Behring Reg'l Ctr. v. Mayorkas

• Decision Date: 24 June 2022
• Docket Number: 22-cv-02487-VC
• Parties: BEHRING REGIONAL CENTER LLC, Plaintiff, v. ALEJANDRO MAYORKAS, et al., Defendants.
• Court: U.S. District Court — Northern District of California

BEHRING REGIONAL CENTER LLC, Plaintiff,
v.
ALEJANDRO MAYORKAS, et al., Defendants.

No. 22-cv-02487-VC

United States District Court, N.D. California

June 24, 2022

ORDER GRANTING PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION RE: DKT. NO. 8

VINCE CHHABRIA UNITED STATES DISTRICT JUDGE

In March 2022, Congress enacted the Reform and Integrity Act, which reauthorized and revamped the system governing so-called regional centers-entities that pool investments from foreign visa applicants to promote job growth in the United States. The United States Citizenship and Immigration Services (USCIS) interpreted the Act as unequivocally deauthorizing the 600-plus previously authorized regional centers. The agency thus announced that the existing regional centers were deauthorized, effectively cutting off their revenue streams. That was almost certainly legal error, because it is unclear whether the Integrity Act deauthorized existing regional centers or allowed them to continue operating under Congress's new regime. The agency was therefore required to weigh competing interests before deciding whether the existing regional centers should be deauthorized. And the agency's treatment of the previously authorized regional centers is harming them irreparably, in a manner that is contrary to the public interest. Therefore, the agency is enjoined from treating the existing regional centers as deauthorized while this litigation is pending (or until the agency engages in a reasoned decision-making process regarding how to treat these centers under the Integrity Act).

1

A

The EB-5 visa program provides a path to permanent residency for immigrants who invest a certain amount of money in commercial enterprises within the United States. 8 U.S.C. § 1153(b)(5). Originally, to qualify for the program, visa applicants were required to demonstrate that their investments led directly to the creation of a specified number of jobs in this country. In 1992, Congress established a “pilot program” designed to give applicants more flexibility in how they could invest. See Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act of 1993, Pub. L. 102-395, § 610(a), 106 Stat. 1828, 1874 (1992). The pilot program created a role for “regional centers” in the investment process. Specifically, the legislation allowed applicants to invest in regional centers, and allowed those centers to pool investments and deploy capital for job creation. Under this system, although the EB-5 visa applicant creates jobs only indirectly, the government still credits the applicant for their investment. See U.S. Securities & Exchange Commission v. Feng, 935 F.3d 721, 726 (9th Cir. 2019).

Typically, when Congress creates a new program, it does so in an “authorization bill.” But it created the regional center pilot program in an annual spending bill-that is, an “appropriations bill.” Section 610(a) of the 1992 Appropriations Act provided that the Secretary of State “shall set aside visas for a pilot program” that “shall involve a regional center in the United States for the promotion of economic growth.” 106 Stat. at 1874. Section 610(b) of the bill then specified the number of visas that must be set aside. Id. Section 610(b) also included a sunset date of October 1, 1997, five years after the bill's enactment.

As discussed more fully in Section II, there has apparently been confusion about whether the sunset date applies only to the specific subsection in which it appears-that is, section 610(b)-or to the entire program created by the appropriations bill. For now, suffice to say that Congress has frequently “reauthorized” the program over the past thirty years by changing the sunset date. Sometimes the reauthorization has occurred after the sunset date already passed, but Congress has consistently continued the program. See Hulli v. Mayorkas, 549 F.Supp.3d 95, 98

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(D.D.C. 2021). The regional center program thus became a “pilot” in name only, and more than 600 regional centers operated throughout the country as of 2021.

Recently, things changed. Over the years, concerns grew that the regional center program was susceptible to fraud and abuse. See Mirror Lake Village, LLC v. Wolf, 971 F.3d 373, 378 (D.C. Cir. 2020) (Henderson, J., concurring). The agency charged with overseeing the program, USCIS, faced difficulty confirming that immigrant investors were using funds from lawful sources. Worries mounted that regional centers might be taking advantage of foreign investors. And the program suffered from the “appearance of favoritism and special access.” Holly Straut-Eppsteiner, Congressional Research Service, R44475, EB-5 Immigrant Investor Visa 20 (2021). Thus, when the appropriations language lapsed most recently-in June 2021-Members of Congress set out to reform the program. Their efforts culminated in the Reform and Integrity Act of 2022, which reauthorized the regional center program but reformed it substantially, adding dozens of pages of new statutory text and incorporating a series of reforms designed to strengthen oversight and combat fraud. EB-5 Reform and Integrity Act of 2022, 8 U.S.C. § 1153. The Integrity Act also moved the pertinent statutory language to new location-specifically, Title 8, Section 1153 of the United States Code (which is titled “Allocation of immigrant visas”). This new language remains in effect until September 2027, at which point reauthorization would be required once again. Reform and Integrity Act § 103(b)(1).^[1]

The Integrity Act took effect on March 15, 2022. Thus, for a roughly 9-month period- from the time the old language from the 1992 appropriations bill lapsed in June 2021 until the effective date of the new legislation-the 600-plus existing regional centers operated in a grey zone. The agency continued to treat those centers as authorized pursuant to the pilot program's statutory authority and continued to process applications submitted by immigrants who had invested through those centers prior to the sunset date. But the agency refused to process new petitions submitted by immigrants investing through regional centers, viewing the sunset date as

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a “pencils down” directive from Congress. Dkt. No. 58 at 26, 59. Apparently, this is how the agency treated the regional centers in prior periods where the program expired without a reauthorization enacted by Congress. Id. at 23.

Following the Integrity Act's enactment, USCIS posted a notice on its website announcing a “New EB-5 Regional Center Program.” See EB-5 Immigrant Investor Program, U.S. Citizenship and Immigration Services, https://www.uscis.gov/working-in-the-united-states/permanent-workers/eb-5-immigrant-investor-program. The agency asserted that Congress “repealed” the original program by passing the Integrity Act. Id. It then stated: “Therefore, regional centers previously designated under section 610”-that is, the section of the 1992 appropriations bill that first created the regional center...