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Barahona v. Napolitano

October 11, 2011


The opinion of the court was delivered by: Shira A. Scheindlin, U.S.D.J.



Oscar Antonio Moya Barahona ("Moya") brings this putative class action against Janet Napolitano, Secretary of Homeland Security, and Alejandro Mayorkas, Director of United States Citizenship and Immigration Services ("USCIS") ("Defendants"), in their official capacities. Moya alleges that in promulgating two regulations -- the Adjustment of the Immigration and Naturalization Benefit Application and Petition Fee Schedule, effective July 30, 2007 (the "2007 Regulation"), and the U.S. Citizenship and Immigration Services Fee Schedule, effective November 23, 2010 (the "2010 Regulation") -- USCIS has exceeded its authority under section 286(m) of the Immigration and Nationality Act ("INA"),*fn1 and that the Regulations are arbitrary, capricious, an abuse of discretion, and not in accordance with law.*fn2 Specifically, Moya alleges that the Regulations "bundle" fees for services, with the result that a large number of applicants pay for services that they do not want or need, cannot use, or do not receive, and that the Regulation establishes fees at rates that improperly include the costs of USCIS activities and expenses that are, at best, distantly related to the provision of services to the fee-paying applicants.*fn3

The parties have now cross-moved for summary judgment. For the reasons stated below, Moya's motion is denied and defendants' motion is granted.


A. The Parties

Since 2003, the Department of Homeland Security ("DHS"), through its component agency, USCIS, has been responsible for granting or denying immigration benefits to individuals, including naturalization, permanent residence, and asylum.*fn5 In connection with permanent residence applications, individuals may seek two interim benefits: employment authorization and travel documents.*fn6

The former allows an applicant to work while her permanent residency application is pending, while the latter allows the applicant to leave the United States without relinquishing her application for permanent residence.*fn7

Moya is a twenty-year-old citizen of Honduras who resides in the Bronx, New York.*fn8 On March 5, 2008, he applied for adjustment of status pursuant to section 245(h) of the INA, and paid the $930 fee plus the $80 fee for biometric services.*fn9

On March 25, 2008, Moya applied for the interim benefit of employment authorization "because he was required to pay for it as a condition of applying for permanent residence and determined that, should the adjudication of the permanent residence application be delayed, an employment authorization card could serve as a form of identification."*fn10 As a full-time high school student, he had no intention or need to work at the time.*fn11

On April 24, 2008, his application for adjustment of status was granted.*fn12 His employment authorization was approved approximately one month later, on May 20, 2008.*fn13 Because lawful permanent residency status automatically confers authorization to work, the employment authorization document was "worthless" to Moya by the time it was issued.*fn14 Moya did not apply for a travel document, as he had no intention of traveling.*fn15 In fact, had he traveled at that time, even with a travel document, there is a significant likelihood he would not have been permitted to re-enter the United States.*fn16 Thus, Moya was required to pay for the two interim benefits, even though he had no intention of working or traveling during the pendency of his application for lawful permanent residence.*fn17

Moya alleges that he will also be subject to fees under the 2010 Regulation. He will be eligible for naturalization on April 24, 2013, and if he decides to naturalize, he will need to file an Application for Naturalization (Form N-400) and pay the $595 filing fee.*fn18 If he chooses not to naturalize, his permanent resident card will have to be renewed when it expires on April 24, 2018, so he will have to file an Application to Replace Permanent Resident Card (Form I-90) and pay the $365 filing fee.*fn19

B. The Historical Background and Statutory Scheme Governing Immigration and Naturalization Fees Congress enacted the INA*fn20 to create a "'comprehensive federal statutory scheme for [the] regulation of immigration and naturalization.'"*fn21 Until the creation of DHS in 2003, the Attorney General was responsible for administering immigration and naturalization benefits.*fn22 The Department of Justice ("DOJ"), through its component agency, Immigration and Naturalization Services ("INS"), collected fees for processing and adjudicating immigration and naturalization applications pursuant to its promulgated regulations.*fn23

Prior to 1988, the INS's fee-setting authority was principally based on the Independent Offices Appropriations Act of 1952 ("IOAA"), which permitted federal agencies to collect user fees for "'a service or thing of value provided by the agency.'"*fn24 Those fees were deposited with the U.S. Treasury as "miscellaneous receipts."*fn25 The costs of the INS's administration of immigration and naturalization benefits was funded entirely by Congressional appropriations.*fn26

