BALCA held that the CO’s discretion to reconsider a denial or treat it as a request for BALCA review under 20 CFR §656.24(g) cannot be exercised to preclude a meritorious argument regarding de facto compliance with the regulations.
Employer on behalf of BARRITA-SANJINES, SERVANDO, Alien.
Act, 8 U.S.C. §1182(a)(5)(A), and the “PERM”(1) regulations found at 20 C.F.R. Part 656.
On June 5, 2009, the Certifying Officer (“CO”) accepted for processing the Employer’s Application for Permanent Employment Certification for the position of “CareTaker-Ranch Hand.” (AF 16, 18-38).(2) The CO denied certification on February 23, 2010 on the ground that Section M-1 of the Form 9089 was not completed. (AF 16-17). The CO cited the regulation at 20 C.F.R. § 656.17(a), which states that incomplete applications will be denied. (AF 17).
Section M-1 asks whether the application was completed by the employer. If the answer is “no,” the preparer is required to complete a declaration in Sections M-2 through M-5 certifying that to the best of the preparer’s knowledge, the information contained in the application is true and correct, and that the preparer understands the penalties for furnishing false information or aiding, abetting or counseling another to do so. In the instant case, the Employer failed to check yes or no for Section M-1 of the Form 9089. However, a “Customer Service Coordinator,” Collette Reed, completed and signed Sections M-2 through M-5, thereby attesting that she was the preparer. (AF 35). Based on Ms. Reed’s e-mail address, it appears that she is an employee the Employer’s attorney’s law firm, Robert W. Yarra, PC. (See AF 29, 35).
By letter dated March 18, 2010, the Employer filed a “Request for Review of Denial of Form ETA 9089.” (AF 1-15). The Employer argued that the failure to check the box in Section M-1 was an inadvertent error and supplied a corrected Form 9089 with new signatures. (AF 5-14). The CO forwarded the Appeal File to the Board without addressing the Request for Review.
On appeal, the Employer informed the Board that it “seeks reconsideration by the Certifying Officer of the denial of ETA Form 9089 issued on February 23, 2010, and not a formal appeal to BALCA. A timely request for reconsideration was made in a letter dated March 18, 2010, explaining the basis for the reconsideration.” The CO filed a letter requesting, without elaboration, that the denial be affirmed. The CO did not address the question of whether the Employer was only seeking reconsideration rather than a formal appeal to BALCA.
When an employer seeks reconsideration of a denial under the PERM regulations, the CO has the discretion to either reconsider the determination or treat the Employer’s request as a request for review by the Board of Alien Labor Certification Appeals. 20 C.F.R. § 656.24(g)(4). In the instant case, the CO did not expressly state that he had chosen to treat the Employer’s request for reconsideration as a request for review. His action of forwarding an Appeal File to the Board without a ruling on the motion was an exercise of this discretion, sub silentio. The issue before the Board is whether the CO’s decision not to reconsider the denial was an abuse of discretion.
In considering whether a CO has abused the discretion to treat a motion for reconsideration as a request for BALCA review, examination of several regulations, the regulatory history, applicable caselaw, and interpretative statements on the Employment and Training Administration (“ETA”), Office of Foreign Labor Certification (“OFLC”) web site is necessary.
After the PERM program had been in effect for about two years, ETA amended the regulations. See ETA, Final Rule, Labor Certification for the Permanent Employment of Aliens in the United States; Reducing the Incentives and Opportunities for Fraud and Abuse and Enhancing Program Integrity, 72 Fed. Reg. 28903 (May 17, 2007) (Hereinafter “Final Rule”). The amendments sought to eliminate “modifications” to applications and sharply limit the bases upon which an employer may supplement the record. In part, the amendments were in response to the Board decision in HealthAmerica, 2006-PER-1 (July 18, 2006) (en banc).
The amendments were primarily focused on stopping attempts by applicants to modify applications once submitted. The amended rules attempted to accommodate procedural due process by acknowledging that an employer is entitled to an opportunity to present documentation to support its application. However, by focusing on preventing modifications to applications, the amended rules introduced analytical and practical problems in addressing motions for reconsideration that do not fit the “no-modifications” concern that drove the amendments.
Because of those analytical and practical problems in implementation of the amended rules, this decision states how we will apply the rule to ensure procedural due process.
The context for our decision begins with a return the Board’s decision in HealthAmerica.
(g)(1) The employer may request reconsideration within 30 days from the date of issuance of the denial.
(2) The request for reconsideration may not include evidence not previously submitted.
(3) The Certifying Officer may, in his or her discretion, reconsider the determination or treat it as a request for review under § 656.26(a). 69 Fed. Reg. at 77397 (codified at 20 C.F.R. § 656.24(g) (2005)).
In HealthAmerica, the employer transposed two numbers on the Form 9089 when filling out the date of one of its required newspaper advertisements, making it appear that it had not conducted one of the two mandatory newspaper advertisements on a Sunday as required by the regulations. The CO denied certification based on a pro forma computer check of the application. The employer requested reconsideration, submitting as evidence of compliance newspaper tear sheets that proved that both newspaper advertisements had been conducted on Sundays in compliance with the regulation. The CO denied reconsideration on the grounds that (1) a request for review could not, under the regulation as it appeared at the time, include evidence “not previously submitted,” and (2) the only basis on which the CO would grant reconsideration was where a mistake by the Department of Labor resulted in erroneous denial of an application.
The Board thoroughly reviewed the caselaw and regulatory history of motions for reconsideration under the 20 C.F.R. Part 656 regulations and found that the CO abused his discretion in denying reconsideration. The Board acknowledged ETA’s authority to write strict procedural rules in order to deal with heavy administrative burdens, but held that in order to do so, ETA must give explicit notice and draft precise regulatory requirements. Id. at 17. The Board rejected ETA’s contention that the original PERM regulations had been written to require that applications be “letter-perfect” when submitted. The Board found no support in caselaw or regulatory history for the CO’s contention that only government errors were the proper subject of a motion for reconsideration. The Board also held that, because PERM required employers to maintain records in support of the application, those records were constructively part of the administrative record and did not constitute “new evidence” barred by the rule on motions for reconsideration. Id. at 21.
The Board also expressed concern about the possibility of fraud, and thus fashioned criteria that permitted a CO to discount records generated after an employer was notified of the deficiency, as opposed to records that demonstrate actual compliance had been achieved at the time of filing. Id. These criteria were (1) that the record must be the type of specific documentation required to be held; and (2) the document must have been demonstrably in existence at the time of the application. Id. The Board also suggested that if ETA’s online application system had provided a computer prompt notifying the employer in HealthAmerica that the date it entered was inconsistent with the regulatory requirements, it might not have found that the CO’s denial of reconsideration was an abuse of discretion. Id. at 22 and n.15.
HealthAmerica is most often cited for the general due process and fundamental fairness aspects of the decision. In the regulatory history to the 2007 amendments to the PERM regulations, ETA focused on how HealthAmerica should be implemented consistent with its original intent to streamline case processing under the PERM system.
We believe it is important, however, to keep in mind that the Board in HealthAmerica expressly limited its decision to the precise circumstances of that specific case. Slip op. at 21-23. Likewise, the criteria fashioned to limit fraudulent documentation in the PERM recordkeeping file applied only to “documentation required to be held” – the first criterion. The rule did not apply to bar other types of documentation, such as documentation of extrinsic facts that could defend against some other ground for denial – for instance, a certified mail receipt showing when an employer sent documentation that the CO deemed untimely. See, e.g., Monnalisa Pastry Shop, 2008-PER-72, slip op. at 2 (June 30, 2009) (CO considered Employer’s certified mail receipt on reconsideration but held that filing was otherwise untimely). Moreover, these limitations do not apply to evidence submitted on appeal to the Board solely to support a legal argument that was preserved before the CO. See CVS Rx Services, Inc., 2010-PER-1108; 2010-PER-1275 (Nov. 16, 2010) (noting that the evidence in support of the preserved legal argument was not the type of evidence covered by the reconsideration rule because its submission did not modify the content of the application).
error or any other need to refile, an employer can withdraw an application, make the corrections and file again immediately. Similarly, after an employer receives a denial under the new system, employers can choose to correct the application and file again immediately if they do not seek reconsideration or appeal. In addition, the entire application is a set of attestations and freely allowing changes undermines the integrity of the labor certification process because changing one answer on the application could impact analysis of the application as a whole.
71 Fed. Reg. at 7659. In HealthAmerica, the Board noted that the rule prohibiting modifications to applications had not yet completed notice and comment rulemaking. Slip op. at 9. Therefore, the Board did not attempt to analyze the scope or propriety of its application.
Effective July 17, 2007, the ETA issued the Final Rule. The preamble to the Final Rule reiterated the Department’s position that the PERM program was not designed to permit exchanges between an employer and the CO for the purpose of modifying an application and that the burden to submit an accurate application rests solely on a petitioning employer. 72 Fed. Reg. at 27915-16. It also noted that the new online system for the submission of PERM applications “will now generate an automated prompt, warning the filer that it may have entered erroneous information that may cause a denial of the application” and that similar manual mechanisms were in place to detect and correct errors on mailed applications, and that “applications containing errors in contravention of system alerts are [automatically] denied.” Id. at 27916. The Department cautioned that, consistent with the prohibition on modifications to applications newly enacted at section 656.11(b), (3) requests for reconsideration seeking to correct applications containing such errors would not be granted. Id.
(3) Paragraphs (g)(1) and (2) of this section notwithstanding, the Certifying Officer will not grant any request for reconsideration where the deficiency that caused denial resulted from the applicant’s disregard of a system prompt or other direct instruction.
Responding to concerns raised by the new “no-modification” rule, the Department affirmed its intention to create a “letter-perfect” requirement for PERM filings, explicitly stating that “this rulemaking satisfies public notice and comment objectives” necessary before the implementation of a precise filing standard. Id. at 27917. However, the Department also contemplated its ability to waive the letter-perfect requirement for applicants who successfully show, on reconsideration, that the application represented a recruitment effort that actually complied with the regulations. (5) While it did not specifically allude to the reconsideration rule in the same sentence, the Department stated that it “understands that human error occurs in limited circumstances” and that “the Department believes it is capable of distinguishing between typographical or inadvertent errors and willful false statements.” (6) Id.
