Lawsuit Challenges Postponement of the International Entrepreneur Rule

Entrepreneurs, start-up companies and a trade association joined together to oppose the postponement of the International Entrepreneur Rule (IER). This rule, with an effective date of July 17, 2017, would have permitted foreign entrepreneurs to travel to or stay in the United States to  grow new businesses. Less than a week before the IER was scheduled to take effect, the Department of Homeland Security (DHS) published a Federal Register notice announcing that its implementation would be significantly delayed and suggesting that it ultimately intends to rescind the IER. 

Immigrant entrepreneurs, who bring their talents, ideas, and initiative with them to the United States often face significant barriers to obtaining permission to travel and work in the United States. The IER was promulgated to address these problems and was informed by extensive input from affected entrepreneurs, the business community, and the American people.  

The Plaintiffs are prospective entrepreneur applicants under the IER or companies founded by potential applicants. Unable to otherwise travel to or work in the United States due to ineligibility for existing visa categories or numerical caps, these plaintiffs are being forced to move their businesses and accompanying jobs elsewhere. 

The Council, in cooperation with the Washington, D.C. office of Mayer Brown LLP, filed the lawsuit against DHS. The complaint alleges that Defendants failed to comply with the APA’s notice and comment requirement. Plaintiffs seeks to compel Defendants to implement the IER and to begin accepting and adjudicating parole applications from international entrepreneurs.

On December 1, the Court granted summary judgment for the Plaintiffs and vacated the postponement rule. The Court found that Plaintiffs had standing because the postponement cost foreign entrepreneurs the opportunity to apply for parole. The Court found no basis for DHS’ claims that implementation costs or public “confusion” were good cause for dispensing with the APA’s notice and comment requirements. Finally, the Court refused to consider any further delay of the IER’s implementation.

On May 9, Plaintiffs filed a motion for court permission to conduct discovery as to whether the government is complying with the Court’s order. Plaintiffs’ concern arises from public statements by USCIS officials suggesting no implementation coupled with no decision on pending applications.

On July 11, the Court ordered Defendants to provide discovery based on the proposal they submitted following oral argument: a deposition of the Division Chief of the Immigrant Investor Program Office (the office responsible for adjudicating the applications) directly relating to steps taken by USCIS to implement the IER and the production of documents from December 1, 2017 forward, and subject to privilege claims, relating to training materials, to selection of adjudicators and supervisors, and to the training process. The Court’s order also provides for further discovery upon Plaintiffs’ motion, which Defendants may oppose.

On July 13, after considering Plaintiffs’ motion for attorneys’ fees under the Equal Access to Justice Act, which Defendants opposed, the Court granted the motion based on the EAJA rate. The Court found that Defendants were not substantially justified “in plowing ahead without notice and comment.”