SCOTUS Grants Certiorari to Two Immigration-Based Cases for 2015 Term: Will the Government Have to Explain Its Exercise of “Discretion”?

Greenberg Traurig Law firm

The United States Supreme Court is back in session as of last Monday, Oct. 6—often referred to as “First Monday” due to the fact that the term must begin on the first Monday of October by law. Among its roughly 50 case docket, featuring headliners that will refine Fourth Amendment jurisprudence and agency regulatory authority, the Justices will tackle two cases that stand to have a considerable impact on American immigration law and procedure.

The first of those cases, Mellouli v. Holder, concerns the issue of whether a noncitizen—even a green card holder—can be mandatorily detained and deported for possessing drug paraphernalia.Section 237(a)(2)(B)(i) of the Immigration and Nationality Act broadly authorizes the deportation of noncitizens that find themselves caught up in charges related to a “controlled substance.” Currently, the circuits are split as to whether the drug paraphernalia itself, the possession of which is prohibited by some states, must be related to a substance listed in Section 802 of Title 21, the Controlled Substances Act, in order to properly form the basis of a deportation order under the immigration laws.

The defendant, Moones Mellouli, is a lawful permanent resident who earned two master’s degrees and worked as an actuary. He was convicted of a Kansas misdemeanor offense, “possession of drug paraphernalia,” a charge that did not make reference to a controlled substance. In fact, his conduct would constitute a crime neither under federal law nor under the laws of many states. Nonetheless, U.S. Immigration and Customs Enforcement (“ICE”) arrested Mellouli and sought to deport him for violating a state law “relating to a controlled substance.” This case could also simultaneously serve as a conduit for showing the public at large how draconian adherence to prioritizing the prosecution of “alien criminals” produces undesirable effects, such as insufficient due process and wildly disproportionate consequences—like deportation—for minor offenders.

The second case, Kerry v. Din, also has at its base important due process concerns. Here, they flow from a U.S. citizen petitioner’s rights before a Department of State (“DOS”) denial of her husband’s visa at one of its consular posts. At issue is (1) whether the consular officer’s refusal of a visa to a spouse of a U.S. citizen impinges upon a constitutionally protected interest of the citizen; and (2) whether a citizen-petitioner is entitled to challenge in court the refusal of a visa to her spouse and to require the government to identify a specific statutory provision rendering him inadmissible and the explicit conduct that would render the spouse ineligible in order to sustain the visa refusal.

Thus, Kerry v. Din will squarely exhort a review of the doctrine of “consular nonreviewability”—sometimes referred to as “consular absolutism.” This principle surged following the SCOTUS decision in United States ex rel. Knauff v. Shaughnessy roughly 65 years ago and embodies the notion that a consular officer’s (i.e., at an exterior post, by definition) decision to grant or deny a visa petition is not subject to judicial review. The Knauff court explicitly stated that “[w]hatever the procedure authorized by Congress is, it is due process as far as an alien denied entry is concerned.” [338 U.S. 537, 544 (1950)]. Those familiar with immigration law will recognize that this was but a culmination of successive rulings reinforcing the idea that the power to exclude aliens is both inherent in the sovereign and exclusive to its political branches of government; that a noncitizen’s rights are at their lowest prior to acceding to our borders. In practice, this means that the exercise of “discretion” by immigration agents often results in an unsatisfactory “because I said so” explanation by the government, without more, as if it were dealing with insolent children. In an area that impacts many fundamental facets of an individual’s daily life, the current dearth of due process and unquestioning reliance on a particular agent’s determinations is grossly misplaced.

Amber and Victor Ramirez of Kankakee, Illinois, is just one couple that has experienced the negative consequences of this amorphous agency “discretion” in 2011. USCIS granted Amber’s petition for a visa for Victor, her spouse. Victor then traveled to the U.S. consulate abroad—a routine practice for noncitizens that switch immigration status—in Juarez, Mexico to obtain the visa. The DOS consular officer refused to grant the already-approved visa, citing only that there was “reason to believe” Victor might engage in illegal activity in the United States. No further explanation was given.

