Huashan Zhang v. USCIS

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 21, 2020 Decided October 27, 2020

No. 19-5021

HUASHAN ZHANG AND MASAYUKI HAGIWARA,
APPELLEES

v.

UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, ET
AL.,
APPELLANTS

Appeal from the United States District Court
for the District of Columbia
(No. 1:15-cv-00995)

Christopher A. Bates, Counsel to the Assistant Attorney
General, U.S. Department of Justice, argued the cause for
appellants. With him on the briefs were Matthew J. Glover,
Counsel to the Assistant Attorney General, Glenn M.
Girdharry, Assistant Director, and Aaron S. Goldsmith, Senior
Litigation Counsel. Joshua S. Press, Attorney, entered an
appearance.

Ira Kurzban argued the cause for appellees. With him on
the brief was John P. Pratt.

Before: MILLETT, KATSAS, and RAO, Circuit Judges.
 2
Opinion for the Court filed by Circuit Judge KATSAS.

KATSAS, Circuit Judge: Certain visas are available to
prospective immigrants who invest capital in the United States.
A longstanding regulation, promulgated in 1991, defines the
required capital to include cash or indebtedness secured by the
immigrant’s assets. This appeal presents the question whether,
under the regulation, the proceeds of a loan qualify as cash or
indebtedness. We hold that loan proceeds qualify as cash, and
we therefore affirm a decision affording relief to a class of
foreign investors denied visas under a contrary interpretation
adopted and announced by the government in 2015.

I

A

In 1990, Congress amended the Immigration and
Nationality Act (INA) to establish the employment-based, fifth
preference immigrant visa program, commonly known as the
EB-5 visa program. See Immigration Act of 1990, Pub. L. No.
101-649, § 121(a), 104 Stat. 4978, 4987–90. This program
provides “employment creation” visas to prospective
immigrants seeking to engage in a new commercial enterprise
in the United States. 8 U.S.C. § 1153(b)(5)(A). To qualify for
such a visa, an applicant must have “invested” or be “actively
in the process of investing” a minimum amount of “capital” in
the new enterprise, which must create full-time jobs for at least
ten qualifying workers. Id. In recent years, the minimum
required investment has been either $1,000,000 or, if the
investment was made in a targeted area, $500,000. See id.
§ 1153(b)(5)(C); 8 C.F.R. § 204.6(f) (2019). A targeted area is
a rural area or one experiencing high employment. 8 U.S.C.
§ 1153(b)(5)(B)(ii).
 3
In 1991, the Immigration and Naturalization Service (INS)
promulgated implementing regulations for the EB-5 visa
program. From then until 2019, the regulations defined the
terms “capital” and “invest” as follows:

Capital means cash, equipment, inventory, other
tangible property, cash equivalents, and indebtedness
secured by assets owned by the alien entrepreneur,
provided that the alien entrepreneur is personally and
primarily liable and that the assets of the new
commercial enterprise upon which the petition is
based are not used to secure any of the indebtedness.

***

Invest means to contribute capital. A contribution of
capital in exchange for a note, bond, convertible debt,
obligation, or any other debt arrangement between the
alien entrepreneur and the new commercial enterprise
does not constitute a contribution of capital for
purposes of this part.

8 C.F.R. § 204.6(e) (2019).1

In 1998, the INS rendered precedential decisions applying
these regulatory requirements to loans and promissory notes.
One decision held that a loan from the investor to the enterprise
does not qualify as an investment of capital. Matter of Soffici,
22 I. & N. Dec. 158, 162–63 (Assoc. Comm. 1998). A second
decision explained that a promissory note from the investor to
the enterprise may constitute either indebtedness or evidence
that the investor is “in the process of investing other capital,

1
In 2019, the definitions were amended to replace
“entrepreneur” with “investor.” See 8 C.F.R. § 204.6(e) (2020).
That change is immaterial to the question presented.
 4
such as cash.” Matter of Izummi, 22 I. & N. Dec. 169, 193
(Assoc. Comm. 1998) (cleaned up). A third decision held that
such a promissory note, to qualify as capital under the
indebtedness prong of the definition, must be secured by assets
amenable to seizure. Matter of Hsuing, 22 I. & N. Dec. 201,
202 (Assoc. Comm. 1998).

