Bautista-Perez et al v. Gonzales et al

Filing 153

ORDER by Judge Thelton E. Henderson granting 145 Motion to Dismiss (tehlc2, COURT STAFF) (Filed on 9/15/2010)

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Bautista-Perez et al v. Gonzales et al Doc. 153 1 2 3 4 5 6 7 8 9 10 v. IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA JOSE BAUTISTA-PEREZ, et al., Plaintiffs, NO. C07-4192 TEH ORDER GRANTING DEFENDANTS' MOTION TO DISMISS ERIC H. HOLDER, Jr., Attorney General of the United States, and JANET NAPOLITANO, Secretary of Homeland Security, Defendants. United States District Court 11 For the Northern District of California 12 13 This matter came before the Court on July 19, 2010, on the motion to dismiss filed by 14 Defendants Eric Holder, the Attorney General of the United States, and Janet Napolitano, 15 Secretary of Homeland Security (collectively, "Defendants"). Plaintiffs are nationals of El 16 Salvador, Honduras, and Nicaragua who allege that United States Citizenship and 17 Immigration Services ("USCIS" or "the Service")1 unlawfully charged them a biometric 18 services fee to register for Temporary Protected Status ("TPS") when no new biometric data 19 was collected from them. Defendants ask the Court to dismiss Plaintiffs' Second Amended 20 Complaint ("SAC") for failure to state a claim, on the grounds that the allegedly unlawful fee 21 was in fact authorized by Congress. 22 For the reasons set forth below, Defendants' motion is GRANTED, and Plaintiffs' 23 SAC is DISMISSED with leave to amend. 24 25 26 27 USCIS's functions were performed by the Immigration and Naturalization Service ("INS") prior to 2003. See footnote 3, infra. This Order will refer to the agency as "the 28 Service" when describing events preceding 2003, when the INS was still in existence. 1 Dockets.Justia.com 1 BACKGROUND 2 I. 3 The TPS Program TPS is a temporary immigration benefit established by Congress in 1990 for nationals 4 of foreign states experiencing "extraordinary and temporary conditions" such as armed 5 conflict or environmental disaster. Immigration Act of 1990, Pub. L. No. 101-649, § 302, 6 104 Stat. 4978, 5030 (1990) (codified at 8 U.S.C. § 1254a).2 The statute empowers the 7 Attorney General ­ now the Secretary of Homeland Security3 ­ to designate such countries 8 for TPS if they are "unable, temporarily, to handle adequately the return" of their alien 9 nationals, or if their nationals cannot return "in safety." 8 U.S.C. § 1254a(b)(1). The 10 Attorney General designated Honduras and Nicaragua for TPS in 1999, 64 Fed. Reg. 524 United States District Court 11 (Jan. 5, 1999), 64 Fed. Reg. 526 (Jan. 5, 1999), and El Salvador in 2001, 66 Fed. Reg. 14214 For the Northern District of California 12 (Mar. 9, 2001). The designations for all three countries have been extended repeatedly since 13 that time, and remain in effect today. See 8 U.S.C. § 1254a(b)(3)(C) (allowing a country's 14 TPS designation to be extended for 6, 12, or 18 months so long as "the Attorney General 15 does not determine" that the country "no longer meets the conditions for designation"); see 16 also 75 Fed. Reg. 24734 (May 5, 2010) (extending designation of Honduras through January 17 5, 2012); 75 Fed. Reg. 24737 (May 5, 2010) (extending designation of Nicaragua through 18 January 5, 2012); 75 Fed. Reg. 39556 (July 9, 2010) (extending designation of El Salvador 19 through March 9, 2012). 20 TPS is available to aliens who have resided continuously in the United States ­ 21 regardless of immigration status ­ since their country's designation, as long as they are 22 23 The Immigration Act of 1990 amended the Immigration and Nationality Act ("INA") by adding (among other provisions) section 244A, 8 U.S.C. § 1254a, which provides the 24 statutory authority for TPS. Section 244A of the INA was renumbered as section 244 in 1996. Pub. L. No. 104-208, Div. C, § 308(b)(7), 110 Stat. 3009-615 (1996). 25 3 The authority to designate countries and administer the TPS program was transferred 26 from the Attorney General to the Secretary of Homeland Security in 2003, with the formation of the Department of Homeland Security ("DHS"), which subsumed the functions of the INS. 27 Homeland Security Act of 2002, Pub. L. No. 107-296, 116 Stat. 2135 (2002). USCIS is the division of DHS that oversees lawful immigration into the United States, including 28 humanitarian programs such as TPS. 2 2 1 admissible as an immigrant and not otherwise disqualified. 8 U.S.C. § 1254a(a)(5), 2 (c)(1)(A), (c)(2). Aliens are ineligible for TPS if they have been convicted of certain crimes 3 ­ including any felony or two or more misdemeanors ­ or if they are subject to other drug 4 and security-related bars. Id. § 1254a(c)(1)(A)(iii), (c)(2)(A)(iii), (c)(2)(B)(i). Once granted 5 TPS, an individual may receive employment authorization and remain in the United States as 6 long as his or her status remains valid. Id. § 1254a(a)(1)-(2). 7 Following a country's designation, any nationals of that country who reside in the 8 United States and seek to qualify for TPS must register "to the extent and in a manner which 9 the Attorney General establishes." 8 U.S.C. § 1254a(c)(1)(A)(iv). The initial registration 10 period lasts no less than 180 days. Id. Once granted TPS, an alien must re-register annually United States District Court 11 "in a form and manner specified by the Attorney General," or the status will be withdrawn. For the Northern District of California 12 Id. § 1254a(c)(3)(C). In practice, USCIS requires those who receive TPS to re-register every 13 time their country is re-designated, usually every 18 months. See, e.g., 75 Fed. Reg. at 24734 14 (setting forth "procedures necessary for nationals of Honduras . . . with TPS to reregister"); 15 id. at 24737 (Nicaragua); id. at 39556 (El Salvador). 