Behring Regional Center Lawsuit Update

Behring Regional Center Lawsuit Update

During a hearing on Thursday, May 14 for the Behring Regional Center v. Wolf, Case No. 3:20-cv-09263 (N.D. Cal), Magistrate Judge Jaqueline Scott Corley heard arguments on whether the former U.S. Secretary of Homeland Security, Kevin McAleenan, was unlawfully appointed and, if so, whether the new Secretary (Alejandro Mayorkas) can legally ratify the EB-5 Modernization Regulations enacted by his predecessor.

Citing the Federal Vacancies Reform Act, the attorney for the Department of Justice (DOJ) said the ratification of the Regs by Mcleenan was delegable and further, now that the Senate has confirmed Secretary Mayorkas, he has authority to retroactively ratify the rule. The representative for Behring Regional Center maintains that McAleenan lacked authority under the law to enact the EB-5 Regs and therefore, his action cannot be ratified by his successor. The Judge ended the hearing by stating that this was clearly a matter of “statutory interpretation,” and she seemed persuaded by the Behring attorney’s arguments. While EB-5 stakeholders continue to wait for the outcome of this case, it is expected that even if the Judge rules for Behring, the Biden Administration will immediately reinstate the regulations.

The case was originally filed in December 2020, when Behring Regional Center filed a motion for preliminary injunction against DHS in the US District Court for the Northern District of California to block the implementation of the new Regulations (the EB-5 Modernization Rule) that went into effect on November 21, 2019. In order to be granted this equitable relief, the Regional Center has argued that it is likely to succeed on the merits of its claims, which allege that: DHS violated federal law by issuing an arbitrary and capricious rule; it failed to examine a regulatory flexibility analysis; the department exceeded its statutory authority in designating TEAs; and, most importantly, that the EB-5 Modernization Rule violates the Administrative Procedure Act because acting DHS officials had no legal authority to enact the Rule. For more information on the case, please read the case summary and expected outcome here:

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