This case presents the further question of how the
regulation treats the cash proceeds of a loan. The INS’s
successor agency, the United States Citizenship and
Immigration Services (USCIS), addressed that question on a
conference call with outside parties held on April 22, 2015.
During that call, a deputy chief within the Immigrant Investor
Program Office (IPO) of USCIS stated that, when a foreign
investor invests cash from a loan in a new U.S. enterprise,
USCIS treats the investment as indebtedness rather than cash.
Thus, according to the deputy chief, “[p]roceeds from a loan
may qualify as capital used for EB-5 investments, provided that
the requirements placed upon indebtedness by 8 C.F.R.
§ 204.6(e) are satisfied.” J.A. 42. In particular, the loan must
be “secured by assets” owned by the foreign investor. Id.

B

The two plaintiffs in this case were denied EB-5 visas
based on this interpretation of the regulation. One denial
occurred shortly before USCIS publicly announced its
position, and the other shortly after.

Masayuki Hagiwara is a Japanese citizen. In 2013,
Hagiwara borrowed $500,000 from a corporation that he
controlled and invested the money in a new commercial
enterprise in Nevada, a targeted area. In 2014, Hagiwara filed
what USCIS calls Form I-526, a petition to establish his
eligibility for an EB-5 visa. In March 2015, USCIS denied the
petition. It reasoned that the loan proceeds invested by
 5
Hagiwara in the Nevada enterprise constituted indebtedness,
not cash, under 8 C.F.R. § 204.6(e). USCIS then concluded
that because the loan was not secured by Hagiwara’s assets, his
investment did not satisfy the regulatory requirements for
indebtedness to qualify as capital.

The case of Huashan Zhang, a Chinese citizen, is similar.
In 2013, Zhang borrowed $500,000 from a corporation that he
controlled, invested the money in a new commercial enterprise
in Nevada, and filed a Form I-526 petition. In May 2015,
USCIS denied Zhang’s petition on the same ground: the loan
proceeds constituted indebtedness, which failed to qualify as
capital because Zhang’s assets did not secure the loan.

C

On June 23, 2015, Zhang and Hagiwara sued to challenge
what they described as “USCIS’s new collateralization rule.”
J.A. 20. The complaint raised four counts. First, the denial of
the plaintiffs’ petitions rested on an impermissible
interpretation of the governing regulation. Second, USCIS
impermissibly applied its new interpretation retroactively to
applicants who made investments and filed Form I-526
petitions under the law as it existed before the April 22, 2015
announcement. Third, the denial of the plaintiffs’ petitions
violated the INA. Fourth, the position announced on April 22,
2015 was a legislative rule promulgated without notice-and-
comment rulemaking.

Zhang and Hagiwara sought to represent a class of EB-5
investors who made investments and filed visa applications
before the 2015 conference call. Specifically, they sought to
represent a class defined as

[a]ll Form I-526 petitioners who: (1) invested cash in
a new commercial enterprise in an amount sufficient
 6
to qualify as an EB-5 investor; (2) obtained some or
all of the cash invested in the new commercial
enterprise through a loan; (3) filed a Form I-526
petition prior to April 22, 2015 based on that
investment; and (4) received or will receive a denial
of their I-526 petition on the ground that the loan used
to obtain the invested cash fails the collateralization
test described in the announcement made by USCIS
during its April 22, 2015 EB-5 stakeholder
engagement.

J.A. 31. On behalf of the class, the plaintiffs sought to require
USCIS to reopen applications that it had denied based on the
collateralization rule, and to prohibit the agency from applying
the rule to pending applications.