16 17 II. 18 Fees Charged for TPS Congress allows USCIS to charge a "reasonable fee as a condition of registering an 19 alien" for TPS, but has capped that fee at $50. 8 U.S.C. § 1254a(c)(1)(B). Since 1998, 20 USCIS has also charged a fee to cover fingerprinting and biometric services for TPS 21 applicants.4 That fee, which has increased gradually over time, has been set at $80 since 22 2007. 72 Fed. Reg. 41888, 41890 (Aug. 1, 2007). In 2009, Congress clarified that, "[i]n 23 24 25 26 27 28 Prior to 1998, TPS applicants were required to submit fingerprint cards to the Service for criminal background checks, but could procure them from private sources. In an appropriations bill passed in 1997, Congress required that fingerprinting for all immigration benefits be done by the Service or other governmental agencies, and authorized agencies to "collect and retain a fee for fingerprinting services." Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 1998, Pub. L. No. 105-119, 111 Stat. 2440, 2447-2448 (1997). The initial fingerprinting fee, which applied to all immigration benefits, was set at $25 and codified at 8 C.F.R. § 103.7(b)(1). 63 Fed. Reg. 12979, 12985, 12986 (Mar. 17, 1998). 4 3 1 addition to collection of registration fees" described in § 1254a(c)(1)(B), "fees for 2 fingerprinting services, biometric services, and other necessary services may be collected 3 when administering" the TPS program. Department of Homeland Security Appropriations 4 Act of 2010, Pub. L. No. 111-83, § 549, 123 Stat. 2142 (2009) (codified at 8 U.S.C. § 1254b) 5 ("section 549"). Section 549 was explicitly retroactive to 1998, when the Service first 6 charged TPS applicants for fingerprinting. Id. A separate work authorization fee has been 7 allowed since 1991, and is currently set at $340. See Miscellaneous and Technical 8 Immigration and Naturalization Amendments of 1991, Pub. L. No. 102-232, § 304(b)(2), 105 9 Stat. 1733, 1749 (1991) (codified at 8 U.S.C. § 1254a(c)(1)(B)); 8 C.F.R. § 103.7(b)(1). 10 An initial applicant for TPS is therefore charged (1) a registration fee of $50.00; (2) a United States District Court 11 "biometric services fee" of $80.00 (if the applicant is 14 years of age or older); and (3) a For the Northern District of California 12 $340.00 fee to apply for work authorization, if desired. 8 C.F.R. §§ 103.7(b)(1), 244.6. The 13 registration fee is charged only once, upon the initial application for TPS. 8 C.F.R. 14 § 103.7(b)(1) (prescribing fee "not to exceed $50" for "filing an initial application for 15 Temporary Protected Status" (emphasis added)). However, USCIS charges the biometric 16 services fee for every registration and re-registration. See, e.g., 75 Fed. Reg. at 24736 17 (requiring "all applicants 14 years of age or older" to "submit a biometric services fee" when 18 registering or re-registering for TPS as a Honduran national). 19 20 III. 21 Plaintiffs' Payment of Biometric Services Fees Plaintiffs are eight nationals of El Salvador, Honduras, and Nicaragua who registered 22 for TPS between the years 2002 and 2006 and have continued to re-register since that time. 23 According to the SAC filed on May 11, 2010, each Plaintiff has been required to remit a 24 biometric services fee every time he or she has applied or reapplied for TPS. In the second 25 half of 2007, seven Plaintiffs received notices that, although their previously captured 26 biometrics could be reused, the biometric services fee they had paid would not be refunded. 27 The notice received by Plaintiff Jose Bautista Perez, dated July 27, 2007, reads as follows: 28 U.S. Citizenship and Immigration Services (USCIS) has received your Form I-821 (Application for Temporary Protected Status) 4 1 2 3 4 and is currently processing your application. This notice informs you that USCIS is able to reuse your previously captured fingerprints and other biometrics. USCIS will run the same security checks and use your biometric data as in the past, however, it is not necessary for you to appear at a USCIS Application Support Center (ASC) for a biometrics appointment. The biometrics fee will not be refunded. 5 Pls.' Request for Judicial Notice (Doc. 147-1), Exh. 1.5 Since that time, Plaintiffs have 6 continued to pay the biometric services fee for their subsequent re-registrations. It is this fee 7 ­ charged when no new biometric data is collected ­ that Plaintiffs challenge. 8 When the Service first began charging a fingerprinting fee in 1998, it was set "at $25 9 per individual who requires fingerprinting." 63 Fed. Reg. 12979, 12982 (Mar. 17, 1998) 10 (emphasis added). An entry titled "For fingerprinting by the Service" was added to the United States District Court 11 provision of the Code of Federal Regulations governing fees for immigration services: "A For the Northern District of California 12 service fee of $25 will be charged by the Service for fingerprinting each applicant, petitioner, 13 sponsor, or other individual who is required to complete Form FD-258 [fingerprint card] in 14 connection with an application or petition for an immigration benefit (other than asylum) and 15 whose residence is in the United States." Id. at 12986 (codified at 8 C.F.R. § 103.7(b)(1)) 16 (emphasis added). The fee applied only to "fingerprinting by the Service," and therefore was 17 not charged of applicants residing abroad who were fingerprinted at U.S. consular offices or 18 military installations. Id. at 12981. 