Federal District Court for the Northern District of California Hears Oral Arguments on Motion for Preliminary Injunction to Implementing the EB-5 Regulations

The Federal District Court for the Northern District of California concluded a hearing yesterday afternoon (March 25) in the matter of Behring Regional Center v. Wolf. The plaintiff is a regional center based in Northern California and is not a member of IIUSA.

The plaintiff asserts the EB-5 regulations finalized in November 2019 are invalid because the then-relevant leadership at the Department of Homeland Security was not properly appointed. In addition to the underlying case’s request that the regulations, therefore, be vacated, the plaintiff moved for a preliminary injunction to prevent the regulations from being implemented now.

During the hearing, the court considered two motions: a) the plaintiff’s motion for a preliminary injunction to stop the implementation of the regulations and b) the defendant’s (government’s) motion to remove the case to the Federal District Court for DC given the government’s assertion that the Federal District Court in DC is hearing the same issue in a case filed by a Florida based regional center. In both cases, the plaintiffs are represented by Greenburg Traurig.

Yesterday’s hearing yielded the following outcomes.

1. The court did not decide the government’s request for removal, seeing the motion for a preliminary injunction as a threshold question. Ultimately, however, the court seemed predisposed to seeing the cases as different enough to keep the matter in California.

2. The court did not decide the question of injunctive relief either. Instead, the court transitioned the plaintiff’s motion from one seeking a preliminary injunction, to one of summary judgment, meaning her ruling on the motion would likely be dispositive for the entire case.

3. The court also stated she wants to hear further deliberation only on the pending questions of law, namely the plaintiff’s argument that the “appointments clause” prohibits the regulations from being valid because they were finalized by inappropriately named officials and the defendant’s “de facto officer” argument which allows a court to treat the acts of an “officer defacto” as “valid and binding” even if he is not “an officer de jure.”

4. The court also asked the government to provide a brief on remedies in the event the motion for summary judgment is granted. This may include sending the decision on whether to abandon or reissue the regulations back to the current Secretary of Homeland Security, Alejandro Mayorkas. In fact, the court stated, “If I were to vacate [the regulation] because I find it was invalid, it goes back to the secretary who could reimpose it if he agrees with it.”

5. Finally, the court and the parties then agreed to the following schedule.

  • The government’s brief on remedies is due by April 1st. Any reply from the plaintiffs is due by April 8th.
  • Additional briefs on matters of law are due by April 22nd.
  • If the court is unable to decide on summary judgment with the briefs alone, a hearing on all of the above is scheduled for May 6th.

Please email questions to advocacy@iiusa.org

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