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September 14, 1994


The opinion of the court was delivered by: I. LEO GLASSER

 GLASSER, United States District Judge:

 Before the court is a motion for summary judgment pursuant to Federal Rule of Civil Procedure 56 by plaintiff Linea Area Nacional de Chile S.A. d/b/a Lan-Chile Airlines ("Lan-Chile"), and the cross-motion for summary judgment by defendant Chris Sale, Acting Commissioner of the Immigration and Naturalization Service, United States Department of Justice ("INS" or the "Service"). At issue is a policy of the INS which holds carriers such as Lan-Chile responsible for detaining certain excludable aliens pending resolution of their applications for political asylum. For the following reasons, plaintiff Lan-Chile's motion is granted and the cross-motion of defendant INS is denied.


 The material facts are not in dispute. Lan-Chile is a corporation organized under the laws of Chile with its principal place of business in Miami, Florida. Complaint, P 4. Lan-Chile is a foreign air carrier authorized by a permit issued to it under Section 402 of the Federal Aviation Act to provide air transportation services between the United States and Chile. Id. Lan-Chile operates regularly scheduled flights between various cities in South America and John F. Kennedy International Airport ("JFK Airport") in New York City. Lan-Chile's 3(g) Statement, P 1.

 Pursuant to an agreement between Lan-Chile and INS -- the "Immediate and Continuous Transit Agreement" (the "Transit Agreement") (Form I-426) *fn1" -- Lan-Chile is allowed to transit aliens through the United States if the aliens carry the appropriate travel documentation establishing permission to enter a country other than the United States. Complaint, Ex. A. *fn2" Lan-Chile's 3(g) Statement, P 2; INS's Response to Lan-Chile's 3(g) Statement at 2. Aliens who travel through the United States pursuant to Form I-426 are commonly referred to as "transits without visas," or "TWOVs." The typical lay-over at JFK Airport for TWOVs is less than eight hours. Lan-Chile's Reply Memorandum of Law at 20 n.11.

 On September 3, 1990, a group of three aliens presented themselves to Lan-Chile representatives in Santiago, Chile with airplane tickets to travel on a Lan-Chile flight transiting through JFK Airport to Seoul, South Korea with a layover at JFK Airport. Lan-Chile's 3(g) Statement, P 3; INS's Response to Lan-Chile's 3(g) Statement at 2. When they arrived at JFK Airport, these aliens requested political asylum in the United States, *fn3" and Lan-Chile was instructed by INS to assume custody of the aliens pending further investigation. Lan-Chile's 3(g) Statement, P 4; INS's Response to Lan-Chile's 3(g) Statement at 2. Lan-Chile then retained a private security firm to guard the aliens in a motel. Lan-Chile's 3(g) Statement, P 5; INS's Response to Lan-Chile's 3(g) Statement at 2.

 On October 22, 1990, and December 19, 1992, a group of six aliens and nine aliens, respectively, arrived at JFK Airport on a Lan-Chile carrier with documentation evidencing an intent to travel to Seoul, South Korea. When they arrived at JFK Airport they also requested political asylum. INS ordered Lan-Chile to assume custody of these aliens. They were delivered to the private security firm for detention and placed under 24-hour armed guard. The aliens who arrived on September 3, 1990 and December 19, 1992, were detained by Lan-Chile for "several months" before they were paroled by INS. Affidavit of Pablo Cuevas (Station Manager for Lan-Chile at JFK Airport), August 27, 1993, P 7; Affidavit of John Zulueta (former Station Manager for Lan-Chile at JFK Airport) ("Zulueta Aff'd"), August 17, 1993, P 7. The aliens who arrived on October 22, 1990, remained in detention for approximately four months until paroled by INS. Lan-Chile's 3(g) Statement, P 8; INS's Response to Lan-Chile's 3(g) Statement at 2-3. During the time period in which the nine aliens who arrived on December 19, 1992, were detained by Lan-Chile under armed guard, several escaped and others required medical attention at a hospital. Zulueta Aff'd, P 7. On at least one occasion, two of the aliens ordered by INS to be detained by Lan-Chile overpowered one of the private security guards and had to be chased through the streets of New York City. Affidavit of David H. Coburn ("Coburn Aff'd"), September 2, 1993, P 4.

