Chang v. U.S.
| Decision Date | 29 April 2003 |
| Docket Number | No. 01-56379.,No. 01-56266.,01-56266.,01-56379. |
| Citation | 327 F.3d 911 |
| Parties | Wen-Wan CHANG; Tsung-Ming Chang; Chiao-Ying Chang; Yi Yuan Chiang; Hsien-Ming Hsieh; Shu-Chuan Hsieh; Pei-Chen Hsieh; Sung Duck Kong; Hye Ra Kong; Hyun Jung Kong; Min Suk Kong; Yei-Chien Lai; Yu Kuei Lai; Yen Chih Lai; Chen Ju Lai; Yoon Sik Lee; Jong Hee Lee; Eung Jun Lee; Sang Eun Lee; Eung Sang Lee; Cheng-Hsiung She; Hui Wen She; Tzu Ming She; Alabama Almark, LP; Alabama Bailey LP; Alabama Coosa LP; Alabama Dallas LP; Alabama Denim LP; Alabama Millry LP; Alabama Pro Sports LP; Alabama Rive Run LP; C & W Hotel LP; Delaware Milford LP; Georgia Almark LP; Louisiana Lasevilla LP; Mississippi Bass LP; Mississippi Magee LP; Mississippi MCT LP; Mississippi Neely LP, Maryland Limited Partnerships; Mississippi Tees LP, a Mississippi Limited Partnership; National Steak Restaurants LP; North Carolina K-Barb LP; North Carolina Russell-Harvelle Hosiery LP; Pennsylvania Loungewear LP; Recap Fund I LP; Recap Fund V LP; RPC Fund I LP; South Carolina Manufacturing LP; Tennessee Lafayette LP; WTC Fund I LP; United States Export Fund I LP, Maryland Limited Partnerships, Plaintiffs-Appellants, v. UNITED STATES of America, Defendant-Appellee. Wen-Wan Chang; Tsung-Ming Chang; Chiao-Ying Chang; Yi Yuan Chiang; Hsien-Ming Hsieh; Shu-Chuan Hsieh; Pei-Chen Hsieh; Sung Duck Kong; Hye Ra Kong; Hyun Jung Kong; Min Suk Kong; Yei-Chien Lai; Yu Kuei Lai; Yen Chih Lai; Chen Ju Lai; Yoon Sik Lee; Jong Hee Lee; Eung Jun Lee; Sang Eun Lee; Eung Sang Lee; Cheng-Hsiung She; Hui Wen She; Tzu Ming She; Alabama Almark, LP; Alabama Bailey LP; Alabama Coosa LP; Alabama Dallas LP; Alabama Denim LP; Alabama Millry LP; Alabama Pro Sports LP; Alabama Rive Run LP; C & W Hotel LP; Delaware Milford LP; Georgia Almark LP; Louisiana Lasevilla LP; Mississippi Bass LP; Mississippi Magee LP; Mississippi MCT LP; Mississippi Neely LP, Maryland Limited Partnerships; Mississippi Tees LP, a Mississippi Limited Partnership; National Steak Restaurants LP; North Carolina K-Barb LP; North Carolina Russell-Harvelle Hosiery LP; Pennsylvania Loungewear LP; Recap Fund I LP; Recap Fund V L; RPC Fund I LP; South Carolina Manufacturing LP; Tennessee Lafayette LP; WTC Fund I LP; United States Export Fund I LP, Maryland Limited Partnerships, Plaintiffs-Appellees, v. United States of America, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Ira J. Kurzban and Matthew Carlson, Kurzban, Kurzban, Weinger & Tetzili, Miami, FL and Marc Van Der Hout, Van Der Hout & Brigagliano, San Francisco, CA, for the plaintiff-appellant-cross-appellee.
John C. Cunningham, Senior Litigation Counsel, and Heather Phillips, Attorney, Office of Immigration Litigation, Civil Division, U.S. Department of Justice, Washington, D.C., for the defendant-appellee-cross-appellant.
Appeal from the United States District Court for the Central District of California; George H. King, District Judge, Presiding. D.C. No. CV-99-10518-GHK.
Before: B. FLETCHER and HAWKINS, Circuit Judges, and BURY, District Judge.*
Plaintiff-Appellants are seven "Immigrant Investors" who have participated in the "EB-5" program, which grants lawful permanent resident ("LPR") status in the United States to those who make qualifying investments under the Immigrant Investor Law ("IIL"), 8 U.S.C. §§ 1153(b)(5), 1186b; 8 C.F.R. §§ 204.6, 216.6.1 Appellants complain that in 1998, after their investment proposals and business plans had been approved and they and their dependents had moved to the United States, the Immigration and Naturalization Service ("INS") changed the rules of the EB-5 program. Appellants contend that the INS applied these new rules to reject their applications at a stage in the process that called only for confirmation that they had fulfilled their part of the originally approved bargain. The government counters, inter alia, that new amendments to EB-5 in November, 2002 render the instant case moot and establish a new exhaustion requirement for some plaintiffs.
