Does 1-72 v. United States Citizenship & Immigration Services ( 2019 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JOHN DOE, et al.,
Plaintiffs,
v.
Civil Action No. 15-273 (CKK)
UNITED STATES CITIZENSHIP &
IMMIGRATION SERVICES, et al.,
Defendants.
MEMORANDUM OPINION
(October 11, 2019)
Plaintiffs in this lawsuit are foreign individuals seeking conditional permanent residence
in the United States via the EB-5 Immigrant Investor Program. The United States Citizenship &
Immigration Services (“USCIS”) denied Plaintiffs’ visa petitions under that program. Pursuant to
the Administrative Procedure Act (“APA”), Plaintiffs challenge that denial as arbitrary and
capricious, unsupported by substantial evidence, beyond the scope of USCIS’s statutory
authority, in violation of congressional intent, and contrary to their Constitutional rights.
Presently before the Court are Plaintiffs’ [144] Motion for Summary Judgment and USCIS’s
[146] Cross-Motion for Summary Judgment.
Upon consideration of the pleadings, 1 the relevant legal authorities, and the record as a
whole, the Court DENIES Plaintiffs’ Motion and GRANTS USCIS’s Cross-Motion. USCIS
1
The Court’s consideration has focused on the following documents:
• Pls.’ Mot. for Summ. J. and Memo. of Law in Support (“Pls.’ Mot.”), ECF No. 144;
• Defs.’ Cross-Mot. for Summ. J. and Opp’n to Pls.’ Mot. for Summ. J. (“Defs.’ Cross-Mot.
and Opp’n”), ECF No. 146;
• Pls.’ Res. to Defs.’ Mot. for Summ. J. and Reply to Defs.’ Res. to Pls.’ Mot. for Summ. J.
(“Pls.’ Opp’n and Reply”), ECF No. 149; and
• Defs.’ Res. in Support of Cross-Mot. for Summ. J. and Reply in Opp’n to Pls.’ Res.
(“Defs.’ Reply”), ECF No. 151.
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denied Plaintiffs’ visa petitions because Plaintiffs failed to establish that it was more likely than
not that the Job Creating Entities which would receive Plaintiffs’ investments were principally
doing business in a Targeted Employment Area. Additionally and independently, USCIS denied
Plaintiffs’ visa petitions because Plaintiffs failed to establish that it was more likely than not that
their investments would create full time positions for at least ten qualifying employees. 2 The
Court concludes that the denial on either ground was reasonable and not arbitrary and capricious,
not unsupported by substantial evidence, not beyond the scope of USCIS’s statutory authority,
not in violation of congressional intent, and not contrary to Plaintiffs’ Constitutional rights.
I. BACKGROUND
A. Statutory and Regulatory Background
The EB-5 Program was created by Congress as part of the Immigration Act of 1990. See
Immigration Act of 1990, Pub. L. No. 101-649, 104 Stat 4978. The program is codified at 8
U.S.C. § 1153(b)(5). Pursuant to the EB-5 Program, “[v]isas shall be made available . . . to
qualified immigrants seeking to enter the United States for the purpose of engaging in a new
commercial enterprise (including a limited partnership) (i) in which such alien has invested . . .
or, is actively in the process of investing, capital in an amount not less than the amount specified
in subparagraph (C), and (ii) which will benefit the United States economy and create full-time
employment for not fewer than 10 United States citizens or aliens lawfully admitted for
permanent residence or other immigrants lawfully authorized to be employed in the United
In an exercise of its discretion, the Court finds that holding oral argument in this action would not
be of assistance in rendering a decision. See LCvR 7(f).
2
USCIS further denied Plaintiffs’ visa petitions because Plaintiffs failed to establish that the
required amount of capital was made available to the businesses which were most closely
responsible for creating the employment upon which Plaintiffs’ petitions were based. However,
as the Court has already determined that the visa petition denials were proper for two
independent reasons, the Court need not address this third ground for denial.
2
States (other than the immigrant and the immigrant’s spouse, sons, or daughters).” 8 U.S.C. §
1153(b)(5)(A). Subparagraph (C) sets the amount of capital that must be invested in order to
participate in the program at $1,000,000. Id. § 1153(b)(5)(C)(i). However, the statute also
provides that the Attorney General may reduce the required amount of investment for
investments made in “targeted employment areas” (“TEAs”), which are defined as “a rural area
or an area which has experienced high unemployment (of at least 150 percent of the national
average rate).” Id. § 1153(b)(5)(C)(ii), § 1153(b)(5)(B)(ii). By regulation, that reduced amount
has been set at $500,000. 8 C.F.R. § 204.6(f)(2).
The Immigration and Naturalization Service—an agency that no longer exists under that
name—published regulations regarding the EB-5 Program in 1991. These regulations set forth
the requirements for classifying an alien under the EB-5 Program, including, preliminarily, the
filing of a Form I-526 Immigrant Petition by Alien Entrepreneur, which “must be accompanied
by evidence that the alien has invested or is actively in the process of investing lawfully obtained
capital in a new commercial enterprise in the United States which will create full-time positions
for not fewer than 10 qualifying employees.” Id. § 204.6(a), (j). An immigrant investor must
“establish that he or she is eligible for the requested benefit at the time of filing the benefit
request and must continue to be eligible through adjudication.” 8 C.F.R. § 103.2(b)(1).
B. Factual Background
1. The Investment
Plaintiffs in this case are foreign individuals who filed Form I-526 petitions with USCIS
on November 15, 2012 seeking permanent residence in the United States under the EB-5
Program. Each of the Plaintiffs filed their petitions based on the same investment: a $500,000
contribution to an Idaho Limited Partnership entitled Quartzburg Gold, LP (“Quartzburg Gold”).
3
See AR 33-55. The Plaintiff-investors were to serve as the limited partners in Quartzburg Gold,
and an entity entitled ISR Capital, LLC, an Idaho Limited Liability Company, was to serve as its
general partner. See generally AR 200-227 (Quartzburg Gold, LP Limited Partnership
Agreement) (“LPA”).3
Quartzburg Gold’s business plan was presented to Plaintiffs in a Confidential Private
Offering Memorandum (“PPM”). AR 68-114.4 In sum, the PPM stated that Quartzburg Gold
intended to aggregate Plaintiffs’ $500,000 contributions and use them to finance several gold
mining projects. AR 72. This financing would take the form of a loan of the aggregate amount
of the Plaintiffs’ capital contributions to an entity entitled Idaho State Gold Company, LLC
(“ISGC”). Id. ISGC would in turn loan or invest the money it borrowed from Quartzburg Gold
into several “Mining Companies” that would then pursue the gold mining projects. Id. The PPM
explained how Quartzburg Gold would select the mining locations:
Projects to be funded by ISGC with proceeds of the ISGC Loan will be identified
by ISGC and approved by the General Partner. ISGC has identified, and the General
Partner has approved, three initial Projects [Yellowjacket, Belshazzar, and Thunder
Mountain]. In addition, a fourth initial Project, Monarch Mountain, has been
3
The Plaintiff-investors in Quartzburg Gold entered into three interrelated agreements: the LPA,
AR 200-27, a Master Escrow Agreement, AR 157-88 (“Escrow Agreement”), and a Limited
Partner Interest Subscription Agreement, AR 189-99 (“Subscription Agreement”). The terms of
the limited partnership, including the rights of the Plaintiff-investors, were set forth in the LPA.
Under the LPA, in return for their capital contributions the limited partners, in aggregate, were
entitled to an 80% share of the partnership, with the general partner retaining the remaining 20%.
