Federal Litigation as a Tool to Fight Unjust L-1 Denials
Federal litigation empowers business immigration attorneys to right a wrong.
Whether handling litigation in-house, co-counseling with an experienced litigator, or referring the matter out, practitioners should fight unreasonable denials in federal court. This is particularly true for L-1 intracompany transferee petitions filed on behalf of founders and top executives or managers of small businesses.
I recently took on, and won, a federal court case challenging an unjust L-1 denial. As I immersed myself in the case, I researched what was happening to L-1s across the board, and everything I learned made me all the more resolved to fight for my client. I encourage my colleagues to follow suit.
Business Immigration Approval and Request for Evidence Rates
L-1 petitions have the lowest approval rate of all employment-based nonimmigrant petitions and investor applications. L-1s are also the most likely to be issued a request for evidence (RFE).
In fiscal year 2022, U.S. Citizenship and Immigration Services (USCIS) denied 1 in 6 (16.4%) L-1 petitions, approving 83.6% of cases filed. More than a third (36.5%) were issued an RFE. Of those issued an RFE, fewer than two thirds (65.1%) were approved.
Other business petitions have extraordinarily different results: USCIS approved 98% of H-1B petitions and issued RFEs in only 9.6% of the cases; approved 94.6% of O petitions and issued RFEs in 20.7%; approved 93.2% of P petitions and issued RFEs in 19.6%; and approved 91.4% of TN petitions and issued RFEs in 17.1%. Consular posts abroad approved 92.5% of E-2 treaty investor visas and 94.2% of E-1 treaty trader visas in fiscal year 2021.
L-1s for Entrepreneurs and Small Businesses
In 1970, Congress created the L classification to “eliminate problems . . . faced by American companies having offices abroad in transferring key personnel freely within the organization.” See H.R. Rep. 91-851 (1970).
The L-1 classification enables a U.S. company to temporarily transfer an executive (L-1A), manager (L-1A), or specialized knowledge employee (L-1B), from one of its foreign offices to the United States. The individual must have been working for the foreign entity in a primarily executive, managerial, or specialized knowledge capacity for one year within the preceding three years. The L-1 classification also enables a foreign company to send an employee to the United States to open a new office.
L-1s are not limited to large businesses. According to an example in the USCIS Policy Manual, businesses may employ “only one or two people, including the beneficiary,” as long as non-managerial functions, such as “accounting, sales, warehousing, and personnel,” are outsourced.
For immigrants, one of the greatest advantages of the L-1A, is that a nearly identical immigrant classification exists, the EB-1C, which leads to permanent residence, or a “green card.”
For the United States, the L-1 is an expressway to bring entrepreneurs, new businesses, investment, and innovation to the country. These businesses create U.S. jobs, spur economic growth, and help America remain competitive in the global marketplace.
USCIS should approve small business L-1s with confidence. Founders and owners of these businesses have a personal stake in their company’s success; not only because of financial investment and sweat equity put into the business, but also because their right to continue to live and work in the United States depends on their company’s growth and prosperity.
Common Issues with L-1 RFEs and Denials
USCIS is notorious for issuing lengthy requests for evidence (RFEs) on L-1 petitions, particularly on those filed on behalf of owners and top executives or managers of small businesses.
Immigration Services Officers (ISOs) often question whether the beneficiary is an executive or manager abroad and will be an executive or manager in the United States. ISOs do so regardless of how well these requirements were documented in the initial petition, and in violation of the USCIS Policy Manual, which states that “[t]he regulations do not require submission of extensive evidence of business relationships or of the beneficiary’s prior and proposed employment.”
The ability of ISOs to efficiently and fairly adjudicate L-1 petitions depends not only on the presentation of the L-1 petition itself, but also on the ISO’s training, experience, and the time allotted to adjudicate each case.
Even though ISOs are not lawyers, they must be well-versed in not only immigration law, but also in business law, corporate relationships, traditional and modern organizational structures, finance, and common business practices to properly adjudicate L-1 petitions.
Further, according to USCIS’s recently published completion rates, ISOs average only 3 ½ hours to adjudicate an L-1 petition. Attorneys may spend weeks or even months to prepare a petition. Errors in adjudication are bound to occur.
Unfortunately, common issues with L-1 RFEs and denials are that ISOs ignore probative evidence, misconstrue evidence, do not follow legal precedents, and wrongfully increase the preponderance of the evidence standard.
As a result, some practitioners avoid filing L-1s altogether, practically closing the door for their clients to later qualify for permanent residence. Instead, they may file an E-2 investor visa application, which generally is easier to document and has a higher approval rate but does not lead to permanent residence without extensive pre-immigration planning.
Suing the Government
Attorneys should reframe the “L-1 problem” as a challenge. A challenge to litigate unjust L-1 denials.
In federal court, an Assistant U.S. Attorney (AUSA) will review the L-1 petition from a lawyer’s perspective. If the petition was well-documented and meets the requirements for the L-1 classification, the AUSA may encourage USCIS to reopen and approve the petition. Even if the case goes further into litigation, an impartial federal judge will take a fresh look at the law and evidence to decide whether USCIS’s decision to deny the petition was arbitrary and capricious under the Administrative Procedure Act (APA).
First-time litigators do not have to fight this battle alone. The American Immigration Lawyers Association (AILA), the American Immigration Council (The Council), and the National Immigration Litigation Alliance (NILA), provide robust resources and support, including step-by-step guides, practice advisories, and sample pleadings. NILA also offers co-counseling and strategic assistance, including pleading review, to back new litigators with the confidence, knowledge, and experience of a seasoned litigator.
Federal court is the most effective way for business immigration attorneys to push back against unjust denials. Eventually, perhaps, USCIS will even take a liking to small business L-1s.
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AILA members interested in preparing for federal litigation may be interested in our upcoming 2023 AILA Federal Court Litigation Institute which is a limited-size unique, hands-on practicum designed to enhance the litigation skills of attorneys new to federal court practice. Tuition assistance will be offered for this Institute based on need and availability. Please complete the tuition assistance application by February 21 for consideration.