19 The fee was raised three times from 2001 through 2007, during which time the 20 definition of the services provided for that fee evolved. In 2002, the Service stated "that it 21 was not recovering the full costs of the fingerprint program" with the $25 fee. 66 Fed. Reg. 22 41456, 41459 (Aug. 8, 2001). After conducting a study to "determine the actual cost of 23 fingerprinting individuals," id., the Service decided to charge $50 "for the fingerprinting of 24 applicants who apply for certain immigration and naturalization benefits," 66 Fed. Reg. 25 65811, 65815 (Dec. 21, 2001) (setting $50 fee "For Fingerprinting by the Service") 26 27 The Court takes judicial notice of the USCIS notice because its contents were alleged in the SAC and its authenticity is not in dispute, which means it can be considered on 28 a Rule 12(b)(6) motion to dismiss. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). 5 5 1 (emphasis added). In 2004, the fingerprinting fee was renamed a "biometric fee" to "better 2 describe the services provided under this fee," which included "electronically captur[ing] and 3 retain[ing] necessary biometrics (photo, signature, and press-print images)." 69 Fed. Reg. 4 5088, 5090, 5092 (Feb. 3, 2004). The fee was raised to $70, and the regulation was amended 5 to provide that a "service fee of $70 will be charged for any individual who is required to 6 have biometric information captured in connection with an application or petition for certain 7 immigration and naturalization benefits (other than asylum), and whose residence is in the 8 United States." 69 Fed. Reg. 20528, 20534 (Apr. 15, 2004) (codified at 8 C.F.R. 9 § 103.7(b)(1)) (emphasis added). 10 In 2007, the Service proposed raising the biometric services fee to $80 after United States District Court 11 conducting a "comprehensive fee review" and determining that the current fees did not For the Northern District of California 12 "recover the full costs of services that should be provided." 72 Fed. Reg. 4888 (Feb. 1, 13 2007). In its proposed rule, the Service defined "Capture Biometrics" for the first time as 14 "involving electronic capture of biometric (fingerprint, photograph, signature) information, 15 and background checks performed by the FBI." Id. at 4987 (emphasis added). The fee 16 review assigned $174 million "directly to the `Capture Biometrics' activity" for Fiscal Year 17 2008-09, and broke that figure down as follows: $86.5 million to operate the Applicant 18 Support Centers "to electronically capture applicants' fingerprints, photographs, and 19 signatures"; $63 million "in costs paid to the FBI to conduct the appropriate background 20 checks of fingerprints and/or applicant names (depending upon the immigration benefit)"; 21 and the remaining costs were unexplained. Id. at 4906. The review acknowledged that this 22 constituted "a change in the manner in which USCIS currently calculates the biometric fee 23 since FBI background check costs were previously included in the immigration benefit 24 application/petition fees." Id. USCIS concluded that the new approach reflected a "more 25 accurate methodology since there is a direct relationship between the biometric workload and 26 the costs paid to the FBI." Id. The fee was calculated by dividing the total cost of providing 27 biometric services ­ $174 million ­ by the 2.196 million individuals expected to pay the fee 28 that year, which came to $79. Id. at 4907. 6 1 The final rule explained that "the biometric fee is not simply a fee for biometric 2 collection or the USCIS cost of the applicant or petitioner appearing at an Application 3 Support Center," but rather "also covers costs associated with the use of the collected 4 biometrics for FBI and other background checks." 72 Fed. Reg. 29851, 29857 (May 30, 5 2007). "Thus, an applicant will pay the biometric fee whenever he or she files another 6 application that requires the collection, updating, or use of biometrics for background 7 checks." Id. USCIS made this change after recognizing the inefficiency of requiring 8 applicants to "provide biometric data more than once," a problem addressed by developing a 9 system to "allow the re-use of fingerprints." Id. USCIS expected the new process to "result 10 in some decreases in costs which may offset the costs of background checks incorporated United States District Court 11 into the biometric fee," an impact that it had "already factored . . . into the fee structure along For the Northern District of California 12 with projected efficiency increases." Id. The $80 fee, which became effective July 30, 2007, 13 was codified in the fee regulation: "A service fee of $80 will be charged for any individual 14 who is required to have biometric information captured in connection with an application or 15 petition for certain immigration and naturalization benefits (other than asylum), and whose 16 residence is in the United States." 8 C.F.R. § 103.7(b)(1). 17 18 IV. 19 Procedural History Plaintiffs filed this action on August 16, 2007. On April 6, 2010, the Court granted 20 partial summary judgment to Defendants as to Plaintiffs' claim that the charging of any 21 biometric services fee in addition to the $50 registration fee violates the statutory fee cap set 22 by 8 U.S.C. § 1254a(c)(1)(B). However, the Court did not address "the legality of DHS's 23 practice of charging a biometric services fee when the collection of biometrics is not 24 required," which was not raised on summary judgment. Summ'y J. Order (Doc. 139), at 18. 25 Plaintiffs further developed that theory in the SAC filed on May 11, 2010, and Defendants 26 moved to dismiss on June 14, 2010. Plaintiffs opposed the motion. 