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Split Rail Fence Co., Inc. v. United States

United States Court of Appeals, Tenth Circuit

March 17, 2017

SPLIT RAIL FENCE COMPANY, INC., a Colorado corporation, Petitioner,
v.
UNITED STATES OF AMERICA, United States Department of Justice Executive Office for Immigration Review Office of the Chief Administrative Hearing Officer, Respondent.

         APPEAL FROM THE DEPARTMENT OF JUSTICE (DOJ No. 12A00059)

          Christopher J. Forrest, Miller & Steiert, P.C., Littleton, Colorado (Michael P. Miller and Benjamin L. Broder, Miller & Steiert, P.C., Littleton, Colorado; and Ann Allott, Allott Immigration Law Firm, Centennial, Colorado, with him on the briefs), appearing for Petitioner.

          Dana M. Camilleri, Trial Attorney (Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Civil Division, and Anthony P. Nicastro, Acting Assistant Director, with her on the brief), Office of Immigration Litigation, Civil Division, United States Department of Justice, Washington, DC, appearing for Respondent.

          Before HARTZ, HOLMES, and MATHESON, Circuit Judges.

         ORDER

         This matter is before the court on the petitioner's Petition for Rehearing En Banc. Any implicit request for panel rehearing contained in the Petition is denied. We have however, sua sponte, decided to revise the original opinion on pages 36 and 41 for clarification. A copy of the amended opinion and its appendix are attached hereto.

         The Petition for Rehearing En Banc was transmitted to all of the judges of the court who are in regular active service and who are not disqualified.[*] As no member of the panel and no judge in regular active service on the court requested that the court be polled, the request for en banc review is denied. The Clerk is directed to file the amended opinion and its appendix effective the date of this order.

          MATHESON, Circuit Judge.

         Split Rail Fence Company, Inc., a Colorado business that sells and installs fencing materials, petitions for review of an administrative law judge's ("ALJ") summary decision. The decision imposed civil penalties on Split Rail for violating the Immigration Reform and Control Act ("IRCA") by (1) "hir[ing] for employment in the United States an individual without complying with the requirements of subsection (b)" of 8 U.S.C. § 1324a in violation of § 1324a(a)(1)(B) (Count One); and (2) "continu[ing] to employ [an] alien in the United States knowing the alien is (or has become) an unauthorized alien" in violation of § 1324a(a)(2) (Count Two). Exercising jurisdiction under § 1324a(e)(8), we deny Split Rail's petition.

         I. BACKGROUND

         We begin by explaining the relevant legal background, the administrative enforcement and adjudication process, and the factual and procedural history of this case.

         A. Legal Background

         Congress amended the Immigration and Nationality Act ("INA") in 1986 by enacting the IRCA. IRCA Section 274A establishes "an extensive 'employment verification system, ' § 1324a(a)(1), designed to deny employment to aliens who (a) are not lawfully present in the United States, or (b) are not lawfully authorized to work in the United States, § 1324a(h)(3)." Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137, 147 (2002).

         Known as the I-9 system, the IRCA requires employers (1) "to verify the identity of their employees and ensure they are eligible to work in the United States by examining certain . . . documents" specified in § 1324a(b), and (2) to complete and retain an Employment Eligibility Verification Form (I-9 form) for each employee. Chamber of Commerce of U.S. v. Edmondson, 594 F.3d 742, 751 (10th Cir. 2010) (citing 8 C.F.R. § 274a.2(b)). A copy of the I-9 form and instructions relevant to this appeal is attached as an appendix to aid in understanding this opinion.

         Section 1324a(b) specifies that an employer must "attest . . . that it has verified that the individual is not an unauthorized alien by examining . . . (i) a document described in subparagraph (B), or (ii) a document described in subparagraph (C) and a document described in subparagraph (D)." 8 U.S.C. § 1324a(b)(1)(A). The acceptable verification documents for each category are listed in § 1324a(b)(1)(B)-(D), 8 C.F.R. § 274a.2(b)(1)(v), and in the "Lists of Acceptable Documents" instructions page accompanying the I-9 form ("List A, B, or C documents"). Once the employer has examined the appropriate documents, it must record the title, number, and expiration date (if any) of those documents in Section 2 of the I-9 form.

