Second Joint Status Report in Sustainment Litigation

George Orwell defined an important political skill called doublethink: “To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them…” This skill is adaptive in many situations these days, including for the EB-5 sustainment litigation IIUSA vs. DHS et al. (previously discussed here).

The second Joint Status Report in the sustainment litigation has now been released. In JSR2, IIUSA asks the Court for a ruling that would apparently revert to the legacy sustainment period tied to an investor’s conditional residency. IIUSA has shared JSR2 in a blog post that states: “Once again, IIUSA reaffirmed that we do not support reverting to a sustainment period tied to an investor’s conditional residency.”

Let’s take a look at JSR2, starting with the first paragraph:

The parties continued to discuss a potential resolution of this matter but have been unable to reach agreement. Plaintiff respectfully requests that the Court resolve the pending motions before it; Defendants respectfully request that the Court hold the case in abeyance while Defendants engage in rulemaking that will resolve this litigation within the estimated timeframe as described below.

Here USCIS (Defendant) is requesting what IIUSA (Plaintiff) had offered in the first JSR – to hold the lawsuit in abeyance pending rulemaking. Abeyance could be an effective strategy to avoid falling back on legacy CPR sustainment period, because abeyance would close the gap between ruling (which could simply void the post-RIA change, if the Court rules as IIUSA had suggested) and rulemaking (which could define a modified new sustainment rule). When IIUSA first offered abeyance in JSR1, I had thought that that IIUSA truly wanted to avoid near-term reversion to the legacy sustainment policy.

But in JSR2, IIUSA declines to accept litigation abeyance because rulemaking can take a long time. USCIS was able to offer a start date for the rulemaking process (November 2025), but not a completion date. IIUSA explains that they do not want the lawsuit to be held in abeyance until rulemaking because that would mean “no change in the status quo between now and then” and thus “no relief in connection with bringing this lawsuit.” Apparently, Plaintiff is primarily fighting for a profitable change to the status quo EB-5 sustainment requirement. Plaintiff does not want to have to wait for a change for as long as it could take to make via the proper notice-and-comment rulemaking process that it had claimed to be fighting for.

IIUSA rests its case by asking the Court to “resolve the pending motions before it.” I assume that means asking the Court to sign off on IIUSA’s [Proposed] Order on Summary Judgment, whose content is simply to order “that USCIS’s action changing the investment sustainment period for EB-5 immigrant investors is vacated, held unlawful, and set aside.” I further reason that the single action of vacating a change puts us back to the sustainment period that existed before the change.

On the other hand, the USCIS side of JSR2 does argue against reverting to legacy sustainment period. First, because stakeholders would predictably react to the unfairness. As USCIS contends:

Applying regulatory requirements based on the pre-amendment version of the INA to investors who filed petitions for classification after the enactment of RIA and amendment of the INA would result in such investors also having investment sustainment periods with unknown future end dates based on uncontrollable variability in visa availability despite the plain language of the post-amendment version of the INA, and would expose Defendants to significant risk of litigation from such investors with potentially contrary judicial rulings.

Secondly, there is some “fact of the matter” here. RIA did make statutory changes, however one interprets the language. The USCIS portion of the JSR concludes:

4. In the event the Court does not hold this case in abeyance, Defendants are amenable to revising the existing website guidance to restate the statutory changes and amendments to the INA made by the RIA. This would also resolve Plaintiff’s claims to the extent that anything in the existing guidance goes beyond a mere restatement of applicable statutory provisions.

How can regional centers and investors deal with the uncertainty created by litigation challenges to USCIS guidance? I wish I knew. It’s so material for deal-planning, structuring, marketing, management, and investing to have a ballpark idea of how long EB-5 funds need to stay invested. I don’t know when and how this open question will be resolved. I sincerely regret the reputational damage that this lawsuit has caused for IIUSA, which occupies such an important place in the industry and needs a strong, respected, and unifying voice. And I’m ashamed of the regional centers who chose not to sue in their own names or own their support for this shameful and compromising if very profitable effort, but using IIUSA as a mask to push it forward.