While the Department clearly envisioned a regulatory scheme that “does nothing to limit or undermine employer due process rights,” we find that ETA failed to create a workable system of rules to apply in every situation that can arise during the PERM filing process.
We are compelled to interpret the rules in a manner consistent with procedural due process. We hold herein that the CO’s discretion under the amended Section 656.24(g) cannot be exercised to preclude an employer from the opportunity to be heard on meritorious arguments regarding its de facto compliance with the regulations.
20 C.F.R. § 656.26(a)(4)(i) (2007). Therefore, BALCA is precluded from considering any evidence or argument that was not considered by the CO – on reconsideration or otherwise.
Although web site FAQ postings are a very powerful method of disseminating information and undoubtedly provide helpful guidance to applicants and their representatives, they are not a method by which an agency can impose substantive rules that have the force of law.
Slip op. at 12-13. Therefore, to the extent that the OFLC has relied on an FAQ to alter the requirements of the regulations, those actions were ineffective. FAQs may be used to clarify a regulation but may not be used to change its requirements. Id.
Five responses later, ETA notifies employers in its response to FAQ 7 that if they do not want ETA to reconsider its decision but would like to request only BALCA review, “An employer’s cover letter should expressly include the terms ‘request for review’ to notify the NPC of the desired request for only BALCA review.” While this advice might aid an employer who seeks to fulfill the purpose addressed by the question, it does not admonish other employers who might seek to avoid the inadvertent result of precluding the opportunity for reconsideration.
Nowhere in the FAQ responses does ETA state that an employer’s failure to use the magic word “reconsideration” will result in the application being placed in the BALCA queue. Moreover, the response to FAQ 2 advises that the reconsideration queue is the default for ambiguous requests. Likewise, nowhere in the FAQ responses does ETA advise that the inadvertent use of the words “request for review” will result in the case being automatically forwarded to BALCA, particularly where the request is otherwise clearly postured as a request for reconsideration by the CO.
Misleading statements contained in letters, guides, or other informal agency advisories that inure to the detriment of the reader cannot be enforced to the extent that such statements actually deprive a party of its rights under the law. See Key v. Lumberjack Meats, Inc., 611 F. 2d 602, 603 (5th Cir. 1980). As such, the informal policies laid out in the online ETA responses to FAQs do not clearly state the CO’s interpretation of them, nor do the regulations require that a “request for reconsideration” can only be styled under that heading. While Section 656.24(g)(4) gives the CO the discretion to treat any request for reconsideration as one for review, to do so with the effect of denying an uninformed employer its sole opportunity to develop the appellate record is an abuse of discretion, as well as an inefficient use of administrative resources. See HealthAmerica, supra, slip op. at 7, n.8.
Where an employer unambiguously requests BALCA review, it makes a tactical decision to have the Board rather than the CO review the denial of certification. The employer is deemed to understand that the consequence of the decision to opt for direct BALCA review is that the employer cannot supplement the record with argument or evidence that was not before the CO when the CO denied the application. See 20 C.F.R. §§ 656.26(a)(4)(i); 656.27(c).
Where an employer’s request for review of a denial is phrased as a request for reconsideration, or when, despite using the words “request for review” it is clear that the employer was actually seeking reconsideration by the CO, or where the employer’s request is ambiguous: if the CO exercises the discretion to treat the request as a request for BALCA review without ruling on the merits of the employer’s request, the ultimate inquiry for the Board will be whether the CO abused that discretion. If the motion is dependent, however, on supplemental argument or documentation, the Board must determine whether the documentation was type of documentation that the CO could have considered on reconsideration under Section 656.24(g)(2).
treat a motion for reconsideration as a request for BALCA review on grounds that exercise of the discretion denied the employer an opportunity to present relevant argument or evidence because, under the rule, an employer must present that argument or evidence at the first opportunity.
Another element of the analysis, however, is whether the employer was in fact given an adequate opportunity to address the ground or grounds on which the CO’s denial of certification was based.
Step 3: Where the Employer never had an adequate opportunity, after notice(9) of the deficiency, to supplement the record on review, did the CO abuse his discretion to treat the motion for reconsideration as one for BALCA review?
Referring to the aforementioned intended applications of the rule on reconsideration, in Situation 1, the circumstances of an audit may not be specific enough to put an employer on notice of the potential deficiency with its application where the type of documentation at issue is not the standard documentation submitted in response to an audit. Thus, we hold that in such circumstances, the CO will be required to request, with specificity, the documentation sought in order for the audit or other request to fulfill the predicate requirement under the regulation that the CO “request” the documentation. Otherwise, requests for reconsideration appearing to fall under Situation 1 will actually fall under Situation 2, because the employer will not be deemed to have had a prior opportunity to present the evidence.
In Situation 2, analytical and procedural problems arise where the employer seeks reconsideration but the CO exercises his discretion to treat the request as one for BALCA review instead. In these cases, forwarding the Appeal File immediately to the Board has the effect of depriving the employer of its full opportunity to develop the record for appellate review where the type of evidence offered is the type that could have been considered by the CO on reconsideration. In this circumstance, we will return the matter to the CO for further processing so that the Employer will have a fair opportunity to present its evidence to the finder of fact. We hold that the CO will be found to have abused his or her discretion when treating what is substantively a request for reconsideration as a request for BALCA review where doing so would have the unsolicited effect of precluding the employer from developing the necessary factual record upon which the denial of certification is properly based under the amended regulations.
In the instant case, the Employer titled its request: “Request for Review of Denial of Form ETA 9089.” This title suggests that it was seeking BALCA review. However, the letter was addressed “Attention: Certifying Officer, William Carlson.” It included the salutation “Dear Officer Carlson.” It stated “Should you require further information, please contact [the Employer’s attorney].” (AF 2) (emphasis added). Thus, despite the use of the words “Request for Review” in the title of the request, the context of the letter strongly suggests that the Employer was seeking reconsideration by the CO. Perhaps the request was ambiguous. But since the request was not clearly a request for direct review by BALCA, we find that the CO exercised the discretion to treat a request for reconsideration as a request for BALCA review, and therefore proceed to consider whether the CO abused that discretion.
In the instant case, the Employer’s position is a primarily a legal argument that inadvertent failure to check Question M-1 on the form was remedied by the completion of the remainder of Section M which clearly advised the Department of Labor that the Form 9089 had been completed by someone other than the Employer. In other words, the CO elevated form over substance. Since a request for review “must contain only legal argument and only such evidence that was within the record upon which the denial of labor certification was based,” direct review by BALCA bars our consideration of this argument. Thus, it was an abuse of discretion for the CO to treat the Employer’s request as a request for BALCA review without first issuing a ruling on reconsideration because it denied the Employer the opportunity to be heard on its legal argument.
Based on the foregoing, we GRANT the Employer’s request to remand this matter for reconsideration by the CO.SO ORDERED.
1 PERM stands for “Program Electronic Review Management” system. See DOL Annual Report, Fiscal Year 2004, at 284.
2 In this decision, AF is an abbreviation for Appeal File.
3 The amended modification rule now provides: “Requests for modifications to an application will not be accepted for applications submitted after July 16, 2007.” 20 C.F.R. § 656.11(b) (2007).
4 We acknowledge that the text of the regulation might be interpreted as foreclosing the use of any documentation in support of a motion for reconsideration if it was it was not “maintained by the employer to support the application for permanent labor certification in compliance with the requirements of § 656.10(f).” As explained in this opinion, preventing an employer from using other types of evidence to respond to a CO’s denial may, in certain circumstances, deny an employer a meaningful opportunity to provide relevant documentation in a motion for reconsideration. Therefore, this panel will apply Section 656.24(g)(2) in the context in which it arose in HealthAmerica, meaning that documentation that should have been maintained as part of an employer’s audit file must meet the 656.24(g)(2) criteria to be used in support of a motion for reconsideration. See, e.g., Techdemocracy LLC, 2009-PER-459 (Nov. 16, 2010) (motion for reconsideration based on substitution of reported web site advertisement for a different web site advertisement).
5 We find further evidence that the 2007 amendments were not intended to completely foreclose grants of certification despite errors or ambiguities in the application in the CO’s pattern of requests for remands by the Board for the purpose of additional processing. See, e.g., Jessie’s Bake Shop, 2010-PER-1039 (Nov. 16, 2010) (to permit consideration of documentation of nature of employer’s business); Neuroassociates, 2010-PER-1054 (Nov. 16, 2010) (to permit correction of date); Montessori of Alameda, LLC, 2010-PER-1167 (Nov. 16, 2010) (accepting Employer’s clarification that listing of job in Section K was not intended to show alien worked for that educational institution, but rather to show that alien meet coursework requirement for the job, and there was no place else on the Form 9089 to show that coursework).
Question: I filed an application that was denied based on incorrect or missing information on the ETA Form 9089. I would like to correct the errors and appeal the denial. How should I file this appeal to notify the NPC of my request?
Answer: An employer may, in limited circumstances as outlined below, make corrections to the denied application and appeal the denial by requesting reconsideration within 30 days from the date of issuance of the denial. An employer only may make corrections to a denied application and appeal the decision if the incorrect or missing information is the result of a typographical error or oversight and the correction is supported by documentation that existed at the time the Application for Permanent Labor Certification was filed (e.g., tear sheet or other advertisements, notice of filing, prevailing wage determination, etc.). This documentation will be accepted for reconsideration only if the employer did not have an opportunity to present the documentation previously (e.g., in response to an audit notification letter or other such request by the Certifying Officer). Requests for reconsideration will be adjudicated in the reconsideration appeals queue. If the CO chooses to uphold the decision the application will be forwarded to BALCA. If the CO chooses to overturn the decision the application will be processed according to Department procedures.
First, the regulation, entitled “Board of Alien Labor Certification Appeals review of denials of labor certification,” was originally focused on denials of certification, as was the proposed version of the amendment. It was only in the final rule, when ETA was attempting to revise the rule to accommodate a distinction between appeals of denials of certification from appeals of revocations or debarments, that the phrase “denial of the request for review” crept into the rule with ETA’s attempt to use parallel construction to describe the difference in scope of review by BALCA in the two circumstances.
(2) The request for review, statements, briefs, and other submissions of the parties and amicus curiae must contain only legal argument and only such evidence that was within the record upon which the denial of labor certification was based.
