Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca3-09-02515/USCOURTS-ca3-09-02515-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 09-2515

 

CYBERWORLD ENTERPRISE 

TECHNOLOGIES, INC. 

d/b/a Tekstrom, Inc. 

v.

JANET NAPOLITANO,

Secretary of the Department of Homeland Security;

ATTORNEY GENERAL ERIC H. HOLDER, JR.;

HILDA L. SOLIS,

Secretary of the Department of Labor;

MICHAEL AYTES,

Acting Deputy Director, United States

Citizenship and Immigration Services

Cyberworld Enterprise Technologies, Inc., 

 Appellant

 

Appeal from the United States District Court

for the District of Delaware

(D.C. Civil No. 1-06-cv-00402)

District Judge: Honorable Joseph J. Farnan, Jr.

 

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2

Argued January 11, 2010

Before: RENDELL, AMBRO and CHAGARES, 

Circuit Judges.

(Filed: April 12, 2010)

 

H. Ronald Klasko, Esq. [ARGUED]

Klasko, Rulon, Stock & Seltzer

1800 John F. Kennedy Boulevard

Suite 1700

Philadelphia, PA 19103

Stephen J. Neuberger, Esq.

The Neuberger Firm

2 East 7th Street, Suite 302

Wilmington, DE 19801

 Counsel for Appellant

Seth M. Beausang, Esq.

Office of United States Attorney

1007 North Orange Street, Suite 700

P.O. Box 2046

Wilmington, DE 19899

Joan Brenner, Esq. [ARGUED]

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Paul L. Frieden, Esq.

United States Department of Labor

Office of the Solicitor

Room N2716

200 Constitution Avenue, N.W.

Washington, DC 20210

 Counsel for Appellees

 

OPINION OF THE COURT

 

RENDELL, Circuit Judge.

In this appeal, we consider whether the Secretary of

Labor retained jurisdiction to impose sanctions for violations of

H-1B visa regulations when she failed to act until eighteen

months after the time period prescribed by statute for her actions

had expired. We conclude that, under the analysis prescribed by

the Supreme Court in Brock v. Pierce County, 476 U.S. 253

(1986), the Secretary had jurisdiction to act after the deadline

passed.

Cyberworld Enterprise Technologies is a temporary

staffing company that obtains H-1B visas for its employees and

then places the employees with other companies, known as

“secondary employers.” Under federal law, Cyberworld is

required to inquire of the secondary employer whether the hiring

of an H-1B employee will cause a “United States worker” to be

laid off, or “displaced.” On August 9, 2001, the Department of

Labor received a complaint that Cyberworld had failed to

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comply with this requirement. Although the Department was

required by law to determine within thirty days whether a

“reasonable basis” existed for the complaint, it did not make this

determination until March 20, 2003, when it found that

Cyberworld had failed to make the required inquiries on

fourteen occasions. As provided for by statute, the Secretary of

Labor assessed a $3400 penalty and notified the Attorney

General to deny Cyberworld’s H-1B applications for the ensuing

year. 

After unsuccessfully challenging these sanctions through

an administrative appeal, Cyberworld brought an action in

federal district court against the Secretary and other officials

under the Administrative Procedure Act (“APA”), contending

that the Secretary was without jurisdiction to impose sanctions

because she had failed to act before the thirty-day deadline.

Cyberworld also contended that the Secretary’s action was

untimely under the doctrine of laches, that sanctions were

improper because Cyberworld had not knowingly violated the

statute, that the sanctions imposed were not authorized by

Department of Labor regulations, and that the Secretary should

have exercised her discretion not to impose sanctions. The

District Court granted summary judgment to the Government

defendants. Like the District Court, we are not persuaded by

Cyberworld’s arguments, and will affirm the District Court’s

order granting summary judgment.

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I.

A.

The H-1B visa program is designed to allow

professionals from other countries who are employed in

“specialty occupations” to work in the United States on a

temporary basis. 20 C.F.R. § 655.700. Employers obtain H-1B

visas for their employees by filing certain applications with the

Department of Labor and the Department of Homeland Security.

See id. H-1B employees either work directly for the employer

who obtained the visa or are placed with other employers in

need of specialty labor. As a temporary staffing agency,

Cyberworld places its H-1B employees with other employers

and is therefore known as a “placing employer.” Since the bulk

of Cyberworld’s workforce consists of H-1B employees, it is

also known as an “H-1B-dependent employer.”

In order to obtain H-1B visas for their employees,

employers must file a “labor condition application” (“LCA”)

with the Department of Labor under procedures set forth by 8

U.S.C. § 1182(n), which was incorporated into the Immigration

and Nationality Act (“INA”) by the Immigration Act of 1990

(the “1990 Act”) and later amended by the American

Competitiveness and Workforce Improvement Act of 1998

(“ACWIA”). See Pub. L. No. 101-649 § 205, 104 Stat. 4978,

5021-22 (1990); Pub. L. No. 105-277 §§ 412-13, 112 Stat. 2681,

2981-642 to -650 (1998). As part of this application, an

employer must make several attestations required by

§ 1182(n)(1), including that the employer will pay H-1B

employees no less than the prevailing wage for that type of job;

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that the employer’s current employees are not on strike; that the

employer has notified its employees of its intent to hire H-1B

workers; and that the employer has attempted to recruit

employees in the United States to fill its positions.

