Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-03361/USCOURTS-cand-4_18-cv-03361-0/pdf.json

Nature of Suit Code: 899
Nature of Suit: Other Statutes - Administrative Procedure Act/Review or Appeal of Agency Decision
Cause of Action: 05:702 Administrative Procedure Act

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FONTENOY ENGINEERING INC,

Plaintiff,

v.

KATHY A. BARAN, et al.,

Defendants.

Case No. 18-cv-03361-DMR 

ORDER ON CROSS-MOTIONS FOR 

SUMMARY JUDGMENT

Re: Dkt. Nos. 42, 47

Plaintiff Fontenoy Engineering Inc. (“Fontenoy”) brings this suit against Defendants United 

States Citizenship and Immigration Services (“USCIS”) and Department of Homeland Security 

(“DHS”), seeking court review of Defendants’ administrative decision to deny the H1-B application 

that Fontenoy filed on behalf of a prospective employee, Mark Goan. [Docket No. 1 (“Compl.”).] 

Fontenoy now moves for summary judgment. [Docket Nos. 42 (“Pltf. Mot.”), 48 (“Opp.”), 49 

(“Reply”).] Defendants filed a cross-motion. [Docket Nos. 47 (“Def. Mot.”), 50 (“Reply”).] The 

court held a hearing on December 19, 2019.

Upon reviewing the parties’ briefs, considering the administrative record, and hearing oral 

argument, the court denies Fontenoy’s motion and grants Defendants’ motion.

I. Background

The following facts are taken from the administrative record. [Docket No. 41 (“A.R.”).] 

Where indicated, the court cites the complaint for the purposes of providing background 

information. Fontenoy is a general engineering contractor specializing in underground utility 

construction. Compl. ¶ 8. Fontenoy intends to employ Goan, a native and citizen of Ireland, in the 

specialty occupation of Civil Engineer (Energy). Id. ¶ 1. Goan holds a Bachelor of Science degree 

from the Institute of Technology, Sligo and a Foundational degree from the Queen’s University of 

Belfast. Id. ¶ 9. Goan previously was admitted to the United States on a J-1 visa. Id. ¶ 10. On 

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April 2, 2016, Fontenoy filed a H-1B petition on behalf of Goan, seeking to change Goan’s 

immigration status from J-1 to H-1B. A. R. 168-231. 

On October 5, 2016, USCIS issued a Notice of Intent to Deny the petition. A.R. 232-239 

(“NOID”). USCIS explained that another petitioner, JMB Construction, Inc. (“JMB”), had also 

filed a H-1B petition for the same beneficiary. A.R. 233. USCIS noted the following similarities 

between the petitions: 

• Both companies are seeking to employ the beneficiary for the same 

position of Civil Engineer (Energy) with an annual salary of $72,700 

per year and perform the same exact duties;

• Both companies are in the same business of providing general 

engineering contracting; 

• The letters of support submitted by both petitioners are nearly 

identical. The language of both appear similar and/or identical in 

material respects;

• The petitions have been filed using the same attorney;

• Aidan O’Sullivan, the listed president of Fontenoy Engineering, was 

the beneficiary of two I-129 and one I-140 petitions filed by JMB 

Construction, Inc.

A.R. 233. The NOID went on to explain that both petitions were filed under the numerical limits of 

the Immigration and Nationality Act (“INA”), section 214(g)(1)(A), and that federal regulations 

prohibit the filing of multiple such petitions for the same beneficiary in the same fiscal year except 

for certain enumerated circumstances. A.R. 233-35. The prohibition extends to an employer’s 

“related entities (such as a parent company, subsidiary, or affiliate),” unless all of the related entities 

can demonstrate a “legitimate business need” to file multiple petitions for the same beneficiary. Id. 

USCIS noted that Fontenoy and JMB appeared to be related entities that had filed duplicate petitions 

for the same beneficiary without a legitimate business need. A.R. 234 (citing 8 C.F.R § 

214.2(h)(2)(i)(G)). It also determined that Fontenoy had not demonstrated that Goan’s foreign 

degree in Energy, Sustainability and the Environment was related to a civil engineering position. 

Finally, because of the alleged relationship between the entities, USCIS found that JMB did not 

make a creditable offer of employment to Goan and did not have the requisite employment 

relationship with him. A.R. 235-39. 

Fontenoy responded to the NOID on November 2, 2016. A.R. 240-412. Fontenoy 

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represented that it is owned 100% by Aidan O’Sullivan, while JMB is majority owned by John and 

Margaret Burke, who together own 94.7% of the company. A.R. 240. Based on the differences in 

ownership, Fontenoy asserted that it is “clearly not a parent or subsidiary of JMB.” A.R. 240. It 

also averred that it is not an affiliate of JMB, as that term is defined in the Foreign Affirms Manual 

(“FAM”):

(a) One of two subsidiaries, both of which are owned and controlled by the 

same parent or individual; or

(b) One of two legal entities owned and controlled by the same group of 

individuals, each individual owning and controlling approximately the 

same share or proportion of each entity . . . . 

A.R. 240-41 (quoting FAM pt. 9, § 402.12-9(A)(b)(6)). According to Fontenoy, it is not an affiliate 

of JMB because the requisite level of ownership and control is missing. Fontenoy argued that there 

is “nothing to prohibit an individual with multiple job offers from two distinct and different 

companies as long as they are not a parent, subsidiary or affiliate of each other.” A.R. 241.

