Chung et al v. USCIS et al EB-5 investor complaint

Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 1 of 25 Page ID #:3

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UNITED STATES DISTRICf COURT CENTRAL DISTRICI' OF CAUFORNIA

Jae Moon CHUNG, AeRaKANG, Hae Young CHUNG, HaeMin CHUNG,

Plaintiffs, vs.

) ) ) ) ) ) ) )

U.S. Citizenship and Immigration Services, ) ("USCIS"); ) Janet NAPOLITANO, Secretary, ) U.S. Department of Homeland Security ) (''DHS"); ) Alejandro MA YORKAS, Director, ) U.S. Citil;enship and Immigration ) Services ("'USCIS"); ) Rosemary L. MEL VILLE, Director, ) USCIS California Service Center; ) md, ) Perry RHEW, Chief~ Administrative ) Appeals Office, USCIS; )

Defundan~. )

SACV12- 1351 AG (JPR.x Civil Action No.: )

COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF

Chung I!!Jt at ~;dJSCJS et al, Complaint Page 1


Plaintiffs JAE MOON CHUNG and AE RA KANG, individually and on behalf of their

minor children, HAE YOUNG CHUNG and HAEMIN CHUNG, by and through undersigned

counsel, bring this Complaint for Declaratory Judgment and Injunctive Relief against the above

mentioned defendants, and allege as follows:

INTRODUCTION

I. This is a civil action brought by an immigrant investor and his family to challenge the decision

of the United 'States Citizenship and Immigration Services ("USCIS") to deny them lawful

permanent residency in the United States.

2. After granting Mr. Jae Moon CHUNG and his family members conditional permanent

residency in the United States based upon an investment of one-half million dollars in a U'SCIS-

designated regional center in South Dakota, USCIS erroneously and arbitrarily denied the

removal of the CHUNG/KANG family's conditional resident status and deprived them oflawful

permanent residency.

3. As a result, after many years of lawful presence, the family now faces the potential initiation

of proceedings to deport and remove them from the United States as well as the loss of the

enormous financial and emotional resources the family has invested in establishing their home in

the United States.

4. This lawsuit requests that this Court reverse the refusal by USCIS to remove the condition

from the CHUNGIKANG family's resident status and grant the family lawful permanent resident

status.

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JURISDICTION

5. This action arises under Sections 201, 203(b)(5), 216A, and 245 of the Immigration and

Nationality Act of 1952 (hereinafter "INA"), 8 U.S.C. §§1151, 1153(b)(5), 1186b, and 1255.

This Court has jurisdiction over this action pursuant to 28 U .S.C. § 1331 (federal question

jurisdiction), the Administrative Procedure Act, 5 U.S.C. 701, et seq., and the Mandamus Act, 28

U.S.C. §1361. Plaintiffs seek relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §2201,

et seq and the Equal Access to Justice Act, 5 U.S.C. Section 504,28 U.S.C. Section 2412.

VENUE

6. Venue properly lies in the Central District of California pursuant to 28 U.S.C. §1391(e)(3)

because the plaintiff resides in Irvine, California, which is within the jurisdiction of District and

there is no real property involved in the action.

7. Venue also lies in the Central District of California pursuant to 28 U.S.C. §1391(e)(1) because

this action is against officers and employees of the United States acting in their official

capacities, and is being brought where Defendant Melville performs her principal official duties

and responsibilities, and maintains her office: Laguna Nigel, California.

PARTIES TO THE ACTION

8. Plaintiff, Jae Moon Chung ("Mr. Chung") is a citizen and national ofKorea. On July 14,2006

he and his family were lawfully admitted to the United States as conditional permanent residents

based on an 1-526 petition approved on October 27, 2005 by USCIS. Mr. Chung used lawfully

earned and acquired assets to invest $500,000 pursuant to the EB-5, Investor Pilot Program.

9. Based on this investment Mr. Chung, his wife, Ae Ra Kang, and their two minor children, Hae

Young Chung and Hae Min Chung were granted conditional permanent residence status.


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10. Mr. Chung filed a timely and complete 1-829 petition on June 2, 2008, which was improperly

denied by USCIS on April14, 2011,2011. Based on this denial, Mr. Chung and his family faces

potential deportation from the United States. Mr. Chung's, wife, Ae Ra Kang, and their two

minor children, Hae Young Chung and Hae Min Chung are also Plaintiffs in this case as their

U.S. immigration status derives from that of Mr. Chung.

11. Defendant Janet NAPOLITANO is Secretary of the Department of Homeland Security

("DHS"). She is sued in her official capacity. As Secretary of DHS, she has ultimate

responsibility for the administration and enforcement of the immigration laws pursuant to 8

U.S.C. § 1103(a).

