Dec. 2020 L-1A/EB1-C Corner (Analysis of AAO Decisions)

By John Khosravi, Esq. (Info@JQKLaw.com)

My primary mentor in learning and understanding the L-1A Intracompany Transfer Visa and the EB-1C Multinational Manager Immigrant Visa has been the Administrative Appeals Office (AAO) and their decisions, which indicate current adjudicating trends. The following are some tips and observations to help you and your practice from recent non-precedent decisions. These decisions cannot be used in legal arguments, but their content is an invaluable teaching opportunity.

Is the AAO the way to go?

Practitioners are turning to federal lawsuits denied cases rather than filing AAO appeals due to AAO delays and inconsistent adjudications. Two December 2020 support this change in preference.

The Petitioner in an EB-1C I-140 AAO Appeal (In Re: 13718186) appealed a denial and submitted additional evidence in the appeal to support a denial based on the qualifying relationship between the US and Foreign employer. The AAO, despite a long history of accepting new evidence on appeal, asserted:

“As our review is limited to the evidence on the record at the time of the Director’s adjudication, the Director is the more appropriate party to consider this new evidence and its impact on the Beneficiary’s eligibility.”

The case was remanded to the USCIS Director to do another analysis. Although the case was likely to be approved, getting an AAO decision will take over half a year to come. Add to that, the subsequent USCIS delay issuing an approval/RFE/NOID in response, and a case can take over a year to reach final adjudication. Federal Litigation may allow faster completion of an appeal.

Source: EB-1C, I-140, Dec. 17, 2020 Link: https://www.uscis.gov/sites/ default/files/err/B4%20-%20 Multinational%20Managers%20 and%20Executives/Decisions_Issued_ in_2020/DEC172020_01B4203.pdf

The AAO decision to withdraw and remand cases also happened in the recent L-1A decision In Re: 12916002 whereupon De Novo review, the AAO concluded that the USCIS Director incorrectly assigned elements of the definition of managerial capacity to the Beneficiary’s subordinates, both abroad and in the proposed position. But the AAO, instead of doing its own analysis and sustaining the appeal, remanded the case back to the Director, causing more delays and uncertainty.

The AAO does not consistently act this way, and many times it does make a final decision and sustain cases. But with the potential of extended delays and the costs associated with it, an I-290B may not be the most prudent course of action.

Source L-1A, I-129L, Dec. 1, 2020 Link: https://www.uscis. gov/sites/default/files/err/ D7%20-%20Intracompany%20 Transferees%20%28L- 1A%20and%20L-1B%29/ Decisions_Issued_in_2020/ DEC012020_01D7101.pdf

Sufficient Physical Premises

When a petition indicates that a beneficiary is coming to the United States to open a “New Office,” the Petitioner must show that it is ready to commence doing business immediately upon approval. Moreover, a petitioner must demonstrate that it has acquired sufficient physical premises to commence business. See 8 C.F.R. § 214.2(1)(3)(v). A petitioner bears the burden of establishing that its physical premises should be considered “sufficient” as required by the regulations. See 8 C.F.R. § 214.2(1)(3)(v)(A). To do so, it must clearly identify the nature of its business, the specific amount and type of space required to operate the business, and its proposed staffing levels, and document that the space can accommodate a Petitioner's growth during the first year of operations.

It is incumbent on the attorney to review and inspect the documents related to the office premises and judge whether the location matches the business operations intended for that business.

In the case of In Re: 9070067, the Petitioner, an importer and exporter of "computer and communication accessories, etc.," submitted a business plan stating that it will "mainly engage in import, export and re-export trade of computer and communication accessories, daily necessities, office supplies and etc., especially new energy products and energy-saving products." Furthermore, it said it would create 11 job positions in the first year of approval. They included a Commercial Lease Agreement dated November 15, 2018, and an Assignment of Lease dated March 4, 2019, indicating the Petitioner subleased a 1,300 square foot office and warehouse space in California. In a request for evidence (RFE), the Director stated the lease does not provide sufficient detail of the Petitioner’s premises and requested the Petitioner to provide additional evidence relating to its premises.

Tip: If submitting a sublease, you must also include the Master Lease.

Petitioner responded, saying that the space in California would be used as an office and a showroom area, and that in the beginning, all products sold will be shipped directly from the supplier and the affiliate company overseas to its customers, without storage in its California office space.

It stated that the office would be used for marketing and research analysis; meeting with potential customers, clients, or partners; and general administration including accounting, filing, meetings, contract negotiations, internal logistics coordination, and customer services. The showroom area would be a small exhibition space to display and store the company’s product samples, which will be required when clients visit the office. The Petitioner further asserted that according to its business needs, it will consider renting a warehouse to store products.

The USCIS Director, in its initial decision, had said that it did not appear that the office space was sufficient for all the uses the Petitioner had listed. Moreover, they said that the record did not contain evidence indicating that the Petitioner promotes its products through videos, a website, or social media and that it was not clear how the Petitioner planned to distribute and market paper copies of its product list and company profile to prospective customers. Leading to the dreaded Matter of Chawathe, 25 I&N Dec. 369, 376 (AAO 2010) reminder that a petitioner’s unsupported statements are of very limited weight and normally will be insufficient to carry its burden of proof.

