Mahalaxmi Amba Jewelers v. Johnson , 652 F. App'x 612 ( 2016 )

FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT June 10, 2016
_________________________________
Elisabeth A. Shumaker
Clerk of Court
MAHALAXMI AMBA JEWELERS;
KARATS INC.; AKSHAY ANAND,
Plaintiffs - Appellants,
v. No. 15-3214
(D.C. No. 2:14-CV-02321-JTM-KGS)
JEH JOHNSON, Acting Secretary, (D. Kan.)
Department of Homeland Security;
ALEJANDRO MAYORKAS, Director,
United States Citizenship and Immigration
Services; MARK J. HAZUDA, Director,
USCIS Nebraska Service Center,
Defendants - Appellees.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before BRISCOE, BACHARACH, and McHUGH, Circuit Judges.
_________________________________
Plaintiffs appeal the decision of the United States Citizenship and Immigration
Services (agency) to deny an I-140 immigrant visa petition seeking to classify
Akshay Anand as a multinational executive or manager. The agency determined that
the plaintiffs had failed to meet their burden of proof on one of the criteria: to
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and collateral
estoppel. It may be cited, however, for its persuasive value consistent with
Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
establish that Karats Inc., the employer in the United States, is an “affiliate,” as
defined by regulation, of Mahalaxmi Amba Jewelers, the foreign employer. To
establish that the two entities are “affiliates,” the plaintiffs must show that they are
owned and controlled by the same individual or group in approximately the same
share or proportion. The district court affirmed the agency’s ruling. This appeal is
governed by the Administrative Procedure Act (APA); we affirm.
I. Background
Mahalaxmi Amba Jewelers (Mahalaxmi) is a family-owned business in Delhi,
India that filed a partnership deed in 2006 under the laws of India. The Mahalaxmi
partnership deed states that there are four partners: Shammi Anand, Vijay Anand,
Sanjiv Anand, and Akshay Anand. Shammi is the elder brother of Vijay and Sanjiv;
Akshay is Shammi’s son. Shammi and Akshay each own 16.7% of the business,
while Vijay and Sanjiv each own 33%.
Karats Inc. (Karats) is a Kansas corporation that operates a jewelry store in
Overland Park, Kansas. The Karats common stock, at one vote per share, is held as
follows: Shammi holds 151,500 shares, Sanjiv and Vijay each hold 12,000 shares,
and Akshay holds 562,5000 shares. In addition, Shammi holds all 12,000 shares of
Class A stock at 70 votes per share.
From 2006 through 2010, the agency annually granted Akshay an L-1A
non-immigrant visa allowing him to work at Karats. In 2009, Mahalaxmi filed a
petition for an I-140 immigrant visa to classify Akshay as a multinational executive
or manager. The petition was denied, as was a second petition. Mahalaxmi filed a
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third I-140 petition and provided additional documentation at the request of the
agency. In the order under review here, the agency held that all of the criteria for
granting an L-1A visa had been satisfied except the requirement that Mahalaxmi and
Karats were “affiliates” because, although the evidence established Shammi’s control
of Karats, it did not establish his control of Mahalaxmi.
The agency reviewed the documents Mahalaxmi submitted, including (1) the
partnership deed; (2) sections of the Indian Partnership Act of 1932; (3) letters dated
February 2012 and April 2014, signed by Shammi, Sanjiv and Vijay stating that the
decisions of Shammi, as the eldest, were “final and binding on the other partners in
Mahalaxmi Amba Jewellers and . . . on the other shareholders in Karats, Inc.,” Aplt.
App. Vol. 2, at 115; and (4) a statement from Mahalaxmi’s Indian accountant opining
that that the February 2012 letter established that Shammi controlled all business
decisions concerning Mahalaxmi, id. Vol. 1, at 91-92. The agency concluded that the
letters signed by only three of the four partners were insufficient to amend the
partnership deed because the deed requires any alteration to be included in an
addendum, for which no evidence was submitted. In addition, the partnership deed
provides that alterations must be mutually agreed upon by all partners, but only three
of the four partners signed the purported alteration. The agency then rejected the
plaintiffs’ argument that they demonstrated Shammi’s control of Mahalaxmi through
a “course of dealing,” as authorized by the Indian Partnership Act, concluding that
the evidence was insufficient to demonstrate a course of dealing.
