Court Invalidates July 2019 EB-5 Final Rule: Behring RC v. Wolf

Behring RC v. Wolf

"Behring Regional Center, LLC, a California-based Regional Center that sponsors capital investment projects using funds from foreign investors who are EB-5 Immigrant Investor Program applicants, brings this Administrative Procedures Act (“APA”) action against the Department of Homeland Security.1 Plaintiff contends that Homeland Security violated the APA when it promulgated a final rule in July 2019 amending its regulations for the EB-5 Program (“the Final Rule”). At the hearing on Plaintiff’s motion for a preliminary injunction, the parties agreed to convert Plaintiff’s motion to summary judgment on its fourth claim—that the Final Rule was promulgated “in excess of statutory authority” because Former Acting Homeland Security Secretary Kevin McAleenan was not properly serving in his position when he promulgated the Final Rule in July 2019. ... Following the hearing, the current Secretary of Homeland Security, Alejandro Mayorkas, ratified the Final Rule. (Dkt. No. 34-1.) The government argues that this cures any defect in Mr. McAleenan’s promulgation of the Final Rule. Having considered the parties’ arguments and the relevant legal authority, and having had the benefit of oral argument on May 13, 2021, the Court GRANTS summary judgment in Plaintiff’s favor on its Fourth Claim for Relief. McAleenan was not lawfully serving as Homeland Security Secretary when he promulgated the Final Rule, and therefore, under the Federal Vacancies Reform Act of 1998 (FVRA), 5 U.S.C. § 3345 et seq., the Final Rule is void. Further, neither Secretary Mayorkas’s after-the-fact ratification nor the de-facto officer doctrine save the Rule."