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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 15-60173
EMPLOYER SOLUTIONS STAFFING GROUP II, L.L.C.,
Pet...
No. 15-60173
2
FACTUAL AND PROCEDURAL BACKGROUND
In April 2010, ESSG, a temporary staffing agency, formed an agreement
wit...
No. 15-60173
3
Nationality Act (“INA”), 8 U.S.C. § 1324a(a)(1)(B), and ordered ESSG to pay
fines totaling $237,162.75.
ESS...
No. 15-60173
4
I. Overview of the INA Employer Verification System
It is unlawful for an employer to hire an individual wi...
No. 15-60173
5
The regulations establish that documents presented by the employee must be
originals. § 274a.2(b)(1)(v).
II...
No. 15-60173
6
interpreting the statute, the I-9 Form itself, and the ALJ’s interpretation in
this enforcement action.
A. ...
No. 15-60173
7
In its briefing here, DHS concedes the INA itself does not address
whether the attester must be the same pe...
No. 15-60173
8
Thus, we find no clear bar to corporate or entity attestation in the
regulations and prior adjudications in...
No. 15-60173
9
it has the “force of law,” that is, if the opinion is precedential and thus binds
third parties.4 See Dhuka...
No. 15-60173
10
Occupational Safety & Health Review Comm’n, 528 F.2d 645, 649 (5th Cir.
1976). Recently, the Supreme Court...
No. 15-60173
11
United States.” Beneath the attestation, there is a signature block for the
“Employer or Authorized Repres...
No. 15-60173
12
section 2 of the Form I-9 that it must be the same individual, and that
interpretation of the regulatory r...
No. 15-60173
13
The regulation can be fairly read to allow corporate attestation, appearing to
envision more than one pers...
No. 15-60173
14
factors which give it power to persuade.” Christopher, 132 S. Ct. at 2168–69
(quotation marks omitted) (ci...
No. 15-60173
15
action has not been subject to public comment, it addressed an issue the agency
had never explicitly addre...
No. 15-60173
16
permits entity attestation, and nothing in the materials which ESSG had to
consider prior to this enforcem...
11 OCAHO no. 1242
UNITED STATES DEPARTMENT OF JUSTICE
EXECUTIVE OFFICE FOR IMMIGRATION REVIEW
OFFICE OF THE CHIEF ADMINIST...
11 OCAHO no. 1242
2
Employer Solutions filed a timely answer denying the allegations and asserting thirteen
affirmative de...
11 OCAHO no. 1242
3
Employer Solutions Staffing Group II identified itself in answers to interrogatories as a limited
liab...
11 OCAHO no. 1242
4
documents the employees presented, and sent them to Teresa Nichols at ESSG. Maldonado said
he never si...
11 OCAHO no. 1242
5
from the deposition of Roberto Maldonado dated June 12, 2014 (12 pp.); G-3) Employer
Solutions’ respon...
11 OCAHO no. 1242
6
employees know.” For this reason, the company says that using more than one person to carry
out the ta...
11 OCAHO no. 1242
7
matter of law, the nonmoving party must come forward with specific contravening evidence to
avoid summ...
11 OCAHO no. 1242
8
individual and the individual only presented original documents to a different person more than a
thou...
11 OCAHO no. 1242
9
that the company failed to properly complete section 2 of Form I-9 for 292 employees and ESSG
II is li...
11 OCAHO no. 1242
10
correlation between the penalty and any alleged injury. The company compares its situation to
employe...
11 OCAHO no. 1242
11
ensure that all employers take seriously their obligation to complete the prescribed verification
pro...
11 OCAHO no. 1242
12
component, there is no way that the knowing creation of false attestations in section 2 of Form
I-9 c...
11 OCAHO no. 1242
13
C. Discussion and Analysis
The company’s conduct in discovery did not conform to the standards expect...
11 OCAHO no. 1242
14
October 31, 2013.
9. On December 5, 2013, respondent filed an answer to the complaint.
B. Additional ...
11 OCAHO no. 1242
15
19. Roberto Maldonado never certified in section 2 of Form I-9 that he reviewed the original
document...
11 OCAHO no. 1242
16
8. In assessing an appropriate penalty, the following factors must be considered: 1) the size of
the ...
11 OCAHO no. 1242
17
Appeal Information
This order shall become the final agency order unless modified, vacated, or remand...
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Employer Solutions Staffing v. OCAHO, et al, --F.3d--(5th Cir. 2016) & OCAHO's Decision

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Employer Solutions Staffing v. OCAHO, et al, --F.3d--(5th Cir. 2016) a.k.a, No. 15-60173 Aug. 11, 2016 Petition Granted & OCAHO's Order mostly Vacated & the Administrative Decision of January 20, 2015 being challenged

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Employer Solutions Staffing v. OCAHO, et al, --F.3d--(5th Cir. 2016) & OCAHO's Decision

  1. 1. IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT No. 15-60173 EMPLOYER SOLUTIONS STAFFING GROUP II, L.L.C., Petitioner v. OFFICE OF THE CHIEF ADMINISTRATIVE HEARING OFFICER; JEH CHARLES JOHNSON, SECRETARY, DEPARTMENT OF HOMELAND SECURITY; UNITED STATES OF AMERICA, Respondents Petition for Review of an Order of the Office of the Chief Administrative Hearing Officer Before DAVIS, PRADO, and SOUTHWICK, Circuit Judges. LESLIE H. SOUTHWICK, Circuit Judge: Employer Solutions Staffing Group II, L.L.C. (“ESSG”), petitions for review of an order imposing a fine for its alleged failure to complete properly the employment verification forms for 242 employees. ESSG used one person in Texas to examine original documents presented by employees and another person in Minnesota to examine photocopies of the same documents and then sign the verification form. An administrative law judge found that ESSG’s procedure violated the Immigration and Nationality Act. We GRANT the petition for review and VACATE the order except for a ruling as to one employee for which no review was sought. United States Court of Appeals Fifth Circuit FILED August 11, 2016 Lyle W. Cayce Clerk Case: 15-60173 Document: 00513633199 Page: 1 Date Filed: 08/11/2016 Employer Solutions Staffing v. OCAHO, et al, --F.3d--(5th Cir. 2016) a.k.a, No. 15-60173 Aug. 11, 2016 Petition Granted - Order mostly Vacated & the Administrative Decision of January 20, 2015 being challenged By Joseph P. Whalen at 5:58 pm, Aug 11, 2016 e-mail: joseph.whalen774@gmail.com See the in-depth discussion on the various levels of "deference" defined via Supreme Court case-law.