The plaintiffs moved for class certification, and the parties
then filed cross-motions for summary judgment. The district
court simultaneously resolved all these motions. Zhang v.
USCIS, 344 F. Supp. 3d 32 (D.D.C. 2018).

As for summary judgment, the court held that the agency’s
interpretation of 8 C.F.R. § 204.6(e), as articulated in the 2015
conference call, was plainly erroneous and was a legislative
rule improperly promulgated without notice-and-comment
procedures. 344 F. Supp. 3d at 44–59. Having concluded that
the agency’s interpretation violated the regulation, the court did
not reach the question whether it also violated the statute. Id.
at 43. And having concluded that the 2015 interpretation could
not be applied at all, the court did not reach the question
whether its retroactive application was independently
objectionable. Id.

The district court then certified a class under Federal Rule
of Civil Procedure 23(b)(2). The court held that the class was
ascertainable, that the claims of all class members arose from
 7
the same course of conduct by USCIS, and that the relief sought
by the class was indivisible. 344 F. Supp. 3d at 61–65. On its
own motion, the court modified the proposed class definition
in two respects. First, it eliminated the requirement that class
members have filed their Form I-526 petitions before the 2015
conference call—a restriction that it thought made sense only
as to the unreached retroactivity claim. See id. at 65–66.
Second, the court required that each class member have filed a
petition that was denied “solely” based on the agency’s new
position. Id. at 66. As a result of these changes, the certified
class includes

[a]ll Form I-526 petitioners who: (1) invested cash in
a new commercial enterprise in an amount sufficient
to qualify as an EB-5 investor; (2) obtained some or
all of the cash invested in the new commercial
enterprise through a loan; (3) filed a Form I-526
petition based on that investment; and (4) received or
will receive a denial of their I-526 petition solely on
the ground that the loan used to obtain the invested
cash fails the collateralization test described in the
USCIS 2015 IPO Remarks announcement.

Id. at 66.

Combining these rulings, the court vacated the denial of I-
526 petitions filed by class members, and it remanded the case
to USCIS for further consideration. 344 F. Supp. 3d at 60.

II

We begin with the district court’s summary-judgment
rulings. Under the Administrative Procedure Act, a reviewing
court must set aside agency action that is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). The question whether agency
 8
action is arbitrary and capricious is a legal one generally made
on the administrative record and resolved on summary
judgment. See, e.g., Nat’l Ass’n of Home Builders v. U.S. Army
Corps of Eng’rs, 417 F.3d 1272, 1277, 1282 (D.C. Cir. 2005).
We review such a determination de novo. Children’s Hosp.
Ass’n of Tex. v. Azar, 933 F.3d 764, 769 (D.C. Cir. 2019).

A

The district court correctly concluded that loan proceeds
qualify as cash, not indebtedness, under the EB-5 visa program.
The INA makes these visas available to prospective immigrants
who have “invested” or are actively “investing” a minimum
amount of “capital” in a new United States enterprise. 8 U.S.C.
§ 1153(b)(5)(A)(i). Implementing regulations, promulgated by
the INS when it was tasked with administering the EB-5 visa
program, define these key terms. The parties assume, and we
have no reason to doubt, that the regulatory definitions are
reasonable and thus entitled to deference under Chevron,
U.S.A., Inc. v. NRDC, 467 U.S. 837, 842–45 (1984).

From 1991 through 2019, the regulation defined capital as
“cash, equipment, inventory, other tangible property, cash
equivalents, and indebtedness secured by assets owned by the
alien entrepreneur, provided that the alien entrepreneur is
personally and primarily liable and that the assets of the new
commercial enterprise upon which the petition is based are not
used to secure any of the indebtedness.” 8 C.F.R. § 204.6(e)
(2019). Whether USCIS properly denied Zhang’s and
Hagiwara’s petitions turns on whether loan proceeds count as
“cash,” which automatically qualifies as capital, or as
“indebtedness,” which qualifies as capital only if it is secured
by the foreign investor’s assets. The regulation does not define
the terms “cash” or “indebtedness,” so we give them their
 9
ordinary meaning. See FTC v. Tarriff, 584 F.3d 1088, 1090
(D.C. Cir. 2009).