In response to the similarities between the companies noted by NOID, Fontenoy explained 

that “the construction industry in the San Francisco Bay Area is currently experienc[ing] a high 

growth rate” and that “construction engineering graduates are currently receiving multiple job 

offers.” A.R. 241. It stated that the identical salaries of $72,700 is based on the “prevailing wage 

of $72,654 for civil engineers” and represented that the job descriptions for the two positions are 

similar because “a civil engineer’s job duties are the same irrespective of the company.” A.R. 241. 

Fontenoy submitted additional documentation from both companies to show that they are separate 

entities, including tax documents and other corporate information. A.R. 241-242. It also provided 

a letter from Professor Rovane Younger of California State University (Chico), confirming that 

graduates from CSU’s construction engineering department typically receive multiple job offers. 

A.R. 241-42.

On December 13, 2016, USCIS denied the petition. A.R. 155-164. It repeated the statutory 

and regulatory authority regarding multiple H-1B petitions and restated the NOID’s conclusion that 

Fontenoy and JMB appear to be related entities. A.R. 157. USCIS indicated that it had reviewed 

the additional evidence Fontenoy submitted and noted additional indicia of relatedness: namely, that 

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JMB’s 2015 tax returns list Aidan O’Sullivan as a 2.3% shareholder of JMB and Fontenoy’s 2015 

tax returns list Sean Burke as a paid officer for the company. A.R. 158. The decision stated: “From 

the evidence submitted, it appears that both entities have vested interest in each other and are 

partially owned by Aidan O’Sullivan.” A.R. 158. USCIS concluded that Fontenoy “failed to submit 

corroborating evidence” that it and JMB are separate entities; that the companies have offered Goan

two or more job offers for distinct positions; or that Fontenoy has a legitimate business need to file 

multiple H-1B petitions for the same beneficiary. A.R. 158. 

USCIS also denied the petition on alternative and independent grounds. First, it reexamined 

whether there was a credible offer of employment. A.R. 159. It noted that the two applications 

indicated that Goan would be performing the exact same duties, and that Fontenoy failed to explain 

how he would be “fully capable of supporting each entity’s needs” while working for “two different 

entities, full-time, with two different workloads; and at two different locations.” A.R. 161. In 

addition, USCIS reaffirmed the NOID’s determination that there was not an employer-employee 

relationship because the “evidence provided does not establish whether [Fontenoy] ha[s] the right 

to control the beneficiary’s employment” if Goan would be simultaneously employed by both 

entities. A.R. 163. It also noted that Fontenoy had not provided any additional evidence that Goan’s 

foreign credentials qualified him for the proffered position. USCIS concluded that “[t]he 

discrepancies in [Fontenoy’s] submission have not been explained satisfactorily” and accordingly 

denied the petition. A.R. 161. 

Fontenoy filed an appeal with the Administrative Appeals Office (“AAO”) on February 10, 

2017. A.R. 64-152. It argued that USCIS had applied an overbroad interpretation of “related 

entities” under section 214.2(h)(2)(i)(G). A.R. 77. It asserted that the finding in USCIS’s decision

was “based on an erroneous reading of the facts and evidence and an exaggeration of Aidan 

O’Sullivan’s ownership interest” in JMB. A.R. 81. Fontenoy contended that USCIS had conflated 

John Burke (JMB’s majority owner) and Sean Burke (Fontenoy’s officer) who are in fact “two 

different individuals.” It also contested USCIS’s reasoning regarding the credible offer of 

employment and the employer-employee relationship, stating that it “never intended to employ 

[Goan] full-time at the same time as JMB [was] also employing him full-time,” and that Goan simply 

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intended to work for the entity whose application was accepted (if either). A.R. 85. With respect 

to Goan’s qualifications for the offered position, Fontenoy represented that Goan holds two degrees 

in Energy, Environment, and Sustainability, and that those degrees are directly related to the position 

of Civil Engineer (Energy). A.R. 86-87. It also submitted contracts for various projects to 

demonstrate that there was a legitimate business need for Goan to work on projects that are unrelated 

to JMB.

On August 1, 2017, the AAO dismissed the appeal. A.R. 56-63. It affirmed USCIS’s 

determination that the companies are “related entities” and cited several rationales. First, it 

reiterated USCIS’s observations that “both companies seek to employ [Goan] in the same position 

with the same job duties, requirements, and salary” and that “[b]oth companies are represented by 

the same attorney and submitted nearly identical documentation, including identical job 

descriptions, in support of the petitions.” A.R. 59. Second, the AAO acknowledged that 

O’Sullivan’s 2.3% ownership interest in JMB appears “minimal in terms of corporate control,” but 

stated that it must also “consider whether an informal relationship exists” between the companies. 

A.R. 59 (internal quotation marks omitted). It considered significant that JMB filed two 

nonimmigrant visa petitions and one immigrant visa petition on behalf of O’Sullivan and inferred 

that O’Sullivan used to be (or still is) a JMB employee. A.R. 59. According to the AAO, Fontenoy’s 

assertion that O’Sullivan is not an employee of JMB and has no other involvement with that 

company was not corroborated by objective, independent evidence. A.R. 59. Third, the AAO noted 

that JMB has two other shareholders and that Fontenoy did not disclose the identities of these 

individuals or state whether they are involved in Fontenoy’s operations. A.R. 59. Fourth, with 

respect to the identities of “Sean Burke” and “John Burke,” the AAO stated that the common last 

name may imply a familial tie or other close relationship between the individuals and therefore it 

was not enough for Fontenoy to merely assert that these are “two different individuals.” A.R. 59. 

