[00:00:00] Speaker 02:
We will move on to our second argument set for argument.

[00:00:07] Speaker 02:
Lesnik versus ISM vusum DOO case number 23-16114.

[00:01:00] Speaker 01:
Go ahead.

[00:01:01] Speaker 01:
Thank you.

[00:01:02] Speaker 01:
May it please the court?

[00:01:03] Speaker 01:
I am Bill Dresser.

[00:01:05] Speaker 01:
I am here to present argument on two legal issues on appeal, both involve interpretation of statute and both in concern the application of facts to that interpretation of the statute.

[00:01:22] Speaker 01:
This appeal arises from the importation of foreign workers to perform

[00:01:29] Speaker 01:
construction services in the United States, including at the Tesla facility in Fremont.

[00:01:36] Speaker 01:
The first claim deals with the issue under the False Claims Act of whether underpayment of visa fees is an obligation under the reverse False Claims Act claim.

[00:01:49] Speaker 02:
So can I ask you about that, because you framed it very carefully to say underpayment, but they didn't underpay.

[00:01:57] Speaker 02:
They paid the fees for the application that they submitted.

[00:02:01] Speaker 02:
Your argument is they submitted the wrong application, right?

[00:02:05] Speaker 01:
There are two parts of the fraud that was involved.

[00:02:08] Speaker 01:
The first fraud is they applied for the wrong visas, and the second is that when they applied for the wrong visas, or impermissible, illegal, impermissible visas, they applied

[00:02:19] Speaker 01:
for visas to do construction work, which you can't do.

[00:02:24] Speaker 01:
It's prohibited.

[00:02:26] Speaker 01:
So the fraud is first in applying for the wrong type of visa, and the second is when they applied for the wrong type of visa, their application included fraudulent statements that these were all supervisors, that they worked for another company, that they would not displace American workers and several other false representations within their application itself.

[00:02:49] Speaker 01:
So there's two parts of it.

[00:02:52] Speaker 02:
Right.

[00:02:52] Speaker 02:
But you don't disagree that the application that they filed, they paid the correct fees.

[00:02:59] Speaker 01:
Uh, that, that is not the claim.

[00:03:01] Speaker 01:
The claim is, I understand that.

[00:03:02] Speaker 02:
I just want to make sure that we, we understand where we're at.

[00:03:05] Speaker 02:
Right.

[00:03:06] Speaker 02:
So we, in order to find for you, we have to delve into this issue and say that we're fraught.

[00:03:11] Speaker 02:
They, they fraudulently, um,

[00:03:15] Speaker 02:
They had an obligation to file this other fee and pay more money, and they didn't do that.

[00:03:20] Speaker 01:
Well, they didn't have an obligation to even apply for visas.

[00:03:24] Speaker 01:
But once they applied for visas, they committed fraud by applying for the wrong visas.

[00:03:29] Speaker 01:
This is exactly the position that is taken by the agency which is tasked with enforcing the FCA, which is the Department of Justice.

[00:03:38] Speaker 01:
So initially in the trial court and initially in this appeal,

[00:03:42] Speaker 01:
I cited to the Infosys case in which the Department of Justice prosecuted Infosys because they applied for the wrong, well, in Infosys there was a couple of different frauds, but one of the frauds was they applied for the wrong types of visas and they committed violations in connection with the visas.

[00:04:02] Speaker 01:
In preparing for the oral argument, I found from the Billington case, which is for some reason still on appeal in the Second Circuit, that they had cited to this other

[00:04:12] Speaker 01:
case that the Department of Justice prosecuted in South Carolina, where the only issue was that the entity, let's forget the name of it, Lourdes and something or other, let me see, Larson and Tubro Technology Services, they applied for and obtained B1 visas, the exact same thing that happened here.

[00:04:38] Speaker 01:
And that was an impermissible type of visa.

[00:04:42] Speaker 01:
They were required to get at least H-1B visas.

[00:04:47] Speaker 01:
So in that case, the Department of Justice tasked with enforcing the FCA in two separate cases that are identified say,

[00:04:58] Speaker 01:
It is fraud to apply for the less expensive non-petition-based visas for $200 or $300 a piece, rather than the more expensive visas.

[00:05:11] Speaker 01:
They committed the fraud and they paid the fees, not sometime in the future, but when they applied for the visas, they paid the money at that time.

