American Logistics International, L.L.C. et al v. Department of Homeland Security et al

Second MOTION to Dismiss for Lack of Jurisdiction

D.D.C.July 10, 2017

CHAD A. READLER Acting Assistant Attorney General Civil Division WILLIAM C. PEACHEY Director GLENN M. GIRDHARRY Assistant Director YAMILETH G. DAVILA Senior Litigation Counsel United States Department of Justice Civil Division Office of Immigration Litigation District Court Section P.O. Box 868, Ben Franklin Station Washington, DC 20044 Tel: (202) 305-0137 Email: Yamileth.G.Davila@usdoj.gov Attorneys for Defendants UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA AMERICAN LOGISTICS ) INTERNATIONAL, L.L.C., et al., ) ) Civil Action No. 15-682-RDM Plaintiffs, ) ) v. ) DEFENDANTS’ MOTION TO DISMISS ) PLAINTIFFS’ COMPLAINT PURSUANT DEPARTMENT OF HOMELAND ) TO FEDERAL RULE OF CIVIL SECURITY, et al. ) PROCEDURE 12(b)(1) ) _______________Defendants. ) DEFENDANTS’ MOTION TO DISMISS Pursuant to Federal Rule of Civil Procedure 12(b)(1), Defendants the United States Department of Homeland Security (“DHS”); DHS Secretary, John F. Kelly; the United States Citizenship and Immigration Services (“USCIS”); USCIS Director, James McCament; USCIS California Service Center Director, Kathy Baran; and Chief of the Immigrant Investor Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 1 of 24 2 Program (“IPO”), Nicholas Colucci (collectively “Defendants”), hereby move this Court to dismiss Corporate and Investor-Plaintiffs’ Amended Complaint (ECF No. 8) because Plaintiffs have not established that this Court retains subject matter jurisdiction over their claims. The grounds for this motion are set forth in the accompanying memorandum of points and authorities. Defendants’ proposed order is attached. Dated: July 10, 2017 Respectfully submitted, CHAD A. READLER Acting Assistant Attorney General WILLIAM C. PEACHEY Director GLENN M. GIRDHARRY Assistant Director /s/ Yamileth G. Davila YAMILETH G. DAVILA Senior Litigation Counsel United States Department of Justice Civil Division Office of Immigration Litigation District Court Section P.O. Box 868, Ben Franklin Station Washington, DC 20044 Tel: (202) 305-0137 Email: Yamileth.G.Davila@usdoj.gov Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 2 of 24 3 AMERICAN LOGISTICS ) INTERNATIONAL, L.L.C., et al., ) ) Civil Action No. 15-682-RDM Plaintiffs, ) ) v. ) ) DEPARTMENT OF HOMELAND ) SECURITY, et al., ) ) Defendants. ) DEFENDANTS’ MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS PURSUANT TO FED. R. CIV. P. 12(b)(1) CHAD A. READLER Acting Assistant Attorney General WILLIAM C. PEACHEY Director GLENN M. GIRDHARRY Assistant Director /s/ Yamileth G. Davila YAMILETH G. DAVILA Senior Litigation Counsel United States Department of Justice Civil Division Office of Immigration Litigation District Court Section P.O. Box 868, Ben Franklin Station Washington, DC 20044 Tel: (202) 305-0137 Email: Yamileth.G.Davila@usdoj.gov DATED: July 10, 2017 Attorneys for Defendants Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 3 of 24 i TABLE OF CONTENTS I. INTRODUCTION .............................................................................................. 1 II. STATUTORY AND REGULATORY BACKGROUND .................................. 2 A. The EB-5 Immigrant Investor Visa Program ................................................ 2 B. Form I-526 Immigrant Petition by Alien Entrepreneur ................................ 3 C. Regulations and Precedent Decisions Governing the EB-5 Program .......... 3 III. ADMINISTRATIVE AND PROCEDURAL HISTORY ................................. 4 IV. RULE 12(b)(1) DISMISSAL STANDARD ....................................................... 6 ARGUMENT ....................................................................................................................... 8 I. PLAINTIFFS HAVE NOT ESTABLISHED THERE IS AN ONGOING CASE OR CONTROVERSY ............................................................................. 8 A. Plaintiffs’ Claims are Moot where the Corporate-Plaintiffs have Ceased Operations ..................................................................................................... 8 B. Plaintiffs Have Not Shown Their Alleged Injuries Can be Redressed ....... 12 CONCLUSION ................................................................................................................. 14 CERTIFICATE OF SERVICE Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 4 of 24 ii CASES *A.N.S.W.E.R. Coal. v. Kempthorne, 493 F. Supp. 2d 34 (D.D.C. 2007) ............................................................................... 8, 9 Bank of Am. Corp. v. City of Miami, 137 S. Ct. 1296 (2017) ................................................................................................... 13 *Beethoven.com LLC v. Librarian of Congress, 394 F.3d 939 (D.C. Cir. 2005) ............................................................................... 7, 9, 10 *Better Government Ass’n v. Department of State, 780 F.2d 86 (D.C. Cir. 1986) ................................................................................. 