Fifth, the AAO observed that Fontenoy had not directly addressed “whether there exists a working 

relationship” between these various individuals and it was unclear whether the companies shared 

any critical employees or personnel. Based on these factors, the AAO found that Fontenoy and JMB 

are related entities. A.R. 58-60. It also considered whether Fontenoy had demonstrated a 

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“legitimate business need” to file duplicative petitions for Goan and concluded it had not because

the petitions were “materially identical” and that Fontenoy admitted that it filed them to increase 

Goan’s chances of being selected under the H1-B lottery. A.R. 61. 

The AAO also determined that Fontenoy failed to show that there was a credible job 

opportunity. A.R. 62. For example, Fontenoy and JMB classified the offered position as a civil 

engineering position. A.R. 61. However, the U.S. Department of Labor’s Occupational Outlook 

Handbook (“OOH”) states that “[c]ivil engineers need a bachelor’s degree in civil engineering, in 

one of its specialties, or in civil engineering technology.” A.R. 62 (citation omitted). The AAO 

stated that Fontenoy had not established that Goan’s degree in “Energy, Environment and 

Sustainability” is equivalent to a degree in civil engineering or a closely related specialty. A.R. 62. 

It also noted that the letter Fontenoy submitted from Professor Younger addressed construction 

management and that it appeared that Goan’s prospective job duties overlapped with those of a 

construction manager. A.R. 62. Based on these reasons, the AAO found that the record did not 

sufficiently demonstrate the “substantive nature” of the proffered position. A.R. 62. The AAO did 

not reach USCIS’s other grounds for denial, including whether the proffered position qualifies as a 

specialty occupation and whether Goan is qualified to perform that job.

1

 A.R. 63.

On September 1, 2017, Fontenoy filed a motion to reopen or reconsider before the AAO. 

Compl. ¶ 16; Id., Ex. G. It argued that the AAO’s interpretation of “related entities” was overbroad 

and unsupported by authority. It disputed the AAO’s finding that it had not provided adequate 

evidence regarding O’Sullivan’s relationship with JMB because Fontenoy’s tax records indicate that 

he devotes 100% of his time to that business. Fontenoy also stated that it contacted JMB after the 

AAO’s decision to confirm that JMB’s two other shareholders have “no relationship whatsoever” 

with Fontenoy. Id. at 8. Fontenoy noted that it could have provided this information to USCIS 

sooner but it was not brought up until the AAO decision. The motion also reasserted that “John 

Burke” and “Sean Burke” are two different individuals and that Sean Burke’s family ties are 

 

1 However, the AAO disproved USCIS’s assertion that the duplicate petitions requested concurrent 

employment at both entities and withdrew any conclusions by the USCIS that were based solely on 

that reasoning. A.R. 63.

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irrelevant. Fontenoy stated that it had made it “abundantly clear that it does not share the same 

signatories, worksite locations, contacts and work orders making it illogical, inefficient and even 

impossible to share critical employees and personnel.” Id. at 10. Fontenoy also argued that it had 

established a legitimate business need to employ Goan even if it is related to JMB. Specifically, it 

asserted that the contracts it submitted on appeal show the availability of projects for the proffered 

position with entities that are not JMB. It contended that the nature of the two businesses is very 

different because Fontenoy qualifies for certain incentive programs that JMB does not. 

The AAO denied the motions. With respect to the motion to reopen, the AAO acknowledged 

that O’Sullivan may not currently be an employee of JMB but that Fontenoy had not addressed other 

significant aspects of O’Sullivan’s relationship to JMB, including his apparent past employment 

with that entity. It accepted Fontenoy’s new evidence that JMB’s other shareholders are not related 

to Fontenoy. However, it determined that the new evidence does not address “all aspects of the 

relationship” between the two entities and pointed out that Fontenoy had apparently, by its 

conspicuous silence, conceded that there is a familial relationship between John Burke and Sean 

Burke. On the motion to reconsider, the AAO rejected Fontenoy’s argument that its interpretation 

of “related entities” is “so broad that it could reach most if not all entities working in the same 

geographical area or industry.” Id. at 3 (quotation marks omitted). It explained:

The Petitioner’s concerns are misplaced. We are not concerned with 

petitioning employers who have any quantum of a relationship. Two 

unwitting companies would not likely have the requisite similitude to 

trigger the bar. But the more similarities in the records, the more likely the 

companies were acting in concert to undermine the purpose of the random 

lottery process. Whether two petitioners are “related entities” is an issue of 

fact that we determine based on the totality of the record. Some factors 

relevant to relatedness may include familial ties, proximity of locations, 

leadership structure, employment history, similar work assignments, and 

substantially similar supporting documentation.

Id. The AAO noted that Fontenoy did not contest the prior decision’s statement that Fontenoy and 

JMB cooperated with each other’s filings. It concluded that the motion to reconsider also did not 

address other concerns raised previously, including inconsistencies with Fontenoy’s claim that the 

proffered position is a civil engineering job and Goan’s intentional actions in seeking out as many 

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job offers as possible. The AAO accordingly denied both motions, and this action followed. 

The complaint alleges three claims for relief. On December 10, 2019, the court granted 

Defendants’ partial motion to dismiss two of the claims. [Docket No. 29.] Petitioner’s sole 

remaining claim under the Administrative Procedures Act (“APA”), 5 U.S.C. § 701 et seq., is the 

subject of this motion. 

II. Standard of Review

In cases involving review of a final agency determination under the APA, a district court’s 

role is not fact-finding. Nw. Motorcycle Ass’n v. U.S. Dep’t of Agric., 18 F.3d 1468, 1472 (9th Cir. 

