A Wisconsin court ruled against a motion for a preliminary injunction filed by the EB-5 trade association Invest in the USA (IIUSA) against the U.S. Department of State (DOS) regarding the allocation of visas under the EB-5 investor visa program.
The legal relief, filed by IIUSA in August before the U.S. District Court for the Eastern District of Wisconsin, aimed mainly to prevent the DOS from transferring unused set-aside EB-5 visas to the Unreserved category.
However, in September, the U.S. court denied the legal relief. Therefore, the DOS can continue allocating these unused EB-5 visas as established by the EB-5 Reform and Integrity Act of 2022 (RIA).
IIUSA declined our request for comment.
In their blog, the immigration association American Immigrant Investor Alliance (AIIA) welcomed the judge’s ruling on this litigation, which they had opposed because it hurt EB-5 investors. “Thankfully, the judge agreed with us that the statute is clear about the carryover of unused visas. If the court ordered the Department of State to do the contrary, it would force them to violate the statute, which is beyond the scope of injunctive power.”
Why IIUSA sued DOS over the set-aside visas
In the claim, the EB-5 association representing USCIS-designated Regional Centers claimed that DOS’ interpretation of the EB-5 Reform and Integrity Act of 2022 (RIA) in this regard was “erroneous and unlawful,” which hurts their businesses, mainly “due to the loss of approximately 4,170 ‘set aside’ EB-5 visas and an unknown number of unreserved EB-5 visas at the end of fiscal year (“FY”) 2024 as a result.”
They argued that allowing the unused set-aside visas to carry over into the Unreserved category at the end of this fiscal year will create a backlog. This backlog could lead to decreased demand for their services, causing imminent harm and injury.
They requested the court to “(1) hold unlawful and set aside the defendants’ interpretation of the RIA, (2) enjoin defendants from allowing unused, unreserved EB-5 immigrant visas to ‘roll up’ into other immigrant visa categories in this fiscal year or any other, (3) enjoin defendants from allowing unused set-aside EB-5 visas from FY 2023 from carrying over to the unreserved EB-5 category at the end the fiscal year, and (4) order defendants to use good faith efforts to implement the program and process EB-5 petitions in a timely manner.”
IIUSA conceded in the claim that the RIA’s plain language explicitly mandates the carryover of unused EB-5 set-aside visas to the Unreserved category at the end of the following fiscal year. However, they asked the court to prevent the unused FY 2023 visas from carrying over as a “corrective measure.”
Why the U.S. court rejected IIUSA’s claim
The Wisconsin judge ruled that IIUSA could not pursue this remedy in a federal court. “Plaintiffs cannot establish causation or redressability and therefore do not have standing to seek the requested relief,” the court case document states.
The court also argued that the DOS does not accomplish the carryover of the set-aside visas itself but that it occurs automatically as per the language in the RIA. Therefore, IIUSA did not establish that such an injury is “traceable” to the department’s conduct.
“By operation of the statute, the unused set-aside EB-5 visas carry over to the unreserved category at the end of the fiscal year. Thus, even if I ordered the defendants to prevent the unused set-aside EB-5 visas from carrying over to the unreserved category, they could not comply with the order because the statute mandates that the visas carry over to the unreserved category at the end of the fiscal year,” the judge said.
Also, the federal court’s ruling argued that IIUSA could not prove that a favorable judicial decision would have likely remedied the alleged injury to their member regional centers’ businesses. “Redressability ‘hinges’ on whether a court can effectively give [the plaintiff the] relief requested, and when a plaintiff seeks relief that the relevant agency lacks the statutory authority to award, the plaintiff lacks standing.”
The court judge also said the motion was “moot” regarding the request for DOS to stop allowing unused, unreserved EB-5 immigrant visas to “roll up” into other immigrant visa categories at the end of the fiscal year.
DISCLAIMER: The views expressed in this article are solely the views of the author and do not necessarily represent the views of the publisher, its employees. or its affiliates. The information found on this website is intended to be general information; it is not legal or financial advice. Specific legal or financial advice can only be given by a licensed professional with full knowledge of all the facts and circumstances of your particular situation. You should seek consultation with legal, immigration, and financial experts prior to participating in the EB-5 program Posting a question on this website does not create an attorney-client relationship. All questions you post will be available to the public; do not include confidential information in your question.