The attestation requirement relevant here was enacted by

the ACWIA, and requires that placing employers attest in the

LCA that they have confirmed with secondary employers that

the hiring of an H-1B employee will not displace a “United

States worker” employed by the secondary employer.

Specifically, 8 U.S.C. § 1182(n)(1)(F) provides that the LCA

must state that:

the employer will not place the

nonimmigrant with another

employer (regardless of whether or

not such other employer is an

H-1B-dependent employer)

where—

(i) the nonimmigrant

performs duties in

whole or in part at

one or more

worksites owned,

operated, or

controlled by such

other employer; and

(ii) there are indicia of

an employment

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 “[T]he employer is considered to ‘displace’ a United

States worker from a job if the employer lays off the worker

from a job that is essentially the equivalent of the job for which

the nonimmigrant or nonimmigrants is or are sought.” 8 U.S.C.

§ 1182(n)(4)(B). “The term ‘United States worker’ means an

employee who—(i) is a citizen or national of the United States;

or (ii) is an alien who is lawfully admitted for permanent

residence, is admitted as a refugee under section 1157 of this

title, is granted asylum under section 1158 of this title, or is an

immigrant otherwise authorized, by this chapter or by the

Attorney General, to be employed.” § 1182(n)(4)(E).

7

relationship between

the nonimmigrant

and such other

employer;

unless the employer has inquired of

the other employer as to whether,

and has no knowledge that, within

the period beginning 90 days before

and ending 90 days after the date of

the placement of the nonimmigrant

with the other employer, the other

employer has displaced or intends

to displace a United States worker

employed by the other employer.

§ 1182(n)(1)(F) (emphases added).1

The inquiry requirement is also contained in Department

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of Labor regulations:

The H-1B employer is prohibited

from placing the H-1B

nonimmigrant with another

employer, unless the H-1B

employer has inquired of the

other/secondary employer as to

whether, and has no knowledge

that, within the period beginning 90

days before and ending 90 days

after the date of such placement,

the other/secondary employer has

displaced or intends to displace a

similarly-employed U.S. worker

employed by such other/secondary

employer.

20 C.F.R. § 655.738(d)(5) (emphases added). The regulations

then set forth “standards and guidance” that apply to the inquiry

obligation. Id.

The Secretary is required to certify an LCA within seven

days unless she “finds that the application is incomplete or

obviously inaccurate.” § 1182(n)(1). Thus, she is not generally

permitted to investigate the veracity of the employer’s

attestations on the LCA prior to certification. However, she is

required to investigate complaints regarding an employer’s

“failure to meet a condition” of § 1182(n)(1) or

“misrepresentation of material facts” in an LCA.

§ 1182(n)(2)(A). Such complaints “may be filed by any

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 Section 1182(n)(2)(B) continues as follows:

If the Secretary determines that

such a reasonable basis exists, the

Secretary shall provide for notice of

such determination to the interested

parties and an opportunity for a

hearing on the complaint, in

accordance with section 556 of

Title 5, within 60 days after the

date of the determination. If such a

hearing is requested, the Secretary

shall make a finding concerning the

matter by not later than 60 days

after the date of the hearing. In the

case of similar complaints

respecting the same applicant, the

Secretary may consolidate the

hearings under this subparagraph

on such complaints.

9

aggrieved person or organization,” and must be “filed not later

than 12 months after the date of the failure or

misrepresentation.” Id.

The statute mandates that “the Secretary shall provide,

within 30 days after the date such a complaint is filed, for a

determination as to whether or not a reasonable basis exists to

make a finding described in subparagraph (C).” § 1182(n)(2)(B)

(emphases added).2

 As relevant here, subparagraph (C) refers

to “a failure to meet a condition of paragraph . . . (1)(F),” which

sets out the inquiry obligation described above.

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§ 1182(n)(2)(C)(i).

Department regulations delegate the “reasonable basis”

determination to the Administrator of the Wage and Hour

Division (the “Administrator”), see 20 C.F.R. § 655.815, and

impose a thirty-day deadline for the Administrator to issue this

determination.

If the Administrator determines that

an investigation on a complaint is

warranted, the complaint shall be

accepted for filing; an investigation

shall be conducted and a

determination issued within 30

calendar days of the date of filing.

The time for the investigation may

be increased with the consent of the

employer and the complainant, or

if, for reasons outside of the control

of the Administrator, the

Administrator needs additional time

to obtain information needed from

the employer or other sources to

determine whether a violation has

occurred. No hearing or appeal

pursuant to this subpart shall be

available regarding the

Administrator’s determination that

an investigation on a complaint is

warranted.

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20 C.F.R. § 655.806(a)(3) (emphases added).

If the Department ultimately determines that the inquiry

requirement was violated, the statute provides for monetary

penalties and a suspension of future approvals of H-1B

applications:

If the Secretary finds, after notice

and opportunity for a hearing, a

failure to meet a condition of

paragraph (1)(B), (1)(E), or (1)(F),

a substantial failure to meet a

condition of paragraph (1)(C),

(1)(D), or (1)(G)(i)(I), or a

misrepresentation of material fact

in an application—

(I) the Secretary shall

notify the Attorney

General of such

finding and may, in

addition, impose

such other

administrative

remedies (including

civil monetary

penalties in an

amount not to exceed

$1,000 per violation)

as the Secretary

determines to be

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3

 Although § 1182 refers to the Attorney General as

having debarment authority, this function was subsequently

transferred by 6 U.S.C. § 271(b) from the Attorney General to

U.S. Citizenship and Immigration Services, a component of the

Department of Homeland Security.