 In accordance with the INS's instructions for detention, Lan-Chile paid for the hotel rooms, the private security guards, and food for the detained aliens. Coburn Aff'd, P 3. Lan-Chile also arranged for medical attention when needed. Letter from David H. Coburn to Edward Grant, INS, March 8, 1993 at 1 (Plaintiff's Motion for Summary Judgment, Ex. 3). Lan-Chile has expended several hundred thousand dollars in fees to the private security firm and the motel in response to the INS's detention order. Coburn Aff'd, P 6; Lan-Chile's 3(g) Statement, P 17. *fn4"

 On or about June 15, 1993, Lan-Chile, served and filed its complaint. Lan-Chile seeks (i) a declaration that INS's policies, which assign responsibility to Lan-Chile for the detention of these aliens pending the processing of their political asylum applications, exceeds INS's statutory authority and are in violation of the Administrative Procedure Act (the "APA"), and that INS is responsible for assuming custody and paying all expenses incurred in detaining these aliens (Count I); and (ii) a declaration that these policies are arbitrary and capricious and in violation of the APA (Count II). Plaintiff also seeks an order requiring INS to "reimburse Lan-Chile for amounts that Lan-Chile has paid or may become obligated to pay . . . in connection with the detention of these aliens." Complaint, P 42.


 I. Summary Judgment Standard

 Summary judgment "shall be rendered forthwith if . . . there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In opposing a properly supported summary judgment motion, "an adverse party may not rest upon the mere allegations or denials of [its] pleading, but [its] response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). "The moving party is 'entitled to a judgment as a matter of law' [if] the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986).

 In deciding a summary judgment motion the court need not resolve disputed issues of fact but need only determine whether there is any genuine issue to be tried. Eastman Mach. Co. v. United States, 841 F.2d 469, 473 (2d Cir. 1988). A genuine factual issue exists if there is sufficient evidence favoring the nonmovant such that a jury could return a verdict in its favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). "Rule 56(e) . . . requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324. "In assessing the record to determine whether there is a genuine issue of fact, the court is required to draw all factual inferences in favor of the party against whom summary judgment is sought." Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir. 1989).

 In this case, the issues are entirely legal and the resolution of the motion and cross-motion turn on a proper interpretation of the Immigration and Nationality Act, 8 U.S.C. § 1101 et seq. (the "INA"), the relevant regulations promulgated thereunder, and INS's interpretation of the statute, the regulations and the Transit Agreement. Summary judgment, therefore, is appropriate. Dia Navigation Co. v. Reno, 831 F. Supp. 360, 365 (D.N.J. 1993) (in challenge to INS's policy of requiring vessels to detain stowaways pending their political asylum applications the court converts INS's cross-motion to dismiss into a cross-motion for summary judgement and grants the cross-motion because the "unresolved issues are primarily legal rather than factual") (quoting Crain v. Board of Police Comm'rs, 920 F.2d 1402, 1405-06 (8th Cir. 1990)), rev'd on other grounds sub nom., Dia Navigation Co. v. Pomeroy, No. 93-5538, 27 F.3d 918, 1994 WL 283268 (3d Cir. 1994).

 II. Statutory Background

 A. 8 U.S.C. § 1223

 Prior to 1986, Section 233 of the INA, 8 U.S.C. § 1223, provided that carriers bore the financial responsibility for detaining aliens who were temporarily removed for examination and inspection prior to the determination of their eligibility to enter the United States. This section provided in relevant part that "whenever a temporary removal of aliens is made under this section, the vessels or aircraft . . . shall pay all expenses of such removal to a designated place for examination . . . and all expenses arising during subsequent detention . . . ." 8 U.S.C. § 1223(b) (1970) (emphasis added) (repealed Pub.L. No. 99-500, 100 Stat. 1783-56 (1986)). *fn5" Like its predecessor section, Section 1223(b) allowed immigration officials to impose on the carrier the duty of safekeeping the alien and maintaining him at the carrier's expense. Low King Yong v. Pan Am Airways, 74 F. Supp. 657, 659 (D. Hawaii 1947).

 Regulations issued by the Service stated that aliens in the country pursuant to the TWOV program were also to remain in the custody of the carrier during their time in the United States. See, e.g., 38 Fed. Reg. 14962 (June 7, 1973); 8 C.F.R. § 214.2(c)(1) (1973) ("An applicant for admission under the transit without visa privilege must establish that he is admissible under the immigration laws . . . Provided, That until his departure from the United States he shall be in the custody of the carrier which brought him to the United States[.]") (emphasis in original). At one time the regulation provided that the alien could only remain in the United States for eight hours, id., 38 Fed. Reg. 19197-98 (June 29, 1973), but this was amended to allow longer stays, 38 Fed. Reg. 24891 (Sept. 11, 1973), 8 C.F.R. § 214.2(c)(1) (1994) ("if there is no scheduled transportation within that 8-hour period, continuation of the journey thereafter on the first available transport will be satisfactory."). The regulations were explicit that "until his departure from the United States responsibility for his continuous actual custody will lie with the transportation line which brought him to the United States unless at the direction of the district director he is in the custody of this Service or other custody approved by the Commissioner." 8 C.F.R. § 214.2(c)(1) (1973).