AR 200-27. Under the Escrow Agreement, U.S. Bank National Association agreed, in return for
fees paid by Quartzburg Gold, to serve as an escrow agent and hold each investor’s capital
contribution pending approval of the investor’s Form I-526 petition, at which time it would
disburse those funds to Quartzburg Gold. AR 157-88. The Subscription Agreement provided that
the Plaintiff-investor would be admitted into Quartzburg Gold as a limited partner upon release
of his or her $500,000 capital contribution pursuant to the Escrow Agreement. AR 189-99.
4
The Administrative Record contains two versions of the PPM. One version is from April 16,
2012. AR 1076-1121. The other version is from June 14, 2012. AR 68-114. Plaintiffs state that,
attached to their Form I-526 petitions, “most of the investors submitted the June 14, 2012 version
of the PPM.” Pls.’ Mot., ECF No. 144, 31. As such, the Court cites to the June 14, 2012 version
of the PPM.
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identified by ISGC but not yet approved by either ISGC or the General Partner
pending satisfactory completion of due diligence. … To the extent that for any
reason the full amount of the ISGC Loan is not required for the development of the
initial Projects, the Partnership intends to invest in one or more other comparable
projects to be identified by ISGC and to be subjected to similar due diligence review
and evaluation. … As of the date of this Agreement ISGC has not committed to,
and the General Partner has not approved any of such additional projects.
AR 72-74. The PPM went on to explain that even for the four initially identified mining
locations, “[a]dditional drilling and other exploration work will be required on all four Initial
Projects to confirm the available resources, and required permits will need to be applied for and
obtained prior to mining production.” AR 74. Additionally, if due diligence or other information
indicates that development of the project is not warranted, “ISGC would intend to halt any
further funding of that Project and re-deploy any remaining funds for the Project to an
‘Additional Project.’” Id. However, again, ISGC had not committed to, and the General Partner,
had not approved any of the additional projects. Id.
2. USCIS’s Preliminary Responses to Plaintiffs’ Petitions
Before beginning to issue the initial set of denials of Plaintiffs’ visa petitions, which are
not the subject of this Memorandum Opinion, USCIS sent Plaintiffs several preliminary
communications notifying them of its intent to deny Plaintiffs’ petitions and requesting
additional evidence to address several perceived deficiencies therein. First, most of the Plaintiffs
received from USCIS a “Notice of Intent to Deny” their Petitions (“NOID”). AR 327-36. In the
NOID, USCIS took the position that the Plaintiffs had not provided sufficient evidence of the
following in support of their petitions: (1) that the job creating entities (“JCEs”) associated with
the investment were located in a TEA, (2) that the minimum investment amount had been met,
(3) that the capital invested was actually at risk, and (4) that the investment would create at least
10 full time positions for qualifying employees. Id.
5
Plaintiffs, through their shared representatives, each subsequently provided additional
materials in response to the NOID. USCIS responded to those additional materials by issuing
two Requests for Evidence (“RFEs”), in which USCIS requested additional evidence regarding
such issues as whether the investment would create the required amount of employment and
whether Plaintiffs’ capital would genuinely be placed at risk. See AR 633-38; AR 656-67.
Again, Plaintiffs submitted additional materials responding to the issues raised in the RFEs.
With small differences not relevant to this Memorandum Opinion, this process was substantially
the same for all Plaintiffs.
3. USCIS’s Initial Denials of Plaintiffs’ Petitions
After this initial round of notices and requests, USCIS began issuing denials to Plaintiffs’
petitions on a rolling basis. Despite the fact that all of Plaintiffs’ petitions were—at least for the
purposes of this Memorandum Opinion—functionally equivalent, USCIS issued three different
denial notices, each citing a different set of reasons for denying the petitions.
a. The First Denial
Although recognizing that other concerns had been raised during the NOID and RFE
process, the first denial received by a number of the Plaintiffs stated that Plaintiffs had not
established their eligibility for the EB-5 Program for a single reason—the capital Plaintiffs
intended to contribute would not be “at risk” due to a call option which was originally present in
the LPA. AR 26-32.
b. The Second Denial
USCIS had not issued the First Denial to all Plaintiffs by the time this lawsuit was filed.
After the suit was filed, USCIS began issuing those Plaintiffs who had not yet received a final
decision on their petitions a new and different denial notice. AR 902-918. The Second Denial
similarly—although with different reasoning—cited the failure of the Plaintiffs to place their
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capital at risk due to the call option and also added three additional reasons for denying the
petition that were not present in the First Denial. In addition to the call option, the Second Denial
stated that the Plaintiffs had not demonstrated that the JCEs associated with the investment were
located in a TEA; had not shown that the full amount of capital would be made available to the
business most closely responsible for creating the required employment; and had not
demonstrated that the investment would create full time employment for at least ten qualifying
employees. With the exception of the call option, none of these reasons for the Second Denial
appeared in the First Denial.
c. The Third Denial
Finally, a single Plaintiff received a slightly different denial than any other. This unique
Third Denial included several reasons for denial that were present in the Second Denial,
including that the Plaintiff had not demonstrated that the full amount of capital had been made
available to the business most closely responsible for job creation, but omitted all other reasons.
AR 1305-13.
4. The Court’s March 10, 2017 Memorandum Opinion and Order
The parties filed Cross-Motions for Summary Judgment on March 11, 2016 and April 15,
2016 pertaining to whether or not USCIS’s first set of denials of Plaintiffs’ visa petitions were
arbitrary and capricious, not supported by substantial evidence, and beyond the scope of
USCIS’s statutory authority. See ECF Nos. 60, 67. Ultimately, the Court granted in part and
denied in part Plaintiffs’ Motion and denied USCIS’s Cross-Motion. ECF Nos. 103, 104. The
Court concluded that USCIS’s First Denial, given to a portion of petitioners, was arbitrary and
capricious and counter to the evidence before USCIS. March 10, 2017 Memorandum Opinion,
ECF No. 104, 2. Specifically, the Court granted in part Plaintiffs’ Motion and found that the
presence of a call option did not prevent Plaintiffs’ capital from being at risk. Id. at 14. The
7
Court further concluded that USCIS acted arbitrarily and capriciously by issuing different denials
to different petitioners even though the petitions and supporting documents were functionally
equivalent. Id. However, the Court denied Plaintiffs’ Motion to the extent it requested that the
visa petitions be granted. Id. at 2. Instead, the Court remanded the case to USCIS for further
consideration of Plaintiffs’ visa petitions. Id. The Court expressly stated that “[o]n remand, the
USCIS shall be free to exercise its discretion to reopen the administrative record, to engage in
additional fact-finding, to supplement its explanation, and to reach the same or a different
ultimate conclusion.” Id. at 20.
5. USCIS’s 2018 Denial of Plaintiffs’ Visa Petitions
Pursuant to the Court’s instructions, in September of 2017, USCIS issued Motions to
Reopen (“MTRs”) to all investors who had not withdrawn their investments, including Plaintiffs
and non-Plaintiffs. AR 919-938. In the MTR, USCIS notified petitioners that, upon an initial
review of the record, petitioners had failed to establish eligibility for EB-5 visas on multiple
bases, including that petitioners had failed to establish that the JCEs were principally doing
business in a TEA, that petitioners’ capital was at risk, that petitioners’ capital was made
available to the businesses most closely responsible for job creation, and that petitioners’
investment would result in full-time jobs for at least ten qualifying employees. Id.