[00:05:20] Speaker 01:
When these workers were given documents in English that they didn't look at, when they were given cash, when they were dropped off at a van just outside the U.S.

[00:05:29] Speaker 01:
Consulate and said, hey, apply for these visas, they committed the fraud at that moment.

[00:05:36] Speaker 01:
Not something in the future.

[00:05:41] Speaker 01:
The 2009 amendments referred to the Conogra and the Pomeroy case where there was violations in the export visas, but they specifically said that those are examples they are not limited to, that this change in the law ...

[00:06:03] Speaker 01:
is not intended to exclude other types of contingent or fixed obligations that are similar in effect and purpose or that otherwise meet the definition set forth in the proposed amendments.

[00:06:16] Speaker 01:
This comes from the appendix, the Senate report authored by Senator Leahy, which went over several ways in which judicial

[00:06:32] Speaker 01:
decisions had limited the effect of the FCA.

[00:06:35] Speaker 01:
They spent several pages identifying the changes under the Reverse False Claims Act.

[00:06:41] Speaker 01:
They said that we're not following the two cases that were cited by the trial court.

[00:06:49] Speaker 01:
The trial court cited two cases which were specifically rejected and specifically overruled in the 2009 amendment saying it's a contingent.

[00:06:58] Speaker 02:
Those were the district court cases, sorry.

[00:07:00] Speaker 02:
Go ahead.

[00:07:01] Speaker 02:
Were those the district court cases?

[00:07:03] Speaker 01:
No.

[00:07:03] Speaker 01:
The two cases cited by the district court in this case for its position that that would be contingent, okay, were the American textile case and the U.S.

[00:07:19] Speaker 01:
versus Bourseau case.

[00:07:20] Speaker 01:
The Bourseau case was in 2008.

[00:07:22] Speaker 01:
The American Textile was in 1999.

[00:07:26] Speaker 01:
Both were specifically identified by the Senate and the House bills and is really well laid out in the Senate report that those are improper, limiting on contingent.

[00:07:42] Speaker 01:
The statute should not be limited to a fixed duty.

[00:07:47] Speaker 01:
And they cited with approval the two cases of, I believe it's one, the Pomeroy and the other Conogra case, which said, hey, even if you apply now for what is the value of some airplane wings or what is the value of the textiles, if you had to sometime in the future do something else, doesn't matter.

[00:08:10] Speaker 01:
You're still committing fraud.

[00:08:13] Speaker 00:
Well, that has to do with the fixed duty.

[00:08:16] Speaker 00:
The requirement, as I understand it, that there has to be an obligation has always been there, hasn't it?

[00:08:29] Speaker 01:
The language is obligation.

[00:08:31] Speaker 01:
Yes.

[00:08:31] Speaker 01:
The question is.

[00:08:32] Speaker 00:
So that is the real question here that I see is whether or not there was an obligation.

[00:08:42] Speaker 00:
Correct.

[00:08:42] Speaker 00:
OK.

[00:08:43] Speaker 01:
Yes, it turns on the issue of what is an obligation under the FCA.

[00:08:49] Speaker 01:
And cases which have narrowly construed obligation have been overruled and rejected.

[00:08:56] Speaker 01:
Those which have a more expensive.

[00:08:58] Speaker 02:
You agree.

[00:08:58] Speaker 02:
I mean, the world today, don't we have a split, as I understand it, in the district courts?

[00:09:05] Speaker 02:
There's two district courts that have rejected this argument that you're making now, and one in New Jersey that arguably has adopted it.

[00:09:13] Speaker 02:
Correct.

[00:09:14] Speaker 02:
There's no circuit court precedent on this right now?

[00:09:17] Speaker 01:
No.

[00:09:17] Speaker 01:
The Billington case, I think, was orally argued in April of 2023, and they still don't have a decision.

[00:09:24] Speaker 01:
So I'm not sure what they're going to do.

[00:09:26] Speaker 02:
And that was, Billington was in the, which court is that?

[00:09:33] Speaker 01:
I believe it's the Second Circuit.

[00:09:34] Speaker 01:
Second Circuit.

[00:09:36] Speaker 01:
Correct.

