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The Louisiana Forestry Association, Civil Action Inc., et al v. Hilda Solis

June 25, 2012


The opinion of the court was delivered by: Legrome D. Davis, J.


Defendant Intervenors have filed a motion to amend their answer to add Mark Cunanan as a defendant intervenor and delete Jesus Vite Lopez, and to add a cross-claim against the Department of Labor ("DOL") and the Department of Homeland Security ("DHS") (collectively, the "Federal Defendants"). (Doc. No. 105, previously filed at Doc. No. 48.) For the reasons that follow, the motion to amend will be granted in part and denied in part.

I. Factual Background and Procedural History

A. The Parties

The plaintiffs in the present suit are groups representing the interests of various national and Louisiana-state industries-including logging and reforestation, hotels, and commercial crawfish and shrimping-in which foreign workers are employed under the H-2B visa program. The H-2B visa program-so named in reference to the statutory section under which it was created, 8 U.S.C. § 1101(a)(15)(H)(ii)(B)-is administered by the DHS in conjunction with the DOL. The program allows U.S. employers to bring foreign workers ("H-2B workers") to the United States to perform temporary non-agricultural work, provided that ". . . unemployed persons capable of performing . . . service or labor cannot be found in this country." 8 U.S.C. § 1101(a)(15)(H)(ii)(B). In accordance with this statutory mandate, the DHS requires employers seeking to sponsor foreign workers for H-2B visas to obtain certifications from the DOL "stating that qualified workers in the United States are not available and that the alien's employment will not adversely affect wages and working conditions of similarly employed United States workers." 8 C.F.R. § 214.2(h)(6)(iv)(A). Such certifications are referred to as "labor certifications."

Plaintiffs have raised a challenge under the Administrative Procedure Act ("APA") and the Regulatory Flexibility Act ("RFA") to the validity of a regulation promulgated by the DOL on January 19, 2011, and currently set to go into effect on October 1, 2012, relating to the DOL's process of issuing labor certifications. See 76 Fed. Reg. 3452 (Jan. 19, 2011) ("the 2011 wage rule"). The 2011 wage rule pertains to the DOL's method of determining the minimum wages that employers seeking to hire H-2B workers must pay to U.S. and foreign workers.

Defendant-Intervenors (the "CATA plaintiffs") are the plaintiffs in a separate case pending before this court, Comite de Apoyo a los Trabajadores Agricolas v. Solis, No. 09-240. The CATA plaintiffs are individuals participating in or affected by the H-2B visa program and organizations representing the interests of similarly situated individuals. They seek to amend their September 22, 2011 answer to the complaint in the present suit to add a challenge to a rule promulgated by the DOL on December 30, 2011. As elaborated below, the December 30, 2011 rule provides for the DOL's continued use of an invalidated 2008 wage rule until the 2011 wage rule, which is the subject of Plaintiffs' challenge, goes into effect. (Doc. 105-1, at 10.)

B. The Skill-Level Methodology of Prevailing Wage Determination On December 19, 2008, the DOL promulgated a regulation specifying that, in the H-2B visa program, "the prevailing wage for labor certification purposes shall be the arithmetic mean . . . of the wages of workers similarly employed at the skill level in the area of intended employment," using data from the Occupational Employment Statistics ("OES") program. 73 Fed. Reg. 78020, 78056 (as codified at 20 C.F.R. § 655.10(b)(2)) (the "2008 wage rule"). In issuing prevailing wage determinations under the 2008 wage rule, the DOL relies on a 2005 guidance letter that set out four levels of wages for each occupation based on the "skill level" of the H-2B employees. CATA v. Solis, No. 09-240, 2010 WL 3431761, at *18 (E.D. Pa. Aug. 30, 2010) ("CATA I"); 73 Fed. Reg. at 78030. The term "skill-level methodology" refers to the methodology for determining prevailing wages for H-2B purposes under the 2008 wage regulation and the 2005 guidance letter.

C. CATA v. Solis

The plaintiffs in CATA v. Solis (Defendant-Intervenors in the present suit) raised a challenge under the APA to various aspects of the regulations governing the H-2B program, among them the skill-level methodology.*fn1 In an opinion dated August 30, 2010, the court (Pollak, J.) held that the skill-level methodology was invalid because the "DOL has never explained its reasoning for using skill levels as part of H-2B prevailing wage determinations" and because the four-level system set out in the 2005 guidance letter was never subject to notice and comment. See CATA I, 2010 WL 3431761, at *25. The court noted that the DOL's errors in promulgating the 2008 regulation were "serious" and that "DOL's failure to provide an explanation for using skill levels in the H-2B program constitutes a recurring issue stretching over more than a decade." Id.

