Second Hearing in Behring Regional Center Case Highlights “Legal Error” made by USCIS in RIA Interpretation

The Federal Court for the Northern District of California held its second hearing in the Behring Regional Center case challenging the USCIS’ interpretation of the EB-5 Reform and Integrity Act of 2022 (“RIA”) as requiring all pre-enactment regional centers to “redesignate.” In the interim between the first hearing and this one, IIUSA was granted leave to file an amicus brief supporting the Behring Regional Center and was granted the opportunity to argue its points.

Although the court did not yet make a final ruling, the hearing went well. The next steps are for the parties to file new briefs on what they believe appropriate relief will be and for the court to consider those arguments and rule on Behring’s motion for a temporary restraining order (TRO) or preliminary injunction.

Here are the most salient points from the hearing:

  1. The court believes, and said so several times, that USCIS made a “legal error” by interpreting the RIA to require regional center redesignation. The court felt that such a policy decision should have at least required analysis by USCIS as to the relative harm and protection of public interests the decision would create and the government did not do so.
  2. The court likewise believes that Congressional intent as to whether all regional centers should be required to redesignate is at best ambiguous.
  3. The court pointed out that since only Behring filed this lawsuit that the court may be limited to providing relief only to Behring. Interestingly, however, the government’s lawyer pointed out that doing so would give Behring an unfair advantage in the marketplace by allowing it to do business while no others can. The court pointed out that if the government was concerned about that outcome that there was nothing keeping USCIS from simply rescinding its interpretation for all regional centers and keeping the playing field level.
  4. It is this last point (#3) that the next round of briefings to the court will consider. Further, the court allowed Behring (as the plaintiff) to request that its motion for temporary relief be converted to a motion for summary judgment. (To this end, the court indicated that Behring would likely win on the merits.)

It is very likely that if the plaintiff wins its motion and especially if it wins a motion for summary judgment that the government will appeal. However, the IIUSA amicus brief played a large role in educating the court and its arguments are reflected in its own and other regional centers’ complaint now filed in the Federal District Court for the District of Columbia. It is unclear how that case will play a role in the outcome here, but it is fair to say it provides support and a very necessary backstop against any government appeal.

When the court makes its final ruling, IIUSA will post that outcome. In the meanwhile, we offer a very sincere thank you for a job well done to Paul Hughes and Ron Klasko who prepared IIUSA’s amicus brief and provided very cogent and persuasive arguments during the hearing.

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