 Of great significance for purposes of this challenge to the INS policy, however, is the following from Section 214.2(c)(1) which authorizes the transit of TWOVs through the United States:

The privilege of transit without a visa may be authorized only under the conditions that the transportation line, without the prior consent of the Service, will not refund the ticket which was presented to the Service as evidence of the aliens's confirmed and onward reservations; that the alien will not apply for extension of temporary stay or for adjustment of status under section 245 of the Act, and that until his departure from the United States responsibility for his continuous actual custody will lie with the transportation line which brought him to the United States . . . .

 8 C.F.R. § 214.2(c)(1) (1994) (emphasis added). As the undisputed facts outlined above demonstrate, the TWOVs in this action did, in fact, apply for an extension of temporary stay; they requested political asylum.

 Regulations regarding aliens other than TWOVs also provided that carriers must accept the responsibility of detaining inadmissible aliens pursuant to transit agreements entered into with the Service. 47 Fed. Reg. 30044-46 (July 9, 1982):

Where an alien who appears to be inadmissible has arrived aboard a regular carrier which has entered into a contract with the Attorney General under section 238 of the [INA] [ 8 U.S.C. § 1228(c)], the placing of aliens in the custody of the carrier, as authorized by section 233 of the [INA] [ 8 U.S.C. § 1223], will ordinarily satisfy the detention requirements of the statute. In cases where carrier custody appears to be inadequate to protect the safety of the public, or where the security precautions which the carrier will take appear to be inadequate or inappropriate to detain the alien, custody may be assumed by the Service.

 B. Pub. L. No. 99-591 -- The Immigration User Fee Statute

 On October 30, 1986, Congress repealed Section 233 of the INA, 8 U.S.C. § 1223, when it passed The Department of Justice Appropriation Act of 1986, Pub. L. No. 99-591, 100 Stat. 1783-56. This act established the Immigration User Fee Statute (the "1986 User Fee Statute" or the "Act") which has been codified in 8 U.S.C. § 1356(d) to (l). The 1986 User Fee Statute provided in relevant part that "the Attorney General shall charge and collect $ 5 per individual for the immigration inspection of each passenger arriving at a port of entry in the United States[.]" 8 U.S.C. § 1356(d). The disposition of these receipts was outlined in Section 1356(h)(2)(A)(i) to (v):

The Secretary of the Treasury shall refund out of the Immigration User Fee Account to any appropriation the amount paid out of such appropriation for expenses incurred by the Attorney General in providing immigration inspection and preinspection services for commercial aircraft or vessels and in --
(i) providing overtime immigration inspection services for commercial aircraft or vessels;
(ii) administration of debt recovery, including the establishment and operation of a national collection office;
(iii) expansion, operation and maintenance of information systems for nonimmigrant control and debt collection;
(iv) detection of fraudulent documents used by passengers traveling to the United States; and
(v) providing detention and deportation services for excludable aliens arriving on commercial aircraft and vessels.

 (emphasis added).

 As the above section indicates, the thrust of the 1986 User Fee Statute is to reimburse the Attorney General for funds she expends in connection with the inspection and preinspection of aliens and the costs associated with their detention and deportation. In repealing Section 1223, "one of the new statute's primary functions was to reverse the existing rule, requiring carriers to bear the expense of detaining aliens pending hearings on their immigration status." Dia Navigation, 27 F.3d 918, 1994 WL 283268 at *5. See also Argenbright, 849 F. Supp. at 280 ("[The 1986 User Fee Statute] shifted the financial responsibility for the detention and deportation costs of excludable aliens to the INS.").

 The enactment of the 1986 User Fee Statute, however, did not result in the repeal of 8 U.S.C. § 1227(a) which provides, in part, that the cost of maintaining an "excluded" alien prior to his or her deportation, including detention expenses, remains upon the carrier responsible for transporting such alien into the United States. *fn6" The repeal of Section 1223 also had no effect on that section of the INA which authorizes the federal government to enter into contracts with the carriers regarding the continuous transit of passengers through the United States. See 8 U.S.C. § 1228(c).

