United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Z. Lee United States District Judge.
29, 2011, the United States Citizenship and Immigration
Services (“USCIS”) approved Plaintiff John
Doe's application for conditional permanent resident
status under the Immigration and Nationality Act's visa
program for aliens investing in qualified job creation
projects in the United States (commonly known as the
“EB-5 program”). On September 16, 2013, Plaintiff
filed an I-829 petition to remove the conditions and become a
permanent resident, but the petition was denied. Plaintiff
now sues Jeh Johnson, Secretary of the U.S. Department of
Homeland Security, Leon Rodriguez, Director of U.S.
Citizenship and Immigration Services, and Nicholas Colucci,
Chief of the Immigrant Investor Program Office
(“Defendants”), challenging that denial. His
eleven-count complaint alleges that USCIS's decision was
arbitrary and capricious under the Administrative Procedure
Act (“APA”), 5 U.S.C. § 706(2)(A), exceeded
its statutory and regulatory authority under 5 U.S.C. §
706(2)(C), failed to provide him with procedural due process,
and violated his First Amendment rights.
parties have filed cross-motions for summary judgment. For
the reasons that follow, Defendants' motion  is
granted, and Plaintiff's motion  is denied.
The EB-5 Program
the EB-5 program, visas are specifically allocated for
“qualified immigrants seeking to enter the United
States for the purpose of engaging in a new commercial
enterprise, ” where (i) the immigrant invests a set
amount of capital in the enterprise, and (ii) the enterprise
benefits the U.S. economy by “creat[ing] fulltime
employment for not fewer than 10 [qualified
employees].” 8 U.S.C. § 1153(b)(5). Where an
investment is made in a “targeted employment area,
” as in this case, the relevant amount of investment
capital is $500, 000. Id. § 1153(b)(5)(C)(ii);
8 C.F.R. § 204.6(f)(2).
obtain a visa under the EB-5 program, an investor must
proceed in two steps. First, the investor must file a
“Form I-526, Immigrant Petition by Alien
Entrepreneur” with USCIS. 8 C.F.R. § 204.6(a).
This petition must be accompanied by evidence that the
investor has invested or will invest the required capital in
a new commercial enterprise that meets the EB-5 program's
job creation requirement. Id. § 204.6(j). As to
the capital investment requirement, “the petition must
be accompanied by evidence that the [investor] has placed the
required amount of capital at risk for the purpose of
generating a return.” Id. § 204.6(j)(2).
USCIS regulations list different types of evidence that is
permissible for this purpose. Id. As to the job
creation requirement, an investor must produce evidence
documenting the number of hired employees, or “[a] copy
of a comprehensive business plan showing that, due to the
nature and projected size of the new commercial enterprise,
the need for not fewer than ten (10) qualifying employees
will result, including approximate dates, within the next two
years, and when such employees will be hired.”
Id. § 204.6(j)(4). If USCIS approves the
investor's I-526 petition, the investor is given lawful
permanent resident status on a conditional basis. 8 U.S.C.
the I-526 petition is approved, the investor may seek to
remove the conditional status by filing a “Form I-829,
Petition by Entrepreneur to Remove Conditions” within
the ninety-day period that precedes the investor's
two-year anniversary of becoming a conditional permanent
resident. 8 C.F.R. § 216.6(a). In evaluating the I-829
petition, USCIS determines whether the investor (i)
established a commercial enterprise, (ii) “invested or
was actively in the process of investing the requisite
capital, ” (iii) “sustained” these actions
throughout the investor's residency by
“substantially me[eting] the capital investment
requirement of the statute and continually maintain[ing] his
or her capital investment over the two years of conditional
residence, ” and (iv) “created or can be expected
to create with a reasonable period of time ten full-time jobs
to qualifying employees.” Id. § 216.6(c).
It is the investor's burden to demonstrate these
requirements by a preponderance of the evidence. Matter
of Chawathe, 25 I. & N. Dec. 369, 375 (BIA 2010).
USCIS approves the I-829 petition, the investor is granted
permanent residency. On the other hand, if USCIS denies the
petition, the investor's conditional permanent resident
status is terminated. 8 C.F.R. § 216.6(d).
Plaintiff's EB-5 Petitions
is an Iranian national who sought to achieve lawful permanent
residency through the EB-5 program by investing in a new
commercial enterprise that would construct and operate an
assisted living facility in Elgin, Illinois. Pl.'s LR
56.1(a)(3) Stmt. ¶¶ 1, 7, ECF No. 78-2;
see Defs.' LR 56.1(a)(3) Stmt. ¶ 5, ECF No.
82-2. This enterprise was structured such that Plaintiff made
an initial capital investment of $500, 000 into the
“Elgin Assisted Living EB-5 Fund, LLC”
(“EALEF”), which maintained his funds in an
escrow account while his I-526 petition was pending.
See Pl.'s LR 56.1(a)(3) Stmt. ¶ 7. EALEF
was created to pool the capital investments of twenty-four
investors, generating a total of $12 million to invest in the
assisted living facility. Defs.' LR 56.1(a)(3) Stmt.
approved Plaintiff's I-526 petition on June 29, 2011.
