Li Zhang v. United States Citizenship & Immigration Servs.
| Decision Date | 17 February 2023 |
| Docket Number | 15-995 (EGS) |
| Parties | HUASHAN ZHANG, et al., Plaintiffs, v. UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, et al., Defendants. |
| Court | U.S. District Court — District of Columbia |
Plaintiffs Huashan Zhang (“Mr. Zhang”) and Mayasuki Hagiwara (“Mr. Hagiwara”) (collectively “Plaintiffs”) brought this action on behalf of themselves and a class of EB-5 investors following an announcement from the United States Citizenship and Immigration Services (“USCIS”) that cash acquired from a loan would be treated as “indebtedness” and no longer be considered “cash” for purposes of their visa petitions. See Huashan Zhang v. U.S Citizenship & Immigr. Servs., 344 F.Supp.3d 32, 41-42 (D.D.C. 2018), aff'd, 978 F.3d 1314 (D.C. Cir. 2020).
Now pending before the Court is Plaintiffs' Motion for Attorney's Fees and Expenses. See Pls.' Mot. Atty's Fees & Expenses Under Equal Access to Justice Act ( ), ECF No. 51.
Plaintiffs seek fees for 1,017.85 hours, calculated using three different hourly rates: (1) $429,986.00, applying the regular hourly rates of Plaintiffs' counsel; (2) $452,411.00, applying the Laffey Matrix hourly rates; or (3) $198,645.03, applying their calculation of the relevant statutory hourly rate as adjusted for cost-of-living increases. See id. at 16-22.[1]Plaintiffs also seek reimbursement of $3,802.00 in costs. See Ex. B, ECF No. 51-2. Defendants USCIS; Alejandro Mayorkas,[2]in his official capacity as Secretary of the U.S. Department of Homeland Security; Ur Jaddou,[3]in his official capacity as Director of USCIS; and Alissa Emmel,[4]in her official capacity as Chief of the Immigrant Investor Program as USCIS (collectively, “Defendants”) oppose this request. See Defs.' Resp. Pls.' Mot. Atty's Fees & Expenses ( ), ECF No. 54.
Upon careful consideration of Plaintiffs' motion, the opposition, and reply thereto, the applicable law, and the entire record herein, the Court hereby DENIES IN PART without prejudice Plaintiffs' Motion for Attorney's Fees, ECF No. 51, as to whether Mr. Hagiwara meets the EAJA's net worth requirement; and HOLDS IN ABEYANCE IN PART the Motion as to the remaining issues.
This litigation concerns the EB-5 visa program, through which immigrant investors who invest a minimum amount of capital in a new commercial enterprise are able to pursue lawful permanent residency. See Zhang, 344 F.Supp.3d at 408 (citing U.S.C. § 1153(b)(5)(A)). USCIS regulations historically defined capital to include, inter alia, lawfully-acquired cash and indebtedness secured by the investor's personally-owned assets. See 8 C.F.R. § 204.6(e). But in 2015, USCIS announced that it would treat loan proceeds as indebtedness, not as cash, and that loan proceeds would qualify as capital only if the loan was secured by personally-owned assets. See Zhang, 344 F.Supp.3d at 41.
Because of this change in interpretation, USCIS denied Mr. Zhang and Mr. Hagiwara's EB-5 visa petitions, along with the petitions of other similarly situated EB-5 investors. Id. at 42 43. Plaintiffs filed this lawsuit on June 23, 2015 to obtain relief. See Compl., ECF No. 1. On behalf of a class of similarly situated EB-5 petitioners, Plaintiffs sought invalidation of USCIS's loan proceeds rule. See generally id.
On November 30, 2018, the Court issued a memorandum opinion and order holding that cash loan proceeds are unambiguously “cash” under 8 C.F.R. § 204.6(e); that USCIS's position contravened the regulation's plain meaning; and that USCIS violated the Administrative Procedure Act, 5 U.S.C. § 706, in issuing the rule without notice and comment. See Zhang, 344 F.Supp.3d at 46-56. The Court also certified the plaintiff class and remanded all EB-5 visa petitions that the agency denied based on its invalid interpretation of loan proceeds. See id. at 60-66. The D.C. Circuit affirmed this Court's decision on October 27, 2020. See Zhang, 978 F.3d at 1316.
Plaintiffs filed this Motion for Attorney's Fees and Expenses on April 23, 2021. See Pls.' Mot., ECF No. 51. On June 7, 2021, Defendants filed their brief in opposition to Plaintiffs' motion, see Defs.' Opp'n, ECF No. 54; and Plaintiffs replied on July 20, 2021, see Pls.' Reply in Supp. Mot. Atty's Fees & Expenses Under Equal Access to Justice Act ( ), ECF No. 57. The motion is now ripe and ready for adjudication.