12

appropriate; and

(II) the Attorney General

shall not approve

petitions filed with

respect to that

employer under

section 1154 or

1184(c) of this title

during a period of at

least 1 year for

aliens to be

employed by the

employer.

§ 1182(n)(2)(C)(i) (emphases added). The one-year suspension

required by § 1182(n)(2)(C)(i)(II) is known as “debarment.”3

The Department’s regulations provide for the same

sanctions:

(b) Civil money penalties. The

Administrator may assess

civil money penalties for

violations as follows:

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(1) An amount not to

exceed $1,000 per

violation for:

(i) A violation

pertaining to

strike/lockout

(§ 655.733) or

displacement

of U.S.

workers (§

655.738);

. . . .

(d) Disqualification from

approval of petitions. The

Administrator shall notify

the [Department of

Homeland Security]

pursuant to § 655.855 that

the employer shall be

disqualified from approval

of any petitions filed by, or

on behalf of, the employer

pursuant to section 204 or

section 214(c) of the INA

for the following periods:

(1) At least one year for

violation(s) of any of

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4

 At oral argument, counsel for Cyberworld stated that the

one-year period of debarment will not begin until the conclusion

of this appeal.

14

the provisions

specified in

paragraph (b)(1)(i)

through (iii) of this

section;

. . . .

20 C.F.R. § 655.810 (emphases added).

B.

On August 9, 2001, the Department’s Wage and Hour

Division received a complaint regarding Cyberworld’s

compliance with § 1182(n). The Division then investigated the

complaint, and on March 20, 2003, over nineteen months after

receiving the complaint, the Administrator issued his reasonable

basis determination, finding that Cyberworld had “failed to

make the required displacement inquiry of the secondary

employer.” App. 129. The Administrator assessed a $3400

penalty and determined that the Attorney General would be

notified of the violation so that he could impose a one-year

debarment.4

Cyberworld filed an administrative appeal. The company

conceded that it had failed to make the required displacement

inquiry with respect to each of the fourteen LCAs that it

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submitted between January 19, 2001, and October 1, 2002. It

also stipulated that the fourteen H-1B workers whom it placed

with secondary employers during this period “perform[ed]

duties” for the other employers and that there were “indicia of

an employment relationship” between the H-1B workers and the

other employers, thus satisfying the other elements of a

§ 1182(n)(1)(F) violation. However, Cyberworld challenged the

Secretary’s jurisdiction to act after the thirty-day deadline, as

well as her authority to impose sanctions without proof of

scienter. An Administrative Law Judge (“ALJ”) rejected these

arguments and affirmed the determination that Cyberworld was

subject to sanctions. Cyberworld then appealed to the

Department of Labor’s Administrative Review Board, which

summarily affirmed on the grounds provided by the ALJ.

Cyberworld then filed a complaint under the APA in federal

district court, seeking declaratory and injunctive relief.

The Government defendants moved for summary

judgment, and the District Court granted the motion. Relying on

the Supreme Court’s decision in Pierce County, the District

Court held that the language in § 1182(n)(2)(B) providing that

“the Secretary shall” make a determination within thirty days

does not deprive the Secretary of jurisdiction to issue such a

determination after the thirty days have expired. The District

Court also rejected Cyberworld’s argument that the Secretary’s

action was foreclosed by the doctrine of laches, since

Cyberworld had failed to show that it was prejudiced by the

Secretary’s delay. Finally, the Court concluded that the

Secretary was not required to show any knowledge on the part

of Cyberworld, and that the Secretary had correctly determined

that the one-year debarment was required by law.

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II.

The District Court had jurisdiction over this case under

28 U.S.C. § 1331 and the APA, 5 U.S.C. §§ 702 and 706. We

have jurisdiction under 28 U.S.C. § 1291.

When reviewing a grant of summary judgment in a case

brought under the APA, we apply de novo review to the district

court’s ruling, and in turn apply the applicable standard of

review to the underlying agency decision. Concerned Citizens

Alliance, Inc. v. Slater, 176 F.3d 686, 693 (3d Cir. 1999). An

agency decision based on an issue of law that does not

“implicate[] agency expertise in a meaningful way,” like the

Secretary’s decision in this case, is subject to de novo review.

Sandoval v. Reno, 166 F.3d 225, 239-40 (3d Cir. 1999).

III.

Cyberworld’s principal argument is that because

§ 1182(n)(2)(B) states that the Secretary “shall” make a

determination within thirty days, and the word “shall” has a

mandatory meaning, the Secretary lost jurisdiction to take action

against it by failing to issue a reasonable basis determination

within thirty days of receiving the complaint against

Cyberworld.

This argument is foreclosed by the Supreme Court’s

decision in Brock v. Pierce County. In Pierce County, the Court

considered a deadline imposed on the Secretary of Labor by

another statute, the Comprehensive Employment and Training

Act (“CETA”), which authorized the Secretary to issue grants

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for job training and employment. 476 U.S. at 255. The CETA

also authorized the Secretary to investigate complaints that

CETA funds were being misused, but “require[d] that the

Secretary ‘shall’ determine ‘the truth of the allegation or belief

involved, not later than 120 days after receiving the complaint.’”

