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Niagara Handpiece, Ltd. v. United States Citizenship & Immigration Services

September 23, 2006


The opinion of the court was delivered by: William M. Skretny United States District Judge



In this action, Plaintiffs Niagara Handpiece Ltd., Inc. ("Niagara Handpiece") and Frank Csemiczky ("Csemiczky"), seek a declaratory judgment that the United States Citizenship and Immigration Services ("CIS") erred in denying immigrant status to Csemiczky as a multinational executive or manager. CIS determined that Niagara Handpiece did not meet its burden of establishing that Csemiczky had been or would be employed primarily in a managerial or executive capacity under 8 U.S.C. § 1153(b)(1)(C). Plaintiffs seek relief under the Administrative Procedure Act, 5 U.S.C. § 701, et seq. Currently before this Court are the parties' Cross-Motions for Summary Judgment.


A. Factual Summary

The following facts are not in dispute. Niagara Handpiece, a New York Corporation, is an affiliate of Denti-Tool, Inc., a corporation incorporated and located in the province of Ontario, Canada. (Def's State., ¶ 1). Niagara Handpiece is engaged in the repair and sale of dental equipment. (Def.'s State., ¶ 2). Csemiczky is a Canadian citizen and the president and sole employee of both companies. (Def.'s State., ¶ 3). Both companies are wholly owned by Csemiczky. (Def.'s State., ¶ 4).

As the sole employee, Csemiczky spends 18 hours a week repairing dental equipment and 28 hours a week "implementing and managing the business' sales and marketing plan," which includes forecasting sales, reviewing and selecting product lines, preparing an annual budget, strategic planning, developing strategies for increasing customer base, marketing, and advertisement, representing the company at trade shows, and developing and overseeing annual accounting functions. (Def.'s State., ¶ 5). He also spends about 18 hours a week supervising a company that performs administrative and office support. (Def.'s State., ¶ 6). Another 9 hours a week is spent on business expansion plans; in the future, Csemiczky plans to spend twenty to twenty-five hours per week training a new employee. (Def.'s State., ¶ 7).

Niagara Handpiece successfully petitioned three times to classify Csemiczky as a non-immigrant intracompany transferee as a manager or executive pursuant to 8 U.S.C. § 1101(a)(15)(L), which authorized him to work temporarily under a L-1A visa. (Pls' State., ¶¶ 1-3). Csemiczky worked as President of Niagara Handpiece under 3 successive L-1A visas between February 12, 1998 and February 11, 1999, February 11, 1999 and February 10, 2002, and February 11, 2002 and February 10, 2005. (Pls' State., ¶¶ 1-3, Adm. Rec., pp. 237-238).*fn1

On or about March 1, 2001, Niagara Handpiece sought to classify Csemiczky as an employment based immigrant pursuant to 8 U.S.C. § 1153(b)(1)(c), as a multinational executive or manager. (Def.'s State., ¶ 8). Niagara Handpiece filed a Form I-140, also known as an Immigrant Petition for Alien Worker, and submitted documents from Denti-Tool Inc. and Niagara Handpiece to establish that Niagara Handpiece and Csemiczky met the statutory requirements for immigrant status. (Def.'s State., ¶ 9; Compl., Exs. B & C). These documents included articles of incorporation, financial and ownership statements, and United States and Canadian Tax returns. (Def.'s State., ¶ 10; Compl., Ex. C).

On August 15, 2001, CIS requested additional evidence, including: (1) a comprehensive description of Csemiczky's duties with an indication of how such duties have been and will be of a managerial or executive capacity; (2) a list of its employees with a breakdown of their respective duties and the number of hours spent carrying out said duties; (3) an hourly breakdown of duties for Csemiczky; and (4) various tax documents. (Def.'s State., ¶ 11; Compl., ¶ 9, Ex. D). By letter dated November 5, 2001, Csemiczky wrote that he was the sole employee, aside from an independent contractor hired to provide administrative services. (Def.'s State., ¶ 12).