3
The plaintiffs appeal, arguing that they demonstrated Shammi’s control of
Mahalaxmi by (1) the Mahalaxmi partnership documents, (2) a course of dealing as a
family-owned business in India, and (3) the February 2012 and April 2014 letters,
which are in essence a proxy agreement. They also contend that the agency failed to
apply a broad definition of “affiliates.”1 They further contend that the agency’s prior
approval of L-1A visas for Akshay compels approval of the I-140 visa.
II. Discussion
A. Standards of Review
Under the APA, we review the district court’s decision de novo. Biodiversity
Conservation All. v. Jiron, 762 F.3d 1036, 1059 (10th Cir. 2014). The agency’s
decision shall be set aside if it is “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). “[A]n agency’s action
is arbitrary and capricious if the agency entirely failed to consider an important
aspect of the problem, offered an explanation for its decision that runs counter to the
evidence before the agency, or is so implausible that it could not be ascribed to a
difference in view or the product of agency expertise.” Boidiversity Conservation
All., 762 F.3d at 1060 (ellipsis and internal quotation marks omitted). “A
presumption of validity attaches to the agency action and the burden of proof rests
1
In their reply brief, the plaintiffs take strong exception to the government’s
representation that the applications for the I-140 visa were filed by Karats, when in
fact they were filed by Mahalaxmi. We do not consider this dispute because the
agency did not rely on it as a ground to deny the visa petition.
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with the parties who challenge it.” Ron Peterson Firearms, LLC v. Jones, 760 F.3d
1147, 1162 (10th Cir. 2014) (brackets and internal quotation marks omitted).2
B. Whether Karats and Mahalaxmi Are “Affiliates”
To be eligible for an I-140 immigrant visa as a multinational executive or
manager, the petitioning alien must show that he “has been employed for at least 1
year by a firm or corporation . . . or an affiliate or subsidiary thereof,” and the alien
plans to continue working for the same employer or affiliate. 8 U.S.C.
§ 1153(b)(1)(C). It is undisputed that the plaintiffs have met these criteria, except for
establishing that Mahalaxmi and Karats are “affiliates.” As used here, “affiliate”
means “[o]ne of two legal entities owned and controlled by the same group of
individuals, each individual owning and controlling approximately the same share or
proportion of each entity.” 8 C.F.R. § 204.5(j)(2)(B). It is further undisputed that
Shammi controls Karats. Therefore, the question is whether Shammi also controls
Mahalaxmi, thus showing that he owns and controls approximately the same share or
proportion of each.
2
The plaintiffs contend that the agency’s decision is not entitled to Chevron
deference, see Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837,
842-44 (1984) (according substantial deference to an agency’s interpretation of “a
statutory scheme it is entrusted to administer”), but should instead be reviewed under
the Skidmore standards, see Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)
(stating agency guidelines are entitled to deference to the extent they have the “power
to persuade”). The government does not claim that the agency’s decision is entitled
to deference, however, so we need not decide which level of deference, if any, is
appropriate. See Hydro Res., Inc. v. United States Envtl. Prot. Agency, 608 F.3d
1131, 1146 & n.10 (10th Cir. 2010) (en banc) (declining to address level of deference
due where agency did not ask for deference to its statutory interpretation).
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The plaintiffs maintain that they established Shammi’s control over
Mahalaxmi in the following ways: (1) by the partnership deed and the February 2012
and April 2014 letters purporting to give approximately 82% control of Mahalaxmi to
Shammi; (2) through a course of dealing; (3) by the unique nature of Indian family
businesses; and (4) by treating the letters as a proxy agreement giving control to
Shammi.
