DLS Precision Fab LLC v. U.S. Immigration & Customs Enforcement
2017 U.S. App. LEXIS 14489
| 9th Cir. | 2017Background
- DLS Precision Fab, a Phoenix sheet-metal company, was inspected by ICE after a 2009 Notice of Inspection; ICE alleged failures to complete/retain I-9 forms and continued employment of unauthorized workers.
- ICE filed a six-count administrative complaint in OCAHO (Jan. 4, 2013): Counts I–IV for I-9 paperwork violations; Counts V–VI for knowingly continuing to employ 15 ineligible individuals.
- The ALJ granted summary decision for ICE, finding DLS liable for 504 of 508 alleged violations (489 paperwork; 15 continuing-employment) and assessed $305,050 in civil penalties; this became the final agency order.
- DLS petitioned for review in the Ninth Circuit and later filed Chapter 11 bankruptcy (ongoing).
- The Ninth Circuit upheld liability for 503 violations but held one continuing-employment charge (Francisco Fernandez) was time-barred under 28 U.S.C. § 2462; it affirmed the penalty amount and remanded consistent with that ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Applicability of § 1324a(a)(3) good-faith defense | DLS: it acted in good faith by hiring an HR director; therefore defense should apply | ICE: § 1324a(a)(3) applies only to hiring/rehiring violations under § 1324a(1)(A), not to paperwork or continuing-employment violations | Court: Defense in § 1324a(a)(3) unavailable because DLS was not charged under the referenced provision |
| Applicability/extension of § 1324a(b)(6) good-faith defense to substantive violations | DLS: HR director’s misconduct makes this a “peculiar” case warranting extension of good-faith protection to substantive violations | ICE: § 1324a(b)(6) is explicitly limited to technical/procedural failures; employer is responsible for agent’s acts | Court: Refused to extend statutory good-faith defense to substantive violations; HR director’s failures imputed to DLS |
| Statute of limitations (28 U.S.C. § 2462) | DLS: claims accruing before Jan. 4, 2008 are time-barred because ICE filed on Jan. 4, 2013 | ICE: limitations period should run until administrative imposition of penalty; also argued DLS failed to plead facts for the defense | Held: Limitations measured from date violation accrued; one charge (Fernandez) accrued before Jan. 4, 2008 and is time-barred; DLS’s generalized defenses mostly waived for failure to plead supporting facts |
| Summary adjudication of penalty / ability to pay | DLS: genuine factual dispute about inability to pay precluded summary determination of penalty amount | ICE: ability-to-pay is a discretionary (not mandatory) factor; ALJ within discretion to give it no weight and proceed on summary decision | Majority: ALJ did not abuse discretion; ability-to-pay need not block summary determination and penalty affirmed. Concurring judge: disputed ability-to-pay was material and should have precluded summary adjudication (would remand on penalty) |
Key Cases Cited
- Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (administrative review is narrow)
- Federal Election Commission v. Williams, 104 F.3d 237 (9th Cir.) (§ 2462 limitations runs from date of violation)
- CTS Corp. v. Waldburger, 134 S. Ct. 2175 (limitations statutes promote repose and prevent stale claims)
- City of Vernon v. Southern California Edison Co., 955 F.2d 1361 (9th Cir. 1992) (corporate liability for acts of employees within scope of employment)
- Ketchikan Drywall Servs., Inc. v. Immigration & Customs Enforcement, 725 F.3d 1103 (9th Cir. 2013) (review standard for administrative civil penalties)
- SEC v. Mohn, 466 F.3d 647 (6th Cir. 2006) (distinguishing enforcement actions to collect previously imposed administrative penalties)
- United States v. Meyer, 808 F.2d 912 (1st Cir. 1986) (context for enforcement actions brought to collect previously imposed penalties)