7, 9, 11 Brady Campaign to Prevent Gun Violence v. Ashcroft, 339 F.Supp.2d 68 (D.D.C. 2004) ..................................................................................... 7 Church of Scientology of California v. United States, 506 U.S. 9 (1992) ............................................................................................................. 7 Friends of the Earth v. Laidlaw, 528 U.S. 167 (2000) ......................................................................................................... 7 Herbert v. National Academy of Sciences, 974 F.2d 192 (D.C. Cir. 1992) ......................................................................................... 8 Honig v. Doe, 484 U.S. 305 (1988) ....................................................................................................... 12 Hunter v. District of Columbia, 384 F.Supp.2d 257 (D.D.C. 2005) ................................................................................... 7 Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249 (D.C. Cir. 2005) ....................................................................................... 7 Kokkonen v. Guradian Life Ins. Co., 511 U.S. 375 (1994) ......................................................................................................... 7 L.A. County v. Davis, 440 U.S. 625 (1979) ....................................................................................................... 12 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 5 of 24 iii Lewis v. Continental Bank Corp., 494 U.S. 472 (1990) ......................................................................................................... 7 *Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) ................................................................................................. 12, 13 Matter of Chawathe, 25 I. & N. Dec. 369 (AAO 2010) .................................................................................... 3 Matter of Ho, 22 I. & N. Dec. 206 (Assoc. Comm. 1998) ..................................................................... 3 Matter of Hsiung, 22 I. & N. Dec. 201 (Assoc. Comm. 1998) ..................................................................... 3 Matter of Izummi, 22 I. & N. Dec. 169 (Assoc. Comm. 1998) ..................................................................... 3 Matter of Soffici, 22 I. & N. Dec. 158 (Assoc. Comm. 1998) ..................................................................... 3 *McBryde v. Committee to Review Circuit Council Conduct and Disability Orders of Judicial Conference of U.S., 264 F.3d 52 (D.C. Cir. 2001) ........................................................................... 7, 9, 10, 12 North Carolina v. Rice, 404 U.S. 244 (1971) ......................................................................................................... 7 Payne Enterprises v. United States, 837 F.2d 486 (D.C. Cir. 1988) ......................................................................................... 9 Powell v. McCormack, 395 U.S. 486 (1969) ....................................................................................................... 12 Primax Recoveries, Inc. v. Lee, 260 F.Supp.2d 43 (D.D.C. 2003) ..................................................................................... 8 Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26 (1976) ......................................................................................................... 13 Southern Company Services v. FERC, 416 F.3d 39 (D.C. Cir. 2005) ......................................................................................... 10 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 6 of 24 iv Southern Pacific Terminal Co. v. ICC, 219 U.S. 498 (1911) ......................................................................................................... 9 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) ................................................................................................... 13 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) ................................................................................................... 12, 13 Systronics Corp. v. INS, 153 F. Supp. 2d 7 (D.D.C. 2001) ..................................................................................... 3 *Webb v. Dep’t. of Health and Human Services, 96 F.2d (D.C. Cir. 1982) ......................................................................................... 11, 12 Worth v. Jackson, 451 F.3d 854 (D.C. Cir. 2006) ......................................................................................... 7 STATUTES 8 U.S.C. § 1153(b)(5) ................................................................................................ Passim 8 U.S.C. § 1153(b)(5)(C) ..................................................................................................... 2 8 U.S.C. § 1154(a)(1)(H) ..................................................................................................... 3 8 U.S.C. § 1154(b) ............................................................................................................... 