  2. 2. No. 15-60173 2 FACTUAL AND PROCEDURAL BACKGROUND In April 2010, ESSG, a temporary staffing agency, formed an agreement with Larsen Manufacturing Co., LLC, to provide staff for Larsen’s facility in El Paso, Texas. ESSG did not hire staff directly for Larsen but subcontracted with Flexicorps, Inc., based in El Paso, to perform this task. Flexicorps employees made all the hiring decisions for temporary workers at the Larsen facility. In addition, Flexicorps completed part of the Employment Eligibility Verification Form (the “I-9 Form”) for each employee hired. Flexicorps employees would examine original identifying documents presented by the hired employees and ensure hired employees completed Section 1 of the I-9 Form, which required providing basic biographical information and signing an attestation that the hired employee was legally authorized to work. Flexicorps employees would make color photocopies of the original documents and send the photocopies along with the I-9 Form to ESSG in Edina, Minnesota. ESSG employees would then inspect the photocopies and complete Section 2 of the I- 9 Form, which required a description of the identifying documents presented by the hired employee and a signed attestation that the employer examined the documents and believed them to be genuine. In November 2011, Immigration and Customs Enforcement (“ICE”), which is part of the Department of Homeland Security (“DHS”), served a Notice of Inspection on ESSG, requesting that ESSG present for inspection I-9 Forms for current and terminated employees in El Paso between February 2008 and February 2011. In February 2013, ICE served a Notice of Suspect Documents and Notice of Intent to Fine on ESSG. ICE alleged that ESSG failed to ensure that 242 employees completed properly Section 1, or failed to complete properly Section 2 or 3 of the I-9 Form, thereby committing substantive paperwork violations. Further, ICE claimed ESSG violated the Immigration and Case: 15-60173 Document: 00513633199 Page: 2 Date Filed: 08/11/2016
  3. 3. No. 15-60173 3 Nationality Act (“INA”), 8 U.S.C. § 1324a(a)(1)(B), and ordered ESSG to pay fines totaling $237,162.75. ESSG contested the charges and requested a hearing before an administrative law judge (“ALJ”). The ALJ ruled for ICE in a Summary Decision, finding ESSG failed to complete properly Section 2 of the I-9 Form for 242 employees. The ALJ fined ESSG $226,270 for these violations.1 ESSG timely filed a petition for review of the ALJ’s order with this Court. DISCUSSION The Office of the Chief Administrative Hearing Officer (“OCAHO”) had jurisdiction for its actions under 8 U.S.C. § 1324a(e)(3)(A)–(B).2 This court has jurisdiction to review final orders issued by OCAHO. § 1324a(e)(8). Agency determinations are reviewed under the “highly deferential” standard of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), Knapp v. U.S. Dep’t of Agric., 796 F.3d 445, 453 (5th Cir. 2015), while an agency’s interpretations of caselaw are reviewed de novo. Willy v. Admin. Review Bd., 423 F.3d 483, 490 & n.18 (5th Cir. 2005). We apply the same de novo standard to agency determinations of constitutional law. Trinity Marine Prods., Inc. v. Chao, 512 F.3d 198, 201 (5th Cir. 2007). Appropriate deference will be given to DHS’s and ICE’s interpretations of ambiguities in the INA and in their own implementing regulations. See Chevron USA, Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984); Auer v. Robbins, 519 U.S. 452, 461 (1997). 1 The ALJ also found ESSG failed to present an I-9 Form for one employee and fined ESSG $981.75 for this violation. ESSG does not appeal that fine. 2 The INA requires the Attorney General to provide an administrative hearing at the request of persons or entities charged with violating the verification requirements of the INA. See 8 U.S.C. § 1324a(e)(3). The Attorney General designated OCAHO — an administrative agency under the control of the Executive Office for Immigration Review of the Department of Justice — to adjudicate these cases, as well as other related violations of the INA. See 28 C.F.R. §§ 68.1–.2. Case: 15-60173 Document: 00513633199 Page: 3 Date Filed: 08/11/2016
  4. 4. No. 15-60173 4 I. Overview of the INA Employer Verification System It is unlawful for an employer to hire an individual without complying with certain identity and employment authorization verification requirements. See 8 U.S.C. § 1324a(a)(1)(B), (b). The INA specifies that a “person or entity must attest, under penalty of perjury and on a form designated or established by the Attorney General by regulation, that it has verified that the individual is not an unauthorized alien by examining” employee documents. § 1324a(b)(1)(A). The statute provides that a document is acceptable only if it “reasonably appears on its face to be genuine.” § 1324a(b)(1)(A)(ii). DHS, not the Attorney General, now has authority to create the form that facilitates the employer verification requirements; DHS also investigates violations of the INA. See § 1324a(b)(1)(A), (e)(1)–(2).3 Regulations for implementing the INA have been promulgated by DHS and its predecessor agency in the Justice Department, the Immigration and Naturalization Service (“INS”). See 8 C.F.R. § 274a.2. Under these regulations, employers must examine documents presented by the employee and attest to having done so on Section 2 of the I-9 Form. § 274a.2(b)(1)(ii). The Section 2 attestation in the form as it existed at the time of the events in this case read: I attest, under penalty of perjury, that I have examined the document(s) presented by the above-named employee, that the above-listed document(s) appear to be genuine and to relate to the employee named, that the employee began employment on (month/day/year) ________ and that to the best of my knowledge the employee is authorized to work in the United States. 3 The Attorney General’s authority to issue regulations to enforce the INA employment verification requirements was transferred to DHS in 2002. See Clark v. Martinez, 543 U.S. 371, 374 n.1 (2005). Case: 15-60173 Document: 00513633199 Page: 4 Date Filed: 08/11/2016
  5. 5. No. 15-60173 5 The regulations establish that documents presented by the employee must be originals. § 274a.2(b)(1)(v). II. Alleged Violation of the INA The ALJ found that ESSG failed to complete Section 2 of the I-9 Form properly because the ESSG employee who signed the I-9 Form did not examine the original employee documents personally and in the presence of the newly hired employee. Therefore, the ALJ held, the I-9 Form’s attestation was false. ESSG argues that it did not attest falsely because (1) the INA allows for ESSG’s employee to speak about actions performed by its corporate representative in El Paso, (2) the INA does not require ESSG’s employee, as opposed to its corporate representative in El Paso, to examine original documents, and (3) the INA does not require ESSG’s employee, as opposed to its corporate representative in El Paso, to examine documents in the presence of the newly hired employee. The central issue before us is whether the INA’s verification procedures require personal, not corporate, attestation. DHS argues personal attestation is required, meaning that the same ESSG representative who examines an employee’s original documents must also meet with the employee and sign the I-9 Form’s Section 2 attestation. Alternatively, ESSG argues that corporate attestation at least is permitted, allowing its representatives in one state to examine original documents and meet with an employee while a representative in another state attests in Section 2 of the I-9 Form. The only difference in the parties’ views is whether the person who signs the Section 2 attestation must also have examined the original documents in the presence of the employee, or whether those tasks may properly be performed by different people. To find the answer, we review the statute, DHS’s regulations and prior adjudications Case: 15-60173 Document: 00513633199 Page: 5 Date Filed: 08/11/2016
  6. 6. No. 15-60173 6 interpreting the statute, the I-9 Form itself, and the ALJ’s interpretation in this enforcement action. A. The Statute We begin with the relevant statutory text. The INA provides that a “person or entity must attest . . . on a form [established by the appropriate agency] by regulation, that it has verified that the individual is not an unauthorized alien by examining” employee documents. § 1324a(b)(1)(A). It also states that a “person or entity has complied with the requirement of this paragraph with respect to examination of a document if the document reasonably appears on its face to be genuine.” § 1324a(b)(1)(A)(ii). In its memorandum of law presented to OCAHO urging a summary decision, DHS argued that Section 1324a supported that ESSG had failed to verify the identity and employment eligibility of 242 employees. It argued that Section 1324a “makes it clear that in Section 2 of the Form I-9, the employer must attest through a signature that it has verified that the individual is not an unauthorized alien by examining the documents presented by the employer.” Further, only original documents could be examined. DHS did not discuss the need for the employee to be present with the original documents. ESSG responded, in part with an explanation of its decision to handle all the I-9 Form attestations centrally in Minnesota after employees presented their individual documents and were interviewed, not just in El Paso but in 22 states around the country. ESSG argued that Section 1324a allows corporate attestation, and therefore, its approach is consistent with the statute. The ALJ rejected ESSG’s position, finding it “impossible” for an attester to say the documents appear genuine and to relate to the employee unless the attester was physically present with the documents and the employee. Case: 15-60173 Document: 00513633199 Page: 6 Date Filed: 08/11/2016