(4) The request for review, statements, briefs, and other submissions of the parties and amicus curiae must contain only legal argument and only such evidence that was within the record upon which the denial of labor certification, revocation, or debarment determination was based.
71 Fed. Reg. at 7655 (Feb. 13, 2006).
Lastly, the preamble to the Final Rule does not make any reference to an attempt by ETA to create a new type of procedural step of denial of a request for review to be appealed from. Rather, the preamble makes reference in this context to review of the “denial of an application:” See 72 Fed. Reg. at 27907(emphasis added).
8 See n.6, supra for citation to the web site. This FAQ was posted in the same set of responses that advised an employer on the limited circumstances available to correct its application on reconsideration.
9 The regulation states that “notice” can be achieved by either an audit notification letter or other notification by the CO.


Are your items required to undergo Flammability Testing? If your toy/item is designed for children under 14, then, yes, it is required to undergo flammability testing.
Fabrics Exemptions are only for fabrics made entirely or in combinations of acrylic, modacrylic, nylon, olefin, polyester, or wool.
Children’s Sleepwear – this applies to children’s sleepwear which is regulated in 16 CFR 1615 and 1616.
In researching labs to test and certify your items, it is important to work with a lab that is accredited to perform flammability testing to ASTM F963-08. Additionally, you may want to ensure that they have the ability to test to European flammability requirements for toys, which is EN 71 Part 2.
What is soluble metals analysis versus analyzing for total metal content?
The Standard Consumer Safety Specification for Toy Safety, ASTM F963-08, became a mandatory consumer product safety standard on February 10, 2009. This standard, in conjunction with CPSIA § 101 and 16 CFR Part 1303 with regards to lead levels, places additional limits on the amount of lead, as well as antimony, arsenic, barium, cadmium, chromium, mercury and selenium, based on the soluble portion of that material using the prescribed extraction process. Toys manufactured after February 10, 2009, have to meet this requirement. Soluble metals analysis simulates a human digestion process to determine if any of the eight heavy metals could be absorbed by the body of a child if the item is swallowed. A dilute hydrochloric acid solution is used as an extractant, which is similar to stomach acid. This extracted solution is then analyzed on an ICP or by an equivalent analytical technique. This testing is important since young children do most of their exploring by way of their mouth. The problem is that heavy metals absorbed into the human body are not readily removed and can reach toxic proportions in repeated exposures.
Analyzing for total metals content is different in that the total concentration for each heavy metal element is determined, as opposed to just analyzing for the soluble content. As of August 14, 2009, the soluble limit for total lead in paint and coatings was reduced to 90 ppm in 16 CFR § 1303.1, which is the more stringent requirement than the total lead content. In other words, if the total lead concentration in a paint or coating is below 90 ppm, it will also be compliant for the soluble lead limit. Currently the CPSC has established a level of allowable total lead content in children’s products, however, there are other heavy metals without established and regulated limits by the CPSC that are becoming of growing concern. This is because some manufacturers are substituting other heavy metals in place of lead. Some of these heavy metals include antimony and cadmium in jewelry and metals items, while compounds of chromium, barium, arsenic, mercury, and selenium are still seen periodically in toys and children’s consumer goods. Just as ASTM F963-08 has established allowable limits with respect to the soluble metals analysis, it is speculated that limits will be established for “total content” with regards to some of the other heavy metals, especially those such as cadmium which has seen widespread attention and control limits set at state and local levels.
Until the federal government establishes such limits, it may be necessary to test for “total” content of these heavy metals, using the established limits set forth in ASTM F963-08 as a basis for allowable limits or to check with any retailers you may be distributing goods to. This strategy will also help in monitoring current manufacturing process with attention focused on future regulatory limits and establish reasonable testing protocols now.
The Consumer Product Safety Commission is issuing a proposed rule that would establish requirements for a reasonable testing program and for compliance and continuing testing for children’s products. The proposal would also address labeling of consumer products to show that the product complies with certification requirements under a reasonable testing program for non-children’s products or under compliance and continuing testing for children’s products. The proposed rule would implement section 14(a) and (d) of the Consumer Product Safety Act (“CPSA”’), as amended by section 102(b) of the Consumer Product Safety Improvement Act of 2008 (“CPSIA”).
The U.S. Consumer Product Safety Commission issued a final rule for CPSIA, Safety Standard for baby bath seats. The list of products in section 104 includes: full-size and non-full-size cribs; toddler beds; high chairs, booster chairs, and hook-on chairs; bath seats; gates and other enclosures for confining a child; play yards; stationary activity centers; infant carriers; strollers; walkers; swings; and bassinets and cradles. The Commission issued a Notice of Proposed Rule making (NPR) in 74 Federal Register 30983 dated September 3, 2009. The proposed rule (16 CFR part 1215) incorporated by reference the requirements for bath seats as outlined in the voluntary standard, ASTM F 1967-08a, “Standard Consumer Safety Specification for Infant Bath Seats,” with certain changes to specific provisions in the voluntary standard in order to strengthen the proposed rule.
The updated analysis includes incident reports through November 2009, with five new fatalities and five new non-fatal incidents, all of which occurred in 2009. Three of the deaths and three of the additional non-fatal incidents involved bath seats that met the stability requirements of either F 1967-04 or F 1967-07. One death involved an earlier, pre-2004 bath seat product and the remaining death involved a combination infant bath tub-bath seat product that is no longer being produced. On September 3, 2009, the U.S. Consumer Product Safety Commission (CPSC) published in the Federal Register (74 FR 45714) a proposal to revoke the regulations pertaining to baby-bouncers, walker-jumpers, baby-walkers, and similar products referenced in 16 CFR § 1500.18(a)(6) and § 1500.86(a)(4). Upon review of comments to the proposed rule, CPSC staff now recommends that the Commission issue a final rule for the revocation of the existing regulations pertaining to baby-walkers in 16 CFR § 1500.18(a)(6) and § 1500.86(a)(4) but that the regulations should continue to apply to baby-bouncers, walker-jumpers, and any other similar articles.


§ 141-1 Establishment; boundaries described.
§ 141-4 Park use limited to rules and regulations.
§ 141-7 Authorization of Board.
§ 141-8 Violations and penalties.
§ 141-19 Additional regulations established.
§ 141-20 Violations and penalties.
§ 141-21 Tobacco use prohibited.
§ 141-22 Notification of public; posting of signage.
§ 141-23 Violations and penalties.
Recreation Board — See Ch. 44.
Animals — See Ch. 63.
Bicycles — See Ch. 68.
Disorderly conduct — See Ch. 87.
Nuisances — See Ch. 132.


In the United States Court of Appeals For the Seventh Circuit ____________________ No. 16 1840 HEARTLAND ALLIANCE NATIONAL IMMIGRANT JUSTICE CENTER, Plaintiff Appellant, v. U.S. DEPARTMENT OF HOMELAND SECURITY, Defendant Appellee. _______________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 12 C 9692 — Charles R. Norgle, Judge. ____________________ ARGUED SEPTEMBER 28, 2016 — DECIDED OCTOBER 21, 2016 ____________________ Before POSNER, FLAUM, and MANION, Circuit Judges. POSNER, Circuit Judge. Heartland Alliance’s National Im migrant Justice Center (sometimes referred to as Heartland Alliance National Immigration Justice Center—we’ll just call it the Center) is, we read on its website, www.immigrant justice.org/about nijc (visited October 19, 2016), “dedicated to ensuring human rights protections and access to justice 2 No. 16 1840 for all immigrants, refugees and asylum seekers. [The Center] provides direct legal services to and advocates for these populations through policy reform, impact litiga tion, and public education. Since its founding three decades ago, [the Center] has been unique in blending individual cli ent advocacy with broad based systemic change.” In the fall of 2011 the Center submitted to the Department of Home land Security (and to other federal agencies as well, but we can ignore them) a request under the Freedom of Infor mation Act, 5 U.S.C. § 552, for information relating to Tier III terrorist organizations, defined by the Immigration and Na tionality Act in 8 U.S.C. § 1182(a)(3)(B)(vi)(III). The Depart ment provided only some of the information requested by the Center, so the Center brought this suit to enjoin the De partment from withholding the other information that the Center had sought—the names of what are referred to as “Tier III terrorist organizations.” Membership in any of the tiers makes one inadmissible to the United States, with nar row exceptions. Tier I and Tier II organizations are publicly identified ter rorist groups such as ISIS and al Qaeda. Tier III organiza tions are defined in 8 U.S.C. § 1182(a)(3)(B)(vi)(III) as any group of two or more people that engages in terrorist activi ty (as defined in 8 U.S.C. § 1182(a)(3)(B)(iv)), even if their terrorist activity is conducted exclusively against regimes that are enemies of the United States. Tier III organizations tend to have a lower profile than Tier I’s or Tier II’s, not only because the government does not publish their names but also because they tend to be groups about which the U.S. government does not have good intelligence, making it es sential that the Department be able to obtain information about them during screening interviews that are as focused No. 16 1840 3 and complete as possible. The district judge granted sum mary judgment for the Department on the ground that the names of the Tier III organizations are protected from disclo sure under the Freedom of Information Act by the Act’s 7(E) Exemption, 5 U.S.C. § 552(b)(7)(E). The judge then dismissed Heartland’s suit with prejudice, precipitating this appeal. The exemption embraces “records or information com piled for law enforcement purposes, but only to the extent that the production of such law enforcement records or in formation ... would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law.” The Center contends not without reason that names of organizations are not “guide lines.” We are puzzled by the amount of space in its brief the government devotes to trying to show that they are “guide lines.” Our puzzlement derives from our inability to see what difference it makes whether the names are or are not guidelines given that the heart of the exemption, at least so far as relates to this case, lies in its authorizing the govern ment not to “disclose techniques and procedures for law en forcement investigations or prosecutions.” The government’s unwillingness to turn over the names of Tier III organizations to the Center—which remember in tends to publicize them if it gets