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International Entrepreneur Rule Wins Big In Court: Judge Overturns Delay of the Rule

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On Friday December 1st, a federal judge for the U.S. District Court for the District of Columbia, issued a ruling in the lawsuit, National Venture Capital Association, et.al. v. Duke, et. al, in favor of the National Venture Capital Association, an association that brought the lawsuit to challenge the government’s delay of the international entrepreneur rule. Earlier this year, the Trump administration had postponed enforcement of the international entrepreneur rule and said that it was very likely that the Obama era rule would ultimately be rescinded. The Plaintiffs in the lawsuit argued that the Department of Homeland Security unlawfully delayed enforcement of the international entrepreneur rule by circumventing the notice-and-comment rule making procedure mandated by the Administrative Procedure Act.

As you may remember the international entrepreneur rule was first published in the Federal Register on January 17, 2017. Following its publication, a notice-and-comment period was expected to begin 30 days later. The government however failed to announce such a comment period, and instead, on July 13, 2017, just days before the rule was set to go into effect, the Department of Homeland Security issued a press release indicating that implementation of the rule would be delayed until March 14, 2018, at which time the government would seek comments from the public on its plan to rescind the rule.

Federal Judge James Boasberg dealt a blow to the Trump administration in his Friday ruling, in which he agreed with the National Venture Capital Association, and ordered the Department of Homeland Security to rescind its delay of the international entrepreneur rule. The court agreed that the government bypassed the procedures of the Administrative Procedure Act to block the rule from going into effect as expected on July 17, 2017.

The Obama era rule was designed to give international entrepreneurs the opportunity to apply for parole into the United States for a 30-month period (or 2.5 years), for the purpose of starting or scaling their start-up business enterprise in the United States. However, the rule is stringent in the sense that it requires entrepreneurs to demonstrate that their entry into the United States would create a ‘significant public benefit’ to the United States, and that their proposed businesses would provide a ‘substantial’ and ‘demonstrated potential’ to create more jobs and business growth in the United States, and not merely to provide income to the entrepreneur and his or her family members.

What does this mean for foreign entrepreneurs who wished to benefit from the International Entrepreneur Rule? 

Now that the Court has ruled that the Department of Homeland Security unlawfully delayed enforcement of the rule, and has overturned the government’s delay of the rule with effect beginning on Friday, the International Entrepreneur Rule may now take effect. It is possible that the Trump administration may appeal the federal judge’s decision, or continue with their plans to rescind the rule, but as far as the ruling goes, the International Entrepreneur Rule went into effect as of Friday.

We are aware that the Trump administration is drafting an order to rescind the rule that is currently under review by the administration, and which is expected to be published in the Federal Register in the next few weeks.

The lead attorney in the case has told reporters that although the Trump administration is currently working on a draft to rescind the rule, the government must accept applications for the international entrepreneur rule, even if the administration continues with plans to rescind the rule. At the moment however, he pointed out, there is no official application for foreigners to use, but that is expected to change soon given the immediacy of the court order.

It is now safe to say that global entrepreneurs have had their day in court, and can claim a decisive victory with this ruling.

President and CEO Bobby Franklin of the National Venture Capital Association made the following remarks after learning of the victory, “Today marks a significant victory for talented foreign entrepreneurs, the entrepreneurial ecosystem and the U.S. economy. The facts speak for themselves—the U.S. economy has long thrived on the contributions and innovations of immigrant entrepreneurs and we are a better country as a result.”

Leslie K. Dellon of the American Immigration Council added, “This decision is an important reminder that this administration must comply with the law and allow the public to have a voice during the agency rulemaking process.  It’s also great news for the talented entrepreneurs who relied on this rule and may now come to the United States to grow their businesses and the American economy.”

For more information on who qualifies for the international entrepreneur rule please click here.

To read the judge’s opinion please click here.