1994). “[T]he function of the district court is to determine whether or not as a matter of law the 

evidence in the administrative record permitted the agency to make the decision it did.” Occidental 

Eng’g Co. v. I.N.S., 753 F.2d 766, 769 (9th Cir. 1985). The reviewing court must “hold unlawful 

and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse 

of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). “Review under the 

arbitrary and capricious standard is deferential.” Nat’l Ass’n of Home Builders v. Defs. of Wildlife, 

551 U.S. 644, 658 (2007). A court should not vacate an agency’s decision unless it has “relied on 

factors which Congress had 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.” Id. (quoting Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. 

Ins. Co., 463 U.S. 29, 43 (1983)).

Judicial review of agency decisions is “especially deferential in the context of immigration 

policy.” Jang v. Reno, 113 F.3d 1074, 1077 (9th Cir. 1997). “To determine whether an agency 

violated the arbitrary and capricious standard, [the] court must determine whether the agency 

articulated a rational connection between the facts found and the choice made.” Ariz. Cattle 

Growers’ Ass’n v. U.S. Fish & Wildlife, 273 F.3d 1229, 1236 (9th Cir. 2001). In order for the court 

to confirm the agency’s decision as rationally connected to the facts, the agency must have 

considered “substantial evidence” that supported its decision. See Nakamoto v. Ashcroft, 363 F.3d 

874, 881–82 (9th Cir. 2004). “To reverse under the substantial evidence standard, the evidence must 

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be so compelling that no reasonable factfinder could fail to find the facts were as the [plaintiff] 

alleged.” Singh v. Reno, 113 F.3d 1512, 1514 (9th Cir. 1997).

III. Discussion

A. Statutory Framework

Employers in the United States may petition for a nonimmigrant temporary work visa under 

the H-1B program. See 8 U.S.C. § 1184(c). To petition for a H1-B visa, the employer must submit 

a Form I-129 (Petition for Nonimmigrant Worker) and file a Labor Condition Application (“LCA”). 

See 8 C.F.R. § 213.2 (h)(4)(i)(B)(1). An H-1B visa grants the employee temporary admission into 

the United States to “perform services . . . in a specialty occupation.” 8 U.S.C. § 

1101(a)(15)(H)(i)(b). For the purposes of a H-1B visa, a “specialty occupation” means an 

“occupation that requires—(A) theoretical and practical application of a body of highly specialized 

knowledge, and (B) attainment of a bachelor’s or higher degree in the specific specialty (or its 

equivalent) as a minimum for entry into the occupation in the United States.” 8 U.S.C. 1184(i)(1). 

Currently, the number of H1-B visas that may be granted in any given fiscal year is capped at 

65,000.2 8 U.S.C. § 1184(g). 

Federal regulations prohibit an employer or a related entity from filing multiple cap-subject 

H-1B petitions on behalf of the same beneficiary in the same fiscal year: 

An employer may not file, in the same fiscal year, more than one H–1B 

petition on behalf of the same alien if the alien is subject to the numerical 

limitations of section 214(g)(1)(A) of the Act . . . . [F]iling more than one 

H–1B petition by an employer on behalf of the same alien in the same fiscal 

year will result in the denial or revocation of all such petitions. If USCIS 

believes that related entities (such as a parent company, subsidiary, or 

affiliate) may not have a legitimate business need to file more than one H–

1B petition on behalf of the same alien subject to the numerical limitations 

of section 214(g)(1)(A) of the Act or otherwise eligible for an exemption 

under section 214(g)(5)(C) of the Act, USCIS may issue a request for 

additional evidence or notice of intent to deny, or notice of intent to revoke 

each petition. If any of the related entities fail to demonstrate a legitimate 

business need to file an H–1B petition on behalf of the same alien, all 

petitions filed on that alien's behalf by the related entities will be denied or 

revoked.

 

2 Some H1-B visa petitions are exempt from the cap, although none of those exceptions are at issue 

in this motion.

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8 C.F.R. § 214.2(h)(2)(i)(G). The Federal Register explains the circumstances under which related 

entities may file multiple petitions for the same beneficiary:

This rule does not, however, preclude related employers from filing 

petitions on behalf of the same [noncitizen]. USCIS recognizes that an 

employer and one or more related entities (such as a parent, subsidiary or 

affiliate) may extend the same [noncitizen] two or more job offers for 

distinct positions and therefore have a legitimate business need to file two 

or more separate H-1B petitions on behalf of the same [noncitizen].

73 Fed. Reg. 15392. That section also explains the consequences of attempting to bypass the 

multiple-petition prohibition:

USCIS may issue a request for additional evidence or notice of intent to 

deny, or notice of intent to revoke for any or each petition if it determines 

that the employer and related entity(ies) filed a duplicate petition as defined 

in this regulation. See 8 CFR parts 103 and 214.2(h)(11). The burden rests 

with the employer to establish that it has a legitimate business need to file 

more than one H-1B petition on behalf of the same alien. If the employer 

does not meet its burden, USCIS may deny or revoke each petition, as 

appropriate. Without such authority, a loophole would exist for related 

employers to file multiple petitions on behalf of the same alien under the 

guise that the petitions are based on different job offers, when the true 

purpose of filing the petitions is to secure employment for the alien with a 

single employer seeking his or her services. As an example, one target of 

this provision is the unscrupulous employer that establishes or uses shell 

subsidiaries or affiliates to file additional petitions on behalf of the same 

alien in order to increase the alien's chances of being allotted an H-1B 

number. USCIS believes that these consequences are warranted in order to 

deter unfair filing practices and further ensure the integrity of the H-1B cap 

counting process.