Plaintiffs responded to the MTRs and filed additional documentation in an attempt to
overcome the perceived shortcomings in their visa petitions. AR 939-1054. However, on April 3,
2018, USCIS issued the denial at issue in this Memorandum Opinion. USCIS denied Plaintiffs’
visa petitions on three independent grounds. Based on the evidence submitted and the facts that
existed at the time that Plaintiffs’ filed their visa petitions, USCIS concluded that Plaintiffs failed
to establish that (1) the JCEs were principally doing business in a TEA, (2) Plaintiffs’
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investments would result in the creation of full time jobs for at least 10 qualifying employees,
and (3) the required minimum amount of capital would be made fully available to the businesses
most closely responsible for job creation.AR 1055-75.
Following the 2018 denial of their visa petitions, Plaintiffs filed a Fourth Amended
Complaint. ECF No. 138. And, on March 7, 2019 and April 24, 2019, the parties again filed
Cross-Motions for Summary Judgment. ECF Nos. 144, 146. Those Motions are currently before
the Court.
II. LEGAL STANDARD
Under Rule 56(a) of the Federal Rules of Civil Procedure, “[t]he court shall grant
summary judgment if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). However,
“when a party seeks review of agency action under the APA [before a district court], the district
judge sits as an appellate tribunal. The ‘entire case’ on review is a question of law.” Am.
Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001). Accordingly, “the standard
set forth in Rule 56[ ] does not apply because of the limited role of a court in reviewing the
administrative record. . . . Summary judgment is [ ] the mechanism for deciding whether as a
matter of law the agency action is supported by the administrative record and is otherwise
consistent with the APA standard of review.” Southeast Conference v. Vilsack, 684 F. Supp. 2d
135, 142 (D.D.C. 2010).
The APA “sets forth the full extent of judicial authority to review executive agency
action for procedural correctness.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513
(2009). It requires courts to “hold unlawful and set aside agency action, findings, and
conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in
9
accordance with law;” “contrary to constitutional right, power, privilege or immunity;” “in
excess of statutory jurisdiction, authority, or limitations, or short of statutory right;” or, in certain
circumstances, “unsupported by substantial evidence.” 5 U.S.C. § 706(2)(A)-(C), (E). “This is
a ‘narrow’ standard of review as courts defer to the agency’s expertise.” Ctr. for Food Safety v.
Salazar, 898 F. Supp. 2d 130, 138 (D.D.C. 2012) (quoting Motor Vehicle Mfrs. Ass’n of U.S.,
Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). However, an agency is still
required to “examine the relevant data and articulate a satisfactory explanation for its action
including a rational connection between the facts found and the choice made.” Motor Vehicle
Mfrs. Ass’n, 463 U.S. at 43 (internal quotation marks omitted). “Moreover, an agency cannot
‘fail[ ] to consider an important aspect of the problem’ or ‘offer[ ] an explanation for its decision
that runs counter to the evidence’ before it.” Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d 46,
57 (D.C. Cir. 2015) (quoting Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43).
Prior to moving to the substantive discussion, the Court notes a dispute between the
parties as to the proper scope of review under the APA. Plaintiffs challenge their visa petition
denials under 5 U.S.C. § 706(2)(E), which requires the Court to “hold unlawful and set aside
agency action, findings, and conclusions found to be … unsupported by substantial evidence in a
case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an
agency hearing provided by statute.” 5 U.S.C. § 706(2)(E). USCIS contends that “substantial
evidence” review under 5 U.S.C. § 706(2)(E) does not apply to the 2018 visa petition denial
because the denial was not an exercise of a rulemaking function and did not require a public
adjudicatory hearing. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 414
(1971) (explaining that the substantial evidence standard applies “only when the agency action is
10
taken pursuant to a rulemaking provision of the [APA] itself … or when the agency action is
based on a public adjudicatory hearing”).
However, the Court need not resolve whether or not the “substantial evidence” scope of
review applies in this case. As the United States Court of Appeals for the District of Columbia
Circuit (“D.C. Circuit”) has explained “the distinction between the substantial evidence test and
the arbitrary or capricious test is largely semantic.” Assoc. of Data Processing Serv. Orgs., Inc. v.
Bd. of Govs. Of Fed. Reserve Sys., 745 F.2d 677, 684 (D.C. Cir. 1984) (internal quotation marks
omitted). The D.C. Circuit has described the APA’s “scope of review” provisions as
“cumulative.” Id. at 683. “Paragraph (A) of subsection 706(2)—the ‘arbitrary or capricious’
provision—is a catchall, picking up administrative misconduct not covered by the other more
specific paragraphs.” Id. As such, “in those situations where paragraph (E) [the ‘substantial
evidence’ standard] has no application …, paragraph (A) takes up the slack, so to speak, enabling
the courts to strike down, as arbitrary, agency action that is devoid of needed factual support.” Id.
In such circumstances, where the arbitrary and capricious standard is used to ensure adequate
factual support for agency action, “there is no substantive difference between what it requires
and what would be required by the substantial evidence test.” Id. at 683-84. Accordingly, the
Court’s analysis addresses whether or not USCIS’s 2018 visa petition denial can be upheld under
the full APA scope of review, including whether the denial is unsupported by substantial
evidence.
III. DISCUSSION
The Court will now review USCIS’s 2018 denial of Plaintiffs’ visa applications under the
applicable APA scope of review. USCIS denied Plaintiffs’ EB-5 visa petitions on multiple,
independent grounds. Plaintiffs do not dispute that USCIS’s multiple grounds for denying their
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visa petitions were independent. Because USCIS offered and defended with substantial factual
support multiple, independent grounds for denying the visa petitions, USCIS need only show that
one of the grounds for denial was sufficient in order to prevail in this matter. See Indiana
Municipal Power Agency v. FERC, 56 F.3d 247, 256 (D.C. Cir. 1995) (explaining that an agency
decision resting on many independent grounds can be sustained if any of those grounds is valid
as long as there is no reason to find that the combined force of otherwise independent grounds
influenced the decision).
The Court upholds the denial of Plaintiffs’ visa petitions on two independent grounds.
First, USCIS denied Plaintiffs’ visa petitions because Plaintiffs failed to establish that it was
more likely than not that the Job Creating Entities (“JCEs”) which would receive Plaintiffs’
investments were principally doing business in a Targeted Employment Area (“TEA”). Second,
USCIS denied Plaintiffs’ visa petitions because Plaintiffs failed to establish that it was more
likely than not that their investments would create full time positions for at least ten qualifying
employees. The Court concludes that USCIS’s denials on these grounds should be upheld under
the APA scope of review as not arbitrary and capricious, not unsupported by substantial
evidence, not beyond the scope of USCIS’s statutory authority, not in violation of congressional
intent, and not contrary to Plaintiffs’ Constitutional rights.
A. Denial for Failure to Establish TEA Requirement
First, USCIS denied Plaintiffs’ visa petitions because Plaintiffs failed to establish that it
was more likely than not that the JCEs which would receive Plaintiffs’ investments were
principally doing business in a TEA. In their 2018 denial, USCIS explained that the initial
evidence submitted with Plaintiffs’ Form I-526 “failed to fully identify all of the JCEs that would
be receiving EB-5 funds, and thus failed to establish that the relevant JCEs were principally
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doing business in a TEA.” AR 1062. USCIS went on to explain that Plaintiffs initially identified
four JCEs that would receive capital; however, the PPM indicated that not all the named JCEs
had been approved by the General Partner of ISGC. AR 1062; AR 73-74. The PPM further
indicated that other potential additional projects, which would be used as alternatives if the full
loan amount was not spent on the four initial projects or if one of the four initial projects fell
through, had also not been approved by the General Partner of ISGC. Id.