its hands on them—rests on a combination of two concerns, both encompassed by the passage in the exemption that we just quoted. The first con cern is implicit in the statutory definition of a Tier III organi zation—“a group of two or more individuals ... which en gages in” specified terrorist activities that involve acts of vio 4 No. 16 1840 lence, 8 U.S.C. § 1182(a)(3)(B)(vi)(III), making it more likely than in the case of other asylum seekers that if admitted to the United States they would commit violent or otherwise unlawful acts. Second, as explained in the government’s brief, “an alien who becomes aware that a particular organi zation has been found to fall within the definition of a Tier III organization will have a very strong incentive to falsify or misrepresent any and all encounters, activities, or associa tions that he or she may have had with that organization.” If the alien doesn’t know that a terrorist organization that he has belonged to, been affiliated with, or maybe simply has provided supplies or money to, has been identified by our government as a terrorist organization, he is likely to be less guarded in answering questions about his activities in or as sociations with the organization. But if he knows that the or ganization he belonged to or was associated with is deemed a terrorist organization, he is likely to deny having ever had any connection to it or even having ever heard of it. And if his denials are believed he may—even if he is a past and pro spective future terrorist—not only escape the government’s net but also cost the government an opportunity to obtain information about the organization that might in the future help in identifying terrorists. The withholding of the name of a terrorist organization from an alien who is being ques tioned is thus a technique of a law enforcement investigation that is squarely within the 7(E) exemption. The Center argues that “no knowing terror affiliate will disclose his or her terror affiliation,” and so the government will learn nothing less from its questioning of aliens if the names were publicized. Well obviously an alien seeking asy lum in the United States is not going to tell the government, in response to the question whether he has ever belonged to No. 16 1840 5 a terrorist organization, that he did, and it was called [what ever]. But that would be dumb interrogation. He’ll be asked what he knows about terrorist activities in whatever region he’s from, and in an effort to demonstrate cooperation he may offer information about some terrorist groups—and one of them may be one he has had dealings with. If the gov ernment is required to name all terrorist groups at the Tier III level this type of questioning will be ineffectual. We learn in the Center’s reply brief that its primary con cern is not with names but with the Tier III category itself, for it says for example that “the designation of Tier III organ izations is often doubtful.” It hopes that if it can obtain the names of all the organizations—its goal in this litigation—it will be able to discredit some or perhaps many of them. Deeply distrustful of the U.S. government, by the tone and content of its briefs the Center signals its disbelief that the government has secrets worth keeping from asylum seekers and their helpers (such as the Center), but it does not explain what the government would gain by pretending that harm less organizations are actually terrorist groups. The govern ment makes mistakes, but the Center has not shown that they’re willful, or that Exemption 7(E), on which this litiga tion pivots, is either invalid—in fact the Center concedes that the exemption is valid—or inapplicable to the withheld names. The judgment of the district court is AFFIRMED. 6 No. 16 1840 MANION, Circuit Judge, concurring in the judgment. Under the Freedom of Information Act, Heartland Alliance’s Na tional Immigrant Justice Center seeks the release of docu ments relating to the denial of entry into the United States of certain individuals. In particular, it seeks the release of a list of the Tier III terrorist organizations that it claims is used to reject immigration applications. 8 U.S.C. § 1182(a)(3)(B)(vi)(III). For its part, the government claims that the release of some or all of these organizations’ names is exempted from FOIA as law enforcement “guidelines,” the release of which would facilitate the circumvention of our na tion’s immigration laws. This claim, if true, would allow the government to claim the protection of exemption 7(E), and re fuse to release the list of these names. 5 U.S.C. § 552(b)(7)(E). Because the government has demonstrated an adequate factual basis for its assertion that disclosure of these organi zations could lead to circumvention of our nation’s immigra tion laws, I concur in the judgment. Enviro Tech Int’l, 371 F.3d 370, 373 (7th Cir. 2004). I write separately for two reasons. First, we need not go beyond affirming the decision of the district court. It properly granted summary judgment on the grounds that the list of Tier III names was a guideline within the meaning of 7(E). Disclosing the names risked allowing terrorists to circumvent the laws. But our court goes on to hold that the names are law enforcement “techniques” akin to the use of wiretapping in drug trafficking investigations, exempt from disclosure under 7(E) on that basis. That leaves us with no better guidance for what constitutes a “technique” or a “guideline” under 7(E). No. 16 1840 7 At oral argument, the government noted plausible foreign relations grounds for the government withholding this infor mation under other FOIA exemptions. Specifically, it noted that U.S. government relations with Tier III organizations might change on short notice, and that revealing certain Tier III organizations might have foreign policy ramifications. What one day might be an allied Christian militia fighting against the Islamic State (ISIS) might the next day be our na tion’s enemy, and while not rising to the level of a Tier I or II organization, might fall under Tier III. All of this suggests that the government has, in our nation’s FOIA law, adequate al ternative claims for exemption that it chose to avoid, so there is no need to broadly construe 7(E). I write separately for a second, critical reason, which is my concern about the apparent lack of Syrian Christians as a part of immigrants from that country. It is possible that our case bears a direct link to this enigma. It is well documented that refugees to the United States are not representative of that war torn area of the world. Per haps 10 percent of the population of Syria is Christian, and yet less than one half of one percent of Syrian refugees admit ted to the United States this year are Christian.1 Recognizing the crisis in Syria, the President in 2015 set a goal of resettling 10,000 refugees in the United States. And in August the gov ernment reached this laudable goal. And yet, of the nearly 11,000 refugees admitted by mid September, only 56 were 1 Stephen Dinian, U.S. accepts record number of Syrian refugees in June despite terrorist screening worries, WASH. TIMES, June 30, 2016, available at http://m.washingtontimes.com/news/2016/jun/30/us accepts record number of syrian refugees in jun/#!. 8 No. 16 1840 Christian. To date, there has not been a good explanation for this perplexing discrepancy. This is not to suggest that any refugee group is more or less welcome: quite the contrary. The good people of this country routinely welcome immigrants from all over the world. But in a democracy, good data is critical to public de bate about national immigration policy. When we demand high evidentiary burdens for states seeking to keep their citi zens safe, and then prevent the states from obtaining that ev idence, we create a Catch 22.2 At oral argument the government explicitly noted that al lies of the United States today might become enemies tomor row, and vice versa: groups might fall in and out of the Tier III designation. Because none of this is public, it is impossible to know if this is the major reason for the lack of Syrian Chris tian immigrants to the United States. It is at least possible that incidental affiliation with some Christian militia could lead an immigration officer to deny entry to Syrians on this basis. That would be a dubious consequence. And yet, Congress, through the exemptions to FOIA, has consciously made the decision to limit what governmental in formation is available to the public. If Congress is concerned about how immigration officers are making their decisions re lated to the designation and application of the Tier III terrorist organization affiliation, Congress has the authority to act. Congress has its own oversight capabilities and subpoena 2 Exodus Refugee Immigration v. Pence, No. 16 1509 (7th Cir. Oct. 3, 2016), available at http://media.ca7.uscourts.gov/cgi bin/rssExec.pl?Sub mit=Display&Path=Y2016/D10 03/C:16 1509:J:Pos ner:aut:T:fnOp:N:1838881:S:0. No. 16 1840 9 power, and Congress could choose to amend our nation’s sunshine laws or our immigration laws. Until that time, how ever, many of us remain in the dark as a humanitarian catas trophe continues.


§ 15-219 Brake Retarder Prohibition at Certain Locations.
§ 15-303 Restrictions as to Weight and/or Size of Vehicles on Certain Streets and Bridges.
§ 15-403 Parking Prohibited in Certain Locations and Certain Days and Hours.
§ 15-407 Stopping or Standing on Roadway for Loading or Unloading.
§ 15-409 Residential Permit Parking.
§ 15-501 Parking Meter Zone Established.
§ 15-502 Days and Hours Parking Meters in Operation and Parking Time Limits Apply.
§ 15-505 Coin Deposit in Meter; Overtime Parking Unlawful.
§ 15-510 Ticketing of Vehicles Parked Unlawfully; Effect of Payment Within 48 Hours.
§ 15-511 Penalty for Violation.
§ 15-601 Metered Parking Lots Established.
§ 15-602 Placement and Characteristics of Parking Meters.
§ 15-603 Reserved Parking Spaces for Handicapped May be Provided.
§ 15-604 Parked Vehicles to be Wholly Within Marked Spaces.
§ 15-605 Manner of Parking at Meters.
§ 15-606 Coin Deposit in Meter; Overtime Parking Unlawful.
§ 15-607 Unlawful to Deposit Substitute for Coin in Meter.
§ 15-608 Unlawful to Remain Parked at a Meter Showing Violation.
§ 15-609 Unlawful to Tamper with Meter.
§ 15-610 Metered Parking Lots for Certain Types of Vehicles Only.
§ 15-611 Ticketing of Vehicles Parked Unlawfully; Effect of Payment of Within 48 Hours.
§ 15-612 Penalty for Violation.
§ 15-701 Unmetered Parking Lots Established.
§ 15-702 Reserved Parking Spaces for Handicapped May be Provided.
§ 15-703 Unlawful to Park Overtime or When Lot Closed.
§ 15-704 Unmetered Lots for Certain Types of Vehicles.
§ 15-705 Manner of Parking.
§ 15-706 Parking on Rental Basis Only.
§ 15-707 Penalty for Violation.
§ 15-803 Tow Away Zones Designated.
§ 15-902 Parking Prohibited, Driving Motor Vehicles Restricted, on Snow Emergency Routes During Emergency.
§ 15-1104 Locations Where Pedestrian May Cross Only in Crosswalk.


text:
Anashkin E. V., Aulchenko V. M., Akhmetshin R. R., Banzarov V. Sh, Barkov L. M., Baru S. E., Bashtovoy N. S., Bondarev D. V., Bondar A. E., Bragin A. V., Gabyshev N. I., Gorbachev D. A., Grebeniuk A. A., Grigoriev D. N., Dhawan S. K., Zverev S. G., Ignatov F. V., Kazanin V. F., Karpov S. V., Koop I. A., Krokovny P. P., Kuzmin A. S., Kurdadze L. M., Logashenko I. B., Lukin P. A., Lysenko A. P., Mikhailov K. Yu, Nesterenko I. N., Okhapkin V. S., Polunin A. A., Popov A. S., Roberts B. L., Root N. I., Ruban A. A., Ryskulov N. M., Sibidanov A. L., Sidorov V. A., Skrinsky A. N., Smakhtin V. P., Snopkov I. G., Solodov E. P., Stepanov P. Yu, Sukhanov A. I., Thompson J. A., Fedotovich G. V., Khazin B. I., Hughes W. V., Chernyak D. V., Shamov A. G., Shatunov Yu M., Shwartz B. A., Eidelman S. I., Yudin Yu V.
