Free Opening Brief in Support - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

MOHAMMAD RAHMAN d/b/a, 7-11 FRANCHISE 11306 and ALVARO T. GRACIAS Plaintiffs, v. MICHAEL CHERTOFF, Secretary of the U.S. Dept. of Homeland Security; EMILIANO GONZALEZ, Director, U.S. Citizenship and Immigration Services; ROBERT P. WIEMANN, Director, Administrative Appeals Office; PAUL NOVAK, Director U.S. Citizenship and Immigration Services Vermont Service Center. Defendants.

Case No.: 07-434-***

PLAINTIFFS' OPENING BRIEF Charles M. Oberly, III (No. 743) Karen V. Sullivan (No. 3872) Oberly, Jennings & Rhodunda, P.A. 1220 Market Street, Suite 710 P.O. Box 2054 Wilmington, DE 19899 (302) 576-2000 ­ Telephone (302) 576-2004 ­ Facsimile [email protected] [email protected] -andDavid E. Piver The Law Office of David E. Piver 150 Strafford Ave, Suite 115 Wayne, PA 19087 (610) 975-4599 ­ Telephone (610) 687-2100 ­ Facsimile Attorneys for Plaintiffs

Dated: January 2, 2008

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TABLE OF CONTENTS Page TABLE OF AUTHORITIES..............................................................................ii I. II. III. IV. V. VI. INTRODUCTION..................................................................................1 ISSUE PRESENTED ON APPEAL.............................................................1 FACTS AND PROCEDURAL HISTORY.....................................................2 LEGAL FRAMEWORK...........................................................................6 SUMMARY OF THE ARGUMENT............................................................7 ARGUMENT.......................................................................................11 A. The AAO's Denial of the I-140 Filed on Behalf of Mr. Gracias Was Erroneous as a Matter of Fact and Law.................................................11 1. The AAO's complete disregard for the $50,000 line of credit Mr. Rahman had access to was erroneous because his access to that line of credit in and of itself demonstrates Mr. Rahman's ability to pay the proffered wage.................................................11 In addition to his access to a line of credit well in excess of the proffered wage, other sources of finances as documented in the record would have compelled as reasonable fact finder to conclude that Mr. Rahman had the ongoing ability to pay the proffered wage.....................................................................14

2.

B.

The Denial of the I-140 Filed By Mr. Rahman on Mr. Gracias'Behalf Was Irrational, Arbitrary, and Capricious and Therefore an Abuse of Discretion....................................................................................22 1. The AAO's decision in this case irrationally and inexplicably Departed from published guidelines for demonstrating the Ability to pay and therefore it cannot be upheld on appeal..................22 The AAO's decision in this case constitutes error as a matter of law because it disregarded an expert analysis of the financial documents in the record in favor of its own non-expert analysis of the documents in the record...................................................26

2.

VII.

CONCLUSION.....................................................................................32

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TABLE OF AUTHORITIES Cases Page

Abdille v. Ashcroft, 242 F.3d 477 (3d Cir. 2004)..........................................................7 Amanfi v. Ashcroft, 328 F.3d 719 (3d Cir. 2003) ........................................................23 Ambartsoumian v. Ashcroft, 388 F.3d 85 (3d Cir. 2004)...........................................27-28 American Federation of Labor v. Chertoff, 2007 WL 2972952 (N.D.Cal. 2007).....................26 Berishaj v. Ashcroft, 378 F.3d 314 (3d Cir. 2004) ...................................................9, 28 Butt v. Gonzales, 429 F.3d 430 (3d Cir. 2005)..........................................12, 13, 14, 31-32 Caushi v. Attorney General, 436 F.3d 220 (3d Cir. 2006).............................................8, 9 Dia v. Ashcroft, 353 F.3d 228 (3d Cir. 2003)..............................................7, 8, 12, 15, 22 Heckler v. Chaney, 470 U.S. 821 (1985)..................................................................23 Hondros v. U.S. Civil Service Commission, 720 F.2d 278 (3d Cir. 1983)........................23, 24 In re: Petitioner, 2004 WL 2897077 (INS Apr. 15, 2004)..............................................17 INS v. Yang, 519 U.S. 26 (1997) .....................................................................9, 23, 26 Jishiashvili v. Attorney General, 402 F.3d 386 (3d Cir. 2005).....................................12-13 K.C.P. Food Co., Inc., v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985)........................18, 19, 20 Ki Se Lee v. Ashcroft, 368 F.3d 218 (3d Cir. 2004).........................................10, 11, 29, 31 Leia v. Ashcroft, 393 F.3d 421 (3d Cir. 2005) ..................................................10, 27, 28 Lincoln v. Vigil, 508 U.S. 182 (1993) .....................................................................23 Lukwago v. Ashcroft, 329 F.3d 157 (3d Cir. 2003).......................................................28 Matter of Michael Herz Assoc., 19 I&N Dec. 558 (Comm. 1988) ...............................22, 26 Matter of Ranchito Coletero, 2002 INA 105 (Jan. 8, 2004) ...........................................17 O'Conner v. Attorney General, 1987 WL 18243 (D. Mass. 1987) .................11, 17, 18, 19, 20

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Cases

Page

Partyka v. Attorney General, 417 F.3d 408 (3d Cir. 2005)..............................................7 Purveegiin v. Gonzales, 448 F.3d 684 (3d Cir. 2006) ..................................................23 Sevoian v. Ashcroft, 290 F.3d 166 (3d Cir. 2002) .......................................................24 Sitar Restaurant v. Ashcroft, 2003 WL 22203713 (D. Mass 2003) ...................................17 Smriko v. Ashcroft, 387 F.3d 279 (3d Cir. 2004) ..........................................................7 Tongatapu Woodcrafts Hawaii, Ltd., v. Feldman, 736 F.2d 1305 (9th Cir. 1984) .............18, 19 Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill. 1982) ...............................................18, 19 U.S. v. Ryan-Webster, 353 F.3d 353 (4th Cir. 2003)......................................................2 Zhang v. Ashcroft, 382 F.3d 993 (9th Cir. 2004) ........................................................27 United States Code 5 U.S.C. § 706 .............................................................................................7, 22 28 U.S.C. §1746 ...............................................................................................2 United States Regulations 8 C.F.R. § 204.5(g)(2).........................................................................................6 8 C.F.R. § 274a.12(C)(9) .....................................................................................5 20 C.F.R. § 656.26 ...........................................................................................17 Miscellaneous Authorities Christine M. Flowers, Ability to Pay Issues For the Small Business, Immigration Law Daily (2004), at http://www.ilw.com/articles/2004,1223-flowers.shtm ...................................................7 Romulo Guevara, Procedural and Policy Changes For I-140 Petitions, Immigration Law Daily (2004), at http://www.ilw.com/articles/2004,0624-guevara.shtm....................................22, 23, 24, 25

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I.