[00:09:37] Speaker 01:
And so, yeah, it may be that the trial court, in finding the way that it did, both made an error in referring to cases as the basis for its decision, which had already been specifically overruled, but in asking to say, hey, if this is the way it is, you're gonna have to get a decision that says this is an obligation.

[00:10:01] Speaker 00:
Yes, but you're real, real,

[00:10:05] Speaker 00:
argument is that they should have filed a different application.

[00:10:15] Speaker 01:
They committed fraud when they applied for the wrong visa saying, we're going to have these people do supervisor work.

[00:10:26] Speaker 01:
And that was a lie?

[00:10:32] Speaker 01:
in the application.

[00:10:33] Speaker 02:
But that may have been.

[00:10:35] Speaker 02:
I mean, but I don't understand how that gets us, I think maybe this is where the shooter's going, is it doesn't mean that they have an obligation to apply for something else.

[00:10:44] Speaker 01:
They didn't have an obligation to apply for any visas, but when they applied for the visas, when they applied for the visas, they committed fraud in applying for the wrong visas.

[00:10:54] Speaker 00:
When they applied for the visa, they had an obligation to pay for that visa.

[00:11:00] Speaker 00:
is my understanding of the decision, the district court decision from our circuit and also the DC circuit.

[00:11:09] Speaker 00:
But they did not have an obligation to pay for a different visa.

[00:11:14] Speaker 00:
That's the problem.

[00:11:15] Speaker 01:
That's not the position that's taken by the Department of Justice, which is tasked with enforcing the FCA.

[00:11:21] Speaker 01:
In two separate cases, which I've identified to the court,

[00:11:24] Speaker 01:
That is the position by the Department of Justice.

[00:11:27] Speaker 01:
They're applying for .

[00:11:28] Speaker 00:
.

[00:11:28] Speaker 00:
.

[00:11:28] Speaker 00:
I'm just trying to .

[00:11:29] Speaker 00:
.

[00:11:29] Speaker 00:
.

[00:11:30] Speaker 00:
That is the position taken by the District Court in the Ninth Circuit and the District Court in the D.C.

[00:11:36] Speaker 00:
Circuit.

[00:11:36] Speaker 01:
That is correct.

[00:11:37] Speaker 01:
Yeah.

[00:11:37] Speaker 01:
Okay.

[00:11:38] Speaker 01:
No doubt about that.

[00:11:39] Speaker 00:
And the Ninth Circuit decision was written by Judge Koh, who's now a judge on this.

[00:11:45] Speaker 01:
Judge Koh is now on this circuit, yes.

[00:11:48] Speaker 01:
Okay.

[00:11:48] Speaker 01:
I don't think that should make a decision.

[00:11:50] Speaker 00:
No, it doesn't make a decision.

[00:11:51] Speaker 00:
It's just a note of color.

[00:11:55] Speaker 01:
This is a matter for which there is a de novo review.

[00:12:00] Speaker 01:
It's an interpretation of a statute.

[00:12:02] Speaker 01:
It's the application of the facts of the statute.

[00:12:06] Speaker 01:
The correct analysis is as indicated, follow the statute, follow the exact words of the statute, do not follow a trial court's decision which cites to the cases which were specifically overruled by that statute.

[00:12:23] Speaker 01:
In fact, apply it as it's being applied by the Department of Justice and as the statute specifically says.

[00:12:31] Speaker 01:
The entirety of the 2009 amendments to the FCA were to

[00:12:36] Speaker 01:
abrogate all of those cases which narrowly construed obligation.

[00:12:45] Speaker 01:
I think we've addressed this.

[00:12:47] Speaker 01:
I have like a very short three minutes.

[00:12:49] Speaker 01:
There is also the issue of the second issue is the interpretation under the TVPA or actually the, it's actually the TVPRA of what is a victim.

[00:13:05] Speaker 01:
I believe that that's a really shorter item because of the exact language of the statute and the illogical fallacy that was used by the trial court.

[00:13:17] Speaker 01:
First, addendum item number 15 is the TVPRA of 2003.

[00:13:23] Speaker 01:
It added the civil action for victims.

[00:13:29] Speaker 01:
This is docket entry 5-3 at page 179.

[00:13:33] Speaker 01:
and it provides that there's a victim for a violation of any of 18 USC 1589, 1590, or 1591.