Based on these issues, in a Notice of Intent to Deny (“NOID”), USCIS informed
Plaintiffs that they had failed to establish that the four originally specified JCEs were doing
business in a TEA. AR 329. In response, Plaintiffs conceded that some investors could not claim
that all four or the originally identified JCEs were doing business in a TEA at the time of filing.
AR 339. But, Plaintiffs insisted that, even if not all the JCEs were in a TEA, the NCE was
principally doing business in a TEA. Id. Additionally, Plaintiffs provided an updated business
plan and evidence of TEA designations for a different set of JCEs, which included only two of
the four originally-identified JCEs. AR 362-430.
In its MTR, USCIS again raised the issue that Plaintiffs’ had failed to establish the TEA
requirements at the time of filing. AR 924-26. Despite Plaintiffs’ responsive arguments, USCIS
ultimately rejected Plaintiffs’ petition, finding that Plaintiffs failed “to meet the TEA eligibility
requirements at the time the Form I-526 was filed … due to Petitioner’s failure to fully identify
all of the JCEs at the time of the initial filing as well as the change of JCEs after filing.” AR
1063.
Plaintiffs contest the denial of their visa petitions on the ground that they failed to meet
the TEA requirement at the time of filing. First, Plaintiffs argue that they were not required to
identify all JCEs at the time of filing because they had established that the New Commercial
13
Enterprise (“NCE”) was principally doing business in a TEA, which was sufficient. Second,
Plaintiffs contend that the change in JCEs after filing did not constitute a material change to their
petitions. The Court will address both arguments in turn.
1. Failure to Establish JCEs prior to Filing Visa Petitions
First, the Court concludes that USCIS’s determination that Plaintiffs failed to establish, at
the time of filing, that it was more likely than not that the JCEs were principally doing business
in a TEA was reasonable under the APA. If an immigrant investor invests his or her capital in a
NCE that is principally doing business in, or creates jobs in, a TEA, then the immigrant investor
need only invest a minimum of $500,000, rather than $1,000,000. 8 U.S.C. § 1153(b)(5)(C)(ii); 8
C.F.R. § 204.6(f)(2). For investments, such as Plaintiffs’, made through regional centers, the
term “principally doing business” applies to the JCE, not to the NCE. See 8 C.F.R. § 204.6(j)(6);
Matter of Izummi, 22 I&N Dec. 169, 171-73 (BIA 1998) (in a regional center case where the
NCE gave loans to various JCEs, the court found that “petitioner has not demonstrated that these
companies are located in the particular census tracts that qualified” as TEAs); Policy Manual,
Vol. 6, pt. G, ch.2 (“Investments through regional centers allow the immigrant investor to seek to
establish indirect job creation. In these cases, principally doing business will apply to the job-
creating entity rather than the new commercial enterprise. The job-creating entity must be
principally doing business in the targeted employment area for the lower capital investment
amount to apply.”).5 Here, the NCE was Quartzburg Gold, which pooled capital from immigrant
5
Plaintiffs make a cursory argument that “the Policy Manual post-dates the NOID, RFEs, and
initial denials.” Pls.’ Opp’n and Reply, ECF No. 149, 5 n.1. However, Plaintiffs introduce no
evidence that the policy was different at the time Plaintiffs filed their visa petitions. Conversely,
USCIS has introduced evidence that the Policy Manual’s requirements for TEAs are the same as
required by the policy in effect at the time of Plaintiffs’ visa petition filing. Defs.’ Reply, ECF
No. 151, 5 n.3. Moreover, Matter of Izummi’s interpretation of the TEA requirement for
14
investors to loan—through the intermediary, ISGC—to various mining projects, which were the
JCEs.
At the time Plaintiffs filed their visa petitions, they failed to fully identify all of the JCEs,
or mining locations, which would receive their funds. In their initial petitions, Plaintiffs
identified four JCEs which would receive the funds. However, the PPM acknowledged that not
all of the named JCEs had been approved by the General Partner of ISGC. AR 68 (explaining
that “a fourth Initial Project, Monarch Mountain, has been identified by ISGC but not yet
approved”). Additionally, if the full capital investment was not spent on the initial projects or if
the initial projects could not be completed, the PPM stated that the left-over funds would go to an
additional project, none of which had been committed to by ISGC or approved by the General
Partner. AR 74. Moreover, in response to the NOID from USCIS indicating that Plaintiffs had
failed to establish that the four originally-identified JCEs were principally doing business in a
TEA, Plaintiff’s counsel admitted that the visa petitions included a business plan in which “not
all” of the JCEs “were specifically and finally identified.” AR 338. Plaintiff’s counsel went on to
identify a new set of JCEs, only two of which had been originally identified in Plaintiffs’ visa
petition. AR 339. As Plaintiffs failed to identify the JCEs at the time of filing their visa petitions,
the Court concludes that it was reasonable for USCIS to conclude that they were unable to
determine whether or not Plaintiffs’ investments were more likely than not to go to JCEs
principally doing business in a TEA.
However, Plaintiffs argue that their failure to fully identify the JCEs at the time of filing
should not be detrimental to their visa petitions. Plaintiffs contend that, at the time of filing, they
petitioners investing in regional centers is in line with the Policy Manual. 22 I&N Dec. at 171-
73.
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had established that they had invested in an NCE which was principally doing business in a TEA
because at least two of the original mining locations were located in a TEA. However, because
Plaintiffs were investing through a regional center, the “principally doing business” requirement
applies to the JCEs, not to the NCE. AR 1062; see also 8 C.F.R. § 204.6(j)(6); Matter of Izummi,
22 I&N Dec. at 171-73 (assessing whether the JCEs, not the NCE, were principally doing
business in a TEA); Policy Manual, Vol. 6, pt. G, ch.2 (explaining that the JCEs must be
principally doing business in a TEA). Pursuant to the regulations, policy, and precedent, it was
reasonable for USCIS to require that each JCE was principally doing business in a TEA. As
such, even if two of the four originally identified JCEs were doing business in a TEA and the
NCE was principally doing business in a TEA, Plaintiffs’ failure to identify the relevant JCEs at
the time of filing prevented Plaintiffs from meeting the TEA requirement.
Plaintiffs further argue that USCIS’s First Denial of Plaintiffs’ visa petitions expressly
found that Plaintiffs had invested in a TEA. AR 26-32. Additionally, Plaintiffs point out that
other documents, such as the two RFEs, did not mention any problems with meeting the TEA
requirement. AR 633-38; AR 656-67. Plaintiffs are correct that the First Denial was based only
on the call option and described Plaintiffs’ investment in the NCE as being “located within a
targeted employment area.” AR 28. Plaintiffs are also correct that some communications from
USCIS prior to the 2018 denial did not highlight an issue with the TEA requirement. However,
USCIS is not bound by a prior finding that is later determined to be erroneous. When an agency
departs from a prior decision, that agency is required to provide a reasoned explanation. Fox
Television Station, 556 U.S. at 514-16. In the 2018 denial, USCIS provided a reasoned
explanation as to why it found that Plaintiffs failed to establish that that they were more likely
than not to meet the TEA requirement. USCIS further explained that “the First Denial was
16
incomplete as it did not discuss important additional bases for denial.” AR 1058. USCIS’s
explanation for changing course after the First Denial was reasonable. And, it would be “absurd
to suggest that [USCIS] … must treat acknowledged errors as binding precedent.” Sussex
Engineering, Ltd. v. Montgomery, 825 F.2d 1084, 1090 (6th Cir. 1987); see also Fogo de Chao
(Holdings) v. U.S. Dep’t of Homeland Sec., 769 F.3d 1127, 1144 (D.C. Cir. 2014) (explaining
that “[t]he mere fact that the agency, by mistake or oversight, approved a visa petition on one
occasion does not create an automatic entitlement to the approval of a subsequent petition”
(internal quotation marks omitted)).