73 Fed. Reg. 15393. The primary issue presented in this motion is whether Fontenoy and JMB are 

related entities within the meaning of the statute and if so, whether Fontenoy has a legitimate 

business need for filing a duplicate petition. Fontenoy also raises other challenges to the AAO’s 

decision, including that USCIS and the AAO did not apply the correct burden of proof and that the 

AAO applied an inappropriate standard in dismissing its motion to reopen. These arguments are 

addressed in turn. 

B. Related Entities

On March 23, 2018, USCIS published a policy memorandum adopting the AAO’s decision 

in Matter of S- Inc. and directed USCIS to follow the reasoning in that decision in similar cases 

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moving forward. See Matter of S- Inc., Adopted Decision 2018-02, 2018 WL 1583229 (Mar. 23, 

2018). The policy memorandum was adopted after the AAO issued its decision in this case.3 In 

Matter of S-, Inc., an employer filed a H-1B petition on behalf of a prospective employee who was 

also the beneficiary of another petition filed by a second company. Id. at *1. USCIS acknowledged 

that the two entities had separate federal employer identification numbers (FEINs), operation 

locations, management, and ownership and were therefore not related to each other as a parent 

company, subsidiary, or affiliate. Id. at *3. Nevertheless, it found they were “related entities” 

“based on the similarities between the two petitions, [and because] both filed for the Beneficiary to 

work in substantially the same job at the same end-client.” Id. at *3. USCIS denied the petition on 

that basis. Id. On appeal, the employer argued that “related entities” refers only to “entities that are 

related through corporate ownership and control.” Id. The AAO rejected that argument. It noted 

that the text of the regulations “does not circumscribe a closed set of relevant relationships” but 

instead provides a non-exhaustive list of examples. Id. (citing 8 C.F.R. § 214.2(h)(2)(i)(G)). The 

AAO determined that adopting the employer’s definition would allow corporations to employ 

crafted strategies to game the lottery system, and instead defined “related entities” to include 

“petitioners, whether or not related through corporate ownership and control, who submit multiple 

petitions for the same beneficiary for substantially the same job.” Id. It also explained the factors 

relevant to deciding whether two jobs are substantially the same:

Whether two jobs are “substantially the same” is an issue of fact that we 

determine based on the totality of the record. Some factors relevant to 

relatedness may include familial ties, proximity of locations, leadership 

structure, employment history, similar work assignments, and substantially 

similar supporting documentation. The Petitioner cautioned that reading the 

rule to include petitioners, whether or not related through corporate 

ownership and control, could ensnare companies that can be found ‘related’ 

for any number of ‘unspecified reasons.’ The Petitioner’s concerns are 

misplaced. We are not concerned with petitioning employers who have any 

quantum of a relationship. Two unwitting companies would not likely have 

the requisite similitude to trigger the bar. But the more similarities in the 

records, the more likely the companies were seeking to undermine the 

 

3 The court acknowledges that Matter of S- Inc. is not retroactive authority for the AAO’s decision 

in this case and is not binding on this court. However, the court considers the reasoning presented 

in that decision as illustrative of whether the AAO’s decision in this case was arbitrary and 

capricious.

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purpose of the random lottery process.

Id. Applying that standard to the facts before it, the AAO noted that USCIS had found multiple 

similarities between the petitions including the beneficiary’s assignment to “the same end-client 

through the same mid-vendors.” Id. at *4. It also observed that the second company had executed 

a subcontractor agreement with the employer less than a month before the H-1B petition at issue 

had been filed. Id. Based on these connections between the companies, the AAO determined that 

the two companies were related entities. 

Matter of S- Inc. is persuasive because it cautions against a bright line rule based on purely 

legal classifications in favor of a fact-intensive inquiry into the actual nature of a corporate 

relationship. As that decision noted, employers could “easily circumvent” a rigid legalistic 

construction “through corporate law stratagems.” 2018 WL 1583229, at *3. Notably, the 

framework proposed by Matter of S- Inc. cuts both ways because it prohibits USCIS from summarily 

denying petitions based solely on legal classifications. In sum, the individualized inquiry set forth 

in that case comports with the language of the federal regulations and the intent behind multiplepetition bar.

While the AAO did not apply Matter of S- Inc. in the current case (as that decision had not 

yet been published), it engaged in a similar fact-intensive inquiry to determine the nature of the 

relationship between Fontenoy and JMB.4 It pointed out that 8 C.F.R. § 214.2(h)(2)(i)(G) lists 

several kinds of related entities (“such as a parent company, subsidiary, or affiliate”) and determined 

that that language only describes some examples of related entities and is not an exhaustive list. 

Examining the intent behind the H-1B lottery system, the AAO stated that it must “expansively 

interpret” the meaning of “related entities” in order to effectuate the remedial purpose of that 

process. (“If we were to limit 8 C.F.R. § 214.2(h)(2)(i)(G) to only legally related entities, then the 

regulation’s primary purpose to curb abuse of the random lottery system could continue to be easily 

frustrated.”). The AAO found that Fontenoy and JMB are related entities on numerous grounds, 

including the “nearly identical documents” submitted by the same attorney in support of both 

 

4

In so finding, the AAO applied the “ordinary meaning” of the word “related,” which it identified 

has having “some sort of connection.” With respect to Fontenoy’s argument that this language is 

overbroad, the court notes that the AAO did not employ that language in the broad manner suggested 

by Fontenoy. Instead, the AAO pointed at specific indicia of relatedness that supported its decision. 