In 1988, Congress enacted INA sections 286(m) and 286(n).*fn27

Through that legislation, Congress directed that the expenses of administering immigration and naturalization benefits would be funded with the fees collected by the INS for its processing and adjudication of applications.*fn28 Pursuant to section 286(m), Congress established the Immigration Examinations Fee Account ("IEFA") as the depository for "all adjudication fees."*fn29 Under section 286(n), fees deposited in the IEFA were to be used to fund the "expenses in providing immigration adjudication and naturalization services."*fn30 Additionally, under section 286(j), the Attorney General had the authority to "prescribe such rules and regulations as may be necessary to carry out" sections 286(m) and (n), among others.*fn31 The conference report that accompanied the 1988 legislation noted that the IEFA funds were for "'enhancing naturalization and adjudication programs.'"*fn32

In 1990, Congress amended section 286(m) to provide: that fees for providing adjudication and naturalization services may be set at a level that will ensure recovery of the full costs of providing all such services, including the costs of similar services provided without charge to asylum applicants or other immigrants. Such fees may also be set at a level that will recover any additional costs associated with the administration of the fees collected.*fn33

The House Appropriations Committee recognized that the purpose of the 1990 amendment was to ensure that the IEFA funds would fund "'the entire cost of operating the Adjudications and Naturalization program.'"*fn34

In 2002, the INS was abolished and DHS was established.*fn35 Congress transferred to DHS responsibility for adjudicating immigration and naturalization benefits, functions that are performed by USCIS.*fn36 Through that process, defendants assert that "Congress reaffirmed that fees, and primarily the IEFA application fees, should fund the full cost of USCIS's processing and adjudicatory functions."*fn37 Section 477 of the Homeland Security Act ("HSA") "directs the Comptroller General of the United States to report to Congress, within one year, on 'whether [USCIS] is likely to derive sufficient funds from fees to carry out its functions in the absence of appropriated funds.'"*fn38

C. The 2007 and 2010 Fee Regulations

In 2007, DHS performed a comprehensive review and analysis of the level of application fees needed to fund the full costs of processing and adjudicating immigration and naturalization benefits.*fn39 That review revealed that DHS needed to increase application fees for the majority of immigration and naturalization benefits, including for naturalization and permanent residence applications.*fn40

DHS complied with notice-and-comment rulemaking in adjusting the IEFA fee schedule.*fn41 A notice of the proposed 2007 fee regulation was issued on February 1, 2007.*fn42 DHS received more than 3,900 comments and responded to issues raised by the comments by creating several types of fee waivers and exemptions.*fn43 The final 2007 fee regulation was published on May 30, 2007, and took effect on July 30, 2007.*fn44

In 2010, DHS undertook another comprehensive review of the IEFA fees, which revealed the need for further adjustment to fee levels.*fn45 On June 11, 2010, DHS invited comments on a proposed fee regulation and made its cost-modeling software available for public access.*fn46 DHS received 225 public comments, in response to which the agency waived and reduced certain fee amounts.*fn47 The final 2010 fee regulation was published on September 24, 2010 and took effect on November 23, 2010.*fn48 The 2010 fee regulation superseded the 2007 fee regulation.*fn49

D. DHS's Determinations of Appropriate Fee Levels

1. DHS's Interpretation of Its Fee-Setting Authority Under INA Section 286(m)

In the rulemaking process, DHS explained to the public its interpretation of section 286(m) and its view that the 2007 and 2010 fee regulations were consistent with that statutory authority.*fn50 DHS considers its fee-setting authority as deriving from INA section 286(m), not from the general authority of IOAA for federal agencies to charge user fees.*fn51 DHS accordingly views "its fee-setting authority under section 286(m) [as] 'an exception from,' and 'broader' than, 'the stricter costs-for-services-rendered requirements under the [IOAA].'"*fn52

Because section 286(m) provides for fees to be set at a level to recover the "'full costs' of providing immigration and adjudication services and other similar services . . . DHS determined that it is authorized to collect fees to fund the cost of improvements designed to enhance its capacity to administer immigration and naturalization benefits, and to ensure that it administers those benefits consistent with its statutory obligations and policy objectives."*fn53 DHS's view of the legislative history is that "Congress intended to allow DHS to set fees at a level sufficient for funding essential investments in USCIS's technology, staffing, and facilities."*fn54

DHS also received comments during the rulemaking period in 2007 and 2010 arguing for a contrary interpretation of DHS's fee-setting authority, based on a reading of Office of Management and Budget ("OMB") Circular A-25.*fn55 DHS considered those comments and rejected them, based on its view that "OMB Circular A-25 did not dictate how DHS was to interpret the costs that would permissibly be funded with IEFA fees."*fn56 First, DHS determined that the Circular does not control because the Circular "states that its provisions 'shall be applied' when agencies assess 'user charges under the IOAA'" while it "only 'provides guidance' for 'assess[ing] user charges under other statutes," such as INA section 286(m).*fn57 Second, DHS determined that the Circular is an ...

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