12. Respondent U.S. Citizenship and Immigration Services, "USCIS," is the sub-agency of the

Department of Homeland Security, responsible for the adjudication of immigration and

naturalization applications or petitions, including the Plaintiffs' 1-829, Petition by Entrepreneur

to Remove Conditions, subject of the Plaintiff's suit.

13. Respondent Alejandro MA YORKAS is sued in his official capacity as the Director of

USCIS, an agency within DHS. As the Director of USCIS, Mr. Mayorkas is responsible for the

overall administration of USCIS and implementation of the immigration laws of the United

States.

14. Defendant Rosemary L. MEL VILLE is sued in her official capacity as the Director of the

USCIS California Service Center. As Director of the USCIS California Service Center, Ms.

Melville is responsible for the overall administration of the California Service Center and is

therefore responsible for the adverse decisions made on the petition at issue in the instant case.

15. Defendant Perry RHEW, is sued in his official capacity as the Chief of the Administrative

Appeals Office located in Washington, DC. Mr. Rhew is the chief of the Administrative Appeals

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Office and is therefore is responsible for affirming the adverse decisions made on the petition at

issue in the instant case.

EXHAUSTION OF ADMINISTRATIVE REMEDIES

16. There are no administrative remedies available for Plaintiffs to exhaust. There is no

administrative appeal of the denial of an 1-829 petition. 8 CFR § 216.6( d)(2).

17. Even if there were administrative remedies available to Plaintiffs, exhaustion is not required

in cases governed by the Administrative Procedures Act where the agency's decision is final and

exhaustion is not expressly required by statute. 1, 2

18. Plaintiffs may renew the 1-829 petition in removal proceedings before the EOIR, but, DHS

has not initiated removal proceedings against Plaintiffs though about one year has passed since

the denial ofthe Plaintiffs 1-829 petition.

19. As only DHS has the legal ability to initiate removal proceedings, the issue ofthe Plaintiffs'

immigration status could remain unresolved for an indefinite period of time.

20. Further, the Immigration Judge and EOIR do not have jurisdiction over the violations of the

Administrative Procedures Act and the Constitution as outlined in this complaint.

1 See Administrative Procedures Act Section IO(c), 5 U.S.C. Section 704:

Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this Section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.

See also Darby v. Cisneros, 509 U.S. 137 (1993). 2 Although not required of the Plaintiffs, on May 16, 2011(Exhibit L - Plaintiffs 5/16/11 Motion to Reconsider) the Plaintiffs submitted a motion to reconsider which the AAO ultimately denied. Exhibit M- AAO's 3/19/12 Decision Dismissing Motion.


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21. For this reason, renewal of the I-829 in removal proceedings before the EOIR is not a

mandatory exhaustion requirement.

STATUTORY BACKGROUND ON THE IMMIGRANT INVESTOR PROGRAM

22. In 1990 Congress enacted Section 203(b )( 5) of the Immigration and Nationality Act ("INA"),

8 U.S.C. §1153(b)(5). This provision created a new preference allocation ofvisas ("EB-5 visas")

for immigrants who have invested or are in the process of investing a designated amount of

lawfully obtained capital in commercial enterprises, and can demonstrate that the investment will

create or preserve, ten or more jobs for qualified U.S. workers, defined as citizens, lawful

permanent residents, lawful temporary residents, asylees, and refugees. Under this "Immigrant

Investor Law," foreign national investors may obtain lawful permanent residence ("LPR status")

in the United States for themselves and their dependents.

23. The law is intended to attract foreign capital, encourage economic development, especially in

economically depressed or rural areas in the United States, and promote job creation or job

retention thus directly benefiting the United States economy and labor market.

24. The law made 10,000 immigrant visas available each year for qualified foreign nationals who

create or preserve at least ten full time jobs by investing in a commercial enterprise. In most

cases, to qualify, the foreign national must invest or be actively in the process of investing one

million dollars. When the investment is made in a rural area, however, as it was in this case, or

in a "targeted employment area" the required investment is one-half million dollars.

25. As part of its 1993 Appropriations Act, Congress created a "Pilot Program" within the

Immigrant Investor Program. The "Pilot Program" is intended to encourage potential immigrants

to invest in "regional centers," entities organized "for the promotion of economic growth,

including increased export sales, improved regional productivity, job creation, and increased

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domestic capital investment." Section 610, Department of Justice and Related Agencies

Appropriations Act, 1993, Pub.L. 102-395, 106 Stat. 1828, 1874 (" 1993 Appropriations Act").

26. users is empowered to designate public or private entities as "regional centers" based on the

above criteria. 8 e.F.R. § 204.6(e).

