WASHINGTON, DC – The National Venture Capital Association (NVCA), entrepreneurs, and startup companies today filed a motion to conduct discovery regarding the Department of Homeland Security’s (DHS) compliance with the court order in NVCA v. Duke. In that case, the U.S. District Court for the District of Columbia ordered DHS to implement the International Entrepreneur Rule (IER). NVCA and the other plaintiffs have grave concerns that DHS has chosen to disregard the court’s previous order. DHS has failed to take action on IER applications, including the applications of the plaintiffs. Troublingly, DHS has made public statements suggesting it is not implementing the IER. The motion to conduct discovery is essential to ensure the court’s decision is fully implemented to allow IER to move forward.
“The federal court’s ruling in NVCA v. Duke was clear: DHS’s delay of the International Entrepreneur Rule was unlawful and the rule must be implemented,” said Bobby Franklin, President and CEO of NVCA. “Unfortunately, DHS has dragged its feet and even tried to persuade immigrant entrepreneurs to not launch new high-growth startups through the International Entrepreneur Rule. The venture capital industry believes the International Entrepreneur Rule will create American jobs by attracting the world’s top startup founders. Our industry is committed to seeing the rule implemented and will continue to advocate for this powerful job-creation tool.”
Finalized by the Obama Administration, the rule allows foreign-born entrepreneurs to launch high-growth startups in the U.S. These immigrant entrepreneurs can remain in the U.S. for two and a half years, with the possible extension of another two and a half years. Less than a week before the IER was to go into effect on July 17, 2017, DHS announced that the rule would be delayed and that DHS intended to rescind the final rule. Represented by Mayer Brown LLP and the American Immigration Council, NVCA and the other plaintiffs argued that because DHS did not solicit advance comment from the public on the delay, it therefore violated clear requirements of the Administrative Procedure Act. On December 1, 2017, United States District Judge James E. Boasberg of the U.S. District Court for the District of Columbia ruled in favor of NVCA and its co-plaintiffs. The ruling compelled DHS to dispense with its delay and to implement the program.
The delay and announced intention to rescind IER comes at a time of increased global competition for entrepreneurship. The U.S. share of global venture capital investment has dropped precipitously from 90% twenty years ago to 53% last year. Countries like Canada, France, Germany, and Singapore have put in place ‘startup visas’ to bring new companies to their shores. The world’s best immigrant entrepreneurs now have many choices on where to start a new enterprise, and the International Entrepreneur Rule would facilitate these job creators launching a startup in the United States, rather than overseas. Further delay of IER will only harm the U.S. economy.