Sheet Metal Maker in Bankruptcy Must Still Pay Immigration Fine

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By Laura D. Francis

Unable to pay the government fine for immigration-related violations? At least one federal appeals court won’t accept that as an excuse.

Arizona-based sheet metal manufacturer DLS Precision Fab LLC must pay more than $300,000 for employment verification violations, even though it’s in bankruptcy proceedings. DLS said it can’t pay the fine and that an administrative law judge was wrong to ignore that claim.

But evidence of DLS’ ability to pay doesn’t matter, the U.S. Court of Appeals for the Ninth Circuit said Aug. 7 ( DLS Precision Fab LLC v. Immigration & Customs Enf’t , 2017 BL 274480, 9th Cir., No. 14-71980, 8/7/17 ). There are five factors the ALJ has to consider when setting a penalty for these types of violations, and ability to pay isn’t one of them. Any additional evidence isn’t going to change the outcome of the case, the court said.

‘Good Faith’ Rejected

The court also rejected DLS’s argument that it acted in good faith because it hired a human resources director with solid credentials who happened to shirk his duty to comply with the Immigration and Nationality Act’s employment verification requirements. The company ultimately was responsible for hiring and supervising its own employees, the court said.

Judge Richard R. Clifton dissented from the unsigned majority decision, arguing that additional evidence of the company’s ability to pay would have affected the outcome. The ALJ acknowledged that the information she had raised questions about whether DLS actually could afford the penalty, meaning that she did consider ability to pay even though she didn’t have to, Clifton said. If there was evidence that the company couldn’t pay, that could have changed her calculations, he said.

The ALJ therefore shouldn’t have imposed the fine without hearing that evidence, he said.

Judges J. Clifford Wallace and Milan D. Smith joined the unsigned majority opinion.

Gallagher & Kennedy represented DLS. The Justice Department represented the government.

To contact the reporter on this story: Laura D. Francis in Washington at

To contact the editors responsible for this story: Peggy Aulino at; Terence Hyland at; Chris Opfer at

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