Spencer Enterprises, Inc. v. U.S.

• Citation: 345 F.3d 683
• Decision Date: 17 September 2003
• Docket Number: No. 01-16391.,01-16391.
• Parties: Spencer Enterprises, Inc.; Li-Hui Chang, Plaintiffs-Appellants, and Chung-Chuan Sun; Jerry Chien-Hua Raan; Ping Fu Lu, Plaintiffs, v. UNITED STATES of America; UNITED STATES Department of Justice; Immigration and Naturalization Service, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

345 F.3d 683

Spencer Enterprises, Inc.; Li-Hui Chang, Plaintiffs-Appellants, and Chung-Chuan Sun; Jerry Chien-Hua Raan; Ping Fu Lu, Plaintiffs, v. UNITED STATES of America; UNITED STATES Department of Justice; Immigration and Naturalization Service, Defendants-Appellees.

No. 01-16391.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 9, 2002 San Francisco, California.

Filed September 17, 2003.

COPYRIGHT MATERIAL OMITTED

H. Ronald Klasko, Dechert, Philadelphia, Pennsylvania, for the plaintiffs-appellants.

Nelda C. Reyna, United States Department of Justice, Washington, D.C., for the defendants-appellees.

Appeal from the United States District Court for the Eastern District of California; Oliver W. Wanger, District Judge, Presiding. D.C. No. CV-99-06117 OWW/LJO.

Before: Dorothy W. Nelson, Robert R. Beezer and Kim McLane Wardlaw, Circuit Judges.

Opinion by D.W. NELSON; Dissent by Judge BREEZER.

OPINION

D.W. NELSON, Senior Circuit Judge.

Appellants Spencer Enterprises, Inc. ("Spencer"), and Li-Hui Chang brought suit in the district court to challenge the denial of an immigrant investor visa to Chang by the Immigration and Naturalization Service ("INS").¹ In applying for the visa, Chang had submitted a business plan developed in cooperation with Spencer, but INS determined that the application lacked credibility and consequently denied the visa petition. We write primarily to confirm the unchallenged assumption of the parties that the district court had jurisdiction in this matter.

I. FACTUAL AND PROCEDURAL BACKGROUND

The immigrant investor program, or EB-5 program, established by the Immigration and Nationality Act ("INA"), allows aliens to receive permanent resident status upon the investment of a specified amount of capital and the creation of at least ten full-time jobs in the United States. 8 U.S.C. § 1153(b)(5). Ordinarily, the alien must invest $1,000,000; however, if the investment is made in a "targeted employment area" with an unemployment rate of 1.5 times the national average, only $500,000 need be invested. Id.; see also 8 C.F.R. § 204.6(f)(2).

In applying for an EB-5 visa, an alien entrepreneur must submit an I-526 petition and supporting documentation demonstrating that the required capital has been committed; that the investment is made from the alien's own lawfully acquired funds; and, if applicable, that the investment is being made in a targeted employment area with a high unemployment rate. If the ten full-time jobs have not been created at the time of the petition, a comprehensive business plan demonstrating the need for such jobs within two years must also be submitted. 8 C.F.R. § 204.6(j).

In 1998, in response to concerns about approvals of questionable investment plans, INS published four "precedent decisions" governing the handling of I-526 petitions. These decisions were designed to govern all future petitions, and clarified several requirements of the EB-5 program.

Chang is a citizen of Taiwan who seeks immigrant investor status. She incorporated FMA Enterprises, Inc., in California in December 1997. Her business plan involves an agreement with Spencer, a Fresno real estate developer. Spencer has used similar plans with seventeen previous aliens whose I-526 petitions were approved. According to the plan, FMA would place $500,000 in an escrow account, to be used to buy several lots² once Chang's I-526 petition was approved. The remainder of the money would be paid to Spencer for a "construction trust account"; FMA would then hire employees to build houses on these lots, although the employees would be managed by Spencer, which has been appointed general manager of FMA.

On May 4, 1998, Chang filed her first I 526 petition. Chang's petition was placed on hold because INS determined that it involved "elements that [were] under review" and that would be addressed in the precedent decisions. In September 1998, after the issuance of the precedent decisions, Chang filed a second I-526 petition. On October 15, 1998, INS sent Chang a request for additional information, noting that her business plan was not comprehensive, detailed, and credible, as required by the precedent decision In re Ho, 22 I. & N. Dec. 206, 1998 BIA LEXIS 29 at *17-18, 1998 WL 483979 (B.I.A.1998), and that there was insufficient evidence documenting the source of Chang's income. Chang submitted a new business plan and a variety of other documents in response.