Next, Plaintiffs contend that “[t]o the extent USCIS has required Plaintiffs to select all
locations in advance, and stick with those locations no matter what, USCIS has created an
additional eligibility requirement that simply does not exist in the statute or regulations.” Pls.’
Mot., ECF No. 144, 23. Plaintiffs rely on the prospective nature of the regulations to argue that
they were not required to identify all JCEs at the time of filing. While the regulations may be
prospective and anticipate that petitioners are in the process of investing at the time of filing,
petitioners are not relieved of their obligation to meet all requirements at the time of filing. 8
C.F.R. § 103.2(b)(1) (explaining that an immigrant petitioner must “establish that he or she is
eligible for the requested benefit at the time of filing the benefit request and must continue to be
eligible through adjudication”); see also Matter of Izummi, 22 I&N Dec. at 176 (explaining that
USCIS “cannot consider facts that come into being only subsequent to the filing of a petition”).
When investors, such as Plaintiffs, invest through a regional center, the locations of the JCEs are
critical to EB-5 visa eligibility as the locations determine whether the petitioner has invested, or
is in the process of investing, the required capital amount, which is lower if the investment is
targeted at a TEA. 8 C.F.R. § 204.6(f)(2). And, lacking established locations of the JCEs, it was
17
reasonable for USCIS to conclude that it could not determine, at the time of filing, whether it
was more likely than not that Plaintiffs would meet the TEA requirement.
Finally, Plaintiffs contend that USCIS improperly ignored evidence that Plaintiffs’ capital
was actually invested into mining activities in TEAs. While evidence that Plaintiffs’ money was
actually invested into a TEA is relevant, it is only probative insofar as it is used to establish that
Plaintiffs were “eligible for the requested benefit at the time of filing the benefit request.” 8
C.F.R. § 103.2(b)(1); 8 C.F.R. § 103.2(b)(12) (explaining that evidence submitted in response to
a request is relevant only if it “establish[es] filing eligibility at the time the benefit request was
filed”); see also Izummi, 22 I. & N. Dec. at 176 (refusing to consider facts which came into being
after filing for purposes of deciding an EB-5 visa petition). Even if Plaintiffs’ investment
ultimately went to a TEA, it was reasonable for USCIS to conclude that Plaintiffs’ original
failure to establish the locations of the JCEs prevented Plaintiffs from showing, at the time of
filing, that it was more likely than not that they would meet the TEA requirement. See Wang v.
USCIS, No. 16-1965-TJK, 2019 WL 1756290, at *2 (D.D.C. April 19, 2019) (“USCIS will deny
a petition if the petitioner becomes eligible only after the petition was filed.”).
Plaintiffs also fault USCIS for ignoring evidence that the business plan was centered on
providing investments to JCEs in a TEA. Similarly, Plaintiffs point out that USCIS ignored
evidence of a contractual obligation for the ISGC General Partner to use the immigrant investors’
capital in mining projects in a TEA. However, it was reasonable for USCIS not to rely on
Plaintiffs’ business plan because the business plan lacked necessary factual support, such as the
locations of the JCEs. In re Ho, 22 I & N Dec. 206, 212 (BIA 1998) (in the context of the job
creation requirement, refusing to rely on conclusory assertions in a business plan). And, any
contractual assurances that Plaintiffs’ capital would be invested in mining activities in a TEA is
18
similarly unavailing. USCIS is statutorily required to make the ultimate determination that an
investment has been made in a TEA. As such, a contractual business agreement, to which USCIS
was not a party, is of little probative value.
In sum, as one ground for denying Plaintiffs’ visa petitions, USCIS determined that
Plaintiffs had failed to establish, at the time of filing, that it was more likely than not that they
were investing in JCEs which were principally doing business in a TEA. This failure occurred
because of Plaintiffs did not establish the locations of the JCEs which would receive their
investments prior to filing their visa petitions. The Court concludes that USCIS’s denial on this
ground was reasonable under the APA standards of review.
2. Material Change to JCE Locations
Relatedly, USCIS rejected Plaintiffs’ visa petitions because the changes to the locations
of the JCEs, made after the initial filing, constituted impermissible material changes. AR 1064.
Plaintiffs argue that the changes in JCEs after filing did not constitute material changes to their
visa petitions. The Court finds USCIS’s determination that such changes were material to be
reasonable under the APA standards of review.
In the 2018 denial, USCIS determined that the changes to the locations of the JCEs, made
after the initial filing, were material “as they affect whether Petitioner’s investment was within
TEAs, which directly determined Petitioner’s required minimum investment amount for
eligibility.” AR 1064. In defining materiality, USCIS cited Kungys v. United States, 485 U.S.
759 (1988). In Kungys, when interpreting a statute revoking citizenship, the United States
Supreme Court defined a fact as material “if it has a natural tendency to influence, or was
capable of influencing, the decision of the decisionmaking body to which it was addressed.” 485
U.S. at 770 (internal quotation marks omitted). With this definition, USCIS determined that the
19
change in JCE locations was material as the change affected whether or not the JCEs were in a
TEA, which in turn affected whether or not an investment of $500,000 rendered Plaintiffs
qualified for an EB-5 visa. 8 U.S.C. § 1153(b)(5)(C)(ii); 8 C.F.R. § 204.6(f)(2).
Plaintiffs dispute USCIS’s interpretation of materiality. Plaintiffs cite to USCIS’s Policy
Manual which states that “[c]hanges that occur in accordance with a business plan and other
supporting documents as filed will generally not be considered material.” Policy Manual, Vol. 6,
Part G, ch. 4(C). According to Plaintiffs, the stated goal of their business plan was to invest in
mining activities in TEAs located in the regional center. As such, any change which resulted in a
JCE being located in a TEA cannot be material.
However, USCIS’s Policy Manual is not adverse to the materiality standard in Kungys.
Most changes that occur in accordance with the petitioner’s business plan will not be material
because most changes that occur in accordance with the business plan will not have a tendency to
influence the visa petition eligibility determination. As the Policy Manual’s example explains, if
a business plan states that ten jobs will be created and, after filing, ten jobs are created, “such a
change would not be considered material.” Policy Manual, Vol. 6, Part G, ch. 4(C). Accordingly,
USCIS’s use of the materiality standard in Kungys was not unreasonable. 485 U.S. at 770
(“Where Congress uses terms that have accumulated settled meaning under either equity or the
common law, a court must infer, unless the statute otherwise dictates, that Congress means to
incorporate the established meaning of these terms.”). Ultimately, Plaintiffs appear to admit as
much, agreeing that “[i]n order to be material, a fact ‘must be of the sort that would affect the
ultimate immigration decision.’” Pls.’ Opp’n and Reply, ECF No. 149, 19 (quoting Yang v.
Holder, 770 F.3d 294 (4th Cir. 2014)).
20
Moving to the substance of Plaintiffs’ argument, even if the change to the locations of the
JCEs was contemplated by the business plan, it was still reasonable for USCIS to conclude that
the change to the locations was material. A business plan cannot simply approve any future
changes such that those future changes will not be material. Allowing such an escape hatch in a
petitioner’s business plan would effectively destroy the materiality requirement. And, the
materiality requirement is crucial to maintaining the fairness of the priority system for immigrant
investor visas. An approved I-526 petition is given a priority date as of the date the petition is
properly filed. 8 C.F.R. § 204.6(d). If petitions did not have to meet the EB-5 requirements at the
time of filing and could be changed at will, then petitioners could file incomplete petitions in
order to receive a better priority position for obtaining a visa. Allowing later changes to
incomplete petitions would be unfair to those petitioners who waited to file their forms until the
appropriate time when they had the evidence necessary to establish all EB-5 requirements.