Mahalaxmi’s partnership deed provides that decisions concerning finances and
operation of the business are to be made by mutual consent of the partners. To
modify this provision, the plaintiffs produced the February 2012 letter signed by
Shammi, Sanjiv, and Vijay, stating, “Due to the fact Mr. Shammi Anand is the eldest
in terms of age and senior most in terms of experience in the jewelry trade, his
decisions are final and binding on the other partners in Mahalaxmi Amba
Jewellers . . . .” Aplt. App. Vol. 2, at 115. A subsequent letter dated April 2014,
reiterates the “express intention [of Shammi, Sanjiv, and Vijay] that Shammi Anand
has the control of every decision” for Mahalaxmi. Id. Vol. 1, at 90. In addition,
Mahalaxmi’s accountant opined that the February 2012 letter established that
Shammi controlled all business decisions concerning Mahalaxmi. Id. at 91-92. And
the partnership deed allows for “all partners at any time to mutually agree to alter”
any term. Id. Vol. 2, at 120. The plaintiffs argue that this evidence establishes
Shammi’s control of Mahalaxmi.
The agency noted that the terms of the partnership deed required alterations to
be mutually agreed upon by all partners and be reflected in an addendum to the deed.
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Because only three of the four partners signed the letters and there was no evidence
of an addendum to the partnership deed, the agency rejected this argument. The
agency applied the terms of Mahalaxmi’s partnership deed. The plaintiffs do not
dispute those terms. Thus, the agency did not abuse its discretion or act contrary to
the applicable law in relying on Mahalaxmi’s partnership deed.
The plaintiffs also point to section 11(1) of the Indian Partnership Act of 1932,
which allows “the mutual rights and duties of the partners of a firm [to] be
determined by contract between the partners, and such contract may be express or
may be implied by a course of dealing.” Id. Vol. 1, at 95. The plaintiffs contend that
the February 2012 letter explaining that Shammi was in control of Mahalaxmi as the
eldest in the family, together with the Indian custom whereby the eldest family
member is in charge of a family business, demonstrated a course of dealing whereby
Shammi controlled Mahalaxmi. The agency found, however, that the documents
submitted, particularly the February 2012 letter, were insufficient to establish that
Mahalaxmi had in fact adopted such a course of dealing.3 Having found insufficient
evidence to show that Shammi controlled Mahalaxmi through a course of dealing, it
follows that the evidence was insufficient to show that Shammi controlled
Mahalaxmi as the eldest member of the family business.
3
The plaintiffs complain that the agency failed to consider hundreds of
documents demonstrating their claimed course of dealing, but they do not identify or
explain how those documents support their argument. “Without a specific reference,
we will not search the record in an effort to determine whether there exists dormant
evidence [to support a party’s claim].” Gross v. Burggraf Constr. Co., 53 F.3d 1531,
1546 (10th Cir. 1995) (internal quotation marks omitted).
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The plaintiffs further argue that the agency did not follow its own precedent in
deciding that Mahalaxmi and Karats were not affiliates. Relying on Matter of Tessel,
Inc., 17 I. & N. Dec. 631 (Acting Assoc. Comm. 1981); Matter of Barsai, 18 I. & N.
Dec. 13 (BIA 1981); and Matter of Hughes, 18 I. & N. Dec. 289 (BIA 1982), they
assert that the term “affiliate” should be defined broadly. The plaintiffs maintain that
those cases do not require equal control over, or ownership of, both companies. But
neither does the applicable regulation, which was promulgated after the cases were
decided. Indeed, 8 C.F.R. § 204.5(j)(2)(B)’s definition of “affiliate” includes entities
owned and controlled in “approximately the same share or proportion.”
The agency did not require the plaintiffs to establish equal control over Karats
and Mahalaxmi. Rather, it determined that the plaintiffs showed that Shammi had
de facto control over Karats by virtue of his majority voting shares, but failed to
show that Shammi also had de facto control over Mahalaxmi. See Matter of Hughes,
18 I. & N. Dec. at 293 (“Control may be de jure by reason of ownership of 51% of
outstanding stocks of the other entity or it may be de facto by reason of control of
voting shares through partial ownership and by possession of proxy votes.”). Thus,
the agency’s application of the relevant law was not arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.