Chang's petition was denied on January 27, 1999, and she appealed to the Administrative Appeals Office ("AAO"). The AAO denied her appeal on April 26, 1999, finding that Chang's credibility, and that of her business plan, was questionable; the source of the money deposited in the escrow account was unproven; Chang had failed to show that her investment would create permanent, full-time, continuous employment for ten employees within two years; Chang had failed to prove that Fresno was a targeted employment area and thus had not invested enough capital; and even if Chang was only required to invest $500,000, she had not placed this amount of money at risk.

After her motion to reconsider was denied, Chang filed suit in district court to challenge INS's action. On cross-motions for summary judgment, the district court held, in a decision dated March 27, 2001, that the AAO's decision was not arbitrary and capricious, and was supported by substantial evidence. The district court found that any one of the AAO's stated reasons for the denial of Chang's petition would be sufficient, and found that each one was supported by substantial evidence, based on a permissible interpretation of the law and regulations. The appellants filed an appeal with this Court.

Although not raised by the parties, the issue of jurisdiction came to this Court's attention in the course of considering the merits of the appeal. At oral argument, both parties agreed that this Court has jurisdiction over this matter. On January 10, 2003, this Court issued an order directing the parties to file supplemental briefs addressing the applicability of 8 U.S.C. § 1252(a)(2)(B)(ii), which prohibits judicial review of certain INS decisions. In their supplemental briefs, both parties again agreed that this Court has jurisdiction over this matter.

II. JURISDICTION

This Court has the duty to consider subject matter jurisdiction sua sponte in every case, whether the issue is raised by the parties or not. "[E]very federal appellate court has a special obligation to `satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review,' even though the parties are prepared to concede it." Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986) (quoting Mitchell v. Maurer, 293 U.S. 237, 244, 55 S.Ct. 162, 79 L.Ed. 338 (1934)); see also Fed.R.Civ.P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action."). This Court's own jurisdiction is created by 28 U.S.C. § 1291, the general federal appellate jurisdiction statute.

The district court's jurisdiction is a more complex question. We first note that agency actions are generally reviewable under federal question jurisdiction, pursuant to 28 U.S.C. § 1331. See Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977) (holding that, except where statutes preclude review, 28 U.S.C. § 1331 "confer[s] jurisdiction on federal courts to review agency action"). Even if no statute specifically provides that an agency's decisions are subject to judicial review, the Supreme Court

customarily refuse[s] to treat such silence "as a denial of authority to [an] aggrieved person to seek appropriate relief in the federal courts," Stark v. Wickard, 321 U.S. 288, 309, 64 S.Ct. 559, 88 L.Ed. 733 (1944), and this custom has been "reinforced by the enactment of the Administrative Procedure Act, which embodies the basic presumption of judicial review to one `suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute.'" Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967) (quoting 5 U.S.C. § 702).

Reno v. Catholic Soc. Serv., Inc., 509 U.S. 43, 56-57, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993) (second alteration in original) (parallel citations omitted). The question before us, then, is whether any statute has deprived the federal courts of jurisdiction to review the particular agency action at issue here: INS's denial of an immigrant investor visa petition.

A. The Administrative Procedure Act

The Administrative Procedure Act ("APA"), which generally provides the standards of review for agency action, also withdraws jurisdiction to review agency decisions that are "committed to agency discretion by law." 5 U.S.C. § 701(a)(2). The Supreme Court has held that this provision applies only where "the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion," Heckler v. Chaney, 470 U.S. 821, 830, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985), and has emphasized that such a situation only occurs in "rare instances." Id. (internal quotation marks omitted). Even where statutory language grants an agency "unfettered discretion," its decision may nonetheless be reviewed if regulations or agency practice provide a "`meaningful standard' by which this court may review its exercise of discretion." Socop-Gonzalez v. INS, 208 F.3d 838, 844 (9th Cir.2000).

In this case, we need not look to regulations or agency practice because the statutory framework provides meaningful standards by which to review INS's action. Although 8 U.S.C. § 1154(b) instructs that the Attorney General should "determine" whether the facts alleged by the visa petitioner are true and whether the petitioner is eligible...