dismissed L-1A Case: Hotel Management

PUBLIC COpy
Identifying data deleted to
prevent clearly unwarranted
invasionofpersonalprivacy
u.S. Department of Homeland Security
20 Mass. Ave., N.W., Rm. A3000
Washington, DC 20529
u.s.Citizenship
and Immigration
Services
File: SRC 05 243 52543 Office: TEXAS SERVICE CENTER Date: MAY 01 2007
IN RE: Petitioner:
Beneficiary:
Petition: Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(l5)(L) of the Immigration
and Nationality Act, 8 U.S.C. § 1101(a)(15)(L)
IN BEHALF OF PETITIONER:
INSTRUCTIONS:
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to
the office that originally decided your case. Any further inquiry must be made to that office.
"~ '-'~ .
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R~~~Wiemann, Chief
Administrative Appeals Office
www.uscis.gov
SRC 05 243 52543
Page 2
DISCUSSION: The Director, Texas Service Center, denied the petition for a nonimmigrant visa. The matter
is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal.
The petitioner filed this nonimmigrant visa petition seeking to employ the beneficiary as its business
development manager as an L-1A nonimmigrant intracompany transferee pursuant to section 101(a)(l5)(L) of
the Immigration and Nationality Act (the Act), 8 U.S.C. § 1101(a)(l5)(L). The petitioner is a corporation
organized under the laws of the State of Texas and allegedly operates a hotel. The petitioner claims a
qualifying relationship with. Construction Company located in India. The beneficiary had been granted a
one-year period of stay to open a "new office" in the United States from July 19, 2004 until July 18, 2005
(SRC 04 196 50605). However, the petitioner's attempt to extend this petition was denied, and the petitioner
has now filed a second extension petition, which is the subject of the instant appeal. While the petitioner has
characterized this second extension petition as a petition for new employment, the director properly treated
the petition as one seeking to extend the original "new office" petition pursuant to 8 C.F.R. § 214.2(l)(l4)(ii).
The director denied the petition concluding that the petitioner did not establish that it and the foreign entity
are qualifying organizations. Specifically, the director concluded that the United States operation is not
controlled by the foreign entity in that the petitioner has ceded control to a third party via an agreement with
Best Western International, Inc. The director also denied the petition concluding that the petitioner did not
establish that it had been doing business for the previous year as required by 8 C.F.R. § 214.2(1)(14)(ii)(B).
The petitioner filed an appeal. The director declined to treat the appeal as a motion and forwarded the appeal
to the AAO for review. On appeal, counsel to the petitioner asserts that Best Western International, Inc. does
not control the petitioner and that the record otherwise establishes that the petitioner and the foreign entity are
qualifying organizations. While counsel does not directly address the second basis for denying the petition,
counsel does state that the petitioner has been doing business in the United States since December 2004. The
instant petition was filed on September 6, 2005.
To establish eligibility for the L-1 nonimmigrant visa classification, the petitioner must meet the criteria
outlined in section 101(a)(l5)(L) of the Act. Specifically, a qualifying organization must have employed the
beneficiary in a qualifying managerial or executive capacity, or in a specialized knowledge capacity, for one
continuous year within three years preceding the beneficiary's application for admission into the United
States. In addition, the beneficiary must seek to enter the United States temporarily to continue rendering his
or her services to the same employer or a subsidiary or affiliate thereof in a managerial, executive, or
specialized knowledge capacity.
The regulation at 8 C.F.R. § 214.2(1)(3) states that an individual petition filed on Form 1-129 shall be
accompanied by:
(i) Evidence that the petitioner and the organization which employed or will employ the
alien are qualifying organizations as defined in paragraph (1)(l)(ii)(G) of this section.
(ii) Evidence that the alien will be employed in an executive, managerial, or specialized
knowledge capacity, including a detailed description of the services to be performed.
SRC 05 243 52543
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(iii) Evidence that the alien has at least one continuous year of full time employment
abroad with a qualifying organization within the three years preceding the filing of
the petition.
(iv) Evidence that the alien's prior year of employment abroad was in a position that was
managerial, executive or involved specialized knowledge and that the alien's prior
education, training, and employment qualifies himlher to perform the intended
services in the United States; however, the work in the United States need not be the
same work which the alien performed abroad.
