Lawsuit Challenging Investment Visa Regulations Could Succeed
In light of a recent hearing, it seems that EB-5 regulations might be revoked because of the illicit appointment of Department of Homeland Security (DHS) Secretaries by the Trump Administration. The first lawsuit filed against the EB-5 regulations was in November 2019. This is now the second lawsuit to challenge these regulations. Although both lawsuits have challenged the same regulations, both have requested on a different basis. The first one won a preliminary injunction request related to the economic harm of the regulations while the subsequent lawsuit questions the legality of the appointed DHS secretaries.
Sanctioned on Nov. 21, 2019, the concerned regulations had expanded venture amounts from $500,000 to $900,000 for investments in a targeted employment area (TEA). This has limited the capacity for investments to be considered inside a TEA and created other modifications in the EB-5 visa category.
The U.S. Magistrate Judge inspecting the lawsuit concentrated on the legitimacy of the authorization of the DHS secretaries who are involved in promoting the regulations. These EB-5 regulations were proposed by acting DHS Secretary Kevin McAleenan, and the final rule was promulgated by Acting DHS Secretary Chad Wolf. During the hearing, several federal courts and the Government Accountability Office (GAO) have discovered that DHS secretaries were appointed illegally. Due to this, the regulations are nulled because both McAleenan and Wolf don’t have the proper authority to promulgate them.
As indicated by the appointed judge, remedies on winding down the regulations agreed to by both the prosecutors and the defendants are needed if the judge rules in favor of the prosecutors challenging the regulations. As per this request, both parties must brief remedies in the case that the regulations were deemed invalid. An additional briefing has been ordered by the magistrate judge, and a hearing date was set on May 6. The judge, however, may decide a final ruling based on the briefs alone.
If the EB-5 regulations are overruled, the I-526 petitions registered by EB-5 visa applicants after Nov. 21, 2019, have no negative effect because the new regulations were comprehensive of the old ones. Overall, the I-526 petitions that certify under the new regulations are still qualified based on the old regulations.
Original publication date: March 29, 2021
Read more:
Here’s where we stand with EB-5 after June 30th 2021
Investor Visa Program Renewal Bill Presented in the US Congress