3 8 U.S.C. § 1361 ................................................................................................................... 3 Pub. L. No. 101-649 ............................................................................................................ 2 RULES Fed. R. Civ. P. 12(h)(3) ....................................................................................................... 8 Fed. R. Civ. P. 12(b)(1) .............................................................................................. passim REGULATIONS 8 C.F.R. § 103.3(c) .............................................................................................................. 4 8 C.F.R. § 204.6(f) ............................................................................................................... 2 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 7 of 24 v 8 C.F.R. § 204.6(j) ......................................................................................... 3, 9, 10, 13, 14 OTHER AUTHORITIES 56 Fed. Reg. 60 .................................................................................................................... 3 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 8 of 24 I. INTRODUCTION Plaintiffs are a USCIS-designated regional center in California, American Logistics International Regional Center, LLC (“Plaintiff-Regional Center”); its associated new commercial enterprises for which it acts as the general partner, American Logistics International Transportation Partners, L.P. (“Transportation L.P.”) and American Logistics International Warehousing and Distribution, L.P. (“Warehousing L.P.”) (collectively, “Corporate-Plaintiffs”); and individual investors (“Plaintiff-Investors”) seeking approval of employment-based, fifth preference (“EB-5”) immigrant investor visa petitions (collectively “Plaintiffs”). Pls.’ Amend. Compl., ECF No. 8. See 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6. Since the commencement of this action, eight of the original fifteen Plaintiff-Investors have sought and received voluntary dismissal of their claims. See Docket No. 1:15-cv-682-RDM. Additionally, the Court dismissed three of the Plaintiff-Investors and denied their mandamus claims with prejudice on January 11, 2017. Id. Plaintiff-Investors Nguyen Quoc Khanh, Mohammad Layeghi, Massoud Majidi, and Fatemah Vahabzadeh are the four remaining individual Plaintiff-Investors. Id. On May 12, 2017, Plaintiffs’ counsel, Mark Zaid (“Mr. Zaid”), filed a “Notice of Change in Status of Corporate Plaintiffs,” stating he “recently learned the corporate plaintiffs [ ] have effectively ceased all operations.” ECF No. 40. Given these developments since institution of the action, Defendants seek dismissal under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction because Plaintiffs have not shown that there is an ongoing case or controversy. Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 9 of 24 2 II. STATUTORY AND REGULATORY BACKGROUND A. The EB-5 Immigrant Investor Visa Program The immigrant petitions at issue in this case were filed under the EB-5 immigrant investor visa category. See 8 U.S.C. § 1153(b)(5). In 1990, Congress amended the Immigration and Nationality Act (“INA”) to provide for classification of “employment creation” immigrants who invest capital in new commercial enterprises in the United States that create full-time employment of United States workers. See Immigration Act of 1990, Pub. L. No. 101-649, § 121(a) (Nov. 29, 1990) (codified at 8 U.S.C. § 1153(b)(5)). The purpose of the EB-5 immigrant investor visa category is not to reward wealthy immigrants, but to create new employment for United States workers and infuse new capital into the economy. See S. Rep. No. 101-55, at 21 (1989). Congress set the qualifying capital investment level for aliens who participate in the EB-5 program at $1 million dollars, but aliens may qualify by investing at least $500,000 in a “targeted employment area” or “TEA.” 8 U.S.C. § 1153(b)(5)(C); 8 C.F.R. § 204.6(f). Congress defined a TEA as “a rural area or an area which has experienced high unemployment (of at least 150 percent of the national average rate).” 8 U.S.C. § 1153(b)(5)(B)(ii). If the alien investor’s investment project is not located within a TEA, then the alien’s capital investment amount must be at least $1 million dollars. Id. In either case, however, the new commercial enterprise must “create full-time employment for not fewer than 10 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrant’s spouse, sons, or daughters).” 8 U.S.C. § 1153(b)(5)(A)(ii). Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 10 of 24 3 B. Form I-526 Immigrant Petition by Alien Entrepreneur A prospective immigrant investor self-petitions USCIS for EB-5 immigrant visa classification using Form I-526 (an “I-526 petition”). 