Moody et al. v. Mayorkas: Summary of the November 12, 2025, Order Staying USCIS's EB-5 Fee Increases

The case, Moody et al. v. Mayorkas et al., No. 1:24-cv-00762, originated in the U.S. District Court for the District of Colorado before Judge Charlotte N. Sweeney. It was filed on March 19, 2024, by plaintiffs Samantha Moody (a Canadian EB-5 investor residing in Colorado with conditional permanent residency), the American Immigrant Investor Alliance (AIIA, a nonprofit advocating for EB-5 investors), and IT Service Alliance (ITServe, a trade group representing over 2,200 IT companies reliant on H-1B visas). The defendants were officials from the U.S. Department of Homeland Security (DHS) and U.S. Citizenship and Immigration Services (USCIS), initially Alejandro Mayorkas and Ur M. Jaddou, later substituted under Fed. R. Civ. P. 25(d) as Kristi Noem (Secretary of DHS) and Joseph B. Edlow (Director of USCIS).

The dispute centered on USCIS's Final Rule, published on January 31, 2024 (89 Fed. Reg. 6194), which adjusted fees for various immigration benefits, including significant increases for EB-5 (immigrant investor) and H-1B (specialty occupation) visa forms. This rule stemmed from USCIS's biennial fee review under 31 U.S.C. § 902(a)(8), which found existing fees insufficient to cover operational costs, including asylum processing. The Final Rule went into effect on April 1, 2024, raising EB-5 fees dramatically—for example, the Form I-526/I-526E fee increased by 204% from $3,675 to $11,160, and the Form I-829 fee rose from $3,750 to $9,525. It also introduced an Asylum Program Fee, shifting costs to employers filing certain forms (e.g., $600 for large employers, $300 for small ones, and $0 for nonprofits).

Key to the case was the EB-5 Reform and Integrity Act of 2022 (RIA, Pub. L. No. 117-103), which mandated USCIS to conduct a specific fee study for EB-5 programs by March 15, 2023, and adjust fees accordingly without modifying them beforehand (RIA § 106(f)(1)). However, USCIS issued a proposed rule in January 2023 (88 Fed. Reg. 402) and finalized it in January 2024 without completing the study. The study was only finished in February 2025, after the Final Rule's implementation, leading to a new proposed rule in October 2025 (with comments due by December 22, 2025) to lower EB-5 fees based on the study's findings.

Plaintiffs challenged the Final Rule under the Administrative Procedure Act (APA), alleging it was arbitrary, capricious, and contrary to law for failing to follow the RIA's fee study requirement, improperly shifting asylum costs to fee-paying applicants, and lacking proper notice-and-comment procedures. They sought to enjoin the rule and stay its effectiveness. Earlier, on March 29, 2024, the court denied a temporary restraining order (Document 17), allowing the rule to take effect. Plaintiffs provided evidence of harm, including Moody's upcoming Form I-829 deadline (February 20, 2026), AIIA member Kanishka Malik's June 2024 filing (paying the increased $9,525 fee), and ITServe members' increased H-1B costs. The administrative record included USCIS's fee calculations, public comments, and post-rule developments.

Issues

The primary issues were whether USCIS violated the APA (5 U.S.C. § 706) in promulgating the Final Rule:

1. Contrary to Law (APA § 706(2)(A)): Did USCIS act unlawfully by increasing EB-5 fees without completing the RIA-mandated fee study? Plaintiffs argued the RIA explicitly prohibited fee modifications until the study was done, making the increases invalid. Defendants contended the RIA did not override USCIS's general fee-setting authority under 8 U.S.C. § 1356(m) and that the study was not a prerequisite for all fee adjustments.
2. Arbitrary and Capricious (APA § 706(2)(A)): Was the Final Rule's fee structure, including the Asylum Program Fee and cross-subsidization of asylum processing, unreasonable? Plaintiffs claimed it improperly forced business immigrants to subsidize non-fee-paying services like asylum, exceeding statutory authority and lacking rational justification. Defendants argued fees were based on a biennial review and necessary for full cost recovery.
3. Procedural Violations (APA § 553): Did USCIS fail to provide adequate notice-and-comment, particularly by not disclosing key data or addressing the RIA's requirements in the proposed rule? Plaintiffs asserted the process was flawed, as the Final Rule deviated from the proposal without opportunity for comment.
4. Standing and Relief: Did plaintiffs have Article III standing (injury-in-fact, causation, redressability)? And if violations occurred, what relief was appropriate—a full vacatur of the rule or a targeted stay under APA § 705?

Additional issues included whether the Final Rule violated the Antideficiency Act (31 U.S.C. § 1341) by spending fees on unauthorized activities, though this was secondary.

Decision

On November 12, 2025, Judge Sweeney issued a 32-page order (Document 41) granting partial relief to plaintiffs. The court held that USCIS violated the APA by implementing EB-5 fee increases contrary to the RIA, which required the fee study as a prerequisite. Accordingly, the court issued a targeted stay under APA § 705, halting enforcement of the EB-5-specific fee hikes (e.g., Forms I-526, I-526E, I-829, I-956) and restoring pre-April 1, 2024 fees pending a new, compliant rule. This did not invalidate the entire Final Rule; non-EB-5 fees (e.g., H-1B, asylum-related) remained in effect.

The court found plaintiffs had standing for the EB-5 claims: Moody and AIIA (via Malik) demonstrated imminent or actual economic harm from the fees, traceable to USCIS's actions and redressable by a stay. However, ITServe lacked standing for H-1B claims, as evidence of member harm was insufficiently specific. The Antideficiency Act claim was dismissed for lack of merit.

No full vacatur was ordered, as the violations were severable and limited to EB-5 provisions. The stay applied nationwide, given the APA's universal scope for agency actions.

Analysis of the Decision

The decision underscores the judiciary's role in enforcing statutory mandates on agencies, particularly in immigration where procedural safeguards are critical. By applying Chevron deference (though post-Loper Bright, with emphasis on statutory text), the court interpreted the RIA's language—"shall not require any modification of fees before the completion [of the study]"—as a clear prohibition on pre-study EB-5 fee changes, rejecting USCIS's argument that its general authority under § 1356(m) superseded this. This textualist approach highlights how specific statutes like the RIA control over general ones, preventing agencies from circumventing congressional intent.

The court critiqued USCIS's timing: issuing the Final Rule before the study rendered EB-5 fees unsupported, as the post-hoc February 2025 study and October 2025 proposal admitted the original increases ignored RIA requirements. However, the court upheld the Asylum Program Fee, finding it rationally tied to cost recovery and not an unlawful cross-subsidy, as § 1356(m) allows recovering costs for non-fee services.

Procedurally, the court noted deficiencies in notice-and-comment, as the proposed rule inadequately addressed the RIA, but limited relief to a stay rather than vacatur to avoid disrupting USCIS operations broadly. This "limited relief" balances equities: it provides immediate cost savings for EB-5 investors (e.g., reducing I-526 fees back to $3,675) while allowing USCIS to finalize a compliant rule via the ongoing comment period.

The ruling has broader implications for business immigration, potentially encouraging more challenges to fee rules and emphasizing study mandates. It does not address retroactive refunds (e.g., for Malik's payment), leaving that to agency discretion or further litigation. Critics may argue the stay disrupts fee equity, but proponents see it as upholding rule-of-law principles. Overall, the decision promotes accountability without overreach, aligning with APA goals of reasoned agency action.

The full decision can be accessed from here: https://www.courtlistener.com/docket/68357075/41/moody-v-mayorkas/

Citation: Moody v. Mayorkas, No. 1:24-cv-00762 (D. Colo. Nov. 12, 2025).