The regulation at 8 C.F.R. § 214.2(l)(l4)(ii) also provides that a visa petition, which involved the opening of a
new office, may be extended by filing a new Form 1-129, accompanied by the following:
(A) Evidence that the United States and foreign entities are still qualifying
organizations as defined in paragraph (1)(1)(ii)(G) of this section;
(B) Evidence that the United States entity has been doing business as defined in
paragraph (1)(1)(ii)(H) of this section for the previous year;
(C) A statement of the duties performed by the beneficiary for the previous year
and the duties the beneficiary will perform under the extended petition;
(D) A statement describing the staffing of the new operation, including the
number of employees and types of positions held accompanied by evidence
of wages paid to employees when the beneficiary will be employed in a
managerial or executive capacity; and
(E) Evidence of the financial status of the United States operation.
As a preliminary matter and as indicated above, while the petitioner has characterized this second extension
petition as a petition for "new employment," the director properly treated the petition as one seeking to extend
the original "new office" petition pursuant to 8 C.F.R. § 214.2(l)(l4)(ii). The original "new office" petition
was approved on July 19, 2004. The record, as further explained below, establishes that the petitioner
acquired the hotel in question in December 2004. While the petitioner asserts that it commenced doing
business in March 2004, there is no evidence of the petitioner regularly, systematically, and continuously
providing goods or services until December 2004 when the hotel was acquired. The current petition was filed
on September 6, 2005. Therefore, as the petitioner has not been "doing business" as defined by 8 C.F.R. §
214.2(l)(l)(ii)(H) for more than one year, this director properly applied the "new office extension" standards
articulated in 8 C.F.R. § 214.2(l)(l4)(ii). It must be noted that the regulations which pertain to extensions of
"new office" petitions may not be bypassed by characterizing a petition as one for "new employment."
Furthermore, the requirement that a petitioner establish that it has been "doing business" for at least one year
generally applies to all petitions, other than initial "new office" petitions, in order to ensure that petitioners are
SRC 05 243 52543
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sufficiently established in the United States. I
The first issue in the Pintmatter is whether the petitioner established that it has a qualifying relationship
with the foreign entity, Construction Company, a partnership organized under the laws of India.
8 C.F.R. § 2l4.2(i)(l)(ii)(G) defines a "qualifying organization" as a finn, corporation, or other legal entity
which "meets exactly one of the qualifying relationships specified in the definitions of a parent, branch, affiliate
or subsidiary specified in paragraph (l)(l)(ii) of this section." A "subsidiary" is defined, in part, as a corporation
"of which a parent owns, directly or indirectly, more than half of the entity and controls the entity."
In this matter, the petitioner claims that the foreign entity "owns 60% of fully paid non-assessable shares of the
common stock" of the petitioner. In support of this assertion, the petitioner provided a stock certificate and
articles of incorporation. The petitioner also provided a copy of a Membership Application and Agreement (the
"Agreement") made between the petitioner and Best Western International, Inc. ("Best Western"), which governs
aspects of the petitioner's operation of a Best Western hotel.
On September 14, 2005, acknowledging that the Agreement with Best Western undermines the petitioner's
assertion that the foreign entity owns and controls the petitioner, the director requested additional evidence. The
director requested, inter alia, evidence that the foreign entity controls the petitioner.
In response, counsel to the petitioner provided evidence of an investment in the United States operation by the
foreign entity; an amendment to the petitioner's articles of incorporation; a bank commitment letter evidencing
that Sterling Bank agreed to loan $2.7 million to the petitioner, partially backed by a personal guaranty from the
beneficiary, for the acquisition of the hotel; and a letter dated November 15, 2005 further explaining the
petitioner's association with Best Western. Counsel explained that Best Western is a not-for-profit, membership
organization which sets minimum standards for hotels choosing to participate in the program. Counsel asserts
that the petitioner owns and controls the hotel, hires and fires employees, sets rates, controls room inventory, and
may terminate its association with Best Western at any time without penalty (paragraph 14 of the Agreement).
On November 28, 2005, the director denied the petition. The director concluded that, since the membership of
Best Western decides what services it provides to its members, and the petitioner only has one vote as a member,
the foreign entity no longer "controls" the petitioner. Therefore, the petitioner has not established that it has a
qualifying relationship with the foreign entity.
On appeal, the petitioner asserts that the director's decision was made in error. Specifically, the petitioner
lWhile not addressed by the petitioner or the director, it should be noted for the record that the instant petition
should not have been treated as a second "new office" petition even though the record indicates that the
petitioner has been "doing business" for less than one year when the instant petition was filed. A petitioner
may not be granted a second "new office" L-l A visa approval. The only provision in the regulations that
allows for the extension of a "new office" visa petition requires the petitioner to demonstrate that it is staffed
and has been "doing business" in a regular, systematic, and continuous manner for the previous year. 8
C.F .R. § 214.2(l)(l4)(ii).