INTRODUCTION This is an immigration matter in which the Plaintiffs, Mohammad Rahman d/b/a 7-11

Franchise 11306 and Alvaro Gracias seek judicial review of the denial of the I-140 Petition for Alien Worker (hereinafter "I-140") by the Administrative Appeals Unit of the U.S. Department of Homeland Security (hereinafter "AAO").1 The denial of the I-140 by the United States Citizenship and Immigration Services Vermont Service Center (hereinafter "Vermont Service Center") and the AAO decision upholding it were legally and factually erroneous, and this Court must now sustain Plaintiffs' arguments on appeal and enter declaratory judgment in their favor ordering USCIS to approve the I-140 filed on Gracias' behalf by Rahman. In the alternative, and at a minimum, based on the facts and law discussed below, the Plaintiffs assert that this Court should sustain their appeal and remand the case to USCIS for further consideration. II. ISSUE PRESENTED ON APPEAL Whether the USCIS erred as a matter of fact and law and abused its discretion in denying the Appellants' I-140 based on the Vermont Service Center's and AAO's determination that Rahman's filings did not demonstrate that he had the ongoing ability to pay Gracias the proffered wage of $38,740?2

The filing of an I-140 is the middle step in the process of the employer sponsored permanent presidency process for foreign workers. The I-140 is filed with the United States Citizenship and Immigration Service (hereinafter "USCIS") after the U.S. Department of Labor (hereinafter "DOL") certifies an Application for Alien Labor Employment Certification (hereinafter "ETA750"). In this case, the DOL Certified Rahman's ETA-750 on March 3, 2003. See Record of Proceeding at 146 (D.I. 7) (hereinafter "A.R. __"). Assuming that the I-140 an employer files on behalf of a proposed employee is approved, the third and final step in this process is for the employee to file an Application to Adjust to Permanent Resident Status on Form I-485 (hereinafter "I-485"). As the record in this case demonstrates, this third and final step in the employment based U.S. immigration policy is dependent upon USCIS' approval of the I-140.
2

1

Appellants preserved this issue for appeal in their briefs and memoranda submitted to the Vermont Service Center and AAO. See generally Plaintiffs' AAO Appellate Brief, A.R. 14-20. 1

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III.

FACTS AND PROCEDURAL HISTORY The Plaintiff Rahman owns and operates 7-11 Franchise 11306 in Wilmington, Delaware.

See, e.g., AAO Decision at 1, A.R. 1. He has owned and operated this business since 2001. See, e.g., AAO Decision at 8; A.R. 8 (noting that Rahman's tax returns indicate that he purchased the 7-11 Franchise in 2001). On July 29, 2002, Rahman initiated the employment-based immigration process on Mr. Gracias' behalf by filing Form ETA-750 with DOL. See generally ETA-750, A.R. 145-49. As certified, Form ETA-750 specifies the terms and conditions of Mr. Gracias' proposed employment with Rahman's 7-11 franchise and the process associated with form ETA-750 demonstrates that by potentially employing Gracias Mr. Rahman would not be displacing a qualified and available American worker. See id. at 146; see also U.S. v. RyanWebster, 353 F.3d 353, 355-56 (4th Cir. 2003) (discussing labor certifications process and stating, "When issued, a Labor Certification evidences the DOL's acknowledgment of two predicate facts: (1) sufficient United States workers are not able, willing, qualified, and available for a particular job; and (2) employment of a particular alien will not adversely effect the wages and working conditions of United States workers similarly employed."). As specified in the ETA-750 in this case, Mr. Gracias was to become the manager of Rahman's 7-11 Franchise in Wilmington, Delaware. See A.R. 146. In signing and submitting the ETA-750 to the DOL, Rahman attested under penalty of perjury to pay Mr. Gracias $745 per week, or $38,740 per year, in exchange for his services as a Manager. Id.3 Upon certification, Mr. Rahman was then eligible to file an I-140 on Gracias' behalf. The I-140 in this case was filed by Rahman on Gracias' behalf on or around April 21, 2003. See I-140 Filing Letter, A.R. 173.
3

This proffered wage of $38,740 is set by DOL as the "prevailing wage." In submitting a signed ETA-750 to the DOL the employer is attesting under the penalty of perjury in accordance with 28 U.S.C. § 1746 to comply with and pay the proffered wage to a proposed employee upon approval. See ETA-750 at 2, A.R. at 147. 2

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When Mr. Rahman filed the I-140 on Gracias' behalf, he submitted substantial evidence of his ability to pay the proffered wage in support of that petition. See, e.g., A.R. 173-74 (listing documents submitted in support of Rahman's I-140). Included in these documents were Rahman's tax returns, other documents detailing his personal finances and materials explaining the supporting financial relationship between 7-11 and its franchisees. Id. Although Rahman believed that these materials were sufficient to demonstrate his ability to pay Gracias the proffered wage, the Vermont Service Center disagreed and, on March 29, 2004, issued a document known as a Request for Additional Evidence (hereinafter "RFE") in response to Rahman's initial filing. See I-140 RFE, A.R. 176-77 (requesting further evidence of Rahman's ability to pay Gracias the proffered wage). Rahman responded to the Vermont Service Center's RFE by timely submitting further substantial evidence in support of his ability to pay the proffered wage on June 22, 2004, as well as a detailed legal argument articulating the reasons why Mr. Rahman could afford to pay Mr. Gracias the proffered wage in accordance with the approved ETA-750. See generally RFE Response, A.R. 178-260. In particular, Rahman retained the services of a certified public accountant (hereinafter "CPA") to assess his financial situation and specifically offer his expert opinion and analysis of Rahman's ability to pay the proffered wage. See generally Caputo Letter, A.R. 35-37. Rahman submitted the accountant's report concerning the financial health of his business with his RFE response. Id. That report concluded that Rahman clearly had the ability to pay the proffered wage despite the negative or small profits shown on his tax returns due to his choice of accounting methods. Id. Ultimately, the CPA described in great detail why the evidence in the record, as well as standard business practices, demonstrated that Rahman could pay the proffered wage pursuant to the terms specified in the approved ETA-750. Id.

