On March 11, 2022, Congress passed the “EB-5 Reform and Integrity Act” as part of the Omnibus spending bill. See blog post here. On April 11, 2022, USCIS posted an interpretation of the legislation that would nullify all 600-plus designated regional centers and require all entities to be re-designated in order to be authorized to file petitions under the new law pursuant to provisions effective May 14, 2022. This interpretation was challenged in the U.S. District Court for the Northern District of California by the EB-5 Investment Coalition (EB5IC) through one of its members. Greenberg Traurig, as counsel for the plaintiff, argued strongly that USCIS’ interpretation ran counter to the plain language of the EB-5 Reform and Integrity Act (RIA) and violated the Administrative Procedure Act because USCIS failed to properly engage in reasoned decision-making as required by law. Today, the Court agreed and enjoined USCIS from treating as deauthorized previously designated regional centers and declared they must be permitted to operate within the regime created by the RIA. As the Court stated, “[t]his includes processing new I‑526 petitions from immigrants investing through previously authorized regional centers…just as the agency would do for a newly approved regional center.” As a result of this ruling, all previously designated regional centers retain their existing designation and can continue to operate.

In remarks, the Court found a strong likelihood of success on the merits by the Plaintiff. The Court concluded that “USCIS was almost certainly wrong” when it deauthorized all existing regional centers. After a thorough analysis the Court found the RIA to be “silent or ambiguous” on the question of whether Congress intended to deauthorized existing regional centers. If Congress had intended to take such a drastic step, it should or could have done so more explicitly and transparently. An absence of such explicit instruction coupled with various “hints” in the RIA that Congress intended for existing regional centers to remain designated was sufficient for the Court to find that the RIA was ambiguous. Thus, the Court concluded that USCIS’ decision rested on “an erroneous view of the law,” the Plaintiff is “exceedingly likely (if not certain)” to prevail on the merits.

While this is a victory for the Plaintiff, it remains to be seen how USCIS will act or whether USCIS will appear and seek a stay of this ruling and/or decide to embark on new rulemaking. USCIS is still permitted to engage in “reasoned decision-making consistent with the Administrative Procedure Act” about how regional centers should be treated given certain ambiguities in the RIA. As the Court noted, it is possible that USCIS, after engaging in the required reasoned decision‑making process, could conclude that new regional center applications are required of existing regional centers. Alternatively, it is possible USCIS could simply allow regional centers to operate while applications for a renewed designation are pending. These are only two possible outcomes of many, and all eyes will be on USCIS’ next move. Subscribe to our blog for further updates.