The cross section for the process e + e - → K L 0 K S 0 is measured by using approximately 1000 events recorded by the CMD-2 detector at the VEPP-2M collider in the energy range from 1.05 to 1.38 GeV. © 2002 MAIK "Nauka/Interperiodica".

matches: V. V. V. V. V. V. V.


Jennifer Gore is a deputy city attorney for the City of Sacramento and can be reached at JVGore@cityofsacramento.org.
Few technologies have overtaken cities as quickly as that of dockless bicycles and scooters. These devices are marketed as an inexpensive, on-demand mobility solution that complements a car-free, environmentally conscious lifestyle1 and allows users to “go farther, get there faster and have more fun.”2 Public reaction, however, is mixed. Some members of the public see dockless bicycles and scooters as a novel, fun and environmentally sensitive transportation alternative — but others see them as a public safety hazard. And for cities, these devices have proved difficult to regulate.
Some cities, wanting to embrace this potential first- and last-mile solution for commuters using public transit, have taken a hands-off approach to these new devices, relying on state-level regulations and market forces to control their use and distribution. Others have crafted pilot programs, allowing a limited number of vendors or devices to operate in their jurisdiction. Some cities have banned the devices altogether.
Though each of these cases could be the subject of a detailed case study, this article focuses instead on outlining some of the policy issues raised by dockless bicycles and scooters and the various approaches jurisdictions have taken in their quest to safely and effectively manage the public right of way without stifling innovation or new technology.
Meet the transportation needs of a variety of vehicles.
Work with your city’s legal counsel to implement that process and document the public safety basis for your decision.
Though these devices are “dockless” and self-locking, many jurisdictions have designated parking areas for them, including bike racks, painted zones on sidewalks, or special on-street parking areas. Some have also adopted “lock-to” requirements, mandating that the devices be locked to a rack or pole.
Disability advocates have championed on-street parking, arguing that allowing the devices to park on sidewalks tempts users to ride on the sidewalk to get to the designated parking area and creates a mistaken belief that they are allowed to ride on the sidewalk. Many cities require operators to accept complaints from the public about improperly parked devices and have mandated maximum response times for the relocation of such devices.
Many cities also use “rebalancing requirements” to manage the concentration of devices. These require operators to move devices to and from high-use destinations, such as transit stations, to ensure that they are available to the public during peak hours.
And because dockless bicycles and scooters are subject to vandalism and sometimes used as instruments of destruction,12 resulting in damage to public property, several cities have required operators to provide a performance bond to ensure that necessary repairs are made.
In addition to public education campaigns, some cities require that devices be equipped with software to limit their speeds to 15 miles per hour to match the state’s speed limit on electric scooters.18 Police departments can enforce laws and regulations, ticketing users who operate scooters on sidewalks, exceed the speed limit or obstruct the right of way.
In addition to enforcing safety laws and requiring companies to provide or fund safety education, many jurisdictions are impounding improperly parked or unpermitted devices to address trip hazards and concerns about accessibility and safety. Cities are also requiring operators to submit maintenance and repair plans for their devices to help ensure that brake lights work, tires are not damaged and other mechanical issues that affect safety are addressed on a regular basis.
Most — if not all — cities also require companies to maintain adequate levels of insurance and to indemnify the city for any liability associated with the operation of permitted devices.
Many cities condition the issuance of permits on the equitable distribution of devices throughout their jurisdiction and are taking other steps to make this new technology available to low-income individuals. Several cities require reduced-cost plans for individuals meeting specified income eligibility requirements.
Some cities also require companies to equitably distribute and operate a certain percentage of their fleet outside the downtown or commercial areas. This helps to achieve the claimed transit benefits and provides opportunities for users in areas that may be economically disadvantaged.
For these efforts to be impactful, it is important to require companies to make their devices accessible to users who do not have a credit card or smartphone. Companies should also provide instructions in various languages.
Infrastructure, such as parking and other necessary improvements.
Cities may consider imposing fees or charges on bicycle- and scooter-sharing companies, including for the use of local government property. To ensure that any fees or costs imposed on companies are properly providing incentives for both users and companies and are consistent with state law, cities should carefully evaluate the proposed fees or costs and consult their city attorney.
Finally, cities may want to require bicycle- and scooter-sharing companies to share certain anonymized data with them to inform future policy decisions, such as the effectiveness of regulations and enforcement and other transportation planning decisions. Because these companies collect financial and location data about users, several jurisdictions require copies of privacy policies with their permit application, and some agencies require companies to obtain cyber liability insurance.
Cities have many options for addressing dockless scooters and bicycles in California, and this article is not intended to present an exhaustive discussion. In choosing the options that make the most sense for your jurisdiction, it is important to talk to your legal counsel. And given how quickly this industry is growing and the issues being litigated, it is certain that the responses to this new technology will continue to evolve.
 Bird Rides, Inc. v. City of Beverly Hills, et al. (Case No. 18STCP02762) (Los Angeles County Superior Court), filed Nov. 1, 2018.
 Neutron Holdings, Inc. d/b/a LIME v. City and County of San Francisco (Case No. CPF-18-516368) (San Francisco County Superior Court), filed Oct. 12, 2018.
 Alex Montoya, et al. v. City of San Diego, et al. (Case No. 3:19-cv-0054-JM-BGS) (U.S. District Court for the Southern District of California), filed Jan. 9, 2018.
 Cal. Veh. Code, § 21235, subd. (i).
 Benjamin Haas, Chinese Bike Share Graveyard a Monument to Industry’s “Arrogance,” The Guardian (Nov. 24, 2017) <https://www.theguardian.com/uk-news/2017/nov/25/chinas-bike-share-graveyard-a-monument-to-industrys-arrogance>; Sasha Lekach, E-Scooters Aren’t Getting Stolen, the Real Issue is Sidewalk Litter, Mashable (April 17, 2018) <https://mashable.com/2018/04/17/electric-scooters-sidewalk-litter>.
 Cal. Veh. Code, § 21235, subd. (g).
 Borgia v. Bird Rides, Inc. (Case No. 18STCV01416) (Los Angeles County Superior Court), filed Oct. 19, 2018.
 Peter Holley, The Life of an Electric Scooter: Nasty, Brutish, and Often Short, The Washington Post (July 27, 2018) <https://www.washingtonpost.com/technology/2018/07/27/life-an-electric-scooter-nasty-brutish-sometimes-short/?utm_term=.8b57b4ab9199>.
 Assem.Bill No. 2989 (2017-2018 Reg. Sess.); Cal. Veh. Code, § 21235, subd. (c).
 Peter Holley, Bird Says Safety is its “Top Priority.” So Why is the E-Scooter Company’s Instagram Page Nearly Devoid of Helmets? The Washington Post (Dec. 21, 2018) <https://www.washingtonpost.com/technology/2018/12/21/bird-says-safety-is-their-top-priority-so-why-is-e-scooter-companys-instagram-page-nearly-devoid-helmets/?utm_term=.f921b677b962>.
 Ibid.; Katie Pyzyk, Lime Launches $3M Campaign to Promote Rider Responsibility, Smart Cities Dive (Nov. 6, 2018) <https://www.smartcitiesdive.com/news/lime-launches-3m-campaign-to-promote-rider-responsibility/541444/>.
 See, e.g., Constance Farrell, Santa Monica Launches Public Education Campaign on E-Scooter Safe Rules of the Road, Santa Monica Daily Press (Aug. 23, 2018) <https://www.smdp.com/santa-monica-launches-public-education-campaign-on-e-scooter-safe-rules-of-the-road/168770>.
 Cal. Veh. Code, § 22411.


The federal law governing civil in rem forfeiture actions gives the government authority to seize items it suspects were used in furtherance of criminal activity and to commence civil in rem proceedings against the property without charging the property's owner with a crime. See United States v. Seventeen Thousand Nine Hundred Dollars ($17,900.00) in U.S. Currency, 859 F.3d 1085, 1087 (D.C. Cir. 2017) explaining the practice of civil forfeiture); see also Leonard v. Texas, 137 S. Ct. 847, 848-49, 197 L. Ed. 2d 474 (2017) (Thomas, J.) (statement respecting the denial of certiorari) (describing some abuses in the administration of civil forfeiture laws in the United States and questioning the constitutionality of such laws). Federal agents and entities have significant latitude to pursue these claims, from special discovery provisions written into the governing rules to a burden of proof that is lower than required in standard criminal cases. But this latitude has its limits, and this case requires us to define some of these limits. The district court granted the government's motion to strike Taiwan Wiggins's and Dalante Allison's claims to currency seized from each man at the Cleveland Hopkins International Airport. Each man's claim asserted that he owned the currency that had been taken from his suitcase. The district court recited the facts as alleged by the government, found that each claim presented "nothing more than a naked assertion of ownership," and held that, under Sixth Circuit precedent, Wiggins and Allison lacked the standing necessary to pursue their claims.
In many ways, this civil forfeiture action looks routine, for federal courts have developed well-settled principles concerning a forfeiture claimant's need to demonstrate both Article III and statutory standing. But this case comes to us in a procedural posture unlike most civil forfeiture actions—the government apparently moved to dismiss the claim before it engaged in any discovery. Its basic argument before the district court and on appeal is that the claimant's pleadings must do more than assert a bare ownership in the res that is subject to forfeiture, and that the claimant's pleadings must provide the government sufficient detail to draft interrogatories allowing it to test the claimant's claim of ownership. As we will explain, the procedural rules governing civil forfeiture actions do not demand such a heightened standard. Accordingly, we REVERSE the district court's order granting the government's motion to strike the claim and REMAND for further proceedings.
The factual background is that DEA agents questioned two persons seeking to depart from an airport and gained access -- allegedly consensual access -- to their baggage. The DEA agents discovered cash in their baggage of $31,000 and $10,000 respectively. A DEA canine alerted the agents to odor of narcotics. Upon questioning, each of the individuals claimed employment with a cleaning service company and one individual could name only one customer of the company. The DEA agents could not locate any of these companies or the customer. The Government then moved to forfeit the cash under "21 U.S.C. § 881(a)(6), as proceeds traceable to drug trafficking activities or that were used or intended to be used to facilitate drug-trafficking in violation of 21 U.S.C. §§ 841(a), 846." Each of the individuals filed claims for their respective cash the Government sought to forfeit. The claims appeared to be slim on details but did make critical assertions that the claimants owned the respective funds and that the funds had been illegally seized.
