Appeals Court Creates Right of I-140 Revocation Notice to New AC21 Sponsor Employer

In an August 3, 2016 opinion, the U.S. Court of Appeals for the Seventh Circuit held that in situations where beneficiaries of I-140 petition have ported their I-485 adjustment of status application to a new employer pursuant to the AC21 portability provisions, USCIS is required to provide a notice of its intent to revoke the earlier I-140 petition to the new AC21 employer but not to the beneficiary.

The case is Musunuru v. Lynch and we have the full opinion.   An important note is that the Musunuru is related to another recent case, Mantena v. Johnson, regarding to USCIS’s obligation to provide a notice in I-140 revocation proceedings.   See our analysis of the Mantena case.

Background of the Musunuru Case

In 2004 Mr. Musunuru was working Vision Systems Group (“VSG”).   VSG secured approvals of a labor certification and an I-140 petition for Mr. Musunuru with a priority date of February 2004 under the EB-3 India category.   A year or so later, when his EB-3 priority date became current, Mr. Musunuru filed his I-485 adjustment of status application and in 2010, after his I-485 had been pending for more than 180 days, he switched employers pursuant to the AC21 portability provisions to Crescent Solutions (“Crescent”).     In early 2011, Crescent filed a new labor certification on behalf of Mr. Musunuru seeking approval under the EB-2 preference category and retention of the 2004 priority and the Crescent I-140 petition was approved while retaining the February 2004 priority date.

In the meantime, around April 2011, the owners of VSG pleaded guilty to unlawfully hiring aliens and mail fraud involving an unrelated H-1B case.  The VSG owners were debarred from the labor certification program and VSG dissolved shortly thereafter.   USCIS sought to revoke the I-140 petition on behalf of Mr. Musunuru and they sent a notice of their intent to VSG which at that time had closed down operations.   VSG did not respond and USCIS revoked the I-140 petition for Mr. Musunuru with a finding of fraud which meant that Mr. Musunuru would lose his earlier priority date.   Mr. Musunuru was not made aware of the earlier I-140 revocation and he was not given an opportunity to respond or provide any information to establish that his earlier I-140 petition was not fraudulent.

In 2012 USCIS sought to revoke the subsequent Crescent I-140 petition.   Crescent defended successfully their I-140 petition but USCIS reverted the priority date claiming that because the earlier VSG I-140 petition had been revoked due to fraud, Crescent cannot claim the benefit of the 2004 priority date; instead, Crescent’s I-140 petition was assigned a 2011 priority date.    Subsequently, USCIS denied the pending I-485 petition for Mr. Musunuru claiming that the I-485 application could not rely on VSG’s revoked I-140 petition at the time it was filed because of the fraud finding.

What is the Current Process and Why Is It a Problem?

Under current practice, when USCIS seeks to revoke an approved I-140 petition, they are required to inform only the petitioning employer and give them an opportunity to respond to the allegations giving rise to the revocation proceeding.    As a result, when USCIS seeks to revoke an I-140 due to fraud or material misrepresentation, they provide a notice to the petitioning employer with an opportunity to respond to the allegations.

The problem is that in many cases (including Mantena v. Johnson and Musunuru vs. Lynch cases), the beneficiary may have already filed an I-485 adjustment of status petition and subsequently changed employers pursuant to the relevant provisions of AC21.   In such cases, the petitioning employer is not often not interested (or unable, if out of business or have changed addresses) to respond to the I-140 revocation proceeding and “defend” the I-140 petition on behalf of a former employee.    When the I-140 petition is revoked due to fraud or misrepresentation, USCIS promptly would deny the pending I-485 adjustment of status application and, without much notice, the beneficiary may be out of status, out of permission to work, unable to retain their priority date and, likely, unable to obtain additional H-1B time after having used the six-year H-1B limit.

The Musunuru Decision

During the appeal process, USCIS argued that the relevant regulations do not create an obligation to notify the beneficiary of an employment-based petition; this obligation is restricted to the sponsoring petitioning employer.   Musunuru claimed that because of the AC21 portability regulations, the Congressional intent was to expand the notice regulations to give visa beneficiaries a notification right as they become an “affected party” as a result of the AC21 porting.