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alleges that the petitioner is owned and controlled by the foreign entity and that the terms of the Agreement
do not cede control to Best Western.
Upon review, the petitioner's assertions are persuasive, and the director's determination that the foreign entity
does not "control" the petitioner based on the petitioner's Agreement with Best Western is hereby withdrawn.
However, for the reasons explained below, the petitioner has nevertheless failed to establish that it has a
qualifying relationship with the foreign entity, and the appeal will be dismissed for those reasons.
The regulation and case law confirm that ownership and control are the factors that must be examined in
determining whether a qualifying relationship exists between United States and foreign entities for purposes
of this visa classification. Matter ofChurch Scientology International, 19 I&N Dec. 593 (BIA 1988); see also
Matter ofSiemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter ofHughes, 18 I&N Dec. 289
(Comm. 1982). In the context of this visa petition, ownership refers to the direct or indirect legal right of
possession of the assets of an entity with full power and authority to control; control means the direct or
indirect legal right and authority to direct the establishment, management, and operations of an entity. Matter
ofChurch Scientology International, 19 I&N Dec. at 595.
Although a franchise or marketing membership may be an asset of an independently owned and operated
company, and pursuit of a franchise or marketing membership business model alone does not automatically
disqualify a petitioner from establishing that it has a qualifying relationship with a foreign entity, the
petitioner must prove that it has retained the necessary latitude to control, direct, and develop the enterprise.
See Matter of Kung, 17 I&N Dec. 260 (BIA 1978). In this case, the petitioner has retained the necessary
latitude to control, direct, and develop its hotel operation. While the director correctly noted that the
membership of Best Western defines the scope of services provided to members, this aspect to the petitioner's
Agreement with Best Western does not affect the petitioner's control over the enterprise. As noted in the
Agreement, the petitioner may withdraw from the Best Western system at any time without penalty. The
petitioner is not obligated to restrict its business activities to the operation of the hotel in question. As
explained by the petitioner, its decision to participate in the Best Western system is a "marketing device"
which tells customers that the petitioner's hotel meets certain minimum standards. This arrangement differs
from many franchise relationships in which the franchisee cedes its ability to control, direct, and develop the
enterprise to the franchisor, and the franchisee's ability to pursue other business activities, either during or
after the termination of the franchise relationship, has been contractually and voluntarily stunted or
relinquished.
Therefore, the director's determination that the foreign entity does not "control" the petitioner based on the
petitioner's Agreement with Best Western is hereby withdrawn. However, as indicated above, the petitioner
has nevertheless failed to establish that it has a qualifying relationship with the foreign entity, and the appeal
will be dismissed for this reason.
As explained above, the petitioner asserts that the foreign entity "owns 60% of fully paid non-assessable shares
of the common stock" of the petitioner. In support of this assertion, the petitioner provided a stock certificate and
articles of incorporation. However, the record is so rife with inconsistencies regarding its ownership and control
that the AAO cannot discern whether the foreign entity actually owns a majority of the petitioner's stock. For
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example, the petitioner stated in its Membership Application and Agreement with Best Western that the petitioner
is 600/0 owned by the beneficiary and 40% owned by another individual. Moreover, the petitioner's 2004 Form
1120, Schedule K, indicates that no individual, corporation, or partnership owned 50% or more of the petitioner's
stock; that no foreign person owned at least 25% of the petitioner's stock; and that total number of shareholders in
2004 was five. Therefore, the Form 1120 is inconsistent with both the petitioner's assertions in the Form 1-129
and in the Agreement with Best Western. Finally, the commitment letter approving the petitioner's financing for
the acquisition of the hotel indicates that the beneficiary and the other stockholder identified in the Agreement
with Best Western have personally guaranteed the $2.7 million loan. It is not credible that the beneficiary, who
holds a minority 40% interest in the foreign entity and who the petitioner does not claim in its petition to be a
stockholder, would personally guaranty such a loan if he did not, in reality, own a substantial interest in the
business enterprise. The petitioner offers no explanation for these inconsistencies. It is incumbent upon the
petitioner to resolve any inconsistencies in the record by independent objective evidence. Any attempt to
explain or reconcile such inconsistencies will not suffice unless the petitioner submits competent objective
evidence pointing to where the truth lies. Matter ofHo, 19 I&N Dec. 582, 591-92 (BIA 1988).