[00:13:44] Speaker 01:
Section 1589 specifically identifies that a violation includes threatening one person to get something from another person.

[00:13:57] Speaker 01:
It defines abuse or threatened abuse of legal process, which is exactly what the issue is for Gregor Lesnik when the Vusums try to have him prosecuted in, I believe they prosecuted him in Slovenia, in order to exert pressure on another person.

[00:14:21] Speaker 01:
That's specifically in the statute.

[00:14:23] Speaker 01:
22 USC 7102 uses the exact same language in order to exert pressure on another person.

[00:14:33] Speaker 01:
So if you're doing a violation of this, specifically under the statute, you're doing something against one person to coerce work by someone else, that is the exact situation that you have with Gregor Lesnik.

[00:14:53] Speaker 01:
And the fallacy by the trial court was a victim can include a person who is a laborer.

[00:15:01] Speaker 02:
But aren't you defining, doesn't your argument require us to, when it says cause that person, that person has to be different than Lesnik, that has to be a different victim?

[00:15:12] Speaker 01:
It could be either or it could be both.

[00:15:15] Speaker 02:
So that is actually the logical... No, I think exerting pressure on another person to cause that person to take some action.

[00:15:23] Speaker 02:
That person refers to the person who's having pressure exerted on them.

[00:15:29] Speaker 01:
Correct.

[00:15:30] Speaker 01:
That is Gregor Lesnik.

[00:15:32] Speaker 01:
And it is to coerce

[00:15:33] Speaker 01:
All of the people working for... Yeah, but that's the whole problem.

[00:15:37] Speaker 02:
Now you're trying to get around that by saying it's not trying to get Lesnik to take any action, it's trying to get other people who aren't covered by the statute to take other action.

[00:15:47] Speaker 01:
No, the other people are covered by the statute.

[00:15:49] Speaker 02:
This is exerting pressure on another person to cause that person to take some action.

[00:15:56] Speaker 01:
No, it uses the word another person to exert pressure on another person.

[00:16:02] Speaker 01:
Okay.

[00:16:03] Speaker 01:
That's the language of the statute.

[00:16:05] Speaker 01:
And the argument is kind of what is being stated here.

[00:16:08] Speaker 01:
Just because the people who were coerced to work are victims does not mean that it isn't also a violation to engage in the abuse of process, to threaten Gregor Lesnik, to confront

[00:16:26] Speaker 01:
to compel or coerce these other people to work.

[00:16:29] Speaker 01:
He's still a victim.

[00:16:32] Speaker 02:
There is no way that the- We've gotten your argument.

[00:16:34] Speaker 02:
You're over time.

[00:16:35] Speaker 02:
Right.

[00:16:35] Speaker 02:
So- Oh, I am.

[00:16:37] Speaker 01:
Yeah, it's counting up.

[00:16:38] Speaker 01:
It's red.

[00:16:39] Speaker 01:
The red light.

[00:16:40] Speaker 01:
Okay, sorry.

[00:16:40] Speaker 02:
I saw- No, I understand.

[00:16:42] Speaker 01:
It's good.

[00:16:42] Speaker 00:
Everybody does it.

[00:16:44] Speaker 01:
Can I just say one second?

[00:16:45] Speaker 01:
This is a de novo review.

[00:16:47] Speaker 01:
There was already the motion filed.

[00:16:48] Speaker 01:
I understand.

[00:16:49] Speaker 01:
You said that already.

[00:16:49] Speaker 01:
There are proposed orders that have been submitted as part of the record.

[00:16:53] Speaker 01:
That's the relief we're asking for.

[00:16:54] Speaker 02:
Thank you so much, counsel, for your argument.

[00:16:57] Speaker 02:
And we've got the strange case where nobody came.

[00:16:59] Speaker 02:
They were also scared of you.

[00:17:01] Speaker 02:
They didn't come to argue against you.

[00:17:03] Speaker 01:
They were argued indirectly.

[00:17:05] Speaker 01:
I understand.

[00:17:05] Speaker 01:
Through their related parties.

[00:17:07] Speaker 01:
I understand.

[00:17:07] Speaker 01:
Thank you very much.

[00:17:08] Speaker 01:
All right.

[00:17:08] Speaker 02:
Thank you.

[00:17:09] Speaker 02:
The case is now submitted.