Even using the materiality standard from Kungys, Plaintiffs argue that the change in JCE
locations was not a material change. Plaintiffs contend that “[i]t appears that all combinations of
locations proposed (and undertaken) have enough activity located in a TEA such that the NCE is
principally doing business in a TEA.” Pls.’ Mot., ECF No. 144, 24-25. And, the job-creating
activity at each site—mining— was the same. As such, Plaintiffs explain that their EB-5 visa
eligibility could not have been affected by choosing one set of JCE locations over another, so the
change in JCE locations was not material.
However, Plaintiffs’ argument rests on a faulty premise. Plaintiffs contend that the
change in locations of the JCEs was not material because all combinations of proposed JCE
locations have enough activity occurring in a TEA so that the NCE is principally doing business
in a TEA. But, again, because Plaintiffs invested through a regional center, the relevant entity
21
which must principally be doing business in a TEA is not the NCE but rather the JCEs. AR 1062;
see also 8 C.F.R. § 204.6(j)(6); Matter of Izummi, 22 I&N Dec. at 171-73 (using JCEs as the
relevant entity); Policy Manual, Vol. 6, pt. G, ch.2 (explaining that for investments through
regional centers “principally doing business will apply to the job-creating entity rather than the
new commercial enterprise”). USCIS determined that Plaintiffs failed to meet the TEA
requirement because they failed to establish that the originally identified JCEs were principally
doing business in a TEA. AR 1062-63. Plaintiffs then submitted a different set of JCEs. See AR
362-430. Insofar as these new JCE locations were an attempt to influence USCIS’s decision on
Plaintiffs’ EB-5 eligibility, it was reasonable for USCIS to conclude that the change in JCE
locations was an impermissible material change.
In sum, USCIS determined that the change in locations of the JCEs which would receive
Plaintiffs’ investments was an impermissible material change because the change had a natural
tendency to influence the eligibility decision. The Court concludes that USCIS’s denial on this
ground was reasonable under the APA standards of review.
3. Conclusion
In the 2018 denial, USCIS denied Plaintiffs’ EB-5 visa petitions on the ground that
Plaintiffs failed to establish that it was more likely than not that their investments would go to
JCEs which were principally doing business in a TEA. USCIS explained that, at the time of
filing, Plaintiffs had not identified which JCEs would receive the investments and whether or not
those JCEs were principally doing business in a TEA. Moreover, USCIS explained that, even if
Plaintiffs could establish that the JCEs identified post-filing were principally doing business in a
TEA, the change in the locations of the JCEs was an impermissible material change. For the
reasons explained above, the Court concludes that denial on this ground was not arbitrary and
22
capricious, not unsupported by substantial evidence, not beyond the scope of USCIS’s statutory
authority, not in violation of congressional intent, and not contrary to Plaintiffs’ Constitutional
rights.
B. Denial for Failure to Establish Job Creation Requirement
While the Court has already concluded that USCIS’s 2018 denial of Plaintiffs’ visa
petitions should be upheld on one independent ground, the Court will nonetheless also address a
second, independent ground for upholding the denial. In addition to denying Plaintiffs’ visa
petitions for failing to establish, at the time of filing, that their investments were more likely than
not to go to JCEs in a TEA, USCIS also denied Plaintiffs’ visa petitions for failing to establish
that it was more likely than not that their investments would create full time positions for at least
ten qualifying employees within two years. AR 1072-74.
In order to qualify for an EB-5 visa, immigrant investors must establish that it is more
likely than not that their investment will create full time positions for at least ten qualifying
employees. 8 U.S.C. § 1153(b)(5)(A). There are two methods of showing that an investment in a
NCE will create full-time positions for at least ten qualifying employees within two years. First,
an immigrant investor’s petition can be accompanied by documentation, such as relevant tax
records or Form I-9s, for ten qualifying employees if such employees have already been hired. 8
C.F.R. § 204.6(j)(4)(i)(A). Alternatively, a petitioner can provide “[a] copy of a comprehensive
business plan showing that, due to the nature and projected size of the new commercial
enterprise, the need for not fewer than ten (10) qualifying employees will result, including
approximate dates, within the next two years, and when such employees will be hired.” 8 C.F.R.
§ 204.6(j)(4)(i)(B). For investments, such as Plaintiffs, in a NCE within a regional center, the
employment positions can be created directly or indirectly by the NCE. 8 C.F.R.
23
§ 204.6(j)(4)(iii). Such indirect job creation must be demonstrated through reasonable
methodologies such as “multiplier tables, feasibility studies, analyses of foreign and domestic
markets for the goods or services to be exported, and other economically or statistically valid
forecasting devices which indicate the likelihood that the business will result in increased
employment.” 8 C.F.R. § 204.6(m)(7)(ii).
In their visa petitions, Plaintiffs relied on the prospective, indirect creation of jobs
through the NCE. However, in the 2018 denial, USCIS determined that “evidence in the record
does not establish that the NCE will create at least 10 full-time positions for qualifying
employees.” AR 1073. As explained in the previous section, Plaintiffs’ initial petition identified
four JCEs, or mining locations, which would receive the investors’ capital contributions through
a loan made by the NCE. However, the four identified JCEs were only preliminary as at least one
of the JCEs had not been approved by the General Partner of ISGC. AR 68. Additionally, the
PPM identified other potential JCEs, which had also not been approved, in case investor capital
was left over after the initial investments or the original mining locations were unworkable. See
Supra Sec. III.A.1; AR 1073; AR 73-74. In response to USCIS’s NOID, Plaintiffs provided an
updated business plan with a new set of JCEs, which included only two of the four original JCEs.
AR 362-430.
In the MTR, USCIS indicated that the failure to identify adequately the JCEs at the time
of filing prevented Plaintiffs from establishing the job creation requirement. AR 935-38. In
response, Plaintiffs filed a new economic report purporting to show that Plaintiffs’ investments
had already resulted in the creation of the requisite number of jobs. AR 969-1000.
Despite Plaintiffs’ responses, USCIS denied Plaintiffs’ visa petitions for failing to meet
the job creation requirement at the time of filing. Absent identified JCEs, USCIS concluded that
24
Plaintiffs could not establish that, “due to the nature and projected size of the new commercial
enterprise, the need for not fewer than ten (10) qualifying employees will result, including
approximate dates, within the next two years, and when such employees will be hired.” 8 C.F.R.
§ 204.6(j)(4)(i)(B); AR 1073. Additionally, lacking identified mining locations in a
comprehensive business plan, Plaintiffs could not provide an adequate economic impact report
indicating indirect job creation using reasonable methodologies. AR 1073-74. Moreover,
Plaintiffs’ later-filed, updated business plan and updated economic report, which relied on JCEs
not identified at the time of filing, constituted an impermissible material change as it affected
Plaintiffs’ ability to establish the job creation requirement at the time of filing. AR 1074.
Plaintiffs have three primary arguments as to why USCIS’s denial on this ground was not
reasonable under the APA standards of review. The Court will address each argument in turn.
First, Plaintiffs contend that the original Economic Report which was provided as an
exhibit to the Form I-526, reflected the facts as they were at the time of filing and should have
been considered as evidence that they met the job creation requirement. AR 281-326. According
to Plaintiffs, the Economic Report was based on mining expenditures and was not based on the
locations of the mining activities, or the JCEs. As such, Plaintiffs argue that, at the time of filing,
they were able to demonstrate that they were more likely than not to invest money in mining
activities which would result in the need for ten or more qualifying employees, even if the
locations of the mines were not originally identified.