27. Under the Pilot Program, the original requirement that each individual investment create ten

jobs for qualifying employees was expressly relaxed, with investors in a "regional center"

instead permitted to put forth in their filings "reasonable methodologies for determining the

number of jobs created by the pilot program, including such jobs which are estimated to have

been created indirectly .... " 1993 Appropriations Act, §610(c). Reasonable methodologies

include multiplier tables, feasibility studies, and "other economically or statistically valid

forecasting devices which indicate the likelihood that the business will result in increased

employment. 8 e.F.R. § 204.6(m)(3)(v). "Indirect jobs are the jobs held by persons who work

outside the newly established commercial enterprise ... There is also a sub-set of indirect jobs

that are calculated using economic models that are known as induced jobs. Induced jobs are

those jobs created when direct and indirect employees go out and spend their increased incomes

on consumer goods and services." 3

28. The Lead Plaintiff invested $500,000 into the Winter Dairy, a pooled investment opportunity

created with the South Dakota International Business Institute ("SDIBI") I Dairy Economic

Development Region ("DEDR").

29. Since April 8, 2004, SDIBI/DEDR has been authorized by USeiS as a regional center of the

Immigrant Investor Pilot Program.

3 Exllibit A - Memorandum (HQ 70/6.2 AD 09-38) ("Neufeld Memo"), December 11, 2009, Adjudication of EB-5 Regional Center Proposals and Affiliated Form 1-526 and Form 1-829 Petitions; Adjudicators Field Manual (AFM) Update to Chapters 22.4 and 25.2 (AD09-38), pg. 3


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30. The job creation methodology approved by USCIS for application to SDIBI/DEDR's Winter

Dairy project utilizes a RIMS II 4 economic multiplier from the Bureau of Economic Analysis of

the U.S. Department of Commerce. 5

31. The approved economic multiplier is 2.66. This means that for every direct job 6 created by

the project, an additional 1.6 indirect jobs are created.

4 RIMS II (Regional Input-Output Modeling System) is used by the Bureau of Economic Analysis for impact analyses. Regional Multipliers Handbook, http://www.bea.gov/scb/pdf/regional/perinc/methlrims2.pdf(last accessed 8/12/2012). 5 The BEA [Bureau of Economic Analysis] BEA is one of the world's leading statistical agencies. The BEA produces economic accounts statistics that enable government and business decision-makers, researchers, and the American public to follow and understand the performance of the Nation's economy. To do this, BEA collects source data, conducts research and analysis, develops and implements estimation methodologies, and disseminates statistics to the public. 6 "Direct jobs are those jobs that establish an employer-employee relationship between the newly established commercial enterprise and the persons that they employ." Neufeld Menw, page 2. Id. at Exhibit A.


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THE EB-5 PETITION PROCESS

32. To obtain an EB-5 immigrant visa or lawful permanent resident status under the Immigrant

Investor Law, a foreign national must first file an 1-526 petition with the USCIS Service Center

having jurisdiction. USCIS has consolidated jurisdiction for all EB-5 adjudications at its

California Service Center located within this District.

33. Under the Pilot Program, the 1-526 petition must contain evidence to prove that the foreign

national has invested, or is actively in the process of investing, at least one-half million dollars

through a USCIS-authorized regional center, and that the investment will, directly or indirectly,

create at least ten full time jobs.

34. The evidentiary standard which the USCIS reqmres petitioners to meet is one of

"preponderance of evidence," 7 which means that the matter asserted is more likely than not to be

true. This evidentiary standard has recently been reaffirmed by the current USCIS Director

Alejandro Mayorkas. 8

35. The USCIS California Service Center adjudicates the 1-526 petition pursuant to regulatory

criteria set forth in 8 C.F.R. § 204.6. Ifthe petition and its supporting documents meet all of the

requirements by a preponderance of evidence, a notice of approval is sent to the foreign national

investor. The foreign national and his or her spouse and minor children can then obtain EB-5

immigrant visas and be admitted to the United States as conditional permanent residents for two

years.

7 Exhibit B- See Memorandum (HQOPRD 70/2), February 16, 2005, stating on page 3, "The standard to be met by the petitioner or applicant is "preponderance of the evidence. Filings are not required to demonstrate eligibility beyond a reasonable doubt." 8 Exhibit C - A Work in Progress: Towards New Draft Policy Memorandum Guiding EB-5 Adjudications (PM-602-XXXX:), November 9, 2011.


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36. Within ninety days of the two year anniversary of admission to the United States as a

conditional permanent resident, the immigrant investor must file an I-829, Petition by

Entrepreneur to Remove Conditions. This petition is filed with the USCIS California Service

Center.