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petitions and apparent connections between the companies through various employees and officers. 

Given the similarities between the petitions as well as the other apparent connections between the 

entities, the AAO determined that Fontenoy and JMB “likely knew of and cooperated with the 

other’s filing for [Goan].” It accordingly held that the multiple petitions fell under the circumstances 

that 8 C.F.R. § 214.2(h)(2)(i)(G) was intended to prohibit. 

At the hearing, Fontenoy acknowledged that “related entities” does not only refer to parents, 

subsidiaries, or affiliates, and that a totality of the circumstances test applies. However, it argues in 

its motion that Matter of S- Inc. supports its position because the AAO in that case found the entities 

related “on the sole grounds that they offered the same job for the same end client through[] the 

same vendors.” Mot. at 14. Fontenoy reiterates that Fontenoy and JMB neither contract services 

from each other nor share the same end clients, and that the petitions show both entities intend to 

“directly employ the beneficiary at its separate locations, to work on its construction projects and 

end clients.” Id. 

Fontenoy’s arguments are not persuasive. While Matter of S- Inc. considered the shared 

end-clients as an important factor to the outcome of that case, it listed many other factors that are 

relevant to the relatedness inquiry, including “familial ties, proximity of locations, leadership 

structure, employment history, similar work assignments, and substantially similar supporting 

documentation.” 2018 WL 1583229, at *3. Notably, most if not all of the listed factors exist in this 

case. Additionally, the court agrees with Defendants that Fontenoy has repeatedly failed to address 

significant concerns raised by USCIS and the AAO. In none of its briefing, either in the 

administrative process or the current motion, does Fontenoy address why the petitions were nearly 

identical and filed by the same attorney; why O’Sullivan was the beneficiary of three visa petitions 

filed by JMB; and whether there is a familial relationship between Sean Burke and the majority 

shareholders of JMB. While those factors may not be dispositive in determining whether the entities 

are related, it is notable that Fontenoy does not directly address them or explain why they are not 

important considerations. At the hearing, Fontenoy argued that each factor cited by the AAO was 

also consistent with Fontenoy and JMB not being related entities. However, it is not within the 

purview of this court to reweigh the evidence considered by the AAO; the AAO’s decision will be 

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upheld so long as it is based on substantial evidence.

In addition, there are other indicators that Fontenoy has been less than transparent. For 

example, Fontenoy summarily asserts that the two companies are “competitors” but offers no 

explanation as to why competitors would coordinate in drafting and filing petitions for the same 

employee.

5

 Considering the record as a whole, the court finds that there is substantial evidence 

supporting the AAO’s determination that Fontenoy and JMB are related entities.

C. Legitimate Business Need

Even if Fontenoy and JMB are related entities, they may each file a H-1B petition for the 

same beneficiary in the same fiscal year if they have a legitimate business need to do so. 8 U.S.C. 

§ 214.2(h)(2)(i)(G). Fontenoy argues that both entities have a legitimate business need to hire a 

Civil Engineer (Energy), while Defendants assert that it has shown no such need. The only authority 

either side cites that interprets the phrase “legitimate business need” is the example in the Federal 

Register cited above:

[I]f the bottled beverage plant owned by the Fortune 500 company and the 

cereal manufacturing company owned by the same Fortune 500 company 

are each in need of the services of a Chief Financial Officer, both may file 

one petition each on behalf of the same alien. A subsidiary should not file 

an H-1B petition for an alien just to increase the alien’s chances of being 

selected for an H-1B number where that subsidiary has no legitimate need 

to employ the alien and is, instead, only filing a petition to facilitate the 

alien’s hiring by a different, although related, subsidiary.

73 Fed. Reg. 15393.

In this case, USCIS did not address “legitimate business need” except to summarily conclude 

that Fontenoy has not established that factor because of the similarities between the petitions. The 

AAO considered the issue more explicitly:

Generally, in determining whether a petitioner has demonstrated a 

“legitimate business need,” we consider factors relevant to the nature of the 

beneficiary’s proposed employment such as the same or similar job duties 

and the submission of identical supporting documentation. We also 

consider factors relevant to the nature of the petitioner’s business 

 

5 Fontenoy argued at the hearing that it is common practice for immigration attorneys to represent 

competitors in the same industries. However, it did not explain why it did not give argument or 

evidence on this point during any stage of the administrative process.

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operations, including the ability of the petitioner to support the proposed 

employment within its particular business operations, the petitioner’s hiring 

and recruiting history for the proffered position, and the petitioner’s intent 

in filing the petition for the beneficiary. Each set of petitions must be 

evaluated on a case-by-case basis, with no one factor necessarily 

determinative or exclusive. Whether or not 8 C.F.R. § 214.2(h)(2)(i)(G) 

applies ultimately boils down to the nature and purpose of the employment 

being offered: each proffered position must be materially distinct and must 

represent a credible, bona fide job opportunity.

Id. at 6 (footnote omitted). The AAO found that Fontenoy failed to establish a legitimate business 

need for three reasons: (1) the petitions filed by both entities were materially identical; (2) Fontenoy 

admitted that Goan sought employment with both entities to increase his chances of being selected 

for the H-1B lottery; and (3) Fontenoy had not demonstrated a credible, bona fide job opportunity 

for Goan.