  7. 7. No. 15-60173 7 In its briefing here, DHS concedes the INA itself does not address whether the attester must be the same person who physically examines the documents in the presence of the hired employee. We agree. B. Regulations and Prior Adjudications Next, we consider the relevant regulations and prior adjudications interpreting the INA. DHS argues that, because the INA does not provide a clear answer, “the choice of developing the answer is left to the agency.” That may be, but at this point we are trying to discover how and when the agency developed its answer. We find no answer in any regulation. The closest is this: “an employer, his or her agent, or anyone acting directly or indirectly in the interest thereof, must . . . [c]omplete section 2 . . . on the Form I-9 . . . and sign the attestation . . . .” § 274a.2(b)(1)(ii)(B). We do not read this regulation to require that the same person who met the hired employee and examined his or her original documents must also sign the attestation. DHS argues we owe Chevron deference to regulations requiring “full and proper completion of the Form I-9.” See § 274a.2(b)(1)(i)(A)–(B). This point is not contested but does not aid our review. If corporate attestation is permitted, then ESSG’s verification procedure could be deemed “full and proper.” DHS also argues “copying documents does not provide an alternative means for fulfilling the obligation to properly complete the Form I-9.” See § 274a.2(b)(3). Again, the issue of copies begs the question of the permissibility of corporate attestation. Original documents were examined; someone else then so attested. The only possibly relevant OCAHO adjudication that has been discussed involves a wholly inapposite situation where the employer attached photocopies of hired employees’ documentation in lieu of actually filling out the I-9 Form. See United States v. Manos & Assocs., Inc., 1 OCAHO 130 (1989). Case: 15-60173 Document: 00513633199 Page: 7 Date Filed: 08/11/2016
  8. 8. No. 15-60173 8 Thus, we find no clear bar to corporate or entity attestation in the regulations and prior adjudications interpreting the INA. C. The I-9 Form and the ALJ’s Interpretation in this Action After finding no guidance from the relevant statutory text and regulations on whether the same person who meets a hired employee and examines documents must also attest, we examine two other sources allegedly supporting DHS’s view that corporate attestation is prohibited. First, in a Rule 28(j) letter filed days before oral argument, DHS argued for the first time that we owe Auer deference to language appearing on the I-9 Form itself. See Auer, 519 U.S. at 461. This form is the only identified source allegedly interpreting DHS’s ambiguous regulations that was made public prior to this enforcement action. Because DHS asked only for Auer deference, we limit ourselves to analyzing that level of deference as “we do not craft new issues or otherwise search for them in the record.” United States v. Brace, 145 F.3d 247, 255 (5th Cir. 1998) (en banc). That form of deference will be given to an agency’s interpretation of its own ambiguous regulations unless the interpretation is “plainly erroneous or inconsistent with the regulation, or there is reason to suspect that the agency’s interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Knapp v. U.S. Dep’t of Agric., 796 F.3d 445, 454 (5th Cir. 2015) (quotation marks omitted) (citing Auer, 519 U.S. at 461–62). We assume without deciding that the I-9 Form qualifies as DHS’s interpretation of its own ambiguous regulation. Second, DHS claims we owe Chevron deference to the ALJ’s decision in this enforcement action. DHS argues “OCAHO permissibly determined . . . the same individual who reviewed the original documents must be the individual that attests to their apparent genuineness in Section 2” of the I-9 Form. We first note that the ALJ’s opinion could be eligible for Chevron deference only if Case: 15-60173 Document: 00513633199 Page: 8 Date Filed: 08/11/2016
  9. 9. No. 15-60173 9 it has the “force of law,” that is, if the opinion is precedential and thus binds third parties.4 See Dhuka v. Holder, 716 F.3d 149, 154–56 (5th Cir. 2013) (holding a non-precedential decision of the BIA is not owed Chevron deference). Here, the ALJ’s decision was published in the OCAHO reporter and appears to be precedential; therefore, it may warrant Chevron deference when it interprets the INA. See United States v. Emp’r Sols. Staffing Grp. II, LLC, 11 OCAHO 1242 (2015).5 Despite the degree of deference potentially owed to the I-9 Form and the ALJ’s decision, we conclude ESSG lacked fair notice that corporate attestation was prohibited. That fact affects the operation of deference, as we now explain. 1. Lack of Fair Notice “[S]tatutes and regulations which allow monetary penalties against those who violate them . . . must give [a regulated party] fair warning of the conduct [they] prohibit[] or require[] . . . .” Diamond Roofing Co., Inc. v. 4 There is caselaw suggesting no deference is owed to an agency’s interpretation where, like here, the interpretation appears for the first time in the agency’s adjudication under consideration. See Paz Calix v. Lynch, 784 F.3d 1000, 1007 (5th Cir. 2015) (citing R&W Tech. Servs. Ltd. v. CFTC, 205 F.3d 165, 171 (5th Cir. 2000)). Other caselaw implies we may give the agency’s adjudication currently under review some degree of deference when it interprets an ambiguous statute the agency is authorized to administer. See, e.g., Knapp, 796 F.3d at 454. Further, one unpublished decision from this court suggested we review de novo all OCAHO conclusions of law. See Wije v. Barton Springs, 81 F.3d 155, 1996 WL 101380, at *1 (5th Cir. 1996) (citing Mester Mfg. Co. v. I.N.S., 879 F.2d 561, 565 (9th Cir. 1989)). Yet, the Ninth Circuit decision we relied on in Wije provides further context for review of OCAHO decisions, explaining “[w]ithin the de novo framework . . . we give a certain amount of deference to an agency’s reasonable construction of a statute it is charged with administering.” Mester, 879 F.2d at 565. We need not address these possible tensions in our caselaw because we resolve the case against DHS even assuming the ALJ’s interpretation would typically warrant deference. 5 OCAHO explains that it “publishes decisions that have been selected for and may be used as precedent[.]” U.S. DEPARTMENT OF JUSTICE, OFFICE OF THE CHIEF ADMINISTRATIVE HEARING OFFICER, https://www.justice.gov/eoir/office-of-the-chief- administrative-hearing-officer-decisions (last visited Aug. 9, 2016). As our citation shows, the ALJ’s decision in this action was published in Volume 11 of the OCAHO reporter. Case: 15-60173 Document: 00513633199 Page: 9 Date Filed: 08/11/2016
  10. 10. No. 15-60173 10 Occupational Safety & Health Review Comm’n, 528 F.2d 645, 649 (5th Cir. 1976). Recently, the Supreme Court cited favorably to Diamond Roofing for the proposition “that agencies should provide regulated parties ‘fair warning of the conduct [a regulation] prohibits or requires.’” Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2167 & n.15 (2012) (alterations in original) (quoting Gates & Fox Co. v. Occupational Safety & Health Review Comm’n, 790 F.2d 154, 156 (D.C. Cir. 1986)). The Court also quoted favorably this summary from a treatise: “[I]n penalty cases, courts will not accord substantial deference to an agency’s interpretation of an ambiguous rule in circumstances where the rule did not place the individual or firm on notice that the conduct at issue constituted a violation of a rule.” Id. at 2167 n.15 (quoting 1 R. PIERCE, ADMINISTRATIVE LAW TREATISE § 6.11, at 543 (5th ed. 2010)). Fair notice requires that the agency have “state[d] with ascertainable certainty what is meant by the standards [it] has promulgated.” Diamond Roofing, 528 F.2d at 649. This rule requires that a statute or agency action “give an employer fair warning of the conduct it prohibits or requires, and it must provide a reasonably clear standard of culpability to circumscribe the discretion of the enforcing authority and its agents.” Id. The challenged statute or agency action must “give the person of ordinary intelligence a reasonable opportunity to know what is prohibited, so that he may act accordingly.” Grayned v. City of Rockford, 408 U.S. 104, 108 (1972). First, we examine the I-9 Form. Our question as to the form is whether the version in the record states with ascertainable certainty the kind of attestation that DHS claims must be made. Section 2 of the form is entitled “Employer Review and Verification,” and it is “[t]o be completed and signed by employer.” Section 2 concludes with the following attestation: “I attest, under penalty of perjury, that I have examined the document(s) presented . . . and that to the best of my knowledge the employee is authorized to work in the Case: 15-60173 Document: 00513633199 Page: 10 Date Filed: 08/11/2016
  11. 11. No. 15-60173 11 United States.” Beneath the attestation, there is a signature block for the “Employer or Authorized Representative.” In the instructions to the I-9, we learn that “the term ‘employer’ means all employers including those recruiters and referrers for a fee who are agricultural associations, agricultural employers, or farm labor contractors.” The I-9 Form provides minimal support for DHS’s claimed interpretation that would prohibit corporate attestation. The attestation includes language that appears personal: “I attest” and “I have examined.”6 Yet, if attestation by the entity is permissible, this language from the form could be interpreted to allow the individual who attests to verify all the actions performed by the entity as a whole. DHS may have recognized the uncertainty when, subsequent to fining ESSG, DHS clarified the I-9 instructions to read: “The person who examines the documents must be the same person who signs Section 2.” U.S. CITIZENSHIP & IMMIGRATION SERVS., OMB No. 1615-0047, INSTRUCTIONS FOR EMPLOYMENT ELIGIBILITY VERIFICATION 3 (2013). DHS’s decision to clarify the instructions is at least some support that at the time of ESSG’s violation, the I-9 attestation was not as clear as DHS now claims. Finally as to the form, Section 2 consistently refers to the employer’s verification requirements. The instructions to the I-9 Form define employer broadly. In its Rule 28(j) letter, DHS offered a conclusory explanation for how the I-9 Form supports its interpretation: “[I]t is clear from the certification in 6 At oral argument, DHS presented this new justification. It argued that if corporate attestation were permitted, the I-9 Form’s certification “wouldn’t say ‘I reviewed these documents’ and ‘I determined that these documents relate to this individual under the penalty of perjury.’” An argument raised for the first time at oral argument is waived. See Comsat Corp. v. F.C.C., 250 F.3d 931, 936 n.5 (5th Cir. 2001). Further, the argument relies on DHS’s interpretation of its ambiguous I-9 Form. We have held no deference is owed an agency’s interpretation of its earlier ambiguous interpretations. See Elgin Nursing & Rehab. v. U.S. Dep’t of Health & Human Servs., 718 F.3d 488, 493–94 (5th Cir. 2013). Case: 15-60173 Document: 00513633199 Page: 11 Date Filed: 08/11/2016
