New Federal Lawsuit Against DHS Alleges APA Violations, Erroneous H-1B Visa Denials

A lawsuit filed on August 10, 2023 against the U.S. Department of Homeland Security alleges that the agency violated the Administrative Procedure Act (APA), 5 U.S.C. § 702, by exceeding its authority and determining that a group of visa applicants were “inadmissible” without reviewing a full record of evidence. The plaintiffs in Sharma et al. v. United States Department of Homeland Security1 are nearly 70 former F-1 students who were labeled “inadmissible” for employment authorization after they were defrauded by a group of would-be visa employers, which committed violations of the F-1 program guidelines by asking the students to pay for “pre-employment trainings” to receive offer letters and then failing to provide them with actual work assignments or remuneration.

The lawsuit claims that DHS improperly marked the plaintiffs as “inadmissible” on the basis of alleged fraud or willful misrepresentation under 8 U.S.C. § 1182(a)(6)(C)(i), without the chance to prove that they had not, in fact, engaged in fraud or willful misrepresentation while trying to procure immigration benefits. In cases of fraud or misrepresentation, an inadmissibility determination can be a permanent bar to a visa and lawful status in the United States.

F-1 OPT Visa Program Overview

The F-1 Optional Practical Training program (“OPT” and “STEM OPT”) is a student visa-specific training program geared towards post-graduates and STEM graduates. The program allows students to apply for and receive an employment authorization document (or “EAD”) as part of their F-1 visa status for employment in fields related to their course of study undertaken while earning or after completing their undergraduate or graduate degrees in the United States. Eventually, many F-1 students are candidates for employment visas.

Case Facts

In this case, each of the referenced plaintiffs had either sought employment or accepted employment as part of the F-1 OPT program from one of four businesses, which eventually never proffered a position. The companies marketed themselves as information technology (IT) staffing clients that needed IT workers for short-term projects. However, they required potential candidates to pay for “pre-employment training” in order to obtain employment offer letters so that they could proceed with their OPT EAD applications, violating program guidelines. Further, after making offers and requiring the F-1 visa holders’ payments for training and for offer letters needed to obtain an employment authorization document, actual work assignments never materialized.

The lawsuit argues that, after DHS uncovered the companies’ scheme to defraud the foreign nationals, without any additional evidence of wrongdoing, they “labeled the victims of the fraud as ‘knowing co-conspirators’ and issued inadmissibility determinations.” The lawsuit argues that DHS’s steps were procedurally deficient, and that DHS misinterpreted INA §212(a)(6)(C)(i) and should have been required to go through numerous steps prior to making a finding of fraud or misrepresentation, including “provid[ing] notice to an affected party when the agency order intends to rely on ‘derogatory information.’”

The lawsuit goes on to explain plaintiffs had difficulty petitioning DHS for H-1B visas and the corresponding “change of nonimmigrant status” that traditionally allow applicants to remain in the United States without interruption and continue to work in their new visa status. Mainly, DHS approved their overall H-1B visa petitions but denied the change of status from F-1 to H-1B based on “fraud or misrepresentation.” This forced applicants leave the United States and apply for a “nonimmigrant waiver of inadmissibility” in their home countries to obtain H-1B visas at a U.S. consulate. The lawsuit argues that because a “nonimmigrant waiver of inadmissibility application” (or Form 601) requires the applicant to concede guilt, it would be a barrier for applicants who believe they truly did not communicate knowingly false information to DHS in an attempt to gain a benefit.

Request for Relief

The lawsuit asks that the court set aside and vacate DHS’s adjudications signifying the plaintiffs’ inadmissibility, enjoin all inadmissibility adjudications under 8 U.S.C. § 1182(a)(6)(C)(i) without an opportunity to be heard, provide plaintiffs with notice and opportunity to retract misrepresentation and allegations of fraud, reinstate plaintiffs’ periods of time spent in the United States as lawful status unless a proper inadmissibility determination is made, and restore plaintiffs to the position they were in prior to the determinations.


We will continue to monitor the progress of the lawsuit and its outcome for potential relief that it may provide for affected students who face continued status issues or trouble obtaining approvals of their H-1Bs. While this specific lawsuit impacts a small subset of the overall F-1 and H-1B student population, one takeaway for employers is to focus on the importance of carefully following F-1 program guidelines to avoid mistakes that could affect employees’ long-term future in the United States or ability to obtain new or extended visas.

Particularly, F-1 students with employment authorization should be careful not to exceed applicable unemployment limits, should report concerns in employer requirements to their Designated Student Office, and report any changes as quickly as possible. For example, F-1 OPT students must report any change in employment or termination of OPT within 10 days of any change. Employers of students on F-1 STEM OPT must be closely involved in creating a training plan and make needed progress reports. We encourage both employers and employees to seek advice from counsel when necessary to clarify related F-1 student visa requirements.

See Footnotes

​1 Sharma et al v. United States Department of Homeland Security, Docket No. 2:23-cv-01227 (W.D. Wash. Aug 10, 2023).

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.