A California-based company is suing U.S. Citizenship and Immigration Services over recent guidance canceling authorization for immigrant investor enterprises.
In a lawsuit filed Friday in the U.S. District Court for the Northern District of California, Behring Regional Center LLC argues that USCIS, a unit of the Department of Homeland Security, is in violation of the Administrative Procedure Act and its recent guidance contradicts the clear intent of Congress.
The EB-5 visa program allows immigrant investors to apply for a green card if they put up a minimum amount of funds into a U.S. business and create at least 10 jobs. EB-5 regional centers, which have come to account for most investments under the program, allow investors to qualify for visas by pooling their resources into large enterprises like real estate projects. Lawmakers passed legislation last month to restart the program after a more than an eight-month lapse in authorization.
The EB-5 Integrity and Reform Act, which was included in a fiscal 2022 omnibus spending bill, boosted minimum investment requirements to $800,000 in targeted investment areas and $1,050,000 for standard investments. The law also added safeguards like new reporting requirements for regional center businesses. Investors had counted on the regional center program restarting next month. But guidance posted to the USCIS website this month requires existing regional center programs to re-certify by submitting new business plans, causing alarm among industry advocates.
That decision already has forced Behring to delay construction projects valued at $450 million scheduled for the next two years, the group said in the complaint. The business also has had multiple requests from investors to pull their funds because they no longer see a path to a green card through the EB-5 program.
“USCIS’s Announcement deauthorizing regional centers inhibits innovative projects, frustrates foreign investment by escalating the risks to unacceptable levels, and destroys any of the last lifelines that regional centers can offer to prospective investors,” the complaint reads.
Years-Long Wait Times
Behring Regional Center, part of a real estate and private equity firm in the San Francisco Bay Area, successfully sued the Trump administration to overturn regulations that would have made the EB-5 more expensive for investors, arguing they violated the federal rule making process. The reauthorization law passed by Congress includes measures similar to those issued in the regulations, such as larger minimum investment amounts and new definitions of targeted investment areas.
Greenberg Traurig LLP, which represents Behring in the lawsuit over the USCIS guidance, also represented the company in that case. Laura Foote Reiff, a partner at the law firm, is a co-chair of the EB-5 Investment Coalition.
Behring argues that it’s unlikely any regional center business will be reauthorized before the expiration of the Integrity Act in 2027, because current wait times for approval of new centers range from five to nine years, according to the complaint.
The latest development also damages the ability of businesses to bring in prospective investors in the future, the group said, and creates a drag on the economy because of the cancellation of new construction projects.
Immigrant investors who have waited years for green card petitions to be adjudicated, meanwhile, now face rejections because they won’t be affiliated with approved regional centers, according to the lawsuit.
Cause of action: Violation of the Administrative Procedure Act.
Relief: A declaration that the USCIS guidance is invalid and an order enjoining the agency from deauthorizing already approved regional centers.
Response: A spokesman for USCIS said the agency doesn’t comment on pending litigation as a matter of practice.
Attorneys: Behring Regional Center LLC is represented by Todd Pickles, Michael Sklaire, Sarah Mathews, and Aaron Levin at Greenberg Traurig LLP.
The case is Behring Regional Center LLC v. Mayorkas et al, N.D. Cal., 3:22-cv-02487, 4/22/22.