However, Plaintiffs ignore that their economic analysis is only reasonable insofar as the
business plan underlying that analysis is sufficiently comprehensive. See 8 C.F.R.
25
§ 204.6(j)(4)(i)(B) (requiring a “comprehensive business plan” to show prospective job
creation).6 In order for a business plan to be sufficiently comprehensive
[t]he plan should contain a market analysis, including the names of competing
businesses and their relative strengths and weaknesses, a comparison of the competition’s
products and pricing structures, and a description of the target market/prospective
customers of the new commercial enterprise. The plan should list the required permits
and licenses obtained. If applicable, it should describe the manufacturing or production
process, the materials required, and the supply sources. The plan should detail any
contracts executed for the supply of materials and/or the distribution of products. It
should discuss the marketing strategy of the business, including pricing, advertising, and
servicing. The plan should set forth the business’s organizational structure and its
personnel’s experience. It should explain the business’s staffing requirements and contain
a timetable for hiring, as well as job descriptions for all positions. It should contain sales,
cost and income projections and detail the bases thereof. Most importantly, the business
plan must be credible.
In re Ho, 22 I & N Dec. at 212. In sum, a comprehensive business plan must be “sufficiently
detailed to permit USCIS to draw reasonable inferences about job-creation potential.” AR 1072
(citing In re Ho, 22 I & N Dec. at 212). Because the original business plan lacked specified
locations for mining, it was reasonable for USCIS to conclude that Plaintiffs’ business plan was
not comprehensive and could not support a credible economic analysis. AR 1073 (“Petitioner
also cannot provide an adequate economic impact report indicating how indirect job creation can
be demonstrated through reasonable methodologies.”) As USCIS’s Policy Manual states, “[i]n
reviewing whether an economic methodology is reasonable, USCIS analyzes whether the
multipliers and assumptions about the geographic impact of the project are reasonable.” Policy
Manual Vol. 6, Pt. G, ch. 2, § D.5. Lacking information about the location of the mines in the
6
Plaintiffs make a conclusory argument that this regulation does not apply because they are
relying on indirect job creation. Pls.’ Mot., ECF No. 144, 26. However, this regulation falls under
the heading “General.” 8 C.F.R. § 204.6(j)(4)(i)(B). And, Plaintiffs fail to explain why this
regulation would be inapplicable. Moreover, Plaintiffs concede that they were required to
provide a comprehensive business plan. Pls.’ Mot., ECF No. 144, 26. The application of 8 C.F.R.
§ 204.6(j)(4)(i)(B) does not prevent Plaintiffs from using “reasonable” methodologies to
establish indirect job creation. 8 C.F.R. § 204.6(m)(7)(ii).
26
original filing, USCIS could not review whether or not Plaintiffs’ assumptions about the
geographic impact of the projects were accurate. As such, it was reasonable for USCIS to
determine that the lack of established JCE locations rendered Plaintiffs’ business plan not
comprehensive, thus making the relied-upon economic analysis not credible.
The Court further finds that it was reasonable for USCIS to require geographic specifics
about the locations of the JCEs prior to crediting a business plan or economic analysis for
purposes of the job creation requirement. Mining locations obviously vary in size, scope, need,
and other characteristics that affect the job opportunities provided. For example, some mines
may require that more money be spent on construction, others may require that more money be
spent on maintenance. Even if the activity—mining—remains the same at each location, changes
in the locations of the mines could affect safety concerns, transportation issues, and other
features which relate to a mine’s ability to attract sufficient workers. The different features of
various mines have a natural impact both on the types of employment opportunities and on
potential workers’ willingness to accept those opportunities. Lacking established locations of
JCEs at the time of filing, it was reasonable for USCIS to discount any business plans or
economic analyses purporting to prove that the job requirement had been met at the time of
filing.
In at least one filing, the immigrant investors appeared to acknowledge that a failure to
have finalized the mining locations impacted their ability to establish the job creation
requirement. According to the June 14, 2012 PPM, “[i]n the event that ISGC or a Mining
Company determines that it is not feasible to obtain the necessary permits, ISGC would intend to
re-deploy the funding that had been allocated to such Project to a different project. There is no
assurance that ISGC could successfully locate such replacement projects that would provide a
27
sufficient number of qualifying new jobs to satisfy the requirements for investors to obtain U.S.
permanent residency under the EB-5 program.” AR 92 (emphasis added). This PPM was
attached to most investors’ form I-526. Pls.’ Mot., ECF No. 144, 31 (“most of the investors
submitted the June 14, 2012 version of the PPM”). Given that filings attached to the most of the
investors’ visa petitions indicated that, if permits could not be obtained, there was no assurance
that the regional center could locate mining projects which would provide the requisite number
of jobs, it was reasonable for USCIS to conclude that Plaintiffs’ business plan, which had not
finalized the mining projects, was not credible for purposes of evaluating job creation. Even
considering Plaintiffs’ economic report, it was reasonable for USCIS to determine that, at the
time of filing, Plaintiffs had not established that they were more likely than not to meet the job
creation requirement.
Second, once again, Plaintiffs argue that post-filing changes to the locations of the mines
were not material changes. According to Plaintiffs, the location of the mining activity is not
material to determining whether or not the job creation requirement can be met. Moreover, the
changes to locations were not material because such changes were in line with Plaintiffs’
business plan. As such, Plaintiffs contend that their later-filed economic report showing the
creation of 1,646 jobs was evidence that Plaintiffs met the job creation requirement. AR 975.
It was reasonable for USCIS to determine that the location of the mines was material to
the job creation requirement. See Supra Sec. III.A.2. As explained above, the location of a mine,
and the specific features of a mine, can have significant impacts on a mine’s ability to attract
workers. As such, the location of the mine is a fact of the sort that would affect USCIS’s ultimate
determination as to whether or not Plaintiffs were likely to meet the job creation requirement.
See Kungys, 485 U.S. at 770 (setting the materiality standard). Moreover, the mere fact that
28
Plaintiffs’ over-broad business plan allowed for changes to location does not render such
changes immaterial. What matters is that the location of the mining activity affected the
investment’s job creation potential, a requirement for EB-5 eligibility. As such, even if Plaintiffs
ultimately created a sufficient number of jobs at the JCEs which were identified after filing their
visa petitions, it was reasonable for USCIS to find that the changes to the locations of the JCEs
were impermissible material changes, which prevents Plaintiffs from using such evidence to
establish the job creation requirement at the time of filing. 8 C.F.R. § 103.2(b)(1) (explaining
that an immigrant petitioner must “establish that he or she is eligible for the requested benefit at
the time of filing the benefit request and must continue to be eligible through adjudication”); see
also Matter of Izummi, 22 I&N Dec. at 176 (explaining that USCIS “cannot consider facts that
come into being only subsequent to the filing of a petition”).
Finally, Plaintiffs contend that USCIS’s Policy Manual allowed investors to demonstrate
job creation even if the locations of the JCEs were not yet known. Specifically, Plaintiffs rely on
a provision of the Policy Manual which was in place at the time Plaintiffs filed their visa
petitions and through USCIS’s 2018 denial. Under that provision, “[USCIS] allowed an EB-5
investor to demonstrate job creation based on jobs to be created by prospective tenants of a
building built with EB-5 money, even thought [sic] there was no direct relationship between the
EB-5 entity and the prospective tenant, and the tenant was generally unknown at the time of
filing.” Pls.’ Mot., ECF No. 144, 28 (citing Policy Manual, Vol. 6, Part G, ch. 2(D)(6)). Plaintiffs
attempt to use this tenant occupancy methodology to argue that they can claim job creation based
on the type of investment activity—mining—rather than on the location of the investment.
