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February 26th, 2021 Kyle Behring

EB-5 Lawsuit Victory is Good News for EB-5 Investor Mandamus Cases

EB-5 investors with pending Writ of Mandamus cases and those who are considering filing a Writ of Mandamus received an important legal victory. The lawsuit Gutta v. Renaud, which was filed by Matthew Galati of the Galati Law Firm and Bradley Banias of Wasden Banias LLC, established precedent for EB-5 mandamus cases as the judge ruled in favor of the EB-5 immigrants seeking the government to act on their petitions. 22 EB-5 investors were facing unreasonably long I-526 adjudication delays, and through the lawsuit, it was ruled that their delays were in violation of the Administrative Procedure Act.

“This case is incredibly important because all of our investors were well below USCIS’ published processing times,” said Galati. “Almost uniformly the government uses processing times as a defense in their Motions to Dismiss. But if this case can be said to mean one thing, it’s that processing times cannot dictate access to federal court.”

The victory followed precedents set by the  Raju et al v. Cuccinelli and Keller Wurtz v. USCIS cases.

The EB-5 investors represented in the lawsuit had I-526 filing dates ranging from October 2017 to November 2019. The 22 investors, who had I-526 petitions pending for 12 to 37 months, come from a wide range of countries, including India, Canada, Russia, Brazil, and the United Kingdom. According to court documents, although some Plaintiffs invested in the same commercial enterprises within the same regional centers, there is largely no overlap between the petitions. It was determined that all the EB-5 investors represented in the case are all eligible to apply for lawful permanent resident status once their petitions are approved.

The ruling opens the door to help the youngest group of I-526 delay cases to date, Galati said.

The investors claimed that USCIS had deliberately slowed its processing of I-526 petitions and “has taken affirmative actions, unknown to the public, to purposefully delay adjudications of EB-5 petitions and applications,” according to court documents.

The investors assert that USCIS’s published processing times are inconsistent with its historical average processing times, which they believe may indicate that the Form I-526 processing times are artificially inflated to create a potential defense against lawsuits and also end Congressional and public inquiry into the length of time it takes to adjudicate those petitions. Additionally, the investors also assert that the decrease in number of petitions processed per year and the increase in published processing times did not correspond with a reduction of USCIS’ resources or significant rise in demand for the program.

In 2016, the I-526 petition filing fee increased by more than 100%, from $1,500 to $3,675, and USCIS again raised the filing fee to $4,015 in October 2020. During that same period, USCIS received far fewer applications than in years prior, yet USCIS adjudicated significantly fewer petitions than it did in previous years despite significant reduction of new I-526 petition filings. In addition, USCIS has allegedly expedited some petitions for some NCEs but not others and has reassigned staff away from processing I-526 applications. The investors asset this is indicative of a “common policy and practice to withhold and delay adjudication” of Form I-526 petitions.

“This decision has the strongest language by a federal judge to date that the U.S. government’s strategy to reflexively file a Motion to Dismiss on a I-526 mandamus action will not stand, and that the determination of whether a case is unreasonably delayed is a fact-intensive inquiry that cannot be defeated by a motion to dismiss,” said Bernie Wolfsdorf, a former President of the American Immigration Lawyers Association.

Attorney David Hirson of David Hirson & Partners LLP, added:

“It seems to support opposition that the published range of times for adjudication cases is unreasonable and out of line with reality,” he said. “Therefore, it appears that the delays are deliberate. Our office regularly files mandamus actions in various jurisdictions across the country. This decision is very favorable to the actions which we have taken in the past and which we will probably have to take on behalf of clients going forward.”

Following this victory, it seems that the next step is for plaintiffs to pursue discovery against USCIS concerning the way it allocates its resources for adjudications, said Attorney Robert C. Divine of Baker Donelson.

“USCIS has shown a tendency to want to avoid such discovery, and it seems likely that it will now expedite the plaintiffs’ cases to moot them,” he said. “Then it will be up to other investors to keep bringing new lawsuits with similar claims to keep pushing USCIS to allocate the resources necessary to complete all I-526 petitions more quickly than it has been doing. “

Between 2016 and 2020, USCIS received fewer EB-5 applications than in previous years but still adjudicated far fewer petitions than in previous years. More than 15,000 I-526 petitions were adjudicated in FY 2018 while only 4,673 were adjudicated in FY 2019.

For its defense, the U.S. Department of Justice claimed this was the USCIS’ processing timeline and it filed a motion to Dismiss, Sever, and/or Transfer, stating that the investors had not waited long enough for adjudication.

“This case upends the government’s knee jerk reaction to delay cases,” Banias said. “If they cannot move to dismiss cases with impunity, they will eventually have to submit to discovery and explain the reasons for these extraordinary delays. I believe they will continue to try to side-step discovery through settlement, which will mean we will continue to see good results through litigation for the EB-5 program.”

Key Takeaways – What Does This Victory Mean for EB-5 Investors

 

  • The results of this lawsuit are promising for EB-5 investors who have endured long wait times and unreliable USCIS processing time estimates. Some of the EB-5 Investors represented in this case had wait times as short as 12 months, were heard by the court, and received a ruling in their favor.

 

  • The U.S. Justice Department will not be able to stand behind arbitrary and constantly shifting processing times posted online. Processing times should become more predictable in the future, and EB-5 investors should be better able to gauge their timelines to achieving I-526 approval, conditional green card receipt, and eventual transition to permanent resident status.

 

  • EB-5 investors seeking to file a Writ of Mandamus should note that USCIS cannot arbitrarily change the jurisdiction of the court in which the lawsuit is filed. Cases filed in the Northern California District Court have seen numerous legal victories siding against USCIS on multiple occasions.

 

  • USCIS is not able to simply file motions to dismiss Writ of Mandamus lawsuits. Writ of Mandamus lawsuits are being heard, and there has been legal precedent set in favor of EB-5 investors experiencing unreasonably long wait times.

 

  • USCIS unsuccessfully attempted a “divide and conquer” strategy by seeking to separate the class action into individual cases to force EB-5 Investors to fight legal battles on their own. EB-5 Investor Class action suits will be heard by the federal courts and EB-5 investors will not need to seek legal action alone.

Sources:

 

Content presented in this article has been adapted from EB5Invesors.com’s article, “EB-5 lawsuit victory sets precedent for mandamus cases”, authored by Marie Ekberg Padilla, posted on February 22nd, 2021. Read the original article here: eb-5 lawsuit victory sets precedent for mandamus cases – EB5Investors.com

Content presented in this article has been adapted from a summary of court document text presented in Gutta v. Renaud, Case No. 20-cv-06579-DMR, 16 (N.D. Cal. Feb. 12, 2021) published by Smarter Legal Research: Casetext on Casetext.com on February 12, 2021, and accessed on February 25, 2021. Read the original article here:  https://casetext.com/case/gutta-v-renaud

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