We hold that the recent amendments to EB-5 neither render this case moot nor establish an additional administrative appeal that plaintiffs must exhaust before obtaining judicial review. We hold further that the district court erred in finding that the claims of six Appellants were not ripe for adjudication and, therefore, that the district court should analyze whether a plaintiffs' class should be certified. Finally, we hold that the district court correctly rejected the motion to dismiss the retroactivity claim on the pleadings. It erred, however, in remanding to the INS. Because the analysis involves solely questions of law, we conduct the retroactivity analysis ourselves and conclude that the 1998 changes in the EB-5 rules are impermissibly retroactive as applied to the evaluation of Appellants' petitions to remove the conditions on their permanent residency.
Appellants have applied to become lawful permanent residents ("LPRs") under the EB-5 program, which grants such status to Immigrant Investors who create jobs for United States workers.2 EB-5 requires prospective Immigrant Investors to file "I-526" petitions seeking approval of their submitted investment and business plans. After approval, Immigrant Investors and their dependents may enter the country as conditional LPRs. EB-5 requires the Immigrant Investors to file a second petition, an "I-829," between 21 and 24 months after the first petition. The INS is to approve the I-829 petition, and grant unconditional LPR status, if it finds that the petitioner made no material misrepresentations in the I-526 petition and complied with the EB-5 requirements. 8 C.F.R. §§ 204.6, 216.6.
The INS approved Appellants' initial I-526 petitions between July 1996 and July 1997. Upon approval, Appellants and their families moved to the United States with conditional LPR status. However, Appellants' I-526 petitions contained features that the INS now believes contravene the terms of the IIL program. For example: 1) Appellants were not partners at the inception of the limited partnerships in which they invested, 2) they were guaranteed the right to redeem their full investments after they received permanent residency, 3) they were guaranteed a return on their investments, 4) their promissory notes were insufficient because they were valued at face value and did not adequately reveal the personal assets securing the notes, and 5) they were permitted to make balloon payments to their limited partnerships or to continue making payments on their promissory notes beyond the end of their two-year conditional residency periods.3 At the time the INS approved Appellants' I-526 petitions, these features were not considered by the INS to be disqualifying, but the INS has since declared that by structuring their investments in these ways Appellants had transformed them into loans.
AIS, the private agency that had recruited Appellants and channeled their investments into the limited partnerships, had conferred with the INS to ensure its investment packages were acceptable. It made some changes as a result of its inquiries, and was assured that any further changes in the IIL would involve notice and comment rulemaking and apply prospectively. Ultimately, however, the INS instead established new rules for EB-5 applicants through a set of "precedent decisions" rejecting the appeals of other new applicants' I-526 petitions. The pertinent case for our purposes is Matter of Izummi, 22 I. & N. Dec. 169, Interim Decision (BIA) 3360, 1998 WL 483977 (1998), which held inter alia that Immigrant Investors' I-526 petitions could not be approved if the Immigrant Investors were not partners at the inception of a partnership or if their investment plans featured a redemption agreement or related provisions. Had the criteria announced in these decisions been in effect at the time Appellants filed their I-526 petitions, the petitions would not have been approved.
The precedent decisions were issued subsequent to the INS's approval of Appellants' I-526 petitions. However, the INS applied the new criteria to the Appellants' I-829 petitions. Prior to the district court hearing, it denied Appellant Yi Yuan Chiang's petition, as well as those of other similarly-situated non-plaintiffs, and placed the six other Appellants' petitions on indefinite "administrative hold." The INS argues that, based on the precedent decisions, a review of Appellants' I-829 petitions will not allow it to certify that Appellants have complied with the legal requirements of EB-5.
Appellants brought suit to force consideration of their I-829 petitions based solely on the criteria that were in effect when their I-526 petitions were approved. They argue that the INS should review the I-829 petitions only for whether they made material misrepresentations in their I-526 petitions and whether they executed their proposed plans. Appellants asked the district court (1) to estop the INS from applying its current interpretation of EB-5 to their I-829 petitions because it had approved their I-526 petitions, (2) to rule that the INS did not follow required Administrative Procedure Act notice and comment procedures for changing its rules governing EB-5, and (3) to rule that applying the new interpretations of the EB-5 law and regulations promulgated in the precedent decisions to their I-829 petitions would be impermissibly retroactive. They also sought certification as a class action.
The INS challenged the justiciability of Appellants' claims and moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). The district court dismissed the claims of all petitioners except Chiang as not ripe and dismissed the motion for certification of a plaintiffs' class as moot. It granted the government's 12(c) motion on...
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