Turning to the question of remedy, the court observed that "[t]he magnitude of DOL's errors . . . counsels in favor of vacating the regulations." Id.However, in order to avoid creating a regulatory gap, the court declined to vacate the skill-level methodology, instead ordering the DOL to promulgate valid replacement regulations within 120 days.Id. On DOL's motion, the deadline for publishing new regulations was extended to January 18, 2011. CATA v. Solis, No. O9-240, 2010 WL 4823236, at *1 (E.D. Pa. Nov. 24, 2010) ("CATA II").

After the court issued its August 30, 2010opinion and order, the CATA plaintiffs filed a motion asking the court, again, to vacate the skill-level methodology and to order the DOL to condition the issuance of new labor certifications to H-2B employers on the employers' agreement to pay a prevailing wage set by the new methodology once that methodology went into effect. The court denied the plaintiffs' request for vacatur in an order filed on October 27, 2010. Id. In an opinion dated November 24, 2010, the court denied plaintiffs' request that it order conditional certifications on the ground that such an order "would blur the line between this court's remedial authority and the DOL's administrative authority."Id., at *3.

D. The 2011 Wage Rule

In January 2011, the DOL announced revised prevailing wage regulations ("the 2011 wage rule"). 76 Fed. Reg. 3452 (Jan. 19, 2011). In its notice of proposed rulemaking, the DOL stated that, while the timing of the new wage rule's issuance was determined by the court order in CATA, the DOL had independently concluded that the skill-level methodology did not produce "the appropriate wage necessary to ensure U.S. workers are not adversely affected by the employment of H-2B workers." 75 Fed. Reg. 61578, 61579 (October 5, 2010).

In the preamble to the 2011 wage rule, the DOL found that the skill-level methodology "artificially lowers the wage to a point that it no longer represents a market-based wage for the occupation". 76 Fed. Reg. at 3477. The agency explained, [t]he predominance of Level I wages in the program, wages based on the mean of the bottom one-third of all reported wages in the systems, is itself evidence of the adverse impact of those wages on those U.S. workers performing the same tasks and engaged in the same jobs. Specifically, a review of the Department's records for the issuance of prevailing wages in calendar year 2010 indicates that almost 75 percent of jobs are classified at a Level I wage, with the remaining 25 percent scattered in levels II, III, and IV. In a broader examination of wages offered over the past several years, in about 96 percent of cases, the H-2B wage is lower than the mean of the OES wage rates for the same occupation. 75 FR 61580, Oct. 5, 2010. In a low-skilled occupation, the mean for the occupation represents the wage that the average employer is willing to pay for unskilled workers to perform that job. The four-tier structure artificially lowers that wage to a point that it no longer represents a market-based wage for that occupation. The H-2B worker, along with the domestic workers recruited against the application, who are being paid a wage significantly lower than two-thirds of those in that area of employment[,] cannot help but have a depressive effect on the wages of those around him. An employer paying U.S. workers as well as H-2B workers has no incentive to pay a higher compensation. Therefore, it follows that if the employer must only offer and pay Level I wages, wages below what the average similarly employed worker is paid, those wages will make the U.S. workers less likely to accept those job opportunities or will require them to accept the job at a wage rate less than the market has determined is prevailing for the job. The net result is an adverse affect on the worker's income.

76 Fed. Reg. at 3463. The DOL concluded that "continuing the current calculation methodology . . . does not provide adequate protections to U.S. and H-2B workers." Id. at 3477.

The DOL's Federal Register announcement set an effective date of January 1, 2012 for the 2011 wage rule, almost a full year after the publication of the new regulations. Id. at 3452. On June 15, 2011, in response to a motion filed by the plaintiffs, the court vacated the January 1, 2012 effective date of the 2011 wage rule and ordered the DOL to announce a new effective date within 45 days. SeeCATA v. Solis, No. 09-240, 2011 WL 2414555 (June 16, 2011). On August 1, 2011, the DOL adopted a final rule setting an effective date of September 30, 2011 for the 2011 wage rule and began issuing prevailing wage determinations using the new methodology. CATA v. Solis, No. 09-240, 2011 WL 6150637, at *2 (E.D. Pa. Dec. 9, 2010) ("CATA III").

E. The Present Action

1. Action filed in ...

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