         IRCA Section 274A makes it unlawful for an employer (1) "to hire . . . an alien knowing the alien is an unauthorized alien, " 8 U.S.C. § 1324a(a)(1); (2) "to hire . . . an individual without complying with" the I-9 system, id. § 1324a(a)(1)(B); or (3) "to continue to employ [an] alien . . . knowing the alien is (or has become) an unauthorized alien, " id. § 1324a(a)(2). An "unauthorized alien" is an alien who is neither "(A) an alien lawfully admitted for permanent residence, [nor] (B) authorized to be so employed by [the IRCA] or by the Attorney General." Id. § 1324a(h)(3). Within the agency, the first type of violation is called a "knowing hire" violation. See, e.g., United States v. Jalisco's Bar and Grill, Inc., 11 OCAHO 1224, 2014 WL 4056921, *3 (June 27, 2014). Of relevance to this case, the second is called a "paperwork violation, " id., and the third is a "knowing continue to employ violation, " United States v. Muniz Concrete & Contracting, Inc., 12 OCAHO 1278, 2016 WL 2851340, at *8 (Apr. 29, 2016).

         The IRCA also includes an anti-discrimination provision under which an employer's "request, for purposes of satisfying the requirements of section 1324a(b) of this title, for more or different documents than are required under such section or refusing to honor documents tendered that on their face reasonably appear to be genuine shall be treated as an unfair immigration-related employment practice if made for the purpose or with the intent of discriminating against an individual." 8 U.S.C. § 1324b(a)(6); see also Edmondson, 594 F.3d at 767.

         B. Administrative Enforcement and Adjudication

         The regulations implementing the IRCA authorize Immigration and Customs Enforcement ("ICE"), an agency within the Department of Homeland Security ("DHS"), to "conduct investigations for violations on its own initiative."[1] 8 C.F.R. § 274a.9(b).

         ICE's investigation process typically begins by serving a Notice of Inspection ("NOI") to the employer. U.S. Immigration and Customs Enforcement, Form I-9 Inspection Overview (June 26, 2013), https://www.ice.gov/factsheets/i9-inspection. The NOI compels production of the employer's I-9 forms and may request other supporting documentation. Id. Once the forms are produced, ICE agents inspect them for compliance. Id.

         When the inspection is complete, ICE notifies the employer of the results in writing. Id. If ICE determines that the employer has violated IRCA Section 274A, it may issue a "Warning Notice, " such as a "Notice of Suspect Documents" ("NSD"), containing "a statement of the basis for the violations and the statutory provisions alleged to have been violated." 8 C.F.R. § 274a.9(c). In addition to or in place of a Warning Notice, ICE may serve a Notice of Intent to Fine ("NIF"), which commences proceedings to assess administrative penalties. Id. § 274a.9(d); see also 8 U.S.C. § 1324a(e)(4), (5) (allowing the assessment of civil penalties). An employer served with an NIF may negotiate a settlement with ICE or request a hearing before an ALJ. 8 C.F.R. § 274a.9(e).

         The United States Department of Justice's Office of the Chief Administrative Hearing Officer ("OCAHO") has jurisdiction to hear alleged violations under the INA. Hearings are conducted before ALJs who issue orders stating their findings of law and fact. 8 U.S.C. § 1324a(e)(3)(B)-(C). An ALJ's order becomes the final agency decision unless appealed to the Chief Administrative Hearing Officer ("CAHO"). 28 C.F.R. § 68.52(g). A party adversely affected by a final order may then petition a circuit court for review. 28 C.F.R. § 68.56.

         C. Factual and Procedural History

         1. ICE's 2009 Investigation, Notice of Suspect Documents, and Settlement

         On June 20, 2009, ICE special agents conducted an inspection at Split Rail to determine its compliance with the IRCA. During the inspection, it examined Split Rail's I-9 forms. On September 11, 2009, ICE sent Split Rail an NSD stating:

This letter is to inform you that, according to the records checked by ICE, the following individuals appear, at the present time, not to be authorized to work in the United States. The documents submitted to you were found to pertain to other individuals, or there was no record of the alien registration numbers being issued, or the documents pertain to the individuals but the individuals are not employment authorized or their employment authorization has expired. Accordingly, the documentation previously provided to you for these employees does not satisfy the Form I-9 employment eligibility verification requirements of the Immigration and Nationality Act.

