cook." Counsel asserts instead that the W-2s from 1992, 1997 and 2000 were submitted to establish that the beneficiary had continuous presence in the U.S. for purposes of adjusting status to lawful permanent resident. The petitioner does not state clearly in any signed letter in the record for what period that the petitioner has employed the beneficiary, if any, in the proffered position as a chef.

Based on the foregoing, the petitioner has failed to establish that the beneficiary has the required three years and ten months of experience in the position offered.

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Additionally, the petitioner must establish that its ETA 750 job offer to the beneficiary is a realistic one. A petitioner's filing of an ETA 750 labor certification application establishes a priority date for any immigrant petition later filed based on the approved ETA 750. The priority date is the date that Form ETA 750 Application for Alien Employment Certification was accepted for processing by any office within the employment service system of the Department of Labor. See 8 CFR § 204.5( d). Therefore, the petitioner must establish that the job offer was realistic as of the priority date, and that the offer remained realistic for each year thereafter, until the beneficiary obtains lawful permanent residence. The petitioner's ability to pay the proffered wage is an essential element in evaluating whether a job offer is realistic. See Matter of Great Wall, 16 I&N Dec. 142 (Acting Reg. Comm. 1977). See also 8 C.F.R. § 204.5(g)(2).

The petitioner indicated that it will pay the beneficiary $52,000 as a chef. The petitioner's tax returns, and the beneficiary's W-2 statements submitted do not evidence that a $52,000 salary for a chef is a realistic job offer. The W -2 statements submitted show that the petitioner has paid the beneficiary the following amounts: 1992: $5,982; 1997: $13,412; 2000: $18,173; and 2001: $17,450. 13 Additionally, the petitioner's 2004 Form 1120S lists that it paid total salaries to all employees in the amount of $69,732. The beneficiary's wage would total almost the entire amount in salaries paid to all employees. Further, the petitioner's tax returns reflect the following amounts in officer's compensation: 2007: $26,200; 2006: return not submitted; 2005: $28,500; 2004: $42,400; 2003: $37,075; 2002: $57,200; 2001: $67,750; and 2000: $46,800. The beneficiary's offered wage would substantially exceed the paid officer's compensation in all but two years.

Counsel states in response to this point, as noted above, that the W-2 statements were submitted only to evidence the beneficiary's continuous presence in the U.S., not that these wages represent his fulltime employment as a cook. Elsewhere in his brief, counsel argues that the wage of a cook in Detroit is now lower, and would be $25,875. This point has been addressed above. If the petitioner thinks the wage is in error, the petitioner can seek a new labor certification for the differing position of a cook, as opposed to the current position of a chef. None of these points, however, address that the petitioner's offer to pay the beneficiary $52,000 as a chef is a realistic job offer. The petitioner has failed to establish this point.

The last point to be addressed is that the petitioner must employ the beneficiary in the position offered. A labor certification for a specific job offer is valid only for the particular job opportunity, the alien for whom the certification was granted, and for the area of intended employment stated on the Form ETA 750. 20 C.F.R. § 656.30(C)(2).

13 As noted above, the petitioner did not submit any W-2 statements subsequent to 2001, and did not address why it was unable to do so despite the director's Request for Evidence seeking such documentation. The purpose of the request for evidence is to elicit further information that clarifies whether eligibility for the benefit sought has been established, as of the time the petition is filed. See 8 C.F.R. §§ 103.2(b)(8) and (12). The failure to submit requested evidence that precludes a material line of inquiry shall be grounds for denying the petition. 8 C.F.R. § 103.2(b)(14).

Joey

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Joey

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The petitioner's letter dated April 11, 2002, indicated that the beneficiary "supervises and manages" the business, and not that he is, or was employed as a full-time cook. The petitioner's labor certification does not indicate that the beneficiary will perform extensive managerial duties, or that he will supervise any employees.

In response to the AAO's RFE, the petitioner submitted a letter signed by the owner, which states, "I [the owner] confirm that I will employ [the beneficiary] as a full time chef in our restaurant. It is not my intention for the beneficiary to supervise and manage the business; that is what I do as the owner." He continues, "the letter dated April 11, 2002 simply referred to other duties that he assists me with during certain times when I am not available. [The beneficiary] is not being offered the position of supervisor or manager. He is being offered the position of full time chef."

Additionally, counsel in his brief states that the beneficiary is not required to work in the position offered until he has attained permanent residence status. Accordingly, the prior letter would reflect the beneficiary's duties as of April 11, 2002, and not the position that the petitioner intends to employ the beneficiary in.

Specifically, the April 11, 2002 letter signed by the petitioner's owner states related to the beneficiary, "He is our best employee ... He supervises and manages our business, he is also a Kitchen Chefwith specialties Mexican Foods [sic] and various International Dishes."

While counsel's statement is correct that the beneficiary does not need to be employed in the position offered until he attains permanent residence status, the April 11, 2002 letter in combination with the beneficiary's higher salary raises doubts that the beneficiary's role will be solely as a chef, the position certified in the labor certification. Doubt cast on any aspect of the petitioner's proof may, of course, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of the visa petition. Matter of Ho, 19 I&N Dec. 582, 591 (BIA 1988). It is incumbent on the petitioner to resolve any inconsistencies in the record by independent objective evidence, and attempts to explain or reconcile such inconsistencies, absent competent objective evidence pointing to where the truth, in fact, lies, will not suffice. !d. at 592. Alternatively, the higher salary coupled with low overall wages and inconsistent information regarding supervisory duties would make the position offered appear unrealistic.

Accordingly, the petition will be denied for the above stated reasons, with each considered as an independent and alternative basis for denial. In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the petitioner. Section 291 of the Act, 8 U.S. C. § 13 61. Here, that burden has not been met.

ORDER: The appeal is dismissed.

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