The plaintiffs next argue that the agency should have treated the February
2012 and April 2014 letters as a proxy agreement among Shammi, Sanjiv, and Vijay,
whereby Sanjiv and Vijay ceded their collective 66% voting power which, with
Shammi’s own 16.7% interest, resulted in Shammi having approximately an 82%
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controlling interest. The plaintiffs rely on Matter of Hughes, 18 I. & N. Dec. at 293,
for the proposition that control of a company may be shown by “possession of proxy
votes.”
The agency did not specifically address this claim, and the plaintiffs do not
identify where in the record they raised it to the agency. See Fed. R. App. P.
28(a)(6); 10th Cir. R. 28.2(C)(2); Ark Initiative v. United States Forest Serv.,
660 F.3d 1256, 1261-62 (10th Cir. 2011) (stating “claims not properly raised before
an agency are waived, unless the problems underlying the claim are obvious, or
otherwise brought to the agency’s attention” (brackets and internal quotation marks
omitted)). Nevertheless, the agency’s decision recognized that control may be shown
“by reason of control of voting shares through . . . possession of proxy votes.” Aplt.
App. Vol. 1, at 80.
We reject the plaintiffs’ argument that the February 2012 and April 2014
letters are “in essence” a proxy agreement, Aplt. Opening Br. at 31, and conclude that
they did not meet their burden of proof. The letter does not specify that it is a proxy
agreement and, moreover, it is equivocal. In contrast to stating that Shammi’s
decisions are final and binding on the other partners, the letter also states that “[a]ll
business decisions in both the firms [Mahalaxmi and Karats] are collective decisions
and are taken jointly by all the partners.” Aplt. App. Vol. 2, at 115.
C. Whether Approval of the L-1A Visa is Controlling
Lastly, the plaintiffs contend that the grant of the L-1A visas for 2006 through
2010 for Akshay compels approval of the I-140 visa, given that the agency has not
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indicated that the L-1A visas were approved in error and both require that Mahalaxmi
and Karats be affiliates. See 8 U.S.C. § 1101(A)(15)(L) (defining nonimmigrant
alien to include an alien who “has been employed continuously for one year by
a . . . legal entity or an affiliate . . . thereof and who seeks to enter the United States
temporarily in order to continue to render his services to the same employer
or . . . affiliate thereof”). They argue that the denial of the I-140 visa was therefore
arbitrary and capricious.
We decline to hold that the grant of an L-1A visa is binding on a future
application for an I-140 visa. The agency is not required to “approve applications or
petitions where eligibility had not been demonstrated, merely because of prior
approvals which may have been erroneous.” Matter of Church Scientology Int’l,
19 I. & N. Dec. 593, 597 (BIA 1988); see also Nat’l Hand Tool Corp. v. Pasquarell,
889 F.2d 1472, 1476 (5th Cir. 1989) (stating Congress did not intend for “the INS to
be bound by its initial determination that an employee is a manager for purposes of
granting a temporary visa when an application for a permanent visa is filed”); Q Data
Consulting, Inc. v. INS, 293 F. Supp. 2d 25, 29-30 (D.D.C. 2003) (holding INS’s
grant of an L-1A visa did not show that the agency committed clear error in denying
an I-140 petition, even though both classifications had the same managerial criteria);
but see Omni Packaging, Inc. v. INS, 733 F. Supp. 500, 504 (D.P.R. 1990) (finding
INS abused its discretion in denying a subsequent application when it did not explain
how the previous grant of an application was error, even though the basic facts were
the same). Moreover, such a rule would impermissibly shift the burden to establish
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eligibility for a visa from the petitioner to the agency. And the benefits of an I-140
visa (permanent residence) are distinct from those provided by an L-1A visa
(temporary non-immigrant status), such that the grant of an L-1A visa does not
require approval of a related I-140 petition. Therefore, we cannot conclude that the
decision to deny the I-140 petition, despite the earlier grant of L-1A visas for
Akshay, was arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.
III. Conclusion
The judgment of the district court is affirmed.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
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