USCIS requests Victorville EB-5 dismissal or stay 9-20-11


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USCIS requests Victorville EB-5 dismissal or stay 9-20-11

  1. 1. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 1 of 38 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA_________________________________________ )CITY OF VICTORVILLE, ) CALIFORNIA, et al., ) ) Plaintiffs, ) ) v. ) Civil No. 11-1287-RWR )U.S. DEPARTMENT OF HOMELAND ) SECURITY, et al., ) ) Defendants. )__________________________________________) DEFENDANTS’ MOTION TO DISMISS OR IN THE ALTERNATIVE TO STAY PROCEEDINGS Defendants move to dismiss Plaintiffs’ complaint under Federal Rule of Civil Procedure12(b)(1) for lack of ripeness, as the agency action at issue in this case is still pending at theadministrative level. The Director of the California Service Center of the United StatesCitizenship and Immigration Services (USCIS) terminated the Regional Center of VictorvilleDevelopment, Inc.’s (RCVD’s) regional center status, which had the effect of denying RCVD’sability to sponsor alien investors for permanent residence. The Director certified her decision,however, to the Administrative Appeals Office (AAO), an administrative appellate body with theauthority to review de novo the Director’s decision. Plaintiffs’ case is currently pending at theAAO, which by December 2, 2011, will render a decision that will at a minimum clarify theissues in this case, and may even overturn the Director’s initial decision, making this case moot.Thus, the agency’s action is not yet fit for judicial review, and Plaintiffs’ complaint should bedismissed without prejudice on prudential grounds for lack of ripeness.
  2. 2. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 2 of 38 Alternatively, the Court should hold this action in abeyance pending the outcome of theagency’s administrative appellate review process. Allowing the agency to complete its appellatereview process will help preserve judicial resources, and potentially obviate the need for Courtintervention in this matter. Defendants accordingly request, in the alternative, that this case beheld in abeyance until the AAO completes its appellate review. BACKGROUNDI. STATUTORY AND REGULATORY BACKGROUND In 1990, Congress amended the Immigration and Nationality Act (INA) to provide forclassification of “employment creation” immigrants who invest capital in new commercialenterprises in the United States and create at least ten full-time jobs for United States workers asa result of their investments. See Immigration Act of 1990, Pub. Law No. 101-649, § 121(a)(Nov. 29, 1990) (codified at 8 U.S.C. § 1153(b)(5)(A)).1 The purpose of this preference categoryis not to reward wealthy immigrants, but to create and sustain jobs for United States workers.See S. Rep. No. 101-55, at 21 (1989). Congress set the qualifying capital investment level at $1 million, but aliens may qualifyfor classification by investing at least $500,000 in a “targeted employment area.” 8 U.S.C.§ 1153(b)(5)(C); see also Employment-Based Immigrants, 56 Fed. Reg. 60,897, 60,911 (Nov.29, 1991) (codified at 8 C.F.R. § 204.6(f)). Congress defined “targeted employment area” as “arural area or an area which has experienced high unemployment (of at least 150 percent of thenational average rate).” 8 U.S.C. § 1153(b)(5)(B)(ii).1 Aliens falling into this category are referred to as “employment-based fifth preferenceimmigrants,” or colloquially by the immigration bar as “EB-5” immigrants, as these aliens areclassified under the fifth section of the employment based provision of INA, i.e., section203(b)(5). 2
  3. 3. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 3 of 38 In 1991, the Immigration and Naturalization Service (INS) published regulations throughnotice and comment rulemaking interpreting the relevant statutory terms and establishingprocedures for aliens to file petitions under the employment creation program. See 56 Fed. 60,910-60,913 (codified at 8 C.F.R. § 204.6).2 Under these procedures, USCIS determineswhether the alien investor has made a qualifying investment and created ten full-time jobs as aresult of the investment. See Matter of Soffici, 22 I. & N. Dec. 158 (Assoc. Comm’r 1998);Matter of Izumii, 22 I. & N. Dec. 169 (Assoc. Comm’r 1998). If USCIS determines that analien’s investment qualifies under the employment creation program, the agency may grantpermanent resident status to the qualifying alien for a conditional two year period. See 8 U.S.C.§ 1186b(a)(1). Within the ninety days before the second anniversary of the alien’s admission tothe United States as a conditional permanent resident, the alien must petition USCIS to removehis or her conditional permanent resident status. See 8 U.S.C. § 1186b(d)(2)(A). USCIS willremove the conditional nature on the alien’s permanent resident status if the alien demonstratesthat he or she has sustained the requisite capital investment and otherwise complied with theemployment creation program during the two-year conditional residency period. Id. at§ 1186b(d)(1). The alien must sustain at least ten full-time jobs for United States workers duringthe entire conditional residency period. See S. Rep. No. 101-55, at 22 (1989). In 1993, Congress expanded the employment creation program by authorizing a “pilotprogram” for “regional investment center[s] in the United States for the promotion of economicgrowth, including increased export sales, improved regional productivity, job creation, andincreased domestic capital investment.” See Departments of State, Justice, and Commerce, the2 Under the Homeland Security Act of 2002, Congress abolished the INS. See Pub. Law No.107-296, § 471 (Nov. 25, 2002). Congress transferred the authority to adjudicate immigrant visapetitions from the Commissioner of INS (and the Attorney General) to USCIS, an agency withinthe Department of Homeland Security. Id. at § 451(b)(1). 3
  4. 4. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 4 of 38Judiciary and Related Agencies Appropriations Act of 1992, Pub. Law No. 102-395, § 610(a)(Oct. 6, 1992).3 The pilot program allows economic units, whether public or private, engaged inthe promotion of economic growth to seek regional investor status with USCIS for the purposeof sponsoring alien investors to fund proposed economic development plans. See USCISAdjudicator’s Field Manual § 22.4(a)(2)(A).4 Thus, a local government unit designated as aregional investment center is able to attract foreign investors to fund public projects, and theforeign investor beneficiaries are able to obtain conditional permanent resident status. Congress directed legacy INS, now USCIS, to “permit aliens admitted under the pilotprogram described in this section [610] to establish reasonable methodologies for determiningthe number of jobs created by the pilot program, including such jobs which are estimated to havebeen created indirectly through revenues generated from increased exports, improved regionalproductivity, job creation, or increased domestic capital investment resulting from the pilotprogram.” Id. at § 610(c), as amended by the Visa Waiver Permanent Program Act, Pub. LawNo. 106-396, § 402(b) (Oct. 30, 2000). In 2002, Congress amended the statute by furtherdefining the nature and scope of regional investment centers: A regional center shall have jurisdiction over a limited geographic area, which shall be described in the proposal and consistent with the purpose of concentrating pooled investment in defined economic zones. The establishment of a regional center may be based on general predictions, contained in the proposal, concerning the kinds of commercial enterprises that will receive capital from aliens, the jobs that will be created directly or indirectly as a result of such capital investments, and the other positive economic effects such capital investments will have.3 For the Court’s convenience, Defendants attach as exhibit “A” the text of the relevant PublicLaws governing the pilot program.4 Available at (follow “Laws” hyperlink; then follow“Immigration Handbooks, Manuals and Policy Guidance” hyperlink). For the Court’sconvenience, Defendants attach as exhibit “B” the relevant portions of the Adjudicator’s FieldManual. 4