Accordingly, the petitioner has not established that the petitioner and the foreign entity have a qualifying
relationship as defined by 8 C.F.R. § 214.2(l)(l)(ii)(G), and the petition will be denied for that reason.
The second issue in the present matter is whether the petitioner has been "doing business" as defined by 8
C.F.R. § 214.2(l)(l)(ii)(H) for more than one year as required by 8 C.F.R. § 214.2(l)(14)(ii)(B). "Doing
business" is defined in pertinent part as "the regular, systematic, and continuous provision of goods and/or
services."
As explained above, the original "new office" petition was approved on July 19, 2004. The instant petition
seeking to extend the approval of the "new office" petition was filed on September 6, 2005. In response to the
Request for Evidence, prior counsel to the petitioner alleges in a letter dated November 15, 2005 that the
petitioner has been doing business in a "regular fashion" since its closing on the hotel at the end of 2004.
Prior to that date, counsel asserts that the petitioner was engaged in "due diligence and pre-closing
preparation." The petitioner also explains its Form 1-129 that the beneficiary was unable to obtain a social
security number for ten to twelve weeks after arriving in the United States.
On November 28, 2005, the director denied the petition. The director concluded that the petitioner failed to
establish that it had been doing business for one year prior to the filing of the instant petition.
On appeal, counsel to the petitioner fails to directly address this issue, although counsel does admit in its brief
that "[f]rom December 2004 to date the petitioning company has been doing regular systematic business in
the U.S." Present counsel makes no mention of any due diligence or pre-closing activities.
Upon review, the AAO concurs with the decision of the director and will dismiss the appeal.
The petitioner has offered no evidence that it commenced doing business in a regular, continuous, and
systematic manner prior to its acquisition of the hotel in December 2004. While the conduct of due diligence
may be a legitimate step in the business acquisition process, it does not constitute the provision of a good or
SRC 05 243 52543
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service in a regular, systematic, and continuous fashion. Therefore, as the current petition was filed on
September 6, 2005 and as the petitioner commenced "doing business" in December 2004, the petitioner has
not established that it had been doing business for at least one year prior to the filing of the petition. For this
additional reason, the petition may not be approved.
Beyond the decision of the director, the petitioner has not established that the beneficiary will be employed in
the United States in a primarily managerial or executive capacity as required by 8 C.F.R. § 2l4.2(l)(3)(ii).
Section lOl(a)(44)(A) of the Act, 8 U.S.C. § 110I(a)(44)(A), defines the term "managerial capacity" as an
assignment within an organization in which the employee primarily:
(i) manages the organization, or a department, subdivision, function, or component of
the organization;
(ii) supervises and controls the work of other supervisory, professional, or managerial
employees, or manages an essential function within the organization, or a department
or subdivision of the organization;
(iii) if another employee or other employees are directly supervised, has the authority to
hire and fire or recommend those as well as other personnel actions (such as
promotion and leave authorization), or if no other employee is directly supervised,
functions at a senior level within the organizational hierarchy or with respect to the
function managed; and
(iv) exercises discretion over the day to day operations of the activity or function for
which the employee has authority. A first line supervisor is not considered to be
acting in a managerial capacity merely by virtue of the supervisor's supervisory
duties unless the employees supervised are professional.
Section 101(a)(44)(B) of the Act, 8 U.S.C. § 1101 (a)(44)(B), defines the term "executive capacity" as an
assignment within an organization in which the employee primarily:
(i) directs the management of the organization or a major component or function of the
organization;
(ii) establishes the goals and policies of the organization, component, or function;
(iii) exercises wide latitude in discretionary decision making; and
(iv) receives only general supervision or direction from higher level executives, the board
of directors, or stockholders of the organization.
Although prior counsel to the petitioner asserts that the beneficiary will be employed in a "managerial
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capacity" in a letter dated November 15, 2006, the petitioner does not clarify whether the beneficiary is
claiming to be primarily engaged in managerial duties under section 101(a)(44)(A) of the Act, or primarily
executive duties under section 101(a)(44)(B) of the Act. A beneficiary may not claim to be employed as a
hybrid "executive/manager" and rely on partial sections of the two statutory definitions. If the petitioner is
indeed representing the beneficiary as both an executive and a manager, it must establish that the beneficiary
meets each of the four criteria set forth in the statutory definition for executive and the statutory definition for
manager. Given the lack of clarity , it will be assumed that the petitioner is asserting that the beneficiary will
be employed either as a manager or an executive, and the AAO will consider both classifications.
