Chang v. United States Citizenship and Immigration Services

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA CHIAYU CHANG, et al., Plaintiffs, v. Civil Action No. 16-1740 (JDB) UNITED STATES CITIZENSHIP & IMMIGRATION SERVICES, et al., Defendants. MEMORANDUM OPINION Federal law provides a path to the United States for foreign citizens who finance American businesses. To become eligible for a visa, however, an investor must actually invest. That is, she must place her money at risk of loss in hopes of potential gain. The question in this case is whether United States Citizenship and Immigration Services (USCIS) acted in an arbitrary and capricious manner when it declared plaintiffs ineligible for visas because their investments came with a “call option,” which gave the company in which they invested the choice to buy plaintiffs out. Because the call option at issue here does not provide the investors with any right to repayment, the Court answers this question in the affirmative and grants partial summary judgment to plaintiffs. I. BACKGROUND A. STATUTORY BACKGROUND The Immigration and Nationality Act (INA) authorizes the United States to issue visas “to qualified immigrants seeking to enter the United States for the purpose of engaging in a new commercial enterprise (including a limited partnership).” 8 U.S.C. § 1153(b)(5). As the fifth category of employment-based preferences listed in § 1153(b), this provision is often referred to as the “EB-5” visa program. To be eligible for EB-5 visas, applicants must have “invested . . . 1 capital” of a specified amount in a business “which will benefit the United States economy and create full-time employment for not fewer than 10 United States citizens” or legal immigrants. Id. § 1153(b)(5)(A). Normally, someone looking for an EB-5 visa must invest $1 million, id. § 1153(b)(5)(C)(i), but only $500,000 is required if the investment is made “in a targeted employment area,” id. § 1153(b)(5)(C)(ii); 8 C.F.R. § 204.6(f)(2). 1 If multiple EB-5 applicants invest in the same business, each must proffer at least $1 million (or $500,000), and each applicant’s investment must create at least ten new full-time jobs. 8 C.F.R. § 204.6(g)(1). Aliens who meet the INA’s requirements may file a Form I-526 petition, the approval of which allows them to apply for EB-5 visas. See 8 U.S.C. § 1202(a); 8 C.F.R. § 204.6(a). Those who are awarded visas are admitted as lawful residents on a conditional basis, along with their spouses and children. See 8 U.S.C. § 1186b(a)(1). Within ninety days of the two-year anniversary of their admission, if they are still fulfilling the EB-5 requirements, they may petition to remove the condition so that they and their families can become lawful permanent residents. See id. § 1186b(c)(1), (d)(2)(A). The EB-5 process thus consists of three steps: the Form I-526 petition, the initial visa application, and the application to lift conditional status. Although the entire EB-5 program is predicated on foreign investment, the INA does not specify what it means to invest. But a Department of Homeland Security (DHS) regulation does: it defines “invest” as “to contribute capital,” id. ...

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