  12. 12. No. 15-60173 12 section 2 of the Form I-9 that it must be the same individual, and that interpretation of the regulatory requirement warrants deference.” We have examined the I-9 Form and do not agree. The form does not fairly address whether corporate attestation is prohibited or permitted. To the extent the I- 9’s attestation implies it must be personal, the I-9 failed to state that requirement with ascertainable certainty. Second, we examine another authoritative source — the ALJ’s decision in this case. Was that interpretation of the INA in this enforcement action an “unfair surprise”? See Knapp, 796 F.3d at 457–58. The ALJ suggested, without expressly holding, that corporate attestation is prohibited. Relying only on commonsense, which no doubt is important, the ALJ explained “[i]t is simply impossible . . . for a payroll administrator in Edina, Minnesota to determine whether a document reasonably appears to relate to an individual when the administrator never saw the individual and the individual only presented original documents to a different person more than a thousand miles away in El Paso, Texas.” In support, the ALJ did not cite to any statute, regulation, or prior adjudication. Apparently, neither Congress nor DHS had ever declared a bar to corporate attestation prior to this enforcement action. For one person in an entity to attest to all the company did is not clearly barred. Moreover, the statute and regulations suggest that corporate attestation is permitted. Either a “person or entity” may attest. 8 U.S.C. § 1324a(b)(1)(A) (emphasis added). An “entity” includes a company. Corporate attestation would permit the company as a whole to perform the examination of original documents, in the presence of the hired employee, and the attestation, even if the same corporate representative does not perform all the required acts. The relevant regulation says that “an employer, his or her agent, or anyone acting directly or indirectly in the interest thereof, must . . . [c]omplete section 2 . . . on the Form I-9 . . . and sign the attestation . . . .” § 274a.2(b)(1)(ii)(B). Case: 15-60173 Document: 00513633199 Page: 12 Date Filed: 08/11/2016
  13. 13. No. 15-60173 13 The regulation can be fairly read to allow corporate attestation, appearing to envision more than one person involved in completing Section 2. Finally, the I-9 Form itself calls for the signature of the “Employer or Authorized Representative,” and the instructions define “employer” broadly. All three sources leave open the possibility that corporate attestation may be accepted. The Supreme Court has held Auer deference is “unwarranted” where to hold otherwise “would seriously undermine the principle that agencies should provide regulated parties ‘fair warning of the conduct [a regulation] prohibits or requires.’” See Christopher, 132 S. Ct. at 2165–69 (alteration in the original); see cf. Knapp, 796 F.3d at 457–58 (reviewing a judicial officer’s interpretation and citing favorably to Christopher). We conclude the same principle applies where an agency’s interpretation of an ambiguous statute unfairly surprises a regulated party. Thus, ESSG lacked fair notice, which alters the deference owed.7 The I-9 Form did not clearly address corporate attestations, and the ALJ’s new interpretation does not flow clearly from any authority in existence prior to this action. Thus, Auer and Chevron are inapplicable. 2. Skidmore Deference Once deciding Auer deference is inappropriate, we follow Christopher’s course and apply Skidmore deference, which is “a measure of deference proportional to the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those 7 Arguably, further analysis is unnecessary because DHS’s failure to give fair notice — on its own — justifies setting aside the imposed fine. In 2012, the Supreme Court set aside a fine imposed after concluding the regulated party lacked “sufficient notice prior to being sanctioned.” See F.C.C. v. Fox Television Stations, Inc., 132 S. Ct. 2307, 2318–20 (2012). The parties have not briefed whether Fox is applicable to this case. Thus, we resolve this case on other grounds. Case: 15-60173 Document: 00513633199 Page: 13 Date Filed: 08/11/2016
  14. 14. No. 15-60173 14 factors which give it power to persuade.” Christopher, 132 S. Ct. at 2168–69 (quotation marks omitted) (citing United States v. Mead Corp., 533 U.S. 218, 228 (2001)). Assuming that both the I-9 Form and the ALJ’s opinion provide support for DHS’s view that corporate attestation is prohibited, we find neither interpretation persuasive. The I-9 Form is essentially silent on the issue. At best, the language of the attestation (e.g., “I attest” and “I have examined”) shows that the agency contemplated a single person would complete all of Section 2 and sign the I-9. As already discussed, though, the I-9 includes other evidence that corporate attestation is permitted (e.g., defining “employer” broadly, and requiring a signature from an “Employer or Authorized Representative”). Even if the I-9 Form was intended to prohibit corporate attestation, we find the I-9 Form unpersuasive because it provides inconsistent clues as to its meaning and lacks the “hallmarks of thorough consideration.” See id. at 2169. Further, an agency’s statements are unpersuasive when they are “internally inconsistent” and “fail to provide clear direction to regulated parties . . . .” Barboza v. Cal. Ass’n of Prof. Firefighters, 799 F.3d 1257, 1268 (9th Cir. 2015) (citing Christopher, 132 S. Ct. at 2169) The ALJ’s interpretation, while not silent on the issue, is also unpersuasive. The ALJ’s conclusion may have been logical, but like the I-9 Form it did not exhibit the “hallmarks of thorough consideration.” See Christopher, 132 S. Ct. at 2169. In Christopher, the Supreme Court found unpersuasive an agency’s interpretation because there had been “no opportunity for public comment . . . .” Id. In a more recent decision, the Supreme Court found unpersuasive an agency’s interpretation of an issue on which the agency had previously been silent and where it failed to “explain the basis of its latest guidance.” Young v. United Parcel Serv., Inc., 135 S. Ct. 1338, 1352 (2015). Likewise, the ALJ’s novel interpretation in this enforcement Case: 15-60173 Document: 00513633199 Page: 14 Date Filed: 08/11/2016
  15. 15. No. 15-60173 15 action has not been subject to public comment, it addressed an issue the agency had never explicitly addressed prior to this enforcement action, and it relied strictly on commonsense rather than any legal authority. Having concluded the agency has provided no persuasive interpretation, “we must employ traditional tools of interpretation” to resolve whether corporate attestation is prohibited. See Christopher, 132 S. Ct. at 2170; see also Elgin Nursing & Rehab. v. U.S. Dep’t of Health & Human Servs., 718 F.3d 488, 494 (5th Cir. 2013). 3. Textual Interpretation We have already explained that the INA’s requirement that a “person or entity” attest appears to permit corporate attestation. See 8 U.S.C. § 1324a(b)(1)(A). The relevant regulation similarly leaves open the possibility, requiring attestation by “an employer, his or her agent, or anyone acting directly or indirectly in the interest thereof . . . .” See 8 C.F.R. § 274a.2(b)(1)(ii)(B). The I-9 Form is also ambiguous, requiring a signature by the “Employer or Authorized Representative” and defining “employer” broadly. In addition to those arguments already addressed, DHS argues that because the form requires the individual completing it to examine the documents presented and to attest that “the above-listed document(s) appear to be genuine and to relate to the employee named,” the same individual must also see the employee as well as the original documents. Yet, ESSG does not deny that an in-person examination had to be conducted. It simply argues that its employee in Minnesota could properly rely on the report of the in-person examination conducted by its representative in Texas. Taking into consideration all relevant legal authorities, we conclude the most reasonable interpretation permits corporate attestation. See Christopher, 132 S. Ct. at 2171. The most basic reason is that the statute Case: 15-60173 Document: 00513633199 Page: 15 Date Filed: 08/11/2016
  16. 16. No. 15-60173 16 permits entity attestation, and nothing in the materials which ESSG had to consider prior to this enforcement action fairly informed the company that its procedures were invalid. We hold that, under the I-9 Form applicable in this enforcement action, corporate attestation was permissible. Thus, ESSG did not violate the law when one corporate representative in El Paso, Texas, examined original documents in the presence of the hired employee, and another corporate representative in Edina, Minnesota, inspected photocopies of the documents and completed Section 2 of the I-9 Form. Our holding does not address whether DHS can lawfully prohibit corporate attestation. We also do not address whether the precedential decision the ALJ entered in this case could be the support for any subsequent enforcement actions. Finally, we agree that deciding the proper manner of attestation is a matter for the agency’s discretion within the limits of the statute. We are simply holding that even if it is proper for DHS to prohibit corporate attestation, neither the applicable I-9 Form nor any other authoritative source clearly so stated prior to the ALJ’s decision in this case.8 * * * We GRANT the petition for review and VACATE all portions of the ALJ’s order brought before us.9 8 Because we have held for ESSG, we do not address ESSG’s “good faith” defense. 9 We do not disturb the ALJ’s unchallenged finding that ESSG failed to present an I-9 Form for one employee or the resulting fine of $981.75. Case: 15-60173 Document: 00513633199 Page: 16 Date Filed: 08/11/2016
  17. 17. 11 OCAHO no. 1242 UNITED STATES DEPARTMENT OF JUSTICE EXECUTIVE OFFICE FOR IMMIGRATION REVIEW OFFICE OF THE CHIEF ADMINISTRATIVE HEARING OFFICER January 20, 2015 UNITED STATES OF AMERICA, ) Complainant, ) ) 8 U.S.C. § 1324a Proceeding v. ) OCAHO Case No. 14A00005 ) EMPLOYER SOLUTIONS STAFFING ) GROUP II, LLC, ) Respondent. ) ) FINAL DECISION AND ORDER Appearances: Jaime Diaz and Lorely Fernandez For complainant Rebecca Levine and Beth Tietz For respondent I. PROCEDURAL HISTORY This is an action pursuant to the employer sanctions provisions of the Immigration and Nationality Act (INA), as amended by the Immigration Reform and Control Act of 1986 (IRCA), 8 U.S.C. § 1324a (2012), in which the United States Department of Homeland Security, Immigration and Customs Enforcement (ICE or the government) filed a four-count complaint alleging that Employer Solutions Staffing Group II, L.L.C. (Employer Solutions, ESSG II, or the company) violated 8 U.S.C. § 1324a(a)(1)(B). Count I alleges that Employer Solutions failed to prepare and/or present a Form I-9 for Norma Rosas. Counts II, III, and IV allege that Employer Solutions failed to ensure that 242 employees properly completed section 1 of their I-9 forms and/or that the company itself failed to properly complete sections 2 or 3 of their forms.