See Pl.'s LR 56.1(a)(3) Stmt. ¶ 7. He
became a conditional permanent resident shortly thereafter on
October 3, 2011. Defs.' LR 56.1(a)(3) Stmt. ¶ 2. As
part of his I-526 petition, Plaintiff submitted a business
plan, which projected that construction of the assisted
living facility would begin in 2010 and the facility would be
completed and operational in 2011. Id. ¶ 5.
Using the “RIMS II economic model,
” Plaintiff's business plan projected
that a total of 278 direct and indirect jobs would be created
by the new commercial enterprise. Defs.' LR 56.1(a)(3)
Stmt. ¶ 6.
29, 2011, one month after USCIS approved Plaintiff's
I-526 petition, EALEF transferred Plaintiff's $500, 000
capital investment to Elgin Memory Care, LLC
(“EMC”), which held the enterprise's
operating account. Pl.'s LR 56.1(a)(3) Stmt. ¶¶
7-8. Three days later-on August 1, 2011-EMC purchased a piece
of real estate, on which it intended to build the assisted
living facility, for $1, 100, 000. Id. ¶ 13.
EMC purchased the land from an entity called UIS Development,
LLC (“UIS”). Id. Earlier on the same
day, UIS had purchased the land from another entity-Nesler
& Lake-CRE, LLC (“Nesler”)-for only $630,
000. Id. ¶ 11. Plaintiff maintains that EMC
used his capital investment to purchase the land from UIS.
See CAR at 8, ECF No. 32-1; Pl.'s Reply &
Resp. at 23, ECF No. 86.
projections in the business plan that Plaintiff submitted
with his I-526 petition proved to be grossly inaccurate.
Construction was severely delayed as EMC sought zoning,
architectural, engineering, and landscaping approval.
Pl.'s LR 56.1(a)(3) ¶ 15. Ultimately, EMC did not
receive a final construction permit for the facility until
October 6, 2014. Id. ¶ 20. As of October 2014,
no structures had been built on the site of the facility.
Id. ¶ 23. Plaintiff maintains that EMC had
“beg[un] its site work” by that time, including
the “installation of [a] sanitary sewer system and
demolition of existing buildings.” Id. But
photographs of the site that Plaintiff provided as part of
his later I-829 application revealed no structures or other
apparent progress in building construction. Defs.' LR
56.1(a)(3) ¶ 10; see CAR 2528- 33, ECF No.
filed his I-829 petition on September 16, 2013. Defs.' LR
56.1(a)(3) ¶ 3. On August 15, 2014, prior to ruling on
Plaintiff's petition, USCIS issued a Request for Evidence
(“RFE”), noting that “[b]ased upon [its]
review of the initial record of evidence, ” USCIS
“[could not] conclude that [Plaintiff] ha[d]
established eligibility for removal of conditions.” CAR
at 12. The RFE explained that Plaintiff's I-829 petition
had failed to demonstrate that he had invested and sustained
the necessary amount of capital during his period of
conditional permanent residency. Id. It specifically
asked Plaintiff to provide additional details about EMC's
purchase of the land, because USCIS could not determine
whether his investment “ha[d] been made available to
[the enterprise] and placed at risk for the purpose of
generating a return.” Id. at 13. Specifically,
the RFE requested, among other items, “[a]n
explanation, with supporting evidence, to explain the prior
sale between [Nesler] and [UIS]” for the land that EMC
purchased, a description of the relationship among the
parties, and “[a]ny other evidence deemed appropriate
by [Plaintiff] to overcome the deficiencies” identified
in the RFE. Id. at 14.
addition to requesting evidence about Plaintiff's
investment, the RFE sought evidence that he had complied with
the job creation requirement (i.e., that the
enterprise had created or would create at least ten full-time
jobs for qualifying employees). Id. In this regard,
the RFE noted various problems with the impact reports that
Plaintiff had submitted with his I-829 petition.
USCIS was concerned that Plaintiff was attempting to use a
methodology that would permit him to take credit for indirect
jobs “based on operation of the facility and
jobs based on construction and development.”
Id. at 15 (emphasis added). This methodology was
different from the one that Plaintiff had used to support his
I-526 petition. Id. Furthermore, noting the
difficulties EMC had faced in getting the facility up and
running, the RFE stated that “[i]t appears that the
Form I-526 may have been filed prematurely, and [Plaintiff]
is now attempting to compensate for the premature filing by
modifying the job creation methodology to suit the
delay.” Id. at 16. Accordingly, the RFE
requested “independent objective evidence” such
as “invoices, canceled checks and contracts, to
substantiate the claimed spending to date on the
project”; “[a] revised economic impact analysis
that properly breaks out construction soft costs from hard
costs”; “[e]vidence that all regulatory approvals
have been received . . . and that construction on the project
has commenced, or will commence in a timely manner”;
and “[a] revised time line for completion and
operation” of the facility. Id. at 16-17.
Plaintiff responded to the RFE with various evidence and
documentation on October 31, 2014. Id. at 18.
