BREAKING NEWS: "Judge Chhabra's Ruling Puts Regional Centers Back in Business"

by David Hirson, Esq. & Mona Shah, Esq.

The agency is enjoined from treating the existing regional centers as deauthorized while this litigation is pending (or until the agency engages in a reasoned decision-making process regarding how to treat these centers under the Integrity Act).”

United States District Judge Vince Chhabria brought a smile of relief to the EB-5 Industry last Friday, with his decision to reverse USCIS’ (under the Department of Homeland Security) decision deauthorizing existing regional centers. The Reform and Integrity Act, signed into law by President Biden on March 15, was interpreted by USCIS as deauthorizing all existing regional centers, essentially cutting off their revenue streams.  Judge Chhabra, in his excellent, well-reasoned decision, opined that USCIS’ actions: “… was almost certainly legal error, because it is unclear whether the Integrity Act deauthorized existing regional centers or allowed them to continue operating under Congress’s new regime. The agency was therefore required to weigh competing interests before deciding whether the existing regional centers should be deauthorized. And the agency’s treatment of the previously authorized regional centers is harming them irreparably, in a manner that is contrary to the public interest.”

Background to the Case

Read a full report of the pending lawsuits against USCIS at

Legal Error & Violation of Agency Rule Making

Judge Chhabra ruled that: “…USCIS was almost certainly wrong in assuming that the Integrity Act affirmatively deauthorized existing regional centers, so the agency was almost certainly wrong to announce that the centers are no longer authorized”.  RIA is actually silent on the issue of de-authorizing existing regional centers. In his opinion, Judge Chhabra dismissed as nonsensical, USCIS’s interpretation that all regional centers provide a proposal even if they have been in existence for years. Judge Chhabra opined several reasons for this stance, including examining RIA for indications of Congressional intent. The Judge stated that even the title of the statute, “Reauthorization and Reform of the Regional Center Program,” does not automatically deauthorize existing regional centers. Other factors included filing of Exemplar petitions along with the multiple tools to ensure ongoing compliance, as indicative of Congress’ intent not to de-authorize existing approved regional centers.

“After all, if Congress had intended to take the seemingly dramatic step of cutting off revenue for hundreds of longstanding regional centers, it could have done so far more transparently. It could have said something like: “All regional centers are deauthorized and must petition the agency for new approval pursuant to the terms of this statute.” USDJ Vince Chhabra.

Please refer to our podcast with the litigation expert John Pratt (from Kurzban Kurzban Tetzeli & Pratt) for a discussion of legal error.

Implications for Investors and Regional Centers

The good news is that regional centers can now start taking in capital from Investors and filing I-526 petitions. RIA did stipulate that before a filing, the regional center must file an Exemplar petition. The Exemplar must incorporate the new rules as laid out in the new Act.  A filing must include a Receipt Notice. Arguably, there is an indication that previously filed Exemplars are sufficient (if supplemented with the new capital investment amount) as the instructions to Form I-956F specifically relates to RCs designated after March 15, 2022. Notwithstanding, it is not recommended to take a chance to see if USCIS accepts the filing.  

What Will the Agency Do Next?

Judge Chhabra’s ruling was extraordinarily well-reasoned. This would make any possible appeal to the California Court of Appeals challenging.  For example, the showing of irreparable harm to regional centers is systematically described. Further, the Agency will find it difficult to defend the obvious breach of the APA.  The APA (Administrative Procedure Act) mandates how a government agency decision making should be conducted. In general, new regulations must go through a notice and comment period, which can take 30 to 60 days at a minimum. Historically it takes at least 12-18 months for complex new regulations to move from proposed rule to final rule. In the instant matter, USCIS simply omitted any notice and comment period.

  • New Rules Immediately via Interim Final Rules?

The procedure governing ‘Interim Final Rules’ does allow USCIS to publish new regulations immediately, but only if there is “good cause”.   Good cause is typically cases where there is 1) an emergency, 2) where prior notice would subvert the underlying statutory scheme, or 3) where Congress has shown it intends to waive notice and comment requirements. Judge Chhabra’s Ruling does put a dampening on the likelihood of success on a showing of “good cause”.  Undoubtedly should USCIS attempt this route, they would be met with a bevy of lawsuits.

 Senator Grassley’s Voice from the Floor


Much has been said about Senator Grassley’s speech from the Senate floor. The Senator explicitly stated that “…all EB-5 regional centers that operated will be expected to seek a new RC Designation…”  USCIS took these words literally in formulating their policy. Judge Chhabra pointed out that Senator’s Grassley’s statement was made after the legislation had been passed and merely added to the record. After examining the Act, the Judge dismissed USCIS’ interpretation, asserting that: “Senator Grassley’s remarks carry little if any interpretive weight. Indeed, the agency’s heavy reliance on this questionable sliver of legislative history only underscores that the statute itself is ambiguous or silent on the question.”  

The EB-5 Industry has long been advocating for USCIS to accept an Attestation from existing regional centers, stating that they are in compliance with the RIA. Perhaps now, the Agency may just pay attention to our many letters and pleas. It is frustrating that the industry’s ideas and opinions are continually ignored. It is certainly more efficient and cost effective to read the opinions of Industry Stakeholders rather than a District Court Judge!

To listen to an in-depth analysis and expert opinion of this situation, subscribe to our website to catch our forthcoming podcast episode where our attorneys sit down again with John Pratt, Esq. (Kurzban Kurzban Tetzeli & Pratt) and other experts to offer expert insights into the possible consequences of the Decision!

About The Author

David Hirson, Esq. has more than 35 years of experience in corporate immigration law, specializing in business and investment immigration. David is the founding and manager partner of David Hirson & Partners, LLP (“DHP”), and he is internationally-recognized for his decades of success in investment immigration. He has been certified as a Specialist in Immigration and Nationality Law by the State Bar of California, Board of Legal Specialization continuously since 1990. David’s success with investment immigration has spanned decades, as seen by his involvement with the EB-5 program since its inception in 1990. DHP’s attorneys have over 70 years of combined experience in advising individuals, start-ups, large corporations, hospitals, and universities in navigating complex areas of employment immigration. The firm’s business and employment-based immigration practice provides a full range of services, including EB-1-1(A), EB-1-2(B), EB-1-3(C), National Interest Waivers (NIW), EB-2, EB-3, EB-5, H-1B, E-1/2, L-1(A)/2(B), H1B, and other immigrant and non-immigrant visas. DHP is one of a select few firms that also specialize in immigration for franchise businesses who have foreign partners/managers. David’s firm also works closely with individuals and HR departments to understand their needs and customize an immigration plan that surpasses their expectations.

Mona Shah, Esq. U.K. born, Mona Shah is a dual-licensed attorney and former British Crown Prosecutor. Mona is the managing partner of MSA, headquartered in Manhattan, with an office in the UK. MSA has an advanced global corporate Immigration practice. Mona has been instrumental in raising hundreds of millions in investor capital.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.