The Court begins by noting that the tenant-occupancy policy relied on by Plaintiffs is
rescinded as of May 15, 2018. Policy Manual, Vol. 6, Part G, ch. 2(D)(6). However, regardless
29
of the policy’s current status, it was reasonable for USCIS to conclude that the policy was not
relevant to Plaintiffs’ visa petitions. The policy involved the job creation requirement for
prospective tenants in an identified commercial space built with capital from immigrant
investors. Plaintiffs provide no evidence that USCIS ever applied the tenant-occupancy policy
outside the context of investments in commercial spaces. And, even if the policy were to apply
outside the context of investments in commercial spaces, it was reasonable for USCIS not to
apply the policy in this case. Under the tenant-occupancy policy, immigrant investors could
satisfy the EB-5 visa’s job creation requirement, even if the tenants of a commercial space were
unknown. But, while the identities of the prospective tenants, or the JCEs, were unknown, the
size, nature, and location of the commercial space was known. Here, both the identities of the
JCEs, or the mines, and the size, nature, and location of the mining activities were unknown.
Lacking such information, it was reasonable for USCIS to conclude that Plaintiffs failed to
establish that it was more likely than not that their investments would result in the creation of
jobs for at least 10 qualifying employees.
In the 2018 denial, USCIS denied Plaintiffs’ EB-5 visa petitions on the ground that
Plaintiffs failed to establish that it was more likely than not that their investments would create at
least 10 full-time positions for qualifying employees. USCIS explained that the denial was
appropriate because, at the time of filing, Plaintiffs had not identified which JCEs would receive
the investments, preventing Plaintiffs from being able to establish the requisite job creation
potential. Absent the location of the JCEs, Plaintiffs could not submit a comprehensive business
plan or a credible economic analysis. Moreover, even if Plaintiffs could establish that the JCEs,
which were identified post-filing, created at least ten full-time positions for qualifying
employees, the change in the locations of the JCEs was an impermissible material change. For
30
the reasons explained above, the Court concludes that denial on this ground was not arbitrary and
capricious, not unsupported by substantial evidence, not beyond the scope of USCIS’s statutory
authority, not in violation of congressional intent, and not contrary to Plaintiffs’ Constitutional
rights.
C. Plaintiffs’ Various Claims in Fourth Amended Complaint
In Plaintiffs’ Fourth Amended Complaint, Plaintiffs bring five claims for relief which are
largely repetitious and cumulative. In Count One, Plaintiffs request relief under the APA arguing
the 2018 denial was arbitrary and capricious (5 U.S.C. § 706(2)(A)); in Count Two, Plaintiffs
request relief under the APA arguing the 2018 denial was in excess of statutory authority (5
U.S.C. § 706(2)(C)); in Count Three, Plaintiffs request relief under the APA arguing that the
2018 denial was unsupported by substantial evidence (5 U.S.C. § 706(2)(E)); in Count Four,
Plaintiffs request relief under the APA arguing that the 2018 denial violated Congressional intent
(5 U.S.C. § 706(2)(A), (C)); and in Count Five, Plaintiffs seek relief under the APA and the
United States Constitution’s Fifth Amendment arguing that the 2018 denial was contrary to a
Constitutional right (5 U.S.C. § 706(2)(B)). See Fourth Am. Compl., ECF No. 138, ¶¶ 117-28.
For the reasons explained above, the Court has already determined that USCIS is entitled
to summary judgment on Plaintiffs’ Counts One, Two, and Three claims as the 2018 visa petition
denial was not arbitrary and capricious, not in excess of statutory authority, and not unsupported
by substantial evidence. In their Motion for Summary Judgment, Plaintiffs completely failed to
develop their Count Four claim for a violation of congressional intent and Count Five claim for a
violation of their Constitutional rights under the Fifth Amendment. Despite Plaintiffs’ lack of
argument, on its independent review, the Court concludes that Defendants are entitled to
summary judgment on these Counts as well.
31
As to Count Four, Plaintiffs claim that USCIS’s interpretation of the statute and
regulations violates the congressional intent behind the EB-5 program. Id. at ¶ 125. In explaining
how USCIS violated congressional intent, Plaintiffs argue that the denial was “not in accordance
with law” and “in excess of statutory jurisdiction, authority, or limitations, or short of a statutory
right.” Id. at ¶ 124 (quoting 5 U.S.C. § 706(2)(A), (C)). However, the Court has already
determined that USCIS’s 2018 visa petition denial did not violate 5 U.S.C. § 706(2)(A) or (C) as
the denial was in accordance with law and not in excess of statutory authority. As such, the
denial did not violate congressional intent and USCIS is entitled to summary judgment on Count
Four.
As to Count Five, Plaintiffs argue that USCIS’s denial was “contrary to constitutional
right” in violation of 5 U.S.C. § 705(2)(B) and deprived Plaintiffs of due process and equal
protection under the Fifth Amendment. Id. at ¶ 127. Specially, Plaintiffs contend that USCIS
unreasonably delayed Plaintiffs’ visa petitions by requiring additional submissions of evidence,
wrongly denying the visa petitions based on the call option in the First Denial, and improperly
concocting new grounds rejecting the petitions in the 2018 denial. Id. at ¶ 128. However,
Plaintiffs provide no evidence that any of the delays in adjudicating and denying Plaintiffs’ visa
petitions were improper, let alone unconstitutional. USCIS is entitled to request additional
information when deemed appropriate, and Plaintiff has introduced no evidence that such
requests were inappropriate. 8 C.F.R. § 204.6(j). And, while USCIS’s First Denial of Plaintiffs’
visa petitions on account of the call option was contrary to the evidence, Plaintiffs have provided
no evidence that the denial was unconstitutional. Moreover, following the initial set of denials,
USCIS reopened and reconsidered the visa petitions of both Plaintiffs and non-Plaintiff
petitioners. Finally, the Court has found that the 2018 visa petition denial was reasonable under
32
the APA standards, and Plaintiffs have provided no evidence that the denial was
unconstitutional. Accordingly, Defendant is entitled to summary judgment on Count Five. 7
IV. CONCLUSION
In conclusion, the Court DENIES Plaintiffs’ Motion for Summary Judgment and
GRANTS Defendants’ Cross-Motion for Summary Judgment. USCIS denied Plaintiffs’ visa
petitions because Plaintiffs failed to establish that it was more likely than not that the JCEs which
would receive Plaintiffs’ investments were principally doing business in a TEA, and,
independently, because Plaintiffs failed to establish that it was more likely than not that their
investments would create full time positions for at least ten qualifying employees. For the
reasons explained above, the Court concludes that the 2018 visa petition denial on these grounds
should be upheld under the APA standards of review as not arbitrary and capricious, not in excess
of statutory authority, not unsupported by substantial evidence, not in violation of congressional
intent, and not contrary to a Constitutional right. An appropriate Order accompanies this
Memorandum Opinion.
/s/
COLLEEN KOLLAR-KOTELLY
United States District Judge
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In addition to requesting summary judgment, in the event that Plaintiffs’ visa petitions were
remanded for reconsideration, Plaintiffs also requested an injunction barring USCIS from
denying Plaintiffs’ petitions on the ground that the Regional Center was terminated. Pls.’ Mot.,
ECF No. 144, 42-49. However, because the Court is granting summary judgment in favor of
USCIS and not remanding the 2018 visa petition denial, the Court need not address this request.
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