With respect to the first rationale, the AAO did not explain why the similarities in the 

petitions indicate the lack of a legitimate business need. As Fontenoy points out, both entities could 

have a legitimate business need to employ Goan for the same type of work. In the Federal Register 

example, two subsidiaries of the same parent company submitted legitimate petitions for a Chief 

Financial Officer. While the AAO recognized that related entities may each try to fill a position 

with the same job title and similar duties, it did not explain why Fontenoy and JMB cannot do so 

here. At the hearing, Defendants conceded that the similarities in the applications alone is not 

material to the legitimate business need analysis. Accordingly, the AAO’s first reason is not 

supported by substantial evidence.

The AAO’s second rationale was that Fontenoy admitted that it filed its petition “with the 

intent to increase [Goan’s] chances of being selected under the H-1B lottery.” That portion of the 

AAO’s decision appears to misconstrue Fontenoy’s position. In the appeal, Fontenoy actually said 

that Goan himself “intentionally sought out as many job offers as possible, and planned on making 

his actual decision on what job offer to accept only after knowing if a particular petition had been 

accepted for processing.” Compl., Ex. E, at 10. The prohibition on multiple petitions is to prevent 

employers from “exploit[ing] the random selection process to the competitive disadvantage of other 

petitioners.” 73 Fed. Reg. 15392. For example, “one target of this provision is the unscrupulous 

employer that establishes or uses shell subsidiaries or affiliates to file additional petitions on behalf 

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of the same alien in order to increase the alien’s chances of being allotted an H-1B number.” Id. at 

15393. The clear intent behind the prohibition is to prevent an employer from gaming the lottery 

system to increase its own chances of hiring a beneficiary. Defendants cite no authority preventing 

beneficiaries from increasing their own chances of being selected, such as by seeking out as many 

sponsoring employers as possible. Therefore, the AAO’s second reason is not supported by 

substantial evidence.

Finally, the AAO found that Fontenoy had not established that there was a credible job 

opportunity for Goan. It noted that the OOH states that “[c]ivil engineers need a bachelor’s degree 

in civil engineering, in one of its specialties, or in civil engineering technology.” Compl., Ex. F, at 

7. The AAO found that neither petition stated that the proffered job required a degree in civil 

engineering or another related engineering degree. Both instead stated that the proffered position 

of Civil Engineer (Energy) requires “at least a bachelor’s degree in Energy, Environment and 

Sustainability or a related field.” Id. As the AAO noted, the “required” degree is conveniently 

identical to the foreign degree held by Goan. The apparent tailoring of the petitions to fit Goan’s 

exact qualifications implicates the lack of a credible job opportunity for a civil engineer. In addition, 

the AAO pointed out that Professor Younger’s letter addressed construction management rather than 

civil engineering. It noted that the job duties listed for Goan also appeared to overlap extensively 

with the job duties of a construction manager.6 Based on these factors, the AAO stated that “it is 

 

6 The application described the proposed job duties as follows: 

Mr. Goan will be involved in conducting site safety management, the preparation 

of scheduling for project start dates and updates, traffic plans, permit acquisitions, 

submittal preparations, material purchasing and control, quality control monitoring, 

overseeing project control systems and documentation. He will compile change 

orders and estimates, and carry out other work in support of on-site engineering 

activities. He will be responsible for analyzing drawings, blueprints, survey reports 

and maps using engineering and design software. He will calculate costs of 

materials required for projects applying his knowledge and techniques of 

engineering and advanced mathematics. He will inspect construction sites to 

monitor progress and ensure conformance to design specifications and safety 

standards in accordance with OSHA rules and regulations. He will prepare daily 

reports, time sheets, safety logs, cost coding, and project schedules. He will prepare 

monthly requisition and progress payments; oversee subcontract provisions related 

to compliance with plans and specification; and ensure quality control procedures 

and standards. He will oversee and facilitate the exploration and use of alternative 

energies and energy efficiency in the planning and development stages of projects.

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not apparent that the proffered position is actually a civil engineering position.” Id. The AAO held 

that it could not determine the substantive nature of the position being offered and therefore could 

not find that there was a credible, bona fide job opportunity. 

Notably, Fontenoy did not address these concerns in its motion to reopen or reconsider, and

did not address them in its briefing in this case other than to point to the contracts it submitted to 

show that there are available construction projects that require the job duties listed on the petitions. 

While the contracts may indicate some legitimate business need to hire civil engineers generally, 

they are not probative of whether the position offered to Goan is a civil engineering job.7 At the 

hearing, Fontenoy asserted that it and JMB both construct underground pipelines to transport energy, 

among other things. It represented that the job duties it listed on the H-1B application may overlap 

to some extent with those of a construction manager but claimed that the position is traditionally 

filled by civil engineers. For this proposition, Fontenoy cited to Younger’s letter; however, 

Younger’s letter discusses construction management rather than civil engineering. The letter does 

not mention engineering at all, much less explain why jobs like the proffered position are 

engineering rather than construction management jobs. See A.R. 397. Younger’s signature block 

also indicates that he is a Professor of Construction Management. Id. In addition, Fontenoy cited 

to the OOH’s statement that “[c]ivil engineers need a bachelor’s degree in civil engineering [or] in 

one of its specialties,” and asserted that energy engineering has been acknowledged as an 

engineering specialty. However, the AAO did not reach its conclusion on the basis that Civil 

Engineer (Energy) is not a specialty of engineering, but rather because the listed job duties did not 

appear to describe an engineering position.8 The AAO acknowledged that Goan’s degree is in 

“Energy, Environment and Sustainability,” but stated that Fontenoy had not established that his 

 

A.R. 219.