As it turns out Victor has tattoos and the couple perceived that the consular office was focusing on them. “Victor has never been in a gang, and is not listed in Illinois’ gang database. Amber worked with the local police to explain that Victor’s tattoos did not match any known gang tattoos. The couple explained each of his tattoos, including the tattoo of the name of their daughterThe consulate refused to reconsider or to explain its reasoning, even though over 40 percent of American households include a member with tattoos. The family remains separated based solely on the word of an anonymous bureaucrat.”

This is precisely the category of government action that would be unreviewable under the prevailing consular nonreviewability doctrine, which forms the foundation of the government’s argument in Din. And Din, for its part, bears on the extent to which the government can get away with vague and perfunctory rationales—perhaps not even truly reaching the substantive inquiry of whether an agent’s subjective profiling of an individual is a lawful basis upon which a discretionary immigration action may be made.

Shaun Staller also contributed to this article.

©2014 Greenberg Traurig, LLP. All rights reserved.

‘Jersey Shore’ Star Pleads Not Guilty to Tax Fraud

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C’mon, admit it: you’ve watched at least a few minutes of MTV’s “Jersey Shore.” Okay, fine, not all of us have let our curiosity get the best of us, but for those who have, one of the main characters of the series is currently making headlines for a tax fraud case.Mike Sorrentino, whose nickname on the show was “The Situation,” is currently facing charges that he and his brother failed to pay $8.9 million of taxes between 2010 and 2012.

According to the IRS, the brothers filed false income tax returns, failing to report personal and business income and claiming false business deductions. Those earnings were largely from public appearances for which potentially thousands of dollars were paid. Authorities also accused Sorrentino of altering accounting records or having them altered after a grand jury issued a subpoena.

Sorrentino denies the allegations and has pleaded not guilty to the charges. His attorney made a public statement last month that Sorrentino “denies that he criminally violated the tax laws.” In effect this means that he is claiming the violations were due to negligence rather than fraud.

The difference between tax negligence and tax fraud is pretty significant, not only in terms of the mental state of the taxpayer at the time the filing was made but also in terms of the penalties attached. Penalties for fraud, of course, are much more significant.

While the IRS usually has a pretty good idea of when an individual has committed fraud or negligence, this is not always the case. Those who have been wrongfully accused of tax fraud need to work with an experienced attorney to ensure their rights are protected.

Department of State Releases November 2014 Visa Bulletin

Morgan Lewis

The bulletin shows slight forward movement in all employment-based preference categories, with the exception of the EB-2 India category, which will remain unchanged.

The U.S. Department of State (DOS) has released its November 2014 Visa Bulletin. The Visa Bulletin sets out per-country priority date cutoffs that regulate the flow of adjustment of status (AOS) and consular immigrant visa applications. Foreign nationals may file applications to adjust their statuses to that of permanent residents or to obtain approval of immigrant visas at a U.S. embassy or consulate abroad, provided that their priority dates are prior to the respective cutoff dates specified by the DOS.

What Does the November 2014 Visa Bulletin Say?

The November Visa Bulletin shows retrogression of more than four years in the cutoff date for the EB-2 India category.

The cutoff date for F2A applicants from all countries will advance slightly in October.

EB-1: All EB-1 categories will remain current.

EB-2: The cutoff date for applicants in the EB-2 category chargeable to India will retrogress by more than four years to February 15, 2005.The cutoff date for applicants in the EB-2 category chargeable to China will advance by 23 days to December 8, 2009. The EB-2 category for all other countries will remain current.

EB-3: The cutoff date for applicants in the EB-3 category chargeable to India will advance by seven days to November 22, 2003. The cutoff date for applicants in the EB-3 category chargeable to China will advance by nine months to January 1, 2010, once again moving ahead of the cutoff date for EB-2 China. The cutoff date for applicants in the EB-3 category chargeable to the Philippines, Mexico, and the worldwide category will advance by eight months to June 1, 2012.

