In the matter of Huashan Zhang, et al. v. United States Citizenship and Immigration Service, et al. (United States District Court for the District of Columbia, Nov. 30, 2018), plaintiffs challenged the decisions of the United States Citizenship and Immigration Service (USCIS) to deny their EB-5 immigrant investor visa petitions based upon USCIS’ erroneous interpretation of its own regulation. Plaintiffs also challenged USCIS’ denials of their petitions as violative of the Administrative Procedure Act (APA) and Immigration and Nationality Act (INA). Furthermore, plaintiffs moved for certification of a class.
Although it is too early to know if USCIS will appeal the decision or if other district courts will follow the ruling of the District of Columbia, as it stands, this is a significant decision favorable to EB-5 investors. The court found that USCIS’ interpretation of the term “capital” is “plainly erroneous, and its denials based on that interpretation are arbitrary and capricious.” (See Opinion at page 43). The court further found that USCIS violated the APA’s notice and comment requirement, as its interpretation was a legislative rule rather than an interpretative rule or statement of policy. In addition, plaintiffs’ motion for certification of a class was granted with certain modifications to the class definition; the modifications affect those petitioners whose petitions were denied solely based upon USCIS’ flawed interpretation as described in the USCIS Immigrant Investor Program Office’s released remarks on April 22, 2015.