United States District Court, District of Columbia
E. BOASBERG, United States District Judge.
have consequences. But when it comes to federal agencies, the
Administrative Procedure Act shapes the contours of those
consequences. This case involves the Department of Homeland
Security's decision to delay the implementation of an
Obama-era immigration rule, the International Entrepreneur
Rule, 82 Fed. Reg. 5, 238 (Jan. 17, 2017). The Rule would
have allowed certain foreign entrepreneurs to obtain
immigration “parole” - that is, to temporarily
enter the United States despite lacking a visa or green card.
It was finalized in the waning hours of the Obama
administration and was set to take effect 180 days later, on
July 17, 2017. On the eve of that date, however, the
Department issued a new rule (“the Delay Rule”)
delaying the effective date of the original one for another
eight months, until March 14, 2018. The agency did so,
however, without providing notice or soliciting comment from
the public, as the APA generally requires. Plaintiffs brought
suit, alleging that the agency lacked good cause to dispense
with the APA's strictures and that the Delay Rule was
therefore invalid. Having now reviewed both sides'
Motions for Summary Judgment, the Court agrees and will
vacate the Delay Rule.
controversy boils down to two competing rules. The first
would have allowed certain foreign entrepreneurs to
temporarily enter the United States. The second, promulgated
six months later, delayed that rule from taking effect. The
Court discusses each in turn and then briefly recounts this
suit's procedural history.
The International Entrepreneur Rule
Department of Homeland Security promulgated the International
Entrepreneur Rule (“IE Final Rule”) to
“encourage international entrepreneurs to create and
develop start-up entities with high growth potential in the
United States.” 82 Fed. Reg. at 5238. The Department
believed that attracting foreign entrepreneurs would
“benefit the U.S. economy through increased business
activity, innovation, and dynamism.” International
Entrepreneur Rule, 81 Fed. Reg. 60, 129, 60, 131 (Aug. 31,
2016) (Notice of Proposed Rulemaking). Before the issuance of
the regulation, foreign entrepreneurs lacked a clear-cut
avenue for entry into this country. Id. at 60,
151-52 & n.52 (citing Nina Roberts, For Foreign Tech
Entrepreneurs, Getting a Visa to Work in the U.S. is a
Struggle, The Guardian (Sept. 14, 2014)). The United
States had no dedicated visa category for foreign
entrepreneurs, and other visa options were frequently
unavailable to that group. Id.
executive branch, however, cannot unilaterally create a new
visa category, see 8 U.S.C. § 1101(a)(15), so
it turned to a more temporary solution for immigrant
entrepreneurs: parole. See 82 Fed. Reg. at 5, 244.
“Parole” - the French source of which term
derives from giving one's word - allows a foreign
national to be physically present in the United States for a
specific, temporary period, ranging from days to years.
See, e.g., Leng May Ma v. Barber, 357 U.S.
185, 190 (1958). Unlike visas, parole is not an admission to
the United States and gives a recipient no formal immigration
status. See 8 U.S.C. §§ 1101(a)(13)(B),
1182(d)(5)(A). The Immigration and Nationality Act (INA)
instead grants the Secretary of Homeland Security the
discretionary authority to parole individuals into the United
States on a case-by-case basis. Id. §
1182(d)(5)(A). DHS views that power as
“expansive.” 82 Fed. Reg. at 5243. Although it
may grant parole only for urgent humanitarian reasons or in
cases of “significant public benefit, ” Congress
has defined neither term. Id. at 5, 242-43; see
also 8 U.S.C. § 1182(d)(5)(A).
promulgating the IE Final Rule, DHS latched onto the latter
criterion. It sought to provide guidance for its line-level
adjudicators as to when parole for foreign entrepreneurs
would provide a “significant public benefit” to
the country. See 82 Fed. Reg. at 5, 239. As the
agency explained, adjudicating applications for that group
often proved complex, so it “decided to establish by
regulation the criteria for the case-by-case
evaluation” of their applications. Id. at 5,
238. The agency also established “application
requirements that are specifically tailored to capture the
necessary information for processing parole requests on this
basis.” Id. In so doing, DHS expected
“to facilitate the use of parole” for foreign
entrepreneurs and provide a “transparent
framework” by which it would exercise its discretion.