  5. 5. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 5 of 38Id. at § 610(a), as amended by the 21st Century Department of Justice Appropriations Act, Pub.Law No. 107-273, § 11037(a)(3) (Nov. 2, 2002). Congress authorized the Secretary ofHomeland Security to grant regional investment center status. Id., as amended by the Basic PilotProgram Extension and Expansion Act of 2003, Pub. Law No. 108-156, § 4(a) (Dec. 3, 2003).The Secretary delegated this authority to USCIS. See 8 C.F.R. § 2.1; Secretary of HomelandSecurity’s Delegation Order No. 0150.1 § 2(Y) (Mar. 1, 2003). In 1993, the agency published regulations implementing the regional investment centerpilot program. See Immigrant Investor Pilot Program, 58 Fed. Reg. 44,606 (Aug. 24, 1993). Theregulations set forth the documentary evidence required for the granting of regional investmentcenter status. Each regional center wishing to participate in the pilot program must submit aproposal that: (i) Clearly describes how the regional center focuses on a geographic region of the United States, and how it will promote economic growth through increased export sales, improved regional productivity, job creation, and increased domestic capital investment; (ii) Provides in verifiable detail how jobs will be created indirectly through increased exports; (iii) Provides a detailed statement regarding the amount and source of capital which has been committed to the regional center, as well as a description of the promotional efforts taken and planned by the sponsors of the regional center; (iv) Contains a detailed prediction regarding the manner in which the regional center will have a positive impact on the regional or national economy in general as reflected by such factors as increased household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center; and (v) Is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported, and/or multiplier tables.Id. at 44,609 (codified at 8 C.F.R. § 204.6(m)(3)). Under these regulations, USCIS defines“direct jobs” as “jobs that establish an employer-employee relationship between the commercial 5
  6. 6. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 6 of 38enterprise and the persons that they employ.” USCIS Adjudicator’s Field Manual§ 22.4(a)(2)(A). The agency defines “indirect jobs” as “jobs held by persons who work for theproducers of materials, equipment, and services that are used in a commercial enterprise’s capitalinvestment project, but who are not directly employed by the commercial enterprise, such assteel producers or outside firms that provide accounting services.” Id. The agency alsorecognizes a subset of indirect jobs flowing from capital investments, called “induced jobs,”which are defined as “jobs created when direct and indirect employees go out and spend theirincreased incomes on consumer goods and services.” Id. A grant of regional investment center status allows an alien investor to file a petition forconditional permanent resident status based on their capital investment in the regional center, butthe alien investor must establish that such investment will create jobs indirectly through revenuesgenerated from increased exports resulting from the new commercial enterprise in connectionwith the regional center. Id. (codified at 8 C.F.R. § 204.6(m)(7)). The alien investor mustestablish indirect job creation through the use of “reasonable methodologies.” Id. (codified at 8C.F.R. § 204.6(m)(7)(ii)). If USCIS determines that a regional investment center no longer serves the purpose ofpromoting economic growth, including increased export sales, improved regional productivity,job creation, and increased domestic capital investment, the agency issues a notice of intent toterminate the participation of the regional center in the pilot program. Id. (codified at 8 C.F.R.§ 204.6(m)(6)).5 The regional investment center has thirty days from receipt of the notice of5 On September 2, 2010, USCIS amended § 204.6(m)(6) to require regional investment centersto submit evidence of their continuing compliance with the statutory and regulatory requirementsof the pilot program on an annual or cumulative basis, or as otherwise requested by USCIS. SeeU.S. Citizenship and Immigration Services Fee Schedule, 75 Fed. Reg. 58,962, 58,990 (Sept. 24,2010). 6
  7. 7. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 7 of 38intent to terminate to offer evidence in opposition to the grounds alleged in the notice. Id. Afterreviewing the record evidence, USCIS notifies the regional center of its decision. Id. In the event the agency terminates the regional center’s status under the pilot program,the regional center may appeal the termination to the AAO. Id. Alternatively, the agency itselfmay certify its decision to terminate the regional center’s status to the AAO for administrativereview. See 8 C.F.R. §§ 103.4(a)(1), (4). The regional center may submit a brief to the AAOwithin thirty days after service of the certification notice. See 8 C.F.R. § 103.4(a)(2). The AAO is an appellate body located within its own division of USCIS, separate fromthe adjudication arm of the agency, which is located under Service Center Operations. See 8C.F.R. § 103.3(a)(1)(iv).6 The AAO performs an important fact-finding function whenreviewing an initial USCIS decision, see United States v. Gonzales & Gonzales Bonds andInsurance Agency, 728 F. Supp. 2d 1077, 1086 (N.D. Cal. 2010), and it has jurisdiction to reviewde novo issues of law and fact on appeals taken from initial USCIS decisions, see Soltane v. U.S.Dept. of Justice, 381 F.3d 143, 145-46 (3d Cir. 2004); see also Taco Especial v. Napolitano, 696F. Supp. 2d 873, 879 (E.D. Mich. 2010). Where the AAO reviews an initial decision of USCIS,the AAO is authorized to overturn or reverse the agency’s decision in whole or in part. SeeMatter of Chawathe, 25 I. & N. Dec. 369, 374-76 (AAO 2010). The AAO’s decision constitutesfinal agency action for purposes of judicial review. See Herrera v. USCIS, 571 F.3d 881, 885(9th Cir. 2009).6 See also USCIS’s organizational chart, available at (use “About Us” hyperlink;then use the “organizational chart” hyperlink). Under the general reorganization of the legacyINS in 1994, the Administrative Appeals Unit was renamed the “Administrative AppealsOffice,” which title it retains today. See Implementation of Internal Reorganization of theImmigration and Naturalization Service, 59 Fed. Reg. 60,065, 60,066 (INS) (Nov. 22, 1994). 7
  8. 8. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 8 of 38II. FACTS AND COURSE OF ADMINISTRATIVE PROCEEDINGS In January 2009, Plaintiff City of Victorville (Victorville) filed a request with USCIS’sCalifornia Service Center (CSC) to designate the RCVD as a pilot program regional investmentcenter. See Compl., Exhibit (Ex) A, ECF No. 1-1 at 2. Victorville stated that RCVD intended toparticipate in the pilot program to finance $100 million in critical infrastructure investments. 45-47. Victorville stated that it created RCVD to attract foreign national investors with thepurpose of using bridge loans from those investors to finance phases of its infrastructureimprovement projects. Id. at 46-47, 51. Victorville also stated that it had been designated as ahigh unemployment area, and accordingly qualified as a targeted investment area under thestatute and regulations. Id. at 6. In support of its petition for designation as a pilot program regional center, RCVDsubmitted an economic input-output analysis based on the IMPLAN model to show the projectedeconomic effect of its proposed infrastructure improvements. Id. at 51.7 RCVD’s IMPLANanalysis projected the creation of 4,224 jobs by year 2011 as a result of the initial bridge loanfrom foreign investors. Id. at 68. On June 19, 2009, CSC approved RCVD’s request for designation under the pilotprogram. See Compl., Ex. B, ECF No. 1-1 at 71. CSC informed RCVD, however, that tomaintain its regional center status, RCVD was required to provide CSC with, among otherthings, follow-up information relating to RCVD’s administration of the regional center’s7 According to the Department of Commerce, IMPLAN is an impact model that regionalizes thedata from the United States national tables using several variables. “The IMPLAN modelingsystem also includes a SAM system, which is a matrix presentation of certain aspects of thenational accounts and of other parts of the economy - such as employment by type of worker orincome distributions - using the structural linkages provided by the input-output accounts.” U.S.Dep’t of Commerce, Bureau of Economic Analysis, Concepts and Methods of the U.S. Input-Output Accounts 12-19 (April 2009),; seealso 8