Appeal from the United States District Court for the Eastern District of New York. No. 6-cr-550 — Joanna Seybert, Judge. Appeal from a judgment of the United States District Court for the Eastern District of New York (Seybert, J.) entered following a jury verdict finding defendant David Brooks guilty of offenses related to fraud and securities laws violations, and Brooks's guilty plea to tax evasion. After Brooks filed his appeal, he died while incarcerated and his estate and members of his family moved to abate his convictions. We conclude that Brooks's counts of conviction resulting from the verdict abated with his death, but not the counts resulting from his guilty plea; the bail bond subscribed by Brooks and his family remains forfeited; and the order of restitution related to the fraud and securities laws counts is abated but not the order of restitution related to the tax counts. Accordingly, the estate-appellant's motion for abatement is GRANTED in part and DENIED in part, Brooks's judgment of conviction for the non-tax counts is VACATED, the motion by Brooks's family members for abatement of the bail bond forfeiture is DENIED, the order denying the motion to set aside bond forfeiture is AFFIRMED, the Government's cross-appeal is DISMISSED, and the case is REMANDED for the dismissal of the non-tax counts of the indictment.
The Court's resolution of the abatement issue is important although relatively straight-forward. It is black-letter that death while on appeal does abate the conviction. The nuance addressed -- or at least implied -- is that the appeal has to question the conviction. There was no appeal of the tax conviction pursuant to the guilty plea (likely because many pleas require waiver of the right to appeal and even when an appeal is permitted under the plea usually is not permitted for guilt of the crime or counts for the plea).
The takeaway is that a defendant convicted by jury verdict or judge decision should always appeal the conviction if the defendant appeals anything. For example, an appeal of only the sentence likely would not require abatement of the guilty conviction (verdict or judge decision). Of course, in almost all cases, the appeal does attack the conviction in some way, so that this precaution would usually be covered anyway.
The amount of the entire bond was $400 million, apparently the largest ever imposed on an individual defendant, and the cash security posted was originally $48 million, also an extraordinary cash security. These amounts were required by the district court because of the nature of the crime, the amounts allegedly involved in the crimes, and Brooks's wealth. They arose out of a concern that Brooks would be able to flee and access those accounts to aid his flight.
In setting the bond, the district court addressed the Government's concern that the defendant might be hiding assets while free on bond. In the bond conditions, the district court specifically provided that "[a]ny knowing violation of this agreement, including . . . an attempt . . . to conceal assets . . . will be grounds for revocation of his bail release and for forfeiture of the $ million in bond security." Finding that the defendant had attempted to secrete assets, the district court revoked bail and forfeited the $48 million cash. That finding was made only upon consideration of the Government's submissions.
In Bedrosian v. United States, 2017 U.S. Dist. LEXIS 154625 (E.D. Pa. 2017) (E.D. Penn. 2017), here, the District Court held that the Government had not established willfulness for the FBAR penalty and ordered refund / return of the illegal exaction the Government had collected. I have previously written on some of the pre-trial developments in the case and provide links to those blog entries at the end of this blog. So, I will just focus on this latest decision on the merits. I will be rather brief since I am posting this from Dublin while on vacation (which also explains why I have been relatively silent on the blog recently).
1. The trial was a one-day trial as indicated in my most recent blog (linked below).
Bedrosian did not tell Handelman about his Swiss account until some point in the mid-1990s, at which time Handelman advised him that he had been breaking the law every year that he did not report the account on his tax return. (Id. at 49-50.) Bedrosian asked Handleman what he recommended doing about it, and Handelman stated that he could not “unbreak the law,” and should therefore take no action. (Id. at 50-51.) Handelman assured Bedrosian that his estate could deal with it upon his death, when his money was repatriated. Heeding Handleman’s advice, Bedrosian continued to not report either Swiss account on his tax returns.
So, this is a variation of the reliance on tax professional defense to a crime or civil penalty requiring willfulness. But, the reliance is inherently inconsistent with the ultimate holding. Handleman, by Bedrosian's admission, told Bedrosian that he was violating the law by not reporting the account. Hence, by his own admission, he thus knew the law and must have intended to violate it, albeit with the goal of leaving it to his estate to work out the solution.
3. Of course, Bedrosian's defense is more subtle. Bedrosian must have told his new accountant, Bransky, who started in 2007 because that accountant did check the Box yes on the Schedule B foreign account question. The resulting FBAR, though, only included one of Bedrosian's accounts, omitting the much larger one.
DOJ Tax is reportedly looking at Swiss life insurance companies who participated in providing so-called insurance wrappers to hide U.S. taxpayer's investments. I offer a recent article and then two other older items for more information.
John Revill, Oliver Hirt, UPDATE 1-Swiss Life speaks to DOJ about possible tax evasion by U.S. clients (Reuters 9/14/17), here.
Swiss Life could face a fine in the United States after it was contacted by the U.S. Department of Justice (DOJ) about whether it helped U.S. clients avoid tax, Switzerland’s biggest life insurer said on Thursday.
The disclosure comes as U.S prosecutors have been widening their probe of Swiss banks who have been helping wealthy American clients dodge taxes to include insurance companies.
The Zurich-based company started selling the products in 2006, but stopped selling them in the United States in 2012. Swiss Life returned funds to hundreds of American clients who had invested in insurance wrappers linked to bank accounts at Bank Frey in 2013, The Wall Street Journal has reported.
Reuters Staff, U.S. looks at Swiss insurers in offshore probe: WSJ (Reuters 2/24/2014), here.
Insurers in Switzerland have been preparing for months for U.S. officials to investigate products known as insurance wrappers - life insurance policies into which the very wealthy place stocks, private equity holdings and other bankable assets, allowing them to lower their tax rate.
Justice Department Announces Resolution under Swiss Bank Program with Union Bancaire Privée, UBP SA (DOJ Tax 1/6/16), here.
UBP maintained undeclared accounts at UBP for U.S. clients in the nominee names of non-U.S. insurance companies. Such accounts, known commonly as insurance wrappers, were titled in the names of insurance companies but were funded with assets that were transferred to the accounts for the beneficial owners of the insurance products. Insurance wrappers were marketed to Swiss Banks by third-party providers in the wake of the UBS investigation as a means of disguising the beneficial ownership of U.S. clients. For example, in November 2009, UBP worked with a third-party service provider to assist a U.S. beneficial owner in restructuring three existing ac=counts he held at UBP in the names of nominee Panamanian entities into three accounts owned by the insurance company.
Effective January 2001, UBP entered into a Qualified Intermediary (QI) Agreement with the IRS. The QI Agreement was designed to help ensure that, with respect to U.S. securities held in an account with UBP, non-U.S. persons were subject to the proper U.S. withholding tax rates and U.S. persons were properly paying U.S. tax. As a consequence of UBP entering into a QI Agreement with the IRS, UBP allowed U.S. clients to create and open accounts in the name of sham offshore entities and insurance wrappers. Certain UBP employees caused UBP to certify compliance with the QI Agreement event though the true beneficial owners were not reflected in the IRS Forms W-8BEN in the account files. UBP also divested U.S. securities from its undeclared U.S. accounts for the purpose of subverting its QI Agreement.
In Bedrosian v United States, 2017 U.S. Dist. LEXIS 142793 (E.D. Pa. 2017), here, the Court granted the U.S. motion in limine "to preclude evidence concerning the 'procedures, actions, analyses, or viewpoints of the Internal Revenue Service and its personnel at the administrative level regarding willfulness.'" Basically, the holding is that the FBAR willful liability at issue is determined by the Court de novo. That means that Bedrosian's willfulness is determined based upon his own mental state -- willfulness -- and his actions in failing to report his UBS account at issue. The IRS's administrative actions are irrelevant to that issue.
Bedrosian Docket Entries as of 9/11/17, here.
Bedrosian Trial Brief 8/28/17, here.
United States Trial Brief 8/28/17, here.
The docket entries (#59) indicate a Minute entry for proceedings on 9/8/17. I could not get to that minute entry because, the message said, "You do not have permission to view this document." I don't know if that was the minute entries of the trial. But, in view of the court's order the previously indicated trial time of two days was likely much shorter and could have been completed in one day.
1. Bedrosian told his accountant in the 1990s about UBS account. His accountant told him that he should have been reporting the account but to "leave the account as it was and that he (or his estate) would pay taxes on the money in the account when repatriated." Plaintiff dutifully followed his accountant's "instructions."
2. The accountant passed away in 2007. There is no indication that there is any written or otherwise objective evidence of the accountant's advice to Bedrosian other than Bedrosian's testimony.
3. Bedrosian's new accountant (i) answered the Schedule B foreign account question in the affirmative and indicated the account was in Switzerland and (ii) prepared an FBAR with only one of two accounts listed because he "inadevertently" omitted it and "plaintiff always viewed it as one account with a subaccount."
a. Bedrosian was "very cooperative," according to the agent.
b. The IRS agent "requested and received plaintiff's FBAR reports for 2006-2009." It is not clear whether this was the original filing of those reports or was copies of the earlier filing after the activity in 2009.
c. The IRS agent "ultimately determined, based on the totality of his investigation, that plaintiff's violation of the FBAR requirements was non-willful."
d. In 2012, the IRS agent and his supervisor "met with the treaty case panel which "recommended that platintiff's case be closed with non-willful violations, thereby sustaining [the IRS agent's] conclusions."
e. That revenue agent went out on medical leave. Another agent was assigned to the matter and "decided that the penalty proposed by [the first revenue agent] was not correct." Bedrosian makes certain claims as to deficiencies in the new agent's investigation.
Some 60 to 70 Swiss private banks are facing serious problems that could force them to close down or sell up, according to a study published on Thursday by consultancy KPMG.
Fighting diminishing profits caused by fierce competition and a global clampdown on tax evasion, these banks must work to cut costs and buy up competitors to reach adequate size.
