In a legal victory for EB-5 investors, on October 12, 2023, the Kentucky Western District Court ruled in favor of a group of plaintiffs who had filed a mandamus lawsuit against United States Citizenship and Immigration Services (USCIS) regarding delayed processing of their EB-5 applications.
The Guthikonda et al. v. Jaddou case was filed in July 2022 by seven EB-5 petitioners against USCIS director Ur M. Jaddou, claiming that their petitions had been delayed due to mishandling by the agency.
Out of the numerous cases filed against USCIS on behalf of EB-5 investors, this is the first occurrence of an I-526 mandamus being decided in their favor, making it all the more significant.
The landmark ruling resulted in the adjudication of I-526 petitions of complainants, and it is expected to set a precedent for many such cases.
This ruling strengthens the legal standing of EB-5 investors seeking accountability on the status of their applications.
EB-5 Investors and USCIS Processing Delays
The EB-5 Immigrant Investor Program, administered by USCIS, was created in 1990 to stimulate the U.S. economy through job creation and capital investment by immigrant investors. It enables foreign nationals and their eligible dependent family members (the spouse and unmarried children under 21) to obtain lawful permanent residency in the United States by investing in a commercial enterprise and creating 10 permanent full-time jobs for qualified U.S. workers.
The increasing popularity of the EB-5 program in recent years, coupled with the limited availability of EB-5 visas, has increased the processing times exponentially, especially after the pandemic.
In a bid to ease the immigration experience for EB-5 investors and make the EB-5 program more efficient and secure, the U.S. Congress passed the EB-5 Reform and Integrity Act of 2022 (RIA) in March 2022. The legislation introduced significant measures to enable faster processing of EB-5 petitions filed post-RIA.
However, some EB-5 investors, especially those who filed Form I-526 before the RIA, still experience long processing times.
The Guthikonda Mandamus Case
A writ of mandamus is a type of lawsuit filed in a U.S. district court that, if successful, can direct USCIS or any administrative agency to take action on a case that has been unjustifiably delayed, causing distress to the applicant. While it does not enforce an application’s approval, it compels the agency to complete its adjudication.
Mandamus cases against USCIS are becoming recurrent due to very long processing times and little information available to applicants on the status of their petitions. Some cases drag on without any legitimate explanation provided to the petitioners.
The Guthikonda case complainants had filed their I-526 petitions between May and November 2019. Experiencing inconsistency in the processing of their petitions wherein many EB-5 applications filed later than theirs were adjudicated before them, they filed a mandamus lawsuit against USCIS, claiming that there were irregularities in the agency’s adjudication process.
The chief argument of the case was that either USCIS did not have a “rule of reason” or it was not followed while adjudicating petitions — meaning that USCIS’s procedure was arbitrary and inconsistent, which delayed the adjudication of plaintiffs’ petitions.
In its defense, USCIS claimed that it followed a “visa availability approach” as the “rule of reason,” whereby it processed applications sequentially on a first-come, first-served basis as and when visas became available.
However, the investors’ attorneys were able to prove with substantial evidence that USCIS did not adhere to this approach consistently. They provided sufficient facts that despite visas being available, the plaintiffs’ petitions were bypassed by USCIS, and petitions filed later than theirs were processed earlier.
After analyzing all aspects of the case, the judge acknowledged that although the “visa availability approach” was a “rule of reason,” USCIS did not apply the rule when processing the I-526 petitions in question. Based on this critical factor, the court ruled in favor of the complainant EB-5 investors and ordered USCIS to adjudicate their petitions.
Significance of the Ruling
The verdict in the Guthikonda case can prove to be pivotal for future I-526 mandamus cases, particularly those filed in the same circuit courts. It will favorably influence the decision-making of succeeding I-526 delay lawsuits by becoming a legal precedent to such cases.
The ruling will also encourage aggrieved EB-5 investors to file delay cases in other courts that do not have such a preceding judgment. It may not be binding on other circuit courts, but citation of this case will undoubtedly strengthen arguments in similar cases.
For more information on how to increase your chances of a timely EB-5 processing time, schedule a free consultation with EB5AN.
