1

The hearing was set pursuant to the magistrate judge’s notice letter dated April 21,

2005. However, the court did not require the appearances of Plaintiff or counsel for Defendants. 

Mr. Watson did not appear or present argument with respect to the Defendants’ motions to

dismiss or his motion for sanctions.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

MARK J. WATSON )

)

V. ) 3-04-CV-2291-H

)

ELECTRONIC DATA SYSTEMS )

CORPORATION, ET AL )

REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Pursuant to the District Court’s order filed on November 15, 2004, and the provisions of 28

U.S.C. § 636(b) on May 17, 2005, came on to be heard Defendant Electronic Data Systems (EDS)’s

Motion to Dismiss filed on December 13, 2004, Defendants United States Department of Labor,

United States Department of Homeland Security and United States Department of States (the Federal

Defendants)’s Motion to Dismiss filed on February 25, 2005, Plaintiff’s Motion for Sanctions filed

on March 30, 2005, and EDS’s Response and Cross-Motion for Sanctions filed on April 19, 2005,

and having considered the relevant pleadings and the statements of counsel for Defendants,1 the

magistrate judge finds and recommends as follows:

FINDINGS AND CONCLUSIONS:

Background of the Dispute: Based upon the statements of counsel for EDS, and other

information contained in the pleadings filed in this action and in the parties’ appendices, it appears

that Mark J. Watson was an employee of EDS until on or about June 25, 2002. According to EDS

 

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There is no indication in the record before the court that Watson filed a timely

complaint with the Equal Employment Opportunity Commission (EEOC) alleging that his

discharge was the product of unlawful discrimination.

2

he was terminated as a result of a reduction-in-force. Watson on the other hand contends that he was

discharged to create a vacancy to be filled by less qualified H-1B nonimmigrant worker.2

Statement of the Claims: In his complaint Watson alleges that he was discharged from his

employment so that EDS could hire a less qualified H-1B nonimmigrant worker and that EDS filed

a false application to obtain H-1B status for the nonimmigrant with the Secretary of Labor. Watson

filed a complaint with the Wage and Hour Division of the Department of Labor contesting the

validity and veracity of EDS’s H-1B application which he claims was not timely addressed and

which was improperly denied. He makes a conclusory claim alleging that the Wage and Hour

Division is systematically granting H-1B applications submitted by employers to the detriment of

native born American workers. As relief it appears that he seeks damages based upon EDS’s alleged

false application for H-1B status of a nonimmigrant worker and a declaratory judgment invalidating

all alien labor certifications and the immediate removal of all H-1B nonimmigrant workers from the

United States. He alleges that this court has jurisdiction over his claims pursuant to the

Administrative Procedure Act (5 U.S.C. § 701 et seq.).

Findings and Conclusions: In its brief in support of its motion to dismiss EDS primarily

relies on the disposition of two complaints which Watson filed with the United States Department

of Labor’s Wage and Hour Division Administrator. The magistrate judge will address this issue

below. However, to the extent that Watson seeks to recover any damages against EDS, it is quite

clear that the Immigration and Nationality Act and, specifically, 8 U.S.C. § 1182(n) does not create

a private cause of action on behalf of an employee who allegedly was terminated in favor of the

 

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As the court noted in Shah, “ a private right of action does not exist ‘unless congressional intent can be inferred from the language of the statute, the statutory structure or some

other source’ Karahalios v. National Federation of Federal Employees, 489 U.S. 527, 532-33,

109 S.Ct. 1282 (1989) (citing Thompson v. Thompson, 484 U.S. 174, 179, 108 S.Ct. 513 (1988)

(noting that congressional intent is the Court’s ‘focal point’ in determining whether to infer a

private cause of action from a federal statute). As the Supreme Court has stated in cases, ‘[i]n

the absence of strong indicia of contrary congressional intent, we are compelled to conclude that

Congress provided [in the statute] precisely the remedies it considered appropriate.’ Id. (Citing

Middlesex County Sewage Authority v. National Sea Clammers Association, 453 U.S. 1, 15, 101

S.Ct. 2615 (1981).” 126 F.Supp. 2d at 647.

Congress has provided numerous statutory remedies for prospective and terminated

employees, who are subject to discrimination. E.g. The Civil Rights Action of 1964, as

amended. However, none of these statutes are before the court in this action.

3

employment of H-1B nonimmigrant employees, whose status was obtained by means of a fraudulent

application. E.g. see Shah v. Wilco Systems, Inc., 126 F.Supp. 2d 641, 647 (S.D. N.Y. 2000). 3

Title 8 U.S.C. § 1182(n) provides a comprehensive procedure under which an employer may

apply for an H-1B nonimmigrant visa as well as a regulatory enforcement scheme providing for

investigations and remedial actions. Pursuant to this statutory scheme, regulations have been

adopted to implement the administration of H-1B applications. See 20 CFR §§ 655.700 et seq.,

Subpart H - Labor Condition Application and Requirement for Employers Using Nonimmigrants

on H-1B Visas in Speciality Occupations and as Fashion Models. Both the statute, § 1182(n)(2)(A)

and more specifically 20 C.F.R. § 655.806 describe the specific procedures to be followed by an

“aggrieved party.” It is undisputed that Watson is an “aggrieved party” as defined in § 655.715,

subpart (1).

