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LATEST on Carlsson et al v USCIS et al restraining order and injunction DENIED fails to demonstrate fair chance of success on the merits

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If this does not signal the end, then something is very wrong with the world.

If this does not signal the end, then something is very wrong with the world.

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  • Judge Snyder's language is clear to me. USCIS can do no wrong, and if you don't show me some substantial hard evidence, this case is out of here, humane treatment of foreign investors be damned.
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  • 1. Latest Developments in Carlsson et al v USCIS et al: Restraining Order and Injunction Denied Due to Failure to Demonstrate Likelihood of Success on the Merits By Joseph P. Whalen (October 10, 2012)District Judge Christina M. Snyder, issued an Order Denying the plaintiffs inCarlsson the temporary restraining order and immediate and perhaps only interiminjunctive relief they sought. That order contains a very thorough written analysisand discussion. The Civil Minutes Order is dated October 3, 2012, and was postedvery late (nearly midnight) the next day. Nobody was likely to have been able toeven see it before Friday the 5th which lead into a holiday weekend with Mondaybeing Columbus Day (let’s not get started about that). I only stumbled upon it lateMonday October 8, 2012. I made some quick observations and posted it onOctober 9, 2012.Now that I have had some additional time to consider the Judge’s InterimDecision, there are some interesting bits and pieces that I’d like to discuss withanyone who cares to know my thoughts on this topic. First, a brief recap seems tobe in order which will be followed by some notable, quotable blurbs and mythoughts. Here we go again; hold on tight because this may be a bumpy ride!On September 13, 2012, Plaintiffs 1 filed the initial complaint for declaratory andinjunctive relief against defendants USCIS et al., which alleged that, defendants: (1) improperly and retroactively applied immigration rules and standards to them; (2) acted arbitrarily and capriciously in violation of the Immigration and Nationalization Act (“INA”) and the Administrative Procedures Act (“APA”); (3) exceeded their statutory authority under the INA; and (4) denied plaintiffs’ rights to due process under the Fifth Amendment to the U.S. Constitution.1 Plaintiffs are a group of EB-5 immigrant investors affiliated with an AmericanLife Regional Center project in Riverside, CA who were denied conditionalresidency in the United States after USCIS denied or revoked their I-526 investorpetitions. Page 1 of 6
  • 2. The most audacious request is something that is almost lost among the myriadpoints made throughout. It is the last sentence of the following quote. “Accordingly, plaintiffs request relief including the following: that this Court declare defendants’ denials or revocations of plaintiffs’ I-526 petitions to be unlawful and direct defendants to issue the petitions forthwith; that it order defendants’ to provide documentation for plaintiffs’ “aged-out” children; order defendants’ not to consider plaintiffs’ presence in the United States as unlawful at any time during the pendency of this litigation; and various other forms of injunctive relief, enjoining defendants from deporting these plaintiffs and their dependents or depriving these plaintiffs of the right to travel, and enjoining defendants from refusing to approve similar investment projects in the future.” October 3, 2012, Minute Order at pp. 1-2 [Emphasis Added]The audacity of the above can easily be overlooked if you do not truly understandwhat they mean by “similar investment projects”! For that, you have to go backto the original September 13, 2012, Complaint. I already wrote about thisseparately and for those who already read that I apologize for being repetitive but itis worth repeating. I must admit that I was confused, in part, by USCIS’ utterinability to make itself plainly understood on this point in its EB-5 Engagements.The confusion from which I was suffering had to do with the so-called TenantOccupancy Methodology. As I read through the Carlsson Compliant, a light wenton and I began to see the real issue. My utter lack of understanding was madepossible by the obfuscations of advocates and poor communication skills byUSCIS.The passage in the Carlsson Complaint that opened my eyes was this: “.... When a project centers on property renovation, the precise identity of the tenants who will occupy the property post-renovation and the way in which said tenants will generate future jobs cannot be known with certainty before the property is ready for occupancy. Once the identity of the tenants that occupy the space becomes known, a projects initial forecast may change as was the case in plaintiffs project.” At p. 13To that, I say “Yes”, it is more likely than not true that the IDENTITY(IES) of the"tenant business(es)" might not be known up-front. However, the characteristics ofand/or type(s) of the business(es) must be from among the approved industries inthe requested operational parameters and within the ultimately defined and Page 2 of 6