Id. at 255-56 (quoting 29 U.S.C. § 816(b) (Supp. V 1976)

(repealed 1982)). The Secretary issued this determination with

respect to Pierce County nearly thirty months after receiving a

complaint, and thus failed to meet the 120-day deadline. Id. at

256-57. The Court of Appeals for the Ninth Circuit held that the

120-day limit was “jurisdictional,” and determined that the

Secretary thus lost his power to issue a determination after the

expiration of the 120 days. Id. at 257-59.

The Supreme Court reversed, concluding that “the mere

use of the word ‘shall’ . . . , standing alone, is not enough to

remove the Secretary’s power to act after” the deadline. Id. at

262. The Court noted that it was “most reluctant to conclude

that every failure of an agency to observe a procedural

requirement voids subsequent agency action, especially when

important public rights are at stake.” Id. at 260. It therefore

studied the language and legislative history of the CETA “to

determine whether Congress did indeed desire [the] somewhat

incongruous result” of depriving the Secretary of his authority

after the expiration of this deadline, and adopted a line of

precedent holding that a statutory time limit does not divest an

agency of jurisdiction unless the statute “specifies a

consequence for failure to comply with the provision.” Id. at

258, 259-60 (internal quotation marks and citations omitted).

After reviewing the CETA’s language and legislative history,

the Court found that there was nothing “to suggest that Congress

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intended to impose a jurisdictional limitation on agency action.”

Id. at 262-63.

The Court also discussed and rejected several opposing

arguments. First, it distinguished Pierce County from an earlier

case, Mohasco Corp. v. Silver, 447 U.S. 807 (1980), in which

the Court had “held that an action filed by a private plaintiff

after the expiration of the 300-day time period provided in [the

Civil Rights Act of 1964] was jurisdictionally barred.” 476 U.S.

at 261. The Court noted that while “legislatures routinely create

statutes of limitations for the filing of complaints” with

jurisdictional effects, “[t]here [was] less reason . . . to believe

that Congress intended such drastic consequences to follow

from the Secretary’s failure to meet the 120-day deadline,”

because the CETA “requires him to resolve the entire dispute

within that time.” Id. This “is a more substantial task than

filing a complaint, and . . . is subject to factors beyond [the

Secretary’s] control.” Id. Moreover, unlike in Mohasco, which

involved a private right of action, “public rights are at stake, and

the Secretary’s delay . . . would prejudice the rights of the

taxpaying public.” Id. 

Second, the Court rejected the argument that agencies

should be permitted to act after the expiration of a deadline

“only when agency inaction would prejudice a private citizen

seeking some sort of redress.” Id. at 261-62. The Court noted

that “the protection of the public fisc is a matter that is of

interest to every citizen, and we have no evidence that Congress

wanted to permit the Secretary’s inaction to harm that interest.”

Id. at 262. 

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Third, the Court rejected the argument that the Secretary

had also lost jurisdiction by failing to comply with

administrative regulations establishing a deadline. As with the

statutory deadline, the Court noted that the regulations “do not

specify any consequences of a failure to meet that deadline.” Id.

at 265.

The Supreme Court has since summarized the holding of

Pierce County as follows: “[I]f a statute does not specify a

consequence for noncompliance with statutory timing

provisions, the federal courts will not in the ordinary course

impose their own coercive sanction.” United States v. James

Daniel Good Real Prop., 510 U.S. 43, 63 (1993). Thus, “a

statute directing official action needs more than a mandatory

‘shall’ before the grant of power can sensibly be read to expire

when the job is supposed to be done,” and we will not construe

“a provision that the Government ‘shall’ act within a specified

time, without more, as a jurisdictional limit precluding action

later.” Barnhart v. Peabody Coal Co., 537 U.S. 149, 161, 158

(2003).

Cyberworld attempts to distinguish this case from Pierce

County on three grounds.

First, according to Cyberworld, Pierce County applies

only when an agency is required to complete a “substantial task”

by the statutory deadline. Cyberworld notes that under the

CETA the Secretary was required to “resolve the entire dispute”

within the statutory time period, 476 U.S. at 261, but that under

§ 1182(n) she is only required to make “a determination as to

whether or not a reasonable basis exists” for finding a violation,

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§ 1182(n)(2)(B). However, Pierce County never limited its

holding to cases where an agency must complete a “substantial

task.” Rather, it used that language to explain why a deadline

for administrative action is not comparable to a statute of

limitations in private litigation, which the Court had held in

Mohasco to be jurisdictional. In any event, similar to the actions

required by the CETA, the Administrator under § 1182(n) issues

a determination only after an investigation, must explain his

reasoning in the determination, and must prescribe remedies for

any violation that he finds. 20 C.F.R. §§ 655.806(a)(3),

655.815(c). Thus, even assuming arguendo that the nature of

the task is a relevant consideration, the “task” here is not

insubstantial.

Second, Cyberworld contends that Pierce County applies

only when an agency is acting to protect a “public right” or the

“public fisc.” In Pierce County, the Court noted that it was

especially reluctant to impose jurisdictional limitations on an

agency trying to protect public rights and the public fisc, 476

U.S. at 260, and explained that this was one reason why

Mohasco was distinguishable from actions under the CETA, id.

at 261. Here, like in Pierce County, the “rights” that the

Secretary seeks to vindicate are of a “public” nature, since she

is acting to protect the U.S. workforce from displacement by

H-1B recipients and to enforce the rules of the immigration

system.