The procedural history of Watson’s initiation of complaints is summarized in EDS’s brief

filed in support of its motion to dismiss at pages 2-3. Specifically he filed an initial complaint with

the Department of Labor’s Wage and Hour Division Administrator on or about June 16, 2003,

alleging that EDS committed immigration fraud by violating 20 C.F.R. §§ 655.738 and 655.739 (h)

 

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One of the ALJs specifically found no jurisdiction to entertain Watson’s complaint

because the Administrator never conducted an investigation. See Defendant EDS’s Appendix at

08-10.

4

and (j). His second complaint, filed on or about December 3, 2003, essentially reiterated the

grounds asserted in his initial complaint. In neither instance did the Administrator conduct an

investigation of his complaints. Despite the undisputed fact that no investigations were authorized,

for reasons which do not appear in the record before the court, Watson obtained hearings before

administrative law judges (ALJs).4

 In both instances rulings in EDS’s favor were entered. See

EDS’s Appendix at Exhibits 1 and 2. Thereafter Watson petitioned the Department of Labor’s

Administrative Review Board (ARB) for review of the adverse decisions, and on May 31, 2005, the

ARB issued its order dismissing his complaints against EDS and a third complaint against Bank of

America (See Attachment 1).

Federal court jurisdiction: Watson invokes federal court jurisdiction pursuant to 8 U.S.C. §

1182(n) of the Immigration and Nationality Act and the Administrative Procedure Act (APA) (28

U.S.C. § 701 et seq.).

As noted above, § 1182 (n) does not create a private cause of action on behalf of an

“aggrieved party” as defined by 20 C.F.R. § 655.715, subpart (1). Therefore Defendant EDS is

entitled to judgment dismissing Plaintiff’s claims against the EDS pursuant to Rule 12 (b)(1) and

(6).

Although Defendants do not directly question this court’s jurisdiction to review a final

agency action by the Department of Labor under the APA, this court has an obligation to

independently satisfy itself that it has jurisdiction to act. E.g. see Bender v. Williamsport Area

School District, 475 U.S. 534, 541, 106 S.Ct. 1326 (1986).

 

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Not all actions by agencies of the executive branch are subject to judicial review. Although

there is a presumption in favor of judicial review of final agency decisions, this presumption may

be overcome by inferences of intent drawn from the statutory scheme as a whole. See Block v.

Community Nutrition Institute, 467 U.S. 340, 349, 104 S.Ct. 2450, 2456 (1984).

The primary purpose of § 1182(n) is to permit an employer to obtain H-1B nonimmigrant

status for alien employees under carefully prescribed circumstances. To insure that applications for

H-1B nonimmigrants are in compliance with the requirements of § 1182 (n)(1)(A), (B), (E), (F) and

(G), the statute additionally provides means whereby a source may submit information which

contradicts or questions the information contained in an H-1B application. The obvious purpose for

allowing such information to be submitted is to insure the integrity of and to curb any abuses of the

H-1B program. However, § 1182 (n)(2)(G)(i) reserves to the Secretary the determination of whether

the information provides reasonable cause to believe that the applicant employer has engaged in a

willful failure to meet the requisite requirements of an H-1B application or that the employer has

engaged in a pattern or practice of failure to meet the requirements.

The statute provides further procedures which the Secretary is to follow, but only in the event

that an investigation has been authorized. See § 1182 (n)(2)(G)(ii)-(vii). The applicable regulations

track the requirements of the statutory provisions. See 20 C.F.R. § 655.806. Who may file a

complaint and how it is processed? Subpart (a)(2) states in pertinent part that: “No hearing or appeal

pursuant to this subpart shall be available where the Administrator [of the Wage and Hour Division,

Employment Standards Administration] determines that an investigation on a complaint is not

warranted.”

 

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Finally, the court looks to the remedies provided for violations. All of the sanctions are

directed against the employer that submitted the application, after a determination that a substantial

failure to meet the requirements occurred or that the application contained a misrepresentation of

material fact. See 8 U.S.C. § 1182 (n)(2)(C).