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Despite these detailed submissions, on September 22, 2004, the Vermont Service Center denied the I-140 filed by Rahman on Gracias' behalf. USCIS I-140 Denial, A.R. 11-13. In response to the Vermont Service Center's denial of the I-140 filed on Gracias' behalf, Mr. Rahman timely filed an appeal with the AAO on October 26, 2004. See I-290B Filing Receipt, A.R. 10. In his brief in support of that appeal, Rahman presented the evidence that he submitted to the Vermont Service Center in support of the I-140 filed on Gracias' behalf and argued that the Vermont Service Center's denial of that petition was erroneous because it failed to meaningfully consider the totality of Rahman's financial circumstances as a sole-proprietor. See A.R. 21-99 (containing evidence submitted by Rahman in support of his AAO Appeal). After setting forth the legal framework for assessing whether an employer has demonstrated its ability to pay a prospective employee's proffered wage and summarizing Rahman's arguments on appeal, the AAO summarized the evidence submitted by Rahman in support of the I-140 filed on Gracias' behalf and determined that the evidence did not demonstrate that Rahman had the ability to pay Gracias' proffered wage. See AAO Decision at 4-9, A.R. 4-9. The AAO rejected Rahman's argument that the case law that the Vermont Service Center based its denial on was inapplicable to the instant matter because of the fact that Rahman is a sole proprietor, whereas the businesses involved in the cases cited by the Vermont Service Center for support were incorporated businesses. See A.R. 5. Second, the AAO did not accept Rahman's assertion that the reason why his tax returns demonstrated losses or small profits was directly related to his choice of accounting method selected for tax purposes, not immigration purposes, to reduce or eliminate his tax liability. Id. The AAO refused to assess Rahman's ability to pay the proffered wage as a sole proprietor in any way other than the manner in which

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he presented his finances to the IRS for tax purposes because it believed that it had no obligation to do so. Id. Next the AAO discarded the Petitioner's assertions regarding his ability to pay the proffered wage as indicated on the cash flow statements submitted by Rahman in support of his I-140. Id. at 6. The AAO stated that these reports were not demonstrative of his ability to pay the proffered wage because they were not audited. Id. In a related note, the AAO also discounted the Petitioner's attestation that his wife's position's duties, who was employed at the 7-11 for the period of time during the pendency of the I-140, would be replaced by Gracias when his I-140 and subsequent I-485 employment authorization were approved for Gracias, and that the money used to compensate her in the past would be available in the future to compensate Gracias. Id.4 The AAO said that, even if it were to consider wages paid to Rahman's wife in the past as potential money available to compensate Gracias in the future, this argument was severely undercut by the fact that Rahman did not describe what his wife's duties were at the 7-11, and therefore it could not ascertain whether Gracias would actually be replacing her. Id. In addition, the AAO rejected Rahman's arguments that his personal assets, his access to a $50,000 line of credit, his satisfaction of several significant financial obligations, which would free up additional financial resources for Rahman to use to pay the proffered wage and support his family, and evidence that the business years of 2002 and 2003 were anomalous, demonstrated that he had the ongoing ability to pay Gracias the proffered wage. Id. at 6-9. For these reasons, the AAO stated that the Vermont Service Center properly denied the I-140 because Rahman

Once an alien properly files an I-485, he is eligible to apply for and receive an employment authorization document which he can renew for the period of time that his I-485 is pending with USCIS. See 8 C.F.R. § 274a.12(c)(9). 5

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failed to demonstrate that he had the ongoing ability to pay the proffered wage to Gracias for the required period. As set forth infra, the AAO's decision to uphold the Vermont Service Center's denial of the I-140 filed on Gracias' behalf by Rahman was erroneous as a matter of fact and law and an abuse of discretion. Accordingly, Plaintiffs respectfully request that this Honorable Court enter declaratory judgment in their favor and order USCIS to approve the I-140 filed on Gracias' behalf by Rahman. Alternatively, and at a minimum, Plaintiffs request that this Honorable Court enter judgment on their behalf and remand this case to the AAO for further consideration of the totality of the Petitioner's financial circumstances as a sole proprietor consistent with the facts and law as discussed in detail below. IV. LEGAL FRAMEWORK This case concerns a single USCIS regulation. See 8 C.F.R. § 204.5(g)(2); see also AAO Decision at 2, A.R. at 2. In order to successfully petition for an immigrant worker by filing an I140, a prospective employer must demonstrate that he has the ability to pay the proffered wage as specified on the ETA-750. See id. The regulation requires the employer to show that he has the financial ability to pay the proffered wage from the date that he files the ETA-750 with the U.S. Department of Labor until the date upon which the proposed employee obtains U.S. Permanent Residency. 8 C.F.R. § 204.5(g)(2). A prospective employer's ability to pay the proffered wage is determined by analyzing the petitioning employer's annual reports, his tax returns, or audited financial statements. Id. Furthermore, in "appropriate cases," USCIS can consider an employer's ability to pay the proffered wage based on other sources of evidence, such as "profit/loss statements, bank account records, or personnel records." Id. Accordingly, based on the framework established by 8 C.F.R. § 204.5(g)(2) and the facts in this case as

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discussed above, in order for Rahman to prevail on the merits of this case, he must demonstrate that he had the ability to pay Gracias the proffered wage from July 29, 2002, the date that he filed an ETA-750 with the Department of Labor, until April 22, 2003 ­ the date upon which Gracias applied for permanent residency with the Department of Homeland Security.5 This Honorable Court reviews allegations of legal error brought under the Administrative Procedure Act de novo. See, e.g., Partyka v. Attorney General, 417 F.3d 408, 411 (3d Cir. 2005); see also Smriko v. Ashcroft, 387 F.3d 279, 282 (3d Cir. 2004). This Honorable Court reviews the factual errors of administrative adjudicators to determine whether substantial evidence in the record would compel a reasonable mind to overturn the underlying decision. See, e.g., Dia v. Ashcroft, 353 F.3d 228, 249 (3d Cir. 2003); see also Abdille v. Ashcroft, 242 F.3d 477, 483-84 (3d Cir. 2004). Based on the facts in the record and the law as discussed in detail below, Plaintiffs respectfully assert that the AAO erred as a matter of law and fact and abused its discretion in denying his I-140. Accordingly, Plaintiffs respectfully request that this Honorable Court reverse the AAO's denial of that Petition and enter judgment in the Plaintiffs' favor. V. SUMMARY OF THE ARGUMENT The AAO's denial of Rahman's I-140 was an abuse of discretion because it was arbitrary, capricious, irrational and contrary to the law. See 5 U.S.C. § 706. When the facts contained in
5

On at least one occasion, the Service has stated in published opinions that in the year in which an employer files an ETA-750, he is only required to demonstrate that he has the ability to pay the pro-rated proffered wage for the portion of the year that remains as of the date the ETA-750 is filed. See, e.g., Christine M. Flowers, Ability to Pay Issues For the Small Business, Immigration Law Daily (2004), at http://www.ilw.com/articles/2004,1223-flowers.shtm (discussing non-precedential AAO decision in which the AAO made the "eminently reasonable determination" that a petitioning employer need only pay the prorated share of a proffered wage for the year in which he files an I-140) (attached hereto as Exhibit A). Accordingly, in this case Gracias had to demonstrate that he had the ability to pay Gracias 42.7% of the proffered wage in 2002. Id. 42.7% of the proffered wage in this case amounts to $16, 542. 7