8 C.F.R. §§ 204.6(a), (c). An employer or other entity cannot file an I-526 petition with USCIS on behalf of a prospective immigrant investor. Compare 8 U.S.C. § 1154(a)(1)(F) and 8 U.S.C. § 1154(a)(1)(H). In adjudicating an I- 526 petition, USCIS must determine whether the facts stated in the petition and supporting documents are true, see 8 U.S.C. § 1154(b), and it may reject statements it finds unsubstantiated or without a factual basis. See Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). The burden of proof rests solely on the alien investor to establish by a preponderance of evidence that he is fully qualified for the benefit sought. See 8 U.S.C. § 1361; Matter of Chawathe, 25 I. & N. Dec. 369, 374-76 (AAO 2010). C. Regulations and Precedent Decisions Governing the EB-5 Program In 1991, the former Immigration and Naturalization Service (“INS”) published regulations interpreting the EB-5 statute and establishing procedures for aliens to file I-526 petitions for classification as EB-5 alien entrepreneurs. See 56 Fed. Reg. 60,897; 60,910-13 (INS) (Nov. 29, 1991) (codified at 8 C.F.R. § 204.6). To demonstrate eligibility for approval, an alien investor must provide evidence they have invested or are actively in the process of investing lawfully obtained capital in a new commercial enterprise in the United States that will create at least ten full-time positions for qualifying employees. See 8 C.F.R. §§ 204.6(j)(1)-(6). In addition to USCIS’s regulations, the former INS designated four agency “EB-5 program precedential decisions” regarding the EB-5 visa classification. See Matter of Izummi, 22 I. & N. Dec. 169 (Assoc. Comm. 1998); Matter of Soffici, 22 I. & N. Dec. 158 (Assoc. Comm. 1998); Matter of Ho, 22 I. & N. Dec. 206 (Assoc. Comm. 1998); Matter of Hsiung, 22 I. & N. Dec. 201 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 11 of 24 4 (Assoc. Comm. 1998). These decisions “serve as precedents in all proceedings involving the same issue(s). Except as these decisions may be modified or overruled by later precedent decisions, they are binding on all Service employees in the administration of the [INA].” See 8 C.F.R. § 103.3(c). III. ADMINISTRATIVE AND PROCEDURAL HISTORY Fifteen foreign nationals each sought to invest $500,000 within a USCIS approved immigrant investor regional center in California, the Plaintiff-Regional Center. See Complaint, ECF No. 1; Plt. Amend. Compl., ECF No. 8 at 5-6. Between January 2011 and June 2013, each Plaintiff-Investor filed an I-526 petition with USCIS.1 Id. at 8-12. Between October 2011 and July 2015, eleven of Plaintiff-Investors’ I-526 petitions were denied, and three were granted. Id. Between December 2013 and April 2014, the three Plaintiff-Investors with approved I-526 petitions filed I-829 petitions for removal of conditions. Plt. Amend. Compl., ECF No. 8 at 9-11. For the I-526 petitions which were denied, USCIS identified deficiencies in the petitions and issued Notices of Intent to Deny (“NOID”) requesting additional information. See Dfd. Mtn. D., ECF No. 13, Exh. A-K. Specifically, the NOID requested additional evidence concerning whether the Plaintiff-Investors placed the required amount of capital at risk and—in three cases—whether the invested capital was obtained through lawful means. Id. USCIS received NOID responses from each of the I-526 Plaintiff-Investors. Id. Following consideration of each response, USCIS denied the petitions. Dfd. Mtn. D., ECF No. 13, Exh. A-K. USCIS found each Plaintiff-Investor failed to establish an at risk investment. Id. Specifically, USCIS noted the 1 When Plaintiffs amended their Complaint on July 16, 2015, two months after filing, Plaintiff- Investor Yashar Zandi (“Mr. Zandi”) was voluntarily dismissed. Plt. Amend. Compl., ECF No. 8. Accordingly, Mr. Zandi’s certified administrative record was not compiled and the administrative history concerning his petition is not included in Defendants’ discussion. Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 12 of 24 5 signed Subscription Agreement between Transportation LP or Warehousing LP and the Plaintiff- Investors contains a “Limited Right to Withdraw Subscription” section, allowing the investors to withdraw their investment prior to adjudication of Form I-526. Id. Section I.D.3. of the Subscription Agreement reads: Limited Right to Withdraw Subscription. If the investor is seeking to obtain permanent resident status in the United States under the EB-5 Program, the Investor has the right to withdraw the Investor’s subscription prior to the approval or denial of the Investor’s I-526 Petition. If the Investor elects to withdraw, the Subscription Price and the amount of the Processing Fee deposited into the Segregated Account (i.e., 50% of the Processing Fee) will be refunded to the Investor (without interest). Dfd. Mtn. D., ECF No. 13, Exh. A-K. Because the right to withdraw appeared to be a unilateral, unconditional right held by the EB-5 investor, USCIS found the capital was not at risk and denied the I-526 petitions. Id. On May 4, 2015, Plaintiffs filed their Complaint before this Court seeking review of I- 526 denials under the Administrative Procedure Act (“APA”) and mandamus relief concerning pending I-829 petitions. Subsequently, USCIS denied Plaintiff-Investors’ pending I-829 petitions and this Court dismissed Plaintiffs’ mandamus claims with prejudice. See Docket No. 1:15-cv-682-RDM, Order of January 11, 2017. On the same date, the Court denied Defendants’ first Motion to Dismiss, without prejudice. Id. Thereafter, Defendants served the Certified Administrative Record and Amended Certified Administrative Records. See Docket No. 1:15- cv-682-RDM, Minute Entry of May 5, 2017. On May 12, 2017, Plaintiffs’ counsel filed a “Notice of Change in Status of Corporate Plaintiffs” informing that all the Corporate-Plaintiffs had “effectively ceased all operations.” ECF No. 43. On the same day, the Court ordered Plaintiffs to inform the Court whether they intended to dismiss Corporate-Plaintiffs from the action by May 19, 2017. See Docket No. 1:15- Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 13 of 24 6 cv-682-RDM, Minute Order of May 12, 2017. Additionally, the Court ordered the parties to provide briefing addressing “whether and to what extent the cessation of operation at the corporations into which the four remaining individual plaintiffs made their purportedly qualifying investments effects the Court’s jurisdiction over the case.” Id. On May 17, 2017, Plaintiffs filed a “Notice of Plaintiffs’ Response to Minute Order Dated May 12, 2017,” informing Plaintiffs could not express a position regarding dismissal of Corporate-Plaintiffs. ECF No. 43. Specifically, Mr. Zaid stated he “attempt[ed] to contact the respective corporate management for specific instructions,” but was unsuccessful. Id. Thereafter, on May 26, 2017, the parties filed a joint motion to enter a briefing schedule noting Mr. Zaid had no additional information regarding Corporate-Plaintiffs and Defendants intended to seek dismissal as to all Plaintiffs. ECF No. 44. Subsequently, the Court held a status conference on June 12, 2017. See Docket No. 1:15-cv-682-RDM, Minute Entry of June 12, 2017. During the conference, Mr. Zaid informed that he was told Corporate-Plaintiffs’ Managing Partner was jailed in Iran due to criminal charges stemming from fraud regarding EB-5 investments that are the subject of this litigation.2 Id. Mr. Zaid stated he was unable to communicate with Corporate-Plaintiffs, and did not confirm whether he had been able to communicate with the four remaining Investor- Plaintiffs. Id. Accordingly, at the Defendants’ request, the Court entered a briefing schedule for Defendants’ Motion to Dismiss. Id. IV. RULE 12(b)(1) DISMISSAL STANDARD “Three inter-related judicial doctrines—standing, mootness, and ripeness—ensure that federal courts assert jurisdiction only over ‘Cases’ and ‘Controversies.’ U.S. Const. art. III § 2.” 2 It is Defendants’ understanding that Mr. Zaid was referring to Corporate-Plaintiff American Logistics’ owner Alireza Mahdavi, however, Defendants are unable to confirm this information and Mr. Zaid has provided no additional update. Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 14 of 24 7 Worth v. Jackson, 451 F.3d 854, 855 (D.C. Cir. 2006). “A federal court is constitutionally forbidden to render advisory opinions or ‘to decide questions that cannot affect the rights of litigants in the case before [the Court].’” Better Government Ass’n v. Department of State, 780 F.2d 86, 90–91 (D.C. Cir. 1986) (quoting North Carolina v. Rice, 404 U.S. 244, 246 (1971)). Federal courts are courts of limited jurisdiction, with the ability to hear only cases entrusted to them by a grant of power contained in either the Constitution or in an act of Congress. See, e.g., Beethoven.com LLC v. Librarian of Congress, 394 F.3d 939, 945 (D.C. Cir. 2005); Hunter v. District of Columbia, 384 F.Supp.2d 257, 259 (D.D.C. 2005). A federal court has no subject matter jurisdiction where the plaintiff lacks standing, or where the case is not justiciable because it is either moot or not yet ripe. See Worth v. Jackson, 451 F.3d at 857. Thus, if events outrun the controversy such that the court can grant no meaningful relief, the case must be dismissed for lack of jurisdiction. See, e.g., Church of Scientology of California v. United States, 506 U.S. 9, 12 (1992). This requirement applies independently to each form of relief sought, see Friends of the Earth v. Laidlaw, 528 U.S. 167, 185 (2000), and “‘subsists through all stages of federal judicial proceedings, trial and appellate.’” McBryde v. Committee to Review Circuit Council Conduct and Disability Orders of Judicial Conference of U.S., 264 F.3d 52 (D.C. Cir. 2001) (quoting Lewis v. Continental Bank Corp., 494 U.S. 472, 477 (1990)). On a motion to dismiss for lack of subject matter jurisdiction, Plaintiffs bear the burden of establishing that the Court has jurisdiction. Kokkonen v. Guradian Life Ins. Co., 511 U.S. 375, 377 (1994); Brady Campaign to Prevent Gun Violence v. Ashcroft, 339 F.Supp.2d 68, 72 (D.D.C. 2004). In considering whether to dismiss a complaint for lack of subject matter jurisdiction, the Court must accept all of the factual allegations in the complaint as true, but may in appropriate cases consider certain materials outside the pleadings. See Jerome Stevens Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 15 of 24 8 Pharms., Inc. v. FDA, 402 F.3d 1249, 1253–54 (D.C. Cir. 2005). “[W]here necessary, the court may consider the complaint supplemented by undisputed facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts.” Herbert v. National Academy of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992). “While the complaint is to be construed liberally, the Court need not accept factual inferences drawn by plaintiff if those inferences are not supported by facts alleged in the complaint, nor must the Court accept plaintiff’s legal conclusions.” A.N.S.W.E.R. Coal. v. Kempthorne, 493 F. Supp. 2d 34, 41–42 (D.D.C. 2007) (citing Primax Recoveries, Inc. v. Lee, 260 F.Supp.2d 43, 47 (D.D.C. 2003)). Finally, aside from dismissal by motion under Rule 12(b)(1), “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action,” pursuant to Rule 12(h)(3). Fed. R. Civ. P. 12(h)(3). ARGUMENT I. PLAINTIFFS HAVE NOT ESTABLISHED THERE IS AN ONGOING CASE OR CONTROVERSY_________________________________________________ A. Plaintiffs’ Claims are Moot where the Corporate-Plaintiffs have Ceased Operations Plaintiffs have not shown that the Court retains subject matter jurisdiction. Specifically, Plaintiffs have not established that their claims remain justiciable, given that the entities into which they made their putative qualifying investments are no longer operational and, as a result, Plaintiffs have not established they can meet threshold statutory and regulatory EB-5 eligibility requirements. As the D.C. Circuit has succinctly explained: “By constitutional design”, a federal court is authorized only to adjudicate “actual, ongoing controversies,” and thus may not “give opinions upon moot questions or abstract propositions, or . . . declare principles or rules of Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 16 of 24 9 law which cannot affect the matter in issue in the case before it.” Beethoven.com LLC, 394 F.3d at 950 (internal citations omitted). Thus, “[i]f events outrun the controversy such that the court can grant no meaningful relief, the case must be dismissed as moot.” McBryde, 264 F.3d at 55. Here, Plaintiffs have not demonstrated that their claims are not moot or that the Court can grant any meaningful relief related to the EB-5 investor petitions because Plaintiffs have not shown they have invested or are actively in the process of investing in a new commercial enterprise that will create the requisite jobs. Specifically, since Corporate-Investors have ceased all business functions, Plaintiffs have not established that the Court is able to grant any meaningful relief to Investor-Plaintiffs with respect to their petitions or that they are eligible for EB-5 visa classification. 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6(j). Moreover, because Corporate-Plaintiffs have ceased business functions, they have no stake in USCIS’s interpretation of “at risk” investments for EB-5 visa classification eligibility. Thus, any ruling from the Court on the merits of Plaintiffs’ challenges to the denial of their I-526 petitions for failure to make a qualifying “at risk” investment (ECF No. 13, Exh. A-K) would amount to an improper advisory opinion because Plaintiffs have not shown their claims are not moot. A.N.S.W.E.R. Coal., 493 F. Supp. 2d at 48; see McBryde, 264 F.3d at 55; Payne Enterprises v. United States, 837 F.2d 486, 491 (D.C. Cir. 1988) (requested declaration from the court that prior government activity was unlawful would be an improper advisory opinion.); Better Government Ass’n, 780 F.2d at 91 (same). Accordingly, dismissal under Rule 12(b)(1) is required. Additionally, although dismissal for mootness may be excepted in limited circumstances, no such circumstances are present here. Specifically, the “capable of repetition, yet evading review” exception was first recognized by the Supreme Court in Southern Pacific Terminal Co. Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 17 of 24 10 v. ICC, 219 U.S. 498, 515 (1911). As the D.C. Circuit has neatly explained: in order to invoke this exception . . . [plaintiffs] must demonstrate that “(1) the challenged action [is] in its duration too short to be fully litigated prior to its cessation or expiration, and (2) there [is] a reasonable expectation that the same complaining party [will] be subjected to the same action again.” Beethoven.com LLC, 394 F.3d at 950 (citations omitted). The burden is on the complaining party to show that these requirements are met. See Southern Company Services v. FERC, 416 F.3d 39, 44 (D.C. Cir. 2005). Here, Plaintiffs’ claims are not capable of repetition, yet evading review. As an initial matter, Plaintiffs did not run out of time to challenge USCIS’s interpretation of the statutory and regulatory requirements for a qualifying EB-5 “at risk” investment prior to “cessation or expiration.” Beethoven.com LLC, 394 F.3d at 950. Rather, judicial review of USCIS’s determination was fully available until Corporate-Plaintiffs terminated business functions and Investor-Plaintiffs failed to establish threshold EB-5 eligibility in light of such termination. 