Start with “cash.” It means “[m]oney; in the form of coin,
ready money.” Cash, Oxford English Dictionary (2d ed. 1989).
This definition easily encompasses loan proceeds. When a
person takes out a loan, he receives money in exchange for a
promise to repay the funds. And when that person uses the
funds to purchase goods, he buys them with cash. Imagine
someone wishes to sell a used car for payment “in cash only.”
If a buyer offered the cash proceeds of a loan, the seller would
happily oblige, for the payment would be “in cash.” Cash is
fungible, and it passes from buyer to seller without imposing
on the seller any of the buyer’s obligations to his own creditors.
The buyer’s source of cash—whether paycheck, gift, or loan—
makes no legal or practical difference. Here, when Zhang and
Hagiwara took out loans from their companies, they received
cash proceeds. And when they invested the proceeds into the
Nevada enterprises, they gave and the enterprises received
cash, plain and simple, regardless of how it was obtained.

Now consider “indebtedness.” It means either “[t]he
condition of being indebted or in debt” or “[t]he extent to which
one is indebted; the sum owed; the actual debt.” Indebtedness,
Oxford English Dictionary (2d ed. 1989). Neither definition
captures loan proceeds, which are the product of a debt, not the
condition of being in debt or the debt itself. Moreover,
eligibility for an EB-5 visa turns on whether capital is
“invested” in the enterprise, 8 U.S.C. § 1153(b)(5)(A)(i), and
to invest means “to contribute capital,” 8 C.F.R. § 204.6(e).
These provisions focus on the exchange between the foreign
investor, who must invest the capital, and the new U.S.
enterprise, which must receive the investment. They do not
focus on any prior exchange between the investor and his
source of funds, whether an employer, a bank, or a controlled
 10
corporation. Moreover, the other kinds of capital listed in the
regulation—cash, equipment, inventory, other tangible
property, and cash equivalents—all become assets of the
enterprise, which indicates that indebtedness must do the same.
See Beecham v. United States, 511 U.S. 368, 371 (1994). But
when the alien invests loan proceeds in an enterprise, the
enterprise does not receive his indebtedness at all—much less
receive it as an asset. Indebtedness thus does not include loan
proceeds.

Instead, an investment of indebtedness is more naturally
understood as a promise to give the enterprise something of
value. When an investor gives the enterprise a promissory
note, he incurs a liability—the “indebtedness” to the
enterprise—and the enterprise can list the note as an asset on
its balance sheet, just as it can list as assets the other kinds of
capital described in the regulation. In this way, the
indebtedness prong of the regulation implements the statutory
provision extending EB-5 visa eligibility not only to any
foreign investor who “has invested” the minimum amount of
capital, but also to any foreign investor who “is actively in the
process of investing” the capital. 8 U.S.C. § 1153(b)(5)(A)(i).

The structure of section 204.6(e) reinforces this
conclusion. That provision separately addresses what types of
assets qualify as capital and how the investor may acquire
them. On the latter point, the regulation provides only that
“[a]ssets acquired, directly or indirectly, by unlawful means
(such as criminal activities) shall not be considered capital.”
By including this single limitation on how the investor may
acquire capital, the regulation implicitly excludes other
limitations. See TRW Inc. v. Andrews, 534 U.S. 19, 28 (2001).
Whether cash is obtained from wages, a gift, or a loan makes
no difference as to whether it qualifies as capital, so long as it
has been lawfully acquired.
 11
Another contextual clue buttresses our reading. To qualify
as capital, an investment of indebtedness must be secured by
the foreign investor’s assets. 8 C.F.R. § 204.6(e). That makes
sense for a promise to pay the enterprise: If the promise were
unsecured, the enterprise would have no recourse in the event
of a default. The enterprise then would receive no money and
could create no jobs, frustrating the purpose of the EB-5
program. By contrast, this security requirement serves no
purpose for loan proceeds. As noted above, when an alien
obtains a loan and invests the proceeds in an enterprise, title to
the cash passes unencumbered to the enterprise. As far as the
enterprise is concerned, whether or how the investor’s loan was
secured makes no difference; it can deploy the cash either way,
and it faces no exposure if the investor defaults on any
obligation to a third-party lender.

