Chamber of Commerce of the United State of America v. United States Department…

Background

The plaintiffs challenged a Department of Homeland Security rule concerning registration for H-1B petitions subject to the annual visa cap. The H-1B program allows employers in the United States to hire qualified foreign professionals in specialty occupations. Before the challenged rule, when registrations exceeded the available number of visas, the Department used a random selection process. The Final Rule instead required the Department to rank and generally select registrations based on the highest applicable wage level for the offered position.

The plaintiffs alleged that the Final Rule conflicted with the Immigration and Nationality Act and was arbitrary and capricious under the Administrative Procedure Act, the federal law governing review of agency action. They also argued that Chad Wolf was not lawfully serving as Acting Secretary of Homeland Security when he approved the Final Rule.

Standing and Zone of Interests

The court considered whether the plaintiffs had Article III standing and whether they fell within the relevant statute’s “zone of interests,” meaning the interests Congress intended the statute to protect or regulate. Although the parties had not addressed those issues, the court raised them because some university plaintiffs are not subject to the H-1B visa cap. Based on evidence that international students consider access to the H-1B program when choosing where to study, and that the rule could make it less likely for recent graduates to obtain H-1B visas, the court concluded that the plaintiffs had standing and satisfied the zone-of-interests test.

Acting Secretary’s Authority

The court concluded that Wolf was not lawfully serving as Acting Secretary when DHS approved the Final Rule. It determined that former Secretary Kirstjen Nielsen’s April 9 succession order did not validly amend the succession order that applied when she resigned. As a result, Kevin McAleenan was not lawfully elevated to Acting Secretary, and his later attempt to elevate Wolf also was invalid.

The court noted that DHS had confirmed at the hearing that Secretary Alejandro Mayorkas had not ratified the Final Rule. Because Wolf was not lawfully appointed when the rule was approved, the court concluded that the Final Rule had to be set aside. The court therefore did not reach the plaintiffs’ alternative arguments.

Disposition

The court granted the plaintiffs’ motion for summary judgment and denied DHS’s cross-motion for summary judgment. It vacated the Final Rule and remanded the matter to DHS. The court stated that it would enter a separate judgment and that the clerk would close the file.