Gutta v. Cuccinelli

Background

The 22 plaintiffs are foreign nationals who filed Form I-526 petitions under the immigrant investor visa program, known as the EB-5 program. They alleged that Tracy Renaud, identified as the senior official performing the duties of the director of U.S. Citizenship and Immigration Services, was unreasonably delaying action on their petitions. The plaintiffs sued under the Administrative Procedure Act, a federal law that permits a court to require an agency to act when it has unlawfully withheld or unreasonably delayed required action.

The plaintiffs had been waiting between 12 and 37 months for their petitions to be adjudicated. They alleged that processing times had increased substantially, that the agency was processing fewer petitions despite increased fees and no corresponding decrease in resources, and that the agency followed a common policy or practice of delaying adjudication. The plaintiffs sought timely adjudication and other relief concerning approved petitions being sent to the National Visa Center.

Defendant’s Motions

The defendant moved under Federal Rule of Civil Procedure 12(b)(1) to dismiss the claims of Begur, Das, Khan, and Bansal as moot. The defendant argued that their petitions had already been adjudicated and approved. The plaintiffs responded that their requested relief also included forwarding approved petitions to the National Visa Center. The defendant also moved to sever the remaining plaintiffs’ claims as improperly joined, transfer the severed claims to districts where venue would be proper, dismiss any claims remaining in the Northern District of California under Rule 12(b)(6) for failure to state a claim, or transfer the entire case to the District of Columbia.

Mootness

The court agreed that the plaintiffs’ request for relief based on delays in forwarding approved petitions to the National Visa Center was not ripe. At the time the lawsuit was filed, none of the petitions had been adjudicated, so no plaintiff had yet experienced such a delay. The court found that any possible future delay was speculative. It also noted that the defendant represented that the approved petitions of Begur, Das, and Khan had been transmitted to the National Visa Center. The court found no other reason the four plaintiffs’ claims were not moot.

The court therefore granted the defendant’s motion to dismiss the claims of Begur, Das, Khan, and Bansal.

Severance and Joinder

The court denied the motion to sever. Under Rule 20, plaintiffs may join in one action when their claims arise from the same transaction or series of transactions and share at least one common question of law or fact. The court concluded that the plaintiffs satisfied those requirements because all of their petitions were submitted to the same agency under the same visa program, were evaluated under the same criteria, and allegedly were delayed by a common policy or practice.

The court acknowledged that the petitions involved different evidence, businesses, and lengths of delay. It nevertheless concluded that those differences did not defeat joinder because the plaintiffs were not asking the court to decide the merits of their individual visa petitions; they were asking the agency to act. The court also found that allowing the claims to proceed together served judicial economy and that the defendant had not shown persuasive prejudice. The court noted that it could later add or drop parties if discovery showed that the claims could not be handled together efficiently.

Failure to State a Claim

The court denied the defendant’s Rule 12(b)(6) motion. The court applied the six-factor test commonly used to evaluate whether an agency has unreasonably delayed action. The factors include whether the agency follows a reasonable timing system, any timetable supplied by Congress, the interests affected by the delay, competing agency priorities, and the effect of expediting the action. The court explained that this inquiry is fact-intensive and ordinarily is better resolved on or after summary judgment, when there is an evidentiary record, rather than at the pleading stage.

The court found numerous factual disputes. For example, the defendant contended that the agency prioritized petitions based on visa availability and then generally processed them in filing order. The plaintiffs alleged that the agency instead arbitrarily expedited petitions for some new commercial enterprises but not others, and that later-filed petitions for the same projects had been approved for other investors. The court held that whether those allegations were true, and whether the agency followed a reasonable process, could not be decided on a motion to dismiss.

The court therefore declined to reach the merits of whether the plaintiffs had actually experienced unreasonable delay at that stage. The Rule 12(b)(6) motion was denied.

Venue and Disposition

The court denied the motion to transfer the case to the District of Columbia. It found that venue was proper in the Northern District of California because one plaintiff resided there and that the defendant had not shown that convenience and the interests of justice strongly favored transfer. The court also found that the agency’s location in Washington, D.C., and the location of some evidence there did not justify transfer.

The final disposition was that the court granted the motion to dismiss the claims of Begur, Das, Khan, and Bansal as moot. The motion was otherwise denied, including the requests to sever, transfer, and dismiss the remaining claims. Judge Donna Ryu did not decide whether the alleged agency delays were ultimately unreasonable.