In the matter of Huashan Zhang, et al. v. United States Citizenship and Immigration Service, et al. (United States District Court for the District of Columbia, Nov. 30, 2018), plaintiffs challenged the decisions of the United States Citizenship and Immigration Service (USCIS) to deny their EB-5 immigrant investor visa petitions based upon USCIS’ erroneous interpretation of its own regulation. Plaintiffs also challenged USCIS’ denials of their petitions as violative of the Administrative Procedure Act (APA) and Immigration and Nationality Act (INA). Furthermore, plaintiffs moved for certification of a class.

Although it is too early to know if USCIS will appeal the decision or if other district courts will follow the ruling of the District of Columbia, as it stands, this is a significant decision favorable to EB-5 investors. The court found that USCIS’ interpretation of the term “capital” is “plainly erroneous, and its denials based on that interpretation are arbitrary and capricious.” (See Opinion at page 43). The court further found that USCIS violated the APA’s notice and comment requirement, as its interpretation was a legislative rule rather than an interpretative rule or statement of policy. In addition, plaintiffs’ motion for certification of a class was granted with certain modifications to the class definition; the modifications affect those petitioners whose petitions were denied solely based upon USCIS’ flawed interpretation as described in the USCIS Immigrant Investor Program Office’s released remarks on April 22, 2015.

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Photo of Bruce C. Rosetto Bruce C. Rosetto

Bruce C. Rosetto represents private and public companies, private equity funds, investment banks, and prominent equestrian clients. He has broad experience in public company securities work, private placement financings, corporate governance, and alternate assets. His practice focuses on entrepreneurs and small to middle…

Bruce C. Rosetto represents private and public companies, private equity funds, investment banks, and prominent equestrian clients. He has broad experience in public company securities work, private placement financings, corporate governance, and alternate assets. His practice focuses on entrepreneurs and small to middle market public companies throughout the United States in a variety of industries, including equine, life sciences, bio-tech, auto dealerships, investment banking, real estate, environmental, manufacturing, technology, entertainment and many others. He also forms private equity funds and family offices and represents affiliated portfolio companies. In addition, he also advises clients in connection with raising capital for and establishing regional centers to administer, projects qualifying for investment under the EB-5 Entrepreneur Investment Visa Program.

Photo of Bracha Pollack Bracha Pollack

Bracha Pollack practices in all areas of corporate and securities law, with a focus on debt and equity investments, securities offerings, joint ventures, restructuring, asset purchases, mergers and acquisitions, private equity transactions, governance issues, general corporate and securities laws matters, and broker-dealer regulation.

Bracha Pollack practices in all areas of corporate and securities law, with a focus on debt and equity investments, securities offerings, joint ventures, restructuring, asset purchases, mergers and acquisitions, private equity transactions, governance issues, general corporate and securities laws matters, and broker-dealer regulation. In addition, Bracha has experience representing borrowers and lenders in secured financing transactions.

She represents private and public companies, emerging companies, private equity funds, family offices, hedge funds, investment banks, and strategic investors across a diverse variety of industries, including banking and finance, real estate, equine, life-sciences, manufacturing, technology, and entertainment. Bracha also counsels clients regarding raising capital under the EB-5 Entrepreneur Investment Visa Program.