37. The petition must, among other things contain evidence that the foreign national's investment

"created or can be expected to create within a reasonable period of time ten full-time jobs to

qualifying employees." (Emphasis added.) 8 CFR 216.6(c)(l)(iv). If the investment is in a

regional center then the jobs can be either direct or indirect results of the investment. Evidence

can include "payroll records, relevant tax documents, and Forms 1-9." Id.

38. USCIS is required by statute and by its own regulations to adjudicate the I-829 petition

within ninety (90) days of receipt. Section 216A(c)(3)(A)(ii) of the INA, 8 U.S.C. §

1186b(c)(3)(A)(ii) and 8 C.F.R. § 216.6(c)(l). Again, the burden of proof is preponderance of

evidence. 9

39. Section 216A(c)(3)(B) states that if the I-829 petition is approved, the condition is removed

and the investor and his family remain lawful permanent residents of the United States. Section

216A(c)(3)(C) and (D) states that ifthe petition is denied, lawful permanent resident status will

be terminated and the alien may request review of such determination in a proceeding to remove

the alien with the burden being on the Attorney General to establish, by a preponderance of the

evidence, that the facts and information described in subsection (d)(l) and alleged in the petition

are not true with respect to the qualifying commercial enterprise.

9 See Exhibit B- Memorandum (HQOPRD 70/2), February 16, 2005.


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40. On November 2, 2002, PL 107-273 10 was enacted and amended the statute so that the

immigrant investor whose petition is denied remains a conditional resident until such time that a

non-appealable, final order is issued by the Board of Immigration Appeals at the conclusion of

removal proceedings.

4l.On December 21,2006, the USCIS published an Interoffice Memorandum (HQPRD70/23.12)

by Michael Aytes Re: Delegation of Authority to Service Center Directors to Adjudicate Form 1-

829, Petition by Entrepreneur to Remove Conditions, in which the USCIS re-affirmed its policy

that states:

If the Form I-829 is still pending or has been denied but no final order of removal has been entered ... [d]ocumentation of conditional resident status must be issued until a final order of removal is issued. 11

, 12

FACTUAL BACKGROUND

42. Mr. Chung's 1-526 petition was submitted to the USCIS on August 8, 2005. It contained a

U.S. EB-5 Immigrant Investment Pilot Program Escrow Agreement with Hana Bank World

Center Branch in Seoul, Korea (hereinafter "Hana Bank") as proof that Mr. Chung set up an

escrow account on July 25, 2005 for the sole purpose of securing the investment funds for

transfer to Winter Dairy.

10 Twenty-First Century department of Justice Appropriations Authorization Act. 11 See Exhibit D- Memorandum by William Yates on January 18,2005, Re: Extension of Status for Conditional Residents with Pending or Denied Form 1-829 Petitions Subject to Public Law 107-273, at page 2 (" ... USCIS must continue to document the conditional resident status of eligible aliens with pending or denied Form I-829s until the conditional status has been removed or a final order of removal has been issued ... "). 12 And Exhibit E- EB-5 Field Memorandum Number 9: Form I-829 Processing by Michael A. Pearson on March 3, 2000 Re: AFM Update: Immigrant Investor Petitions - Form 1-829 Adjudication, at page 13.


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r 43. Mr. Chung's 1-526 was approved by the USCrS on October 27, 2005 based on Mr. Chung's

proposed one-half million dollar investment in the Winter Dairy, a Pilot Program pooled

investment opportunity offered by SDrBr/DEDR, a users designated regional center.

44. The construction of the Winter Dairy began in December of 2005 and was completed in

December of 2006.

45. Mr. Chung and his family were admitted to the United States in conditional permanent

resident status on July 14,2006.

46. Mr. Chung's $500,000 investment was made fully available to Winter's Dairy on August 25,

2006.

4 7. Winter Dairy commenced operations and, in good faith, complied with the condition that it

create the requisite number of jobs for qualified U.S. workers.

48. Specifically, Winter Dairy through its managers, faithfully complied with the employment

eligibility verification requirements explicitly set forth in Section 274A of the INA, 8 U.S.C.

Section 1324a. Pursuant to Section 274A of the INA and implementing regulations and

guidelines, the Winter Dairy managers required all prospective employees to affirm and provide

documentary proof of their authorization to work in the United States in full compliance with the

statute and regulations governing the r-9 employee identification and employment authorization

verification process.

49. The vast majority of these employees, in compliance with the r-9 process, affirmed that they

were lawful permanent residents of the United States, and provided their facially valid Alien

Registration Receipt Cards ("green cards") as proof. 13

13 It should be noted that the users has never alleged that the lawful permanent resident cards were not facially valid or that the Petitioners acted in bad faith in regards to the acceptance of the lawful permanent resident cards.


