L.A. Closeout, Inc. v. Department of Homeland ( 2008 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
L.A. CLOSEOUT, INC., d/b/a 
Gametronics; JOHANSEN GROSPE,
Plaintiffs-Appellants, No. 06-56084
v.
 D.C. No.
CV-05-00074-DT
DEPARTMENT OF HOMELAND
SECURITY; CITIZENSHIP & OPINION
IMMIGRATION SERVICES,
Defendants-Appellees.

Appeal from the United States District Court
for the Central District of California
Dickran M. Tevrizian, District Judge, Presiding
Argued and Submitted
December 7, 2007—Pasadena, California
Filed January 18, 2008
Before: Harry Pregerson, John T. Noonan, and
Stephen S. Trott, Circuit Judges.
Per Curiam Opinion
701
L.A. CLOSEOUT, INC. v. DHS 703
COUNSEL
Wade J. Chernick, Law Office of Wade J. Chernick, Encino,
California, for the plaintiffs-appellants.
Carla A. Ford, Assistant United States Attorney, Los Angeles,
California, for the defendants-appellees.
OPINION
PER CURIAM:
L.A. Closeout and Johansen Grospe appeal the district
court’s decision affirming U.S. Citizenship and Immigration
Services’ (“CIS”) denial of Grospe’s adjustment of status
application. Grospe wished to adjust his status from a B-2
tourist visa to an H-1B visa for specialty occupation workers.
Appellants first claim that CIS’s use of an internal memoran-
704 L.A. CLOSEOUT, INC. v. DHS
dum (the “Pearson memorandum”) interpreting 8 C.F.R.
§ 248.1 violated the notice and comment requirements of the
Administrative Procedure Act. Appellants also claim that
CIS’s interpretation of 8 C.F.R. § 248.1 contradicts the lan-
guage of the regulation. We have jurisdiction under 28 U.S.C.
§ 1291. We reject both of these arguments and affirm the dis-
trict court’s decision.
Notice and Comment Procedures
[1] Appellants challenge the use of the Pearson memoran-
dum, claiming that the agency’s reliance on the memo vio-
lated the Administrative Procedure Act (“APA”) because the
agency did not go through notice and comment procedures.
Section 553 of the APA provides that notice and comment
procedures are generally required for agency “rule making.”
5 U.S.C. § 553. However, 5 U.S.C. § 553(b)(A) provides that
notice and comment procedures are not required for “interpre-
tative rules.” Interpretative rules are “issued by an agency to
advise the public of the agency’s construction of the statutes
and rules which it administers.” Erringer v. Thompson, 371
F.3d 625, 630 (9th Cir. 2004) (quoting Shalala v. Guernsey
Mem’l Hosp., 514 U.S. 87, 88 (1995)). By contrast, legislative
rules, which require notice and comment, “create rights,
impose obligations, or effect a change in existing law pursu-
ant to authority delegated by Congress.” Id. (citing Hemp
Indus. Ass’n v. DEA, 333 F.3d 1082, 1087 (9th Cir.2003)).
[2] The Pearson memorandum did not create new law,
rights or obligations. It was an internal memorandum that
simply provided the agency’s construction of the regulation in
a particular factual circumstance. As such, notice and com-
ment procedures were not required.
CIS’s Interpretation of 8 C.F.R. § 248.1
[3] 8 C.F.R. § 248.1(b) provides that “a change of status
may not be approved for an alien who failed to maintain the
L.A. CLOSEOUT, INC. v. DHS 705
previously accorded status or whose status expired before the
application or petition was filed.” CIS denied Grospe’s adjust-
ment of status application because it concluded that he did not
“maintain” his status during the six-month period from April
5, 2004, when his tourist visa expired, and October 1, 2004,
when he would be eligible for an H-1B visa. CIS thus inter-
prets the phrase “maintain the previously accorded status” to
require applicants to be “in status” not just until their visa
application is filed, but until October 1, the date H-1B visas
become operative.
An agency’s interpretation of its own regulation is “control-
ling” if it is not “plainly erroneous or inconsistent” with the
regulation. Auer v. Robbins, 519 U.S. 452, 461 (1997); see
also SEC v. Phan, 500 F.3d 895, 904 (9th Cir. 2007). “Under
this standard, we defer to the agency’s interpretation of its
regulation unless an alternative reading is compelled by the
regulation’s plain language or by other indications of the
[agency’s] intent at the time of the regulation’s promulga-
tion.” Bassiri v. Xerox Corp., 463 F.3d 927, 931 (9th Cir.
2006) (alterations in original) (citations and internal quotation
marks omitted).
[4] The regulation at issue, 8 C.F.R. § 248.1, is ambiguous
because it does not define what it means to “maintain the pre-
viously accorded status.” The requirement that a new petition
must be filed before the previous status expires adds ambigu-
ity regarding whether a petitioner need remain “in status”
only until the new application is filed, or instead until the new
visa begins. However, despite these ambiguities, we cannot
conclude that the agency’s interpretation is “plainly erroneous
or inconsistent” with the text of the regulation, as would be
required under Auer for us to reject the agency’s interpreta-
tion.
[5] In sum, because the agency was not required to comply
with notice and comment procedures and because the agen-
cy’s interpretation of 8 C.F.R. § 248.1 was not plainly errone-
706 L.A. CLOSEOUT, INC. v. DHS
ous or inconsistent, we affirm the decision denying Grospe’s
adjustment of status application.
AFFIRMED.