On October 21, 2014, a panel of the D.C. Circuit reversed a District Court decision granting summary judgment to the U.S. Citizenship and Immigration Services (USCIS) in a case brought by Brazilian steakhouse Fogo de Chao seeking approval of an L-1B “specialized knowledge” visa for a skilled culinary position.  The USCIS’s administrative denial decision was vacated and the agency was directed to reconsider the application consistent with the Court’s ruling.

By a 2-1 vote, the panel found that:  (i) USCIS had improperly rejected evidence of “cultural knowledge” submitted by Fogo in its attempt to establish the “specialized knowledge” of its workers; (ii) did not give proper consideration to the “economic inconvenience” that the company would experience if L-1B visas were not available to its U.S. operations; and (iii) improperly rejected the application for lack of certain evidence that in fact was in the record.

The lengthy timeline for agency and judicial review, and the need for swift decision making in the business world, make appeals court decisions addressing business immigration issues rare.  The level of judicial deference typically owed to agency decisions make successful judicial challenges to visa denials rarer still.  While this decision addressed a fairly narrow factual context, aspects of the decision clearly have broader reach to other corporate petitioners for specialized-knowledge workers, and raise the prospects for litigation as a powerful option in the L-1B context:

  • Longstanding agency guidance that the agency has ignored  in recent years -- the 1994 “Puleo Memo” and 2004 “Ohata Memo” -- remain valid authority upon which a petition may be based and to which USCIS must refer when adjudicating an L-1B petition.
  • The USCIS regulations implementing the "specialized knowledge" definition are not worthy of federal-court deference under the Chevron standard because the agency regulations merely restate the statute -- nearly verbatim.  As such, the regulations do nothing to clarify the statutory ambiguity, and the federal courts have nothing to defer to. 
  • The non-precedential USCIS administrative appellate decision that was vacated is also not worthy of the lower levels of federal-court deference under the Mead and Skidmore cases, because it failed to engage in sufficiently well-reasoned decision making. 

USCIS’s adjudication of “specialized knowledge” cases has been the subject of criticism by the immigration bar since 2007, and rapid increases over this period in the rates of denials and time-consuming requests for additional evidence appear to confirm concerns of silent shifts in agency policy.  This is the first decision by a federal court that sustains important aspects of this critique.