 Plaintiff argues that the 1986 User Fee Statute now mandates that INS bear the physical and financial responsibility for detaining TWOVs who seek political asylum upon their arrival in the United States. Lan-Chile's Memorandum of Law at 10-14. INS, on the other hand, contends that "by repealing 8 U.S.C. § 1223, and modifying 8 U.S.C. § 1222, *fn7" Congress apparently intended to free carriers in certain cases from liability for detention costs for certain excludable aliens." INS's Opposition Memorandum of Law at 16 (emphasis added). INS contends that the enactment of the 1986 User Fee Statute did not alter the Service's authority to enter into or continue the transit agreements discussed supra. These agreements, it contends, place the physical and financial responsibility of detaining TWOVs pending a determination of their application for political asylum upon the carriers. INS's Reply Memorandum of Law at 9. *fn8"

 The term "excludable aliens" referred to in the 1986 User Fee Statute refers to specific classes of aliens who enter the United States. A list of excludable aliens is found in 8 U.S.C. § 1182(a). They include, among others, aliens who are excludable because of health reasons, criminal backgrounds, security risks, risk of becoming a public charge, or stowaways. The statute also provides that,

Any alien who, by fraud or willfully misrepresenting a material fact, seeks to procure (or has sought to procure or has procured) a visa, other documentation, or entry into the United States or other benefit provided under this chapter is excludable.

 8 U.S.C. § 1182(a)(6)(C)(i). Upon the assumption that the aliens detained by Lan-Chile misrepresented at the outset their intention to travel through the United States to South Korea, they are guilty of fraud or misrepresentation. United States v. Kavazanjian, 623 F.2d 730, 738 (1st Cir. 1980) ("We agree that the aliens, by arriving as TWOVs with no intention of effecting an orderly and expeditious departure, were guilty of fraud or misrepresentation."). Therefore, pursuant to 8 U.S.C. § 1182(a)(6)(C)(i), the TWOVs detained by plaintiff in this action were "excludable aliens." This point is conceded by INS. INS's Memorandum of Law at 9 ("An alien who obtains TWOV status with the intent of claiming asylum upon his arrival in the United States is held to be excludable from the United States on the ground that he had made a willful misrepresentation of a material fact in procuring his TWOV document."). *fn9" See also Aerolineas Argentinas v. United States, 31 Fed. Cl. 25, 27 (1994) ("A TWOV who violates the TWOV requirements is excludable.").

 It is important to note that neither a passport nor a visa is required of a TWOV who comes to the United States for passage through it to a designated foreign country. All that is required is that he possess a travel document establishing his identity, nationality and ability to enter another country. 8 CFR 212.1(f)(1). Those documents presented to INS upon arrival here are not fraudulent and would permit the TWOV to continue on his journey to the country of his destination if he chose to do so. That person becomes an excludable alien when he constructively abandons those documents and hence his status as a TWOV, when he refuses to continue on his journey and applies for political asylum instead. *fn10" It is at that moment that he becomes an excludable alien for the reason that he has no authorization to remain here. Quite clearly, he is not a stowaway.

 It is also significant to note the distinction between the TWOV who becomes an excludable alien and a stowaway. Unlike the term "excludable aliens," the term "excluded" alien, as found in Section 1227(a), is not defined in the INA. Two district courts have concluded that even though "stowaways" are listed in Section 1182 as "excludable aliens," *fn11" they should be considered "excluded" and hence do not fall under the umbrella of the 1986 User Fee Statute, but rather are covered by Section 1227(a) which mandates carrier responsibility for detention costs. Dia Navigation Co. v. Reno, 831 F. Supp. 360, 367 (D.N.J. 1993), rev'd on other grounds sub nom., Dia Navigation Co. v. Pomeroy, No. 93-5538, 27 F.3d 918, 1994 WL 283268 (3d Cir. 1994); Argenbright Sec. v. Ceskoslovenske Aeroline, 849 F. Supp. 276, 280 (S.D.N.Y. 1994).

 Both courts reached this conclusion based on the fact that stowaways are a particularly disfavored category of aliens and that, unlike other aliens, they are not entitled to an exclusion hearing before an immigration judge to determine whether they "shall be excluded and deported," 8 U.S.C. § 1226(a), and they are not entitled to an appeal to the Attorney General in the event of an adverse determination. See 8 U.S.C. § 1323(d). *fn12" Argenbright, 849 F. Supp. at 281 ("In fact, except for temporary medical treatment, alien stowaways are not even permitted to land in the United States.") (citing 8 U.S.C. § 1323(d)). Stowaways who apply for political asylum, however, are accorded asylum hearings and the right of appeal. Yiu Sing Chun v. Sava, 708 F.2d 869 (2d Cir. 1983).