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50. Winter Dairy, through its managers, was also cognizant of its duty not to discriminate in

employment by engaging in explicitly prohibited conduct, pursuant to the anti-discrimination

provisions specified within Section 274B of the INA (8 U.S.C. Section 1324b), such as

demanding additional or alternative proof of lawful U.S .immigration status. 14

51. INA Section 274B prohibits citizenship or immigration status discrimination with respect to

hiring, firing and recruitment or referral for a fee, by employers with four or more employees.

Employers may not treat individuals differently because they are, or are not, U.S. citizens. U.S.

citizens and nationals, recent permanent residents, asylees, and refugees are protected from

citizenship status discrimination.

52.All individuals eligible to work m the United States - including citizens, nationals,

immigrants, and temporary work visa holders -- are protected from national origin

discrimination.

53.1n addition, INA Section 274B prohibits unfair documentary practices related to verifying the

employment eligibility of employees. Employers are prohibited from requesting more or

different documents than are required to verify an individual's employment eligibility and

identity. Employers are also prohibited from rejecting reasonably genuine-looking documents

that appear to relate to the person presenting them, or specify certain documents over others.

14 It should be noted that the Department of Justice ("DOJ") does aggressively investigate and pursue these matters as evidenced by two recent DOJ Press Releases, one in where the Assistant Attorney General of the Civil Rights Division states, "Employers may not treat authorized workers differently during the employment eligibility verification process based on their citizenship status. Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law." See DOJ Press Release, 12-28-2011 entitled, "Justice Department Reaches Settlement with Virginia-Based BAE Systems Ship Repair Inc." (available at: http://www.justice.gov/opa/pr/20 11/December/11-crt-1712.html -last accessed 8/2/12). See also DOJ Press Release, 01-04-2012 entitled, "Justice Department Settles with University of California San Diego Medical Center." (available at: http://www.justice.gov/opa/pr/2012/January/12-crt-006.html -last accessed 8/2/12).


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r 54. All work authorized individuals are protected from unfair document inquiry abuse. 15

55. On June 2, 2008 Mr. Chung timely and properly filed her 1-829 petition with the USCIS

California Service Center.

56. Included with the petition were documents evidencing actual direct employment of at least

sixteen 16 apparently U.S. workers: 1-9 forms and copies of the proffered identity documents for

each employee; W-4 and W-2 forms for each worker employed at the time; the Annual Federal

Tax Return for Agricultural Employees for tax year 2007; the Annual Federal Unemployment

(FUTA) Tax Return for tax year 2007; and, an organization chart illustrating the structure that

also listed the employees and descriptions of their positions.

57. These documents established, by a "preponderance of evidence," that Winter Dairy had

created, or could be expected to create within a reasonable period of time, at least sixteen direct,

full-time jobs for U.S workers, all of whom appeared to be qualified U.S. workers based on their

sworn affirmations and original, facially valid documents submitted in compliance with the

instructions for the 1-9 and in compliance with the statute at INA Section 274B.

15 See USCIS's Handbook for Employers M274, page 38:

8. Q. What is my responsibility concerning the authenticity of document(s) presented to me?

A. You must examine the document(s), and if they reasonably appear on their face to be genuine and to relate to the person presenting them, you must accept them. To do otherwise could be an unfair immigration-related employment practice. If the document(s) do not reasonably appear on their face to be genuine or to relate to the person presenting them, you must not accept them.

available at: http://www.uscis.gov/files/form/m-274.pdf (last accessed 8/2/12). 16 Using the RIMSII multiplier of 2.66, sixteen direct jobs equates to 42.56 direct and indirect jobs. Because there were four immigrant investors in the Winter Dairy, 10.64 direct and indirect jobs are attributable to each investor.


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58. In violation of the INA and its own regulations, USCIS failed to adjudicate Mr. Chungs I-829

petition within ninety days. 17 Instead, the petition languished at the California Service Center

("CSC") for well over eight months when the first request for evidence was issued.

59. On February 20, 2009, the CSC issued a Request for Evidence ("RFE"). 18

60.The RFE requested evidence that the petitioner had invested the requisite amount of capital

and that the investment will create full-time employment for not fewer than 10 qualified workers.

In addition, the RFE requested copies of the Quarterly Wage Reports for all employees for the

four quarters immediately preceding the filing date of the I-829 petition, and, evidence of the

current immigration status of all workers.

61. Most ofthis evidence had already been provided with the initial I-829 submission.

62. Plaintiff timely responded to the RFE providing additional proof of job creation, which by

that point included an additional three full time employees, bringing the total to nineteen.