In response, USCIS highlights the proviso that
indebtedness, to qualify as capital, cannot be secured with the
assets of the enterprise. 8 C.F.R. § 204.6(e). The agency says
that this restriction would be pointless if indebtedness referred
only to a promise to pay the enterprise, because the investor
could not use the enterprise’s assets to secure such a promise.
But this type of arrangement is hardly far-fetched. To qualify
for an EB-5 visa, a foreign investor must seek to engage in a
“new commercial enterprise” and must make a substantial
investment in it. 8 U.S.C. § 1153(b)(5)(A). The investor may
well have control over the new enterprise, and potentially could
use its assets to secure an ostensible promise to invest further
capital. The restriction sensibly prohibits this kind of
maneuvering, which would substantially reduce the benefit to
the enterprise of the ostensible investment.2

2
We recognize that similar concerns could arise if the alien
obtained cash for his investment from a third-party loan secured by
 12
USCIS further invokes 8 C.F.R. § 204.6(j), which sets
forth the evidence that must accompany a Form I-526 petition.
One subsection of that provision states that a petition “must be
accompanied by evidence that the petitioner has placed the
required amount of capital at risk for the purpose of generating
a return.” Id. § 204.6(j)(2). This showing “may include, but
need not be limited to,” five specific types of evidence. Id.
One of these is “[e]vidence of any loan or mortgage agreement,
promissory note, security agreement, or other evidence of
borrowing which is secured by assets of the petitioner, other
than those of the new commercial enterprise, and for which the
petitioner is personally and primarily liable.” Id.
§ 204.6(j)(2)(v). According to USCIS, the fact that the
investor’s “borrowing” was “secured” by his own assets would
matter only if the definitional provisions treated proceeds of the
borrowing as indebtedness.

This argument runs into several obstacles. For starters, the
meaning of “capital” is controlled by the definition of that term
in section 204.6(e), not by details in sub-subsections of the
evidentiary rules that follow. See Burgess v. United States, 553
U.S. 124, 129 (2008) (“Statutory definitions control the
meaning of statutory words … in the usual case.”) (cleaned up);

assets of the enterprise. In that instance, even though the cash
proceeds would qualify as capital, a question would arise whether the
investor had adequately invested it. In defining “invest,” section
204.6(e) states that a contribution “in exchange for a note, bond,
convertible debt, obligation, or any other debt arrangement between
the alien entrepreneur and the new commercial enterprise does not
constitute a contribution of capital” (emphases added). If the
enterprise pledges its assets as collateral, the investor’s contribution
may be “in exchange for” a disqualifying “debt arrangement”
imposed on the enterprise. Because neither Zhang nor Hagiwara
used assets of the enterprise to secure their respective loans, we need
not resolve that question here.
 13
Whitman v. American Trucking Ass’n, 531 U.S. 457, 468
(2001) (Congress “does not alter the fundamental details of a
regulatory scheme in … ancillary provisions”). Under the
governing definition, capital includes cash, which plainly
encompasses the cash proceeds of a loan. Moreover, the
evidentiary rules in section 204.6(j)(2) are by their terms non-
exclusive; to prove the requisite capital investment, the petition
“may include, but need not be limited to” the five categories of
evidence. And the first of these categories is bank statements
showing amounts deposited into the enterprise’s accounts, 8
C.F.R. § 204.6(j)(2)(i), which would show loan proceeds so
deposited. Finally, our understanding of indebtedness,
referencing the alien’s promise to invest in the enterprise, does
not make it pointless to consider whether the investor’s
borrowing was secured by his own assets. In assessing large
loans taken out by foreign investors, security arrangements
might help confirm that the loans are legitimate. For an
investor still in the process of investing, that consideration
bears on whether the enterprise ultimately will receive the loan
proceeds. And in all cases, the bona fides of a loan tend to
show that its proceeds were lawfully acquired—an independent
requirement for any asset to qualify as capital. 8 C.F.R.
§ 204.6(e). Taken as a whole, the evidentiary provisions of
section 204.6(j) do not undercut our conclusion that the “cash”
referred to in section 204.6(e) includes loan proceeds.