The relevant priority date cutoffs for foreign nationals in the EB-3 category are as follows:

China: January 1, 2010 (forward movement of 275 days)
India: November 22, 2003 (forward movement of 7 days)
Mexico: June 1, 2012 (forward movement of 244 days)
Philippines: June 1, 2012 (forward movement of 244 days)
Rest of the World: June 1, 2012 (forward movement of 244 days)

Developments Affecting the EB-2 Employment-Based Category

Mexico, the Philippines, and the Rest of the World

The EB-2 category for applicants chargeable to all countries other than China and India has been current since November 2012. The November Visa Bulletin indicates no change to this trend. This means that applicants in the EB-2 category chargeable to all countries other than China and India may continue to file AOS applications or have applications approved through November 2014.

China

The October Visa Bulletin indicated a cutoff date of November 15, 2009 for EB-2 applicants chargeable to China. The November Visa Bulletin indicates a cutoff date of December 8, 2009, reflecting forward movement of 23 days. This means that applicants in the EB-2 category chargeable to China with a priority date prior to December 8, 2009 may file AOS applications or have applications approved in November 2014.

India

Throughout September and October, the cutoff date for EB-2 applicants chargeable to India was May 1, 2009. The November Visa Bulletin indicates a cutoff date of February 15, 2005, reflecting a retrogression of more than four years. This means that only applicants in the EB-2 category chargeable to India with a priority date prior to February 15, 2005 may file AOS applications or have applications approved in November 2014.

The cutoff date in the EB-2 India category had advanced rapidly in recent months through the use of “otherwise unused” employment-based visa numbers prescribed by section 202(a)(5) of the Immigration and Nationality Act. The DOS’s Visa Office had warned that continued forward movement of this cutoff date could not be guaranteed and that increased demand in this category would require the retrogression of the cutoff date in order to hold number use within the fiscal year 2015 annual limit.

Developments Affecting the EB-3 Employment-Based Category

China

The October Visa Bulletin indicated a cutoff date of April 1, 2009 for EB-3 applicants chargeable to China. The November Visa Bulletin indicates a cutoff date of January 1, 2010, reflecting forward movement of 275 days. This means that applicants in the EB-3 category chargeable to China with a priority date prior to January 1, 2010 may file AOS applications or have applications approved in November 2014.

India

The October Visa Bulletin indicated a cutoff date of November 15, 2003 for EB-3 applicants chargeable to India. The November Visa Bulletin indicates a cutoff date of November 22, 2003, reflecting forward movement of seven days. This means that EB-3 applicants chargeable to India with a priority date prior to November 22, 2003 may file AOS applications or have applications approved in November 2014.

Rest of the World

The October Visa Bulletin indicated a cutoff date of October 1, 2011 for EB-3 applicants chargeable to the worldwide category. The November Visa Bulletin indicates a cutoff date of June 1, 2012, reflecting forward movement of 244 days. This means that applicants in the EB-3 category chargeable to the worldwide category with a priority date prior to June 1, 2012 may file AOS applications or have applications approved in November 2014.

Developments Affecting the F2A Family-Sponsored Category

The October Visa Bulletin indicated a cutoff date of July 22, 2012 for F2A applicants from Mexico. The November Visa Bulletin indicates a cutoff date of September 22, 2012, reflecting forward movement of 62 days. This means that applicants from Mexico with a priority date prior to September 22, 2012 will be able to file AOS applications or have applications approved in November 2014.

The October Visa Bulletin indicated a cutoff date of February 1, 2013 for F2A applicants from all other countries. The November Visa Bulletin indicates a cutoff date of March 1, 2013, reflecting forward movement of 28 days. This means that F2A applicants from all other countries with a priority date prior to March 1, 2013 will be able to file AOS applications or have applications approved in November 2014.

Developments in the Coming Months

The DOS Visa Office predicts the following movement in the next three months:

F2A Family-Sponsored Category

  • The cutoff date in the F2A category will likely advance by three to five weeks per month.

Employment-Based Second Preference Category

  • The worldwide category will likely remain current.

  • The cutoff date in the EB-2 China category will likely advance by three to five weeks per month.

  • The cutoff date in the EB-2 India category will likely remain unchanged.

Employment-Based Third Preference Category

  • The cutoff date in the EB-3 worldwide category will continue to advance rapidly for the next several months. Demand is expected to increase significantly, at which point, the cutoff dates will be adjusted accordingly.