63. Specifically, plaintiff provided: I-9 forms and copies ofthe proffered identity documents for

each worker employed at the time of the submission of the response to the RFE; I -9 forms and

copies of the proffered identity and employment authorization documents for each worker

employed in 2007; W-2 forms for tax years 2008 and 2007; Quarterly Wage Reports for all four

quarters of tax year 2008.

64. In October 2009, the First National Bank of Sioux Falls foreclosed on the Winter Dairy.

65. Pleasant Dutch Dairy, LLC purchased the Winter Dairy assets from First National Bank in

January 2010.

17 INA Section 216A(c)(3)(A), 8 U.S.C. Section 1186b(c)(3)(A) 18 Exhibit F- USCIS CSC 2/20/09 Request for Evidence.

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r 66. Over one year and three months after Plaintiffs timely RFE response, on August 11, 2010,

USCIS issued a Notice oflntent to Deny ("NOID") Mr. Chung's I-829 petition. 19

67. At no time prior to August 11, 2010 was Plaintiff or anyone else associated with the Winter

Dairy put on notice of the issue of unauthorized workers. 20

68. The USCIS put into effect a heightened evidentiary standard more aligned with the "clear

and convincing" standard than with the "preponderance of evidence" standard called for in the

statute. In fact, the NOID states the following: "The beneficiary is not clearly eligible for the

benefit sought." (Emphasis added.) Furthermore, the USCIS checked data systems that Plaintiff

and the employer were not required by law to check and, moreover, that were not available to the

Plaintiff or the employer. The actions of the USCIS went far beyond any investigation an

employer would be lawfully permitted to perform.

69. Once again, Mr. Chung filed a timely response.

70. The director of the California Service Center denied the petition on December 6, 2010 and

certified her decision to the AAO. 21 The denial was based on CSC's determination from

checking its internal Government data bases, that "the majority of employees hired by Winter

Dairy ... are not authorized to work in the United States."

71. The denial was not due to the fact that the Plaintiff did not or could not have been expected

to create the requisite number of jobs during the two year period. Rather, the petition was denied

because, after years of unwarranted investigation and delay, USCIS determined that the

individuals hired to fill the jobs misrepresented themselves as qualified U.S. workers using

19 Exhibit G- USCIS' 8/11/10 NOID. 20 On May 13, 2010 the Petitioners filed in this Honorable Court an action (Chung et a/. v. Napolitano et a/., Case No. CV10-03584) seeking USCIS' adjudication of the pending 1-829 ~etition. Upon USCIS issuing its August 11, 2010 NOID the Petitioners withdrew the suit.

1 Exllibit H- USCIS 12/6/10 Denial ofl-829 and Certification to AAO.


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facially legitimate documents, which under Section 274B of the INA the employer was required

to accept as proof of that status. This determination was based exclusively on an allegedly

exhaustive check of internal Government Data Bases that are inaccessible to the general public

including the plaintiff.

72. Mr. Chung submitted a brief and additional evidence in response to the notice of

certification.

73. On February 17, 2011, the AAO advised Mr. Chung of derogatory evidence and found

therein that the Plaintiff had made fraudulent and material misrepresentations. 22

74.The AAO's February 17, 2011 correspondence further allowed the Petitioner the opportunity

to "overcome" the AAO's finding of fraud and misrepresentation. !d.

75. On March 3, 2011 Mr. Chung responded to the AAO's notice with a statement and additional

evidence. 23

76. On April14, 2011 the AAO affirmed the director's decision in part and withdrew a portion in

par.t, denying Mr. Chung's petition. 24

77. The AAO affirmed the director's decision finding that Mr. Chung had not met the job

creation requirement of the EB-5 program, as well as making an independent formal finding of

misrepresentation by Mr. Chung. !d.

78. The AAO did withdraw the director's concerns regarding the use of multipliers that were

disclosed during the approved Form I-526 petition.

79. On May 16, 2011 the Plaintiff filed a timely motion to reconsider the AAO's April14, 2011

decision. 25

22 Exhibit I- AAO's 2/17/11 Notice of Fraud Determination. 23 Exhibit J- Plaintiffs 3/3/11 Response to AAO's 2/17/11 Notice of Fraud. 24 Exhibit K- AAO's 4/14111 Decision on Certification.