Third, Cyberworld contends that even if the statutory

deadline did not foreclose the Secretary’s actions, the regulatory

deadline imposed by 20 C.F.R. § 655.806(a)(3) would bar her

actions. Under Pierce County, we evaluate regulatory deadlines

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21

in the same manner as statutory deadlines, by determining

whether a regulation “specif[ies] any consequences of a failure

to meet [its] deadline.” 476 U.S. at 265. Nothing in § 655.806

indicates that any consequence results from a failure to issue a

determination within thirty days. As the Court of Appeals for

the Seventh Circuit has held, “absent a clear indication to the

contrary, regulatory deadlines, like statutory deadlines, provide

no remedy for their own violation.” Hendrickson v. FDIC, 113

F.3d 98, 101 (7th Cir. 1997).

Pierce County thus controls here, and requires that we

analyze the “express language” of the statute, as well as its

“structure, purpose, and legislative history,” to determine

whether Congress intended to remove the Secretary’s authority

to act after the thirty-day deadline. Barnhart, 537 U.S. at 161,

163. We find nothing in the language, structure, purpose, or

legislative history of § 1182(n) to support Cyberworld’s claim

that Congress had this intent.

The only relevant piece of statutory language cited by

Cyberworld is the word “shall.” Cyberworld correctly argues

that “shall” usually has a mandatory meaning. However, by

virtue of Pierce County, we cannot rely on the word “shall”

alone to conclude that Congress intended for the Secretary to

lose her power to act. This is especially true given that

§ 1182(n) was enacted several years after Pierce County, once

“Congress was presumably aware that [courts] do not readily

infer congressional intent to limit an agency’s power to get a

mandatory job done merely from a specification to act by a

certain time.” Barnhart, 537 U.S. at 160. Nothing else in the

statute’s language indicates that Congress intended to limit the

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22

Secretary’s power after the expiration of thirty days, or to

impose any other consequence for her failure to meet the

deadline.

Cyberworld also points to the other instances of the word

“shall” in § 1182(n)(2)(B), and argues that if we allow the

Secretary to exercise jurisdiction after the statutory deadline has

passed, we must construe the other instances of “shall” in a

similarly permissive manner. If “shall” is not mandatory, it

argues, then the Secretary would not be required to give notice

of her “determination to the interested parties and an opportunity

for a hearing,” or to “make a finding” after the hearing.

§ 1182(n)(2)(B). This argument overstates the impact of Pierce

County. Pierce County does not deprive the word “shall” of its

mandatory force. The Secretary is still required by

§ 1182(n)(2)(B) to make a reasonable basis determination, to

give notice of that determination to interested parties, to hold a

hearing if requested, and then to make a further determination

after the hearing. Pierce County does, however, prevent us from

reading the word “shall” so expansively as to mean that the

Secretary was forbidden from imposing sanctions because she

failed to comply with the statute’s “procedural requirement” that

she act within thirty days. 476 U.S. at 260, 258.

Cyberworld also cites a statement in the legislative

history of the 1990 Act that “the Secretary of Labor is to

investigate and determine within thirty days if there is

reasonable cause” for finding a violation, H.R. Rep. No. 101-

723 pt.1, at 65 (1990) (emphasis added), and argues that the

phrase “is to” demonstrates that Congress intended for the word

“shall” to have a mandatory meaning. Even without relying on

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23

this legislative history, we agree that the word “shall” has a

mandatory meaning. As in Pierce County, however, this

legislative history does not “suggest that Congress intended to

impose a jurisdictional limitation on agency action” occurring

after the thirty-day period. 476 U.S. at 262-63.

Indeed, the legislative history and purpose of § 1182(n)

offer no support for Cyberworld’s position. A report of the

House Committee on the Judiciary regarding the 1990 Act,

which first implemented the complaint-driven process and

thirty-day timetable that are still in place today, demonstrates

that Congress was concerned with remedying the prior H-1B

system, which had “neither serve[d] business needs nor

protect[ed] the domestic labor force,” in part because of lengthy

processing delays in issuing the visas. H.R. Rep. No. 101-723

pt. 1, at 61 (1990). Although the Committee report refers to the

thirty-day deadline, it does not explain why the reasonable basis

determination must be issued so quickly. Id. at 65-66. When

the ACWIA later added several provisions regarding the

displacement of U.S. workers, including the inquiry requirement

at issue here, Congress emphasized its goal of “ensur[ing] that

companies will not replace American workers with foreign born

professionals,” such as by “replacing a particular laid-off U.S.

worker with a particular covered H-1B” worker. 144 Cong.

Rec. S12741, S12749-50 (Oct. 21, 1998) (statement of Sen.

Abraham). Again, however, the legislative history is silent as to

the reasons for applying the thirty-day deadline to reasonable

basis determinations regarding the inquiry requirement. Id. at

S12752.

