A court has ruled that the Trump Administration’s failure to implement the entrepreneur parole rule last July was unlawful and that the government’s issue of a rule to delay the implementation of the rule (with the intention of rescinding it) did not comply with the Administrative Procedures Act and is vacated. The upshot is that DHS must immediately begin accepting these applications.
The court’s ruling can be found here.
US District Court Judge James Boasberg opens his summary judgment ruling by noting that while elections have consequences, the Administrative Procedure Act (APA) shapes the contours of those circumstances.
The court recites the history – the Obama Administration issued a final rule last January creating an entrepreneurial parole program to provide work authorization for certain start up founders. The rule was set to take effect this past July.
July prior to the July 17th effective date of the rule, the Administration issued a rule delaying the effective date 8 months and providing notice that it intended to rescind the rule altogether. No opportunity for comment was provided.
The plaintiffs argued that the delay rule violated APA. The court agreed with this argument and granted a motion for summary judgment.
The court next discussed the specifics of the two rules – the Obama Administration’s final rule creating the program and the Trump Administration delay rule.
The court notes that the first rule had a comment process that resulted in 763 comments and meaningful changes to the rule as a result. And allowing 180 days to implement was enough time for USCIS to roll out the program.
The court then notes that the new President issued an executive order in January to take action to ensure that parole authority exercised on a case-by-case basis only in humanitarian cases and for public policy reasons.
The White House then stayed silent for the next six months regarding the entrepreneur parole rule and issued delay rule six days before rule set to take effect and only provided for comments AFTER the delay took effect.
The court then turns to the legal standard in the case noting that each side asked for summary judgment. The court must set aside government actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
The court then turns to his analysis noting that the case is not about the decision being arbitrary and capricious but about DHS failing to follow the APA’s notice and comment requirements.
The court discussed standing noting that the plaintiffs must suffer an injury-in-fact, that the injury is caused by the defendant’s conduct and is likely to be redressed by a favorable decision. This is discussed in the context of two entrepreneur siblings who are plaintiffs.
Atma and Anand Krishna are founders of LotusPay and claim they meet the requirements of the parole program.
DHS argued that the Krishnas could not sue because they were not residing in the US, that parole is discretionary so neither was actually injured and the plaintiffs’ injuries cannot be redressed since the program is discretionary.
The court ruled in plaintiffs favor on this noting that they lost the OPPORTUNITY to apply. DC Circuit and other case law support the view that losing an opportunity to pursue a benefit is enough.
The court next turns to whether the plaintiffs are injured since the rule is delayed and the program is not eliminated. The court notes that a delay is tantamount to an amendment of the rule and the APA requirements apply.
The court also addresses the issue of injury and standing since plaintiffs can still apply for parole on an individual basis outside the parameters of the entrepreneur rule. But the government did not dispute plaintiffs argument that parole would be virtually impossible without this rule.
The court notes that it is aware of no case of parole ever being granted to an entrepreneur through the existing rule. The court rules for plaintiffs on this issue.
The plaintiffs asked the court to invalidate the delay rule. The government agrees that if this happens, the entrepreneur final rule would take immediate effect thereby restoring the plaintiffs shot at parole.
The court believes there is no evidence DHS will not exercise good faith and adjudicate parole applications in a timely manner rather than running out the clock until a rescission rule becomes final.
The court then turned to the merits of the case – the issue of the lack of notice and comment. The court first cites the recent loss DC Circuit loss by the Trump Administration – Clean Air Council v. Pruitt which says an agency is bound by a rule until that rule is amended or revoked.
Furthermore, an agency cannot stay a final rule without a notice and comment process.
DHS doesn’t dispute this and instead cites the “good cause” exception to providing for notice and comment. That applies when notice and comment is “impracticable, unnecessary, or contrary to the public interest.” DHS argues public interest
The court notes the onus is on the government to show good cause and courts should construe this narrowly and this exception should only be used in rare cases.
Plaintiffs argue that DHS has forfeited any right to good cause exception by doing nothing for six months. The court agrees that good cause cannot be the result of the government’s own delay.
DHS never offered a reasonable explanation of its delay and at oral arguments the lawyers couldn’t explain. They just noted that it was taking a while to digest January executive order.
DHS offered two explanations for good cause in the delay rule. 1st, it would have to expend limited DHS resources. 2nd, it would “sow confusion” among stakeholders and trigger unwarranted reliance.
The court says the expense argument is not the type of emergency that constitutes good cause. Life of physical property must be threatened. Financial damage to an agency not enough and since filing fees were to be collected, this doesn’t make sense.
The court also disagreed with DHS’ contention that the rule represents a “tectonic” shift for the agency. Fewer than 3,000 applications are expected each year and had plenty of time to prepare.
Finally, the court rejected DHS’ argument that implementing the rule was a waste because the rescission rule is coming soon. The court found no evidence that DHS is working on a rescission rule despite five months having passed since the delay rule was published.
The court also rejected DHS’ argument that regulatory “confusion” constituted good cause.
The court concludes by vacating the delay rule and restoring the earlier rule. No comment is provided on how applications are to be filed with USCIS. The agency had not released filing instructions previously.
Greg Siskind

Greg Siskind

Greg Siskind is a partner with Siskind Susser, PC - Immigration Lawyers. After graduating from Vanderbilt University, he received his law degree at the University of Chicago. He created the first immigration law web site in 1994 and the first law blog in 1997. He's written four books and currently serves on the board of governors of the American Immigration Lawyers Association. He can be reached by email at gsiskind@visalaw.com.
Greg Siskind

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