  • 3. approved "scope of the Regional Center". The Regional Center (RC) defined itsown scope when it presented its proposal. Since you are going to renovate thespace, you MUST KNOW how to plan that renovation. You cannot take an emptybuilding and create a restaurant for a completely unknown and undefined futuretenant to operate as a gym, a florist, a cannery, a textile mill, or a computermanufacturer!While retaining some flexibility is permissible and desirable for everyone and inkeeping with the Congressional Intent of the Program to improve the regionaleconomy, when the RC tries to venture too far, it creates an untenable situation forUSCIS. IF 200 or 300 RCs were to continually shift outside their scope, THENthe Program would become unmanageable. Limits must be set for the Programand this is one of them.In essence, the “similar investment projects” that Plaintiffs seek to ratify throughan injunction boils down to an exceedingly vague approach .The speculativeapproach of “build it and they will come” or as more aptly expressed for this case“buy it and hope for the best” is not now nor has it ever been EB-5 qualifying,nor has it been intentionally permitted by USCIS for any Regional Center, ever.IF the Regional Center clearly defines which “kinds of commercial enterprises” itwill seek to support and develop in its “limited geographic area”, THEN its effortsto achieve its specifically approved objectives in support of the “EB-5 RegionalCenter Program’s” stated goals are indicative of, and supportive of, a qualifyingmoney-to-jobs nexus. The mere mundane landlord-tenant relationship alone isinsufficient to establish the required nexus, [i.e., a palpable connectivity that iseasily felt or touched and is often clearly discernible with the naked eye]. Thesimplistic example of “mall tenants’ jobs” as being suitable as input in a welldefined interdependent relationship (clear nexus situation) has been taken out ofcontext and misconstrued.IF a property is specifically developed in order to (1) meet a need, especially as toa shortage of a specific type of space , or (2) fill a void in the local/regionaleconomy such that: (3) new businesses spring up, or (4) existing businessessurvive, or (5) expand [(6) rather than merely relocate across the street or acrosstown]; THEN (7) the new commercial tenants will have been facilitated in theirefforts and ability to (8) increase the employment in the immediate andsurrounding area. That, in my not-so-humble opinion is an EB-5 qualifying nexusfor appropriately labeled “tenant jobs” which should count as EB-5 indirect jobs. Page 3 of 6
  • 4. The “methodology” (and I use the term loosely) that this lawsuit attempts to havevalidated by the District Court and which in my not-so-humble opinion, has beenvery poorly named as the “Tenant Occupancy” Methodology is really nothingmore than blind real estate speculation with little or no real planned use for theproperty beyond profit. It would be easier to understand if it were called the“Absentee Landlord” Methodology or the “Blind Greed” Methodology or the“Real Estate Speculator” Methodology! Please take painstaking notice that inthat last suggested alternate name, I said speculator, not developer. That was for adistinct reason. An actual “developer” has a specific plan to develop a propertyregardless of whether it is its own plan or that of the client for whom it willdevelop the property. The mere speculator has no real plan beyond finding a primelocation at a low enough price to be very reasonably assured of turning a profitwhen it sells or leases out that real estate holding. It matters little, if at all, to thespeculator as to what develops at their prime location. If the property will be leasedout, the real estate speculator turned “Landlord” does not really care what his orher “Tenant” is or does as long as they pay the rent. Here, job creation potential isperipheral or an afterthought, if given any thought at all.On September 25, 2012, plaintiffs filed an ex parte application for a temporaryrestraining order and injunction against USCIS. Plaintiffs asked the Court totemporarily restrain defendants from: (1) treating as unprotected under the Child Status Protection Act, 8 U.S.C. § 1153(h)(1), any of plaintiffs’ children who were under the age of 21 at the time their parents’ I-526 petition was filed, but now exceed this age; (2) refusing to grant “motions to reopen” regarding the I-485 applications of plaintiffs Courtney Carlsson and DeQing Kong and refusing to grant permission for these plaintiffs to travel and retain their work authorization; (3) refusing to renew plaintiff Gerardus Van Der Ham’s eldest son’s B-2 visa.On September 27, 2012, USCIS quickly opposed and plaintiffs replied to that onthe same day. The Judge examined that which she had before her at that point andapplied the appropriate legal standard to her thorough analysis of the discerniblefacts. She noted that “[t]he standards for issuing a temporary restraining order anda preliminary injunction are “substantially identical.”” At Pg. 7 Those standardsdemand that the one seeking an injunction or restraining order show that they havea very strong prima facie case and have at least a fair chance to win on the merits.At this point, all the legal arguments are so poor that it seems wasteful to go on. Page 4 of 6