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6(j). Thus, Plaintiffs’ challenges are not of the brief duration contemplated by the first prong of the repetition, yet evading review exception. Beethoven.com LLC, 394 F.3d at 950. Next, Plaintiffs cannot satisfy the second prong where there is no reasonable expectation they will be subjected to the same complained action again. Id. Indeed, Corporate-Plaintiffs are no longer in business and it is entirely speculative whether Investor-Plaintiffs will ever again execute a similar subscription agreement containing the same right of withdrawal language found objectionable by USCIS here. ECF No. 13, Exh. A-K. Thus, Plaintiffs’ claims are not capable of repetition, yet evading review and dismissal for mootness is required. McBryde, 264 F.3d at 55. Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 18 of 24 11 The D.C. Circuit’s decision in Webb v. Dep’t. of Health and Human Services, 96 F.2d 101 (D.C. Cir. 1982), a case involving a Freedom of Information Act (“FOIA”) request, is instructive here. In Webb, 696 F.2d at 107, the D.C. Circuit determined the mooting out of a live dispute before the plaintiff could challenge a regulation at issue was not the type of hardship warranting immediate review of issues not otherwise fit for judicial decision. Specifically, the D.C. Circuit held that plaintiff’s challenge to the agency rule at issue was uniquely fact-based, because “the validity of applying [the regulation] to a FOIA request will vary depending on what information is actually contained in the [application].” Id. at 107. Moreover, in Webb the D.C. Circuit concluded that if the only hardship that would spring from delayed consideration when a live controversy is presented is “the burden of having to file another lawsuit . . . [that is] hardly the type of hardship which warrants immediate consideration of an issue presented in abstract form.” Id. Here, as in Webb, Plaintiffs cannot establish an exception to the mootness doctrine where IPO’s determination concerning a qualifying “at risk” investment under the EB-5 statute and regulations is heavily fact dependent. Importantly, it is the specific language of Plaintiffs’ Subscription Agreement at Section I.D.3 concerning the limited right of withdrawal that was the focus of Plaintiffs’ I-526 petition denials. ECF No. 13, Exh A-K. Had the Subscription Agreements contained different language, USCIS may have decided differently. Thus, the importance of the specific details of an investment agreement submitted to support an EB-5 petition make Plaintiffs’ challenge to USCIS’s interpretative standards inhospitable to review in “abstract form.” Webb, 696 F.2d at 107; see Better Gov’t Ass’n, 780 F.2d at 95 (noting a fact- based inquiry undermines a challenge to a regulatory standard for the purpose of establishing an exception to mootness). Likewise, because Plaintiffs have no pending EB-5 petitions and it is entirely speculative whether they will file again and be denied again on the same basis, the only Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 19 of 24 12 harm in waiting for a live controversy to address challenges to USCIS’s “at risk” interpretation is the cost of filing a new lawsuit. Consistent with Webb, the Court should dismiss the Amended Complaint. Webb, 696 F.2d at 107. Because there is no operating job creating entity or new commercial enterprise to support Plaintiffs’ EB-5 petitions, Plaintiffs have not shown that a case or controversy exists, and Plaintiffs’ demands for relief are moot. Honig v. Doe, 484 U.S. 305, 317 (1988). A case is moot “when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome.” L.A. County v. Davis, 440 U.S. 625, 631 (1979) (quoting Powell v. McCormack, 395 U.S. 486, 496 (1969)). Here, “events [have] outrun the controversy such that the court can grant no meaningful relief, [and] the case must be dismissed as moot.” McBryde, 264 F.3d at 55. Consequently, dismissal under Rule 12(b)(1) is required. B. Plaintiffs Have Not Shown Their Alleged Injuries Can be Redressed Because it is undisputed that all Corporate-Plaintiffs have ceased business functions, Plaintiffs have not established there is redressability for Plaintiffs’ claims; as such, they lack Article III standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992), identifies three requirements for Article III standing: (1) an injury in fact that (2) is fairly traceable to the challenged conduct and (3) has some likelihood of redressability. If Plaintiffs fail to satisfy any of these requirements, they lack standing under Article III of the Constitution and the Court lacks subject matter jurisdiction and must dismiss the case. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101-02 (1998). Plaintiffs have not shown they can establish standing given that Corporate-Plaintiffs are no longer in business and Plaintiffs have not demonstrated they can meet the threshold eligibility requirements for EB-5 immigrant investor visa classification. 8 U.S.C. § 1153(b)(5)(A)(ii); 8 Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 20 of 24 13 C.F.R. § 204.6(j). To establish Article III standing, among other criteria, Plaintiffs must show an injury “‘that is likely to be redressed by a favorable judicial decision.’” Bank of Am. Corp. v. City of Miami, 137 S. Ct. 1296, 1302 (2017) (quoting Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)). Here, redress is unavailable where Plaintiffs have not shown they invested or are actively in the process of investing in a new commercial enterprise that will create the requisite jobs. 