On appeal, the Petitioner said that product samples cover “a small part of [its] products and only will be used when there are clients actually visiting [its] office.” However, the Petitioner indicated that it plans to hire a full-time customer service agent who will be responsible for organizing the showroom and presenting the company’s samples to customers when needed. The AAO said the Petitioner had not reconciled its assertion that will show a small portion of its samples in its showroom with the fact that it will staff a full-time customer service agent to organize and show the samples.

Tip: Sometimes being conservative with the number of employees to be hired by the end of the 1 st year of a New Office L-1 is better.

Additionally, the Petitioner had indicated that it plans to employ 11 employees within the first year, but it was not clear how 1,300 square feet of office and warehouse space would be able to support that many employees, while also using part of the space as a showroom. The AAO noted the photos and floor plan did not indicate that this was possible, nor was there sufficient parking for that many employees. Thus, the USCIS’ denial stood. A practitioner could have worked with a client to better formulate the business plan, staff size, and use of the premises so that the evidence was not so inconsistent.

The USCIS’ denial (and AAO‘s concurrence) focusing on the Petitioner’s showroom and marketing seems excessive. But based on my reading these types of decisions over the last decadeplus, I have seen that once they feel a Petition does not match their expectation, they will bring out the smallest details. In my opinion, the Petitioner’s promise of a large staff by the end of the year in that limited office space was what they disliked the most. That mistake led to them to further analyze the case and find fault with the “showroom.” When stating an expected employee count by the end of the 1 st year of a New Officer, you have to have the physical office space to house that number at the time of the initial I-129 filing (even if that much space is not needed when starting).

Source: L-1A, I-129, Dec. 2, 2020 https://www.uscis.gov/sites/ default/files/err/D7%20 -%20Intracompany%20 Transferees%20%28L- 1A%20and%20L-1B%29/ Decisions_Issued_in_2020/ DEC022020_01D7101.pdf

Ownership and Control Through Proxy Voting & Using Case Precedent

One of the leftovers from the Trump Administration is their crackdown on the evidence used to support the transfer of shareholder voting power by Proxy. The case of In Re: 10133839, makes interesting notes on this issue. The Petitioner here makes wild arguments in favor of the ownership of control for establishing the Qualifying Relationship requirement. The USCIS Director initially approved the Petition, but subsequently revoked the approval.

The AAO noted that stock certificates alone are not sufficient to demonstrate whether a stockholder maintains ownership and control of a corporate entity. The corporate stock certificate ledger, stock certificate registry, corporate bylaws, and the minutes of relevant annual shareholder meetings must also be examined to determine the total number of shares issued, the exact number issued to the shareholder, and the subsequent percentage ownership and its effect on corporate control. In addition, a petitioning company must disclose all agreements relating to the voting of shares, the distribution of profit, the management and direction of the subsidiary, and any other factor affecting control of the entity. See Matter of Siemens Med. Sys., Inc., 19 I&N Dec. at 365.

What is worthy of attention of practitioners is the AAO response to the Petitioner’s citation to USCIS Memorandum “L-1 Qualifying Relationships and Proxy Votes, PM-602-0155”, issued on December 29, 2017. They say:

“First, as a preliminary matter, the policy memorandum cited by the Petitioner is clearly titled “L-1 Qualifying Relationships and Proxy Votes” and cites law related to this nonimmigrant visa category. It is not apparent that this memorandum is applicable in the context of the immigrant classification for multinational executives or managers at issue in this matter.”

Although it would be preferred that this more onerous Proxy evidentiary requirement for L-1s not apply in the EB-1C context, it is troubling to see this statement because the overlap between the L-1 and EB-1C visas are significant. The two visa categories do have statutory and regulatory differences for sure. But the issue and USCIS precedent of ownership & control through Proxy Voting would seem like a legal decision that encompasses more than the specific category.

This more stringent interpretation could also then apply to case precedent that benefits Petitioners too. For example, a pivotal L-1 decision about qualifying relationships like Matter of Siemen (Id) cited by the AAO here, potentially should not be used in the EB-1C context since it expressly references an L-1 case. Thus, this AAOs inconsistent statement should cause all Practitioners to pay additional evidence to how they use L-1 verse EB-1C precedents.

On the other end, USCIS has been increasingly using the dreaded Matter of Kazarian EB-1A decision in the O-1 context. Separating the effects of these decisions for similar but different visa categories could be beneficial

Source: EB-1C, I-140, Dec 18, 2020 https://www.uscis.gov/sites/ default/files/err/B4%20-%20 Multinational%20Managers%20 and%20Executives/ Decisions_Issued_in_2020/ DEC182020_02B4203.pdf

This is not considered legal guidance. Please Consult with an Immigration Attorney to review a legal case.