Federal Court cases deciding on EB-5 issues

A few, relevant Federal court cases (both District & Circuit Court) deciding on EB-5 issues will be attached in their entirety in this section.

Spencer Enterprises, Inc. v. United States, CIV-F-99-6117, 22 (E.D. Calif. 2001), a district court decision is often cited by AAO decisions as holding that USCIS or AAO can ask for detailed documentary evidences on the ground that these "hypertechnical" requirements serve a valid government interest of confirming the funds utilized are not of suspect origin.

The 9th Circuit appellate decision for the same Spencer Enterprise case described above upholds the federal district court's decision.

The 2003 Chang case is very important EB-5 9th Circuit Court decision which ruled in favor of EB-5 applicants on an issue related to I-829 petitions by holding that it is impermissible to apply changes in the EB-5 program to the adjudication of an I-829 petition to remove the conditions on permanent residency when these changes were made subsequent to the approval of the initial I-526 immigrant petition. The. U.S. government took an appeal on the Federal District Court case because it wanted to overturn the District Court's holding but lost on the appeal, setting a significant precedent for I-829 purpose, at least in the 9th Circuit.

Attached is the first brief submitted by U.S. government, followed by its second brief in response to Petitioner's response brief and then the 9th Circuit Court's decision itself, Chang v. U.S., No. 01-56266 (9th Cir. 4/29/03).

The holding of the Chang Federal District Court can be summarized below:

Judge King held that the INS could properly change its administration of the immigrant investor program by issuing administrative decisions rather than following the normal notice and comment rulemaking required by the Administrative Procedure Act. This sort of looks like it favors INS . . .

However, Judge King also held that the INS could not “change the rules of the game”by automatically applying its new, more restrictive interpretations retroactively to EB-5 investors who had already received conditional green cards and who are now trying to have those conditions removed through I-829 process. Instead, the INS (now USCIS) must allow such investors an opportunity to show how such a retroactive application would hurt them.

Basically, the equity argument won over. It's sort of hard to allow the deportation of 200 investors who relied on certain interpretations by the then INS.