The statute clearly reserves to the Secretary the initial determination of whether the contents

of a complaint contain sufficient information to provide “reasonable cause to believe” that a

violation has occurred. The use of the term “reasonable cause” without any attempt to define the

term makes clear that Congress gave discretionary authority to the Secretary to decide when and if

an investigation should be conducted. The broad discretion granted by the statute is analogous to

the unfettered discretion reserved to the Department of Justice in determining whether criminal

charges should be sought. The analogy become even stronger in light of the fact that the only

sanctions, when violations have been found, are imposed against the offending employer. See also

Heckler v. Chaney, 470 U.S. 821, 831, 105 S.Ct. 1649, 1655 (1985), where the Supreme Court

reiterated that “This Court has recognized on several occasions over many years that an agency’s

decision not to prosecute or enforce, whether through civil or criminal process, is a decision 

 

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The magistrate judge’s opinion that the Secretary’s rejection of Watson’s

complaint is not subject to judicial review under the APA is buttressed by the absence of any

case authority in my independent research which holds that the APA applies. The magistrate

judge’s opinion is further buttressed by the Administrative Review Board’s decision issued on

May 31, 2005 (See Attachment 1). I do note that the court in Shah v. Wilco, supra, suggests that

upon exhaustion of administrative remedies, the plaintiffs in that case could seek judicial review,

126 F.Supp. 2d at 648. However, the facts recited showed that the plaintiffs had not even

pursued administrative remedies, nor did the court undertake to address the Secretary’s initial

authority in determining whether “reasonable cause” existed. As such, the court’s suggestion is

mere dictum.

6

The other rules cited in Watson’s motion are irrelevant and inapplicable.

7

generally committed to an agency’s absolute discretion. (Citations omitted).”5

Watson’s Original Motion for Sanctions: In his motion Watson accuses EDS’s counsel of

making false statements in a labor condition application (LCA) in order to obtain an H-1B

nonimmigrant worker visa, “blacklisting” him from obtaining employment in the information

technology industry for a period of one year and further accuses EDS’s counsel of asserting a

fraudulent defense in this judicial action.

He further accuses the Federal Defendants’ counsel of having failed to file a certified copy

of prior administrative proceedings and in moving to dismiss this action for failure to exhaust

administrative remedies.

In its response to Watson’s motion, EDS seeks an award of attorney’s fees under the court’s

inherent authority. The District Court should refuse to impose sanctions under its inherent authority

because the facts in the present action do not establish sufficiently egregious conduct on the part of

Mr. Watson proceeding pro se to warrant such measures.

Watson specifically relies on Rule 11(b) and (c)(1)(A), Federal Rules of Civil Procedure, as

a basis for his motion.6

 

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Rule 11 (b) imposes an obligation on an attorney or a party with respect to pleadings filed

in a civil action. Regardless of any ultimate outcome with respect to administrative proceedings

which pre-dated the filing of this action, such conduct or representations do not come within the

purview of Rule 11 since they do not constitute pleadings filed in a federal district court. 

Rule 11(c)(1)(A) sets out the procedural requirements which a party intending to seek

sanctions under Rule 11 must follow. Among the requirements imposed is prior service of the

motion on the alleged offending party at least 21 days prior to filing the Rule 11 motion in the

pending action - i.e. the 21 day “safe harbor” provision. Watson represents in his motion that he

spoke to counsel for Respondents on March 3, 2005, who indicated they opposed a motion for

sanctions. See Original Motion for Sanctions filed on March 30, 2005, at page 3 “Certificate of

Conference. The identities of the opposing counsel is not set out. More to the point, this conferring

does not comply with the specific requirements of Rule 11 (c)(1)(A).

In addition, nothing identified in Watson’s motion or in his reply or briefs establish a basis

for finding that any opposing party violated Rule 11 (b).

Rule 11 (c)(1) provides in pertinent part that: “If warranted, the court may award to the party

prevailing on the motion the reasonable expenses and attorney’s fees incurred in ... opposing the

motion.” An appropriate sanction in this instance is an order awarding EDS its reasonable attorney’s

fees and expenses incurred in the preparation and filing of its opposition on April 19, 2005.

RECOMMENDATION:

For the foregoing reasons it is recommended that the District Court find that it has no

jurisdiction to consider the actions of the Federal Defendants pursuant to the provisions of the

 

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Administrative Procedure Act, and accordingly that it grants Defendants’ motions to dismiss

Watson’s action with prejudice pursuant to Rule 12 (b)(1) and (6).

It is further recommended that the District Court deny Watson’s Original Motion for

Sanctions and grant EDS’s cross-motion for attorney’s fees and expenses incurred in opposing the

said motion and that the same be referred back to the magistrate judge for determination of the

amount of the monetary sanctions to be awarded. 

A copy of the recommendation shall be transmitted to Plaintiff and counsel for the

Defendants.

SIGNED this 7th day of June, 2005.

____________________________________

WM. F. SANDERSON, JR.

UNITED STATES MAGISTRATE JUDGE

NOTICE

In the event that you wish to object to this recommendation, you are hereby notified that you

must file your written objections within ten days after being served with a copy of this

recommendation. Pursuant to Douglass v. United Servs. Auto Ass'n, 79 F.3d 1415 (5th Cir. 1996)

(en banc), a party's failure to file written objections to these proposed findings of fact and

conclusions of law within such ten-day period may bar a de novo determination by the district judge

of any finding of fact or conclusion of law and shall bar such party, except upon grounds of plain

error, from attacking on appeal the unobjected to proposed findings of fact and conclusions of law

accepted by the district court.

 

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