Should I avoid a regional center project with a waiver of jury trial in its subscription agreement?

It is not unusual for a subscription agreement to have a waiver of the right to a jury trial. In such a circumstance, the agreement may provide for arbitration instead. In some cases, an argument can be made that you can pursue a bench trial as well but just not a jury trial. Furthermore, one does not need to necessarily avoid this type of project because, the recourse to litigation should not drive your investment decision. In EB-5 investments, there is no such thing as protection or warranty or indemnity against loss of investment. To the contrary, an EB-5 investment is an investment at-risk. In essence, an investor can earn profit or even lose his entire investment. Prior to signing any subscription agreement, consult an attorney to verify your legal options in the event legal action is necessary in the future.

This is certainly a personal preference issue. While most investors would prefer not to waive the right to a jury trial, my personal view is that there are so many other factors that make a project desirable or not that accepting or rejecting a project solely on the basis of this clause would not be advisable.

If you&#39re referring to arbitration, it may be more common (fortunately or unfortunately) then you&#39d expect. The more important focus, which the project should answer, is if you&#39re waiving jury rights, then what protections and safeguards does the project have in place if things go south. Well-structured projects with professional teams should have already considered such possibilities and have prepared contingencies in place to protect you and your interests.

Impossible to advise you without knowing many more facts. If the facts are complicated in a case it is often better to have a judge or arbitrator decide. Again, depends on which judge and rules for arbitration.

This is pretty common. This should not be the reason to avoid investing in the project, as long as you and your attorney have done solid due diligence on the merits of the project, the regional center performances and track record, etc.

It is not material for securities law litigation; however, hire an EB-5 immigration attorney to prepare your I-526 petition and EB-5 due-diligence professional to ensure you invest in a reputable regional center with an excellent track record and multiple successful projects behind its shoulders.

As an immigration attorney, I would defer to my corporate counsel colleagues on that. EB-5 investments are both an immigration and business decision to make.

There would be many criteria in selecting a regional center project, including whether or not there is an approval of an exemplar, any prior approvals of EB-5 investor petitions on Form I-526, the reputation of the project developer, the length of time the project developer has been in business, the protections provided to the investor, where the EB-5 investors are in the financing stack. With respect to the waiver of your right to a jury trial in conjunction with any dispute, you have to see what alternatives were provided. Typically, this might be an arbitration provision. Remember, whether or not you have a jury trial or arbitration, you would still be entitled to legal representation. Of course, the best bet would be to avoid investing in a project where you are likely to have a dispute.

A jury trial versus a judge trial may not be a critical aspect if it is a complex securities matter. This is merely one small aspect. It is important to evaluate the project, who are the principals, what is the track record, what is the capital stack, i.e., how much skin does the developer have in the project? Jury trial versus judge trial is not material. If you have to do any trial, it is very bad. Try and stay out of court by choosing a good project.

I would avoid it! Too one-sided.

Many agreements have arbitration clauses instead of lengthy lawsuits. So, waiving jury trials may not be a disqualification for investing with that regional center. What I would look at more closely is whether the regional center is closely related/affiliated with the project developer or if they are the one and the same. The vertical integration where the regional center does not exercise independence and oversight of the project on behalf of the investors is more of a red flag than a jury trial waiver.

Yes, this is indeed common and, in many cases, serves both parties. With that said, you should have the subscription agreement carefully reviewed by your personal attorney before you sign.

That is a normal provision in many contracts. It does not suggest the investment is good or bad.