I typically counsel clients to skip the AAO and go directly to federal court if they are dealing with a USCIS denial.  That is because federal court APA cases are fought on the administrative record (no new evidence is allowed at that stage). So if USCIS made a boneheaded mistake, I advise clients to lock them in to that mistake. By challenging USCIS’s denial in federal court straightaway, you force USCIS to defend that mistake based on the record USCIS had when it issued the mistaken decision. Filing in federal court prevents USCIS from modifying the record and potentially making a more defensible denial at the AAO stage.

There are exceptions to this advice. The most prominent one is if you have substantial new evidence that can support your case. An AAO appeal is an opportunity to add that evidence into the administrative record, which gives a federal judge the ability to consider it if federal litigation becomes necessary.