Opinion ID: 2446
Heading Depth: 2
Heading Rank: 2

Heading: Air India: Lawful Permanent Residents

Text: Air India (AI) challenged the INS's imposition of a fine for bringing a lawful permanent resident (LPR) to the United States without the required reentry permit or visa. In 1993, AI transported from India to the United States an LPR who did not have the required documentation. Under the relevant regulation, which allows INS officers to waive the visa requirement if the alien shows good cause for doing so, 8 C.F.R. § 211.1(b)(3), INS officers waived the requirement and allowed the LPR to enter the United States. The INS nonetheless fined AI for violating the Penalty Statute. AI argues that it should not be fined, due to the fact that [the LPR] was granted a waiver of the documentary requirement. Contrary to its later approach in United Airlines, in recounting the history of the statutory and regulatory framework governing visa waivers for LPRs, the district court wrote approvingly of the BIA's longstanding rule that when the relevant waiver regulation nullified the visa requirement, the Penalty Statute did not apply. The district court observed that the BIA's approach gave effect to the plain meaning of the statute and the Regulation. Air India v. Brien, No. 00-CV-1707, slip op. at 6 (E.D.N.Y. Feb. 14, 2002). It explained that the BIA had consistently followed this approach through 1966applying the Penalty Statute or not, depending on whether the waiver regulation stated that aliens granted a waiver were not required to present a visa. In 1966, this good-cause waiver was amended to state that an LPR who satisfied the district director that there is good cause for his failure to present an immigration visa... may... be granted a waiver of that requirement. [5] Id. at 6-7 (citing 31 Fed. Reg. 13387 (Oct. 15, 1966)). According to AI, between 1966 and 1988 the INS did not fine airlines pursuant to the Penalty Statute in those cases where it granted a waiver. AI believed that the INS had radically changed its enforcement practices, however, when it created a National Fines Office in 1988 and allegedly began fining airlines even when it waived the visa requirement for good cause. Id. at 7. Before the National Fines Office and the BIA, AI argued that the regulations required an LPR to present a visa except when the LPR was able to show good cause, and that the LPR it had brought to the United States, who had shown good cause and received a waiver, was therefore not required to present a visa. See id. at 8. That is, because the LPR was ultimately not required to present a visa, the Penalty Statute did not apply. Before the BIA had issued a decision, however, AI (along with eleven other airlines) filed the 1995 lawsuit. Id. at 9. After this Court dismissed the 1995 lawsuit as unripe, see Air España v. Brien, 165 F.3d 148, 151-53 (2d. Cir. 1998), AI appeared again before the BIA. At that point, for the first time, it challenged the 1966 regulation as having violated the APA. Air India, No. 00-CV-1707, slip op. at 12. The BIA found the 1966 regulation valid and affirmed the imposition of the fine, interpreting the regulation as not exempting aliens from visa requirements, even if they were granted post-arrival waivers. Id. at 13. Once again before the district court, AI argued that (1) the fines were invalid because LPRs granted a waiver were exempt from the visa requirement, and (2) a 1998 amendment to the visa regulation was invalid. Id. at 14. The district court began by commenting that if it were to consider only the text of the [1966] Regulation, there could be little doubt that the fines imposed by the INS were proper. Id. at 16. It agreed with the INS that nothing in the 1966 regulation exempted aliens later granted waivers from the visa requirement, and it found unpersuasive AI's argument that a 1997 revision of the regulation reflected a preexisting understanding that the regulation did so. Thus, if the [district court] were to consider only the plain language of the INA and the Regulation, the fines would appear to have been properly levied. Id. at 21-22. The court noted, however, that it was not constrained to consider only the terms of the INA and the Regulation. Id. at 22. If the 1966 regulation had not been properly promulgated under the APA, it observed, it could not be enforced. In that event, the 1957 version of the regulation would remain effective, and the 1957 version did exempt from the visa requirement any alien granted a good-cause waiver. Id. The parties agreed that the 1966 regulation had not been subject to a notice-and-comment process, and the Attorney General had explained the decision not to conduct notice and comment because the amendment was meant to benefit the persons affected thereby. Id. at 23 (internal quotation marks omitted). The district court found itself at a loss to understand how the agency could have thought that the 1966 amendment, which removed the exemption, benefitted LPRs. Id. Furthermore, the regulation affected airlines, and they did not benefit from it. Id. at 24. The district court concluded, therefore, that the Attorney General did not have authority to promulgate the 1966 regulation without notice and comment. It dismissed the INS's argument that the agency had invoked the good cause exception to the notice-and-comment requirement, noting that the government had made no showing that compliance with the requirement was impractical or unnecessary in that case. Id. at 26 n.21. Because the agency had not complied with the APA, the 1966 regulation was void, and the district court applied the 1957 regulation instead. See id. at 27. Under the BIA's longstanding interpretation of that regulation, airlines were not subject to fines when an LPR was granted a waiver of the visa requirement. Finally, turning to AI's challenge to the 1998 regulation, the district court dismissed the challenge as unripe. Id. The 1998 regulation had not been enforced against AI, and the INS had indicated that it had no plans to enforce it in the future. Id. at 29.