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the record are correctly assessed in light of the binding and persuasive case law, a reasonable fact finder would be compelled to conclude that the AAO's decision must be overturned for five primary reasons. First, the AAO's decision indicating that it might have considered "existent loans," but not Rahman's $50,000 line of credit (an amount well in excess of the proffered wage) was arbitrary and capricious because the AAO's decision to consider one form of credit as evidence of the ability to pay a proffered wage, but not another does not "flow in a reasoned way" from the facts in the record. See, e.g., Caushi v. Attorney General, 436 F.3d 220, 226 (3d Cir 2006) (citing Dia v. Ashcroft, 353 F.3d 228, 250 (3d Cir. 2001)); see also infra, pp. 11-14. Second, the AAO's decision must be reversed because it failed to meaningfully consider other evidence in the record that, when properly considered as a whole, demonstrates that Rahman had the ongoing ability to pay Gracias the proffered wage from the resources of this business and his personal resources available to his business. See infra, pp. 14-21. This evidence included documents related to Rahman's checking account and retirement savings account, the fact that he had recently satisfied several significant personal financial obligations, an expert analysis of his overall financial situation by a CPA, and several other documents discussing a 7-11 franchisee's relationship with the 7-11 corporation. Id. Because Rahman's 711 franchise is structured as a sole-proprietorship, his unfettered ability to draw upon portions of all of his assets, credit, and other business resources is something that the AAO failed to consider in a meaningful manner. See, e.g., AAO Decision at 6, A.R. at 6 (discussing fact that Rahman had satisfied the loan and completed the car payments on his BMW). Because the AAO failed to meaningfully consider the totality of Rahman's financial circumstances as a successful owneroperator of an internationally recognized franchise business, its decision cannot be squared with

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the evidence in the record, and, therefore, its decision amounts to an abuse of discretion that should now be overturned. See, e.g., Caushi, 436 F.3d at 226. This Court should also overturn the AAO's decision for a third reason ­ because it irrationally departs from standards published by the Vermont Service Center to be used by USCIS adjudicators to assess an employer's ability to pay the proffered wage in effect at the time the I-140 in this case was filed. See infra, pp. 22-26. In 2002 when Rahman submitted the I-140 on Gracias' behalf, the Vermont Service Center adjudicated I-140s pursuant to the standards issued in a policy memorandum published in 1994 containing standards that were considerably more flexible than the standards in place in 2004 when the AAO denied Plaintiffs' appeal. See id. Because its decision in 2004 appears not to have applied the standards in place at the time the I-140 was filed, its decision is a departure from established agency guidelines and is, therefore, an abuse of discretion. See, e.g., INS v. Yang, 519 U.S. 26, 32 (1997) (stating that when an agency voluntarily circumscribes its adjudicative discretion it must consistently adhere to its own guidelines). Fourth, the AAO's decision cannot be upheld is because its treatment of the expert assessment by Rahman's CPA violates precedential case law concerning the deference that administrative adjudicators should give to expert analysis of the facts in a case provided by individuals seeking immigration benefits. See infra, pp. 26-32. The Third Circuit has repeatedly held in the immigration context that administrative fact finders are "obliged" to meaningfully consider evidence submitted by individuals seeking immigration benefits in support of their cases. See, e.g., Berishaj v. Ashcroft, 378 F.3d 314, 325 (3d Cir. 2004). Part and parcel of meaningful consideration of the evidence submitted by aliens in support of their cases is giving deference to expert analysis of the facts provided by individuals seeking immigration benefits

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when such evidence is submitted. See Leia v. Ashcroft, 393 F.3d 421, 434-35 (3d Cir. 2005) (finding administrative adjudicator's determination that specific expert assessment in the record was "just totally irrelevant" to be reversible error). In this case, the AAO essentially deemed the letter from Mr. Rahman's CPA as "totally irrelevant" because it was unaudited. See, e.g., AAO Decision at 5; A.R. at 5 (dismissing Caputo's analysis of Rahman's finances because of the manner in which his earnings are reported to the IRS for tax purposes). In Leia, this level of disregard for expert analysis of the facts in a case involving an individual seeking immigration benefits was condemned by the Third Circuit and that case was remanded to the agency for further consideration with proper deference accorded to the expert analysis of the financial documents in the record in the case. See 393 F.3d at 421. Likewise, as discussed infra at pp. 2632, the AAO's decision in this case reflects an attempt by an executive agency charged with interpreting immigration law to assert that it has expertise in financial analysis and tax law. See, e.g. AAO Decision at 5, A.R. at 5 (asserting that accountant Caputo's letter did not demonstrate the ability to pay ­ even when Rahman's finances are viewed from an alternative method of accounting). The Third Circuit recognized in Ki Se Lee v. Ashcroft, that courts must provide due deference to executive immigration agencies and their subdivisions, such as the AAO, only with respect to immigration matters. See 368 F.3d 218, 225 n.10 (3d Cir. 2004). Because the AAO's decision in this case attempts to substitute its own financial analysis of the documents in the record for the expert analysis of the financial information in the record provided by a CPA, its determination that the documents in the record failed to demonstrate that Rahman had the ongoing ability to pay the proffered wage, must now be overturned. Id. Given the similarity between the circumstances in Leia and the erroneous nature of the AAO's decision in this case,

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as well as the AAO's impermissible attempt to assert expertise in finance or tax law as the Third Circuit suggested was inappropriate in Ki Se Le, this Court should reverse the AAO's decision. VI. A. ARGUMENT The AAO's Denial of the I-140 Filed on Behalf of Mr. Gracias Was Erroneous as a Matter of Fact and Law. The instant case is one that involves a sole-proprietorship franchise of a well-known international franchisor. USCIS recognizes that assessing the ability of a sole-proprietorship's to pay the proffered wage requires a holistic analysis of the totality of the financial circumstances of a sole-proprietor's business, including his personal finances. See, e.g., O'Conner v. Attorney General, 1987 WL 18243 (D. Mass. 1987). Here, the Vermont Service Center, as well as the AAO failed to appropriately consider the facts in the record detailing the totality of Rahman's finances which demonstrate his ability to pay the proffered wage as required. When the record in this case is appropriately considered, a reasonable mind would be compelled to conclude that Mr. Rahman had the ongoing ability to pay Mr. Gracias the proffered wage as stated on his ETA-750 and, therefore, also that his I-140 should have been approved by USCIS. 1. The AAO's complete disregard for the $50,000 line of credit Mr. Rahman had access to was erroneous because his access to that line of credit, in and of itself, demonstrates Mr. Rahman's ability to pay the proffered wage.

The first error in the AAO's analysis of this case was its incorrect treatment of the fact that Mr. Rahman possessed a $50,000 line of credit with Wachovia Bank; Mr. Rahman's access to that line of credit, in and of itself, exceeds the proffered wage. See AAO Decision at 7; A.R. 7. Although the AAO labeled the use of lines of credit as "an integral part of any business operation," it irrationally discarded Mr. Rahman's ability to access his line of credit as evidence of his ability to pay the proffered wage. As a sole-proprietor, he had unfettered ability to use his line of credit for any purpose he saw fit ­ including paying the proffered wage to Mr. Gracias.