USCIS also advances several policy arguments.
According to the agency, if the proceeds of unsecured loans
qualified as capital, then wealthy third parties could buy visas
for foreigners unlikely to create jobs, and foreign investors
could qualify for visas by investing domestic funds. The
plaintiffs respond that the statute sets forth requirements for the
enterprise (not the investor) to create jobs, and it does not
prohibit investments (secured or otherwise) involving the U.S.
funds of foreign investors. We need not engage these
 14
arguments, for we cannot disregard the plain meaning of a
regulation based on policy considerations. Mercy Hosp., Inc.
v. Azar, 891 F.3d 1062, 1070 (D.C. Cir. 2018). Likewise, given
the clarity of the governing regulation, we cannot defer to the
agency’s contrary interpretation. Kisor v. Wilkie, 139 S. Ct.
2400, 2415 (2019).

Text, structure, and regulatory context show that the term
“cash,” as used in 8 C.F.R. § 204.6(e), unambiguously includes
the proceeds of third-party loans. Because USCIS’s contrary
construction is impermissible, we affirm the district court’s
decision to set aside the denial of the plaintiffs’ petitions.

B

The district court further held that USCIS’s interpretation
of its own regulation, as announced in the April 2015
conference call, constituted a legislative rule requiring notice-
and-comment rulemaking. USCIS contends that the
announcement was not final agency action at all, and thus was
unreviewable, or at most was an interpretive rule.

We need not attempt to categorize the April 2015
comments, for nothing would turn on it. USCIS wisely does
not argue that telephone statements made by its IPO deputy
chief were intended to change, or could change, a binding
regulation published by a predecessor agency in the Code of
Federal Regulations. Instead, the agency defends the
statements as a permissible interpretation of the regulation and
as a reiteration of its prior position. But whether the statements
have no independent legal effect by design or because they
were improperly adopted makes no difference. In either event,
the regulation itself—not a statement made by an agency
official on a conference call—governs the question of what
constitutes a capital investment under the INA. We thus need
 15
not consider whether the statements amounted to an improperly
promulgated legislative rule or something less binding.

Likewise, we need not consider whether those statements
amounted to an interpretive rule or to non-final agency action.
The question whether agency action is final and thus
reviewable under the APA is not jurisdictional, Flytenow, Inc.
v. FAA, 808 F.3d 882, 888 (D.C. Cir. 2015), so we need not
decide it first. And we have already held that 8 C.F.R.
§ 204.6(e) unambiguously forecloses the position expressed by
the deputy chief in the conference call. Thus, nothing turns on
whether that position reflects an interpretive rule that does not
warrant deference under Kisor or simply informal and
unreviewable agency advice.

Regardless of how the comments are characterized, we
affirm the district court’s conclusion that they are inconsistent
with the regulation and thus can have no legal effect.

III

After rejecting USCIS’s interpretation of 8 C.F.R.
§ 204.6(e), the district court turned to class certification. The
court certified a class of all Form I-526 petitioners who
invested the cash proceeds of loans in new commercial
enterprises and had their petitions denied “solely on the ground
that the loan used to obtain the invested cash fails the
collateralization test described in the USCIS 2015 IPO
Remarks announcement.” 344 F. Supp. 3d at 66. For all such
investors, the court vacated the denials and remanded to USCIS
for further consideration. Id.