Thus, while the 1990 Act made the investigative process

Case: 09-2515 Document: 003110097463 Page: 23 Date Filed: 04/12/2010
24

complaint-driven and imposed deadlines to eliminate

unnecessary bureaucratic processing, the deadline was certainly

not a goal of the statute. The same is true of the ACWIA’s

application of this deadline to investigations of the inquiry

requirement. To the contrary, a primary goal of the 1990 Act

and the ACWIA was to prevent displacement of the American

workforce. Although Congress was cognizant of the impact of

government procedures on employers and workers, we can find

no evidence that it intended to make the interests of H-1B

employers paramount to the enforcement of regulations

designed to prevent displacement. This is especially true given

the federal government’s strong interest, which is not even

shared with the states, in regulating immigration. If the federal

government were prevented from acting after the thirty-day

deadline, the statute’s displacement requirements would be left

essentially unregulated. We see no indication that Congress

intended such a drastic result.

 We agree with Cyberworld that nineteen months is a long

period of time for an agency to take before acting when the

governing statute specifies that the agency “shall” act within

thirty days. Nonetheless, since Congress did not prevent the

Secretary from acting after the deadline had expired, Pierce

County dictates the conclusion that the Secretary had

jurisdiction to act when she did.

IV.

Cyberworld also argues that the doctrine of laches bars

the imposition of sanctions because of the Secretary’s nineteenmonth delay in issuing the determination, that it was entitled to

Case: 09-2515 Document: 003110097463 Page: 24 Date Filed: 04/12/2010
25

discovery to establish facts supporting its laches argument, and

that summary judgment on the issue of laches was premature in

the absence of such discovery. We find these arguments

unpersuasive.

The doctrine of laches bars an action only when the delay

in bringing the action both caused prejudice and was

inexcusable. Tracinda Corp. v. DaimlerChrysler AG, 502 F.3d

212, 226 (3d Cir. 2007). We review a district court’s

determination regarding laches for abuse of discretion. Id. We

also review a district court’s discovery orders for abuse of

discretion, and will not disturb such orders without a showing of

actual and substantial prejudice. Mass. Sch. of Law at Andover,

Inc. v. Am. Bar Ass’n, 107 F.3d 1026, 1032 (3d Cir. 1997);

Hewlett v. Davis, 844 F.2d 109, 113 (3d Cir. 1988).

Cyberworld urges that it experienced two types of

prejudice resulting from the Secretary’s delay: the harm

inherent in being required “to operate in a state of uncertainty

for an unduly lengthy period of time,” and the possibility that its

employees and other witnesses would remember events less

clearly because of the passage of time. Appellant’s Br. at 38.

Both are speculative and lack any support in the record.

Cyberworld has offered no evidence to substantiate its claim that

it was harmed by either of these potential forms of prejudice,

and in light of Cyberworld’s concession in the administrative

proceedings that it violated the inquiry requirement on fourteen

occasions, we are skeptical that any such evidence could have

been produced. Moreover, we do not understand how discovery

would have been of use to Cyberworld. If it wished to introduce

evidence that it had been harmed by “operat[ing] in a state of

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5

 Cyberworld invokes our decision in Lehigh Valley

Manpower Program v. Donovan, 718 F.2d 99 (3d Cir. 1983), to

argue that “prejudice is not a requirement for a time limit to be

enforced.” Not only did Lehigh Valley not address the elements

of laches, but we have previously recognized that it was

overruled by the Supreme Court in Pierce County. See City of

Camden v. U.S. Dep’t of Labor, 831 F.2d 449, 451 (3d Cir.

1987).

6

 Cyberworld also contends that evidence produced in

discovery could have bolstered its argument that the Secretary

did not comply with the thirty-day deadline in 20 C.F.R.

§ 655.806(a)(3), since that regulation allows extensions to the

26

uncertainty,” it could have done so by producing its own

business records. It could also have guarded against any

memory loss by having its employees record their knowledge in

affidavits. Since Cyberworld has not shown prejudice from the

Secretary’s delay, there was no genuine issue of fact to preclude

the entry of summary judgment regarding the issue of laches.5

Nonetheless, Cyberworld contends that it was entitled to

discovery from the Government regarding the reasons for the

Secretary’s delay, ostensibly to show that the delay was

“inexcusable.” Even if Cyberworld had been able to make such

a showing, however, discovery would not have enabled it to

show prejudice, and its laches claim would still have failed.

Thus, Cyberworld has not demonstrated that discovery would

have allowed it to “present facts essential to justify its

opposition.” Fed. R. Civ. P. 56(f). We therefore find no abuse

of discretion in the District Court’s denial of further discovery.6

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deadline only when the delay is caused by reasons “outside of

the control of the Administrator.” In light of our holding that

the Secretary’s failure to comply with this deadline did not

divest her of jurisdiction, however, such discovery could not

have helped Cyberworld’s case.

27

V.

Cyberworld contends that sanctions can only be imposed

under § 1182(n)(2)(C)(i) if there is scienter—that is, if the

failure to inquire was knowing or intentional—and that it was

therefore improperly sanctioned because it lacked such

knowledge. However, § 1182(n)(2)(C)(i) contains no such

requirement, and we see no basis for finding that Congress

intended to include one in the statute.

Cyberworld was sanctioned under § 1182(n)(2)(C)(i),

which provides for sanctions for “a failure to meet a condition

of paragraph . . . (1)(F).” Paragraph (1)(F), in turn, provides that

employers will not place H-1B visa recipients with another

employer “unless the employer has inquired of the other

employer as to whether, and has no knowledge that . . . , the

other employer has displaced or intends to displace a United

States worker employed by the other employer.”

