Collins Foods Inc. Immigration Lawsuit: INS, ALJ, and Ninth Circuit

The Collins Foods immigration lawsuit was a 1989 federal enforcement action in which the Immigration and Naturalization Service charged Collins Foods International, the parent of the Sizzler restaurant chain, with knowingly hiring an unauthorized worker at a Phoenix location and with eight separate I-9 paperwork violations. An administrative law judge found the company liable on all nine counts, but in 1991 the Ninth Circuit reversed the knowing-hire finding in Collins Foods International, Inc. v. INS, 948 F.2d 549, ruling that an employer who accepts documents that reasonably appear genuine on their face cannot be treated as having constructive knowledge that a worker is unauthorized.¹

What Happened at the Phoenix Sizzler

The conduct at the center of the case took place at a single Sizzler restaurant at 4501 East Cactus Road in Phoenix. Its general manager, Ricardo Soto-Gomez, had full authority to hire and fire, and he ran the location from February to December 1988.²

Soto knew the family of Armando Rodriguez-Montion personally. He had stayed as a guest in the Rodriguez family home in Mexico, and his girlfriend was Rodriguez’s cousin. At the request of Rodriguez’s brother, a longtime friend, Soto promised Rodriguez a cook’s job at $5.50 an hour before ever meeting him or looking at any documents. Rodriguez arrived in March 1988 and was formally hired on March 22. Soto later acknowledged that he had not read the employment application closely, because the job was already promised. When Rodriguez produced a Social Security card, Soto did not compare it against the examples in the INS Handbook. The card was a laminated forgery with misspellings and no reference to the United States.²

The Charges the INS Brought

On February 13, 1989, the INS filed a nine-count complaint with the Office of the Chief Administrative Hearing Officer. Count I alleged that Collins Foods had knowingly hired an unauthorized alien in violation of 8 U.S.C. § 1324a(a)(1)(A). Counts II through IX alleged eight separate failures to comply with the employment verification requirements of 8 U.S.C. § 1324a(b), the provision that governs Form I-9. The government sought a cease-and-desist order on Count I and civil penalties totaling $2,300 across all nine counts.³

How the ALJ Ruled

Administrative Law Judge E. Milton Frosburg granted the government partial summary decision on the eight paperwork counts in July 1989 and imposed a $1,000 civil penalty, within the statutory range of $100 to $1,000 per individual then in effect.³

On Count I, the government could not show that Soto had actual knowledge Rodriguez was unauthorized. The ALJ instead applied a constructive-knowledge theory drawn from United States v. Mester Manufacturing Co., 879 F.2d 561 (9th Cir. 1989), the first federal appellate ruling under IRCA’s employer sanctions provisions. Under that theory, an employer who deliberately avoids learning a worker’s status can be treated as having known it. Judge Frosburg concluded that Soto had “wilfully and deliberately failed to inquire into the immigration status of Rodriguez” and that the I-9 process here was a “mere formality” because the job had already been promised. He found Collins Foods liable on Count I.² The Chief Administrative Hearing Officer affirmed the decision in February 1990.³

What the Ninth Circuit Decided

Collins Foods appealed, and in 1991 the Ninth Circuit reversed the knowing-hire finding in an opinion authored by Judge Canby. The court rejected the government’s constructive-knowledge theory on several grounds.¹

There is no legal requirement that an employer verify documents at the moment a job offer is made. Pre-employment questioning about national origin or citizenship could expose employers to Title VII discrimination claims. An employer meets its verification duty by examining documents that “reasonably appear on their face to be genuine,” and is not required to compare a Social Security card against INS handbook examples. Stretching constructive knowledge too far, the court warned, would push employers toward discriminatory hiring by avoiding anyone with an “appearance of alienage.”¹

Why the Ruling Still Matters

Collins Foods set the outer limit of what “knowing” means under IRCA’s employer sanctions. Accepting facially valid documents is generally enough, even when a closer look might have raised questions. Courts have drawn a distinction between employers who ignore direct government notification about specific workers, as in United States v. El Rey Sausage, and employers who accept ordinary-looking documents at hire.

The AFL-CIO relied heavily on Collins Foods in 2007 when it challenged a Department of Homeland Security rule on Social Security “no-match” letters in American Federation of Labor and Congress of Industrial Organizations v. Chertoff, arguing the rule would expand “knowing” employment beyond what Congress intended.⁴ The Ninth Circuit itself applied the reasoning again in Aramark Facility Services v. Service Employees International, 530 F.3d 817 (9th Cir. 2008), holding that a no-match letter alone does not put an employer on constructive notice, in part because the Social Security Administration’s database contains millions of errors and imposes no penalty for disregarding those letters.⁵

The standard the case defined has become more consequential as worksite enforcement has intensified. In March 2026, ICE reclassified more than ten categories of previously technical I-9 errors as substantive violations and eliminated the ten-day good-faith cure window, with substantive-violation penalties now running from $288 to $2,861 per form.⁶ Current ICE guidance warns that uncorrected I-9 errors surfaced in an internal audit can be treated as evidence of bad faith or constructive knowledge if the agency later finds them, the same standard the Ninth Circuit narrowed in Collins Foods.⁷

1
Quimbee. Collins Foods International Inc. v. INS
2
U.S. Department of Justice. Collins Foods International Inc., OCAHO Case No. 89100084, Decision and Order
3
U.S. Department of Justice. Collins Foods International Inc., OCAHO Case No. 89100084, Affirmation of Decision and Order
4
American Civil Liberties Union. AFL-CIO v. Chertoff Motion for Preliminary Injunction
5
CyrusMehta.com. Resumption of Social Security No-Match Letters and Constructive Knowledge
6
Office of the Law Revision Counsel. 8 U.S.C. § 1324a
7
USCIS. Penalties for Prohibited Practices