U.S. Court of Appeals for D.C. Circuit Reverses District Court in Specialized Knowledge Case

The U.S. Court of Appeals for the District of Columbia Circuit recently reversed and remanded the district court’s grant of summary judgment to the government in Fogo de Chao (Holdings) Inc. v. U.S. Department of Homeland Security. (PDF)

The court noted that Fogo de Chao owns numerous Brazilian steakhouses that focus on the churrasco, a traditional festive style of preparing and serving meat derived from the gaucho culture of the Rio Grande do Sul region of southern Brazil. Following its success in Brazil, Fogo de Chao entered the U.S. market in 1997 and now has restaurants in 16 cities in the United States.

From 1997 to 2006, the Department of Homeland Security granted Fogo de Chao more than 200 L-1B visas for its churrasqueiro chefs to work in its U.S. restaurants. In 2010, Fogo de Chao sought to transfer another such chef, Rones Gasparetto, to the United States, reasoning that his distinctive cultural background and extensive experience cooking and serving meals in the churrasco style constituted “specialized knowledge.” The Administrative Appeals Office (AAO) concluded, however, that Mr. Gasparetto’s cultural background, knowledge, and training did not constitute specialized knowledge as a matter of law.

The D.C. Circuit held that it was unable to discern either a “sufficiently reasoned path” in the AAO’s strict bar against culturally based skills or “substantial evidence supporting its factual finding” that Mr. Gasparetto did not complete the company training program. The court also referred to the government’s dismissal of Fogo de Chao’s argument that it would suffer economic hardship if it had to train another employee to perform the chef’s duties. The court noted: “Consideration of evidence of this type provides some predictability to a comparative analysis otherwise relatively devoid of settled guideposts….That specialized knowledge may ultimately be a ‘relative and empty idea which cannot have plain meaning’…is not a feature to be celebrated and certainly not a license for the government to apply a sliding scale of specialness that varies from petition to petition without explanation. Suddenly departing from policy guidance and rejecting outright the relevance of Fogo de Chao’s evidence of economic inconvenience threatens just that.”

The appeals court generally noted, among other things, that deference is generally due to an agency’s interpretation of a statute it administers and its own implementing regulations. No deference was due here, however, because the agency’s “specialized knowledge” regulation merely restated the statute and added nothing of its own in which to ground an interpretation to which a court might defer. The AAO’s decision, and any legal interpretations contained within it, “were the product of informal adjudication within [U.S. Citizenship and Immigration Services] rather than a formal adjudication or notice-and-comment rulemaking.” Finally, the court did not find the government’s arguments persuasive and agreed with Fogo de Chao that the agency’s conclusion regarding the categorical irrelevance of culturally acquired knowledge was insufficiently reasoned to be sustained.