USCIS's Decision on Plaintiff's I-829
January 16, 2015, USCIS issued its decision denying
Plaintiff's I-829 petition. It concluded, “based
upon a preponderance of the evidence, ” that Plaintiff
had not met his burden of establishing eligibility for
removal of the conditions on his permanent residency.
Id. at 4.
offered two “independent and alternative” grounds
for its denial. Id. at 9. First, USCIS found that
Plaintiff had failed to demonstrate that he had met and
sustained the capital investment required by the EB-5
program. Id. at 6. It explained that, in order to
satisfy the capital investment requirement, Plaintiff needed
to show that his capital had been “placed at risk for
the purpose of generating a return, ” meaning that
“‘the full amount of [his] money [was] made
available to the business(es) most closely responsible for
creating the employment upon which'”
Plaintiff's petition was based. Id. at 4
(quoting In Re Izummi, 22 I. & N. Dec. 169, 179
(BIA 1998)). After reviewing the record, USCIS determined
that Plaintiff had not made this showing, because he could
not show that his investment was not “simply being used
for purposes unrelated to job creation.” Id.
arriving at this determination, USCIS focused on the land
transaction, explaining that “the same-day land
transaction and the doubling of the price cast doubt on the
legitimacy of the transaction.” Id. Although
Plaintiff had submitted affidavits disclaiming any prior
relationship among EMC, UIS, and Nesler, the agency did not
consider them sufficient to explain the terms of the sale,
particularly given Plaintiff's failure to provide a copy
of the UIS-Nesler sales agreement or an independent appraisal
of the land. Id. Thus, USCIS concluded that
Plaintiff had not satisfied his burden to prove that his
investment “was truly made available to [EMC] and
placed at risk for the purpose of generating a return.”
Id. at 5-6.
also determined that Plaintiff had failed to demonstrate that
he had complied with the job creation requirement.
Id. at 7-9. USCIS noted that the various business
plans and employment impact reports Plaintiff had submitted
provided varying estimates for the project. For example, the
2010 business plan stated that construction would commence on
2010 and the facility would be fully operational by 2011.
Id. at 8. The revised 2011 business plan stated that
the facility would be completed by 2012. Id. And the
revised 2012 business plan stated that the facility would be
completed by 2014. Id. USCIS observed that, as of
the date of the denial, “contrary to the projections in
the business plans provided by [Plaintiff], construction of
the [facility] has yet to begin.” Id. This
problem was made worse, in USCIS's view, by
Plaintiff's failure to provide a revised, updated
timeline for the facility's completion and operation.
Id. USCIS therefore declined to rely on the job
projections in Plaintiff's impact reports. Instead, it
performed its own analysis of Plaintiff's
“documented expenses, ” finding that “[t]he
only documented expenses so far are soft construction cost
expenses for architectural and engineering designs, legal and
accounting services[, ] etc. for which total proof of payment
has been provided for $736, 046.” Id. at 9.
USCIS then summarized these expenses in a table and
calculated that thirteen jobs-four direct and nine
indirect-had been generated from those investments.
Id. But, in light of Plaintiff's failure to
“establish that construction will last at least two
years, ” USCIS found that “these
jobs”-without specifying whether it meant the direct
jobs, indirect jobs, or both-could not be counted in
Plaintiff's favor. Id. (citing Spencer
Enters., Inc. v. United States, 229 F.Supp.2d 1025,
1038-39 (E.D. Cal. 2001)).
court reviews an agency decision under 5 U.S.C. § 706,
it must “decide all relevant questions of law,
interpret constitutional and statutory provisions, and
determine the meaning or applicability of the terms of an
agency action.” 5 U.S.C. § 706. “The
factfinding capacity of the district court is thus typically
unnecessary to judicial review of agency
decisionmaking.” Fla. Power & Light Co. v.
Lorion, 470 U.S. 729, 744 (1985). For this reason,
“judicial review of an agency's final determination
follows standards quite different from those applied in a
typical summary judgment proceeding.” J.N. Moser
Trucking, Inc. v. U.S. Dep't of Labor, 306 F.Supp.2d
774, 781 (N.D. Ill. 2004). Review is based solely on the
record in the administrative proceeding below, and the court
does not take or consider new evidence. Hunger v.
Leininger, 15 F.3d 664, 669 (7th Cir. 1994).
“[w]hen a party moves for summary judgment in such a
judicial-review proceeding, he does not implicitly reserve a
right to a trial if the motion is denied; there is no right
to a trial in a review proceeding, as contrasted with an
original proceeding. The motion for summary judgment is
simply the procedural vehicle for asking the judge to decide
the case on the basis of the administrative record. It
informs the judge that he should resolve the case as a matter
of law; that there are no triable issues of fact.”
Id. (internal citation omitted).
Court first addresses Plaintiff's contentions that
USCIS's decision is arbitrary and capricious under 5
U.S.C. § 706(2)(A). The Court then considers
Plaintiff's claim that USCIS's decision exceeded the
agency's statutory and regulatory authority under 5