Asylum Seeker Alleges RLI Corp. Intends to Issue ICE Bond Payments to Gov’t Prior to Final Breach Determinations

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Property and casualty insurer RLI Corp. faces a proposed class action that alleges certain immigrants face “immediate and irreparable injury” should the company remit breached immigration bond payments to the United States government prior to a final determination that such a bond is actually breached. 

The plaintiff behind the 20-page breach-of-contract case, a Guatemalan asylum seeker detained by ICE in California in 2017, asserts that pre-adjudication payment of his bond by RLI could subject him and other proposed class members to immediate arrest and deportation.

As the lawsuit tells it, RLI should not be permitted to “exonerate its liability” under immigrations bonds simply because the government’s determination as to whether immigrants may stay in the U.S. is taking longer than the defendant expected, particularly given the fact that the defendant “made all of its money in premiums on the front end—realizing millions of dollars in premiums—and simply wants ‘out’ early because it isn’t making any more money on these bonds.”

According to the suit, the Secretary of the Department of Homeland Security (DHS) has authority pursuant to the Immigration and Nationality Act to prescribe “bonds” for use by detained asylum seekers attempting to bail out of ICE detention pending a status determination. The case explains that under DHS regulations, an asylum detainee who enters the country at a location other than a port of entry, as is common, may be released on a cash or surety bond after a “risk classification assessment.” At a future date, the detainee must appear before an ICE administrative hearing to determine their status, the lawsuit says. 

With regard to the plaintiff, the suit relays the Guatemalan national entered the U.S. in 2015 seeking asylum and thereafter passed his credible fear exam, which the government takes to mean indicates there exists a significant possibility that the individual can establish before a judge that they’ve been persecuted or have a well-founded fear of persecution on the basis of race, religion, nationality, political opinion or social standing if returned to their home country.

On February 25, 2017, the government determined the plaintiff had established a credible fear of persecution and allowed the man to be released from ICE custody on bond as an immigrant lawfully in the United States until a determination was made on his status, the complaint reads. Despite this, the man was still required to secure a release bond, which he obtained from RLI Corp., in order to be let out of federal detention, per the suit.

The lawsuit relays, however, that the plaintiff missed one “master calendar” status hearing related to his request for asylum due to receiving no notice of the event. According to the suit, the plaintiff’s failure to appear yielded an entry of an order for his deportation. The plaintiff argues he did not, in truth, “fail to attend” the hearing given he received no notice of such, and would have plainly appeared, as he’d done numerous times before, had he known of the event, especially considering he’d already passed his credible fear exam and “thus had the strongest incentive in the world not to breach the terms of his bond—his very life literally depended on it.”

Crucially, the plaintiff timely appealed his apparent bond breach on November 21, 2019 with the Administrative Appeals Office, the lawsuit continues. According to the case, that appeal has not been dismissed or rejected, and remains pending.

Despite the foregoing, however, defendant RLI “intends to remit payment of Plaintiff’s bond based on the government’s assertion of a right to claim payment on a breach bond,” the lawsuit alleges. From the suit:

“The plain language of the federal statute provides a claim for payment, by the government, on a bond can only be made after a final—with emphasis on the word final— determination that a bond has been breached: ‘A final determination that a bond has been breached creates a claim in favor of the United States which may not be released by the office. DHS will determine whether a bond has been breached.’… Relevantly, that same regulation goes on to state, ‘If DHS determines that a bond has been breached, it will notify the obligor of the decision... and inform the obligor of the right to appeal.’”

The case charges RLI “simply does not care” about the fact that the plaintiff’s timely appeal has not been decided.

The lawsuit looks to represent all individuals nationwide who were released from immigration detention with a release bond issued by RLI and who the federal government has stated has a breached immigration bond prior to a final determination by the Administrative Appeals Office and the relevant U.S. Circuit Court of Appeals that such bond is actually breached. Additionally, the suit aims to represent a class of those who were released from immigration detention with an RLI-issued release bond and who have done nothing to breach the terms of the bond.

Initially filed in Los Angeles County Superior Court on June 23, the suit was removed to California federal court on August 5. 

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