App. at 145. The NSD listed 32 current employees and 51 terminated employees. It further stated, "Unless the above employee(s) present valid identification and employment eligibility documentation acceptable for completing the Form I-9, other than the documentation previously submitted to you, they are considered by ICE to be unauthorized to work in the United States." App. at 147. It noted that continued employment of these employees without valid documentation could subject Split Rail to civil monetary penalties.

         Split Rail's president and owner, Tom Barenberg, stated in his affidavit that "shortly after" Split Rail received the NSD, it served the NSD on the 32 current employees named in it, videotaping the service.[2] Id. at 723. He further stated, "Twenty-three (23) of the employees would not affirm that they were authorized to work in the United States and their employment was immediately terminated." Id. The nine remaining employees continued to work at Split Rail.

         On October 14, 2009, Split Rail emailed the Office of Special Counsel ("OSC") for Immigration Related Unfair Employment Practices, seeking guidance on how it should respond to the NSD consistent with the IRCA's anti-discrimination provision. OSC replied:

[OSC] cannot provide an advisory opinion on any particular instance of alleged discrimination or on any set of facts involving a particular individual or entity. However, we can provide some general guidelines regarding employer compliance with the INA's anti-discrimination provision.
. . . .
The anti-discrimination provision of the INA prohibits the request for specific documents or the rejection of documents during the employment eligibility verification process with the intent to discriminate on the basis of national origin or citizenship status. However, it has been long recognized that action by an employer taken for reasons other than an intent to discriminate does not constitute an unfair employment practice within the meaning of the antidiscrimination provision of the INA. While an ICE Notice of Suspect Documents may provide a non-discriminatory reason behind the decision to re-verify an employee's employment eligibility, the standard for accepting documents presented by the employee to re-establish his or her employment eligibility remains the same-whether the document(s) presented reasonably appear on their face to be genuine and to relate to the person who presents the document(s).

App. at 696-97 (citations omitted).

         On February 1, 2010, ICE served Split Rail with an NIF, and in June 2010, ICE and Split Rail entered a settlement agreement.

         2. Jaime Lopez Ramirez's I-9 Form

         On October 5, 2009-after the issuance of the 2009 NSD and before the settlement-Split Rail hired Jaime Lopez Ramirez. It verified his employment eligibility using his Mexican passport, which included a temporary I-551 stamp. The I-551 stamp authorized employment in the United States until September 13, 2010. Mr. Lopez Ramirez continued working at Split Rail after his I-551 authorization expired. Split Rail did not update or re-verify his employment authorization on or after that date.

         3. ICE's 2011 Investigation and NSD

         On June 15, 2011, ICE mailed Split Rail a Notice of Inspection and five days later began a review of Split Rail's I-9 forms "for possible violations of Section 274A" of the IRCA. App. at 161. ICE completed its investigation on August 29, 2011, and mailed Split Rail an NSD the next day, which read:

This letter is to inform you that, according to the records checked by ICE, the following individuals appear, at the present time not to be authorized to work in the United States. The documents submitted to you were found to pertain to other individuals, or there was no record of the alien registration numbers being issued, or the documents pertain to the individuals but the individuals are not employment authorized or their employment authorization has expired. Accordingly, the documentation previously provided to you for these employees does not satisfy the Form l-9 employment eligibility verification requirements of the Immigration and Nationality Act.

         The NSD listed nine current employees and one terminated employee, stating,

Unless the [named] employee(s) present valid identification and employment eligibility documentation acceptable for completing the Form I-9 other than the documentation previously submitted to you, they are considered by ICE to be unauthorized to work in the United Sates. If you continue to employ these individuals without valid documentation, you may be subject to a civil money penalty. . . .
If you or the employees feel that this determination is in error and the employees are authorized to work, immediately call [the] Forensic Auditor . . . . ICE will re-verify the information provided about the employees, including any new information provided by you or the employees.

Id. at 152-53.

         All but one of the individuals named in the 2011 NSD had also been named in the 2009 NSD. Split Rail had not updated or changed the I-9 forms of the nine employees named in both NSDs since the 2009 inspection. According to Mr. Barenberg's affidavit, these nine employees were among the 32 employees Split Rail had videotaped after receiving the 2009 NSD. He stated that, during the videotaping, the nine employees had all orally "verified that they were authorized to work in the U.S." App. at 723.