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See id. The AAO's statements regarding Mr. Rahman's ability to use his line of credit to supplement his business's ability pay the proffered wage in this case is internally inconsistent. The AAO stated that, although it would not consider the effect of Mr. Rahman's access to a $50,000 line of credit on his ability to pay the proffered wage, it might have considered an "existent loan" in the same amount. Id. (incorrectly excluding Mr. Rahman's access to a line of credit, while at the same time inferring that it would have considered other loans as evidence of his ability to pay the proffered wage). Lines of credit and loans, the latter of which the AAO stated could have been used by Rahman to demonstrate the ability to pay the proffered wage, are conceptually identical because both forms of credit depend on a financial institution's assessment of creditworthiness and both must ultimately be repaid to the lender. This schizophrenic attempt by the AAO, indicating that it would have considered loans already taken out by Mr. Rahman but not available credit issued to Mr. Rahman in the form of a line of credit from Wachovia Bank, defies common sense and fails the substantial evidence test. See, e.g. Dia, 353 F.3d at 350. Both forms of credit would require Rahman to be deemed credit worthy by a financial institution and eventually repay the lender. Accordingly, because the AAO's decision defies common sense, its decision runs afoul of precedential Third Circuit case law and must be overturned. See Butt v. Gonzales, 429 F.3d 430, 438 (3d Cir. 2005) (requiring all actions of administrative adjudicators to be based on common sense). Accordingly, this Honorable Court must reverse the AAO denial, and enter judgment in the Plaintiffs' favor. In the immigration context, the Third Circuit has ruled time and again that administrative fact finders' decisions must be "grounded in the record" and that they must be based on "specific, cogent" reasoning. See, e.g., Dia v. Ashcroft, 353 F.3d 328, 249-50 (3d Cir. 2001). In Jishiashvili v. Attorney General, the Third Circuit refined its general holdings in cases like Dia

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and held that an administrative fact finder's decision that is internally inconsistent, such as the AAO's decision in this case, with respect to treating two very similar forms of credit differently cannot be upheld on appeal. See 402 F.3d 386, 296 (3d Cir. 2005). When the holding in Jishiashvili is applied to this case, it is clear that this Honorable Court should reverse the AAO's denial of Rahman's I-140 because of its failure to recognize the importance of Rahman's ability to use his line of credit, if and as necessary, in order to pay Gracias the proffered wage rate. See id. In Jishiashvili, a fact finder stated that he believed that an alien seeking asylum was a credible witness, but ultimately denied his asylum application without explaining why his credible testimony about the persecution he experienced failed to qualify him for relief. Id. In response to the fact finder's odd conclusion denying the alien the relief he was seeking after labeling his testimony as credible, the Third Circuit stated that his decision was the product of speculation and conjecture, rather than the product of "specific, cogent reason[ing]." Id. at 396. Although the facts and circumstances involved in Jishiashvili do not precisely dovetail with the employment-based immigration context of the instant case, when the Third Circuit's general reasoning and rationale in Jishiashvili are applied to the this case, it is clear that the AAO's decision must be reversed because its reasoning with respect to the line of credit is speculative and not cogent. If the AAO would have accepted proof that Mr. Rahman had more than the amount of the proffered wage in available in existent loans, it defies common sense for the AAO to suggest that he could not similarly use an existing line of credit for the same purpose because both sources of credit are monies that are existing monies available to Rahman. See Butt v. Gonzales, 429 F.3d 430, 438 (3d Cir. 2005) (holding that, "In the law, as in all things, common sense must be our guide); see also Jishiashvili, 402 F.3d at 396 (holding that in order to be upheld on appeal fact finder's decisions must be internally consistent).

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Likewise, the Third Circuit's decision in Butt, when applied to the facts in this case, should compel this Court to decide in the Plaintiffs' favor. In that case, also involving an asylum seeker, the Third Circuit condemned fact finding that revolved around a "strained interpretation" of the phrase "under the care of" in a letter from a doctor describing medical treatment that an asylum seeker received prior to fleeing to the United States. See 429 F.3d at 434-35. The fact finder in that case took the phrase "under the care of" to mean that the asylum seeker received continuous in-patient medical care for injuries he sustained, as opposed adopting to the commonly accepted commonsense meaning of that phrase ­ that he was simply receiving a course of treatment from a doctor for a specific period of time. Id. Again, although the facts here are not on all fours with those presented in Butt, the broader implications of the Third Circuit's decision in Butt demonstrate the erroneousness of the AAO's decision holding that Mr. Rahman's access to a $50,000 line of credit ­ an amount that in and of itself exceeds the proffered wage ­ did not demonstrate that he had the ongoing ability to pay the proffered wage. See generally 429 F.3d at 434-38; compare A.R. 7. Much like the inappropriate "strained" interpretation of the phrase "under the care of" in Butt, the AAO's attempt to suggest that one form of access to credit in excess of the proffered wage failed to demonstrate an ability to pay the proffered wage ­ even though it would have considered another source of credit as being available to satisfy his burden of demonstrating his ability to pay the proffered wage ­ cannot be upheld by this Honorable Court on appeal. Id. Accordingly, because Mr. Rahman possessed access to a $50,000 line of credit which he could have drawn on in order to pay the proffered wage, the AAO's decision was error as a matter of fact and law. 2. In Addition to His Access to a Line of Credit Well In Excess of the Proffered Wage, Other Sources of Finances as Documented in the Record Would Have Compelled a Reasonable Fact Finder to Conclude that Mr. Rahman Had the Ongoing Ability to Pay the Proffered Wage.

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In addition to the fact that Mr. Rahman had the ongoing ability to pay the proffered wage because of his access to a line of credit in excess of the proffered wage itself, other financial resources documented in the record, when meaningfully considered as a whole, would have convinced a reasonable fact finder that Rahman had the ability to pay Gracias the proffered wage. Therefore, the AAO's denial of his I-140 was erroneous as a matter of fact and this Court cannot uphold its decision, and it should enter judgment in the Plaintiffs' favor. See, e.g., Dia, 353 F.3d at 250. The record in this case contains several critical pieces of evidence that when, viewed through the lens of common sense and ordinary business practices, as documented and attested to by a CPA, demonstrate that the totality of Rahman's financial circumstances could amply afford the proffered wage. See generally AAO Decision at 1-9, A.R. 1-9 (citing reasons considered by the AAO as evidence that Mr. Rahman could not pay the proffered wage). For example, the AAO improperly rejected Mr. Rahman's argument that once Mr. Gracias began working for him, his wife would stop working at the 7-11, and that the wages previously paid to her would be available in the future to contribute to compensating Gracias. See, e.g., Caputo Letter at 1, A.R. 35. Rahman's CPA, with professional knowledge of Rahman's financial circumstances, indicated this would free up substantial amounts of money annually that Rahman could use to pay the proffered wage. Id. The AAO is correct in noting that the wages paid to Mrs. Rahman in the past are not, in and of themselves, sufficient to pay the proffered wage, but it was wrong to discount the prospective effect of this available money because when the salary that Rahman was using to pay his wife in 2002 and 2003 are considered in light of the totality of his finances, this money is relevant and important in demonstrating his ability to pay the proffered wage. See AAO Decision at 6, A.R. 6; compare Caputo Letter at 1, A.R. 35. In addition to his access to a form of credit that is regularly drawn upon by small owners