In its holding, the Seventh Circuit agreed with Musunuru that the AC21 portability regulations expanded who may be considered an affected party.  However, after examining the regulations and Congressional intent in the AC21 regulations, the Court held that Musunuru’s new employer, Crescent, was entitled to a notice and an opportunity to respond or challenge the revocation of the prior employer’s I-140 petition.   In AC21 porting cases, the court held, the “new employer must be treated as the de facto petitioner for the old employer’s visa petition” and as such, the “new employer is entitled under the regulations to pre-revocation notice and an opportunity to respond.”

The court specifically highlighted that this right is only limited to the new sponsor employer and does not include the sponsored beneficiary.   As a result, beneficiaries do not have a right of notice or to challenge an adverse decision on their prior I-140 petition.

A Notification Does Not Always Mean Ability to Defend or Prevent a Revocation

It should be noted that just because USCIS may have to provide a notice to the new AC21 sponsoring employer does not mean that an I-140 revocation may be prevented by the new AC21 employer.     When USCIS seeks to revoke an I-140 due to fraud or misrepresentation, they often allege misconduct on the part of the initial sponsoring employer and in this kind of situations the new employer (presumably working together with the beneficiary) may not be able to do much even if they have a notice of the proceeding.

At a minimum, the I-140 intent to revoke notification would serve as an advance warning to the beneficiary and their new employer that the I-485 and its benefits such as EAD work authorization and advance parole may end soon.    The possible options would certainly vary on a case-by-case basis, but having an advance warning would certainly help affected foreign nationals, their families and their new employers to seek alternatives.

Reconciling the Mantena and Musunuru Decisions

The December 2015 Mantena decision was actually based on I-140 fraud revocation with the same employer, VSG.   Both cases are factually very similar, especially for the notification right analysis.   In Mantena, the Second Circuit held that there is a notification right, but did not specifically state which of the parties — the petitioner or the beneficiary — has the right of notification and to challenge the revocation.    The Mantena court remanded the case back to the District Court for determination on who has the notification right.

The Musunuru court acknowledged the Mantena decision and went further in specifically holding that the notification right vests with the new sponsor employer and not the beneficiary.

Importance of I-485 AC21 Porting and Proactively Notifying USCIS of Change of Employers (and Perhaps Retaining H-1B Status)

In light of the Musunuru decision, it becomes even more important to consider notifying USCIS of changing employers pursuant to AC21 based on I-485 adjustment of status pending for more than 180 days to same or similar position.

A very common question we get from prospective AC21 porters is whether USCIS AC21 notification is required. Technically, invoking AC21 and porting an I-485 to a new employer is automatic.  In other words, by meeting the AC21 requirements (e.g. switching to a different employer and by working in a “same or similar job”) the individual has  successfully taken advantage of green card portability provisions of AC21.  However, without proactively informing them, USCIS does not know that the individual has changed job.   As a result, they may not know that the individual has a new AC21 employer and USCIS would not know who is the new employer entitled to the notice and challenge right of the prior I-140 petition.

As a result, even though it may not be technically required at the time of AC21 porting, we recommend that it is best to notify USCIS of the job change and to inform USCIS that AC21’s requirements have been met as soon as possible.   Please see our AC21 article for other reasons why it is a good idea to proactively invoke AC21 and inform USCIS.

Seventh Circuit Decision Does Not Mean Uniform USCIS Application (As Least, Not Yet)

It is important to note that this decision was handed by the Seventh Circuit Court of Appeals which has jurisdiction over the states of Illinois, Indiana and Wisconsin.   It is unclear how USCIS would proceed in complying with this decision — our hope is that they will have adopt a uniform approach and adopt a notification practice for all I-140 revocation cases.

Conclusion

We applaud the Seventh Circuit’s decision to require notification in certain revocation cases when the beneficiary has changed employers pursuant to AC21.   As USCIS is considering expanding the I-140 regulations to add benefits of an approved (and not revoked due to fraud or misrepresentation I-140), the significance of an I-140 to a beneficiary is even greater.     While we recognize that in many cases the new employer may not be in a position to successfully defend the prior employer’s I-140 petition revocation, the sole fact of a notice may alert the foreign national and their new employer of a possible upcoming issue and allow them an opportunity to seek alternatives.

Please do not hesitate to contact us if we can review your case, answer any questions or schedule a consultation.   We also invite you to subscribe to our free weekly immigration newsletter to receive timely updates on this and related topics.