§ 1182(n)(1)(F). Thus, an employer can effectuate a placement

only if both conditions are met. Conversely, sanctions must be

imposed under paragraph (2)(C)(i) for a violation of paragraph

(1)(F) either if the placing employer fails to inquire of the

secondary employer about displacement or if, even though the

placing employer did make the inquiry, it had knowledge

(including independently) that the secondary employer “has

Case: 09-2515 Document: 003110097463 Page: 27 Date Filed: 04/12/2010
28

displaced or intends to displace a United States worker.” Since

Cyberworld concedes that it did not inquire about displacement,

it clearly failed to fulfill one of the two conditions. Here, the

Secretary sanctioned the placing employer for failing to make

the displacement inquiry (rather than for knowing that

displacement would occur); the statute only required her to show

that the inquiry was not made. She need not have determined

whether there was an actual displacement, or whether the

placing employer had any knowledge (independent or

otherwise) regarding displacement.

Cyberworld urges a different reading. Cyberworld

argues that since Congress included a scienter requirement in a

different section, namely § 1182(n)(2)(E)(i), which provides for

sanctions when a secondary employer “has displaced . . . a

United States worker” and the “placing employer . . . knew or

had reason to know of such displacement” (emphases added),

Congress must have also intended scienter to be required in

§ 1182(n)(2)(C)(i). However, the presence of this language in

a paragraph different from the paragraph under which

Cyberworld was sanctioned actually undermines Cyberworld’s

position, since it demonstrates that Congress knew how to

impose a scienter requirement when it wanted to do so. Indeed,

by including a scienter requirement in paragraph (n)(2)(E)(i),

which applies in instances of actual displacement rather than

failures to inquire about displacement, Congress protected an

entity like Cyberworld from being sanctioned for displacement

resulting from the actions of third parties without its knowledge.

By contrast, Cyberworld is being sanctioned for failing to take

an action that was entirely within its control.

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29

Cyberworld also contends that compliance with the

inquiry requirement does not serve the statute’s goal of

preventing displacement because secondary employers can still

place Cyberworld employees with “tertiary employers” without

Cyberworld’s knowledge, even if an inquiry is made. Thus,

tertiary placements could still result in displacement, and this

displacement would not be prevented by Cyberworld’s inquiry

of the secondary employer. Although Cyberworld may be

correct that the statutory scheme will not always prevent

displacement, that possibility does not justify our rewriting

§ 1182(n) so as to eliminate either the inquiry requirement or the

Secretary’s authority to sanction violations of the requirement.

VI.

As a sanction for violating the inquiry requirement, the

Secretary notified the Attorney General that Cyberworld was

disqualified from submitting H-1B petitions for a period of one

year, which is commonly known as “debarment.” Cyberworld

argues that Department of Labor regulations do not authorize

debarment for failures to inquire about displacement. This

argument has two prongs. First, Cyberworld contends that the

regulations that address debarment, 20 C.F.R. § 655.810(b) and

(d), apply only to instances of actual displacement, not to

failures to inquire about displacement. Second, Cyberworld

contends that 20 C.F.R. §§ 655.855(a) and (c), which were cited

by the Administrator’s determination, do not authorize the

sanctions imposed and therefore could not be invoked to

sanction Cyberworld.

As an initial matter, the Secretary is directly authorized

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7

 Cyberworld also argues that because § 655.810(b) and

(d) were not specifically cited in the Administrator’s

30

by § 1182(n) itself to sanction violations of the inquiry

requirement. Debarment is not only permitted, it is specifically

required by § 1182(n)(2)(C)(i), which states that when the

Secretary finds that an H-1B employer failed to satisfy the

inquiry requirement “the Secretary shall notify the Attorney

General of such finding” and “the Attorney General shall not

approve [H-1B] petitions filed with respect to that employer . . .

during a period of at least 1 year.” This alone gave the

Secretary the authority to sanction Cyberworld.

Contrary to Cyberworld’s contention, debarment is also

required by 20 C.F.R. § 655.810(b) and (d). Section 655.810(d)

requires debarment for violations “specified in paragraph

(b)(1)(i).” Section 655.810(b)(1)(i), in turn, refers to

“violation[s] pertaining to . . . displacement of U.S. workers

(§ 655.738).” Finally, § 655.738 describes all of the

displacement-related violations, including, in § 655.738(d)(5),

the failure to make displacement inquiries. Cyberworld

contends that, because § 655.810(b)(1)(i) refers to

“displacement of U.S. workers (§ 655.738)” without referring to

“inquiries about displacement,” it only authorizes sanctions

when actual displacement has occurred. However, it is clear

that § 655.810(b)(1)(i) refers to § 655.738 in its entirety, and

uses the phrase “displacement of U.S. workers” only as a

shorthand to refer to the numerous displacement-related

violations described in that regulation. Thus, § 655.810(b)(1)(i)

authorizes sanctions for failing to inquire about displacement,

which is described in § 655.738(d)(5).7

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determination, Cyberworld should not have been sanctioned

under those regulations. However, the determination did state

that Cyberworld had “failed to make the required displacement

inquiry of another employer . . . as required under 20 C.F.R.

§ 655.738.” App. 132. As noted above, § 655.738 describes all

displacement-related violations, and this statement was therefore

sufficient to give Cyberworld notice of “the determination of the

Administrator and the reason or reasons therefor,” as required

by 20 C.F.R. § 655.815(c)(1).