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of businesses to cover expenses like payroll in order to expand and grow their businesses, Mr. Rahman had substantial personal assets that he attested he was willing to use to pay for portions of Mr. Gracias' salary on an as needed basis to invest into the growth of his businesses. See Caputo 2002 Cash Flow Statement, A.R. 35. These assets include his personal checking account, his Roth IRA, and the estimated value of his home. Id. These are all forms of liquid capital commonly drawn upon by many sole-proprietors in the process of growing their businesses. Id. The importance of each of these assets was addressed by the Plaintiffs in their filings with USCIS and their relevance in terms of Rahman's ability to pay the proffered wage was also addressed by the CPA in his expert discussion of the totality of Rahman's finances. See, e.g., RFE Filing Letter, A.R. 178-83; see also Caputo Letter A.R. 35-39. In its denial, however, the AAO erroneously dismissed Caputo's professional analysis of Rahman's ample financial resources available to Rahman because it did not believe that any of these assets on their own demonstrated that Rahman had the ability to pay the proffered wage and because it did not think that the evidence in the record provided a precise enough picture of how much money could reasonably be derived from these assets in order to pay the proffered wage to Gracias. See AAO Decision at 6, A.R. 6 (stating that there was not information in the record regarding how much Mr. Rahman had been paying per month prior to paying off his loan for a BMW). The AAO's assessment of this part of the record is technically accurate, in that none of these assets alone listed by Rahman in his filing with USCIS demonstrate his ability to pay the proffered wage. However, when they are considered in their totality, it is clear that the AAO's consideration of these financial resources was flawed in that its own decision recognizes the legal standard that in the case of a sole proprietorship USCIS must assess the "totality" of an employer's finances as a whole in order to determine whether he or she has the ability to pay the

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proffered wage, as well as support his family. See AAO Decision at 3, A.R. 3. In their brief to the AAO, the Plaintiffs relied upon a decision from the Board of Alien Labor Certification Appeals (hereinafter "BALCA") to support the proposition that when considering a sole proprietor's ability to pay a proffered wage, an administrative fact finder should look at the totality of the proposed employer's finances, instead of merely looking at the employer's business's financial documents. See Plaintiffs' AAO Brief at 1, A.R. 14 (citing Matter of Ranchito Coletero, 2002 INA 105 (Jan. 8 2004)).6 Because the Plaintiffs based their argument to the AAO on a decision emanating from the DOL, the AAO stated that it was under no obligation to consider these arguments. AAO Decision at 3, A.R. 3 (stating that the AAO, as part of the Department of Homeland Security did not have to defer to a decision from the Department of Labor). The AAO's categorical dismissal of the Plaintiffs' request to have the totality of Rahman's finances considered by the AAO was unreasonable given the fact that this argument has been endorsed in the context of demonstrating an potential employer's ability to pay a proffered wage at the INS or DHS level by at least one U.S. District Court. See generally O'Conner v. Attorney General, 1987 WL 18243 (D. Mass. 1987).7 In O'Conner, the court held that because the AAO failed to look at the employers' finances as a whole, the AAO's denial of an I-140 filed for a foreign employee was arbitrary and
6

BALCA is an appellate tribunal within the U.S. Department of Labor that is responsible for considering appeals filed by employers when they believe that the Department of Labor erroneously denied an ETA-750 filed on behalf of a prospective employee. See 20 C.F.R § 656.26 (discussing jurisdiction and role of BALCA in the Alien Labor Certification proceed).

USCIS has attempted to suggest that O'Conner has been effectively overturned by a subsequent unpublished decision from the U.S. District Court in Massachusetts. See, e.g., In re Petitioner, 2004 WL 2897077 (INS Apr. 15, 2004) (citing to Sitar Restaurant v. Ashcroft, Civ. A. 0230197-MAP, 2003 WL 22203713 (D. Mass Sept. 18, 2003). However, the Massachusetts Court's decision in Sitar is distinguishable from O'Conner and from this case because of the fact that the potential employer in Sitar was organized as a corporation, as opposed to the sole proprietorships at the heart of O'Conner and of this case. 17

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an abuse of discretion. See 1987 WL 18243, *1. In fact, the O'Conner court noted that financial documents related to the employers' business, were merely "one aspect...of the entire financial picture." Id. Instead of narrowly fixating on the store's tax returns, the O'Conner court looked at real estate owned by the petitioning employer, the business's reputation, past profitability, and the fact that the store had been run successfully for ten years prior to the filing of the I-140 and concluded that when the information in these documents was properly analyzed, the I-140 should have been approved. Id. at *2. Furthermore, the O'Conner court noted that the cases cited by the INS to support its denial were distinguishable from the facts in O'Conner. Id. (distinguishing Ubeda v. Palmer, 539 F. Supp. 647 (N.D. Ill 1982), aff'd mem., 703 F.2d 571 (7th Cir. 1983), Tongatapu Woodcrafts Hawaii, Ltd. v. Feldman, 736 F.2d 1305 (9th Cir. 1984), and K.C.P. Food Co., Inc. v. Sava, 623 F. Supp. 1080 (S.D.N.Y. 1985) from facts in O'Conner). Interestingly, the cases that the O'Conner court found did not apply to that case are substantially the same cases that the AAO used in this case to attempt to claim that Rahman did not maintain the ability to pay the proffered wage. See generally AAO Decision; A.R. 1-9. This Court should adopt the persuasive rationale employed by the O'Conner court and reject the list of cases used by USCIS to deny Rahman's I-140. For example, in Ubeda, the documents in the record did not contain any information at all about the petitioning employer's ability to pay a governess a wage of $6,000 per year beyond merely providing evidence of the prospective employer's gross income. O'Conner, 1987 WL 18243 at *2; see also Ubeda, 539 F. Supp. at 648, 650. In Rahman's case, although his tax returns do not show profits in excess of the proffered wage, his ample line of credit alone does. Moreover, other documents in the record indicate that the totality of Rahman's financial situation could support paying the proffered wage to Gracias while at the same time providing for his family through a combination of his access to