After the district court granted judgment to AI, the INS moved for reconsideration under Rule 59. For the first time, the INS argued that AI's challenge to the validity of the 1966 regulation was time-barred because it had not been brought within six years of the promulgation of the regulation. The district court acknowledged that the federal statute of limitations for claims against the government is six years, and it described the defense as unwaivable because compliance with the statute is a jurisdictional predicate for the court's ability to entertain the claim. Air India v. Brien, 261 F. Supp. 2d 134, 137 (E.D.N.Y. 2003). The district court cited several Courts of Appeals decisions addressing the same question that all found that claims based on procedural defects in the promulgation of a regulation accrue when the regulation is published in the Federal Register. See, e.g., Dunn-McCampbell Royalty v. Nat'l Park Serv., 112 F.3d 1283, 1287 (5th Cir. 1997); Commonwealth of Penn. Dep't of Welfare v. U.S. Dep't of HHS, 101 F.3d 939, 947 (3d Cir. 1996). Here, the regulation was published in 1966, and the period of limitations governing challenges to the regulation expired long before AI brought its claim. Because compliance with the six-year statute of limitations was jurisdictional, the district court found it appropriate to grant the INS's motion for reconsideration notwithstanding its failure to raise the defense at summary judgment. Rejection of AI's procedural challenge to the 1966 regulation did not, however, dispose of AI's substantive challenge. The district court noted that it had already considered and rejected several of AI's claims regarding the meaning of the 1966 regulation, but it had not consider[ed] [AI's] claim that imposition of fines under the regulation was improper in that it violated the stated intent of the Attorney General in promulgating the amendment. Id. at 139. The 1966 regulation was accompanied by a statement that the regulation was not subject to notice and comment because it confers benefits on persons affected thereby. Id. (internal quotation marks omitted). The district court determined that [t]his clear expression of intent refutes the argument that the regulation was intended to impose liability on the airlines when none had existed under the prior version of the regulation as amended in 1957. Id. Moreover, the INS had not imposed fines under the 1966 regulation for 22 years, and the agency could not explain why it began imposing fines in 1988. To the extent that any evidence of the INS's intent existed, it was in the form of an internal memorandum directing staff to begin enforcing the 1966 amendment against airlines and explaining that the agency was shifting policy to maximize revenues. Such motivation, found the court, was not a proper basis for a change in enforcement policy. Id. at 140. The district court therefore concluded that the INS's decision to begin fining air carriers some twenty-two years after the 1966 regulation was promulgated was arbitrary, capricious and an abuse of discretion, and the fines imposed thereunder must still be vacated. Id. Finally, because the period of limitations for challenging regulations begins accruing at the time of publication in the Federal Register, the district court reversed its earlier finding that AI's challenge to the 1998 regulation was unripe, at least insofar as AI was challenging the 1998 regulation on procedural grounds for lack of a notice-and-comment period. The district court determined that the 1998 regulation was not merely interpretive, as even if it were designed to correct a technical error in the 1997 amendment of the regulation, its correction plainly altered the substantive rights of those affected by it. Id. at 141. In response to the INS's invocation of the good-cause exception, [6] the district court found that the INS had failed to show any good cause existed to dispose of the notice-and-comment requirement. Because no exception applied and the 1998 regulation had therefore been issued in violation of the APA, the district court declared it void. The INS filed a notice of appeal, but the parties later stipulated to dismissal of the appeal and AI's cross-appeal.
