A few weeks before H-1Bs will be filed subject to a random lottery, an Oregon judge dismissed a lawsuit challenging the H-1B lottery system, granting summary judgment to United States Citizenship and Immigration Services (USCIS).

The plaintiffs filed a complaint on June 2, 2016, arguing that the H-1B lottery violates an immigration statute that provides that visas shall be issued in the order in which petitions are “filed.” The court found that the regulation was subject to Chevron deference (which gives deference to an agency’s interpretation of rules) and that “filed” is an ambiguous term to be interpreted by USCIS. In other words, the court found that USCIS was justified in deeming petitions “filed” only after they are selected randomly by the computer. The court’s decision is the latest development in the nearly 30-year evolution of the H-1B visa.

The Scarcity of H-1Bs

There are only 85,000 H-1Bs available to private employers on a fiscal year (FY) basis: 65,000 for regular cases and an additional 20,000 for U.S. advanced degree cases. Last year, more than 236,000 cases were received, and we expect similar or more extreme conditions this year. USCIS uses a computer generated random process (or lottery) to select cases for the 85,000 limit or “cap.” If not selected, USCIS rejects petitions and returns filing fees. The U.S. advanced degree lottery is completed before the regular lottery.

H-1B visas in their current form were created under the Immigration Act of 1990 (IMMACT), which also created the 65,000 cap. The cap was progressively increased from 1999 to 2003 through the American Competitiveness and Workforce Improvement Act of 1998 and the American Competitiveness in the Twenty-First Century Act of 2000. But since 2004, when the U.S. advanced degree cap was created under the H-1B Visa Reform Act of 2004, the overall H-1B limit has been 85,000. Legislation adjusting the cap has also increased fees, enhanced penalties, and expanded the U.S. Department of Labor’s investigative authority over the immigration process.

The Lottery

The lottery system was created in order to deal with the extreme volume of H-1B petitions submitted. From 1997 to the present day, H-1Bs have regularly been exhausted prior to the end of the fiscal year. Changes to the H-1B process since the mid-2000s have attempted to address the speed with which the cap is met. In 2005, USCIS implemented the use of a random computer selection process. After enough petitions had been received to fill 85,000 slots, USCIS announced the final receipt date and administered the selection process. But by 2008, the limit was met on the first day. USCIS then adjusted its procedures because petitioners had been forced to overnight or courier petitions to be received on the first allowable date, putting intense pressure on overnight delivery carriers and USCIS offices. The current rule implements the lottery for all petitions received within the first five business days of filing (April 1st of each year). In FY 2010 and 2011 it took longer to reach the cap due to the recession, but since FY 2013, the cap has been reached in the first five business days of filing.

Some of the same issues USCIS directly or indirectly addressed in previous years were central to the plaintiffs’ complaint. They argued that a waiting list should be used and that the random selection process violated the statute.

Waiting List

The plaintiffs argued that a waiting list should be used because the statute requires that visas must be issued in the order in which they are filed. The court found that the statute is silent on how to handle petitions received in excess of the cap (a waiting list is not part of the statutory protocol) and that silence leaves room for agency discretion. The plaintiffs also argued that a random selection should not be used because it was not part of the statute; they referred to the Diversity Immigrant Visa statute, which expressly requires random selection and reasoned that if Congress had intended a lottery, it would be similarly included in the statute. The court reiterated that the statue is silent on the selection process, so the agency is able to choose how to administer it. Ultimately, the court found that because the lottery is reasonable and Congress had the opportunity to implement a waiting list a number of times, but did not, a waiting list is not required.

Random Lottery

Beyond arguing for a waiting list, the plaintiffs argued that the lottery is unfair because some people never receive a visa while others receive a visa on their first year of trying. Further, the plaintiffs pointed out that the regulation implementing the lottery was an interim rule that was never finalized, so it should not receive as much deference as afforded under Chevron. But the court found that even under the lesser deference standard, USCIS is justified in its implementation of the H-1B lottery under the 2005 and 2008 interim rules. The court also pointed out that the plaintiffs offered no suggestion as to how to order 150,000 simultaneously submitted petitions to create a waiting list, i.e., it is no less arbitrary to use a lottery than to order petitions based on how they are removed from delivery bags. The court reasoned that USCIS’s decision to use a lottery rather than a waiting list is the result of responding to the problems created by the intense demand for H-1Bs.

Employers struggle to secure H-1Bs for talented individuals within the current system, and this lawsuit may represent some of that frustration. Last year, almost three times the number of H-1Bs available were filed, and this year we could see even more demand. The court’s decision recognizes that USCIS is dealing with an incredibly high volume in a reasonable way based on what they have learned since 1990. The H-1B is a sought-after visa category and continues to be a major concern for employers and legislative bodies.