United States District Court, District of Columbia
N. McFADDEN, U.S.D.J.
Siqing Wang invested $500, 000 in a U.S. business to qualify
for an investor visa, but the United States Citizenship and
Immigration Services (“USCIS”) declared her
ineligible. The central issue was-and is still-whether
proceeds from a loan are either “cash” or
“indebtedness” under the regulation. Both USCIS
and Ms. Wang filed motions for summary judgment. After a
motions hearing, the Court finds that USCIS's
interpretation of its own regulation is plainly erroneous
because it conflicts with the language of the regulation and
is unsupported by the regulation's history and
USCIS's own precedent. So the Plaintiff's motion will
be granted in part, and the Defendants' motion will be
Wang is a Chinese graduate student who wishes to become a
permanent resident of the United States. CAR 207. She
invested $500, 000 in a U.S. business because she believed
that this investment would make her eligible for permanent
residency under 8 U.S.C. § 1153(b)(5). See CAR
4-7. The $500, 000 came from proceeds of a loan secured by
property that Ms. Wang alleges that she owned jointly with
her father. CAR 375-79, 395-411. Ms. Wang then invested $500,
000 in a commercial enterprise designed to finance the
renovation of the Jung Hotel, a historical hotel in New
Orleans, Louisiana. CAR 562, 574.
Ms. Wang filed an I-526 visa petition. CAR 4-6. In October
2015, USCIS approved the petition, concluding that she
satisfied the requirements for an EB-5 immigrant investor
visa. CAR 1257. But two months later, USCIS issued her a
Notice of Intent to Revoke. CAR 1258-62. Upon further review,
USCIS classified Ms. Wang's EB-5 investment as
“indebtedness” and determined that Ms. Wang
failed “to establish that she has an ownership interest
in the asset used to secure the loan that is equal to the
minimum capital investment of $500, 000.” CAR 1262. So
it suggested that she had not invested enough capital to
satisfy Section 1153(b)(5). Id.
to the Notice, Ms. Wang clarified that her father had given
her his share of the loan proceeds. CAR 1264-65. Ms.
Wang argued that because her interest in the property used to
secure the loan was worth more than her own half of the loan
proceeds, it was “sufficient to secure her share”
of the loan. CAR 1265. USCIS was unconvinced. CAR 1283-88.
Again, USCIS categorized Ms. Wang's $500, 000 as
indebtedness under 8 C.F.R. § 204.6(e) because the money
was from a loan. CAR 1287. And USCIS explained that it could
not consider Ms. Wang's father's signed
statement-explaining that he had given Ms. Wang his share of
the loan proceeds-because it would amount to a material
change in the evidence. Id. Ms. Wang filed an
administrative motion to reopen or reconsider, and USCIS
denied it. CAR 1349-55.
Wang then filed this suit, challenging both the denial of her
visa petition and the denial of her motion to reconsider or
reopen. Wang v. USCIS, 306 F.Supp.3d 1, 2 (D.D.C.
2018). Defendants USCIS; Jeh Johnson, then-Secretary of the
Department of Homeland Security; Leon Rodriguez,
then-Director of USCIS; and Julia Harrison, Acting Chief of
the Immigrant Investor Program, filed a joint motion to
dismiss for lack of subject matter of jurisdiction and for
failure to state a claim. Id. The Court determined
that it had jurisdiction to review the agency's decision
because it was characterized as a denial-not a revocation-and
thus subject to judicial review despite 8 U.S.C. §
1252(a)(2)(B)(ii). Id. at 6. But the Court did grant
the Defendants' motion in part insofar as Ms. Wang was
challenging the denial of her motion to reconsider or reopen
because she had failed to state such a claim. Id. at
judgment is usually only appropriate if there is no genuine
issue as to any material fact and the moving party is
entitled to judgment as a matter of law. Fed. R. Civ. Pro.
56. But when a court is reviewing an administrative
agency's decision, the standard set out in Federal Civil
Procedure Rule 56 does not apply. Richards v.
I.N.S., 554 F.2d 1173, 1177 (D.C. Cir. 1977). Instead,
as both parties acknowledge, courts review an agency's
decision under the deferential standard provided in the
Administrative Procedure Act. See Ramaprakash v. Fed.
Aviation Admin., 346 F.3d 1121, 1124 (D.C. Cir. 2003).
Courts set aside agency action that is “arbitrary,
capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A).
the scope of review under this standard is narrow, courts
must consider ‘whether the agency acted within the
scope of its legal authority, whether the agency has
explained its decision, whether the facts on which the agency
purports to have relied have some basis in the record, and
whether the agency considered the relevant
factors.'” Chang v. USCIS 289 F.Supp.3d
177, 182 (D.D.C. 2018) (quoting Fund for Animals v.
Babbitt, 903 F.Supp. 96, 105 (D.D.C. 1995)).
qualify for an immigrant visa under the EB-5 Program, an
applicant must invest a qualifying amount of
“capital” in a new U.S. business. See 8
U.S.C. § 1153(b)(5). Ordinarily, an EB-5 visa applicant must
invest $1 million, id. § 1153(b)(5)(C)(i), but
only $500, 000 is required if the investment is “in a
targeted employment area, ” id. §
1153(b)(5)(C)(ii); 8 C.F.R. § 204.6(f)(2). Here, both
parties agree that Ms. Wang's investment was in a
targeted employment area. The statute does not define
“capital, ” but the regulation does. 8 C.F.R.
204.6(e) provides that
Capital means cash, equipment, inventory, other tangible
property, cash equivalents, and indebtedness secured by
assets owned by the alien entrepreneur, provided that the
alien entrepreneur is personally and primarily liable and
that the assets of the new commercial enterprise upon which
the petition is based are not used to secure any of the
8 C.F.R. 204.6(e). So capital in the form of indebtedness is
subject to a collateralization requirement. Id. The
regulation also makes clear that assets acquired unlawfully