27 28 7 1 LEGAL STANDARD 2 Dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(6) when a 3 plaintiff's allegations fail "to state a claim upon which relief can be granted." In ruling on a 4 motion to dismiss, the Court must "accept all material allegations of fact as true and construe 5 the complaint in a light most favorable to the non-moving party." Vasquez v. L.A. County, 6 487 F.3d 1246, 1249 (9th Cir. 2007). Courts are not, however, "bound to accept as true a 7 legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, --- U.S. ----, 129 S. Ct. 8 1937, 1949-50 (2009). 9 A Rule 12(b)(6) dismissal "can be based on the lack of a cognizable legal theory or 10 the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica United States District Court 11 Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a motion to dismiss, a plaintiff For the Northern District of California 12 must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic 13 Corp. v. Twombly, 550 U.S. 544, 570 (2007). Plausibility does not equate to probability, but 14 it requires "more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 129 15 S. Ct. at 1949. "A claim has facial plausibility when the plaintiff pleads factual content that 16 allows the court to draw the reasonable inference that the defendant is liable for the 17 misconduct alleged." Id. Dismissal of claims that fail to meet this standard should be with 18 leave to amend unless it is clear that amendment could not possibly cure the complaint's 19 deficiencies. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1296 (9th Cir. 1998). 20 21 DISCUSSION 22 Section 549 allows USCIS to collect "fees for fingerprinting services, biometric 23 services, and other necessary services . . . when administering" the TPS program. 8 U.S.C. 24 § 1254b. Plaintiffs allege that USCIS violates this provision and the Administrative 25 Procedure Act by charging a biometric services fee when it does not collect biometric 26 information. Defendants move to dismiss pursuant to Rule 12(b)(6).6 They argue that 27 Defendants also move to dismiss for lack of jurisdiction pursuant to Rule 12(b)(1), reiterating jurisdictional arguments that this Court already addressed in a prior order. Order 28 6 (continued...) 8 1 Plaintiffs cannot plausibly claim that the services at issue here ­ the performance of 2 background checks using previously collected biometric information ­ are neither "biometric 3 services" nor "necessary services" authorized by section 549. Since Congress explicitly 4 permitted USCIS to assess such fees, Defendants urge this Court to dismiss the SAC for 5 failure to state a claim. 6 Resolution of this motion hinges on the meaning of section 549. "When interpreting a 7 statute, `we look first to the plain language of the statute, construing the provisions of the 8 entire law, including its object and policy, to ascertain the intent of Congress.'" Zuress v. 9 Donley, 606 F.3d 1249, 1252-53 (9th Cir. 2010) (quoting United States v. Mohrbacher, 182 10 F.3d 1041, 1048 (9th Cir. 1999)). "The preeminent canon of statutory interpretation requires United States District Court 11 us to `presume that [the] legislature says in a statute what it means and means in a statute For the Northern District of California 12 what it says there.' Thus, our inquiry begins with the statutory text, and ends there as well if 13 the text is unambiguous." BedRoc Ltd. v. United States, 541 U.S. 176, 183 (2004) (internal 14 citations omitted). "If the statutory language is ambiguous, we consult legislative history." 15 Zuress, 606 F.3d at 1253. 16 Plaintiffs challenge the fee itself and the rate at which that fee is set. First, they rely 17 on the text of section 549 to argue that no fee can be charged when no biometric data is 18 collected. Second, they claim that those applicants whose biometric data is already on file 19 are overcharged, as the $80 fee includes the cost of services they do not receive. The Court 20 begins by considering those arguments, both of which allege that the fee is charged in 21 22 23 24 25 26 27 6 Denying Defs.' Mot. to Dismiss (May 1, 2009) (Doc. 109). As Plaintiffs do not raise new 28 arguments, the Court stands by its earlier ruling and does not address these arguments here. 9 (...continued) 1 violation of section 549.7 The Court will then consider Plaintiffs' argument that the 2 biometric services fee also violates the Administrative Procedure Act. 3 4 I. 5 Section 549 Plaintiffs claim that USCIS cannot charge the biometric services fee when it conducts 6 security and background checks using previously collected biometric information, because 7 such checks do not constitute a "biometric service" under section 549, and "the collection of 8 biometric information" is "not required or necessary." SAC ¶ 27. Plaintiffs' argument traces 9 the language of section 549, which provides that "fees for fingerprinting services, biometric 10 services, and other necessary services may be collected when administering" the TPS United States District Court 11 program. 8 U.S.C. § 1254b (emphasis added). They contend, in short, that USCIS violates For the Northern District of California 12 section 549 "by charging for services that are [1] not provided, [2] not `biometric services,' 13 [3] not necessary, and [4] not related to TPS." Opp'n at 10. The Court addresses each of 14 these assertions in turn. 15 16 A. 17 USCIS can only charge for "services." Section 549 allows USCIS to charge "fees for fingerprinting services, biometric 18 services, and other necessary services." 8 U.S.C. § 1254b (emphasis added). The statute 19 requires that USCIS perform a service in exchange for the fee. Plaintiffs argue that USCIS 20 violates this mandate by charging a fee of applicants whose biometric data is not recollected. 