 In Sava, the Second Circuit reconciled Section 1323(d)'s directive denying stowaways a hearing and the right to appeal from an exclusion order with Section 1158's directive that the Service establish uniform procedures for asylum applications "irrespective of [an] alien's status." In reaching the conclusion that the 1986 User Fee Statute does not mandate Service responsibility for stowaways who seek asylum, the district courts in Argenbright and Dia Navigation noted that even though asylum-seeking stowaways are granted political asylum hearings and appeals pursuant to Sava, this does not change their status as de facto "excluded" aliens. The court in Argenbright reasoned:

The fact that stowaways may now apply for political asylum has not altered their excluded status. See Yiu Sing Chun v. Sava, 708 F.2d at 876; Matter of Waldei, 19 I. & N. Dec. 189, 193 (BIA 1984); c.f., United States ex rel. Tom We Shung v. Murff, 176 F. Supp. 253, 256-58 (S.D.N.Y. 1959) . . . . While section 1158(a) entitles a stowaway to apply for political asylum, the right is limited "solely to the issue of asylum eligibility," thereby preserving the basic thrust of section 1323(d). Yiu Sing Chun, 708 F.2d at 876. Thus, despite the availability of an asylum hearing, stowaways remain "excluded" aliens and, as such, the expenses incident to their detention must be borne by carriers pursuant to section 1227(a)(1). Dia Navigation, 831 F. Supp. at 371-73.

 Argenbright, 849 F. Supp. at 281 (footnote omitted) (emphasis added). *fn13"

Sections 1227(a)(1) and 1323(d) require that stowaways be deported immediately unless the Attorney General in the exercise of her discretion determines otherwise, and § 1227(a)(1) places the burden of deportation, and any detention incident to deportation, on the carrier. Section 1105a, however, provides that asylum applicants may not be deported until their applications have been processed, and this is not a matter of discretion. The statute nowhere addresses the question presented here -- the status of an asylum applicant, otherwise excluded, pending the processing of the asylum application.

 Id. at *7 For purposes of the challenge to the INS policy before this court, the Third Circuit's observations in Dia Navigation highlight the fact that, unlike stowaways, TWOVs are not an historically disfavored class of aliens and, unlike stowaways, Section 1323(d) does not bar them from a hearing before an immigration judge or an appeal to the Attorney General regarding their status as an excludable alien. Whereas stowaways who do not seek political asylum are subject to immediate deportation, the same cannot be said of TWOVs. In other words, the tension noted by the Dia Navigation court between "excluded" and "excludable" aliens as it relates to stowaways is not applicable to TWOVs who do enjoy the right to an exclusion hearing and appeal, whereas stowaways do not. *fn14"

 C. Legislative History of the 1986 User Fee Statute

 In support of its interpretation that the 1986 User Fee Statute mandates that INS bear the custodial, physical and financial responsibility of detaining TWOVs pending the determination of their applications for political asylum, Lan-Chile draws the court's attention to several legislative reports. These reports, it argues, establish that it was Congress's intent to "relieve carriers of the obligation to serve as jailers on behalf of INS." Lan-Chile's Memorandum of Law at 11. For example, Lan-Chile draws the court's attention to a 1985 Senate Appropriations Committee Report, in which the Committee stated that it was,

concerned about the policy of the Immigration and Naturalization Service which requires scheduled passenger airlines to assume custody and financial responsibility for aliens who arrive by plane in the United States without proper documentation. . . . The Committee believes this policy raises significant questions about the equity and legal propriety of requiring private entities to assume the financial burdens of maintaining and, at the same time exercising physical custody over, excludable aliens for extended periods of time. Specifically, the Committee is concerned about the possible ramifications of detention of aliens by airline personnel or their agents who are not, of course, law enforcement officials.

 S. Rep. No. 99-150, 99th Cong., 1st Sess. 37 (1985) (emphasis added). Identical language appears in the House Appropriations Committee report as well. H. Rep. No. 99-197, 99th Cong., 1st Sess. 38 (1985).

 Although the Senate and House Reports specifically discussed aliens who arrive "without proper documentation," the House Appropriations Committee was even more expansive ...

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