Immigration Lawsuit Filed To Block USCIS Fee Rule

A new lawsuit challenges a government fee rule that would raise immigration filing costs for many employers. If successful, the litigation could save companies significant sums compared to the projected costs under a final rule published by U.S. Citizenship and Immigration Services on January 31, 2024. The fees in the rule become effective April 1, 2024.

The Rule Would Impose Significant Fee Increases On Employers

Under the rule, employers will pay 70% more for beneficiaries on H-1B petitions, 201% more for employees on L-1 petitions and 129% more for individuals on O-1 petitions. USCIS will also charge employers a new $600 Asylum Program Fee when filing a Form I-129, Petition for a Nonimmigrant Worker, or Form I-140, Immigrant Petition for Alien Worker. The agency will also raise the H-1B Electronic Registration Fee for each beneficiary from $10 to $215.

Lynden Melmed of BAL projects that the firm’s larger clients should expect higher filing fees in the first year to raise costs by 115% to 175%. (The USCIS website includes a list of the new fees.)

The National Foundation for American Policy estimates most companies will spend approximately $9,400 to petition for a first-time H-1B visa holder under the new fee rule, assuming premium processing and average attorney fees.

Filing an extension for an H-1B professional would raise the costs for most employers to about $18,000. (USCIS often requires extensions when H-1B employees change locations, not just after three years in H-1B status.)

Over the past two decades, employers have paid more than $6 billion in H-1B fees to fund approximately 100,000 scholarships for U.S. students in science and technology fields and job training for U.S. workers, according to the NFAP analysis.

Challenging The Fee Rule

The lawsuit challenges several aspects of the final rule. “The Final Rule should be enjoined preliminarily and permanently because it was promulgated without appropriate notice and comment, arbitrarily forces certain businesses and individuals, but not all, to fund asylum adjudications, and unlawfully imposes fee increases of 100% or higher on foreign investors seeking immigrant status based on the creation of jobs for United States workers,” according to a lawsuit filed March 19, 2024, in the U.S. District Court for the District of Colorado in the Tenth Circuit.

The plaintiffs are the ITServe Alliance, an employer group, the American Immigrant Investor Alliance and Samantha Moody, a Canadian citizen and EB-5 investor. The plaintiffs’ attorneys are Jonathan Wasden of Wasden Law, Jesse M. Bless of Bless Litigation LLC and Matthew T. Galati of the Galati Law Firm, LLC.

The complaint states the lawsuit does not intend “to derail Defendants from charging reasonable fees for the adjudication of immigration benefits,” but to “ensure Defendants do so in accordance with the Administrative Procedure Act and, as relevant, the EB-5 Reform and Integrity Act of 2022.”

The plaintiffs’ complaint makes three arguments. First, it states that the final rule “is unlawful because it was promulgated without adequate notice and comment.” According to the complaint, the final rule contravenes the Administrative Procedure Act because it “does not adequately provide the terms or substance of the Proposed Rule, or a description of the subjects and issues involved” and “fails to give persons adequate opportunity to participate in the rulemaking.”

Second, “The Final Rule is unlawful because it arbitrarily and in excess of statutory authority imposes an ‘Asylum Program Fee’ that taxes certain categories of petitioners for employment-based immigration benefits between $300 to $600 per benefit request.” The plaintiffs argue, “These funds are ostensibly earmarked to pay for DHS’s asylum programs.”

Third, “The Final Rule doubles immigrant investor fees through the EB-5 program in violation of law,” according to the complaint. “By statute, the condition precedent to any fee increase over EB-5 applications is the completion of a fee study.”

DHS and USCIS argued when publishing the final rule that it conformed to the Immigration and Nationality Act and “non-statutory guidance” and “accounts for, and is consistent with, congressional appropriations for specific USCIS programs.”

The fees will go into effect on April 1, 2024, unless a judge grants the plaintiffs’ motion for a request for a preliminary injunction.