21 As appearing at an Application Support Center for a biometric collection appointment is the 22 "core biometric service the Government provides to TPS registrants," Opp'n at 11, Plaintiffs 23 contend the biometrics fee cannot be charged in the absence of that service. 24 7 At hearing, Plaintiffs also argued that USCIS is improperly evading the $50 fee cap 25 set by 8 U.S.C. § 1254a(c)(1)(B). They contend that the cost of background checks was originally included in the capped $50 registration fee, which was intended to cover all costs 26 of adjudicating TPS applications, and that USCIS has violated that cap by moving the cost of background checks to a separate fee. However, as discussed below, section 549 explicitly 27 allows USCIS to charge fees in addition to the capped $50 registration fee for services performed in administering the TPS program. The fee therefore does not violate 28 § 1254a(c)(1)(B). 10 1 However, the fee is meant to cover more than the collection of biometrics; it "also 2 covers costs associated with the use of the collected biometrics for FBI and other background 3 checks." 72 Fed. Reg. 29851, 29857 (May 30, 2007). The question, then, is whether the 4 performance of background checks constitutes a "service." A "service" is a "useful labor 5 that does not produce a tangible commodity." Merriam-Webster's Collegiate Dictionary 6 (11th ed. 2003) at 1137. Background checks, used to determine whether an applicant 7 qualifies for TPS, are appropriately characterized as a service: they represent a "useful labor" 8 without which an applicant's application could not be processed. 9 There is no basis for constricting the definition of "services," as Plaintiffs do, to 10 encompass only an applicant's appearance for a biometrics appointment. Section 549 is United States District Court 11 broadly worded to allow USCIS to collect fees for a range of services, and Plaintiffs offer no For the Northern District of California 12 reason for excluding background checks from that spectrum. Plaintiffs do not contend that 13 USCIS fails to perform this service (or have it performed by the FBI), nor do they explicitly 14 deny that background checks comprise a service. Plaintiffs therefore do not plausibly allege 15 that Defendants violated section 549 by failing to provide a service. 16 17 B. 18 The services must be "biometric" or "necessary." The Court considers Plaintiffs' next two arguments in tandem. Plaintiffs contend that 19 the fee can only be charged for "biometric services" and for services that are "necessary." 20 Although Plaintiffs' position appears to be that both conditions must be satisfied for the fee 21 to be lawful ­ i.e. the service must be both biometric and necessary ­ the plain language of 22 the statute does not support such a reading. USCIS is entitled to charge "fees for 23 fingerprinting services, biometric services, and other necessary services." 8 U.S.C. § 1254b. 24 A fee is authorized by the statute so long as it fits into one of those categories; it need not fit 25 them all. The legality of the fee therefore hinges on its being "biometric" or "necessary." 26 Plaintiffs argue that the fee can only be charged for the performance of "biometric 27 services," which they define as "the service of taking and recording, or collecting of, a 28 person's individual identifying information (i.e., fingerprints, photographs, and signatures)." 11 1 Opp'n at 12. Conducting background checks using previously captured biometric 2 information does not fall within that definition. Defendants assail Plaintiffs' definition as 3 unsupported, and assert that the term "biometric services" also encompasses the performance 4 of background checks. 5 Plaintiffs and Defendants both insist that the legislative history of section 549 6 supports their definition, and they spar over the significance of USCIS's fee-setting 7 regulations. Before 2007, the fee was charged "for fingerprinting," 63 Fed. Reg. 12979, 8 12986 (Mar. 17, 1998), or for an individual "who is required to have biometric information 9 captured," 69 Fed. Reg. 20528, 20534 (Apr. 15, 2004); no fee was charged for the 10 performance of background checks alone when biometric information was not collected. In United States District Court 11 2007, however, USCIS expanded the scope of the fee so that it "also covers costs associated For the Northern District of California 12 with the use of the collected biometrics for FBI and other background checks." 72 Fed. Reg. 13 29851, 29857 (May 30, 2007) (final rule). Although the revised definition appeared in the 14 final rule published in the Federal Register, the Code of Federal Regulations continues to 15 provide that the $80 fee will be charged only when an individual "is required to have 16 biometric information captured." 8 C.F.R. § 103.7(b)(1). Defendants argue that the 17 "capture" of biometric information includes its capture from stored data, as occurs when 18 previously captured biometrics are reused. As an agency's interpretation of its own 19 regulation is controlling if not "plainly erroneous or inconsistent with the regulation," Auer v. 20 Robbins, 519 U.S. 452, 461 (1997), Defendants contend that USCIS's reading of the 21 regulation must govern. Plaintiffs respond that the dictionary definition of "capture" ­ "the 22 act of recording in a permanent file," Opp'n at 14 ­ can only encompass the collection of 23 biometrics from the applicant, at which time the biometric data is permanently recorded. 24 Plaintiffs therefore argue that the agency's definition is not worthy of deference, and 25 conclude that background checks are not biometric services for which fees can be charged. 