On January 15, 2002, CIS denied the petition on the basis that the record did not demonstrate that Csemiczky's duties had been and would be primarily managerial or executive in nature. (Def.'s State., ¶ 13; Adm. Rec., pp. 66-70). Specifically, CIS found that Niagara Handpiece failed to show that Csemiczky functioned at a senior level within an organizational hierarchy other than in a position title, or that he managed a subordinate staff of professional, managerial, or supervisory personnel who would relieve him of performing non-qualifying duties. (Def.'s State., ¶ 14, Adm. Rec., p. 68). Further, CIS concluded that Csemiczky's duties, as outlined in his application, were vague, and that Niagara Handpiece did not specify what duties Csemiczky had been and would be performing, which qualified his position as managerial or executive in nature. (Def.'s State., ¶ 14, Adm. Rec., p. 68). In this decision, CIS erroneously reported: (1) that Niagara Handpiece did not provide its Federal United States Tax return for fiscal year 2000, as requested; and (2) that the company's net income was $31,845. (Def.'s State., ¶¶ 16-17, Adm. Rec., p. 68).

On February 15, 2002, Niagara Handpiece filed an appeal with the Administrative Appeals Office ("AAO"). (Def.'s State., ¶ 18, Adm. Rec., p. 63). The basis of the appeal was that the CIS director made "erroneous conclusions" based on the documentation presented and "abused his discretionary powers" by determining that Niagara Handpiece failed to provide an essential document for proper adjudication of the petition. (Def.'s State., ¶ 19, Adm. Rec., p. 63). On November 21, 2003, the AAO dismissed Petitioner's appeal. (Def.'s State., ¶ 20, Adm. Rec., pp. 7-13). In so doing, the AAO noted that CIS did not in fact request the 2000 tax return and that it was not clear why the director used the figure of $31,845 for Petitioner's net income. (Def.'s State., ¶ 21, Adm. Rec., pp. 11-12). Nonetheless, the AAO reasoned that these inaccuracies related to "collateral" matters rather than the core issue of whether Csemiczky had been and would be performing managerial or executive duties. (Def.'s State., ¶ 21, Adm. Rec., p. 12).

To ascertain the answer to this core question, the AAO reviewed the statutory provisions, specifically, 8 U.S.C. §§ 1101(a)(44)(A) & (B), and a list and breakdown of Csemiczky's duties. (Def.'s State., ¶ 22; Adm. Rec., pp. 9-11). The AAO reasoned that:

While . . . (the) denial of a petition should not be entirely based on the number of a petitioning entity's employees, the circumstances of the instant case indicate that the lack of personnel causes [Csemiczky] to have to perform nearly all of the petitioner's daily operational tasks, which are of a non-qualifying nature. (Def.'s State., ¶ 23; Adm. Rec., p. 12). The AAO also noted that:

[Csemiczky's] status as [Niagara Handpiece's] only employee requires that he be the one to market, sell and actually provide the company's clients with that service. Regardless of [Csemiczky's] discretionary authority, or the fact that [he] performs functions that are clearly essential to [the corporation's] survival and financial success, [his] involvement in these day-to-day operational tasks negates the claim that he primarily acts in a managerial or executive capacity. It is noted that an employee who primarily performs the tasks necessary to produce a product or to provide services is not considered to be employed in a managerial or executive capacity. Matter of Church of Scientology, 19 I & N Dec. 593, 604 (Comm. 1988).

(Def.'s State, ¶ 24-25; Adm. Rec., p. 12).

The AAO noted that there was insufficient evidence of a qualifying relationship between Csemiczky and Niagara Handpiece pursuant to 8 U.S.C. § 204.5(j)(3); but ultimately, the appeal was dismissed because the evidence failed to demonstrate that Csemiczky had been and will be employed in a capacity that is primarily managerial or executive. (Def.'s State, ¶ 26; Adm. Rec., p. 12). The AAO concluded that Niagara Handpiece failed to sustain its burden under 8 U.S.C. § 1361 to establish that Csemiczky was eligible to be classified as an employee based immigrant. (Def.'s State, ¶ 27; Adm. Rec., p. 13). Accordingly, the appeal was dismissed. (Id.)

The notice of decision dated November 21, 2003, which was forwarded to counsel, specifically stated that "[a]ny motion to reconsider must be filed within 30 days of the decision that the motion seeks to reopen[,]" and "must be filed with the office that originally decided your case." (Def.'s State, ¶¶ 28, 33; Adm. Rec., p. 7). To be timely, Petitioner's motion to reconsider had to be filed on or before December 24, 2003. (Def.'s State, ¶ 30). The record reflects that Petitioner's Motion to Reconsider was en route to the AAO in Washington, D.C. on December 24, 2003, and did not arrive at the Vermont Service Center, the office that originally decided the case, until January 12, 2004, fifty-two (52) days after the AAO decision was issued. (Def.'s State, ¶¶ 32, 34-35). On January 11, 2005, the AAO rejected the Motion to Reconsider as untimely, pursuant ...

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