  18. 18. 11 OCAHO no. 1242 2 Employer Solutions filed a timely answer denying the allegations and asserting thirteen affirmative defenses. In their prehearing statements, the parties agreed to nine stipulations that are set forth herein as findings of fact. Prehearing procedures have been completed, but did not proceed smoothly. Presently pending are the government’s motion for sanctions related to discovery issues, and the government’s motion for summary decision. The time for responding to the motion for sanctions has expired.1 Employer Solutions filed a response to the motion for summary decision and both motions are ripe for resolution. II. BACKGROUND INFORMATION ICE Auditor Donna Gutierrez states in pertinent part in her declaration that she served a Notice of Inspection (NOI) on Larsen Manufacturing Co., L.L.C., at Larsen’s offices in El Paso, Texas on February 17, 2011. Gutierrez received a telephone call thereafter on February 22, 2011 from Jeff Kubas, the president of Flexicorps, Inc., which is co-located with Larsen at 12150 Rojas Drive in El Paso. Kubas told Gutierrez that Flexicorps provided temporary staffing to Larsen, and Gutierrez then served a NOI on Flexicorps on February 24, 2011. Flexicorps subsequently presented I-9s for 242 current and terminated temporary Larsen workers during the period from February 18, 2008 to February 17, 2011, as requested. Gutierrez observed in reviewing these I-9s that the forms were actually executed by Employer Solutions Staffing Group, L.L.C., and she telephoned Kubas to inquire about this. Kubas informed Gutierrez that ESSG was a separate human resource company that Flexicorps subcontracted to provide temporary workers to Larsen, that ESSG was the actual employer, and that Kubas had provided the documentation from ESSG. Gutierrez then served a NOI on ESSG II on November 3, 2011 at their offices located at 7301 Ohms Lane in Edina, Minnesota, and the company responded saying that their original I-9 forms for the period requested had already been provided to the government by Flexicorps. A Notice of Suspect Documents (NSD) was served on ESSG II on February 6, 2013, and a Notice of Intent to Fine (NIF) was served on the company on February 9, 2013. The company made a timely request for hearing on March 6, 2013. All conditions precedent to the institution of this proceeding have been satisfied. 1 See Rules of Practice and Procedure, 28 C.F.R. pt. 68 (2012). A party has ten days in which to respond to a motion. 28 C.F.R. § 68.11(b). Where service has been made by ordinary mail, five days are added to the period. 28 C.F.R. § 68.8(c)(2). The motion for sanctions was served on November 14, 2014, and a supplement followed on November 17, 2014. A response to the motion was due on or before December 2, 2014 (counting from the latter filing).
  19. 19. 11 OCAHO no. 1242 3 Employer Solutions Staffing Group II identified itself in answers to interrogatories as a limited liability company incorporated in Minnesota in 2008. Darryl Peterson is identified as the owner and managing director, and also as the owner of Employer Solutions Staffing Group III, L.L.C.; Employer Solutions Staffing Group IV, L.L.C.; Employer Solutions Staffing Group V, L.L.C.; and one of three owners of Employer Solutions Group, L.L.C.; Employer Solutions Staffing Group, L.L.C.; Employer Solutions Nationwide Group, L.L.C.; and Project Resource Group, L.L.C.2 Other interrogatory responses state that temporary employees for Larsen were recruited, screened, and interviewed by Flexicorps employees in El Paso, Texas, and that Flexicorps employees operated as agents on behalf of ESSG pursuant to an Outsource Agreement. ESSG II’s interrogatory answers also explained the division of responsibility for hiring Larsen’s temporary employees, the standard operating procedures, and the respective roles of Flexicorps and ESSG in completing I-9 forms. Robert Contreras and Irene Ordonez, employees of Flexicorps in El Paso, made all the hiring decisions for temporary workers at the Larsen Manufacturing facility between April 13, 2010 and September 28 or 29, 2010, and Roberto Maldonado, Flexicorps’ branch manager, made the decisions thereafter. The employees completed and dated section 1 of Form I-9, and Flexicorps personnel examined the documents the workers presented. In examining the workers’documents, Flexicorps personnel verified that those documents were on the list of acceptable documents, appeared genuine and related to the employees, and evidenced unexpired employment eligibility. Flexicorps personnel copied the employees’ documents, returned the originals to the employees, and sent the copies to ESSG’s payroll administrators in Edina, Minnesota. A payroll administrator at ESSG then examined the documents again and completed section 2 of the employees’ I-9 forms. An email from Shannon Peterson at Employer Solutions Group3 confirmed that the procedure was that the Flexicorps hiring agent in El Paso examines the employees’ documents to determine if they are reasonable and genuine, then copies the documents and attaches the copies to a New Hire Packet, which Flexicorps then sends to ESSG. The ESSG payroll administrator in Edina completes section 2 of the I-9 form “using the identification determined to be reasonably genuine by the hiring agent.” The deposition of Roberto Maldonado says in pertinent part that Flexicorps takes the lead on posting, searching, screening, and hiring the temporary employees for Larsen pursuant to a staffing agreement between ESSG and Larsen. Maldonado says he made color copies of the 2 Employer Solutions Group, L.L.C. and Project Resource Group, L.L.C. are identified as professional employer organizations; Employer Solutions Nationwide Group, L.L.C. is identified as an associated services organization, and the other entities are identified as staffing agencies. 3 ESSG II’s prehearing statement identifies Peterson as the COO for ESSG, L.L.C.
  20. 20. 11 OCAHO no. 1242 4 documents the employees presented, and sent them to Teresa Nichols at ESSG. Maldonado said he never signed the section 2 attestation of the I-9s during the period at issue. Elsewhere in the same deposition, Maldonado said he sent the documents by FedEx to Mr. Piper and that Mr. Piper signed the I-9 forms. ESSG’s payroll administrators were elsewhere identified as Teresa Nichols, Doyle Piper, and Carrie Fischer, but examination of the I-9s reflects that virtually all the section 2 attestations are signed by Doyle Piper. One is unsigned (Roberto A. Flores); eight are signed by Rachel Piper (Carlos Cordova, Luis Escalante, Anthony Holmes, Julia Sanchez, Ruben Torres, Veronica Vaquera, Luis Villarreal, and Griselda Villegas); and none is signed by Teresa Nichols or Carrie Fischer. III. THE ISSUE OF LIABILITY A. The Government’s Motion ICE says that ESSG listed Norma Rosas as an employee but did not present an I-9 form for her and that the company also failed to properly complete section 2 of the I-9 for 242 employees listed in Counts II, III, and IV of the complaint. The government says it is evident that ESSG never examined the employees’ original identity or work authorization documents, but that ESSG personnel nevertheless signed section 2 of the I-9s attesting that they had done so. ICE points out that nothing in the statute or regulations proves a basis for examining copies in lieu of original documents, and that 8 C.F.R. § 274a.2(b)(1)(v) (emphasis added) expressly provides that “[t]he individual may present either an original document which establishes both employment authorization and identity, or an original document which establishes employment authorization and a separate original document which establishes identity.” Roberto Maldonado said he made copies of the original identity and work authorization documents, but never signed section 2 to attest that he had reviewed the original documentation presented. ESSG personnel signed section 2, but never examined the employees’ original identity and work authorization documents. ICE says that failure to review and verify proper List A, B, or C documents is a substantive violation, and that copies are not proper documents. ESSG accordingly cannot prove that it examined original, valid documentation, and failed to properly complete section 2 of the I- 9s for the 242 employees named in the complaint. Exhibits accompanying the government’s motion for summary decision include: G-1)4 the declaration of ICE Auditor Donna Gutierrez dated November 17, 2014 (4 pp.); G-2) excerpts 4 Because both parties identified their exhibits numerically, to distinguish between them the letter “G” has been added to the government’s designations and the letter “R” has been added to Employer Solutions’ designations.
