DLS Precision Fab LLC, DBA Di-Matrix Precision Manufacturing, Petitioner,
U.S. Immigration & Customs Enforcement; Office of Chief Administrative Hearing Officer; United States of America, Respondents.
and Submitted January 13, 2017 San Francisco, California
Petition for Review of an Order of the Office of Chief
Administrative Hearing Officer, Executive Office for
Immigration Review, Department of Justice DHS No. 13A00019
Peder Johnsen (argued), Gallagher & Kennedy P.A.,
Phoenix, Arizona, for Petitioner.
Suzanne Nicole Nardone (argued), Trial Attorney; Anthony P.
Nicastro, Acting Assistant Director; Office of Immigration
Litigation, Civil Division, United States Department of
Justice, Washington, D.C.; for Respondents.
Before: J. CLIFFORD WALLACE, RICHARD R. CLIFTON, and MILAN D.
SMITH, JR., Circuit Judges.
panel granted in part and denied in part DLS Precision Fab
LLC's petition for review of an administrative law
judge's ("ALJ") decision finding DLS liable for
504 violations of 8 U.S.C. § 1324a, which requires
employers to verify that their employees are legally
authorized to work in the United States and prohibits
employers from knowingly continuing to employ aliens who are
not authorized to work.
panel granted the petition as to one violation because the
charge was untimely under the statute of limitations. The
panel denied the petition as to the other 503 violations,
concluding that DLS was not entitled to good faith defenses.
The panel also denied the petition as to the ALJ's
summary determination of a penalty in the amount of $305,
050, concluding that DLS' ability to pay was not a
material issue of fact that would preclude summary
determination of the penalty amount because it was within the
power of the ALJ to decline to consider the factor at all.
in part and dissenting in part, Judge Clifton disagreed with
the majority's conclusion regarding summary determination
of the penalty. Judge Clifton wrote that the determination of
the penalty on the equivalent of summary judgment was
improper because there was a material, unresolved factual
issue regarding the ability of DLS to pay the penalty. He
would grant the petition as to the amount of the penalty and
remand that issue to the agency for further proceedings.
274A(b) of the Immigration and Nationality Act (INA), 8
U.S.C. § 1324a(b), requires employers to verify that
their employees are legally authorized to work in the United
States. Regulations designate use of the Employment
Eligibility Verification Form, also known as the "I-9
form, " for this purpose. 8 C.F.R. § 274a.2(a)(2).
Employers must retain these forms and provide them for
inspection by the Department of Homeland Security upon three
days' notice. 8 C.F.R. § 274a.2(b)(2)(ii). Section
274A(a)(2) prohibits employers from continuing to employ an
alien "knowing the alien is (or has become) an
unauthorized alien with respect to such employment." 8
U.S.C. § 1324a(a)(2).
Precision Fab LLC (DLS) petitions for review of the summary
decision of the Administrative Law Judge (ALJ), Office of the
Chief Administrative Hearing Officer (OCAHO), which found DLS
liable for numerous violations of these sections of the INA
and ordered DLS to pay civil money penalties in the total
amount of $305, 050.
most part, we deny DLS's petition, but we grant it in one
part and disagree with the ALJ's conclusions in one
important respect. With regard to the ALJ's finding that
DLS was liable for 504 violations, we conclude that one
charge was untimely under the applicable statute of
limitations, so that violation cannot stand. We deny the
petition for review as to the ALJ's finding of the other
503 violations, and as to the ALJ's determination of the
a company located in Phoenix, Arizona, providing custom sheet
metal fabrication in a variety of industries. In the late
2000s, DLS grew to about 200 employees because of the
expansion of a Department of Defense program. To deal with
the sudden growth of its workforce and ensure its compliance
with applicable state and federal employment laws, DLS hired
a well-credentialed human resources director (the "HR
director"). Unbeknownst to the company, however, this
individual shirked his responsibility to ensure the
company's compliance with the INA to the point, as later
described by DLS, "of literally stuffing the
government's correspondence in a drawer and never
November 2009, United States Immigration and Customs
Enforcement (ICE) served DLS with a Notice of Inspection and
an administrative subpoena. After reviewing DLS's I-9
forms and other relevant business information, ICE served DLS
with a Notice of Suspect Documents in January 2010 and a
Notice of Intent to Fine in October 2012. Around this time,
the Department of Defense program that had fueled DLS's
growth was cut back, causing a substantial reduction in
DLS's business. DLS consequently reduced the number of
its employees from a peak of about 200 to 77 in 2012, 34 in
2013, and 33 at the time of the summary decision proceedings.
response to the Notice of Intent to Fine, DLS requested a
hearing before an ALJ. ICE filed a six-count complaint with
OCAHO on January 4, 2013. Counts I-IV alleged that DLS failed
to comply with employment verification requirements pursuant
to 8 U.S.C. § 1324a(a)(1)(B), and Counts V-VI alleged
that DLS continued to employ 15 individuals despite knowing
that they were ineligible for employment, in violation of 8
U.S.C. § 1324a(a)(2).
moved for summary decision as to liability for all six counts
and requested penalties totaling $495, 250.75. The ALJ
granted ICE's motion for summary decision, finding DLS
liable for 504 of the 508 alleged violations, 489 of which
were I-9 paperwork violations and 15 of which involved
DLS's continuing employment of ineligible aliens. DLS was
ordered to pay civil money penalties in the total amount of
$305, 050. The ALJ's April 22, 2014 decision became the
final agency order on June 21, 2014. DLS timely petitioned
for review. See 8 U.S.C. §§ 1324a(e)(7),
27, 2016, DLS filed for reorganization and protection under
Chapter 11 of the Bankruptcy Code. The bankruptcy proceedings
are ongoing. See In re DLS Precision Fab, LLC,
2:16-bk-06109-EPB (Bankr. D. Ariz. 2016).
Standard of Review
review of an agency decision is narrow. We will not
substitute our judgment for that of the agency. See Marsh
v. Or. Nat. Res. Council, 490 U.S. 360, 378 (1989).
Under the Administrative Procedure Act, we may only set aside
an agency decision if it is arbitrary, capricious, an abuse
of discretion or otherwise not in accordance with law, or if
it was taken without observance of procedure required by law.
5 U.S.C. § 706(2)(A), (D); Barnes v. U.S. Dep't
of Transp., 655 F.3d 1124, 1132 (9th Cir. 2011).
"We do not overturn an agency's determination of a
civil penalty unless it is either unwarranted in law or
unjustified in fact." Ketchikan Drywall Servs., Inc.
v. Immigration & Customs Enf't, 725 F.3d 1103,
1110 (9th Cir. 2013) (citation and quotation marks omitted).
The ALJ's Summary ...