  • The cutoff date in the EB-3 China category is expected to advance rapidly in the next few months. Demand is expected to increase and may result in adjustments to the cutoff date by February 2015.

  • The cutoff date in the EB-3 India category will advance little, if at all.

  • The cutoff date in the EB-3 Mexico category will remain at the worldwide date.

  • The cutoff date in the EB-3 Philippines category will remain at the worldwide date. Increased demand in this category may result in adjustments to the cutoff date later in the fiscal year.

How This Affects You

Priority date cutoffs are assessed on a monthly basis by the DOS, based on anticipated demand. Cutoff dates can move forward or backward or remain static. Employers and employees should take the immigrant visa backlogs into account in their long-term planning and take measures to mitigate their effects. To see the November 2014 Visa Bulletin in its entirety, please visit the DOS website.

Copyright © 2014 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

Ebola Response Missing A Critical Player

Covington BUrling Law Firm

The Obama Administration has mobilized a number of government agencies to respond to the Ebola crisis in West Africa and to prevent its spread into the U.S. At the frontline of the Administration’s response is the Pentagon, the Department of Health and Human Services, the Center for Disease Control, the U.S. Agency for International development and, more recently, the Department of Transportation.

Conspicuously missing, however, is the Department of Commerce, which traditionally is the link to the U.S. private sector.

This omission is significant because U.S. companies are likely to get materials to the stricken countries of Liberia, Sierra Leone and Guinea more quickly than the Pentagon.  In the instances in which they operate locally, the companies provide a valuable source of information and delivery infrastructure.

For example, in mid-August, more than 20 leading medical companies shipped 40 tons of supplies and protective equipment to Liberia.  The airlift was coordinated  by the California-based NGO, Direct Relief, and facilitated by Fedex. Companies such as Pfizer, Teva, Merck, Kimberly-Clark and Mylan Laboratories contributed 2.3 million gloves, 65,000 masks and 185,000 tabs of antibiotics. As of September 20th, Direct Relief had coordinated 11 shipments of supplies.

Equally important is the Ebola Private Sector Mobilization Group (EPSMG) which is a network of more than 40 companies active in West Africa and, especially, Liberia, Guinea and Sierra Leone. Chaired by ArcelorMittal and including companies such as Chevron, Rio Tinto and BHP Billiton, the group seeks to provide a single access point for the private sector to help mobilize and coordinate a response.  The group’s first principal is to “be part of the region’s long-term economic and social recovery and development.” EPSMG has met with Dr. Margaret Chan, Director General of the World Health Organization, and the U.S. ambassador to Liberia, Deborah Malac, and engaged with organizations such as the UN Ebola Task Force, the World Bank and various NGOs.

The in-country private sector plays other important roles.  ArcelorMittal, which has a workforce of nearly 3000, provides health care for its workers and their families and uses its internal communications network to convey accurate and timely information about the epidemic.  Firestone Rubber, which has been in Liberia since 1926, detected in first case of Ebola on March 30th, according to NPR. Since then, the company went into crisis mode, built its own treatment center and developed a comprehensive response that effectively stopped the transmission of the virus among more than 80,000 employees and family members who live on the sprawling plantation.

Local companies such as the National Oil Company of Liberia and the Sierra Leone Produce Marketing Company have also made contributions to combatting the virus.

The importance of the private sector’s role in responding to health emergencies cannot be underestimated.  Companies such as Anglo-American, SABMiller and Ford Motor Company played critical roles in combatting the HIV/AIDS crisis in South Africa by making medicines and quality health care available to their employees and their families, and they continue to play this role.

The U.S. Chamber of Commerce and the Corporate Council on Africa are to be applauded for the role that they have played in helping to coordinate and publicize the U.S. private sector response to the Ebola crises.

The Obama Administration has effectively integrated the private sector into key development initiatives such as Power Africa and the New Alliance for Food Security and Nutrition, which is the private sector component of Feed the Future.  It would do well to establish a similar mechanism as part of its Ebola response. Controlling the spread of Ebola and the development of viable health care systems in the three affected countries will require the sustained engagement of governments, NGOs, international organizations and agencies and the private sector.  The sooner that all parties are able to coordinate their efforts the more likely this virus will be controlled.