  • 5. Plaintiff cried foul and assert that USCIS changed the rules and heightened thestandards and are re-adjudicating settled matters. The Judge did not buy any of thatand shot them all down in flames. “Plaintiffs cite to the intervening “Tenant Occupancy” announcement as evidence of the USCIS applying different standards to the subsequent denial of their petitions as were applied at the initial approval of the regional center application. However, USCIS offers argument and evidence in their final decisions to rebut plaintiffs’ assertions, contending that the decision was not based upon any heightened standards, but merely a reevaluation of the plaintiffs’ evidence. Moreover, given that plaintiffs’ new evidence went, in part, towards describing a new business project that Innovation LP planned to undertake to fulfill plaintiffs’ EB-5 visa obligations, defendants argue that USCIS has not revisited its prior determinations but is evaluating plaintiffs’ revised project instead. Plaintiffs have not directed the Court’s attention to any particular change in the statutory law, regulations, or immigration case law that was applied to their petitions retroactively.” At p. 9The project that was put forth strayed outside the approved scope of the RegionalCenter’s operational parameters. The desired deference would have been availableto a project that was actually presented or was similar enough to what waspreviously presented in the earlier decision. “3 This amended designation stated that any I-526 that is submitted based on investment in ALDC “need not show that the new commercial enterprise created ten new jobs indirectly,” because USCIS’ acceptance of the center’s proposal established that this criterion had been met. Instead, “the investor must show at the time of the removal of conditions [i.e., in the I-829 petition] that they performed the activities described in the model and on which the approved methodology is based.” FN3 p. 5The above footnote summed it up fairly well. I would point out that the samesentiment has been expressed in other ways. For instance, the requirements toremove conditions entail: substantiating fulfillment of obligations and/orcommitments; presenting corroborating evidence, satisfying conditions precedentor conditions subsequent as the case may be; or in the vernacular putting yourmoney where your mouth is or living up to your end of the bargain.I am not against flexibility or the freedom to shift in response to outside forces buta plan must build in the desired flexibility and shift within its approved parameters. Page 5 of 6
  • 6. In discussing the due process challenge, the Judge uses some terminology toexpress an idea near and dear to me in a different way. I wish to point it out andsay, yes, that works too! “In addition, the Court does not find that plaintiffs have demonstrated a likelihood of success on their claim that defendants applied a new evidentiary standard in adjudicating their petitions, in violation of plaintiffs’ rights to a full and fair hearing. The Court is unable to find clear evidence in the administrative record that defendants applied a heightened or different evidentiary standard in evaluating plaintiffs’ petitions, particularly in light of the new evidence that plaintiffs’ submitted in response to the NOIRs and RFEs. Instead, as noted previously, defendants appear to have closely evaluated all of the evidence plaintiffs submitted—including weighing the deviations from Innovation LP’s original proposal—in deciding that plaintiffs were unable to demonstrate that they qualified for the immigration benefits at issue. Plaintiffs may yet be able to show that defendants violated their rights to due process, but the Court finds their showing to be insufficient for purposes of this motion. Accordingly, the Court finds that plaintiffs have not carried their burden with respect to demonstrating a likelihood of success on their due process challenge.” At p. 13Where I have discussed at length the concept of performing a “within the scopeanalysis”, the Judge characterized the same process as a function of evaluating theevidence through “weighing the deviations from...[the]... original proposal”. Shehad already made it quite clear that the project upon which the instant I-526s werebased was a new and/or revised plan.I don’t see why this case should drag on. The Court agreed that, for most if not allof the individual I-526 petitioners (and families) involved, there is an urgent needto reach a definitive conclusion. It was for that reason that Judge Snyder set such ashort time until a status conference for October 11, 2012 at 1 p.m. Maybe weshall see this case come to a fast resolution? Stranger things have happened.That’s my two-cents, for now.e-mail me at: joseph.whalen774@gmail.com Page 6 of 6