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6(j). Further, because Corporate-Plaintiffs have ceased functions altogether, Plaintiffs have not demonstrated that the Court can provide redress for their claims that USCIS’s interpretation of the “at risk” investment requirement “caused and will continue to cause an actual disruption of the economic relationship between the Immigrant Investors and Plaintiff-Regional Center’s business model . . . . ” Plt. Amend. Compl., ECF No. 8 at ¶ 22. “Relief that does not remedy the injury suffered cannot bootstrap a plaintiff into federal court; that is the very essence of the redressability requirement.” Steel Co., 523 U.S. at 107. Consequently, this Court can provide no redress for Plaintiffs. Although Plaintiffs’ counsel may be unsure of the details of Corporate-Plaintiffs’ termination of business functions, the Supreme Court has long made clear that standing requires that it “be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be ‘redressed by a favorable decision.’” Lujan, 504 U.S. at 56 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 38, 43 (1976)). Here, given that the managing partner of all Corporate-Plaintiffs is facing criminal charges related to fraud of EB-5 investors in Iran, Plaintiffs have not established it is likely that even a favorable decision from this Court concerning USCIS’s “at risk” interpretation will redress either Investor-Plaintiffs’ or Corporate-Plaintiffs’ putative injuries. Further, even if this Court were to order that Defendants reconsider the I-526 petition denials on remand, Plaintiffs have not shown that USCIS has the ability to approve EB-5 immigrant Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 21 of 24 14 investor visa classification in light of the facts presented. 8 U.S.C. § 1153(b)(5); 8 C.F.R. § 204.6(j). Accordingly, the Court should dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) because Plaintiffs have not demonstrated that a favorable decision on the merits is likely to redress any purported injury to Plaintiffs. CONCLUSION For the reasons indicated above, the Court should dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1). Dated: July 10, 2017 Respectfully submitted, CHAD A. READLER Acting Assistant Attorney General Civil Division WILLIAM C. PEACHEY Director GLENN M. GIRDHARRY Assistant Director By:/s/Yamileth G. Davila YAMILETH G. DAVILA Senior Litigation Counsel United States Department of Justice Civil Division Office of Immigration Litigation District Court Section P.O. Box 868, Ben Franklin Station Washington, DC 20044 Tel: (202) 305-0137 Email: yamileth.g.davila@usdoj.gov Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 22 of 24 15 CERTIFICATE OF SERVICE I hereby certify that I am over the age of eighteen and not a party to the above-titled action. I am employed as Senior Litigation Counsel at the United States Department of Justice, Office of Immigration Litigation, District Court Section. My business address is P.O. Box 868, Ben Franklin Station, Washington, DC 20044. On July 10, 2017, I served DEFENDANTS’ NOTICE AND MOTION TO DISMISS AND SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES, on each person or entity named below by uploading an electronic version of this document to the Court’s ECF system: Mark S. Zaid LAW OFFICES OF MARK S. ZAID, P.C. 1250 Connecticut Avenue, NW Suite 200 Washington, DC 20036 (202) 454-2809 Fax: (202) 330-5610 Email: Mark@MarkZaid.com Jason D. Wright LAW OFFICES OF MARK S. ZAID, P.C. 1250 Connecticut Avenue, N.W. Suite 200 Washington, DC 20036 (202) 578-0260 Fax: (917) 677-8577 Bradley P. Moss LAW OFFICES OF MARK S. ZAID, P.C. 1250 Connecticut Avenue, NW Suite 200 Washington, DC 20036 (202) 907-7945 Fax: (202) 330-5610 Email: brad@markzaid.com Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 23 of 24 16 I declare under penalty of perjury under the laws of the United States of America that the forgoing is true and correct. Executed on July 10, 2017, at Washington, DC. By: /s/ Yamileth G. Davila YAMILETH G. DAVILA Senior Litigation Counsel United States Department of Justice Case 1:15-cv-00682-RDM Document 46 Filed 07/10/17 Page 24 of 24 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA AMERICAN LOGISTICS ) INTERNATIONAL L.L.C., et al., ) ) Civil Action No. 15-682-RDM Plaintiffs, ) ) v. ) [PROPOSED] ORDER GRANTING ) DEFENDANTS’ MOTION TO UNITED STATES DEPARTMENT OF ) DISMISS HOMELAND SECURITY, et al., ) ) Defendants. ) [PROPOSED] ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS Before the Court is Defendants’ motion to dismiss for lack of subject matter jurisdiction. Having considered the motion, Plaintiffs’ opposition thereto, and oral argument, if any, the Court HEREBY GRANTS the motion and DISMISSES the Amended Complaint. Dated: ______ ____________________________ Hon. Randolph Daniel Moss United States District Judge Case 1:15-cv-00682-RDM Document 46-1 Filed 07/10/17 Page 1 of 1