         On September 26, 2011, ICE served Split Rail with an NIF, commencing this administrative proceeding against Split Rail. Split Rail requested a hearing before an ALJ three days later.

         On February 17, 2012, Mr. Barenberg mailed ICE a letter, stating he "had absolutely no reason to believe either now or at any time in the past that any of [the nine individuals identified as 'current employees' in the 2011 NSD] are anything but law abiding residents of the United States of America." Id. at 586. He noted many of them were long-term employees who, along with their families, had been involved in company activities, parties, and picnics. He further stated they each appeared authorized to work in the United States because they had bank accounts, cars, homes, and mortgages. He also noted many had valid driver's licenses and some had filed successful workers' compensation claims. He did not, however, state that Split Rail had taken any action regarding the employees' I-9 forms.

         4. ICE's Complaint and Summary Decision

         On April 6, 2012, ICE filed a complaint against Split Rail. On July 20, 2012, it filed an amended complaint-the complaint relevant to this appeal.

         Count One of the amended complaint alleged a paperwork violation under § 1324a(b) as to Mr. Lopez Ramirez. It alleged that (1) when Split Rail hired Mr. Lopez Ramirez, it verified his employment eligibility using his Mexican passport, which included a temporary I-551 stamp authorizing employment in the United States until September 13, 2010; (2) § 1324a(b) required Split Rail to re-verify his work authorization and update his I-9 form with the new basis for employment eligibility when his authorization expired; and (3) Split Rail failed to do so and therefore committed a paperwork violation under § 1324a(a)(1)(B).

         Count Two alleged Split Rail continued to employ nine of the employees listed on the 2011 NSD knowing they were or had become unauthorized in violation of § 1324a(a)(2).

         ICE moved for summary decision under 28 C.F.R. § 68.38, the administrative analog to summary judgment under Federal Rule of Civil Procedure 56. The ALJ granted ICE summary decision on both counts. Split Rail timely filed its petition for review with this court.

         II. DISCUSSION

         A. Standard of Review

         We have yet to determine the standard of review that applies to a summary decision under 28 C.F.R. § 68.38(c). Split Rail argues de novo review applies. ICE asserts we may only reverse if the ALJ's decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, " arguing that we should review questions of law de novo and factual determinations for a basis in "substantial evidence." See 5 U.S.C. § 706(2)(A), (E). Other circuits reviewing ALJ decisions in this context have used varying standards.[3] Because we conclude under de novo review-the standard most favorable to Split Rail-there is no genuine issue of material fact and ICE is entitled to summary decision, we need not decide which standard applies.

         B. Summary Decision Standard

         The requirements for a summary decision under 28 C.F.R. § 68.38(c) are the same as under Federal Rule of Civil Procedure 56. See Getahun v. OCAHO, 124 F.3d 591, 594 (3d Cir. 1997) ("The standards governing the entry of summary judgment under Fed.R.Civ.P. 56(c) in federal court cases are applied in determining whether summary decision under 28 C.F.R. § 68.38(c) is appropriate in OCAHO cases."); United States v. Foothill Packing, Inc., 11 OCAHO 1240, 2015 WL 329579, *5-6 (2015) (citing the Rule 56 standard in Celotex Corp. v. Catrett, 477 U.S. 317 (1986), and Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986), to explain the summary decision standard under 28 C.F.R. § 68.38(c)).

         Under 28 C.F.R. § 68.38(c), an ALJ "shall enter a summary decision for either party if the pleadings, affidavits, material obtained by discovery or otherwise, or matters officially noticed show that there is no genuine issue as to any material fact and that a party is entitled to summary decision." An issue is genuine "if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way." Becker v. Bateman, 709 F.3d 1019, 1022 (10th Cir. 2013) (quotations omitted); see also Anderson, 477 U.S. at 248. An issue of fact is material if under the substantive law it is essential to the proper disposition of the claim. Anderson, 477 U.S. at 248; Foothill Packing, Inc., 11 OCAHO 1240, 2015 WL 329579, at *5.

         The movant bears the initial burden of demonstrating the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Celotex, 477 U.S. at 323; Foothill Packing, Inc., 11 OCAHO 1240, 2015 WL 329579, at *6. If the movant satisfies this initial burden, the burden shifts to the non-movant to show specific facts from which a rational trier of fact could find for the ...


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