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.· 80. The California Service Center transferred the motion to the AAO for adjudication to which

the AAO dismissed the motion on March 19, 2012. 26 The AAO dismissed the motion pursuant

to 8 C.F.R. 103.5(a)(4) for not meeting the applicable requirements for such a motion. /d. 27

CAUSES OF ACTION

Count 1: Arbitrary and Capricious Action in Violation

of the INA and the Administrative Procedures Act

81. Plaintiffs incorporate paragraphs 1 through 74 as if fully stated in this Count.

82. Defendants' practices, policies, interpretations of law, and conduct violate the INA and the

Administrative Procedures Act ("APA") and should be set aside pursuant to 5 U.S.C.

§706(2)(A) as arbitrary, capricious and otherwise not in accordance with law and pursuant to 5

U.S.C. §706(2)(D) as without observance of procedure as required by law.

83. Defendant's denial of Plaintiffs for I-829 violates the APA and the INA because, contrary to

the ninety day adjudication period mandated by Section 216A(c)(3)(A)(ii) of the INA, and

Defendant USCIS' own regulations, Defendants took almost three years to render a decision.

84. The lengthy, unexplained, unreasonable, and unjustified delay in adjudicating Plaintiffs 1-

829 petition illegally deprived Plaintiff of the opportunity to remedy, or even know about the

deficiency upon which Defendant denied the petition.

85. Moreover, it is indisputable that more than the requisite numbers of new direct and indirect

full time jobs were created by Plaintiffs investment. These were real jobs which were, in good

faith, made available to qualified U.S. workers as required by law. Had Defendant, USCIS,

followed the law and timely adjudicated Plaintiffs petition, Plaintiff would clearly have met the

25 Exhibit L- Plaintiffs 5/16/11 Motion to Reconsider. 26 Exhibit M- AAO's 3/19/12 Decision Dismissing Motion. 27 The denial of the Plaintiffs' motion to reconsider is not being challenged in this suit.


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.-requirement that the foreign national's investment "created or can be expected to create within a

reasonable period of time ten full-time jobs to qualifying employees." (Emphasis added.) 8 CFR

216.6( c )(1 )(iv).

86. The USCIS acted in an arbitrary and capricious manner in adjudicating Plaintiffs' petition

under a heightened standard above and beyond the correct "preponderance of evidence" standard

contrary to their own regulations and guidance. See Aytes Memo, supra, as well as Gonzalez v.

Reno, 212 F.3d 1338 at 1349 (lith Cir 2000); Morton v. Ruiz, 415 U.S. 199, 94 S. Ct. 1055 at

1074; see also Hall v. Schweiker, 660 F.2d 116, 119 (5th Cir. 1981) ("Agencies must respect

their own procedural rules and regulations.").

87. The US CIS and the AAO acted in an arbitrary and capricious manner in making a find of

material misrepresentation by Mr. Chung, as this charge is baseless and entirely without merit.

Count II: Exceeding Statutory Authority

88. Plaintiffs incorporate paragraphs I through 74 as if fully stated in this Count.

89. The USCIS exceeded its statutory jurisdiction, authority and limitations in violation of

Section 706(2)(C) of the APA by requiring, as a pre-condition to approval, actions of Plaintiff

which would have violated INA Sections 274A and 274B in order to be deemed in compliance

with 8 C.F.R. § 216.6(c)(1)(iv).

90. The USCIS exceeded its statutory authority by adjudicating the Plaintiffs' petition under

heightened standard above and beyond the correct "preponderance of evidence" standard

contrary to their own regulations and guidance.

91. The USCIS's position, that the requirements of INA 203(b)(5)(A)(ii) and 8 C.F.R. 204.6(e)

are rightfully enforced by requiring a heightened standard above and beyond the correct

"preponderance of evidence" standard of verifiable proof through Federal government internal

Chung et at. v. USC/Set a/., Complaint

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: records not available to the investors or any other member of the public, in a manner that would

subject the investors to liability under 274A and 274B, is ultra vires. 28

Count Ill: Violation of Due Process

92. Plaintiffs incorporate paragraphs 1 through 74 as if fully stated in this Count.

93. The USCIS adjudication was contrary to the due process clause of the 5th Amendment of the

United States Constitution by failing to provide Mr. Chung an opportunity to be heard in a

meaningful time and in a meaningful manner in violation of Section 706(2)(B) of the APA.

94. The USCIS adjudication was contrary to the due process clause of the 5th Amendment of the

United States Constitution by adjudicating Plaintiffs' petition under a heightened standard above

and beyond the correct "preponderance of evidence" standard contrary to their own regulations

and guidance.

95. The USCIS' imposition of a heightened standard above and beyond the correct

"preponderance of evidence" standard of proof, its unwarranted reliance on information

contained in non-public Government databases, and the lengthy adjudicatory delays combined to

deny the Plaintiff due process.