  9. 9. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 9 of 38activities and all relevant information pertaining to RCVD’s sponsorship of foreign investorsunder the employment-based immigrant investor program. Id. at 73-76. In May 2010, CSC sent to RCVD a notice of intent to terminate its regional center status.See Compl. ¶ 26, ECF No. 1 at 9-10. In response to the agency’s notice of intent to terminate,RCVD represented that “very little has changed relating to the implementation of the VictorvilleRegional Center designation from its original application,” but RCVD admitted nevertheless thatthree of the projects “previously included in the Victorville Regional Center designation arecurrently on temporary hold, pending a change in the economic climate.” Compl., Ex. D, ECFNo. 1-1 at 86-87. As a result, only an industrial wastewater treatment facility project wascurrently active at the time RCVD responded to CSC’s notice of intent to terminate. Id. at 86.RCVD stated that 12 permanent jobs would be required to operate the wastewater facility in year2010. Id. at 107. RCVD’s amended IMPLAN analysis also projected that several otherpurported “direct” jobs would result from the operation of the wastewater facility. Id. After reviewing RCVD’s evidence filed in response to CSC’s notice of intent toterminate, the agency identified several unresolved issues. See Compl. Ex. E, ECF No. 1-1 at116. For example, CSC noted that RCVD’s direct job analysis appeared defective because ofreliance on employment purportedly arising from another employer. Id. at 119. In addition,CSC noted that RCVD’s assumption that 100% of the investment would be spent locally was notadequately explained in the IMPLAN analysis. Id. at 120. As a result, on August 10, 2010, theagency issued a second notice of intent to terminate in which it requested RCVD to submitfurther evidence and documentation for the purpose of resolving discrepancies in RCVD’sIMPLAN analysis. Id. at 115, 121. 9
  10. 10. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 10 of 38 On September 1, 2010, RCVD responded to CSC’s request for evidence. See Compl. Ex.F, ECF No. 1-1 at 125. RCVD withdrew from its investment scheme three of the fourinfrastructure improvement projects that originally appeared in its initial request forclassification as a regional center. Id. RCVD provided further detail regarding the remainingwastewater treatment project and the creation of “direct jobs.” On October 20, 2010, after reviewing RCVD’s additional evidence, CSC issued a noticeof termination. See Compl. Ex. G, ECF No. 1-1 at 137. The agency found that RCVD did notadequately explain its direct job analysis, and that RCVD’s expert failed to provide an economicanalysis that focused on capital investment in the wastewater treatment facility in terms of its jobcreation efficacy. Id. at 144. Accordingly, CSC concluded that RCVD failed to demonstrate thatits proposed infrastructure improvement project would result in the creation of 500 direct orindirect jobs as a result of the 50 prospective EB-5 investors associated with RCVD’s plannedparticipation in the pilot program. Id. On November 15, 2010, RCVD filed a motion to reopen administrative proceedings withCSC, based on its submission of a new economic model. See Compl. Ex. H, ECF No. 1-1 at 148,165. RCVD abandoned the IMPLAN model and relied instead on a new RIMS II analysis basedon a capital spending multiplier.8 Id. at 177-79. Because of discrepancies in RCVD’s economicmodeling, however, CSC requested additional evidence to resolve these discrepancies. SeeCompl. Ex. I, ECF No. 1-1 at 199-201.8 According to the Department of Commerce, Bureau of Economic Analysis (BEA), “RIMS II isbased on an accounting framework called an I-O table. For each industry, an I-O table shows thedistribution of the inputs purchased and the outputs sold. A typical I-O table in RIMS II isderived mainly from two data sources: BEA’s national I-O table, which shows the input andoutput structure of nearly 500 U.S. industries, and BEA’s regional economic accounts, which areused to adjust the national I-O table in order to reflect a region’s industrial structure and tradingpatterns.” U.S. Dep’t of Commerce, Bureau of Economic Analysis, Regional Multipliers 1(March 1997), 10
  11. 11. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 11 of 38 On May 24, 2011, after considering RCVD’s additional evidence, CSC granted RCVD’smotion to reopen but affirmed the agency’s prior decision to terminate. See Compl. Ex. K, ECFNo. 1-1 at 215. The agency noted that RCVD failed to resolve adequately several factual issuesthat had not been clarified in the economic model or in RCVD’s response to CSC’s request foradditional evidence. Id. at 216. For example, RCVD appeared to overstate the aggregateamount of capital expenditures for the wastewater treatment project, which called into questionthe accuracy of the RIMS II analysis that RCVD submitted. Id. at 218. In addition, RCVD wasunable to identify the source of funding for several other purported infrastructure projects. Id. at220. Although CSC upheld its termination of RCVD’s regional investor center status based onmaterial factual discrepancies in the record, the agency certified its decision to the AAO for denovo appellate review. Id. at 221. CSC indicated that certification to the AAO was justifiedbecause of the complexity of the issues involved in RCVD’s investment scheme and economicmodeling. Id. As a result, CSC’s order is not yet final, see USCIS Adjudicator’s Field Manual§ 10.18(a), as the AAO may ultimately overturn the CSC’s decision, see Matter of Chawathe, 25I. & N. Dec. 369, 374-76 (AAO 2010). On July 15, 2011, Plaintiffs filed a complaint with this Court seeking review of USCIS’sinitial termination of RCVD’s regional investor center status. See Compl., ECF No. 1-1.Plaintiffs seek review of the agency’s action under the Administrative Procedure Act (APA). ¶¶ 40-41. 11
  12. 12. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 12 of 38 ARGUMENTI. THE COURT SHOULD DISMISS PLAINTIFFS’ COMPLAINT ON PRUDENTIAL GROUNDS FOR LACK OF RIPENESS The ripeness doctrine is drawn both from Article III limitations on judicial power andfrom prudential reasons for refusing to exercise jurisdiction. See Nat’l Park Hospitality Ass’n v.Dep’t of the Interior, 538 U.S. 803, 807 (2003). Because of prudential considerations thatundergird the ripeness doctrine, the D.C. Circuit has mandated dismissal of a civil action “even ifthere is not a constitutional bar to the exercise of jurisdiction.” Wyo. Outdoor Council v. UnitedStates Forest Service, 165 F.3d 43, 48 (D.C. Cir. 1999). The ripeness doctrine is designed torespond to pragmatic concerns about the relationship between the courts and agencies. See FullValue Advisors, LLC v. SEC, 633 F.3 1101, 1108 (D.C. Cir. 2011). “The ripeness inquiry probes the fitness for review of the legal issue presented, alongwith . . . the hardship to the parties of withholding court consideration.” Teva Pharm. USA, Inc.v. Sebelius, 595 F.3d 1303, 1308 (D.C. Cir. 2010) (internal quotations and citations omitted).The “fitness” prong of the analysis generally addresses “whether the issue is purely legal,whether consideration of the issue would benefit from a more concrete setting, and whether theagency’s action is sufficiently final.” National Ass’n of Home Builders v. U.S. Army Corps. ofEngineers, 440 F.3d 459, 463 (D.C. Cir. 2006). The Court should also consider whether theCourt and the agency would benefit from postponing review until the policy in question hassufficiently “crystalized” by taking a more definite form. Better Gov’t Ass’n v. Dep’t of State,780 F.2d 86, 92 (D.C. Cir. 1986); AT&T Corp. v. FCC, 349 F.3d 692, 700 (D.C. Cir. 2003). AsDefendants show below, under these standards Plaintiffs cannot demonstrate that this case is fitfor judicial review at this time. 12
