Behring Regional Center LLC v. Wolf

Background

Behring Regional Center LLC, described by the court as a California-based regional center that sponsors capital-investment projects using funds from foreign investors who apply through the EB-5 Immigrant Investor Program, brought an action under the Administrative Procedure Act. Behring argued that the Department of Homeland Security violated that law when it issued a final rule amending EB-5 regulations on November 21, 2019.

Behring moved for a preliminary injunction, which is an order intended to provide temporary relief while a case continues. The defendants moved to transfer the case to the U.S. District Court for the District of Columbia. The court considered the parties’ written arguments and oral argument held March 25, 2021.

Motion to Transfer

The defendants sought transfer based first on the federal first-to-file rule. That rule gives a court discretion to transfer, pause, or dismiss a later-filed case when substantially similar parties and issues are already being considered in another federal court. The defendants relied on an earlier case pending in the District of Columbia.

The court denied transfer under the first-to-file rule. Although the District of Columbia case had been filed more than a year earlier, the court found that the plaintiffs were wholly separate and unrelated entities doing business in different states and affected by the regulatory change in different ways. The defendants did not identify, and the court was not aware of, a case transferring an action under that rule when there was no overlap between the plaintiffs. The court also stated that the District of Columbia case would not resolve Behring’s case.

The defendants alternatively sought transfer under 28 U.S.C. § 1404(a), which allows transfer for the convenience of the parties and witnesses and in the interest of justice. The court considered the relevant convenience and fairness factors, including the plaintiff’s choice of forum, convenience for parties and witnesses, access to evidence, familiarity with applicable law, local interest, and court congestion. The court denied this request as well, reasoning that the defendants had not shown that the Northern District of California was clearly inconvenient and that the plaintiff’s choice of forum receives substantial weight.

Preliminary-Injunction Motion

After giving notice to the parties, the court converted the portion of the preliminary-injunction motion addressing whether Mr. McAleenan’s appointment was valid into a motion for summary judgment under Federal Rule of Civil Procedure 65(a)(2). Summary judgment is a procedure for deciding a claim when the governing facts and law can be resolved without a trial. The court did not decide that issue in this order.

The defendants were allowed to file an additional submission on the de facto officer doctrine by April 1, 2021, and Behring was required to respond by April 8, 2021. Behring also had to address the remedy it sought if its summary-judgment motion on the appointment issue were granted. The defendants’ remedies brief was due April 22, 2021, and oral argument was scheduled for May 6, 2021.

Disposition

The court denied the defendants’ motion to transfer. It converted the plaintiff’s preliminary-injunction motion into a summary-judgment motion on the appointments issue and held the remaining preliminary-injunction motion in abeyance pending resolution of that converted motion. The order disposed of Docket No. 18 but did not resolve the merits of the appointment issue or the remaining request for preliminary relief.