Under the so-called “American Rule,” each party is responsible for its own attorney's fees and costs unless a statute expressly authorizes some other form of recovery. See Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 245 (1975). The Equal Access to Justice Act (“EAJA”), 28 U.S.C. § 2412, provides that authorization for “prevailing parties” to recover their attorney's fees and costs in actions against the United States “unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” 28 U.S.C. § 2412(d)(1)(A).
The party seeking an EAJA fee award must submit an application showing “(1) that it is a prevailing party, (2) its statutory eligibility to receive an award, and (3) the amount sought, including an itemized statement breaking down that claim for reimbursement.” Wash. All. of Tech. Workers v. U.S. Dep't of Homeland Sec., 202 F.Supp.3d 20, 24 (D.D.C. 2016) (citing 28 U.S.C. § 412(d)(1)(B)), aff'd, 857 F.3d 907 (D.C. Cir. 2017). The moving party also must “allege that the position of the United States was not substantially justified.” 28 U.S.C. § 412(d)(1)(B). The United States then bears “[t]he burden of establishing ‘that [its] position . . . was substantially justified.'” Scarborough v. Principi, 541 U.S. 401, 414 (2004) (quoting 28 U.S.C. § 2412(d)(1)(A)).
There is no dispute that Plaintiffs are the prevailing party in this litigation. See Zhang, 978 F.3d at 1316; see generally Defs.' Opp'n, ECF No. 54. The parties disagree as to whether Plaintiffs have satisfied the statutory threshold requirements to recover their attorney's fees and costs under the EAJA. See Defs.' Opp'n, ECF No. 54 at 12-16; Pls.' Reply, ECF No. 57 at 8-12. For the reasons that follow, the Court DENIES IN PART without prejudice Plaintiffs' Motion for Attorney's Fees and orders the parties to submit supplemental briefing regarding Mr. Hagiwara's net worth at the time this case was filed.
To receive an EAJA fee award, a party must demonstrate that his “net worth did not exceed $2,000,000 at the time the civil action was filed.” 28 U.S.C. § 2412(d)(2)(B). The EAJA fee applicant bears the burden of establishing his financial eligibility, see Ivy Sports Med., LLC v. Burwell, 174 F.Supp.3d 130, 138 (D.D.C. 2016); by a preponderance of the evidence, Sosebee v. Astrue, 494 F.3d 583, 589 (7th Cir. 2007) (citing Herman & MacLean v. Huddleston, 459 U.S. 375, 390 (1983)).
In support of their motion for attorney's fees, Plaintiffs submit an affidavit from Mr. Hagiwara-the sole fee applicant-in which he avers that his “individual net worth does not, nor has it ever, exceeded the amount of $2,000,000 U.S. dollars.” Ex. E, ECF No. 51-5 at 2.
Plaintiffs do not submit any further information about Mr. Hagiwara's finances in their briefing. See Pls.' Mot., ECF No. 51 at 16. Defendants challenge this “bare assertion” as insufficient to satisfy the EAJA financial-eligibility requirement. Defs.' Opp'n, ECF No. 54 at 12-16. They argue that Mr. Hagiwara should have submitted documentation about his assets and liabilities to enable the Court to assess his net worth. See id. at 12-15. They further contend that the record contains information suggesting that Mr. Hagiwara's net worth may exceed the EAJA threshold. See id. at 12-15.
The Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) has not specified what level of supporting evidence is necessary to establish a party's net worth under the EAJA. Cf., e.g., Haselwander v. McHugh, 797 F.3d 1, 2 (D.C. Cir. 2015) (per curiam). Courts may consider statements by the party seeking to recover attorney's fees, see id. at 2 (); as well as other information in the record, see Hirschey v. FERC, 760 F.2d 305, 309 n.19 (D.C. Cir. 1985) (). Under certain circumstances, an affidavit alone may be sufficient documentation. See Cobell v. Norton, 407 F.Supp.2d 140, 148 (D.D.C. 2005). For instance, in Cobell, the named plaintiffs in the class action submitted affidavits swearing that their net worth fell within the statutory range, and the district court “f[ound] these submissions amply satisf[ied] the requirements of the statute for the entire class.” Id. The Court agrees that affidavits, particularly those from parties and their attorneys, are “an efficient way of presenting evidence” as to a party's net worth. Sosebee, 494 F.3d at 588.
More often, though, courts have relied on additional evidence to assess a plaintiff's net worth. The D.C. Circuit in Haselwander considered the following evidence of the plaintiff's qualifying net worth: a letter from the plaintiff to a senator stating that he and his wife “are just mid-level State of Indiana employees” who “cannot afford to pay for the current very high costs of college educations” and an “uncontested statement” from the plaintiff's attorney. Haselwander, 797 F.3d at 2 (citation and internal quotation marks omitted). The D.C. Circuit did not hold or suggest that such statements would be sufficient in all EAJA cases. Rather, the Haselwander court clearly...
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