But many of the affected banks will ultimately have to exit the market, the study concluded.
The number of Swiss private banks has already fallen by over a third from 180 in 2005, according to the data.
In United States v. Melton, ___ F.3d ___, 2017 U.S. App. LEXIS 16753 (8th Cir. 2017), here, the Court affirmed the conviction and sentence for for twelve counts of mail fraud (18 USC § 1341) and five counts of failure to pay employment taxes (§ 7202). The defendant raised a number of arguments on appeal, mostly related to the mail fraud and its background. I excerpt here only the discussion of the defendant's argument that the prosecutor improperly argued in closing argument that the prosecutor believed the defendant was guilty or that a witness was credible or not credible, rather than leaving those determination to the jury. E.g., United States v. Warshak, 631 F.3d 266, 301-308 (6th Cir. 2010), reh'g and reh'g en banc denied, 2011 U.S. App. LEXIS 5007 (6th Cir. 2010) (involving a litany of improper prosecutor assertions); United States v. Bess, 593 F.2d 749, 755 (6th Cir. 1979) ("Implicit in an assertion of personal belief that a defendant is guilty, is an implied statement that the prosecutor, by virtue of his experience, knowledge and intellect, has concluded that the jury must convict. The devastating impact of such 'testimony' should be apparent."); United States v. Wolfe, 701 F.3d 1206 (7th Cir. 2012) (noting as a tyope of impermissible vouching: "a prosecutor may not express her personal belief in the truthfulness of a witness, and a prosecutor may not imply that facts not before the jury lend a witness credibility."); and United States v. Woods, 710 F.3d 195, 202 (4th Cir. 2013) ("highly improper for the government to refer to a defense witness as a liar.).
Melton asserts a new trial should be granted because the government's remarks during closing affected his right to a fair trial. Because Melton did not object on those grounds during trial, we review for plain error. See United States v. White, 241 F.3d 1015, 1023 (8th Cir. 2001). The burden is on Melton to demonstrate the district court plainly erred by allowing the government's comments. See id. "We will reverse an improper remark during closing argument without an objection only under 'exceptional circumstances.'" United States v. Branch, 591 F.3d 602, 609 (8th Cir. 2009) (quoting United States v. Eldridge, 984 F.2d 943, 947 (8th Cir. 1993)). Reversal for prosecutorial misconduct requires proof that "'the prosecutor's remarks were improper,'" and "'such remarks prejudiced the defendant's rights in obtaining a fair trial.'" Id. (quoting United States v. Bentley, 561 F.3d 803, 809 (8th Cir. 2009)).
Melton calls our attention to several statements made during closing. Referring to Melton's testimony, counsel for the government remarked, "His lips are moving, things are going through his brain coming out his mouth and it's just flat out lies. That pretty much typifies Mr. Melton." Counsel repeated he believed Melton was lying, and Melton was selling "magic" on the stand. Counsel also called Melton's testimony "silly" and "made up," and remarked, "there is just arrogance flowing from that man [Melton] right there." Near the end of his closing, counsel concluded: "The evidence is Andrew Melton is lying. . . . It's amazing what that man got up there and testified about and lied to you. . . . That man right there is guilty. Convict him."
While these comments taken together and out of context arguably may be inappropriate for a federal government prosecutor, we liken their effect to those discussed in United States v. White, where we determined the prosecutor's comments were "questionable," but did "not rise to the level of plain error affecting [the defendant's] substantial rights." White, 241 F.3d at 1023. In White, under plain error review, the defendant challenged the prosecutor's statements that the defendant was "'lying bold face to you,'" and "'tried to lie to you,'" by suggesting he had not used drugs for several decades. Id. at 1022-23. The prosecutor also stated, "'If he can suggest to the government that witnesses are willing to lie, what kind of lies do you think he would tell in order to evade responsibility entirely?'" Id. at 1023. We determined the comments did not warrant reversal because the prosecutor "outlined the evidence and highlighted the reasons he believed [the defendant's] testimony was not credible," and "we [chose] not to employ the discretion conferred by Rule 52(b)" because it was not "a miscarriage of justice." Id. (citation omitted); see also Fed. R. Crim. P. 52(b). We reasoned it was "permissible for a prosecutor to interpret the evidence as indicating that the defendant [was] not telling the truth." Id. "So long as prosecutors do not stray from the evidence and the reasonable inferences that may be drawn from it, they, no less than defense counsel, are free to use colorful and forceful language in their arguments to the jury." United States v. Robinson, 110 F.3d 1320, 1327 (8th Cir.1997); cf. United States v. Holmes, 413 F.3d 770, 775 (8th Cir. 2005) (holding the prosecutor's closing comments implying defense counsel was "conspiring with the defendant to fabricate testimony" were "highly improper because they improperly encourage the jury to focus on the conduct and role of [the defendant's] attorney rather than on the evidence of [the defendant's] guilt"); United States v. Johnson, 968 F.2d 768, 772 (8th Cir. 1992) (granting a new trial where closing remarks improperly ignited "fear and concern engendered by the national drug epidemic").
Pierre also complains that the district court created unwarranted sentencing disparities when it sentenced him based on intended loss ($5.2 million) rather than actual loss ($1.2 million), because his co-conspirators received sentences based on the actual loss amount attributable to them. The guidelines direct the court to consider the greater of actual loss or intended loss, USSG § 2B1.1, comment. (n.3(A)), so there was no error in using the larger amount. The statutory direction to avoid unwarranted disparities among defendants, 18 U.S.C. § 3553(a)(6), refers to national disparities, not differences among co-conspirators, so Pierre's argument founders on a mistaken premise. See United States v. Fry, 792 F.3d 884, 892-93 (8th Cir. 2015). In any event, any disparity among co-conspirators here was warranted by Pierre's greater culpability in the conspiracy. Pierre was aware of the full scope of the conspiracy: he recruited co-conspirators to open several phony tax-preparation companies and bank accounts, and he directed them to deposit and withdraw money from the bank accounts. Most of the co-conspirators were associated with only a single fictitious company and bank account. The district court reasonably sentenced Pierre based on a greater amount of loss.
For review, 18 USC § 3553(a), here, states the "Factors To Be Considered in Imposing a Sentence," including in subparagraph (6) "the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct." § 3553(b) requires the sentencing court to "impose a sentence of the kind, and within the range, referred to in subsection (a)(4) unless the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described." As interpreted by Booker, the Court has ultimate discretion in applying the § 355a(a) factors to vary from the Guidelines.
Our court has not previously decided whether "[t]he statutory direction to avoid unwarranted disparities among defendants [in accordance with] 18 U.S.C. § 3553(a)(6) refers to national disparities [rather than] differences among co-conspirators." Supra at 8. See Fry, 792 F.3d at 892-93 (noting in dicta that "[m]ost courts say that the statutory direction to avoid unwarranted sentence disparities, see 18 U.S.C. § 3553(a)(6), refers to national disparities, not differences among co-conspirators" but affirming defendant's longer sentence as substantively reasonable when compared to sentences of other participants in fraud scheme because "disparate sentences among dissimilar defendants are not unwarranted") (emphasis omitted); United States v. Nshanian, 821 F.3d 1013, 1019 (8th Cir. 2016) (citing Fry, 792 F.3d at 892, but nonetheless "[a]ssuming for the sake of analysis that the statutory direction to avoid unwarranted sentence disparities might refer to differences among co-conspirators rather than national disparities"); United States v. Avalos, 817 F.3d 597, 602 (8th Cir. 2016) (citing Fry, 792 F.3d at 892-93, but "assuming for the sake of analysis that sentence disparities among co-conspirators could demonstrate unreasonableness"). In my view, there is no need to do so here, because any disparity between Pierre's sentence and those of his co-conspirators was warranted for the reasons stated by the court. For this reason, I concur in the result, but not in the conclusion regarding the proper scope of § 3553(a)(6). I otherwise concur in the court's opinion.
In Cantrell v. Commissioner, T.C. Memo. 2017-170, here, the Court sustained the civil fraud penalty based on the taxpayer's plea agreement to tax evasion for one of the years (2002) and the pattern of conduct related to other years. In the criminal case, the taxpayer had also pled to a scheme of bribery related to his official position as a Government employee.
The Tax Court's determination that facts supported the civil fraud penalty (including collateral estoppel for 2002) is not particularly exceptional. It might be a good read for students and young lawyers.
Section 6011(a) provides that "any person made liable for any tax * * * shall make a return * * * according to the forms and regulations prescribed by the Secretary." A return required to be filed by "the internal revenue laws or regulations shall contain or be verified by a written declaration that it is made under the penalties of perjury." Sec. 6065.
Section 6061(a) provides the general rule that "any return, statement, or other document required to be made under any provision of the internal revenue laws or regulations shall be signed in accordance with the forms or regulations prescribed by the Secretary." Section 301.6061-1(b), Proced. & Admin. Regs., provides further that the method for signing may be prescribed in "forms, instructions, or other appropriate guidance".
In 1998 Congress enacted the IRS Restructuring and Reform Act of 1998 (RRA 1998), Pub. L. No. 105-206, sec. 2001, 112 Stat. at 723, which provides, inter alia, that it is Congress' policy that the IRS implement guidelines for electronic filings with the hope that the IRS would achieve 80% electronic filing by 2007. See H. Conf. Rept. No. 105-599, at 234-235 (1998), 1998-3 C.B. 747, 988-989; S. Rept. No. 105-174, at 39-42 (1998), 1998-3 C.B. 537, 575-578. RRA 1998 sec. 2003(a)(2), 112 Stat. at 724, amended section 6061 by adding subsection (b). The Secretary thereby is required to develop procedures for the acceptance of signatures in digital or other electronic form; and until such time as such procedures are in place, the Secretary may waive the requirement of a signature or provide for alternative methods of signing or subscribing a return. Sec. 6061(b). Thus, the strict requirements for the filing of a paper return by an agent do not apply with full force to electronically filed returns.
IRS Publication 1345, Handbook for Authorized IRS e-file Providers, provides guidance for the electronic filing of Federal income tax returns by Electronic Return Originators (EROs), such as TurboTax, including the signature requirement. IRS Publication 1345 has been in effect since before the years at issue. Accordingly, where it is clear that a preparer had actual authority to electronically file a return for a taxpayer, the Secretary acts within his discretion in waiving the signature requirements. Ballantyne v. Commissioner, T.C. Memo. 2010-125, slip op. at 7.