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credit, the value of his personal real estate, the fact that he satisfied his mortgage and car loan, his business's reputation as part of an large international franchise corporation, and because several of the profit-draining charges on his tax returns were clearly one-time expenses associated with the purchase of his 7-11 franchise from an earlier owner. See, e.g., A.R. 21-99 (containing evidence submitted in support of Rahman's AAO appellate brief). Likewise, just as in O'Conner, the franchise that Rahman purchased was a going concern with substantial good will ­ a fact that the O'Conner court recognized as being significant to an employer's ability to pay a proffered wage. O'Conner, 1987 WL 18243 at *2. The AAO's summary dismissal of this fact was erroneous. This evidence separates this case from Ubeda in which no evidence other than documents related to the petitioner's gross income was submitted, and, therefore, as the court did in O'Conner, this Honorable Court, should overturn the AAO's decision. Similarly, the O'Conner court rejected the AAO's use of Tongatapu and K.C.P. Food Co. in that case because those cases were distinguishable from the facts in O'Conner. See 1987 WL 18243 at *2. For example, the O'Conner court stated that INS' use of Tongatapu to deny the petitioning employer's I-140 in that case was inappropriate because of the fact that Tongatapu related to a new business which could not rely upon past success as a prediction for future performance. Id.; see also Tongatapu, 736 F.2d at 1310 (noting that petitioner in that case attempted to base entire ability to pay on predicted future earnings). However, the business in O'Conner, much like Rahman's 7-11, was a well-established business. O'Conner, 1987 WL 18243 at *2; see Caputo Letter at 1; A.R. 35 (noting the 7-11 franchise's longevity). Accordingly, as the O'Conner court did, this Honorable Court should recognize that the underlying facts in Tongatapu are so substantially different from the facts in this case that it should not have been relied upon by the AAO to deny of the I-140 filed on Gracias' behalf of

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Rahman. Finally, O'Conner rejected the AAO's reliance on K.C.P. Food Co., Inc. because the documents in the record in that case "suggested an imminent demise" of the petitioner's business and "no financial ability to pay the beneficiary." O'Conner, 1987 WL 18243 at *2 (emphasis added). In this case, as discussed above and below, when the record is meaningfully considered as a whole, any reasonable fact finder would be compelled to conclude, either by relying solely on a line of credit in excess of the prevailing wage rate or that by utilizing some percentage of each of sources of financing discussed previously to which Rahman had unfettered access, he clearly had the ability to pay the proffered wage. See generally Caputo Letter, A.R. 35-38. Certainly nothing in the record in Rahman's case suggests that his business is about to collapse, as was the case in K.C.P. Food Co. See 623 F. Supp. at 1084-85; compare generally Caputo Letter, A.R. 35-38 (proving that Rahman maintained substantial cash balances at all times during the pendency of Gracias' visa petition). Therefore the AAO's flawed analysis should be reversed by this Honorable Court and judgment should be entered in favor of the Plaintiffs. Lastly, the AAO's statements related to the payments appearing on Mr. Rahman's 2002 tax returns regarding 7-11 franchise start up costs must be rejected by this Honorable Court because objective evidence in the record supports Rahman's assertions that these were not recurring expenses and would not prevent him from being able to pay the proffered wage in the future or afford to hire Gracias at the time he filed the I-140 on his behalf. AAO Decision at 8-9, A.R. 8-9. In its denial, the AAO rejected Mr. Rahman's assertion that charges listed on his 2001 and 2002 tax returns were one-time only costs imposed by 7-11 on new franchisees and would not impede his ongoing ability to pay the proffered wage. See Caputo Letter at 2, A.R. 37 (discussing isolated nature of "7-11 Charges"). The AAO incorrectly claimed that there was

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nothing in the record to support Mr. Rahman's assertion that these fees were indeed one time events. See AAO Decision 8-9; A.R. 8-9. In addition to the evidence submitted by Rahman's CPA, evidence elsewhere in the record indicates that there are substantial one-time payments that a franchisee must make to the company when he purchases and opens a 7-11 store. See Documents printed from 7-11's corporate website, A.R. 169-72 (discussing start-up costs and procedures of running a 7-11 Franchise). While the 7-11 materials note that the franchise charge will vary depending on the type of store that an individual is purchasing, those materials do indicate that there is a one time $10,000 charge for security money as well as other variable one-time start-up franchise fees. Id. Therefore, the AAO erred in failing to accept Caputo's explanation of how these charges do not prevent Rahman from having the ongoing ability to pay the proffered wage because evidence in the record explains both that the "7-11 charges" were not actual events in which Rahman experienced an outflow of cash and that these charges were not ongoing. See Caputo Letter, A.R. 35-38. As Caputo states in his letter, when Rahman's cash position in 2002 is considered properly, even with these large one time charges listed on his 2002 tax returns for tax purposes, Rahman had a cash balance of $135,340 on hand in 2002 when he filed for Gracias' I-140 ­ which is more than enough money to compensate Mr. Gracias pursuant to the terms of the ETA-750 and support his family at the same time. See Caputo Letter at 2, A.R. 37. Accordingly, this Court should enter judgment in the Plaintiffs' favor and remand this case to the AAO for approval of the I-140 filed by Rahman on Gracias behalf, or at a minimum for further consideration. Ultimately, the AAO's denial of the I-140 in this case suffers from its failure to consider as a whole the facts and evidence in this case. Whether the ample line of credit is considered alone, or if the information above is assessed in the aggregate, a reasonable fact finder would

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have been compelled to conclude this business had the ample ability to pay the proffered wage. In the aggregate, Rahman's cash balance of $135,343 at the end of 2002 in excess of three times the proffered wage, his access to a line of credit that exceeded the proffered wage, the business's continuously improving bottom line and reputation as franchisee of an internationally known corporation, and the satisfaction of some of Mr. Rahman's personal debts, such as his car payment and his mortgage, proved that Rahman had the ongoing financial resources required for the ability to pay the proffered wage for the period of time required. See Dia, 353 F.3d at 250.8 B. The Denial of the I-140 Filed By Mr. Rahman on Mr. Gracias' Behalf Was Irrational, Arbitrary and Capricious and Therefore an Abuse of Discretion. 1. The AAO's Decision in this Case Irrationally and Inexplicably Departed From Published Guidelines for Demonstrating the Ability to Pay and Therefore it Cannot be Upheld on Appeal.

The AAO's decision in this case departs from protocol in effect at that time Mr. Rahman filed this I-140 on Mr. Gracias' behalf, when he responded to the Service's RFE related to that Petition, and when he filed his appeal with the AAO. See, e.g., Romulo Guevara, Procedural and Policy Changes For I-140 Petitions, Immigration Law Daily (2004), at http://www.ilw.com/articles/2004,0624-guevara.shtm (discussing 1994 guidelines) (hereinafter "Guevara") (attached hereto as Exhibit B). Therefore, because the AAO's decision departs from this established protocol without providing a rational explanation for its departure, it must now be reversed by this Honorable Court pursuant to the Administrative Procedure Act. See 5 U.S.C. § 706. From 1994 until 2004, petitioners filing I-140s at the Vermont Service Center on behalf
8

It bears mention that in other business-immigration contexts, it is well settled that business owners are the best judges of what their companies need to do in order to be successful. See Matter of Michael Herz Assoc. 19 I&N Dec. 558 (Comm. 1988)(holding that business owners are better able to judge whether a proposed foreign employee has the skills required to perform a proposed job than federal agencies are). 22