7 Fontenoy acknowledged at oral argument that the contracts do not reference Mr. Goan specifically. 

Nor did it explain how the general need for civil engineers in energy established that the specific 

position offered would meet that need. 

8 Fontenoy asserted that it had to list Goan’s position under the general “Civil Engineer” code when 

filing the LCA because there is no code specific to Civil Engineer (Energy). But the code Fontenoy 

used on the LCA is immaterial to whether the position available to to Goan is actually an engineering 

job.

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degree is “equivalent to an engineering degree, much less an engineering degree in the specific field 

of civil engineering or one of its closely related specialties.” Compl., Ex. F at 7. In sum, Fontenoy’s 

arguments do not address the core concern raised by the AAO; namely, whether the specific position 

offered to Goan qualified as a civil engineering job.

Fontenoy complains at several points that “there would be no evidence that [it] could have 

provided to meet the burden applied in this case,” but that statement is not credible. See Mot. at 16. 

In its initial decision, the AAO listed several factors relevant to the “legitimate need” determination, 

including “the ability of the petitioner to support the proposed employment within its particular 

business operations, the petitioner’s hiring and recruiting history for the proffered position, and the 

petitioner’s intent in filing the petition for the beneficiary.” Fontenoy could have, but did not, submit 

evidence of how it has hired for the position of Civil Engineering (Energy) in the past; what 

qualifications it has previously accepted for that position; or evidence of industry custom relating to 

the job duties of civil engineers in energy.

For all of the reasons stated above, the court finds that the AAO’s decision that Fontenoy 

failed to demonstrate a legitimate business need to submit a duplicate petition on behalf of Goan is 

supported by substantial evidence. 

D. Burden of Proof

The applicable burden a petitioner must meet to establish eligibility for a H-1B visa is a 

preponderance of the evidence. Matter of Chawathe, 25 I. & N. Dec. 369, 375 (2010) (“Except 

where a different standard is specified by law, a petitioner or applicant in administrative immigration 

proceedings must prove by a preponderance of evidence that he or she is eligible for the benefit 

sought.”). 

Fontenoy argues that USCIS and the AAO improperly imposed a heightened burden of proof 

in this case. It asserts that at each stage of the administrative proceedings, it presented the requested 

additional evidence “only to find new allegations” raised in the next decision. It argues that the 

AAO did not even consider the contracts it submitted, which “demonstrate the nature and type of 

the Plaintiff’s work, and make it clear that such work does require the services of the proffered 

position.” Mot. at 16. Fontenoy asserts that “it appears that there would be no evidence that Plaintiff 

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could have provided to meet the burden applied in this case.” Id.

Fontenoy’s argument lacks merit. The record establishes that Fontenoy repeatedly failed to 

address concerns raised by USCIS and the AAO, such as why two the petitions are nearly identical 

and filed by the same attorney; why O’Sullivan was the beneficiary of three visa petitions filed by 

JMB; and whether there is a familial relationship between Sean Burke and the majority shareholders 

of JMB. In its initial decision, the AAO explained in depth why it found there was not a credible 

job offer and listed the kinds of evidence relevant to that determination. Fontenoy’s motion to 

reopen or reconsider summarily asserted that the contracts it submitted prove the existence of the 

proffered position, but it did not explain how the contracts prove the job duties and qualifications 

required for a civil engineer. In sum, the record does not support Fontenoy’s characterization of the

burden of proof applied in this case.

E. Motion to Reopen

“A motion to reopen must state the new facts to be provided in the reopened proceeding and 

be supported by affidavits or other documentary evidence.” 8 C.F.R. § 103.5(a)(2). A petitioner 

must “support [its] motion to reopen with new facts that [are] material to the merits of [the] 

underlying application.” Delgado v. Quarantillo, 611 F. App’x 30, 31 (2d Cir. 2015).

Fontenoy filed a motion to reopen with “new fact[s] about its contracts for ongoing 

construction projects and copies of actual contracts as supporting evidence.” Reply at 3. Fontenoy 

argues that the AAO inappropriately failed to consider the new arguments and evidence because 

they establish that Fontenoy and JMB do not contract for or with one another and that Fontenoy had 

a legitimate business need to employ Goan to complete the work pursuant to the contracts. Id. at 5. 

Fontenoy’s position is unconvincing. It is clear that the AAO did consider the new evidence on the 

merits because it acknowledged that “[t]he newly submitted evidence resolves the ownership of 

[JMB].” Id. However, the AAO also noted that the new evidence does not establish that Fontenoy 

and JMB are not related because it does not explain other factors the AAO considered relevant in 

making its decision, such as O’Sullivan’s employment history with JMB and the apparent familial 

relationship between Sean Burke and John Burke. Fontenoy does not explain how the new evidence 

it submitted is relevant to those concerns. The AAO’s initial decision made clear that it was not 

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relying on some formal legal relationship (such as a contracting relationship) between the parties, 

so more evidence disputing that point is not relevant. Therefore, the AAO did not err in not 

specifically addressing the contracts Fontenoy submitted.

IV. Conclusion

For the reasons stated above, the court denies Fontenoy’s motion and grants Defendants’ 

motion. The Clerk shall enter judgment for Defendants and against Fontenoy and close the file in 

this matter.

IT IS SO ORDERED.

Dated: January 13, 2020

______________________________________

Donna M. Ryu

United States Magistrate Judge

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORN

I

A

IT IS SO ORDERED

Judge Donna M. Ryu

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