The US District Court for the Northern District of California issued a decision today in Behring Regional Center’s lawsuit seeking a preliminary injunction to stop United States Citizenship and Immigration Services (USCIS) from deauthorizing previously designated EB-5 Regional Centers.
“We are relieved to have the courts favor in issuing the preliminary injunction stopping USCIS from cancelling EB-5 regional centers,” said Colin Behring, CEO of the Behring Companies. “The ruling is strong and clear in its language that EB-5 is to continue immediately. Our investors asked us to do everything we could to fix this and our team at Behring and the EB-5 Investment Coalition delivered. This was our third lawsuit with USCIS, and with this ruling we are heading toward victory on the merits on all of them.”
EB-5 regional centers can continue working immediately, verdict said
Congress enacted the Reform and Integrity Act in March 2022, reauthorizing and revamping the system that oversees regional centers. The suit alleged that the USCIS wrongly interpreted the Act as deauthorizing the more than 600 previously authorized regional centers and putting an end to their revenue streams. The lawsuit said the agency’s guidance violates the Administrative Procedure Act (APA) and misinterprets the new EB-5 law enacted by Congress.
The court found that the USCIS “violated the APA” and added that it “was almost certainly wrong in assuming that the Integrity Act affirmatively deauthorized existing regional centers, so the agency was almost certainly wrong to announce that the centers are no longer authorized.”
The court has ordered USCIS to not require previously designated regional centers to go through steps to be reauthorized. It also required that the USCIS process new I‐526 petitions from immigrant investors investing through previously authorized regional centers. The ruling is a big win for EB-5 industry and investor stakeholders.
“We are so pleased that the court recognized the true congressional intent. Existing regional centers can now operate and accept new investors,” says Laura Foote Reiff, a partner at Greenberg Traurig LLP, which represents Behring in the lawsuit over the USCIS guidance. “This is a program that should be embraced by the agency and the country as it brings much-needed revenue into the US and helps with job creation.”
Behring regional center wins case against USCIS and clears way for EB-5 processing
Before issuing his ruling, Judge Vince Chhabria concluded with an analogy, likening Behring and other regional centers as members of a club created by Congress who gave the USCIS the responsibility of admitting members, creating club rules, and club privileges. But with the Integrity Act, Congress made many changes to the club’s structure but failed to specify whether existing members could, like before, remain members. Then the agency removed all existing members, based on what they thought Congress wanted.
“The agency was wrong to act based on that assumption,” Chhabria said. “But it does mean that, for now, the agency must continue treating the existing members as members of the newly revamped club. The motion for a preliminary injunction is granted.”
The lawsuit follows the firm’s 2021 legal victory, when a federal judge vacated the EB-5 Modernization Rule that was implemented unlawfully by the Department of Homeland Security in 2019.
“The nationwide injunction decision is huge for the EB-5 industry and means investors can file immediately especially for the new fast track categorizes created by the Reform and Integrity Act signed by President Biden on March 15, 2022,” says Bernard Wolfsdorf an LA based immigration lawyer. “There will be a frenzy of filings with all the pent-up demand.”