Question: Foreign national is in H-1B status with I-94 expiring in June 2012. Spouse has indepedant L-1A status. I-129 H-1B extension pending with USCIS. Foreign national is asking RWG - in case H-1B extension is rejected, can he change status to L-2 (dependent of L-1A) without having to leave the United States?
RWG Answer: Possibly.
When reviewing your I-539 change of status (from H-1B to L-2) USCIS will want to know if you were IN VALID H-1B STATUS at the time you filed the I-539 application.
In order to be in valid H-1B status, you must be working for the employer pursuant to an unexpired I-94. If not, USCIS can take the position that at the time of filing the request to change status, you were not in status, and deny the request (to change status in the US).
Basically, USCIS is saying to CHANGE status, you have to BE IN status first.
In your scenario let's assume you are in the US, your I-94 expires, then your H-1B is rejected. You then file the I-539 (asking for a change from H-1B to L-2). This request is unlikely to be granted because you were not maintaining valid H-1B status when you filed the I-539. Note under this scenario you would be acruing unlawful presence.
Alternatively, let's assume your H-1B is rejected, and then you file the I-539 before your H-1B I-94 expires and while you are still working for the employer. This should BE approved, since despite getting the extension rejected, you were maintaining valid status at the time of filing the I-539.
Note that premium processing might be useful if you want a fast answer on the H-1B extension; and you should - if you haven't already done so - inform yourself with respect to getting the L-2 by applying for a visa abroad and entering pursuant to that visa.
I realize you prefer to avoid leaving the US, but it might become a reality; and just in case you don't already know, L-2 USCIS approval is NOT a pre-requisite to applying for an L-2 visa stamp at a US Consulate abroad.