© 2014 Covington & Burling LLP
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November Visa Bulletin Confirms Fears of Significant Retrogression for EB-2 India

Greenberg Traurig Law firm

The Department of State released its November Visa Bulletin today. It is a mixture of good news and really bad news. The good news is that the EB-2 and EB-3 categories for all countries, except for India, continue to experience forward movement. Worldwide, EB-2 availability remains current and EB-3 availability advanced to June 1, 2012. China also experienced forward movement, with EB-2 advancing to December 8, 2009, and EB-3 advancing to January 1, 2010.

The really bad news in the Visa Bulletin relates to visa availability for India. As expected, EB-2 availability for India retrogressed by more than four years, from May 1, 2009, to February 15, 2005. EB-3, however, advanced by one week to November 22, 2003.

The Visa Bulletin also contains projections for future months. Visa availability in the EB-1 (all countries) and EB-2 (worldwide) categories are expected to remain current over the coming months. EB-3 worldwide availability is expected to experience rapid forward movement for the next several months. For China, EB-2 availability is projected to increase by three to five weeks per month, and rapid forward movement is also expected in the EB-3 category, with potential retrogression in February. India is not expected to have any forward movement in the EB-2 or EB-3 categories.

In short, individuals from India face a bleak outlook in green card availability over the next few months, while the future is brighter for individuals from all other countries.

EB   Category

Worldwide

China

India

EB-1

Current

Current

Current

EB-2

Current

12/08/2009

02/15/2005

EB-3

06/01/2012

01/01/2010

11/22/2003

©2014 Greenberg Traurig, LLP. All rights reserved.
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Reclassification of Hydrocodone Takes Effect This Week

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The U.S. Drug Enforcement Administration (“DEA”) published a Final Rule on August 22, 2014, which elevates hydrocodone-combination products (“HCPs”) to a Schedule II category of drugs under the Controlled Substances Act. That rule becomes effective this week – on October 6, 2014. While some hydrocodone products are already listed as Schedule II, some combination products (such as Vicodin, Norco, and Tussionex) were previously listed on the less-restrictive Schedule III. In determining whether rescheduling was necessary, the DEA considered multiple factors including the potential for abuse, likelihood of dependence, and the threat to public health posed by the drug.

How does the new rule affect prescribers?

According to DEA, HCPs prescriptions issued prior to October 6, 2014 and authorized to be filled or refilled may be dispensed if such dispensing occurs before April 8, 2015. In some cases, pharmacy dispensing software products may not be able to process existing refills starting on October 6, or pharmacies may simply choose not to dispense refills after the effective date.

Pursuant to the Final Rule, HCPs prescriptions written on or after October 6, may not be refilled. No refills are allowed by any practitioner for Schedule II controlled substances and Schedule II prescriptions may only be given for maximum of a 30-day supply. Commentators to the proposed rule worried that rescheduling would result in more trips to the doctor to receive appropriate pain control. In response to these concerns, the DEA noted in the Final Rule that prescribers may issue multiple prescriptions authorizing patients to receive up to a 90-day supply, provided certain regulatory requirements (established in 21 CFR 1306.12) are met.

Prescription Bottle of Pills Spilled on Table

In addition, in Kentucky, Schedule II controlled substance prescriptions may not be faxed or called in to a pharmacy except as provided for in 902 KAR 55:095. Schedule II controlled substance prescriptions that are electronically prescribed must use a system that has been audited for compliance with the regulations specified in 21 CFR 1311. Further, Schedule II controlled substance prescriptions are valid for 60 days from the date written and controlled substance prescriptions must be signed and dated on the date issued by the prescriber.

Kentucky prescribers should be aware that restrictions on prescribing existing Schedule II pure hydrocodone products remain under current Kentucky statutes and regulations because these products were not rescheduled to Schedule II.