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of potential employees, filed these petitions pursuant to the guidelines contained in the minutes from a 1994 meeting between the Vermont Service Center director and the AILA Service Center Liaison. See generally Guevara. The minutes of that meeting established significant guidance as to what potential employers need to demonstrate to the Service in order to demonstrate that they have the ongoing ability to pay a proffered wage. As discussed in detail below, the AAO's denial of the Plaintiffs' petition in this case was irrational, arbitrary, and capricious because it departed from these standards, which voluntarily constricted the Service's discretion to approve of deny I-140s. See, e.g., INS v. Yang, 519 U.S. 26, 32 (1997) (stating that when an agency voluntarily circumscribes its adjudicative discretion it must consistently adhere to its own guidelines); see also Hondros v. United States Civil Service Commission, 720 F.2d 278, 294 (3d Cir. 1983) (recognizing that executive agencies are bound by policies announced in less formal documents than formal rules or regulations). It is well-settled law that certain acts are "absolutely committed" to agency discretion. See, e.g., Purveegiin v. Gonzales, 448 F.3d 684, 689 (3d Cir. 2006). However, clear precedent from the Supreme Court and Third Circuit holds that the cases in which agency action is "absolutely" discretionary are few and limited to cases in which "a court could have no meaningful standard against which to judge the agency's action." Id. (citing Lincoln v. Vigil, 508 U.S. 182, 190-91 (1993) (quoting Heckler v. Chaney, 470 U.S. 821, 830 (1985)). In other cases, however, where an administrative agency has voluntarily placed limits on its otherwise "unfettered" discretion, that agency must strictly adhere to its self-restricting policies or risk having its actions declared to be arbitrary and capricious abuses of discretion by the courts. See Yang, 519 U.S. at 32; see also Amanfi v. Ashcroft, 328 F.3d 719, 728 (3d Cir. 2003) (reiterating the Supreme Court's statements in Yang regarding potential abuses of discretion by agencies

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when they depart from published information limiting their discretion). Additionally, and specifically in the immigration context, the Third Circuit has created a bifurcated analysis to determine whether an agency's actions, such as the AAO's denial of the I-140 filed by Rahman on behalf of Gracias, constitute abuses of discretion. See, e.g., Sevoian v. Ashcroft, 290 F.3d 166, 174 (3d Cir. 2002). In Sevoian, the Third Circuit stated that in order to determine whether an agency's actions constitute an abuse of discretion, a court should first assess whether underlying factual determinations made by the administrative adjudicator are supported by substantial evidence in the record. Id. Second, if the administrative adjudicator's factual determinations are not supported by substantial evidence, the court should assess whether the denial of a requested benefit was an abuse of discretion ­ i.e., arbitrary, irrational, or capricious. Id. When the rationale in these precedential decisions is applied to the facts, fact finding, and relevant USCIS guidelines in effect at the time Rahman's I-140 was filed, are considered it is clear that the AAO's denial of the I-140 filed by Rahman on Gracias' behalf was arbitrary, capricious, and irrational and, therefore, that the AAO's decision should not be upheld by this Court on appeal. In this case, at the time the Plaintiff's case was filed, the USCIS Vermont Service center was adjudicating cases in accordance with guidelines published in the minutes from a November 16, 1994 meeting between the AILA Service Center Liaison and the Director of the Vermont Service Center. See generally Guevara. That published document indicates that the Vermont Service Center limited its discretion in adjudicating I-140s and took a holistic, totality of the circumstances, approach to assessing an employer's ability to pay a proffered wage. See Hondros, 720 F.2d at 294 (noting that agencies are bound by policies published in memoranda and other somewhat informal media such as the minutes in this case). This is consistent with the

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Plaintiffs' arguments from the inception of this case that the overall financial resources of, and secured by, of Rahman's business, as well as the overall health of his personal finances as a soleproprietor amply demonstrate that he maintained the ongoing ability to pay Gracias the proffered wage from the time of filing the ETA-750 through the pendency of his I-140 petition. Id; compare AAO Brief at 3, A.R. 16. Had the AAO properly used the more flexible 1994 minutes' standards to assess the ability of Rahman to pay the proffered wage, it would have been compelled to conclude that Rahman could afford to employ Gracias according to the terms stated in the approved ETA-750, could afford to provide for his family, and, therefore, it would have been compelled to approve his I-140. See generally Caputo Letter, A.R. 35-38. Specifically, the 1994 Minutes list seven principles that Service Center adjudicators should employ when assessing evidence submitted in support of an employer's ability to pay a proffered wage, three of which are applicable in this case. See Guevara at 3. First, the 1994 minutes state that if an employer's taxable income exceeds the proffered wage for the period of time during which an ETA-750 and I-140 are pending, then the employer has the ability to pay the proffered wage. Id. Second, the 1994 Minutes indicate that even in cases where an employer's tax returns demonstrate losses during the requisite period of time, he may still be able to demonstrate that he has the ability to pay the proffered wage if his financial documents demonstrate a "favorable enough ratio of total current assets to total current liabilities." Id. Third, the Service Center's 1994 minutes indicate that in the case of a sole proprietorship, as is the case here, the personal financial circumstances of the proprietor can be taken into consideration in order to find that he has the ability to pay the proffered wage. Id. Fourth, contrary to the AAO's decision in this case, the Service Center indicated that depreciation can and should be considered as taxable income for purposes of demonstrating that a prospective

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employer maintains the ongoing ability to pay a proffered wage. Id. These flexible standards explicitly recognize the importance of considering the totality of a sole-proprietor's financial circumstances were in place throughout the period of time that Rahman's I-140 was pending with USCIS.9 Rahman understood that his tax returns were not sufficient to demonstrate his ability to pay the proffered wage, and, therefore, he supplied USCIS adjudicators using these flexible standards with his CPA's detailed expert analysis of his overall financial position in order to demonstrate his ability to pay the proffered wage. As discussed below, USCIS should have used Rahman's CPA's expert analysis of the totality of Rahman's finances to determine that he maintained the ability to pay the proffered wage as required. Adopting Caputo's assessment of the facts would have been consistent with the USCIS guidelines in place at the time the I-140 was filed. USCIS' failure to use these guidelines amounted to a clear abuse of discretion. See Yang, 519 U.S. at 32. 2. The AAO's Decision in this Case Constitutes Error as a Matter of Law Because it Disregarded an Expert Analysis of the Financial Documents in the Record in Favor of its Own Non-Expert General Analysis of the Documents in the Record. The AAO's denial of the Plaintiffs' appeal was also erroneous because the AAO substituted its own general knowledge and general assessment of the financial documents in the record for the expertise and specific consideration of the financial documents in the record
9

These standards are consistent with recent persuasive case law that suggests that immigration officials need to be cognizant of the disparate impact that their decisions will have on small business owners, because they operate very differently than large corporations. See, e.g., American Federation of Labor v. Chertoff, 2007 WL 2972952, at *11-12 (N.D. Cal. 2007) (discussing requirement that agencies conduct "flexibility analyses" when implementing regulations in order to protect small businesses from being harmed by agency action). Moreover, in other immigration contexts, administrative tribunals have held that an individual business owner is far better equipped to judge