  13. 13. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 13 of 38 A. Plaintiffs’ claims are not fit for judicial review at this time Plaintiffs are unable to show that their claims alleging CSC’s erroneous termination ofRCVD’s regional center status are fit for judicial determination at this point in time. The agencyaction at issue in this case is still pending before an administrative appellate body, see Compl.Ex. K, ECF No. 1-1 at 215, which has de novo authority to review the questions of fact and lawarising out to the initial agency decision to terminate RCVD’s regional center status, see Soltane,381 F.3d at 145-46. The initial decision of the CSC’s Director does not have precedential effect,see 8 C.F.R. § 103.3(c), and the AAO does not owe any deference to such non-precedentialdecisions, see Izummi, 22 I. & N. Dec. at 182. Thus, the certification of Plaintiffs’ case to theAAO allows Plaintiffs a “second bite at the apple” regarding RCVD’s ability to qualify as aregional center. Plaintiffs may ultimately succeed before the AAO, which militates strongly infavor of dismissing Plaintiffs’ complaint without prejudice for lack of ripeness. Cf. Full ValueAdvisors, 633 F.3 at 1107-08. The issues Plaintiffs raise involve mixed questions of law and fact, which are normallynot fit for judicial review where, as here, the agency is still engaged in fact finding. See GeneralMotors Corp. v. EPA, 363 F.3d 442, 452 (D.C. Cir. 2004). Unlike other administrative appellatebodies, the AAO does not defer to the fact finding of the initial decision maker; rather, it weighsthe record evidence anew. See Chawathe, 25 I. & N. Dec. at 374-76. Moreover, the AAO’sadministrative appellate process “provides a means for the agency to gather facts contrary to itsinitial determination.” Gonzales & Gonzales Bonds and Insurance Agency, 728 F. Supp. 2d at1086. The AAO is authorized to engage in its own fact finding when reviewing an initial agencydecision, and may issue requests for evidence to resolve factual issues on appeal. See 8 C.F.R.§ 103.2(b)(8)(iii). In this case, the AAO’s de novo review authority may allow for further 13
  14. 14. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 14 of 38development of the factual record, which will permit the agency to apply the statute andregulations to a complex set of economic facts based on policy determinations by higher-levelagency officials. Agencies act at the height of their delegated authority when dealing with mixed questionsof law and fact, see NLRB v. Hearst Publications, Inc., 322 U.S. 111, 130-31 (1944), and courtsgenerally allow the agency’s fact finding to conclude before reviewing the agency action, seeGeneral Motors Corp., 363 F.3d at 452. In this case, because the agency is still engaged in factfinding and the administrative record is still open, this matter is not currently ripe for judicialreview. The pending agency action in this case is also not ripe for review because the Court andthe agency would benefit from postponing review until the agency has adequately “crystalized”the relevant issues through higher-level agency review. See AT&T Corp., 349 F.3d at 700. Theagency created the AAO specifically to centralize all agency appeals with the goal ofestablishing an “expeditious appeals procedure with uniform, consistent decisions.” Powers andDuties of Service Officers, 48 Fed. Reg. 43,160 (INS) (Sept. 22, 1983). The AAO reviews initialUSCIS decisions for consistency and accuracy in the interpretation of statutes and regulations.See USCIS Adjudicator’s Field Manual § 3.5(c). The AAO provides guidance to the publicregarding the meaning of the statute and regulations, id., and it resolves novel or complex issuesof law and fact by providing uniform guidance to field adjudicators, id. at § 10.18(a).Accordingly, the agency may refer novel or complex issues to the AAO for resolution by higher-level agency officials. See 8 C.F.R. 103.4(a)(1). The agency should be given an opportunity tocomplete its review of the administrative proceedings in this case, and to formulate a definitive, 14
  15. 15. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 15 of 38uniform policy position at the administrative appellate level before the Court reviews the agencyaction. Plaintiffs ask this Court to review a decision of the CSC Director, see Compl. Ex. K, ECFNo. 1-1 at 215, but this decision does not contain the agency’s final position on the complexeconomic issues arising out of the administration of the regional center pilot program. Althoughthe Director’s decision discusses RCVD’s investment proposal and economic projections indetail, the Director is not empowered to set policy for the agency. See Matter of Sanchez, 21 I.& N. Dec. 444, 460 (BIA 1996) (district directors are not empowered to make binding policydeterminations). Moreover, because the Director certified her decision to the AAO, it “is notconsidered final until the order has been considered by the appellate body.” See USCISAdjudicator’s Field Manual § 10.18(a). Ordinarily, a preliminary determination of an agencyofficial that does not represent the “last word” on a policy issue is not fit for judicial review. SeeAm. Portland Cement Alliance v. EPA, 101 F.3d 772, 777 (D.C. Cir. 1996). Therefore, once theAAO issues its final decision, the Court will be better informed about the agency’s final policydecisions, which will aid judicial review in the event of an adverse decision against Plaintiffs. Plaintiffs allege that the agency’s action thus far is “final” under the APA, see 5 U.S.C.§ 704, and is therefore fit for judicial review, but such an argument is misplaced. Althoughripeness and finality are related and often overlapping doctrines that limit challenges to agencyaction in federal court, ripeness is a distinct category in that it relates to whether the claimsagainst an agency are premature. See Ass’n of Flight Attendants v. Chao, 493 F.3d 155, 160(D.C. Cir. 2007). An agency action may be final under the APA, but for prudential reasons, theripeness doctrine may counsel against judicial review until the agency completes itsadministrative process. See Toilet Goods Assn., Inc. v. Gardner, 387 U.S. 158, 163 (1967); see 15
