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Wang v. United States Citizenship and Immigration Services

United States District Court, District of Columbia

January 31, 2019

SIQING WANG, Plaintiff,
v.
UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, et al., Defendants.

          MEMORANDUM OPINION

          TREVOR N. McFADDEN, U.S.D.J.

         Plaintiff 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 denied.

         I. BACKGROUND

         Ms. 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.

         Next, 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.

         Responding 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.

         Ms. 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 8-9.

         II. LEGAL STANDARDS

         Summary 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).

         “Although 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)).

         III. ANALYSIS

         To 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).[1] 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 indebtedness.

8 C.F.R. 204.6(e).[2] So capital in the form of indebtedness is subject to a collateralization requirement. Id. The regulation also makes clear that assets acquired unlawfully ...


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