ATTORNEY'S FEES

96. As a result of the Defendants' unlawful actions, Plaintiffs were required to hire counsel and

pay counsel reasonable fees and expenses. Because Det(mdants were not substantially justified

in pursuing this action, Plaintiffs are entitled to recover legal fees and all costs and expenses

under the Equal Access to Justice Act, 5 U.S.C. § 504 and 28 U.S.C.§ 2412.

28 The anti-discrimination provision of 274B had been on the books for several years when the Immigrant Investor Program was created by IMMACT90. Notably Congress did not waive Section 274B prohibitions for immigrant investors.

Chung et at. v. USC/Set a/., Complaint

Page 20


RELIEF REQUESTED

WHEREFORE, Plaintiffs respectfully request this Court enter judgment on their behalf

and issue the following:

a. an order declaring the Defendants' denial of Plaintiffs' I-829 application to be

violative of the INA and its attendant regulations; violative of the Administrative Procedures

Act, ultra vires; arbitrary and capricious and not otherwise in accordance with law;

b. an order declaring that Plaintiffs capital investment in the Winter Dairy satisfies

the investment and employment requirements of INA § 216A, 8 U.S.C. § 1186b, and the

implementing regulations;

c. an order directing Defendants and their agents to promptly approve Plaintiffs

Form I-829 petition to remove the condition from his lawful permanent residence and that of her

spouse and children;

d. an order directing Defendants and their agents to immediately issue all necessary

and appropriate documentation to Plaintiffs evidencing permanent resident status in the United

States;

e. an order directing Defendants and their agents not to consider the Plaintiffs'

presence in the United States as unlawful during the period of time between the denial of Form 1-

829 and the disposition of this litigation;

f. an order enjoining the Defendants from placing the Plaintiffs m removal

proceedings pending a final determination in this case;

g. an order enjoining the Defendants from taking any action to deport, remove or

deem inadmissible any of the Plaintiffs from the United States pending a final determination in

this case;


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: h. an order enjoining the Defendants from taking any action to deprive the Plaintiffs

of their right to be employed in the United States during the pendency of this case;

proper.

1. a mandatory injunction requiring the approval of Plaintiffs' I-829 applications;

J. an order awarding Plaintiffs their attorney's fees and costs; and

k. an order granting such other relief as the Court may deem just, equitable and

Dated: 1 ... J!Z,

By:

Respectfully submitted,

Jb"Z" SUKIKIM California Bar #: 242573 Counsel for Plaintiffs Hanul Professional Law Corporation 2677 N. Main St. Suite 1070 Santa Ana, CA 92705 Tel: (714) 347-0008 Fax: (714) 347-0088 www .iminlawfirm.com

Chung eta/. v. USC/Set at., Complaint

Page 22


Chung et al. v. USCIS et al.

EXHIBIT INDEX

Exhibit A - Memorandum (HQ 70/6.2 AD 09-38) ("Neufeld Memo"), December 11, 2009, Adjudication of EB-5 Regional Center Proposals and Affiliated Form 1-526 and Form 1-829 Petitions; Adjudicators Field Manual (AFM) Update to Chapters 22.4 and 25.2 (AD09-38), pg. 3

Exhibit B - See Memorandum (HQOPRD 70/2), February 16, 2005, stating on page 3, "The standard to be met by the petitioner or applicant is "preponderance of the evidence. Filings are not required to demonstrate eligibility beyond a reasonable doubt."

Exhibit C- USC1S, A Work in Progress: Towards New Draft Policy Memorandum Guiding EB-5 Adjudications November 9, 2011 (PM-602-XXXX)

Exhibit D- Memorandum by William Yates on January 18, 2005, Re: Extension of Status for Conditional Residents with Pending or Denied Form I-829 Petitions Subject to Public Law 107-273, at page 2.

Exhibit E- EB-5 Field Memorandum Number 9: Form I-829 Processing by Michael A. Pearson on March 3, 2000 Re: AFM Update: Immigrant Investor Petitions- Form I-829 Adjudication, at page 13.

Exhibit F- USCIS CSC 2/20/09 Request for Evidence

Exhibit G-US CIS' 8111110 NOID

Exhibit H- USCIS 12/6110 Denial ofl-829 and Certification to AAO

Exhibit I- AAO's 2117111 Notice of Fraud Determination

Exhibit J- Plaintiffs 3/3/11 Response to AAO's 2/17111 Notice of Fraud

Exhibit K- AAO's 4/14111 Decision on Certification

Exhibit L- Plaintiffs 5/16111 Motion to Reconsider

Exhibit M- AAO's 3119112 Decision Dismissing Motion

Date post:	22-May-2015
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Chung et al v. USCIS et al EB-5 investor complaint

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