31

Cyberworld is correct that § 655.855(a) and (c), despite

being cited in the Administrator’s determination, do not clearly

authorize debarment. Section 655.855 provides as follows:

(a) The Administrator shall

notify the [Department of

Homeland Security

(“DHS”)] and [Department

of Labor Employment and

Training Administration] of

the final determination of

any violation requiring that

the DHS not approve

petitions filed by an

employer. The

Administrator’s notification

will address the type of

violation committed by the

employer and the

appropriate statutory period

for disqualification of the

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32

employer from approval of

petitions. Violations

requiring notification to the

DHS are identified in

§ 655.810(f).

. . . .

(c) The DHS, upon receipt of

notification from the

Administrator pursuant to

paragraph (a) of this section,

shall not approve petitions

filed with respect to that

employer under sections 204

or 214(c) of the INA (8

U.S.C. 1154 and 1184(c))

for nonimmigrants to be

employed by the employer,

for the period of time

provided by the Act and

described in § 655.810(f).

§ 655.855 (emphases added). Thus, these paragraphs require

debarment only for “[v]iolations . . . identified in § 655.810(f),”

and “for the period of time . . . described in § 655.810(f).”

§ 655.810(a), (c). Yet § 655.810(f) does not identify any

violations or set forth any time periods; instead, it describes the

procedure for paying monetary penalties assessed by the

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8

 Section 655.810(f) provides as follows:

The civil money penalties, back

wages, and/or any other

remedy(ies) determined by the

Administrator to be appropriate are

immediately due for payment or

performance upon the assessment

by the Administrator, or upon the

decision by an administrative law

judge where a hearing is timely

requested, or upon the decision by

the Secretary where review is

granted. The employer shall remit

the amount of the civil money

penalty by certified check or money

order made payable to the order of

“Wage and Hour Division, Labor.”

The remittance shall be delivered or

mailed to the Wage and Hour

Division office in the manner

directed in the Administrator’s

notice of determination. The

payment or performance of any

other remedy prescribed by the

Administrator shall follow

procedures established by the

Administrator. Distribution of back

wages shall be administered in

accordance with existing

33

Administrator.8

 The reference to § 655.810(f) thus appears to

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procedures established by the

Administrator.

9

 It appears that the reference in § 655.855(a) and (c)

should be to § 655.810(d) instead of § 655.810(f).

34

be erroneous.9

 As discussed above, however, 8 U.S.C.

§ 1182(n)(2)(C)(i) and 20 C.F.R. §§ 655.738 and 655.810

provide sufficient authority for the debarment sanction,

notwithstanding this error.

VII.

Cyberworld also argues that the Secretary should have

exercised her discretion not to impose the debarment sanction.

The Government, on the other hand, maintains that because

§ 1182(n)(2)(C)(i) states that “the Secretary shall notify the

Attorney General of such finding,” and that “the Attorney

General shall not approve petitions filed with respect to that

employer . . during a period of at least 1 year,” the Secretary

does not have any such discretion.

Cyberworld relies on Asika v. Ashcroft, 362 F.3d 264 (4th

Cir. 2004), and Heckler v. Chaney, 470 U.S. 821 (1985), for the

proposition that the Government can exercise discretion even

when a statute uses apparently mandatory language. However,

these cases stand, at most, for the proposition that the

Government could choose to exercise discretion even where a

statute does not specifically refer to its discretionary authority.

They do not say that a court can require the exercise of

discretion when a statute contains a mandatory penalty. The

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35

Government has correctly read § 1182(n)(2)(C)(i) to foreclose

its exercise of discretion, and neither Asika nor Heckler provides

authority for a court to compel the Government to exercise

discretion when a statute’s language indicates that no such

discretion exists.

Cyberworld argues, however, that if we find that the

Secretary retained jurisdiction after the thirty-day deadline

despite the use of the word “shall” in § 1182(n)(2)(B), we must

allow the Government to escape the mandatory force of the

“shall” in § 1182(n)(2)(C)(i)(I). That is, the two instances of the

word “shall” should operate in tandem; if the Government can

ignore the binding force of “shall” with respect to the thirty-day

deadline, then it should not be bound by the word “shall” in the

imposition of sanctions. In the latter context, however, there is

no Supreme Court precedent compelling a certain interpretation

of the statute, and the Government is not seeking to avoid

compliance with its literal terms. Our interpretation of the word

“shall” in § 1182(n)(2)(B) thus does not govern our

interpretation of the same word as it is used in

§ 1182(n)(2)(C)(i). See Official Comm. of Unsecured Creditors

of Cybergenics Corp. v. Chinery, 330 F.3d 548, 559 (3d Cir.

2003) (en banc) (noting that the presumption “‘that identical

words used in different parts of the same act are intended to

have the same meaning’” may be overcome when “‘there is such

variation in the connection in which the words are used as

reasonably to warrant the conclusion that they were employed

in different parts of the act with different intent’” (quoting Atl.

Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433

(1932))).

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36

We agree with Cyberworld that a one-year debarment

appears to be a harsh sanction for a company like Cyberworld,

which depends on H-1B visa applications for its business,

especially when the sanction is being imposed for failing to

inquire about possible displacement rather than for actual

displacement. However, this is an issue for Congress to

consider, not the courts.

VIII.

For the reasons stated above, we will affirm the District

Court’s order granting summary judgment to the Government

defendants.

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