Mirror Lake Village, LLC v. Chad F. Wolf, 971 F.3d 373

EB-5 grants visas to foreign nationals who "invested capital" in a new U.S. commercial enterprise that benefits the U.S. economy and creates 10 full-time jobs; rural-targeted minimum investment at the time was $500,000.
Mirror Lake Village, LLC planned a rural senior-living project; five foreign nationals each invested $500,000 in exchange for membership interests.
The operating agreement allowed two sell-back (put) options: a one-time repurchase at purchase price after conditional residency removal, and annual 20% sales thereafter at fair market value; both put exercises were expressly contingent on Mirror Lake having sufficient "Available Cash Flow" (excluding members' capital).
USCIS denied the EB-5 petitions, finding investors had not placed capital "at risk," reasoning the sell-back options allowed recovery if the business succeeded; USCIS relied on agency precedent (Matter of Izummi) in its denials.
Plaintiffs sought reopening/reconsideration at USCIS (denied) and then sued under the APA in district court; the district court granted summary judgment to USCIS.
The D.C. Circuit reversed, holding USCIS's explanation arbitrary and capricious because it failed to explain why a cash-flow-contingent sell-back eliminated the requisite risk of loss.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the investors' capital was "at risk" under 8 C.F.R. § 204.6(j)(2)	Investment is at risk because redemption depends on future cash flow; risk of loss exists if business fails or lacks cash	Sell-back options function as exit strategies; if business succeeds investors can recover, so capital is not at risk	Capital was placed at risk; USCIS failed to reasonably explain why contingency on cash flow did not create risk — denial overturned
Whether USCIS's denial was arbitrary and capricious	USCIS did not reasonably explain inconsistency between its definition of 'at risk' and its denial	USCIS relied on its prior reasoning and agency precedent	Denial was arbitrary and capricious for lack of reasoned explanation; remanded to set aside denials
Whether Matter of Izummi supports denying petitions with contingent sell-back options	Izummi is distinguishable because there the redemption was guaranteed and not contingent on business performance	USCIS cited Izummi to treat sell-back/redemption arrangements as non-investments or illusory promises	Court held Izummi inapplicable — Izummi involved guaranteed redemption; contingent put here presents ordinary business risk, not an illusory promise

Fogo De Chao (Holdings) Inc. v. DHS, 769 F.3d 1127 (D.C. Cir. 2014) (applies arbitrary-and-capricious review to agency EB-5 determinations)
Jackson v. Mabus, 808 F.3d 933 (D.C. Cir. 2015) (agency action must be reasonably explained)
Mirror Lake Village v. Nielsen, 345 F. Supp. 3d 56 (D.D.C. 2018) (district court decision granting summary judgment to USCIS)