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Rule Delaying Foreign Entrepreneur Parole Vacated: DC District Court
Practical Law Legal Update w-011-9203 (Approx. 5 pages)
Rule Delaying Foreign Entrepreneur Parole Vacated: DC District Court
by Practical Law Labor & Employment
| Published on 05 Dec 2017 • USA (National/Federal) |
In National Venture Capital Association v. Duke, the US District Court for the District of Columbia (DC District Court) vacated the Department of Homeland Security's (DHS) Delay Rule, a rule that would have delayed the effective date of the previous administration's International Entrepreneur Rule, finding that the Delay Rule violated the notice and comment requirements of the Administrative Procedure Act (APA).
On December 1, 2017, in National Venture Capital Association v. Duke, the US District Court for the District of Columbia (DC District Court) vacated a rule by Department of Homeland Security (DHS) that would have delayed the effective date of the previous administration's International Entrepreneur Rule (IE Rule). The DC District Court found that the DHS's Delay Rule violated the notice and comment requirements of the Administrative Procedure Act (APA). The court also found that certain international entrepreneurs had standing to challenge the Delay Rule because their loss of opportunity to pursue immigration parole under the IE Rule constituted an injury. ( (D.D.C. Dec. 1, 2017).)
Background
During President Obama's administration, the DHS issued the IE Rule, which described when international entrepreneurs who met certain criteria might be able to qualify for a discretionary immigration parole so they could stay temporarily in the US without a visa or green card, to create and develop start-up companies with potential for growth in the US. Those who met certain criteria were considered for, but not guaranteed, up to 30 months of parole, with possible re-parole. After going through the notice and comment procedures required by the APA, the DHS's rule was published on January 17, 2017 and was to take effect 180 days later, on July 17, 2017 (see Legal Update, DHS Issues Final Rule With Foreign Entrepreneur Parole Authority).
On January 25, 2017, President Trump issued an Executive Order concerning immigration practice, including to end parole abuse (see Practice Note, Immigration Executive Orders Under Trump: Border Security and Immigration Enforcement). On July 11, 2017, several days before the IE Rule's effective date (and after nearly six months of inactivity by the DHS), the DHS issued a superseding Delay Rule to postpone the effectiveness of the IE Rule for eight months to March 14, 2018. The DHS also indicated that the rule would likely be rescinded (see Legal Update, DHS Delays Entrepreneur Rule While Suggesting It Will Be Withdrawn). The agency did not follow the notice and comment requirements of the APA before the Delay Rule's issuance, allowing only a short comment window after the rule was already effective.
Several plaintiffs sued the DHS arguing that the Delay Rule:
- Was invalid for its APA non-compliance.
- Caused serious damage to their businesses and investments.
Both parties submitted cross-motions for summary judgment.
Outcome
The DC District Court:
- Granted the plaintiff's motion for summary judgment.
- Denied the defendants' motion for summary judgment.
- Vacated the DHS's Delay Rule.
The DC District Court reasoned that:
- The DHS has discretion to grant parole on a case-by-case basis, only for:
- urgent humanitarian reasons; or
- cases of significant public benefit.
- When creating the IE Rule, the DHS saw it as creating a significant public benefit, but still would require certain criteria to be met by parole applicants.
- The plaintiffs had standing to bring their claims because they suffered injury at the hands of the Delay Rule, namely that they lost the opportunity to apply for parole under the IE Rule and stay in the US to advance their businesses.
- The US Court of Appeals for the District of Columbia Circuit (DC Circuit) has held that the loss of an opportunity to pursue a benefit is a cognizable injury for a plaintiff, even if the plaintiff was not certain to ultimately receive the benefit (CC Distributors, Inc. v. United States, 883 F.2d 146, 150 (DC Cir. 1989)). Further, although the DC Circuit has not yet considered the issue, several other circuits have made this same determination specifically within the immigration context (see Patel v. USCIS, 732 F.3d 633, 638 (6th Cir. 2013) (quoting Abboud v. INS, 140 F.3d 843, 847 (9th Cir. 1998)); Mantena v. Johnson, 809 F.3d 721, 731 (2d Cir. 2015); Shalom Pentecostal Church v. Acting Sec'y U.S. Dep't of Homeland Sec., 783 F.3d 156 (3d Cir. 2015); Musunuru v. Lynch, 831 F.3d 880 (7th Cir. 2016); Kurapati v. USCIS, 775 F.3d 1255, 1260 (11th Cir. 2014)).
- The APA generally requires an agency to provide notice or solicit public comment before publishing a rule (5 U.S.C. § 553(c)). Rare exceptions to this requirement arise only:
- in emergency situations or when a delay could cause serious harm (Jifry v. FAA, 370 F.3d 1174, 1179 (D.C. Cir. 2004) (citations omitted)); or
- when the agency finds good cause that the notice and public comment procedures are impracticable, unnecessary, or against public interest (5 U.S.C. § 553(b)(B)).
- The DHS waited nearly six months before issuing the Delay Rule and argued that it did not comply with the APA notice and comment procedures for "good cause." However:
- the DHS had plenty of time to initiate those APA-compliant procedures; and
- it is well-established that an agency's claim of good cause cannot arise as a result of its own delay (Washington All. of Tech. Workers v. U.S. Dep't of Homeland Sec., 202 F. Supp. 3d 20, 26 (D.D.C. 2016), aff'd, 857 F.3d 907 (D.C. Cir. 2017)).
- The DHS's rationales for claiming "good cause" (the expense of implementing the new parole system and the confusion caused by a new rule and system) were unpersuasive and unsupported by sufficient evidence.
- The DC Circuit has held that when a court finds an agency action unlawful, it ordinarily vacates the rule (see Ill.Pub. Telecomms. Ass'n v. FCC, 123 F.3d 693 (D.C. Cir. 1997)). In the present case, the DHS's shortcomings concerning the Delay Rule were deemed worthy of vacatur.
Practical Implications
This decision allows the IE Rule to go into effect. Individuals seeking to qualify under the rule's requirements should provide detailed documents in support of a parole application. However, given the administration's determination to limit immigration to the US, applicants should be prepared for lengthy processing and discretionary decisions against issuing parole.