Out of Status on H1B per 'last action rule'


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Hello Murthy Team and Forum Members,

I am in trouble and need your guidance here. I am working in USA on H1B since Oct-10 with a valid US Visa stamping that expired on Sept 29th 2012. However, my company filed for H1B extention well ahead that got approved in July-2012. The H1B extension is valid from 09/20/2012 till Sept 2015.

Currently, the dilemma that I have is regarding my recent trip to Bermuda in Aug-12. At POE (to USA) while coming back from Bermuda on 23rd Aug 2012, the IO didn't ask to show the new I-797 as my US Visa was still valid until Sept 29th 2012. However, my lawyer is telling me that

Every entry to the U.S. or formal decision from USCIS "trumps" the previous grants of stay through a concept known as the "last action rule."

So in nut shell, my lawyer is indicating that the entry of August 23, 2012 on my passport post dates the issuance of the approval notice on July 10, 2012 making me out of status starting Sept 29th 2012.

My question is : Is this correct? If yes, what are my options. Can I go to Canada for Visa stamping or I have to go to India for visa stamping considering I am out of status. Also, whether I am accruing Out of Status OR Unlawful Presence?

Please respond ASAP.

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