In a letter dated July 19, 2005 appended to the initial petition , the petitioner provided a brief description of the
beneficiary's duties as "business development manager." As this letter is in the record, the petitioner's
description of the beneficiary's duties will not be repeated here. On September 14, 2005 , the director
requested additional evidence. The director requested, inter alia, evidence that the beneficiary will be
employed in a managerial or executive capacity, including job descriptions for each employee.
In response, the petitioner provided a list of the beneficiary's accomplishments leading up to the acquisition of
the hotel. The petitioner also provided an organizational chart for the petitioner and job descriptions for
several subordinate employees. However, the petitioner did not provide a more detailed description of the
beneficiary's proposed job duties.
On November 28, 2005, the director denied the petition for those reasons explained above. However, the
director stated that "[t]he petitioner has submitted sufficient evidence that the beneficiary will be employed in
an executive or managerial position." Upon review, the AAO withdraws this determination and, beyond the
decision of the director, will dismiss the appeal on the basis that the petitioner failed to establish that the
beneficiary will be employed in an executive or managerial capacity.
When examining the executive or managerial capacity of the beneficiary , the AAO will look first to the
petitioner's description of the job duties. See 8 C.F.R. § 214.2(l)(3)(ii). The petitioner's description of the job
duties must clearly describe the duties to be performed by the beneficiary and indicate whether such duties are
either in an executive or managerial capacity. Id.
The petitioner has failed to establish that the beneficiary will act in a "managerial" capacity. In support of its
application, the petitioner has provided a vague and nonspecific description of the beneficiary 's duties that
fails to demonstrate what the beneficiary will do on a day-to-day basis. For example, the petitioner states that
the beneficiary will set goals and policies. The petitioner did not, however , define these policies and goals.
Going on record without supporting documentary evidence is not sufficient for purposes of meeting the
burden of proof in these proceedings. Matter of Treasure Craft of California, 14 I&N Dec. 190 (Reg. Comm.
1972). Specifics are clearly an important indication of whether a beneficiary's duties are primarily executive
or managerial in nature; otherwise meeting the definitions would simply be a matter of reiterating the
regulations. Fedin Bros. Co., Ltd. v. Sava , 724 F. Supp . 1103 (E.D .N.Y. 1989), aff'd, 905 F.2d 41 (2d. Cir.
1990). Other than arranging for the acquisition of the hotel, the record is devoid of any credible description
of what the beneficiary does, and will do, on a day-to-day basis now that the hotel is owned by the petitioner.
The record also does not explain the role of the beneficiary's apparent business partner, Kirin Shah, in the
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management of the business, or to explain why the hotel needs two managers at the top of the organization.
Simply assigning the beneficiary a managerial title and placing him at the top of an organizational chart is not
probative of his performance of executive or managerial duties.
Moreover, it must be noted that the director specifically requested job descriptions for the employees in the
Request for Evidence, and that the petitioner chose not to specifically define the duties of either the
beneficiary or _ Failure to submit requested evidence that precludes a material line of inquiry shall
be grounds for denying the petition. 8 C.F.R. § 103.2(b)(l4).
Accordingly, the petitioner has not established that the beneficiary will be employed in the United States in a
primarily managerial or executive capacity as required by 8 C.F.R. § 214.2(l)(3)(ii).
The initial approval of an L-1A new office petition does not preclude Citizenship and Immigration Services
(CIS) from denying an extension of the original visa based on a reassessment of petitioner's qualifications.
Texas A&M Univ., 99 Fed. Appx. 556,2004 WL 1240482 (5th Cir. 2004). Despite any number of previously
approved petitions, CIS does not have any authority to confer an immigration benefit when the petitioner fails
to meet its burden of proof in a subsequent petition. See section 291 of the Act, 8 U.S.C. § 1361.
An application or petition that fails to comply with the technical requirements of the law may be denied by
the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See
Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), aff'd, 345 F.3d 683
(9th Cir. 2003); see also Dar v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989) (noting that the AAO reviews
appeals on a de novo basis).
The petition will be denied for the above stated reasons, with each considered as an independent and
alternative basis for denial. When the AAO denies a petition on multiple alternative grounds, a plaintiff can
succeed on a challenge only if it is shown that the AAO abused its discretion with respect to all of the AAO's
enumerated grounds. See Spencer Enterprises, Inc., 229 F. Supp. 2d at 1043.
In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the
petitioner. Section 291 of the Act. Here, that burden has not been met. Accordingly, the appeal will be
dismissed.
ORDER: The appeal is dismissed.