“considered for a discretionary grant of parole”
under the Rule, an entrepreneur “would generally need
to demonstrate the following”:
1. The applicant must have formed a new start-up entity in
the United States within 5 years of the application;
2. The applicant must a) possess at least a 10% ownership
interest in the business; and b) “have an active and
central role” in its operations and future growth; and
3. The applicant must validate the business's potential
“for rapid growth and job creation” by showing a)
it has received at least $250, 000 from established U.S.
investors; or b) it has received at least $100, 000 in grants
from government entities.
Id. at 5, 239. The Rule also created
“alternative criteria” for meeting the final
prong. Id. If an alien partially met one of the
investment thresholds, she could provide “additional
reliable and compelling evidence” of her company's
potential for rapid growth and job creation. Id.
who met the criteria (along with spouses and minor children)
could be considered for discretionary parole of up to 30
months. Id. Those individuals could also apply for
re-parole for up to 30 additional months if they met certain
conditions. Id. at 5, 240. Importantly, however,
satisfying the above criteria did not guarantee
parole. Rather, the IE Final Rule streamlined the
agency's treatment of entrepreneurs and guided how it
would interpret the “significant public benefit”
prong of the test. Agents would still need to assess
applications on a case-by-case basis and retained the
ultimate discretion as to whether to approve parole.
Id. at 5, 239. In making such discretionary
determinations, USCIS would consider all relevant
information, including any criminal history or other serious
adverse factors that could weigh against admission.
Id. DHS, moreover, retained its authority to
terminate parole at any time, consistent with existing
regulations. Id. at 5, 243. In such cases, the
individual would be “restored to the status that he or
she had at the time of parole.” Id. (quoting 8
C.F.R. § 212.5(e)); see also 8 U.S.C. §
agency solicited and received 763 comments on its proposed
rule. See 82 Fed. Reg. at 5, 244. In response, it
meaningfully revised the final version, including changing
the minimum investment amount, the definition of an
entrepreneur, and the definition of a start-up entity.
Id. at 5, 244-5, 273. This final rule was set to
take effect July 17, 2017, 180 days from its publication in
the Federal Register. Id. at 5, 242. DHS determined
that this 180-day period would give USCIS “a reasonable
period to ensure resources are in place to process and
adjudicate Applications for Entrepreneur Parole filed . . .
under this rule without sacrificing the quality of customer
service for all USCIS stakeholders.” Id.
The Delay Rule
course, times change and so do administrations. On January
25, 2017, President Trump issued an Executive Order targeting
current immigration practice. See Border Security
and Immigration Enforcement Improvements, Exec. Order No. 13,
767, 82 Fed. Reg. 8, 793 (Jan. 25, 2017). As relevant here,
the Order announced that it “is the policy of the
executive branch to end the abuse of parole” of aliens
in the United States. Id. at 8, 795. Section 11(d)
of the Order required the Secretary of Homeland Security to
“take appropriate action to ensure that parole
authority under section 212(d)(5) of the INA (8 U.S.C. §
1182(d)(5)) is exercised only on a case-by-case basis in
accordance with the plain language of the statute, and in all
circumstances only when an individual demonstrates urgent
humanitarian reasons or a significant public benefit derived
from such parole.” Id. at 8, 796.
next six months, the Department stayed silent. Six days
before the IE Final Rule would take effect, however, USCIS
issued a superseding “Delay Rule.” 82 Fed. Reg.
31, 887 (July 11, 2017). This latter Rule postponed the
International Entrepreneur Rule's effective date by eight
months, to March 14, 2018. Id. at 31, 887. DHS
issued the Delay Rule, however, without offering the public
advance notice or an opportunity to comment, claiming that
there was good cause to jettison the APA's requirements
on that score. Id. at 31, 887-88. Instead, it
provided a short window for comments only after the
Delay Rule took effect. Id. at 31, 887. DHS further
indicated that, pursuant to the Executive Order, the agency
was “highly likely” to rescind the IE Final Rule.
Id. at 31, 888. Its new Delay Rule was designed to
bridge the gap, such that the Obama-era Rule would never take
effect. Id. (seeking “to delay the IE Final
Rule while DHS considers rescinding the rule”).
include two foreign nationals (Atma and Anand Krishna), two
U.S. businesses (Omni Labs, Inc. and Peak Labs L.L.C., d/b/a
Occasion), and the National Venture Capital Association,
which is an organization of individuals who “frequently
invest in businesses founded by foreign entrepreneurs.”
Pl. MSJ ...