  16. 16. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 16 of 38also Ass’n of American Railroads v. ICC, 846 F.2d 1465, 1469 (D.C. Cir. 1988). Because theagency action here is currently subject to higher-level agency review at the AAO, which hasauthority to review initial USCIS decisions de novo and set nation-wide guidance for agencyadjudicators, the agency’s decision making process has not sufficiently unfolded to the point atwhich the Court can be certain the agency has finally spoken on the relevant factual and policyissues related to Plaintiffs’ claims. The Court and the parties would benefit from a determinationof the complex issues in this case by the AAO, which will issue a decision by December 2, 2011.This is particularly true considering the AAO may ultimately grant Plaintiffs the relief theyrequest. Yet, even if the AAO upholds the director’s decision, the Court and the parties willbenefit from a more developed articulation of the relevant issues of fact and law in this case.Thus, Plaintiffs’ claims are premature, and for prudential reasons, the Court should dismiss theircomplaint. B. The agency’s strong institutional interests in completing the administrative review process outweigh any potential harm to Plaintiffs Where the Court concludes there are strong interests militating in favor of postponement,the Court must weigh those interests against the potential hardship to the plaintiff as a result ofdelaying judicial review. See AT&T Corp., 349 F.3d at 702. Here, Plaintiffs are unable to showsufficient hardship to counterbalance the administrative and judicial interests in allowing theagency to complete further fact finding and to crystalize the legal and policy issues arising fromthe administration of the regional center pilot program. As a threshold matter, hardship is not established simply because a plaintiff is forced toparticipate in further administrative and judicial proceedings in the event the court dismisses thesuit for lack of ripeness. See AT&T Corp., 349 F.3d at 702. In any event, Plaintiffs in this casedo not suffer any harm by pursuing the administrative process with the AAO, as Plaintiffs may 16
  17. 17. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 17 of 38ultimately obtain the benefit requested. Additionally, Plaintiffs do not present a situation wherea statutory protection or right will expire in the event the Court declines judicial review at thispoint, so they cannot show harm based on a delay in federal court review. See City of Fall River,Mass. v. FERC, 507 F.3d 1, 7 (1st Cir. 2007). Moreover, Plaintiffs’ claims of lost revenue and the frustration of their infrastructureimprovement projects as a result of USCIS’s termination of RCVD’s regional center status(Compl., ECF No. 1 at ¶¶ 33, 35) are insufficient to outweigh the Department of HomelandSecurity’s institutional interests in completing administrative review in this case.9 Regarding thedegree of alleged harm in this case, Plaintiffs’ own documentation indicates that the disruption toRCVD’s infrastructure improvement projects is the result of a flagging economy, not simplyUSCIS’s decision to terminate its status. See Compl. Ex. F, ECF No. 1-1 at 125-16. At most,Plaintiffs can only allege harm resulting from insufficient funding of the wastewater treatmentproject. Yet, this project has been pending for several years, and Defendants expect the AAO toissue a final decision in Plaintiffs’ case by December 2, 2011. Any harm in delaying review atthis point for 80 days is marginal in comparison to the length of time that this project has beenpending.9 Plaintiffs claim that various immigrant investors are “harmed” by the termination of RCVD’sstatus, as these unnamed immigrant investors are unable to immigrate to the United States basedon their investments with RCVD. See Compl. ¶ 34, ECF. No. 1 at 10. Defendants note that thisalleged harm is not sufficient to satisfy the applicable standing requirements. Prudentialrequirements for standing mandate that plaintiffs fall within the statutory “zone of interest,”which bar standing for generalized grievances, and prohibit individuals from raising a thirdparty’s legal rights. See Allen v. Wright, 468 U.S. 737, 751 (1984). “The plaintiff generallymust assert his own legal rights and interests, and cannot rest his claim to relief on the legalrights or interests of third parties.” Valley Forge Christian Coll. v. Ams. United for Separation ofChurch & State, 454 U.S. 464, 474-75 (1982) (quoting Warth v. Seldin, 422 U.S. 490,499(1975)); see also United Food & Commercial Workers Union v. Brown Group, 517 U.S. 544,556-57 (1996); Singleton v. Wulff, 428 U.S. 106, 114-16 (1976). An individual’s standing alsocannot be based on that of third-party co-workers, friends, or family members who should pleadtheir own injuries. See Miller v. Albright, 523 U.S. 420, 446-48 (1998). 17
  18. 18. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 18 of 38 In addition, Plaintiffs have been afforded the opportunity to present more evidence to theAAO, and the AAO may ultimately agree with Plaintiffs and overturn the director’s initialdecision. Even if Plaintiffs do not prevail at the administrative level, given that decisivequestions remain open at the administrative level, including the sufficiency of Plaintiffs’investment plans and economic modeling, the prudent course is to allow the agency to concludeits proceedings and crystalize the issues before this Court determines the relevant factual andlegal issues currently pending before the agency.II. ALTERNATIVELY, THE COURT SHOULD STAY PROCEEDINGS PENDING THE OUTCOME OF THE ADMINISTRATIVE APPEAL Alternatively, if the Court declines to dismiss Plaintiffs’ case for lack of ripeness,Defendants request that the Court stay proceedings pending the outcome of the AAO’s decision,which is anticipated by December 2, 2011. The result of the pending certification to the AAOmay render Plaintiffs’ case moot. It serves the interest of all parties and advances judicialeconomy to stay proceedings pending the final outcome of the pending administrative appeal. Ifthe AAO were to reverse the director’s initial decision to terminate RCVD’s regional centerstatus, a live case or controversy would no longer exist. Even if the AAO were to affirm thedirector’s decision, the AAO’s decision would facilitate the Court’s review by clarifying therelevant issues of fact and policy in this case. As a result, it is in the Court’s interest to stayproceedings until the issues have been finalized at the administrative level. This Court has broad discretion to stay proceedings as an incident to its power to controlits own docket. See Clinton v. Jones, 520 U.S. 681, 706 (1997); see also SEC v. Chestman, 861F.2d 49, 50 (2d Cir. 1988). Proper use of this authority “calls for the exercise of judgment,which must weigh competing interests and maintain an even balance.” Wedgeworth v.Fibreboard Corp., 706 F.2d 541, 545 (5th Cir. 1983) (quoting Landis v. North American Co., 18
  19. 19. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 19 of 38299 U.S. 248, 254-55 (1936)). In deciding whether a stay should be ordered in a given case, adistrict court should evaluate hardship and inequities to the parties to the lawsuit and therelationship of the stay to fulfillment of judicial objectives of simplification of the issues inquestion and trial of the case. See United Merchants and Mfrs., Inc. v. Henderson, 495 F. Supp.444, 447 (N.D. Ga. 1980); see also United Sweetener USA, Inc. v. Nutrasweet Co., 766 F. Supp.212, 217 (D. Del. 1991). Courts have granted motions to stay proceedings where an agencyaction with the potential of affecting the litigation is unfolding concurrently with the districtcourt proceedings. See, e.g., Milk Industry Foundation v. Glickman, 955 F. Supp. 8 (D.D.C.1997). In light of the pending AAO proceedings in this case, judicial objectives are fulfilled bystaying proceedings. The AAO engages in further fact finding following an initial agencydetermination, see Gonzales & Gonzales Bonds and Insurance Agency, 728 F. Supp. 2d at 1086,and the AAO serves the important function of crystalizing the agency’s policy and legaldeterminations for uniform administration of nationwide programs, see USCIS Adjudicator’sField Manual §§ 3.5(c), 10.18(a). In the event the AAO affirms the director’s decisionterminating RCVD’s status, the Court would benefit from the AAO’s final determination of therelevant issues in this case, but such an event may never come to pass since there is a possibilitythat the AAO may grant Plaintiffs the relief they request by reversing the Director’s initialdecision. Because ongoing agency proceedings here may resolve the very issue presented to theCourt by rendering the case moot, it serves judicial economy to hold proceedings in abeyancewhile the central issue to this litigation is finalized at the agency level. Staying proceedings here 19
