Cite as "AILA InfoNet Doc. No. 01052380 (posted May. 23, 2001)"
FOR IMMEDIATE RELEASE
May 09, 2001
AILA Senior Director of Advocacy
Court Rules in Favor of Immigrant Investors
federal court has ruled that the U.S. Immigration and Naturalization
Service (INS) may not automatically apply new rules retroactively to
certain immigrant investors. Rather, the INS must allow investors a chance to prove that
retroactive application of the new rules would hurt them.
The May 3, 2001 decision by Federal District Judge George H. King
in Chang v. United States, No. CV-99-10518-GHK (AJWx) (C.D. Cal. May 3,
2001), “is a victory for immigrant investors and proves that the INS
must follow due process when it changes the rules of the game,” said
Stephen Yale-Loehr, chair of the Investors Committee of the American
Immigration Lawyers Association (AILA).
case involves more than 200 foreign investors and their family members
who sued the U.S. government in federal court in San Francisco in 1999,
alleging that the INS illegally changed its rules governing the
immigrant investor visa category. The
case is the largest of almost a dozen lawsuits filed against the INS
over its mishandling of the immigrant investor visa program.
The investors all
obtained conditional green cards by investing in U.S. companies.
The plaintiffs allege that after the INS granted them conditional
resident status, the INS abruptly changed its rules interpreting the
immigrant investor program in mid-1998, and is applying the new
restrictive rules retroactively. Because
of the INS’ changes, the plaintiffs could now be deported from the
United States, even though they complied with the rules in effect when
they invested their money. The plaintiffs claim that the INS’s actions violate their
constitutional due process rights, the Administrative Procedure Act, and
the U.S. immigration statute.
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.
But the judge held
that the INS could not “change the rules of the game” by
automatically applying its new, more restrictive interpretations
retroactively to investors who had already received conditional green
cards and who are now trying to have those conditions removed.
Instead, the agency must allow such investors an opportunity to
show how such a retroactive application would hurt them.
Ira Kurzban of Miami,
Florida and Marc Van Der Hout of San Francisco, California represent the
plaintiffs. According to Mr. Kurzban, “We hail Judge King’s ruling on
the retroactivity issue. The
INS cannot arrogantly decide to secretly change the rules for an entire
visa program in mid-stream and then apply them retroactively, hurting
hundreds of innocent people.”
Attached is a
backgrounder summarizing the immigrant investor visa category and
detailing the problems caused by the INS.
For more information or press interviews, contact Judy Golub,
Senior Director of Advocacy and Public Affairs at AILA (ph:
202-216-2403; email: firstname.lastname@example.org), or Stephen Yale-Loehr, Chair,
AILA Investors Committee (ph: 607-273-4200; email: SYL@twmlaw.com).
INS Hurts the EB-5 Immigrant Investor Program
Congress created the employment-based fifth preference (EB-5) immigrant
visa category in 1990 for immigrants who invest in U.S. companies that
benefit the U.S. economy and create at least 10 full-time jobs.
The basic amount required to invest is $1 million, although
that amount is reduced to $500,000 if the investment is made in a high
unemployment area or rural area. When
investors first make their investment, they get a “conditional”
green card good for two years. At the end of that time they must prove
that they have satisfied the requirements of the law before the
Immigration and Naturalization Service (INS) will remove the condition
and make them regular green card holders.
The requirements to
get an EB-5 green card are strict.
Although 10,000 EB-5 green cards are available each year, at most
only about 1,000 investors and their families have immigrated in this
category each year.
The INS is not familiar with handling complex investment programs.
Worried that some investors were not investing their full money
up front (even though the law does not require that, and the INS has
never proven fraud in the program), in 1998 the INS issued four
precedent decisions that significantly restricted eligibility for EB-5
status. To make matters
worse, the INS is applying the new restrictions retroactively to
terminate the conditional green cards granted to foreign investors who
made their investments in good faith based on the rules in effect before
the 1998 decisions. About
850 investors are caught in this dilemma.
Immigration Lawyers Association (AILA) believes that the retroactive
application of these four decisions violates the rulemaking requirements
of the Administrative Procedure Act.
Moreover, since 1998 the INS has issued numerous nonprecedent
decisions that make it even more problematic to use the EB-5 program.
It is estimated that currently, the INS is approving only about
15-25 percent of the few EB-5 petitions that are still being filed.
The INS’s actions
have effectively gutted the EB-5 program.
AILA estimates that over $400 million in potential investments have been
lost since 1998 because investors are unwilling to engage in such an uncertain process. But for the INS’s actions, at least 10,000 U.S. jobs would
have been saved or created, many in high unemployment areas such as
rural communities and urban areas.
For more information,
contact Judy Golub, Senior Advocacy Director at AILA (ph: 202-216-2403;
email: email@example.com), or Stephen
Yale-Loehr, Chair, AILA Investors Committee (ph: 607-273-4200; email: SYL@twmlaw.com).