  21. 21. 11 OCAHO no. 1242 5 from the deposition of Roberto Maldonado dated June 12, 2014 (12 pp.); G-3) Employer Solutions’ response to ICE’s interrogatories and requests for production of documents (37 pp.); G-4) the Certificate of Organization for Employer Solutions Staffing Group II, L.L.C.; G-5) email from Shannon Peterson to Donna Gutierrez dated November 14, 2011, with attachment (3 pp.); and G-6) 2011, 2012, and 2013 Tax Returns for Employer Solutions Staffing Group II and I-9s (132 pp.). B. ESSG II’s Response ESSG II first asserts that the company has an absolute right to a hearing and that summary decision procedures may not be utilized to preclude a hearing because a hearing is compelled by federal common law and constitutional due process, as well as by 8 U.S.C. § 1324a(e)(3)(A). The company contends that to the extent OCAHO rules permit otherwise, they should not be followed. ESSG II asserts in addition that legacy INS improperly promulgated the regulation requiring employers to complete section 2 of Form I-9 within three business days of an employee’s hire, 8 C.F.R. § 274a.2(b)(1)(iii), and that the rule cannot stand. ESSG II contends further as a matter of affirmative defense that it is protected pursuant to 8 U.S.C. § 1324a(b)(6) as to any allegation of failure to sign section 2 of an I-9 within three days of an employee’s hire. The company also contends that many of the other violations alleged are technical and procedural, and that it substantially complied with all the requirements of the employment eligibility verification system. The company explains that at the time it started providing temporary employees to Larsen, it was operating in about twenty-two states and had approximately six to eight thousand temporary employees on its payroll. In order to create a centralized I-9 process, ESSG established a process whereby recruiting agents were the first point of contact. Once an employee accepted the job, the employee completed, signed, and dated section 1 of the I-9 form, and presented the form in person to the agent representative (on-site staffing recruiter or hiring agent) on or before the first day of employment. The representative examined the documents in the presence of the employee, and if the representative determined that the documents were reasonably genuine, related to the employee, and evidenced unexpired employment eligibility, the representative photocopied the original documents, attached the copies to the employee’s I-9, and forwarded them to ESSG in Edina, Minnesota. The payroll administrator in Edina then completed section 2 based on an independent review of the I-9 and supporting documentation. The company asserts that the rules of agency permit this procedure because general agency law attributes the principal’s knowledge to the agent, and the agent’s knowledge to the principal. ESSG II accordingly concludes that “[t]he knowledge of both agents and principals creates a type of enterprise knowledge such that the entity knows the sum total of what its agents and
  22. 22. 11 OCAHO no. 1242 6 employees know.” For this reason, the company says that using more than one person to carry out the task of completing an entity’s I-9 obligations is a proper procedure. ESSG II provides a comprehensive chart of the E-Verify results for the employees, as well as of the time elapsed between each employee’s first date of work and the date section 2 of the individual’s I-9 form was signed. The company also provided a detailed list of specific errors ICE identified in section 1 and section 2 of ESSG II’s I-9 forms. The company’s response was accompanied by the Certification of Rebecca Levine together with exhibits consisting of R-1) Notice of Inspection dated February 17, 2011 (4 pp.); R-2) email from Donna Gutierrez to Shannon Peterson dated November 7, 2011; R-3) 64 Fed. Reg. 7066 1999 (8 pp.); R-4) selection from U.S. Code Congressional and Administrative News, 99th Congress, Second Session 1986 (17 pp.); R-5) 52 Fed. Reg. 2115 1987 (2 pp.); R-6) 52 Fed. Reg. 8762 1987 (9 pp.); R-7) 52 Fed. Reg. 16216 1987 (14 pp.); R-8) I-9 form dated March 20, 1987 (2 pp.); R-9) Bill Summary & Status H.R. 2202 1995-96 (18 pp.); R-10) Public Law 104-208 September 30, 1996 (10 pp.); and R-11) deposition of Roberto Maldonado (100 pp.). Also accompanying the response was the Certification of Lindsay Miyamoto, together with an Excel spreadsheet, and the Certification of Ross Plaetzer, together with a Staffing Agreement between EESG and Larsen Manufacturing, as well as an Outsource Agreement between ESSG and Flexicorps. C. Discussion and Analysis Contrary to ESSG II’s claim of an absolute right to a hearing, parties in this forum are not ordinarily put to the burden and expense of a hearing absent a showing by the nonmoving party that there is a genuine, specific, material factual issue requiring a hearing. United States v. Nebeker, Inc., 10 OCAHO no. 1165, 2 (2013) (citing United States v. Aid Maint. Co., 7 OCAHO no. 951, 475, 478 (1997) (stating that the purpose of summary adjudication is to avoid an unnecessary hearing)).5 Once a party moving for summary decision satisfies its initial burden of demonstrating both the absence of a material factual issue and entitlement to judgment as a 5 Citations to OCAHO precedents reprinted in bound Volumes 1 through 8 reflect the volume number and the case number of the particular decision, followed by the specific page in that volume where the decision begins; the pinpoint citations which follow are thus to the pages, seriatim, of the specific entire volume. Pinpoint citations to OCAHO precedents subsequent to Volume 8, where the decision has not yet been reprinted in a bound volume, are to pages within the original issuances; the beginning page number of an unbound case will always be 1, and is accordingly omitted from the citation. Published decisions may be accessed in the Westlaw database “FIM-OCAHO,” or in the LexisNexis database “OCAHO,” or on the website at http://www.justice.gov/eoir/OcahoMain/ocahosibpage.htm# PubDecOrders.
  23. 23. 11 OCAHO no. 1242 7 matter of law, the nonmoving party must come forward with specific contravening evidence to avoid summary resolution. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). An issue of fact is genuine only if it has a real basis in the record. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986). A genuine issue of fact is material only if, under governing law, it might affect the outcome of the suit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); United States v. Primera Enters., Inc., 4 OCAHO no. 615, 259, 260- 61 (1994). ESSG II pointed to no material factual issue with respect to liability for the violations to which ICE’s motion is actually addressed. There is no genuine issue involving ESSG II’s attack on the three-day regulation because the government’s motion for summary decision is not based on any alleged failure to complete the form within three days,6 nor is it based on any specific omissions ESSG sets forth and characterizes as technical or procedural. The motion is addressed to the methodology ESSG used in completing its I-9 forms and raises the question of whether that methodology complies with the requirements of the employment eligibility verification system. This is a question of law. The parties do not dispute, and the record clearly reflects, that ESSG II’s standard operating procedure was for its personnel in Edina, Minnesota to sign the section 2 attestation after reviewing copies of the employees’ documents without ever seeing the individuals whose documents they examined. ESSG II acknowledges this procedure and describes it in detail. The problem with this procedure is that it does not comply with the requirements of the employment eligibility verification system. To begin with, examining copies of the employees’ documents to complete section 2 is insufficient where the regulations clearly provide that the originals must be examined. 8 C.F.R. § 274a.2(b)(1)(ii)(A),(v). The Handbook for Employers7 similarly states clearly that individuals must present original documents, and employers must examine original documents. The section 2 certification contains affirmative attestations under the penalty of perjury saying that “I have examined the document(s) presented by the above-named employee,” and that the documents presented “appear to be genuine and to relate to the employee named.” The I-9 form does not say that the certifier examined copies of the employees’ documents, it says that the certifier examined the documents presented by the above-named employee. It is simply impossible, moreover, for a payroll administrator in Edina, Minnesota to determine whether a document reasonably appears to relate to an individual when the administrator never saw the 6 The short answer to ESSG II’s attack on the regulation is that the company lacks standing to pursue this claim absent some issue respecting the application of this provision. 7 See Handbook for Employers, U.S. Citizenship and Immigration Services (rev. Apr. 3, 2009).
  24. 24. 11 OCAHO no. 1242 8 individual and the individual only presented original documents to a different person more than a thousand miles away in El Paso, Texas. While the company’s general appeal to agency law is creative, it is nevertheless unpersuasive. It is unexceptional black letter law that the knowledge of a principal may under appropriate circumstances be imputed to an agent, and vice versa. Restatement (Third) of Agency Intro. (2006). Our case law recognizes in addition that where a corporate manager reviews specific records, the manager may properly testify to the facts reflected therein. See Stubbs v. DeSoto Hilton Hotel, 8 OCAHO no. 1005, 148, 155-56 (1998). Nothing in the case law or in the Restatement suggests, however, that this authorizes the principal or the agent to attest under oath that he or she personally performed actions that the individual did not in fact perform. ESSG II points to no provision of agency law that would endorse such a result. The attestations made in section 2 of these I-9s are patently false. An employer does not substantially comply with the employment eligibility verification system by completing a false certification, and nothing in the E-Verify system justifies such a practice. Neither can use of the E-Verify program excuse a failure to properly complete section 2 of the I-9 forms; in fact, the first requirement of the E-Verify system is for the employer to properly complete an I-9 form.8 The affirmative defense provided by 8 U.S.C. § 1324a(b)(6) is unavailable to ESSG II because it applies only to technical or procedural violations, not to substantive violations. The creation of false section 2 attestations is not a technical or procedural violation. ESSG II points to no case holding that an employer that examines copies of documents outside the presence of the individual presenting them can satisfy the employment eligibility verification requirements. Neither does the company cite any case holding that an employer substantially complies with the statute by having a long-distance agent examine the original documents and not sign the section 2 certification. What was implicit in prior versions of the I-9 form instructions has been made explicit in the March 8, 2013 version of those instructions which now expressly provide that in completing an I-9 form, “[t]he person who examines the documents must be the same person who signs Section 2.” The company stipulated that Norma Rosas was employed at some time during the period from February 18, 2008 and February 17, 2011 and did not deny that it failed to present an I-9 for her upon request. ESSG II is accordingly liable for the allegation in Count I. The record also reflects 8 See Background and Overview, E-Verify User Manual for Employers, U.S.C.I.S. (2008). The manual has since been updated, but the version in effect at the time of the events in question was the 2008 manual.