  20. 20. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 20 of 38would serve the “longstanding policy of the law to avoid duplicative litigative activity.” Envtl.Def. Fund v. Reilly, 909 F.2d 1497, 1507 (D.C. Cir. 1990). On the other hand, denial of the requested stay will prejudice Defendants by denyingUSCIS the opportunity to crystalize its policy position through the administrative appellateprocess, which necessarily involves the contribution of higher-level agency officials who areresponsible for making final determinations that affect the administration of a nationwideprogram. The Court would also benefit from a more complete administrative record in the eventof an adverse agency decision from the AAO. Defendants expect that the AAO will issue itsdecision by December 2, 2011. Thus, holding the case in abeyance for 80 days will notunreasonably delay the Court’s determination of the issues in the event this case is not renderedmoot by that time. Therefore, if the Court declines to dismiss Plaintiffs’ complaint for lack of ripeness,Defendants move in the alternative to stay the instant litigation pending the outcome of thecertified administrative appeal with the AAO. Defendants expect that the AAO will issue adecision by December 2, 2011. 20
  21. 21. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 21 of 38Respectfully submitted this 13th day of September, 2011: RONALD C. MACHEN, Jr. United States Attorney RUDOLPH CONTRERAS Chief, Civil Division /s/ Harry B. Roback HARRY B. ROBACK, DC Bar No. 485145 Assistant U.S. Attorney 555 Fourth St., NW Room E4218 Washington, D.C. 20530 (202) 616-5309 /s/ Geoffrey Forney GEOFFREY FORNEY Trial Attorney United States Department of Justice Office of Immigration Litigation District Court Section 450 5th Street, NW Washington D.C. 20001 (202) 532-4329 21
  22. 22. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 22 of 38 CERTIFICATE OF SERVICE I hereby certify that on September 13, 2011, I electronically filed the foregoingDEFENDANTS’ MOTION TO DISMISS OR IN THE ALTERNATIVE TO STAYPROCEEDINGS with the Clerk of Court by using the CM/ECF system, which will provideelectronic notice and a hyperlink to this document to the following attorney of record: Carl W. Hampe BAKER & McKENZIE 815 Connecticut Avenue, NW Washington, DC 20006-4078 /s/ Geoffrey Forney GEOFFREY FORNEY Trial Attorney United States Department of Justice 22
  23. 23. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 23 of 38 Defendants’ Exhibit A
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  29. 29. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 29 of 38 Defendants’ Exhibit B
  30. 30. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 30 of 38 USCIS Adjudicator’s Field Manual3.5 Roles of Headquarters, Regions and Field Organizations.***(c) Administrative Appeals Office . (Revised 03-13-2005)The Administrative Appeals Office (AAO) produces appellate decisions that provide fair andlegally supportable resolutions of individual applications and petitions for immigration benefits.These decisions provide guidance to applicants, petitioners, practitioners, and governmentofficials in the correct interpretation of immigration law, regulations, and policy.To accomplish its mission of providing timely, consistent, and accurate resolutions of appealsthrough written decisions that are fair, impartial, and legally supportable, the AAO:· Reviews the decisions of adjudicators of petitions and applications for immigration benefitsto ensure consistency and accuracy in the interpretation of immigration laws, regulations, andpolicies.· Maintains awareness of applicable case law to ensure compliance with the most current legalstandards.· Reviews and edits all decisions for quality control as to accuracy and legal sufficiency.· Maintains the highest possible level of output for every officer consistent with a highstandard of quality in appellate decisions issued.· Recommends the publication of precedent decisions as necessary to clarify issues in theadjudications program.The authority to adjudicate appeals is delegated to the AAO by the Secretary of the Departmentof Homeland Security (DHS) pursuant to the authority vested in him through the HomelandSecurity Act of 2002, Pub. L. 107-296 . See DHS Delegation Number 0150.1 (effective March 1,2003); see also 8 CFR 2.1 (2003). The AAO exercises appellate jurisdiction over the mattersdescribed at 8 CFR 103.1(f)(3)(iii) (as in effect on February 28, 2003), with two exceptions - (1)petitions for approval of schools and the appeals of denials of such petitions have been theresponsibility of Immigration and Customs Enforcement since November 1, 2004; and (2)applications for S nonimmigrant status have been the responsibility of the Office of FraudDetection and National Security of U.S. Citizenship and Immigration Services since October2004.*** USCIS Adjudicator’s Field Manual
  31. 31. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 31 of 38(e) Service Centers.There are four Adjudications service centers. Originally, they were completely regional incharacter; that is, they each handled the same types of work within their respective geographicregions and each reported through the regional director. Eventually, the centers began reportingdirectly to Headquarters and the workloads, in part, became specialized. For most applicationsand petitions except asylum, the geographic jurisdictions of the service centers are as follows:Vermont Service Center : Connecticut, Delaware, District of Columbia, Maine, Maryland,Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, RhodeIsland, Vermont, Virgin Islands, Virginia, West Virginia.Texas Service Center : Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi,New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, TexasNebraska Service Center : Alaska, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan,Minnesota, Missouri, Montana, Nebraska, North Dakota, Ohio, Oregon, South Dakota, Utah,Washington, Wisconsin, WyomingCalifornia Service Center : Arizona, California, Guam, Hawaii, Nevada.Asylum pre-processing and related employment authorization applications are divided among thefour service centers according the asylum office jurisdictional lines: Newark, New York andArlington asylum office cases are handled through the Vermont Service Center; Chicago and SanFrancisco asylum office cases are handled through the Lincoln Service Center; Los Angelesasylum office cases are handled through the California Service Center and Miami and Houstonasylum offices are handled by the Texas Service C enter.In addition, specific service centers have been designated to handle certain specialty cases:Nebraska Service Center handles refugee and asylee adjustment cases; refugee relative petitioncases; all refugee travel document issuance and reentry permit issuance cases; military serviceand Filipino War Veteran N-400 cases; employment authorization for A and G dependents;HRIFA adjustment cases and relating employment authorizations and parole requests, andNAFTA and sports-related temporary worker cases;Texas Service Center handles immigrant investor cases ( I-526 and I-829 ); Cuban adjustmentcases; immigrant visas except those entering at Los Angeles and San Francisco; NACARASection 202 adjustment cases and relating employment authorizations and parole requests;California Service Center handles immigrant visa cases from Los Angeles and San Francisco;immigrant investor cases ( I-526 and I-829 ); NACARA Section 203 applications ( I-881 ) foraliens living in Alaska, Arizona, California, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa,Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, USCIS Adjudicator’s Field Manual
