EB-5 Litigation Update Post #9: DHS Files Notice of Appeal in Behring Regional Center v Wolf
Today, DHS filed its notice of appeal on the last day before the 60-day window expired in Behring Regional Center v. Wolf et al. This is not cause for alarm, and EB-5 investors should not make hasty decisions and feel they must rush to make new EB-5 investments. Contrary to some reports already floating around, EB-5 will not suddenly return to $900,000 by virtue of filing a notice of appeal. It is expected that DHS would file a notice of appeal to preserve its rights. A federal appeal is a lengthy process, and Behring’s legal victory remains law throughout this process. We also anticipate DHS to drop its appeal once new EB-5 legislation is passed, which we expect occurring later this fall.
It is likely the appeal actually has little to do with the EB-5 regulation itself. Rather, DHS most likely wishes to argue about the specific legal question of agency ratification. This likewise turns on technical interpretation of the Vacancies Act. The district court rejected DHS’s very narrow interpretation in its June 22, 2021 judgment against DHS. Learn more about the court’s decision in Behring Regional Center v. Wolf et al.
No Cause for Rush – Hearing Not Expected Until 2022
Generally, after a notice of appeal is filed, the district clerk prepares the court record for appellate review. Once the record is completed, DHS will have 40 days to file a written argument in support of its appeal. Behring would have 30 days to respond, while DHS would have an additional 14-21 days to file a reply. In litigation, it is common for extensions to be granted. Thus, this briefing schedule could be longer, but the 9th Circuit Court may issue its own briefing schedule.
According to the Ninth Circuit Court of Appeals, for civil appeals, a hearing occurs approximately 9-12 months after the parties have submitted their written arguments. This assumes no extensions are given, which are common, and can extend the timeframe. After the hearing, the court has no time limit to issue its decision, but most cases are decided within 3-12 months after the hearing. See Ninth Circuit’s FAQ: https://www.ca9.uscourts.gov/general/faq/
Here, we expect briefs pertaining to Behring Regional Center v. Wolf et al to be filed later this year with a hearing scheduled in the spring. We should not expect a decision before mid-2022.
Potential EB-5 investors should not feel pressured to make new EB-5 investments under rushed circumstances. Instead, they should continue to complete their due diligence and have all their questions answered to understand the terms and their associated risks as they would with any investment. In fact, EB-5 investors have time to wait to see if the EB-5 Regional Center Program will be reauthorized as expected in late September 2021. Behring will host a webinar to provide update on the appeal and reauthorization efforts. Contact Behring to learn more.
DHS did not seek stay of judgment – $500,000 remains law of land
Notably, DHS did not file a motion to stay the judgment of the district court. This means that minimum investment amount of $500,000 remains the law of the land. It was unlikely DHS would succeed in obtaining a stay of judgment, especially 60 days after the district court’s order, because there is no urgency and no immediate harm. Moreover, USCIS itself acknowledged in early July 2021 that it would accept new EB-5 petitions received on or before June 30th at the $500,000 investment amount. See USCIS announcement.
Expected Reauthorization May Render Appeal Moot – EB-5 Investors Have Time to Wait and See
We anticipate that once new EB-5 legislation is passed, DHS will drop the appeal as it will no longer be relevant. Even if DHS pursues its right to appeal, we are confident that Behring will prevail and that the district court’s decision will be affirmed. Learn more about the district court’s June 22, 2021 decision here.