Judge: Gulick’s testimony shows no allocation system for CW-1 permits

U.S. District Court for the NMI Chief Judge Ramona V. Manglona has determined from the testimony of U.S. Citizenship and Immigration Services District 26 Director David G. Gulick that the U.S. Department of Homeland Security and USCIS have not set in place an allocation system for CNMI-only transitional workers visa (CW-1) permits.

Manglona said that based on Gulick’s testimony, DHS and USCIS only prioritize CW-1 petitions based on the date they actually arrive in their offices.

While the parties have not fully briefed the issue as to whether an allocation system exists or not, Manglona said that Gulick’s testimony leads her to believe that no allocation system is in place.

Rather, Manglona said, CW-1 permits are examined on a first-in, first-out basis without regard to the occupational category the permit may fall under.

Until the allocation issue is fully addressed, the judge said, the court cannot state that DHS has complied with the Consolidated Natural Resources Act to the extent that it has established, administered, and enforced a system to allocate the CW-1 permits authorized.

Manglona discussed the CW-1 allocation system issue in her 33-page order last week that denied a motion for preliminary injunction filed by the Commonwealth Utilities Corp. to allow its 13 CW-1 workers to continue to work despite their permits’ expiration dates.

Manglona also denied the preliminary injunction to prevent DHS Secretary Jeh Charles Johnson and co-defendants from enforcing the published fiscal year 2016 CW-1 cap set by DHS.

Manglona ruled that CUC and its 13 CW-1 workers have not established that they are entitled to a preliminary injunction.

The judge noted that CUC’s CW-1 workers have been allowed to continue working pending the resolution of this case.

Manglona concluded that DHS has complied with the CNRA. The judge pointed out that what CUC failed to address in its motion for injunctive relief is the allocation of permits.

Manglona said the CNRA requires that the DHS secretary “establish, administer and enforce a system for allocating and determining the number, terms and conditions of permits.”

In the regulation, Manglona said, DHS implicates an allocation system by defining “occupational categories” as “those employment activities that DHS has determined require alien workers to supplement the resident workforce.”

But besides defining and laying out the various occupational categories, Manglona said, DHS has not promulgated any rule or regulation showing how it is allocating the number of CW-1 permits among the various occupational categories for all foreign workers in the CNMI.

This lack of an allocation system was also brought up in the comments on the Interim Final Rule, Manglona said.

DHS responded to the commenters’ concerns by stating that the CNRA requires it to establish a permit system based on any “reasonable method” so long as it annually reduced the number of permits to zero at the end of the transition period.

Manglona said DHS’ response to the commenters’ concerns fails to establish that an allocation system for CW-1 permits was properly established, administered, and enforced.

Manglona said the CW-1 classification is not a license under the Administrative Procedure Act.

As Johnson and co-defendants aptly point out, the description of a “license” cannot apply to a CW-1 application since CW-1 applications do not refer to an activity of a continuing nature.

First, Manglona said, Congress has characterized the CNMI CW-1 program as a “transition program” and mandated the termination of CW-1 status by Dec. 31, 2019.

Second, the judge said, CW-1 status is not renewed as a regular matter of course.

Manglona said because neither Congress nor DHS has ever referred to the CW-1 visas as a “license” nor expressed an intent to treat CW-1 petitions as such, the court rejects plaintiffs’ interpretation of section 558(c) as applying to the CNMI-only transitional worker program.

Citing section 558(c), plaintiffs argue that “when the license has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency.”

Manglona said the 2011 Final Rule and Federal Register Notices are sufficient to determine that a flexible system has been put in place.

Manglona said because Congress has directed DHS to not only annually reduce the number of CW petitions to zero at the end of the transition period, but also to consider specific factors during the establishment, administration, and enforcement of the transition period, a meaningful standard exists and judicial review is warranted.

Manglona said DHS did not seamlessly implement the transitional worker program.

In 2008, the CNMI government filed a lawsuit against the U.S., challenging the legality of certain provisions of the CNRA.

In the midst of litigation, Manglona said, DHS published an interim final rule on the transitional worker program on Oct. 27, 2009, with a 30-day comment period ending on Nov. 27, 2009.

The CNMI government then filed an amended complaint, alleging violations of the APA due to the absence of any notice-and-comment period prior to promulgation of the interim final rule, and seeking an injunction with regard to implementation of the rule.

The court granted the CNMI’s motion for preliminary injunction on the ground that DHS did not have good cause to dispense with the APA’s notice-and-comment procedures prior to promulgating the rule.

To provide the government as well as the general public with sufficient opportunity to comment on the proposed transitional worker program, USCIS reopened the public comment period for an additional 30 days, ending on Jan. 8, 2010.

DHS duly promulgated its regulations when it published its final rule on Sept. 7, 2011.

Manglona said plaintiffs’ challenge to DHS’ “system” is fitting seeing as that word is not defined in the statute.

Unlike other provisions of the CNRA, Manglona said, there is no substantial “definitions” section under the provisions relating to the CNMI. Nor do the regulations define the word “system” or describe what the “system” may look like.

Manglona said whether DHS implemented “system” requires the court to examine DHS’ response to public comments regarding a system on the Interim Final Rule, as well as its reasoning articulated in the Final Rule and subsequent notices in the Federal Register for each fiscal year cap.

Prior to promulgation of the 2011 Final Rule, the judge noted, DHS received 146 comments on the Interim Final Rule from “a broad spectrum of individuals and organizations, including the CNMI Governor’s Office, the Saipan Chamber of Commerce, a former CNMI senator, and other interested organizations and individuals.”

