NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 23 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT R&SL, INC, DBA Total Employment and No. 22-70026 Management (TEAM), DHS No. Petitioner, OCAHO Case No. 19A00044 v. MEMORANDUM* U.S. DEPARTMENT OF HOMELAND SECURITY; U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT, Respondents. On Petition for Review of an Order of the Department of Homeland Security Submitted February 16, 2023** San Francisco, California Before: WARDLAW, NGUYEN, and KOH, Circuit Judges. R&SL, Inc., doing business as Total Employment and Management (“TEAM”), petitions for review of a decision by the Administrative Law Judge (“ALJ”) imposing penalties totaling $1,527,308.90 for the untimely and improper * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2). completion of employment eligibility verification forms of more than a thousand employees. TEAM challenges the ALJ’s finding that it did not demonstrate an inability to pay the penalties. We have jurisdiction under 8 U.S.C. § 1324a(e)(8). Reviewing the ALJ’s factual determinations for substantial evidence, see Frimmel Mgmt., LLC v. United States, 897 F.3d 1045, 1050–51 (9th Cir. 2018), we deny the petition for review. TEAM primarily contends that the ALJ arbitrarily and capriciously relied on gross receipts and gross profits rather than its preferred metric—cash flow. The ALJ considered all of TEAM’s evidence, including its limited cash flow and reliance on factoring, an expensive method of financing, to cover its payroll expenses. The ALJ agreed with TEAM that “[c]ash flow is a relevant data-point” but found that it was not dispositive to the analysis because “cash flow can look different at different times of year” for companies like TEAM with cyclical earnings. The ALJ thus considered additional metrics, including the upward “trend” in gross profits and receipts as well as TEAM’s business expansion. Substantial evidence supports these findings. TEAM’s expert, CPA Andrew Manning, testified that it would be “very difficult” for TEAM to pay a penalty of any amount. Manning explained that at the end of March 2021, TEAM’s short term financial obligations exceeded the amount of cash it had on hand and could be expected to generate by factoring its 2 existing invoices. Manning also relied on evidence showing that TEAM had negative cash flow from its operating activities during various intervals over the preceding 30 months—with a focus on the first six months of TEAM’s fiscal year. 1 However, TEAM’s co-owner, Randy Lustig, testified that TEAM’s business is cyclical—demand peaks in September and October and is at its lowest in mid- November through January. For example, TEAM’s revenues in the last five months of fiscal year 2019 (May through September 2019) were more than double its revenues during the first seven months (October 2018 through April 2019). Given this cyclicality, the ALJ reasonably considered annual metrics in addition to TEAM’s stock of available cash at a …
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