26 Regardless of whether or not the background checks constitute a "biometric service," 27 they are permissible so long as they are "necessary" ­ which they clearly are. Plaintiffs 28 allege that USCIS unlawfully charged the $80 fee "when the collection of biometric 12 1 information is not necessary." Opp'n at 19. However, this argument suffers the same 2 infirmity as their previous argument regarding "services": Plaintiffs reference only one 3 service, the in-person collection of biometrics. Since that service was not provided to 4 Plaintiffs, they argue, it cannot be necessary. However, the service at issue is not the 5 collection of biometrics, but the performance of a background check. That service is 6 necessary to determine whether any of the statute's criminal and security-related bars to TPS 7 eligibility would require the denial of an individual's application. See § 1254a(c)(1)(A)(iii), 8 (c)(2)(A)(iii), (c)(2)(B)(i). In light of that requirement, Plaintiffs cannot plausibly argue that 9 background checks are not a "necessary service."8 10 United States District Court 11 C. For the Northern District of California The service must be related to the TPS program. Section 549 only allows fees to be collected "when administering the [TPS] program." 12 13 The report of the House Committee on Appropriations characterized section 549 as an effort 14 "to clarify that USCIS is permitted to charge TPS applicants for related application services 15 such as fingerprint collection." H.R. Rep. No. 111-157, at 132 (June 16, 2009) (emphasis 16 added). Both sides agree that the fees charged to TPS applicants must be related to TPS.9 17 Plaintiffs argue that USCIS violates this mandate in its calculation of the biometric services 18 8 Plaintiffs raise, in footnotes, two arguments casting doubt on the necessity of the 19 background checks. First, they question whether the re-registration process implemented by USCIS is necessary by pointing out differences between the "annual registration" mandated 20 by 8 U.S.C. § 1254a(c)(3)(C) and 8 C.F.R. § 244.17(a), and the way re-registration has evolved in practice (occurring every 18 months upon USCIS's extension of a country's TPS 21 designation). See Opp'n at 18-19 n.13. Second, they argue that further discovery must be performed to determine whether background checks are necessary, as § 1254a "does not 22 include a provision requiring background checks upon TPS re-registration." Opp'n at 19 n.14. Plaintiffs contend, in essence, that it may not be necessary for an individual who has 23 previously qualified for TPS to demonstrate continued eligibility for TPS upon reregistration. This position has no merit. The TPS statute explicitly sets forth "[e]ligibility 24 standards" for TPS, 8 U.S.C. § 1254a(c)(2), and allows the status to be withdrawn if "the Attorney General finds that the alien was not in fact eligible for such status under this 25 section," id. § 1254a(c)(3)(A). The eligibility standards include bars based on an individual's criminal history, the applicability of which can only be determined by 26 performing background checks. Plaintiffs do not plausibly claim that the re-registration process and the background checks accompanying it are not necessary. 27 9 Defendants characterize Congress's "clear intent" as having been "to clarify that 28 USCIS is authorized to collect fees related to biometric collection." Mot. at 12. 13 1 fee, which forces TPS applicants whose biometric information is not recollected to shoulder 2 costs unrelated to their own applications. They therefore challenge not only the fact of the 3 biometrics fee, but also the amount. 4 As a preliminary matter, there can be no doubt that the fee is related to TPS: it is 5 charged only when an individual registers or re-registers for the status. Plaintiffs never claim 6 to have had to pay the biometric services fee when they were not applying for or renewing 7 TPS. Plaintiffs seek to dig deeper, however, insisting that the $80 fee is calculated in a 8 manner that defies section 549 because it requires TPS applicants to pay for biometric 9 services unrelated to the TPS program. For applicants whose biometric information is 10 already on file, Plaintiffs argue, the $80 fee is an overcharge because it reflects the cost of United States District Court 11 collecting biometric data, a service they never receive. In addition, all TPS applicants are For the Northern District of California 12 overcharged because the biometric services fee is set at a level meant to recoup the cost of 13 providing such services to asylum applicants, who do not pay for the service. Since that 14 portion of the fee is unrelated to TPS, Plaintiffs argue it violates section 549. 15 USCIS explained its calculation of the biometric services fee in its proposed rule 16 increasing the fee to $80: the total cost of providing biometric services, which includes the 17 collection of biometric data and the performance of background checks, was divided by the 18 population of fee-paying applicants. See 72 Fed. Reg. 4888, 4906-4907 (Feb. 1, 2007). 19 According to the fee review conducted in 2007, the $174 million assigned to "the `Capture 20 Biometrics' activity" for Fiscal Year 2008-09 was made up of $86.5 million to operate the 21 Applicant Support Centers to collect biometrics, and $63 million "in costs paid to the FBI" 22 for background checks, with the remaining costs unexplained. Id. at 4906. The $80 fee was 23 calculated by dividing the total cost of providing biometric services ­ $174 million ­ by the 24 2.196 million individuals expected to pay the fee that year, which comes to $79. Id. at 4907. 