Split Rail Fence Co. v. United States
844 F.3d 880
| 10th Cir. | 2016Background
- Split Rail Fence Company was inspected by ICE in 2009 and 2011; ICE issued Notices of Suspect Documents (NSDs) identifying employees whose I-9 documentation appeared invalid. 32 were named in 2009; nine of those appeared again in 2011.
- After the 2009 NSD Split Rail videotaped (but did not produce) employees affirming authorization; it terminated 23 employees but kept nine and did not obtain new I-9 documents from them.
- Split Rail hired Jaime Lopez Ramirez in October 2009; he presented a Mexican passport with a temporary I-551 stamp authorizing work through Sept. 13, 2010, but Split Rail did not reverify or complete Section 3 of his I-9 after that expiration.
- ICE issued a Notice of Intent to Fine in 2011 and sued; ALJ granted ICE summary decision on two counts: (1) paperwork violation for failing to reverify Lopez Ramirez (I-9 Section 3), and (2) knowingly continuing to employ nine unauthorized aliens (constructive knowledge after NSDs).
- On review, the Tenth Circuit applied de novo summary-decision principles and affirmed: (1) Section 3 must be completed upon expiration of temporary authorization; Split Rail failed to reverify Lopez Ramirez; (2) ICE made a prima facie showing of unauthorized status via DHS database certificates and the NSDs sufficiently imparted constructive notice; Split Rail’s responses (oral assurances, indicia like bank accounts, and OSC inquiry) were insufficient to rebut.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to complete I-9 Section 3 (reverification) for Lopez Ramirez violated §1324a | Split Rail: not required because employee mischecked Section 1 as lawful permanent resident | ICE: employer is responsible to ensure Section 1/Section 2 accuracy and must reverify when documented authorization expires | Held: Employer must reverify and complete Section 3; summary decision for ICE (paperwork violation) |
| Whether nine employees were unauthorized (prima facie) | Split Rail: NSDs and database searches unreliable; NSDs alone insufficient | ICE: DHS database search certificates and investigation reports show documentation false/no records, establishing prima facie unauthorized status | Held: ICE’s database certificates and reports created prima facie showing; Split Rail failed to rebut with §1324a(B)-(D) documents or specific attack on searches |
| Whether receipt of NSDs gave constructive knowledge to Split Rail | Split Rail: its post-NSD steps (videotaped oral affirmations, indicia like licenses/bank accounts, OSC guidance) showed reasonable response/no knowledge | ICE: NSDs provided specific notice; employer must reverify by examining acceptable I-9 documents; Split Rail’s measures were inadequate | Held: NSDs were sufficiently specific to impart constructive knowledge; Split Rail failed to reverify per statute; summary decision for ICE (knowing-continue-to-employ violation) |
| Standard for reviewing ALJ summary decision | Split Rail: de novo review | ICE: deferential (arbitrary/capricious or substantial-evidence) | Held: Court assumed de novo for purposes of decision and affirmed on the merits without deciding final standard |
Key Cases Cited
- Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (U.S. 2002) (describing I-9 employment verification regime under IRCA)
- Chamber of Commerce of U.S. v. Edmondson, 594 F.3d 742 (10th Cir. 2010) (discussing employer I-9 obligations)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary-judgment burden-shifting principles)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (standard for genuine issue of material fact)
- Mester Mfg. Co. v. INS, 879 F.2d 561 (9th Cir. 1989) (computer database search can establish prima facie unauthorized status; constructive knowledge doctrine)
- United States v. New El Rey Sausage Co., Inc., 925 F.2d 1153 (9th Cir. 1991) (INS/ICE warning letters can impart constructive notice; employer must reverify with acceptable documents)
- Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229 (10th Cir. 2016) (treating nonbinding decisions as persuasive for administrative-review context)