We here find as fact that the joint returns filed by petitioner and his then wife for the years at issue met the signature requirements adopted by the IRS.
In United States v. $525,695.23 Seized from JPMorgan Chase Bank, ___ F.3d ___, 2017 U.S. App. LEXIS 16077 (6th Cir. 2017), here, the Court vacated the district court's application of the fugitive disentitlement statute, 28 U.S.C. § 2466. The case involves civil forfeiture of certain U.S. assets based on drug trafficking and money laundering. Tax crimes were not involved. Still the fugitive disentitlement can be implicated in tax crimes cases. See Ninth Circuit Speaks on FOIA, but Ducks Fugitive Disentitlement (Federal Tax Crimes Blog 3/13/12), here.
I provide the statute and then the Court's general discussion of the requirements for application of the statute.
(2) is not confined or held in custody in any other jurisdiction for commission of criminal conduct in that jurisdiction.
(b) Subsection (a) may be applied to a claim filed by a corporation if any majority shareholder, or individual filing the claim on behalf of the corporation is a person to whom subsection (a) applies.
(1) a warrant or similar process must have been issued in a criminal case for the claimant's apprehension; (2) the claimant must have had notice or knowledge of the warrant; (3) the criminal case must be related to the forfeiture action; (4) the claimant must not be confined or otherwise held in custody in another jurisdiction; and (5) the claimant must have deliberately avoided prosecution by (A) purposefully leaving the United States, (B) declining to enter or reenter the United States, or (C) otherwise evading the jurisdiction of a court in the United States in which a criminal case is pending against the claimant.
Salti, 579 F.3d at 663 (quoting Collazos, 368 F.3d at 198).


text:
Mr. Moses E. Clapp for plaintiff in error. [199 U.S. 564, 565] Mr. William E. Hale for defendant in error.
This case was tried upon a stipulation of facts. It involves the title to the northeast quarter of the southeast quarter of section 5, township 133 north, of range 42, west of the 5th principal meridian, Minnesota, which is situated opposite to and coterminous with a part of the line of the Northern Pacific Railroad as definitely located on the 21st day of November, 1871, and is within the first indemnity limits of the grant of public lands made by the act of Congress of July 2d, 1864, in aid of the construction by the Northern Pacific Railroad Company of a railroad and telegraph line from Lake Superior to Puget sound, on the Pacific coast. 13 Stat. at L. 365, chap. 217.
The state court adjudged that plaintiff, Sjoli, was not entitled to the land, and that the defendant, Dreschel, who asserts title under the railroad company, was the owner.
That the Secretary of the Interior has no authority to withdraw from sale or settlement lands that are within indemnity limits which have not been previously selected, with his approval, to supply deficiencies within the place limits of the company's road.
These principles, it would seem, make it easy to determine the present case, the controlling facts in which are undisputed. Let us see.
The plaintiff, Sjoli, a qualified entryman, settled upon the land in dispute in 1884, with the intention in good faith to perfect his title under the homestead laws. He grubbed and broke about 2 1/2 acres, built a house and stable thereon, and moved into the house with his family on the 4th day of October, 1884. He has lived upon the premises continuously with his family ever since that time. At the time of the bringing of this action he had broken about 22 acres, constructed 220 rods of fencing, and made improvements of the value of $500. In 1889 he applied at the proper local land office to make entry of this land under the homestead laws. That [199 U.S. 564, 567] application was rejected because the land was then erroneously supposed to be within the granted limits of the St. Paul, Minneapolis, & Manitoba Railroad Company. No appeal from that order seems to have been taken. But Sjoli did not abandon the land or his claim upon it; for, in 1895, and relying upon his settlement of 1884, he again applied at the proper land office to enter the land under the homestead laws. His application was resisted by the Northern Pacific Railroad Company, and, upon a hearing before the local land office as between him and that company, in March, 1895, the case was decided in his favor. Subsequently, Sjoli having made his final proofs, as required by the homestead laws, a patent was issued to him under date of June 18th, 1901. His title rests upon that patent.
Dreschel's claim to the land arises out of a contract made by him April 21st, 1900, with the Northern Pacific Railway Company, by which that corporation agreed to sell to him the land in question. The parties agree that that company succeeded to whatever rights belonged to the Northern Pacific Railroad Company.
If the railway company was not entitled to the land as between it and Sjoli,-if it had no interest to sell,-then the defendant Dreschel has no claim as between himself and the plaintiff.
We have seen that Sjoli's settlement upon the land was in 1884, and his original application to enter it was in 1889; whereas, the railroad company made and filed its list of selections of lands within indemnity limits to supply alleged deficiencies in place limits in 1885, Sjoli being still in occupancy of the land. But, as already stated, the result of the cases in this court is that the railroad company did not acquire an interest in any particular lands within the indemnity limits merely by filing its lists of selections, nor until its selections were approved by the Secretary of the Interior.
In Musser v. McRae, 38 Minn. 409, 411, 38 N. W. 103, the supreme court of Minnesota had occasion to construe the act of Congress granting lands in aid of the Chicago, St. Paul, Minneapolis [199 U.S. 564, 568] & Omaha Railway Company. That act provided among other things that if, when the line of railroad should be definitely fixed, the United States have sold, or rights of pre-emption should have attached to any such granted sections or parts thereof, then, in lieu thereof, any agent to be appointed by the governor might select, subject to the approval of the Secretary of the Interior, from the lands of the United States, so much land as should be equal to those sold or pre-empted, etc. Chief Justice Gilfillan, speaking for that court, said: 'As to the lands in place, the title attached upon the definite location of the line of road. As soon as that was done, the acts pointed out the lands. As to those to be taken for deficiencies, it was necessary that something more than fixing the line of the road should be done; it was necessary that there should be a selection, and an approval of such selection by the Secretary of the Interior. Until that was done, the title granted did not attach to any lands outside of the 10-section [place] limit.' In the later case of Resser v. Carney, 52 Minn. 397, 400, 54 N. W. 89, referring to the grant of 1864 to the Northern Pacific Railroad Company, the same court said: 'The selection of indemnity lands, which was to be made 'under the direction of the Secretary of the Interior' (13 Stat. at L. 367, chap. 217, 3) did not become effectual, nor did the title pass from the United States, at least until the selection was approved, or in some way sanctioned by the Secretary of the Interior,' etc. These cases are in accord with the decisions of this court above cited.
Now, it is stipulated in this case that the Secretary of the Interior has never approved the selection by the railroad company of the land here in question to supply deficiencies in place limits. So that, when Sjoli settled upon the land, it was, so far as the railroad company was concerned, part of the unappropriated public lands open to settlement under the homestead laws. The railroad company had no direct legal interest in it. The company's unapproved selections did not, therefore, stand in the way of the lands being occupied and entered under the homestead laws. The mere filing of its lists of selections of indemnity [199 U.S. 564, 569] lands did not have the effect to exclude them from occupancy under the preemption or homestead laws. On the contrary, notwithstanding the filing of such lists, they remained open, as before, to settlement or occupancy under those laws, until the selections were formally approved by the Secretary of the Interior, and the lands withdrawn from settlement or sale. No such approval ever occurred.
It results that the patent issued to Sjoli is evidence of the better title and must prevail. His settlement upon the land, with the intention to perfect his title under the homestead laws, was not a violation of the act of 1864. On the contrary, he thereby acquired, within the meaning of the act of 1864, a claim upon the land which was perfected by the patent issued to him by the United States. The learned state court erred in not so holding, and in adjudging that the Northern Pacific Railway Company acquired an interest in the land immediately upon filing its list of selections, and that the defendant in error was the owner of it. The relief asked by the plaintiff should have been granted.
The judgment of the Supreme Court of Minnesota is reversed and the cause remanded for further proceedings not inconsistent with this opinion.
Mr. Justice Brewer did not participate in the decision of this case.
Hewitt v. Schultz, 180 U.S. 139 , 45 L. ed. 463, 21 Sup. Ct. Rep. 309; Nelson v. Northern P. R. Co. 188 U.S. 109 , 47 L. ed. 406, 23 Sup. Ct. Rep. 302; United States v. Northern P. R. Co. 152 U.S. 284, 296 , 38 S. L. ed. 443, 448, 14 Sup. Ct. Rep. 598; Northern P. R. Co., v. Sanders, 166 U.S. 620, 634 , 635 S., 41 L. ed. 1139, 1144, 17 Sup. Ct. Rep. 671; Menotti v. Dillon, 167 U.S. 703 , 42 L. ed. 333, 17 Sup. Ct. Rep. 945; United States v. Oregon & C. R. Co. 176 U.S. 28, 42 , 44 S. L. ed. 358, 364, 20 Sup. Ct. Rep. 261; St. Paul & P. R. Co. v. Northern P. R. Co. 139 U.S. 1, 5 , 35 S. L. ed. 77, 79, 11 Sup. Ct. Rep. 389; St. Paul & S. C. R. Co. v. Winona & St. P. R. Co. 112 U.S. 720, 726 , 28 S. L. ed. 872, 874, 5 Sup. Ct. Rep. 334; Missouri, K. & T. R. Co. v. Kansas P. R. Co. 97 U.S. 491, 501 , 24 S. L. ed. 1095, 1098; Cedar Rapids & M. River R. Co. v. Herring, 110 U.S. 27 , 28 L. ed. 56, 3 Sup. Ct. Rep. 485; Grinnell v. Chicago, R. I. & P. R. Co. 103 U.S. 739 , 26 L. ed. 456; Kansas P. R. Co. v. Atchison, T. & S. F. R. Co. 112 U.S. 414 , 28 L. ed. 794, 5 Sup. Ct. Rep. 208; Wilcox v. Eastern Oregon Land Co. 176 U.S. 51 , 44 L. ed. 368, 20 Sup. Ct. Rep. 269; Northern P. R. Co. v. Miller, 7 Land Dec. 109, 120; Northern P. R. Co. v. Davis, 19 Land Dec. 87, 90; Spicer v. Northern P. R. Co. 10 Land Dec. 440, 443; Northern P. R. Co. v. McCrimmon, 12 Land Dec. 554; Northern P. R. Co. v. Plumb, 16 Land Dec. 80.

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