1. What business purpose is served by the L-1 visa program?
2. Does the INA impose the burden of proof on the transferee and his or her employer to demonstrate that the transferee’s responsibilities are “primarily managerial”?
3. Why did the USCIS deny dos Santos’s petition for an L-1A visa?

[The Citizenship and Immigration Service determined that the transferee was not entitled to an L-1A visa. The employer appealed the decision to the Department of Homeland Security's Administrative Appeals Office (AAO), which dismissed the appeal. The matter was next considered by the United States district court.]
O'SCANNLAIN, J.…
Eugene Tavares dos Santos is a Brazilian citizen who has served as the President and Chief Executive Officer ("CEO") of a Brazilian corporation known as Granite Ebenezer since the corporation's founding in 1998. Granite Ebenezer sells and exports Brazilian granite and other decorative stones for use in residential and commercial construction….
In 2002, in an effort to improve its ability to import its wares into the United States, Granite Ebenezer established a U.S.-based affiliate, Brazil Quality Stones, Inc. ("BQS"), as a California corporation. Like Granite Ebenezer, dos Santos owns 99% of the corporation's stock, while his wife owns the remaining 1%.
Once established, BQS and dos Santos (collectively "Petitioners") sought to transfer dos Santos from Brazil to the United States so that he could operate BQS as its President and CEO. Thus, BQS filed a petition for an L-1A nonimmigrant visa on dos Santos's behalf. The L visa is designed to allow multinational firms to transfer employees from the firm's overseas operations to its operations in the United States. The Immigration and Nationality Act ("INA") requires an alien granted such a visa (referred to as an "intracompany transferee") to be employed by the entity sponsoring his or her petition for a continuous period of at least one year within the three years preceding the petition. In addition, the noncitizen must "seek to enter the United States temporarily in order to continue to render his services to the same employer … in a capacity that is managerial, executive, or involves specialized knowledge." Id. A noncitizen employed in a "managerial" or "executive capacity" is eligible for an L-1A classification, while a noncitizen employed in a position of "specialized knowledge" is eligible for L-1B status. The two classifications impose different limitations upon the noncitizen's stay.
On August 29, 2002, the Immigration and Naturalization Service ("INS") granted dos Santos the L1-A visa Petitioners had requested. Dos Santos arrived in the United States and began operating BQS the next month. Because the applicable regulations classified BQS as a "new office," however, dos Santos's L-1A classification was approved for only one year, subject to extension by a later application. Thus, as the end of dos Santos's first year in the United States drew near, BQS filed a second petition seeking to extend his L-1A classification for an additional three years. To obtain such extension, the INA and applicable regulations required BQS to demonstrate that it was "doing business" in the United States for the year preceding dos Santos's petition and that dos Santos was employed in a "managerial" or "executive capacity," 8 U.S.C.
§§ 1101(a)(15)(L), 1101(a)(44).
The United States Bureau of Citizenship and Immigration Services ("USCIS"), as the successor to the INS, received the petition and soon thereafter requested additional evidence from BQS, explaining that the petition failed to establish that dos Santos was employed in a managerial or executive capacity. BQS timely responded with additional documentation.
The evidence submitted by BQS included an organizational chart of the corporation listing dos Santos, at the top, supervising five employees: an International Budget Analyst, an Accounting Clerk, and a three-person sales team. Yet payroll records indicated that BQS had paid only three employees other than dos Santos during the quarter preceding the petition.
BQS also set forth dos Santos's duties, explaining that he was responsible for (1) supervising and managing BQS's "office and business affairs"; (2) "overseeing capital investment opportunities"; (3) developing "plans to further channels of distribution"; (4) "hiring and firing all employees and supervising managers";
(5) overseeing "domestic and international sales"; and (6) managing "outsourced relationships" with BQS's accounting firm and warehouse.
To document dos Santos's performance of these tasks, BQS submitted, among other things, a letter dos Santos sent to the INS seeking an H-1B visa on behalf of the International Budget Analyst, letters from BQS's accounting and warehousing firms indicating that dos Santos managed BQS's relations with them, and a brochure for a $35,000 piece of granitecutting equipment that dos Santos had proposed for purchase by BQS.
After reviewing this evidence, the Director of the USCIS California Civil Service Center denied the petition to extend dos Santos's L-1A classification, concluding that the record failed to establish that dos Santos was employed in a managerial or executive capacity and that the record did not prove that BQS was doing business in the United States.

BQS appealed the Director's decision to the DHS Administrative Appeals Office ("AAO")…. The AAO … dismissed the appeal, affirming the Director's conclusion that the record failed to show that dos Santos was a qualifying employee or that BQS was a qualifying organization….
In 1970, Congress created the L nonimmigrant visa for a multinational firm's intra-company transferees by providing for the temporary admission of such noncitizens if, among other things, the noncitizen sought to render services in the United States to the firm or its subsidiary or affiliate "in a capacity that is managerial, executive, or involves specialized knowledge." 8 U.S.C. § 1101(a)(15)(L). Years later, in 1987, the INS in a set of regulations defined the terms "managerial" and "executive capacity." See 8 C.F.R. § 214.2(l)(1)(ii)(B), (C)(198). Although nothing in the express language of the INA limited the availability of L visas to employees of multinational firms of a certain size, the INS comments accompanying the final rule expressed concern that sole proprietors were taking improper advantage of this classification. As the INS explained,

self-employed person … will frequently attempt to qualify under the L category by setting up a corporation in the United States, giving himself an executive title (e.g., "president") and continuing his self-employment in the U.S., often with a minimal "investment," with no foreign operations abroad and no intent to return abroad…. We do not believe that Congress intended the L classification to be used in this manner, and the regulations are intended to control this abuse.