  25. 25. 11 OCAHO no. 1242 9 that the company failed to properly complete section 2 of Form I-9 for 292 employees and ESSG II is liable for the violations in Counts II, III and IV as well. IV. PENALTY ASSESSMENT Civil money penalties are assessed for paperwork violations according to the parameters set forth at 8 C.F.R. § 274a.10(b)(2): the minimum penalty for each individual with respect to whom a violation occurred after September 29, 1999, is $110, and the maximum is $1100. Because the government has the burden of proof with respect to the penalty, United States v. March Construction, Inc., 10 OCAHO no. 1158, 4 (2012), ICE must prove the existence of any aggravating factor by a preponderance of the evidence, United States v. Carter, 7 OCAHO no. 931, 121, 159 (1997). In assessing an appropriate penalty, the following factors must be considered: 1) the size of the employer’s business, 2) the employer’s good faith, 3) the seriousness of the violations, 4) whether or not the individual was an unauthorized alien, and 5) the employer’s history of previous violations. 8 U.S.C. § 1324a(e)(5). The statute neither requires that equal weight be given to each factor, nor rules out consideration of additional factors. See United States v. Hernandez, 8 OCAHO no. 1043, 660, 664 (2000). A. The Government’s Position Based on internal agency guidance, ICE calculated a baseline penalty of $935 for each violation. The government treated the size of ESSG’s business, the company’s good faith, the absence of unauthorized workers, and ESSG’s lack of history of previous violations as neutral factors warranting neither aggravation nor mitigation of the penalties. ICE’s motion for summary decision seeks to aggravate the penalty only for the violation in Count I involving the failure to present an I-9 form for Norma Rosas, for which it seeks $981.75. B. ESSG II’s Position ESSG II contends that the due process clause of the Fifth Amendment, as well as the excessive fines clause of the Eighth Amendment, precludes enforcement of the penalty proposed because no evidence was shown that the paperwork violations facilitated or permitted the employment of unauthorized workers. The company says that United States v. Bajakajian, 524 U.S. 321, 334 (1998) provides the framework for assessing the penalty and that, like the defendant in Bajakajian, employers such as itself are not the principal target of the statute in question. ESSG II points out that it was neither an employer of unauthorized aliens nor a trafficker or contractor in unauthorized aliens, and says that there was virtually no harm done, no fraud, and no
  26. 26. 11 OCAHO no. 1242 10 correlation between the penalty and any alleged injury. The company compares its situation to employers in other cases who were fined for failing either to sign section 2 or to complete I-9 forms within three days of the date of hire. ESSG II argues that the penalties should be substantially reduced because it acted in good faith and had no unauthorized workers or history of previous violations. The company says with respect to the seriousness of the violations that it failed to sign only six of the I-9s, and five other unsigned forms were for employees rolled over from a previous staffing service. The company says the majority of the violations for which it was cited involved the failure to date section 2 of the form, and this is a technical or procedural violation that the company should have been afforded an opportunity to correct. C. Discussion and Analysis Generally speaking, when a civil money penalty falls below the statutory maximum, the party protesting it would have to make a very compelling case in order to prevail on a claim that the penalty is constitutionally excessive. See United States v. Chaplin’s Inc., 646 F.3d 846, 852 (11th Cir. 2011); see also CFTC v. Levy, 541 F.3d 1102, 1112 (11th Cir. 2008) (penalty is not excessive when it falls within the range of permissible statutory and regulatory limits and is rationally related to the offense charged or to the need for deterrence). The Levy court referred with approval to language in Monieson v. CFTC, 996 F.2d 852, 862 (7th Cir. 1993) stating that when a penalty is within the limits set by the statute, the agency has made an allowable judgment. See also United States v. Aleff, 772 F. 3d 508, 512 (8th Cir. 2014) (noting that legislative intent is relevant to proportionality); accord Qwest Corp. v. Minn. Pub. Util. Comm’n, 427 F.3d 1061, 1069 (8th Cir. 2005). Substantial deference to congressional judgments means that the statutorily enacted penalties in question come to us with a presumption of validity. Unlike the criminal forfeiture at issue in Bajakajian, moreover, the civil money penalties in this case are remedial in nature and not merely punitive as ESSG II suggests. As explained in Aleff, 772 F.3d at 511, the excessive fines clause applies to civil penalties that are punitive in nature, and a facial evaluation of the particular statute informs the analysis of whether a statute is punitive or remedial. See also United States v. Lippert, 148 F.3d 974, 977-78 (8th Cir. 1998). ESSG II’s constitutional claims are premised on a view that minimizes both the seriousness of its conduct and the intended reach of the governing statute. Nothing in the statute or the implementing regulations requires a finding that an employer be a trafficker or an employer of unauthorized workers before the range of statutory penalties provided by 8 U.S.C. § 1324a(e)(5) may be imposed for a paperwork violation. Employment of unauthorized workers is only one of the criteria for consideration in setting penalties. 8 U.S.C. § 1324a(e)(5). Contrary to ESSG II’s contentions, the statute is aimed at virtually every employer in the United States, not just traffickers or employers of undocumented workers. Congress enacted a system designed to
  27. 27. 11 OCAHO no. 1242 11 ensure that all employers take seriously their obligation to complete the prescribed verification procedures. There are other statutes that impose higher penalties on employers who knowingly hire unauthorized workers or traffic in unauthorized aliens. See, e.g., 8 U.S.C. § 1324a(e)(4) (imposing higher range of civil money penalties for knowing hire violations than for paperwork violations); 8 U.S.C. § 1324(a)(1)(A) (imposing criminal penalties for trafficking). As explained in United States v. Guewell, 3 OCAHO no. 478, 814, 823-24 (1992), case law construing § 1324a(e)(5) has consistently recognized that the purpose of imposing penalties for paperwork violations is at least twofold: deterring repeat violations by the employer in question and encouraging other employers to comply with the employment eligibility verification system. OCAHO cases have repeatedly emphasized the principle that a penalty should be sufficiently meaningful to deter future violations without being unduly punitive. See United States v. Jonel, Inc., 8 OCAHO no. 1008, 175, 201 (1998). A meaningful penalty enhances the probability of future compliance. Id. This means that a penalty cannot be set so low that the employer can comfortably pay it simply as a cost of doing business; the prophylactic purpose of a penalty is best served when a penalty is sufficiently significant to motivate a change of behavior. Some employers will require a more substantial penalty than others to effect such a result. The record reflects that ESSG is a sizeable company. In response to the government’s motion, the company said it has six to eight thousand temporary employees on its payroll, and its 2013 tax return reflects gross income of $144,830,081. While no unauthorized workers were identified and no previous history was alleged, the violations are far more serious than ESSG II acknowledges. Notwithstanding ESSG’s characterizations, ICE does not seek penalties here for the company’s failure to sign a few I-9s or failure to enter a date on many of its I-9 forms. The government seeks relief because the company systematically executed false attestations in section 2 of 242 I-9 forms. These violations are exceedingly serious because the section 2 attestation is appropriately described as “the very heart” of the verification process. United States v. Acevedo, 1 OCAHO no. 95, 647, 651 (1989). ESSG II’s attempt to compare itself to employers that failed to sign a few I-9 forms or to enter dates on some of the forms is wholly inapposite. Why the government treated the good faith factor as neutral is unexplained. The company apparently chose to design its own methodology instead of complying with the verification system established by the statute and the regulations. For purposes of assessing an employer’s good faith, OCAHO case law has traditionally looked to the question of whether an employer honestly exercised reasonable care and diligence to ascertain what the law requires and to conform its conduct to the law. See, e.g., United States v. Sunshine Bldg. Maint., Inc., 7 OCAHO no. 997, 1122, 1177 (1998) (citing United States v. Riverboat Delta King, Inc., 5 OCAHO no. 738, 126, 130 (1995)). The standard has both a subjective component (honesty) and an objective component (reasonableness). United States v. Felipe, Inc., 1 OCAHO no. 93, 626, 634 (1989). While I construe the facts most favorably to ESSG II with respect to the subjective
  28. 28. 11 OCAHO no. 1242 12 component, there is no way that the knowing creation of false attestations in section 2 of Form I-9 can be characterized as objectively reasonable. Considering the record as a whole and the statutory factors in particular, I find no compelling reason to adjust the penalties set by the government in this case. The penalty for failure to present an I-9 for Norma Rosas is $981.75. The penalties for the false attestations in section 2 of the I-9s for the remaining 242 employees will be $935 each, totaling $226,270. Penalties will accordingly total $227,251.75.9 V. ICE’s Motion for Sanctions A. Background Information ICE served interrogatories and document requests on ESSG on June 23, 2014, and responses were due on or about July 28, 2014. ESSG sent the government an email dated July 16, 2014 and a letter dated July 31, 2014 representing, respectively, that the company was “working on” responses and “should have thorough responses along with objections to you within the next two weeks.” When responses were still not forthcoming, ICE filed a motion to compel discovery. ESSG sought an extension of time to respond to the government’s motion, and I granted the extension based on the company’s representations that it was “diligently working” on the responses. That extension turned out to be ill-advised because the response ESSG finally made answered not a single interrogatory and produced not a single document, but recited boilerplate objections so broad as to be meaningless, and requested a protective order relieving the company from discovery altogether. The government’s motion to compel was granted, but the prior scheduling order had to be vacated and procedures prolonged because of the extended delay. See United States v. Emp’r Solutions Staffing Grp. II, L.L.C., 11 OCAHO no. 1234, 6 (2014). B. ICE’s Motion for Sanctions ICE’s motion for sanctions asserts that the responses ESSG II finally made after the order to compel were both untimely and inadequate because some of the answers were still unresponsive, and a number said only “see deposition of Roberto Maldonado,” or “the information will be provided shortly.” The government requests that a full range of sanctions pursuant to 28 C.F.R. § 68.23(c) be imposed. The government filed a supplement to the motion shortly thereafter reporting that the company subsequently provided the government with additional responses. ICE nevertheless asserts that a full range of sanctions should still be imposed. 9 The government did not explain why it requested $227,251.74. This appears to be a typographical error.
