EB-5's investment amount reinstated to $500,000, court rules today
On June 22, 2021, in Behring Regional Center LLC V. Chad Wolf, et al., the U.S. District Court for the Northern District of California ruled that Former Acting Homeland Security Secretary Kevin McAleenan was not properly serving in his position under the Federal Vacancies Reform Act when he promulgated the EB-5 Modernization Final Rule, and accordingly ruled that, the new regulations which took effect on Nov. 21, 2019 must be "set aside." U.S. Magistrate Judge Jacqueline Scott Corley also ruled that the ratification of the EB-5 Modernization Final Rule by current Secretary of Homeland Security Alejandro Mayorkas in March of 2021 did not cure the defect arising from McAleenan's improper appointment.
The court declined to address the U.S. government's request for a stay and "remanded the matter to [DHS]". The court stated: "While there would certainly be some disruption if the Rule is vacated given the length of time the Rule has been in effect, the government has made no specific showing of harm beyond asserting that it would be 'extraordinarily disruptive.'" On the other hand, the court also declined to grant Plaintiff's injunction barring USCIS from reinstating the EB-5 Modernization Rule absent compliance with the rule-making process governed by the Administrative Procedures Act.
It is possible that USCIS appeals the decision to the 9th Circuit Court of Appeals. It is also possible, and likely, that Secretary Mayorkas will now seek to finalize the EB-5 Modernization Rule, but until then, the old minimum investment amounts ($500,000 if in a TEA/$1,000,000, if not) and Targeted Employment Area standards go back to pre-November 2019. This is a developing story.