Following its March 2003 decision in the Air India case, the district court issued its opinion in the United Airlines case. As explained supra, in its September 2004 United Airlines decision the district court held that airlines incur liability for a fine under the Penalty Statute upon bringing an undocumented alien to the United States, notwithstanding any subsequent waiver or parole and regardless of the precise language used in the visa requirement implementing regulations. In so ruling, the court found the BIA's interpretation of the statutes and regulations flawed. As a result of the United Airlines decision, the INS moved on December 1, 2004, pursuant to Federal Rule of Civil Procedure 60(b)(6) for relief from the March 2003 Air India decision. The district court noted that the INS motion potentially implicated two provisions of Rule 60. The first, Rule 60(b)(1), allows for relief based on mistake, inadvertence, surprise, or excusable neglect, and it requires that the movant file the motion within one year of the judgment. The second, Rule 60(b)(6), allows for relief based on any other reason justifying relief, and it imposes no time limit on the motion. AI argued that the INS's motion was properly characterized as a Rule 60(b)(1) motion and that it was therefore untimely, not having been brought within one year of the March 2003 judgment. The district court found that because the parties had not made arguments related to the Penalty Statute, it had not erred in focusing only on the regulations thereunder; the INS was therefore not seeking relief based on judicial error under Rule 60(b)(1). Air India, Ltd. v. Brien, 239 F.R.D. 306, 313-14 (E.D.N.Y. 2006). It further found that even if some of the INS's arguments were related to judicial error, the INS had also made claims that properly fall under a Rule 60(b)(6) motion. Id. at 314. For example, the INS asserted that the conflicting opinions issued by [the district court] have created confusion in the law and would make it more difficult for the INS to enforce immigration laws. Id. The court agreed with the INS that the judgment had the potential for creating extreme hardship and that the interest of justice require[d] reconsideration of the March 2003 order. Id. It therefore found that the motion was properly brought under Rule 60(b)(6) (and was thus timely). On the merits, the district court found that its September 2004 United Airlines decision render[ed] the March 13 [ Air India decision] moot. Id. at 315. The court reasoned that because it had found that the Penalty Statute did not allow for a blanket waiver of fines in those instances where an alien was granted a waiver of the visa requirement, any regulations purporting to effect such a waiver were void. Id. The court recognized that its focus in Air India on the Attorney General's intent in promulgating the 1966 regulation missed the point, because regardless of the Attorney General's intent, the regulation could not be construed as prohibiting the INS from imposing fines on carriers who bring to the United States aliens without the required documentation, even if those aliens are subsequently paroled or receive a waiver, as such a construction would violate the Penalty Statute. Id. The court concluded that the inconsistency between the Air India and United Airlines decisions, as well as the substantial overlap in parties between the two lawsuits and the effect the inconsistency would have on the government's ability to control its borders... constitute[d] the `extraordinary circumstances' necessary to invoke relief under [Rule] 60(b)(6). Id. at 316. It therefore granted the INS's motion for relief from the March 2003 judgment. The government requested an order that explicitly laid out the result of the district court's Air India decision and in that order, issued in January 2007, the district court clarified that in granting the INS's Rule 60 motion for relief from judgment, it had implicitly grant[ed] the government's underlying motion for summary judgment and deni[ed] the airlines' underlying cross-motion for summary judgment. Air India, Ltd. v. Brien, No. 00-CV-1707, slip op. at 4 (Jan. 25, 2007).