25 This means that a share of each fee pays for the general collection of biometric information, 26 even though an individual fee-payer may not have their biometrics recollected. This also 27 means that those who pay the fee bear some of the costs related to applicants for immigration 28 benefits who are not required to pay a biometric services fee, notably asylum seekers. Id. at 14 1 4888 (providing that "these fees must recover the cost of providing similar services to asylum 2 and refugee applicants and certain other immigrants at no charge"). Plaintiffs therefore argue 3 that they are being unlawfully charged for services unrelated to their own TPS applications. 4 At hearing, Plaintiffs stated that the appropriate charge for individuals whose biometrics are 5 already on file should be $28 ­ a figure presumably reached by dividing the $63 million cost 6 for background checks by the 2.196 million fee-payers (which comes to $28.69). 7 The strict accounting that Plaintiffs demand for the biometric services fee is 8 unwarranted by the statute. Section 549 does not purport to dictate how USCIS calculates 9 the fee for this service; it merely authorizes the charging of fees for "necessary services . . . 10 when administering" the TPS program. USCIS does not defy that authority by charging a United States District Court 11 standard fee even though some applicants require more services than others. Indeed, section For the Northern District of California 12 549 is not even explicit that the fee be related to TPS; the "related" language appears in the 13 legislative history, which provides that the fee can be charged for "related application 14 services." H.R. Rep. No. 111-157, at 132. Plaintiffs argue, in essence, that section 549 15 requires every component of the fee to be directly tied to the fee-payer's TPS application. 16 The Court does not see how section 549 gives it the authority to scrutinize the calculation of 17 USCIS's biometric services fee in such painstaking detail. 18 USCIS is authorized by 8 U.S.C. § 1356(m) to set "fees for providing adjudication 19 and naturalization services . . . at a level that will ensure recovery of the full costs of 20 providing all such services, including the costs of similar services provided without charge to 21 asylum applicants or other immigrants." 8 U.S.C. § 1356(m) (emphasis added). Indeed, 22 § 1356(m) was cited in the final rule establishing the $80 biometric services fee as the legal 23 authority for calculating that fee. See 72 Fed. Reg. 29851, 29852 (May 30, 2007). In 24 compliance with § 1356(m), the fee was set by dividing the cost of providing biometric 25 services by the number of individuals expected to pay the biometric services fee ­ so the 26 calculation ensured "recovery of the full costs" of the services. 27 Plaintiffs argue that USCIS cannot rely on § 1356(m) as a basis for its biometric 28 services fee because it conflicts with section 549, and the more specific provision of section 15 1 549 should prevail over § 1356(m). See Morales v. Trans World Airlines, Inc., 504 U.S. 374, 2 384 (1992) (observing that "it is a commonplace of statutory construction that the specific 3 governs the general"). In denying an earlier motion to dismiss, this Court refused to interpret 4 the general provisions of § 1356(m) "in a way that eviscerates the far more specific fee cap 5 on applicants for TPS" set by 8 U.S.C. § 1254a(c)(1)(B). Feb. 4, 2008 Order Denying Defs.' 6 Mot. to Dismiss (Doc. 68), at 16. However, the "specific" provision at issue then was not 7 section 549, but the $50 cap on registration fees set by § 1254a(c)(1)(B). Although USCIS 8 could not rely on the general authority of § 1356(m) to supersede a specific $50 limit on 9 registration fees,10 § 1356(m) is not being used to supersede section 549: the authority to 10 charge a fee "when administering" one program is not inconsistent with the general authority United States District Court 11 to set that fee at a level that recoups the costs of those services and similar services For the Northern District of California 12 performed for non-fee-paying applicants. "[P]rinciples of construction requiring the more 13 recent and specific statute to prevail over the earlier and more general only apply when there 14 is an irreconcilable conflict between statutes." Chevron U.S.A., Inc. v. Hammond, 726 F.2d 15 483, 490 n.8 (9th Cir. 1984). Section 549 authorizes USCIS to charge a fee for necessary 16 services but does not govern how USCIS calculates such a fee; that is done by § 1356(m), 17 which expressly allows USCIS to charge fees at a level that ensures the full recovery of its 18 costs. Plaintiffs therefore do not state a plausible claim that charging the $80 fee in this 19 context violates section 549 because applicants are paying for services that are not related to 20 their unique applications. 21 22 II. 23 The Administrative Procedure Act None of Plaintiffs' bases for arguing that USCIS violates section 549 by charging the 24 biometric services fee without collecting biometric data is sufficient to state a claim. 25 However, Plaintiffs also argue that the fee violates the Administrative Procedure Act, which 26 allows a reviewing court to "hold unlawful and set aside agency action, findings, and 27 The Court later concluded, in light of the passage of section 549, that the $50 cap on registration fees does not apply to the biometric services fee. See Summ'y J. Order (Doc. 28 139) at 9-11. 10 16 1 conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in 2 accordance with law." 5 U.S.C. § 706(2)(A). Plaintiffs rely on the explanation of the 3 "arbitrary and capricious" standard set out by the Supreme Court in Motor Vehicle 4 Manufacturers' Association v. State Farm Mutual Auto Insurance Co.: 5 6 7 8 Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. 