  32. 32. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 32 of 38Oregon, Ohio, South Dakota, Washington or Wisconsin; replacement alien registration cards (I-551 renewal program); andVermont Service Center NACARA Section 203 applications ( I-881 ) for all states except thoselisted for California Service Center; and replacement alien registration cards (I-551 renewalprogram).***10.18 Certification of Decisions.(a) General.A certification is a request by the deciding official for review of a decision (approval or denial)by an appellate authority. A decision may be certified to the appropriate appellate authority(AAO or BIA). In a case where there is no appeal provided by regulation, certification is to theAAO. Certification should be initiated in a case where:· Headquarters has directed certification of an individual case, class of cases or cases withparticular fact patterns;· the deciding official believes the facts or issues of a case are so novel or complex that reviewby a higher level of authority is an appropriate means of obtaining guidance.A certification, whether the decision is to approve or deny a case, requires a formal written orderand preparation of Form I-290C. A certified decision is not considered final until the order hasbeen considered by the appellate body. [See 8 CFR103.4](b) Procedures for Forwarding.In order to certify a case, the office preparing the initial decision must assemble a competerecord of proceedings in the same manner as a record prepared for an appeal, including the“Board” and “Public” copies.***22.4 Employment Creation Entrepreneur Cases.(a) General.In 1990, Congress created the Employment Creation Immigrant Visa Category (EB-5). Section121(a) of Public Law 101-649 (Nov. 29, 1990) . Section 203(b)(5) of the Immigration andNationality Act, as amended, allows for admission to permanent residence on a two-yearconditional basis to qualified aliens who will contribute to the economic growth of the UnitedStates by investing in U.S. businesses and creating needed employment opportunities. In 2002,Congress amended the EB-5 statute. Those amendments are discussed in paragraph (h), below. USCIS Adjudicator’s Field Manual
  33. 33. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 33 of 38(1) Basic (Non-Pilot Program) Provisions.Section 203(b)(5) of the Act authorizes up to 10,000 visas each fiscal year to alien entrepreneurs(along with their spouses and unmarried minor children) who have invested or are actively in theprocess of investing in a new commercial enterprise.The new commercial enterprise may take any lawful business form, including a limitedpartnership, and must both benefit the U.S. economy and directly create full-time employmentfor not fewer than 10 “qualifying employees,” defined as U.S. citizens, lawful permanentresidents, or certain other immigrants lawfully authorized to be employed. Noncommercialactivities, including home ownership, do not qualify. In general, the Act established a thresholdinvestment amount of one million U.S. dollars ($1,000,000.00). In order to encourage theinvestment in new enterprises located in areas that would most benefit from employmentcreation, section 203(b)(5)(B) of the Act sets aside on an annual basis 3,000 of the available10,000 EB-5 visas for qualified aliens who have made investments in “targeted employmentareas.” Such targeted employment areas are defined in the Act to include rural areas and areaswhich have experienced high unemployment. The investment amount for investing in a targetedemployment area is currently set at five hundred thousand dollars ($500,000.00).(2) Regional Center Pilot Program. [Revised 12-11-2009](A) Program Overview.The Regional Center Pilot Program was first instituted in 1992. Three thousand of the 10,000total available EB-5 visas are set aside for aliens who invest in a USCIS designated “regionalcenter” in the United States organized “for the promotion of economic growth, includingimproved regional productivity, job creation, and increased domestic capital investment.”Section 610 of Pub. L. 102-395, as amended by section 116(a)(l) of Pub. L. 105-119 and section402(a) of Pub. L. 106-396.An alien investing in a new commercial enterprise affiliated with and located in a regional centeris not required to demonstrate that the new commercial enterprise itself directly employs ten U.S.workers; a showing of indirect job creation and improved regional productivity will suffice.Implementing regulations for the Pilot Program are found at 8 CFR 204.6(m) .NoteDirect jobs are those jobs that establish an employer-employee relationship between thecommercial enterprise and the persons that they employ. Regional centers typically use theRIMS II or IMPLAN economic models to determine the number of indirect jobs that will becreated through investments in the regional center’s investment projects.Indirect jobs are the jobs held by persons who work for the producers of materials, equipment,and services that are used in a commercial enterprise’s capital investment project, but who are USCIS Adjudicator’s Field Manual
  34. 34. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 34 of 38not directly employed by the commercial enterprise, such as steel producers or outside firms thatprovide accounting services.There is a sub-set of indirect jobs that are calculated using economic models that are known asinduced jobs. Induced jobs are those jobs created when direct and indirect employees go out andspend their increased incomes on consumer goods and services.A Regional Center Proposal must be filed with the CSC to request USCIS approval of theproposal and designation of the entity that filed the proposal as a regional center.A “Regional Center” is defined as any economic unit, public or private, engaged in thepromotion of economic growth, improved regional productivity, job creation and increaseddomestic capital investment.The Regional Center Proposal must demonstrate that capital investments made by individualalien investors within the geographic area of the regional center will satisfy the EB-5 eligibilityrequirements in order to create qualifying EB-5 jobs.The Regional Center Proposal should also demonstrate that the new commercial enterprise’sorganizational documents, capital investment offering memoranda, and transfer of capitalmechanisms for the transfer of the alien investor’s capital into the job creating enterprise are incompliance with established EB-5 eligibility requirements.(B) Regional Center Proposal EB-5 Eligibility Requirements.Regional Center Proposals must demonstrate the following EB-5 eligibility requirements in orderto be approved:(i) A clearly identified, contiguous geographical area for the regional center. If the regionalcenter proposal bases its predictions regarding the number of direct or indirect jobs that will becreated through EB-5 investments in the regional center, in whole or in part, by offeringinvestment opportunities to EB-5 investors with the reduced $500,000 threshold, then theTargeted Employment Areas (TEAs), Rural Areas (areas with populations under 20,000 people)and areas of high unemployment (areas with unemployment rates 150% or more of the nationalrate), should be identified.NoteAn alien filing a regional center affiliated Form I-526 must still establish that the investment willbe made in a TEA at the time of filing of the alien’s Form I 526 petition, or at the time of theinvestment, whichever occurs first, to qualify for the reduced $500,000 capital investmentthreshold.(ii) A detailed description of how EB-5 capital investment within the geographic area of theregional center will create qualifying EB-5 jobs, either directly or indirectly. This analysis mustbe supported by economically and statistically valid forecasting tools, including, but not limited USCIS Adjudicator’s Field Manual
