ASSE International, Inc. v. Kerry
2015 U.S. App. LEXIS 17666
| 9th Cir. | 2015Background
- ASSE International (ASSE), a long-standing private sponsor in the State Department’s Exchange Visitor Program (EVP), was issued a Notice of Intent and then lesser sanctions (written reprimand, corrective-action plan, and 15% DS-2019 reduction) after the Department found regulatory violations based primarily on complaints by a trainee, Noriko Amari.
- The Department’s findings included failures to ensure Amari’s English proficiency, that her placement was bona fide training (not substitute labor), and that ASSE properly supervised third-party contractors (e.g., American Career Opportunities). DHS had also issued Amari a T visa.
- ASSE responded in writing within the ten-day window but alleged the Department relied on undisclosed evidence (sparse interview notes and an ASSE employee email not mentioned in the Notice) when imposing sanctions.
- ASSE sued in district court under the Administrative Procedure Act (APA) claiming the sanctions were arbitrary and capricious, and asserted procedural due process violations under the Fifth Amendment.
- The district court dismissed for lack of APA reviewability (action “committed to agency discretion by law”) and held the process was fundamentally fair. ASSE appealed.
- The Ninth Circuit reversed: it held the sanctions decision is reviewable under the APA against the Department’s own regulations, and that ASSE plausibly alleged a due process violation because it lacked a meaningful opportunity to rebut key evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the State Department’s imposition of lesser sanctions is reviewable under the APA | ASSE: agency must follow its own EVP regulations; courts can review final agency action for arbitrariness/abuse of discretion | State Dept.: EVP statute vests broad, foreign-affairs discretion; actions are committed to agency discretion by law (5 U.S.C. § 701(a)(2)) | Reversed district court: regulations supply a meaningful standard; sanctions are subject to APA review for arbitrary, capricious, or abuse-of-discretion review |
| Standard and scope of judicial review of agency factfinding here | ASSE: Department relied on insufficient/undisclosed evidence; factual findings must meet substantial-evidence/arbitrary-and-capricious review | State Dept.: factfinding about program administration and foreign-relations implications lies beyond meaningful judicial review | Court: review available under 5 U.S.C. § 706(2)(A); factual determinations can be reviewed for substantial evidence and arbitrary-and-capriciousness, with appropriate deference |
| Whether due process requires trial-type hearings (confrontation/cross-examination) before imposing lesser sanctions | ASSE: meaningful process requires ability to confront adverse witnesses and cross-examine, especially where case rests on one complainant | State Dept.: Mathews balancing favors paper hearing; trial-like confrontations are unnecessary and burdensome | Court: Mathews test—trial-type hearings not required here; paper hearings ordinarily sufficient given program context |
| Whether ASSE received adequate procedural protections (meaningful opportunity to rebut evidence) | ASSE: Department failed to disclose key evidence (interview notes, an internal ASSE email referenced only later), depriving ASSE of opportunity to rebut | State Dept.: Notice and paper procedures used were adequate; later reliance on certain facts (e.g., DHS T visa) was disclosed | Court: ASSE plausibly alleged inadequate process—Department withheld material evidence and relied on new evidence in final decision without giving ASSE a chance to respond; remanded for district court to address property-interest and harmless-error issues |
Key Cases Cited
- Helgeson v. Bureau of Indian Affairs, 153 F.3d 1000 (9th Cir. 1998) (strong presumption of judicial review of administrative action)
- Traynor v. Turnage, 485 U.S. 535 (1988) (presumption of reviewability of agency action)
- Pinnacle Armor, Inc. v. United States, 648 F.3d 708 (9th Cir. 2011) (narrow scope of § 701(a)(2) exception and abuse-of-discretion standard)
- Webster v. Doe, 486 U.S. 592 (1988) (limits on review when statutes provide no law to apply; but court can review where regulations provide standards)
- Heckler v. Chaney, 470 U.S. 821 (1985) (agency nonenforcement discretion and reviewability principles)
- Socop–Gonzalez v. INS, 208 F.3d 838 (9th Cir. 2000) (regulatory standards can supply meaningful review even when statute grants broad discretion)
- Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) (arbitrary-and-capricious review and searching inquiry)
- Mathews v. Eldridge, 424 U.S. 319 (1976) (three-part balancing test for procedural due process)
- Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985) (requirements for notice and opportunity to respond)
- Greene v. McElroy, 360 U.S. 474 (1959) (due process requires disclosure of evidence used to support adverse action)