There are many factors to consider when applying for the EB-5 immigrant investor visa. Investors typically focus on aspects within their control, such as choosing the right legal counsel, providing a solid source of funds for their investment capital, and selecting a suitable project.
However, litigation aimed at holding the United States Citizenship and Immigration Services (USCIS) accountable for handling EB-5 applications is becoming increasingly common. Understanding these legal actions as an essential part of the EB-5 landscape helps potential and current investors better grasp the risks and opportunities associated with obtaining a U.S. green card through this program.
For EB-5 litigator John Pratt from Kurzban Kurzban Tetzeli & Pratt, litigation helps define and refine the EB-5 program’s parameters to ensure fairness and consistency. “We’re in a regulated industry, and lawsuits and litigation are a component in a regulated industry to manage the program effectively.”
U.S. immigration attorney Robert Cornish from the Law Offices of Robert V. Cornish, JR., P.C., points out that the industry is maturing. “You are not seeing a lot of post-RIA things falling into the bucket of mismanagement and fraud yet, but it certainly hasn’t come to roost. What is coming to roost, though, are legacy projects and matters involving legacy projects from many years ago.”
Litigation cases that have made a difference in EB-5
Therefore, EB-5 investors must stay informed about ongoing and potential lawsuits involving applications like theirs. Awareness of the legal landscape enables them to make informed decisions and anticipate possible challenges involving their applications.
The case involving the Northern Rockies Regional Center is among the recent lawsuits that show litigation has power in shaping the EB-5 landscape.
In early 2024, the Northern Rockies Regional Center faced the loss of approval or authorization from USCIS due to unpaid program integrity fees. The lawsuit highlighted that more than 100 EB-5 regional centers were at risk of losing approval due to unpaid program integrity fees. Northern Rockies argued that USCIS did not provide proper notice of the late payment and that the agency had the flexibility to change deadlines for the fee. The regional center emphasized the impact on ongoing construction projects totaling $1.7 billion and the green cards of more than 500 investors. Ultimately, the court issued an injunction to maintain the regional center’s designation while reviewing the case.
According to Brad Banias from Banias Law, the litigation attorney representing Northern Rockies, the judge’s ruling affected the entire industry, not just individual cases. “It was one plaintiff in one court. And it was an industry-wide solution,” he said.
In another case, the Battineni lawsuit challenged USCIS’s decision to deny EB-5 investor visa petitions based on the source of investment funds. The lead litigator in the claim, Ron Klasko from Klasko Law, notes, “The judge ruled that the path of funds requirement, as the government has been using it, is wrong.” The D.C. judge who issued the ruling reinforced the need for USCIS to adhere to clear and consistent standards, safeguarding investors from arbitrary decisions.
EB-5 lawyer Steven Reingold from Saul Ewing Arnstein & Lehr LLP recounts a case involving an I-956F denial for a regional center project in Nevada. In this case, the USCIS could rectify its actions before a ruling was made. Reingold adds, “I’d like to say we won without firing a shot…the government saw no way out and had to do what we were asking.”
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