  35. 35. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 35 of 38to, feasibility studies, analyses of foreign and domestic markets for the goods or services to beexported [if any], and/or multiplier tables.(iii) A detailed prediction of the proposed regional center’s predicted impact regionally ornationally on household earnings, greater demand for business services, utilities, maintenanceand repair, and construction both within and outside of the geographic area of the proposedRegional Center.(iv) A description of the plans to administer, oversee, and manage the proposed RegionalCenter, including but not limited to how the regional center will:· Be promoted to attract EB-5 alien investors, including a description of the budget for thepromotional activity;· Identify, assess and evaluate proposed immigrant investor projects and enterprises;· Structure its investment capital, e.g., whether the investment capital to be sought will consistsolely of alien investor capital or a combination of alien investor capital and domestic capital,and how the distribution of the investment capital will be structured, e.g. loans to developers,venture capital, etc.; and· Oversee all investment activities affiliated with, through or under the sponsorship of theproposed Regional Center.(C) “Exemplar” Form I-526 Petition.The Regional Center Proposal may also include an “exemplar” Form I-526 petition that containscopies of the commercial enterprise’s organizational documents, capital investment offeringmemoranda, and transfer of capital mechanisms for the transfer of the alien investor’s capitalinto the job creating enterprise. USCIS will review the documentation to determine if they are incompliance with established EB-5 eligibility requirements.Providing these documents may facilitate the adjudication of the related I-526 petitions byidentifying any issues that could pose problems when USCIS is adjudicating the actual petitions.For example, if a new commercial enterprise’s limited partnership (LP) agreement contains abuy-back agreement (i.e. a redemption clause guaranteeing the return of the alien investor’scapital investment), then the alien investor’s capital investment will not be a qualifying “at-risk”investment for EB-5 purposes.Likewise, if the LP agreement requires the payment of fees from the alien investor’s capitalinvestment of $1,000,000 or $500,000, respectively, to the extent that the investment will beeroded below the qualifying level, preventing the full infusion of the capital into the job creatingenterprise, then the alien investor’s capital investment will not meet the required EB-5 level ofinvestment. The approval of a Regional Center Proposal containing defects such as these is not in USCIS Adjudicator’s Field Manual
  36. 36. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 36 of 38the best interest of the prospective regional center or the USCIS EB-5 program as the end resultwill most likely be the denial of the individual alien investor’s Form I-526 petition.Any individual Form I-526 and Form I-829 petitions claiming new commercial enterpriseaffiliation with a regional center and thus EB-5 eligibility based on indirect job creation must bedenied if they are filed prior to the approval of the regional center’s Regional Center Proposal.(D) Regional Center Proposal and Amendment Request Processing.There are two general workflows for the adjudication of Regional Center Proposals, one forInitial Regional Center Proposals and one for Regional Center Amendment requests. ISOsadjudicate cases within these workflows in “first in, first out” order, unless an expedite request isgranted by the CSC director in accordance with the routine expedite criteria that is used for allcases filed with USCIS.(E) Amended Regional Center Proposals.(i) Amendments Due to Material Changes in EB-5 Related Organizational Structure or CapitalInvestment Instruments.Designated regional centers may elect to file an amended Regional Center Proposal and receivean updated approval of the regional center designation prior to the filing of individual EB-5petitions that use supporting documentation relating to EB-5 eligibility issues that has beenmaterially altered or is inconsistent with the documentation used as the basis for the approval ofthe regional center designation. Doing so, may assist in the streamlining of the adjudication ofaffiliated individual EB-5 petiti ons, as the altered documentation may otherwise need to be re-evaluated within the individual EB-5 petitions to determine if they still EB-5 compliant.(ii) Other Amendments .Some Regional Center Proposals are approved for an industry segment using a hypotheticalinvestment project in order to demonstrate how an actual investment project will be capitalizedand operate in a manner that will create at least 10 direct or indirect jobs per alien investor.Individual Form I-526 petitions are then filed with copies of the business plan for thehypothetical investment project as well as the regional center’s actual investment project.If the actual investment project is not different in a material way from the exemplar investmentproject, then the job creating efficacy of the investment project, if carried through as specified inthe business plan will generally be established.Regional centers may opt to file an amendment of their Regional Center Proposal in order toeliminate the uncertainty as to whether the actual investment project is different in a materialway from the exemplar investment project that was approved in the Regional Center Proposal.The filing of these amendments is in the best interest of the EB-5 program as it may assist in thestreamlining of the adjudication of the individual Form I-526 petitions. These amendments USCIS Adjudicator’s Field Manual
  37. 37. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 37 of 38should be supported by detailed documentation relating to the actual investment project. Onceapproved, then only the documentation relating to the actual approved project would be providedin support of the Form I-526 petition, eliminating the uncertainty regarding whether the actualproject meets EB-5 eligibility requirements.A regional center may also file an amendment in order to provide an exemplar Form I-526 withthe supporting documentation required by 8 CFR 204.6 in order for USCIS to determine if thedocumentation is EB-5 compliant, and thus facilitate adjudication of an actual but identical FormI-526 petition, if the evidence of record otherwise establishes EB-5 eligibility.NoteIf the Regional Center requirements are met and a determination of eligibility is made, then thefavorable determination regarding regional center eligibility requirements for the capitalinvestment structure and job creation should generally be given deference and not revisited in theadjudication of individual EB 5 petitions, as long as the underlying facts upon which thefavorable decision was made remain unchanged.The CSC EB-5 program manager should be notified to determine the appropriate action to take ifan ISO discovers during the adjudication of an EB-5 petition that:· Documentation relating to the regional center’s capital investment structure or job creationmethodologies, or the exemplar Form I-526 petition has materially changed since the most recentapproval of the regional center designation;· The record contains evidence of fraud or misrepresentation; or· The evidence of record indicates that the previously favorable decision to approve theregional center proposal (or amendment) to include the determination that the exemplar Form I-526 petition is EB 5 compliant.(b) Governing Factors .8 CFR 204.6(a) cites several governing factors which you must consider. They are:· A visa petition must be filed;· A fee for filing the petition is required;· Before the petition is considered properly filed, the petition must be signed by the petitionerand the initial supporting documentation required by this section must be attached;· The petition must be filed with the California Service Center. [bullet revised 06-17-2009]· The appeal of a denial of this petition is to the Administrative Appeals Office; and USCIS Adjudicator’s Field Manual
  38. 38. Case 1:11-cv-01287-RWR Document 12-1 Filed 09/13/11 Page 38 of 38· The approval of the petition is valid indefinitely, provided that the investment remainsqualifying. USCIS Adjudicator’s Field Manual