Midlevel providers who operate under collaborative agreements or are limited in their ability to prescribe certain Schedules of medications may be particularly affected by the Final Rule. In Kentucky, KRS 314.011, Section 8 (a) limits APRN prescribing of Schedule II controlled substances to a 72 hour supply with no refills, except certified psychiatric-mental health nurses are permitted to prescribe up to a 30-day supply of a Schedule II psychostimulant with no refills. KRS 314.011, Section 8 (b) limits APRN prescribing of Schedule III controlled substances to a 30-day supply with no refills. Because KRS 314.011, Section 8 (b) was in effect March 19, 2013, all APRNs will continue to be permitted to prescribe a 30-day supply of Schedule II hydrocodone combination products if allowed under their DEA license.

Even if the Final Rule does not specifically affect a prescriber’s abilities, prescribers should be prepared to work with pharmacies in order to minimize dispensing disruptions after the effective date. They should also identify and inform patients who are currently receiving HCPs about the rescheduling and, if necessary, discuss alternative pain management options. And, as prescribers well know, any new regulatory framework also brings with it the expectation of greater scrutiny and oversight in the future from regulatory authorities and law enforcement agencies.

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Where do Social Security Payments Made by Undocumented Workers Go?

Greenberg Traurig Law firm

Many employers are familiar with the following scenario: You hire someone, put them on payroll and deduct taxes from their checks automatically – just like you do with all employees. You then find out through an audit by U.S. Immigration Customs and Enforcement (ICE) or by the employee coming clean that he or she is using a fake social security number. You consequently terminate employment on the grounds that they violated the company’s “honesty policy” or simply because he or she is not authorized to work in the United States. So what does Social Security do with the payments that the employee has made?

According to the Social Security Administration (SSA) unauthorized workers are paying an estimated $13 billion per year in social security taxes and are receiving about $1 billion in return. During an interview, Stephen Goss, the chief actuary of the SSA, estimated that there are approximately 11 million undocumented people in the United States and about 7 million of these people are working illegally. Further, out of these 7 million undocumented workers, approximately 3.1 million people are using fake or expired social security numbers. Goss noted that undocumented workers have paid around $100 billion in social security taxes over the last decade, which the SSA has treated as a positive cash flow without a home. Goss indicated that the $100 billion in unclaimed social security created by undocumented workers has been a key factor in allowing the SSA “to be paying benefits for as long as it now can.”

So, and in answering the headline question, the SSA puts all of these “homeless” contributions into the Social Security Trust Fund for Old-Age and Survivors Insurance (OSAI). This fund is used to ultimately pay out social security benefits to U.S. workers and retirees.

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House Passes Bill to Prevent EPA Overreach

Varnum LLP

The U.S. House of Representatives recently passed legislation prohibiting the U.S. Army Corps of Engineers and the Environmental Protection Agency (EPA) from developing, finalizing, adopting, implementing, applying, administering, or enforcing the EPA rule defining what constitutes “waters of the United States” under the Clean Water Act.

This Waters of the United States Regulatory Overreach Protection Act of 2014, H.R. 5078, comes as a response to a move by the EPA in April of this year that proposed changes to how the EPA will define “waters of the United States.” The EPA’s update uses scientific terms from hydrogeology to define which waters are covered under the Clean Water Act.

Farmers, however, have criticized the EPA update as 80 pages of technical and legal jargon. After Congressional hearings, the House passed The Waters of the United States Regulatory Overreach Protection Act of 2014. This bill will go to the Senate next for consideration.

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Employers’ Immigration Law Update – September 2014

Jackson Lewis Law firm

ICE Levies $2M Fine against Hotel for I-9 Related Violations

A Salt Lake City-based hotel will have to pay nearly $2 million for hiring unauthorized workers, including illegal aliens. The hotel will avoid criminal prosecution in exchange for its full cooperation with a U.S. Immigration and Customs Enforcement investigation and for taking action to correct its hiring practices. According to the non-prosecution agreement, several lower-level employees and mid-level managers conspired to rehire unauthorized workers amidst an administrative audit of I-9 employee verification forms that began in September 2010. The hotel was notified that 133 employees were not authorized to work in the United States; however, the conspirators created three temporary employment agencies, essentially shell companies, to rehire 43 of the unauthorized, and most of the workers returned under different names using fraudulent identity documents.

