Does 1-72 v. United States Citizenship & Immigration Services
239 F. Supp. 3d 297
| D.D.C. | 2017Background
- Foreign investors (Plaintiffs) filed I-526 petitions under the EB-5 program based on identical $500,000 investments in Quartzburg Gold, LP to fund risky mining projects.
- The partnership agreement included a general‑partner‑exercisable "Call Option" allowing repurchase of a limited partner’s interest for $550,000 or 400 oz. gold if the business succeeded; the option was not a right held by investors nor guaranteed to be exercised.
- USCIS issued preliminary NOIDs and RFEs; Plaintiffs responded. USCIS then issued denials on a rolling basis using three different denial forms (First, Second, Third Denials) that cited different reasons.
- First Denial: sole ground was that the Call Option meant investors’ capital was not "at risk" (thus akin to a prohibited guaranteed return or debt).
- Second and Third Denials: in addition to or instead of the Call Option concern, raised TEA qualification, whether capital was made available to the job‑creating entity, and employment‑creation sufficiency.
- Procedurally, Plaintiffs sued under the APA; the district court reviewed the administrative record and granted‑in‑part Plaintiffs’ summary judgment, remanding all petitions to USCIS.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether USCIS lawfully concluded investors’ capital was not “at risk” because of the Call Option | Call Option did not guarantee return; investors’ capital remained at risk given dependence on risky mining projects | Call Option resembles a prohibited redemption/guaranteed return (citing Matter of Izummi), so investment is functionally debt, not capital at risk | Court: USCIS’s First Denial reasoning was arbitrary and capricious; Call Option did not guarantee return and did not eliminate risk; reliance on Izummi was misplaced |
| Whether USCIS lawfully treated factually identical petitions differently by issuing different denial forms | Plaintiffs: petitions were functionally identical and should have been treated same; unexplained disparate treatment is arbitrary | Defendants: suggested later denials subsume earlier ones but offered no adequate explanation for inconsistent treatment | Court: USCIS acted arbitrarily and capriciously by treating similar cases differently without explanation; remand required |
| Whether court should order approval of petitions or remand for further agency action | Plaintiffs: requested mandatory grant of petitions | Defendants: asked court to consider only later denials and remand earlier denials for consistency | Held: Court declined to grant petitions; remanded to USCIS for further explanation and reconsideration consistent with opinion |
| Whether court resolved merits of additional grounds raised in Second/Third Denials | Plaintiffs: other denial grounds also defective | Defendants: additional grounds justified denials | Held: Court did not decide merits of those additional grounds; remanded so USCIS may address them and explain disparate treatment |
Key Cases Cited
- Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (agency must examine relevant data and explain rational connection between facts and decision)
- Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (district court reviewing agency under APA sits as appellate tribunal; summary judgment resolves legal sufficiency of administrative record)
- Florida Power & Light Co. v. Lorion, 470 U.S. 729 (record deficiencies normally require remand to agency)
- Cty. of Los Angeles v. Shalala, 192 F.3d 1005 (D.C. Cir. 1999) (remand is proper where agency record does not support action)
- Hagelin v. Fed. Election Comm’n, 411 F.3d 237 (D.C. Cir. 2005) (agency action not upheld if not supported by substantial evidence or clear error in judgment)
- Transactive Corp. v. United States, 91 F.3d 232 (disparate treatment of similar cases without adequate explanation is arbitrary)
- Kreis v. Sec’y of Air Force, 406 F.3d 684 (agency must treat similar cases similarly or explain distinctions)
- Colorado Interstate Gas Co. v. F.E.R.C., 146 F.3d 889 (remand required where agency fails to explain differential treatment)
- Fox v. Clinton, 684 F.3d 67 (prudence in remanding agency decisions in immigration contexts)