ANIMAL HEALTHCARE CENTER INC v. CITIZENSHIP AND IMMIGRATION SERVICES (2026)

ORDER GRANTING MOTION TO DISMISS

Re: Dkt. No. 47

Plaintiff Animal Healthcare Center, Inc. filed this suit against defendant U.S. Citizenship and Immigration Services after USCIS revoked an H1-B petition for a nonimmigrant veterinarian employed by the Center. The Court granted USCIS's motion to dismiss the original complaint. Animal Healthcare Ctr., Inc. v. U.S. Citizenship & Immigr. Servs., 819 F. Supp. 3d 1105, 1106 (N.D. Cal. 2026). USCIS now moves to dismiss the Center's amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons discussed herein, the motion to dismiss is granted.

BACKGROUND

The H1-B program permits certain nonimmigrant foreign workers to come to the United States to temporarily work in a “specialty occupation” “upon the petition of the importing employer.” 8 U.S.C. §§ 1101(a)(15)(H)(i)(b); 1184(c)(1). The Center is a veterinary hospital that filed a registration for its intended H-1B beneficiary, veterinarian Dr. Amanat Kaur Suag, in the H-1B lottery for the Fiscal Year 2023 selection process. The registration was selected in the lottery, and the Center subsequently submitted an I-129 petition on behalf of Suag for an employment period from October 1, 2022, to September 30, 2025. The petition was approved in August 2022 and Suag received an H1-B visa to work for the Center. In July 2024, USCIS informed the Center that it had determined that the Center committed fraud because it had registered Suag in the FY 2023 lottery multiple times in order to unfairly increase her chances of success. In October 2024, USCIS revoked the Center's I-129 petition on behalf of Suag with a finding of fraud.

The Center asserts two claims against USCIS under the Administrative Procedure Act, 5 U.S.C. §§ 701 et seq., alleging that the revocation of its I-129 petition (1) was based on an unlawful legislative rule and (2) was arbitrary and capricious.

LEGAL STANDARDS

The Federal Rules require a complaint to include a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). If the complaint does not do so, the defendant may move to dismiss the complaint. Fed. R. Civ. P. 12(b)(6). Dismissal is required if the plaintiff fails to allege facts allowing the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

In considering a Rule 12(b)(6) motion, the Court must “accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable” to the non-moving party. Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1029–30 (9th Cir. 2009). While legal conclusions “can provide the [complaint's] framework,” the Court will not assume they are correct unless adequately “supported by factual allegations.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)).

A complaint that fails to establish a federal court's subject matter jurisdiction may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1). A Rule 12(b)(1) challenge may be facial, contending that the complaint's allegations are insufficient to invoke federal jurisdiction, or factual, disputing the allegations that otherwise establish federal jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). When considering a facial challenge, the Court must “take the allegations in the plaintiff's complaint as true.” Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). In a factual attack, however, a defendant “can attack the substance of a complaint's jurisdictional allegations despite their formal sufficiency, and in doing so rely on affidavits or any other evidence properly brought before the court.” St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989).

To establish standing in federal court, Article III of the Constitution requires a plaintiff to demonstrate “(i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423, 141 S.Ct. 2190, 210 L.Ed.2d 568 (2021). If the plaintiff's claim is one for which the court can offer no remedy, “there is no case or controversy for the federal court to resolve.” Id. at 423, 141 S.Ct. 2190 (citation omitted).

ANALYSIS

The Court previously dismissed the Center's original complaint after finding that it failed to establish standing under Article III. The Center's amended complaint is substantially similar to its original one, though it now adds facts to further support its claim to standing.¹

After withdrawing approval of the Center's petition, USCIS imposed a finding of fraud, which now “exists in perpetuity.” FAC ¶14.² A finding of fraud may be “relevant to future benefits requests,” including by potentially leading to adverse decisions in future proceedings. Matter of Texperts, 29 I&N Dec. 491, 494 (AAO 2026). USCIS relies on a screening platform that flags whether a petitioner presents a fraud concern. If a petition is flagged, then the matter is automatically routed for additional review before the case is released to adjudicators. The Center argues that the additional review—which includes an administrative investigation—is a concrete harm, as it delays adjudication and increases the resources it expends on its petitions. The Center has had at least one H-1B petition approved since its designation but alleges that it paid $2,805 for “premium processing” of that petition to guarantee adjudication within 15 business days.

The Court previously determined that whether a “fraud finding constitutes ‘an invasion of a legally protected interest’ that could be redressed through judicial relief depends upon whether it will cause future harm to the Center.” Animal Healthcare Ctr., Inc., 819 F.Supp.3d at 1108 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). It then dismissed plaintiff's complaint, holding that “[a]bsent further evidence, any harm the Center might suffer as a result of USCIS's increased scrutiny is too speculative to establish Article III standing.” Id. at 1108

The Center now argues that the finding of fraud satisfies the injury-in-fact requirement because it creates both delay and expense in future immigration proceedings. It presents the UCSIS Admirative Appeal Office's decision in Matter of Texperts and the agency's process of granting discretionary immigration benefits—like employment-based Green Cards or Changes of Status—as evidence of the harmful effects of heightened scrutiny. It argues that this evidence establishes that fraud findings create collateral consequences that always attach to future petitions.

The evidence does not do what the Center claims it does. First, Matter of Texperts establishes that a fraud finding “may have a direct bearing on eligibility for future temporary and permanent immigration benefits, eligibility for discretionary relief, and admissibility,” not that it will. Matter of Texperts, 29 I&N Dec. at 494 (emphasis added). Next, while the Center alleges that Fraud Detection and National Security Directorate (“FDNS”) review is a concrete harm that delays adjudication and burdens the subject of the investigation, it never alleges that every application it submits will be subject to such review. See FAC ¶ 12-13. In fact, the Center's attempt to show injury arguably undermines its claim of standing: while it paid nearly three thousand dollars for expedited review, it does not allege that that petition was subjected to FDNS review or that it had to respond to a Request for Evidence to clarify whether it merited a positive exercise of discretion. Therefore, the evidence is not meaningfully different from what was presented to the Court in the original complaint.

CONCLUSION

Speculation about future harm does not establish imminent injury. Mayfield v. United States, 599 F.3d 964, 970 (9th Cir. 2010) (citing Friends of the Earth, Inc. v. Laidlaw Env't Servs. (TOC), Inc., 528 U.S. 167, 184, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000)). Because the Center fails to allege an injury-in-fact, it has not established standing under Article III. The Court GRANTS the motion to dismiss. Dismissal is without prejudice and without leave to amend.

IT IS SO ORDERED.

FOOTNOTES

1.   For the purposes of defendants' motions, the Court assumes the truth of the facts alleged in plaintiffs' complaint.

2.   The Center is currently appealing the finding.

P. Casey Pitts, United States District Judge