Tuesday, October 13, 2015
Ninth Circuit Says State Department Denied Company Due Process
Panel Says Sponsors in Exchange Program Have Protections Against Sanctions
By KENNETH OFGANG, Staff Writer
The State Department did not provide adequate procedural protections when it imposed sanctions against a sponsor of the Exchange Visitor Program, the Ninth U.S. Circuit Court of Appeals ruled Friday.
The panel overturned a ruling by U.S. District Judge Cormac Carney of the Central District of California, who concluded that the sanctions were unreviewable under the Administrative Procedure Act and that the department’s procedures were “fundamentally fair” under the Due Process Clause.
The EVP allows foreign nationals to participate in temporary cultural and educational exchange programs in the United States.
After a Japanese participant, Noriko Amari, lodged a complaint about her training conditions at a restaurant called The Cream Pot, a Hawaiian host organization, the State Department imposed sanctions against program sponsor ASSE International.
Amari alleged labor exploitation, excessive work hours, inadequate compensation and harassment.
The State Department sought an explanation from ASSE about Amari’s claims and ASSE claimed that Amari did not respond to the sponsor’s immediate attempts to communicate with her and offer assistance.
State Department officials then began a review of ASSE’s compliance with program regulations and found that sanctions were warranted because ASSE had not responded to Amari’s complaints appropriately and had failed to ensure that she had a sufficient knowledge of English to participate in the program.
The sanctions included a written reprimand of ASSE, an order that the organization provide a corrective action plan, and a 15 percent reduction in the number of trainees in its program.
Those penalties are classified as “lesser sanctions” under government regulations, meaning the sponsor is entitled to fewer procedural protections than if it were facing suspension or revocation of its status as a sponsor. The regulations require that the sponsor be given 10 days to respond to the government’s notice of intent to sanction, following which the department may, in its discretion, “modify, withdraw or confirm” the sanctions.
ASSE’s response to the 10-day notice included, among other things, Amari’s self-assessment of her English skills and transcripts showing she had passed her English courses at a Japanese university. The department declined to modify or withdraw the sanctions, and ASSE sued under the APA and Due Process Clause.
The Ninth Circuit panel said the suit should not have been dismissed.
Judge Jay Bybee rejected the State Department’s argument that the sanctions were not reviewable under the APA. He said “the department failed to rebut the strong presumption of judicial reviewability because its regulations provide a ‘meaningful standard’ by which we can review its exercise of discretion in sanctioning ASSE.”
He also said that the appeals court has authority to measure the department’s administration of the program against the department’s own regulations because it can do so “without infringing any of the State Department’s prerogatives under the” law establishing the EVP, the Mutual Educational and Cultural Exchange Act of 1961.
He also swept aside the claim that APA review would intrude on the Executive Branch’s administration of foreign policy. Bybee said “a weak connection to foreign policy is not enough to commit an agency action to the agency’s discretion” and that the Exchange Act only gives the State Department the absolute discretion to create or not to create exchange programs for foreign students, and that decision is not challenged here.”
As to the due process claim, ASSE argued that the department’s procedure was inadequate because it did not allow for an opportunity to rebut evidence in a trial-type setting, and that even if the procedure of allowing presentation of evidence by document submission only was adequate, it did not provide a sufficient summary of evidence against the organization.
The panel, however, held that the Due Process Clause did not mandate a trial-type proceeding because the sanctions were not permanent, there was little risk that the process would result in a mistake that could be avoided through a more formal process, and that the financial burden of requiring adversarial hearings would be excessive.
In this specific case, however, Bybee said the process was inadequate because the department relied “almost exclusively” on Amari’s testimony and provided its own summary of the testimony, rather than interview notes, to ASSE
“Such evidence may have affected the department’s decision as to the severity of the sanctions, or whether to even impose sanctions at all,” Bybee said. “Thus, the risk of an erroneous decision was heightened, and the State Department should have provided ASSE with complete interview notes so it would have an opportunity to rebut the details of the harassment.”
The panel, which also included Senior Judge Dorothy W. Nelson and Judge Sandra S. Ikuta, remanded to the district court for further proceedings.
The case is ASSE International, Inc. v. Kerry, 14-56402.
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