  29. 29. 11 OCAHO no. 1242 13 C. Discussion and Analysis The company’s conduct in discovery did not conform to the standards expected of parties in this forum. After stonewalling all the interrogatories and document requests with boilerplate objections until after the close of discovery, eventual compliance was evidently grudging and untimely. The fact that no sanctions are imposed for this conduct should not be read either as approval of such cavalier tactics or as precedent for immunity from sanctions for any similar abuse of the litigation process by subsequent litigants. ICE’s motion for sanctions, however, is denied as moot because any such sanctions would have no effect on this case. VI. STIPULATIONS, ADDITIONAL FINDINGS OF FACT, AND CONCLUSIONS OF LAW A. Stipulations Agreed to By the Parties 1. A Notice of Inspection (NOI) was served upon Employer Solutions Staffing Group II, L.L.C. (ESSG or respondent) at 7301 Ohms Lane, Suite 405, Edina, Minnesota, 55439 on November 3, 2011. 2. In the NOI, respondent was requested to present for inspection Employment Eligibility Verification forms (Forms I-9) to DHS no later than November 8, 2011 for current and terminated employees in El Paso, Texas for the time period between February 18, 2008 and February 17, 2011. 3. On February 6, 2013, complainant served upon respondent a Notice of Suspect Documents. 4. A Notice of Intent to Fine was served upon respondent on February 9, 2013. 5. The two-hundred forty three (243) employees listed in the Notice of Intent to Fine were employed by respondent during some or all of the period between February 18, 2008 and February 17, 2011. 6. The two-hundred and forty-three (243) employees listed in the Notice of Intent to Fine were employed by respondent after November 6, 1986. 7. On or about March 6, 2013, respondent requested a hearing before an administrative law judge. 8. Complainant filed a complaint with the Office of the Chief Administrative Hearing Officer on
  30. 30. 11 OCAHO no. 1242 14 October 31, 2013. 9. On December 5, 2013, respondent filed an answer to the complaint. B. Additional Findings of Fact 10. Employer Solutions Staffing Group II, L.L.C. is a limited liability company located in Edina, Minnesota. 11. Employer Solutions Staffing Group II, L.L.C. was incorporated in 2008 and operates as a temporary employment staffing agency. 12. Flexicorps, Inc., located in El Paso, Texas, recruited, screened, interviewed, and hired the 243 individuals named in the complaint to work temporarily at Larsen Manufacturing, L.L.C., also located in El Paso, Texas. 13. Flexicorp, Inc. acted as an agent of Employer Solutions Staffing Group II, L.L.C. pursuant to an Outsource Agreement between Employer Solutions and Flexicorps, Inc. 14. Robert Contreras and Irene Ordonez, employees of Flexicorps, Inc., made all the hiring decisions for temporary workers at the Larsen Manufacturing facility in El Paso between April 13, 2010 and September 28 or 29, 2010, and Roberto Maldonado, branch manager of Flexicorps, Inc., made all the hiring decisions after September 28 or 29, 2010. 15. When the employees were hired, they completed, signed, and dated section 1 of the I-9 form and presented the form in person to Robert Contreras, Irene Ordonez, or Roberto Maldonado at Flexicorps, Inc., on or before their first day of employment at Larsen Manufacturing, L.L.C. 16. Robert Contreras, Irene Ordonez, or Roberto Maldonado referred employees to the list of acceptable documents and asked them to present either an original document from List A, or original documents from List B and List C. 17. Robert Contreras, Irene Ordonez, or Roberto Maldonado examined the original documents presented by the employees to verify that the documents were on the list of acceptable documents, that they appeared genuine and to relate to the employee, and that they evidenced the employee’s unexpired employment eligibility. 18. Robert Contreras, Irene Ordonez, or Roberto Maldonado made color copies of the employees’ documents and sent the copies, via FedEx delivery, to Doyle Piper, Carrie Fischer, or Teresa Nicols, payroll administrators of Employer Solutions Staffing Group II, L.L.C.
  31. 31. 11 OCAHO no. 1242 15 19. Roberto Maldonado never certified in section 2 of Form I-9 that he reviewed the original documents the employees presented, but instead he sent copies of the documents to payroll administrators at Employer Solutions Staffing Group II, L.L.C. 20. Upon receiving copies of the employees’ documents, a payroll administrator at Employer Solutions Staffing Group II, L.L.C. examined the copies and signed section 2 of the I-9 forms. 21. Employer Solutions Staffing Group II, L.L.C. hired Norma Rosas for employment and failed to present an I-9 form for her upon request of the Department of Homeland Security, Immigration and Customs Enforcement. 22. Employer Solutions Staffing Group II, L.L.C. hired 242 employees named in the complaint and signed the certification in section 2 of their I-9 forms under penalty of perjury without ever seeing the individuals in person or examining their original documents. C. Conclusions of Law 1. Employer Solutions Staffing Group II, L.L.C. is an entity within the meaning of 8 U.S.C. § 1324a(a)(1). 2. All conditions precedent to the institution of this proceeding have been satisfied. 3. Employer Solutions Staffing Group II, L.L.C is liable for 243 violations of 8 U.S.C. § 1324a(a)(1)(B). 4. Failure to prepare an I-9 at all is one of the most serious violations because it completely subverts the purpose of the employment verification requirements. See United States v. M & D Masonry, Inc., 10 OCAHO no. 1211, 11 (2014); see also United States v. Skydive Acad. of Haw., 6 OCAHO no. 848, 235, 248-49 (1996). 5. Failure to review an individual’s original documents before signing section 2 of Form I-9 constitutes a failure to properly complete section 2 of the form I-9. 8 C.F.R. § 274a.2(b)(1)(v). 6. Failure to properly complete section 2 of Form I-9 is a serious violation. Cf. United States v. Four Seasons Earthworks, Inc., 10 OCAHO no. 1150, 9 (2012) (citing United States v. Alyn Indus., Inc., 10 OCAHO no. 1141, 8-10 (2011)). 7. Section 2 of Form I-9 is properly completed only when the person who signs the section 2 attestation is the same person as the person who examines the employee’s original documents.
  32. 32. 11 OCAHO no. 1242 16 8. In assessing an appropriate penalty, the following factors must be considered: 1) the size of the employer’s business, 2) the employer’s good faith, 3) the seriousness of the violations, 4) whether or not the individual was an unauthorized alien, and 5) the employer’s history of previous violations. 8 U.S.C. § 1324a(e)(5). 9. The excessive fines clause of the Eighth Amendment applies to civil money penalties that are punitive in nature. United States v. Aleff, 772 F. 3d 508, 512 (8th Cir. 2014). 10. Case law construing § 1324a(e)(5) has consistently recognized that the purpose of imposing penalties for paperwork violations is at least twofold: deterring repeat violations by the employer in question and encouraging other employers to comply with the employment eligibility verification system. United States v. Guewell, 3 OCAHO no. 478, 814, 823-24 (1992). 11. The statutory scheme enacted by 8 U.S.C. § 1324a reflects that the principal purpose of its penalty provisions is prophylactic and corrective rather than punitive. To the extent that any statement of fact is deemed to be a conclusion of law or any conclusion of law is deemed to be a statement of fact, the same is so denominated as if set forth as such. ORDER Employer Solutions is liable for 243 violations of 8 U.S.C. § 1324a(a)(1)(B) and is ordered to pay civil money penalties totaling $227,251.75. The government’s motion for sanctions is denied. SO ORDERED. Dated and entered this 20th day of January, 2015. __________________________________ Ellen K. Thomas Administrative Law Judge
  33. 33. 11 OCAHO no. 1242 17 Appeal Information This order shall become the final agency order unless modified, vacated, or remanded by the Chief Administrative Hearing Officer (CAHO) or the Attorney General. Provisions governing administrative reviews by the CAHO are set forth at 8 U.S.C. § 1324a(e)(7) and 28 C.F.R. pt. 68. Note in particular that a request for administrative review must be filed with the CAHO within ten (10) days of the date of this order, pursuant to 28 C.F.R. § 68.54(a)(1) (2012). Provisions governing the Attorney General’s review of this order, or any CAHO order modifying or vacating this order, are set forth at 8 U.S.C. § 1324a(e)(7) and 28 C.F.R. pt. 68. Within thirty (30) days of the entry of a final order by the CAHO, or within sixty (60) days of the entry of an Administrative Law Judge’s final order if the CAHO does not modify or vacate such order, the Attorney General may direct the CAHO to refer any final order to the Attorney General for review, pursuant to 28 C.F.R. § 68.55. A petition to review the final agency order may be filed in the United States Court of Appeals for the appropriate circuit within forty-five (45) days after the date of the final agency order pursuant to 8 U.S.C. § 1324a(e)(8) and 28 C.F.R. § 68.56.

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