Relying on its discretion, DHS believed that setting the cap for the first two years of the transition period, coupled with the Federal Register Notice for each fiscal year thereafter would provide the public sufficient notice and guidance to implement the required CW classification drawdown.

Manglona said the Final Rule only gives notice of DHS’ intent to exercise flexibility to adjust to the needs of the Commonwealth when setting the numerical limit.

Manglona said whether DHS later established a particularized system for allocating and determining the number of CW permits requires the court to examine the Federal Register notice of each fiscal year cap.

For fiscal 2016, DHS calculated this cap by taking the previous year’s cap and reducing it by 1,000 or approximately 7.2 percent.

DHS set this cap at 12,999.

Before setting the cap, Manglona said, DHS discussed its proposed cap with then governor Eloy S. Inos by telephone on June 2, 2015, as well as in person at his office on July 8, 2015.

The governor recommended reducing the cap by one to 13,998 CW-1 permits.

According to Gulick, DHS considered the governor’s advice, along with other applicable factors, and reduced the cap by 1,000 from the previous fiscal year.

One of those factors was that the 2015 cap was not met, with defendants claiming that 4,390 available visas went unclaimed for that fiscal year.

Manglona said defendants cited a website in their opposition to support the number of unclaimed visas in fiscal 2015. Upon reviewing the website, however, the court could not confirm the number.

Based on the absence of any announcement that the fiscal 2015 cap was ever reached, the court deduces that the cap was not reached.

“To what extent, however, is unclear,” the judge said in the footnote of her order.

DHS also considered the cap’s effect “in conjunction with the published media reports indicating that the CNMI economy continues to grow and that any reduction in the number of CW-1 workers available will have to account for new investments and the expansion of existing businesses.”

Accordingly, Manglona said, the fical 2016 cap “preserved access to foreign labor within the CNMI and provided a cushion for demand growth, yet provided a meaningful reduction that aids DHS in the implementation of the mandated cap reductions to zero over the transition period.”

For fiscal 2017, DHS calculated this cap by taking the previous year’s cap and reducing it by one. DHS set this cap at 12,998.

It settled on this number by acknowledging that the cap for fiscal 2016 was reached on May 5, 2016—the first time the cap had been reached in the history of the CW program—and deciding to “preserve the status quo, or current conditions.”

DHS opined that the cap “preserves access to foreign labor in the CNMI” while reducing the number of transitional workers from the previous fiscal year.

Manglona said Gulick expounded at the hearing that the reduction of one is their “recognition that the situation exists and the cap—the situation—is still in flux.”

Gulick said it is also confirmation that they have “gotten people’s attention that the situation cannot go beyond a reasonable doubt in 2019 without some statutory action.”

Based on a review of the Federal Register notice for each fiscal year through fiscal 2017, Manglona concluded that DHS has established, administered, and enforced a flexible system to “determine the number, terms, and conditions of CW-1 permits.”

Manglona said because the caps for fiscal years 2013 through 2015 were never reached and plaintiffs’ CW-1 petitions were granted, plaintiffs have not been injured for those respective periods.

Thus, the judge said, the caps for fiscal years 2013 through 2015 cannot be enjoined.

As to the cap for fiscal 2016, plaintiffs claim injury when their CW-1 renewal petitions were rejected, as well as suffering “legal wrong, or having been adversely affected or aggrieved by defendants’ actions.”

Here, Manglona said, the plaintiffs lack any legally protected right to seek admission to the CNMI, and therefore CUC, as the petitioning employer, lacks a right as well.

As to enjoining the caps for fiscal 2017, which counsel for plaintiffs brought up for the first time at the motion hearing, Manglona said plaintiffs “have not shown injury, legal or otherwise, nor can they claim injury from an otherwise valid cap.”

Manglona said DHS and USCIS properly rejected plaintiffs’ CW-1 renewal petitions.

Here, she said, USCIS complied with its rules and procedures when it rejected and returned plaintiffs’ CW-1 petitions.

Manglona said plaintiffs submitted their CW-1 extension requests after the cap had been reached.

As a result, the judge said, USCIS rejected plaintiffs’ petitions, returned their filing fees, and provided plaintiffs with notice that that CW-1 cap for 2016 had been reached.

Accordingly, Manglona said, the court rejects plaintiffs’ claims that USCIS unlawfully rejected their petitions without proper consideration.

Manglona said a separate notice and comment period is not warranted for the setting of each CW-1 cap.

Manglona said given that none of the renewals were filed more than four months before their expiration, and some as little as one month before, plaintiffs’ harm is to a certain extent self-inflicted.

Furthermore, the judge said, any harm plaintiffs may have suffered as a result of being rejected under the fiscal 2016 cap is no longer applicable as we are already one month into 2017 and plaintiffs were eligible to file new CW-1 permits beginning Oct. 1.

Manglona added that plaintiffs were allowed to continue working pending the resolution of this case.

Accordingly, the judge said, the court does not find irreparable harm.

CUC employs over 300 workers, including 42 non-resident workers.

Plaintiffs are suing Johnson and others for not acting on their CW-1 permit renewals. Plaintiffs are also suing U.S. Immigration and Customs Enforcement director Sarah R. Saldana, and USCIS director Leon Rodriguez.

CUC counsel James Sirok alleged that the failure of USCIS to make a determination on the CW renewal petitions violates the APA.

Sirok said CUC will be adversely affected by the loss of these CW-1 workers in its ability to maintain and operate its power generation facilities on Saipan, Tinian, and Rota.

Sirok alleged that the DHS secretary has failed to comply with the requirements of the CNRA in setting the annual cap for CW-1 transitional workers for fiscal years 2013 through 2016 without first establishing and administering a regulated “system” and taking into consideration various statutory standards prior to adopting and publishing the cap.