Case History: Judge Shrouds H-1B Case with Secrecy

By David North on April 9, 2012

While supporters of the H1-B program say it brings us the "best and the brightest", a careful examination of a recent federal court case in Ohio – strangely masked in secrecy by the judge – shows us how shabby the program can be.

The case involves: a young alien man with a mysterious legal status, probably an illegal alien, who has a bachelor's degree from a marginal educational institution, a private one that accepts all applicants, and his employer, a mortgage finance company in trouble in two different states.

The judge, ignoring all the above, ruled against a USCIS decision to deny the H-1B visa and saved the young man, apparently, from the threat of deportation.

What is really unusual, to the point of weirdness, is the decision of Southern Ohio Federal District Judge Gregory L. Frost to throw a blanket of secrecy over the whole case. There are 21 separate documents filed in the case, and the judge has quashed 16 of them, including such innocuous sounding items as "a notice of hearing". The only publicly available documents are the judge's five narrowly written orders in this case and in these orders, unusually, he does not tell us anything about the employer, and mentions only a couple of facts about the alien.

Typically, immigration decisions provide at least a two- or three-sentence description of the legal status of the beneficiary, say a word or two about the employer, and allow the publication of all the documents in the case.

So, here is an H1-B mystery: a small child arrived in the U.S. at the age of four, stayed for 21 years in an unknown status or statuses, and then, at age 25 secured an U.S. district court decision granting him legal status as an H-1B. How did that happen and why won't the court tell us? I suspect the young man was in illegal status for all those years, and the judge sealed the records to hide that fact.

We have the following scant details from the judge's order: the 25-year-old is Geza Rakoczi; he completed a bachelor's degree at an unnamed educational institution somewhere in the U.S.; his course work included some business courses; he persuaded a mortgage finance company (Residential Finance Corporation) to file a petition for him as an H-1B beneficiary on the grounds that the proposed work assignment, as a market research analyst, was in a "specialty occupation"; USCIS said no; the firm appealed and the judge overturned the agency decision.

It is common knowledge that USCIS usually says "yes" to applications before it, including the vast majority of H-1B applications, so the agency's decision is unusual. The case wound up in federal district court, which is unusual, as cases normally move from the Board of Immigration Appeals to the Circuit Courts. The judge, at some length argued that he had jurisdiction over the matter, though the USCIS argued he did not.

The case came to my attention because a summary of the judge's legal reasoning appeared in the March 26 issue of Interpreter Releases, p. 618. That report is not online, and did not mention much of any of the information noted above; among other things there was not a word in the trade paper article that 16 of the court documents were denied to the public.

It was only when I reviewed what was left of the case history in court records, and used the Google search engine, that much of the details of the case became clear. For readers with access to PACER, the courts' electronic data system, the case is 2:12-cv-0008-GLF-MRA.

What Google led me to was an indication that the young alien, Geza Rakoczi, had studied at Franklin University, a small nonprofit institution in Columbus, Ohio; he was noted as the manager of a student project, and thus a student there, at this page.

Similarly, there were web references that showed Franklin University to be an institution that accepts all applicants and offers much of its program over the internet.

The Better Business Bureau material on Residential Finance reported the following:

On January 18, 2010, Residential Finance Corporation entered into a settlement agreement with the Maryland Commission of Financial Regulation. The agreement settled an investigation that the company conducted 71 Maryland mortgage transactions at its Tampa, Florida location without a proper license. Under terms of the agreement, the business applied for and was issued a license for its Tampa, Florida location and agreed to pay $34,870 to the commission for conducting business prior to the commission's approval. The agreement is not deemed an admission by Residential Finance Corporation of a liability or a willful violation of the licensing provisions.

On Jan. 20, 2011, Residential Finance Corporation of Ohio entered into a consent order with the Arizona Department of Financial Institutions. Without admitting liability, the company agreed to comply with all Arizona statutes, rules and regulations, [and] pay a $10,000 assessment. As part of the settlement, Residential Finance Corporation of Ohio consented to findings which included that Residential Finance Company of Ohio: failed to conduct reasonable employee investigations prior to hiring employees; failed to use a statutorily correct written fee agreement signed by all parties; allowed borrowers to sign regulated documents containing blank spaces; failed to maintain a complete organizational file; and used an inappropriate appraisal disclosure form.

These are all serious matters and it sounds to me as if the firm should have been treated more harshly.

But the combination of the apparent illegal status of Rakoczi, the dubious nature of the mortgage firm's practices, and the slimness of the education credentials, are not mentioned in either the judge's orders or the Interpreter Release report. They all show on closer examination, however, that some pretty marginal aliens can acquire legal status (and marginal jobs) through the H-1B program.

What IR did report, however, was that the judge thought that the USCIS lawyers did a lackluster job of defending the agency's decision. The trade paper wrote:

He accused USCIS of doing a "poor job of keeping the record straight" and chastised its inexplicable errors, including misplaced references to the Department of Labor's Occupational Outlook Handbook. He also took the agency to task for incorrectly identifying the position as a "marketing manager" rather than "marketing analyst". He described these errors as a "litany of incompetence that presents fundamental misreading of the record, relevant sources, and the point of the entire petition."

It sounds as if the judge might have added that the government failed to use the spell-check function, and thus its case should be rejected. I mean, can't those government lawyers put the references to the Occupational Outlook Handbook in precisely the right place?

More fundamentally, the judge ruled that the agency's definition of "specialized occupation" was too narrow, and that the beneficiary had the qualifications needed for the visa.

Then there's the policy question, which is, of course, not discussed by either the judge or IR: do we really need to use the immigration system to help staff a mortgage firm in trouble in two states with an alien worker with a slender bachelor's degree? Aren't there some fairly desperate, unemployed, appropriately educated citizens who would accept such an assignment?

I hope that USCIS appeals to the Circuit Court, but I would not hold my breath.