$300K for H-2B Violations

According to a Department of Labor announcement, the agency has charged a landscaping company with violating federal law by failing to hire U.S. workers, and for underpaying temporary foreign workers. The company will pay $280,000 in back wages to 80 workers and nine job applicants and $20,000 in civil money penalties.

Immigration Reform Update

With comprehensive immigration reform legislation no longer a realistic possibility for the foreseeable future, advocates for reform have shifted their focus to executive actions the President may take unilaterally to implement changes in immigration policy.

The President reportedly is considering broad use of executive action, granting relief potentially to up to 6 million undocumented individuals, similar to what has been provided under the administration’s Deferred Action to Childhood Arrivals program (DACA).

Building off of DACA, the President has directed the Department of Homeland Security to review the administration’s immigration enforcement policies and recommend additional changes, possibly expanding the deferred action and work authorization to family members of U.S. citizens and lawful U.S. residents. The administration reportedly also is looking at possible changes to current law and regulation that could benefit employers.

Any unilateral action by the administration likely will be controversial.

Owner Liable for H-1B, J-1 Costs

The owner of several medical clinics is personally liable for back wages and the costs of physicians’ H-1B visas and J-1 waivers, the Court of Appeals for the Sixth Circuit has ruled. Kutty v. DOL, No. 11-6120 (6th Cir. Aug. 20, 2014). The Court held Dr. Mohan Kutty and his medical clinics violated H-1B provisions by having physicians cover the costs of their own H-1B visa petitions and related J-1 visa waivers.

Department of Defense Contractors Agree to Pay the U.S. Government $5.5 Million for Allegedly Supplying the Military with Low-Grade Batteries for Humvee Gun Turrets Used in Iraq; Minnesota Whistleblower to Receive $990,000

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On September 16, 2014, the Department of Justice (DOJ) announced that Department of Defense (DOD) contractors, M.K. Battery, Inc. (M.K. Battery), East Penn Manufacturing Company (East Penn), NPC Robotics, Inc. (NPC), BAE Systems, Inc. (BAE) and BAE Systems Tactical Vehicle Systems LP (BAE) had agreed to a settlement of $5.5 million for allegedly violating the False Claims Act (FCA) by selling the U.S. Military substandard batteries for Humvee gun turrets used on military combat vehicles in Iraq. Minnesota whistleblower, David McIntosh, former employee of M.K. Battery, will receive $990,000 which represents his share of the settlement for reporting fraud against the government – in this case misrepresentation of a vital product supplied to the DOD.

A gun turret is a weapon mount that protects the crew or mechanism of a projectile-firing weapon and at the same time lets the weapon be aimed and fired in many directions. Sealed acid batteries are used as a backup to turn the turrets on the Humvees in the event that the engine gives out.  According to Mr. McIntosh, and unbeknownst to the Army, the manufacturing process of the batteries was allegedly changed from the original design presented to the DOD, consequently cutting the battery’s life span by as much as 50 percent and potentially putting U.S. Troops in harm’s way.  Mr. McIntosh, from Stacy, Minnesota, who at the time was employed by M.K. Battery as a regional sales representative, brought his concerns to top company officials at M.K. Battery.  However, in 2007 after numerous unsuccessful attempts to convince M.K. Battery that its decision to cut costs on these batteries could be hazardous to U.S. Troops, especially during combat, Mr. McIntosh alerted the DOD to this matter.  Three month later, M.K. Battery fired Mr. McIntosh.

Shortly thereafter, Mr. McIntosh and his attorneys filed the lawsuit under the whistleblowersprovisions of the False Claims Act, which is one of the most effective methods that the government has implemented for combating fraud. Under the FCA, any person, who knows of an individual or company that has defrauded the federal government, can file a “qui tam” lawsuit to recover damages on the government’s behalf.  Mr. McIntosh filed this particular lawsuit on behalf of himself and the Department of Defense. Additionally, a whistleblower who files a case against a company that has committed fraud against the government, may receive an award of up to 30 percent of the settlement. In this case, Mr. McIntosh’s share of $5.5 million is approximately 18 percent of the settlement.

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