9 463 U.S. 29, 43 (1983). Plaintiffs contend that, in setting the biometric services fee, USCIS 10 relied on impermissible factors and failed to consider the problem that TPS applicants would United States District Court 11 pay for services they were not receiving. For the Northern District of California 12 Plaintiffs assert that this is a "fact intensive" inquiry that requires "substantial 13 evidence," and therefore cannot be resolved on a motion to dismiss. Opp'n at 23. The Court 14 disagrees. The "substantial evidence" test can be applied to set aside agency action only in 15 "certain narrow, specifically limited situations." Citizens to Preserve Overton Park, Inc. v. 16 Volpe, 401 U.S. 402, 414 (1971) (overruled on other grounds, Califano v. Sanders, 430 U.S. 17 99, 105 (1977)).11 Plaintiffs' allegations, to the contrary, "can be resolved with nothing more 18 than the statute and its legislative history." Am. Bankers Ass'n v. NCUA, 271 F.3d 262, 266 19 (D.C. Cir. 2001) (rejecting argument that district court could not resolve motion to dismiss 20 without reliance on administrative record). 21 USCIS acted well within its authority under section 549 and 8 U.S.C. § 1356(m) in 22 setting the biometric services fee at $80 and charging those whose biometrics were already 23 on file. Plaintiffs' arguments for setting aside that fee as arbitrary and capricious have no 24 merit. Plaintiffs claim that USCIS relied on "factors Congress did not intend it to consider," 25 "Review under the substantial-evidence test is authorized only when the agency action is taken pursuant to a rulemaking provision of the Administrative Procedure Act itself, 26 or when the agency action is based on a public adjudicatory hearing." Citizens to Preserve Overton Park, 401 U.S. at 414. Although Plaintiffs appear to argue that the "substantial 27 evidence" standard applies to claims that agency action is "arbitrary and capricious," they are in fact two distinct standards under the APA. See 5 U.S.C. § 706(2)(A) (arbitrary and 28 capricious standard), (E) (substantial evidence standard). 11 17 1 as section 549 allows a fee to be charged only "for services actually provided." Opp'n at 22. 2 However, the Court has already refuted this argument: the fee is charged for the performance 3 of background checks, which are a service provided to TPS applicants. Plaintiffs also argue 4 that charging applicants for services they do not receive is "an important aspect of the 5 problem" that USCIS "entirely failed to consider." State Farm, 463 U.S. at 43. To the 6 contrary, USCIS acted within its congressional mandate to ensure recovery of the full costs 7 of services, including services provided to non-fee-paying asylum applicants. 8 U.S.C. 8 § 1356(m). USCIS followed that mandate by setting a single fee to be paid by anyone who 9 receives biometric services. Plaintiffs have therefore alleged no facts that would support a 10 finding that the agency action was arbitrary and capricious. United States District Court 11 For the Northern District of California 12 III. 13 Leave to Amend The Court concludes that the SAC does not state any claim for which relief can be 14 granted. Plaintiffs have requested leave to amend, which should be granted unless the Court 15 "determines that the pleading could not possibly be cured by the allegation of other facts." 16 Doe v. United States, 58 F.3d 494, 497 (9th Cir. 1995) (internal citations omitted). When 17 asked at hearing what additional facts they would allege in an amended complaint, they 18 raised two issues. 19 First, Plaintiffs would allege that USCIS improperly included the cost of biometric 20 services for asylum applicants in the biometric services fee paid by those applying for TPS. 21 However, the Court has already concluded that doing so is justified by 8 U.S.C. § 1356(m), 22 and is not contrary to section 549. Amending the complaint to allege such facts would 23 therefore be futile. 24 Second, Plaintiffs would allege that USCIS is "double-dipping" by charging Plaintiffs 25 twice for the provision of secure documentation. Plaintiffs contend that the biometric 26 services fee includes costs associated with providing secure documentation to TPS recipients; 27 however, the only secure documentation they receive is an employment authorization 28 document, for which they pay a separate $340 fee. See 8 U.S.C. § 1254a(c)(1)(B) (allowing 18 1 "a separate, additional fee for providing an alien with documentation of work 2 authorization"); 8 C.F.R. § 103.7(b)(1) (setting fee for "filing an application for employment 3 authorization" at $340). Plaintiffs would therefore allege that they are being charged twice 4 for a single service. Section 549 grants USCIS broad authority to collect fees when 5 administering the TPS program, and it is not clear that the facts proposed by Plaintiffs are 6 sufficient to withstand another motion to dismiss. However, in light of the liberal rules in 7 favor of amendment, and in an abundance of caution, the Court grants Plaintiffs leave to file 8 an amended complaint. 9 10 CONCLUSION United States District Court 11 For the Northern District of California For the reasons set forth below, Defendants' motion is GRANTED, and Plaintiffs' 12 SAC is DISMISSED without prejudice. Plaintiffs' amended complaint, should they choose 13 to amend, shall be filed no later than October 29, 2010. 14 15 IT IS SO ORDERED. 16 17 Dated: 9/15/10 18 19 20 21 22 23 24 25 26 27 28 19 THELTON E. HENDERSON, JUDGE UNITED STATES DISTRICT COURT

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