On appeal, USCIS raises one objection to the class
certification: that the class is overbroad insofar as it sweeps in
investors whose petitions were denied as far back as 1991. As
USCIS explains, the statute of limitations for claims against the
 16
federal government is six years, 28 U.S.C. § 2401, and the
complaint in this case was filed on June 23, 2015. The claims
of investors whose petitions were denied before June 23, 2009
thus are time-barred. USCIS invokes the rule that a
certification order may neither revive time-barred claims nor
include individuals with such claims in the class. See, e.g., Doe
v. Chao, 306 F.3d 170, 184 (4th Cir. 2002), aff’d on other
grounds, 540 U.S. 614 (2004); Broussard v. Meineke Discount
Muffler Shops, Inc., 155 F.3d 331, 344 (4th Cir. 1998); Wetzel
v. Liberty Mut. Ins. Co., 508 F.2d 239, 246 (3d Cir. 1975).
Further, USCIS continues, ascertaining which Form I-526
petitioners are in this class would impose an unreasonable
burden involving a manual review of over 11,000 files going
back some three decades.

We are troubled by USCIS’s failure to raise this argument
before the district court and to afford that court the opportunity
to address it in the first instance. At no point after the district
court certified the class did USCIS voice its current objection.
It did not raise this concern in a motion for clarification or
reconsideration of the certification order, in a motion to amend
the judgment under Federal Rule of Civil Procedure 59(e), or
in its motion for a partial stay. Ordinarily, the failure to raise
an issue below would result in a forfeiture. See, e.g., Trudel v.
SunTrust Bank, 924 F.3d 1281, 1285 (D.C. Cir. 2019).

But we need not address forfeiture in this case, for we see
no indication that the district court included time-barred
claimants in the certified class. Nothing in the court’s thorough
opinion indicates that it was doing so, despite the settled law
noted above. Quite the opposite, the district court recognized
and applied the six-year statute of limitations in concluding that
the notice-and-comment claims were timely. USCIS had
argued that the plaintiffs were making a time-barred challenge
to the adoption of section 204.6(e) in 1991. The court rejected
 17
that contention, not because it thought the plaintiffs could use
class certification to challenge agency actions that occurred
decades ago, but because it viewed the notice-and-comment
claims as focused on “USCIS’s interpretation of the regulation”
as “announced … on April 22, 2015.” 344 F. Supp. 3d at 57.
The court thus concluded that the claims were filed “well
within the applicable six-year statute of limitations.” Id. It also
explained why older actions by USCIS or INS, such as the
precedential 1998 decisions, provided no support for the 2015
position. See id. at 53–55. Finally, the court modified the
proposed class definition to require that denials be based
“solely” on the 2015 position, thus emphasizing the need for a
tight connection between it and any individual denials. See id.
at 66. For these reasons, denials based solely on “the
collateralization test described in the USCIS 2015 IPO
Remarks announcement,” id., cannot fairly be understood as
including denials made outside the limitations period.

The plaintiffs’ own arguments reinforce this conclusion.
At every turn, the plaintiffs characterized the position taken by
USCIS in April 2015 as a bolt out of the blue—a new position
representing a sharp break from past agency practice. The
complaint alleged that “class members were blindsided” by a
new rule announced and applied “only after they made their
investments and filed their Form I-526 petitions.” J.A. 31. The
retroactivity and notice-and-comment counts, which focused
on the April 2015 conference call as opposed to individual
denials, rested centrally on the proposition that the agency had
announced an unexpected new rule. J.A. 36 (“At the time
Plaintiffs invested capital in a new commercial enterprise and
submitted their Form I-526 petitions, Defendants treated the
investment of cash proceeds from a third-party loan as cash,
not ‘indebtedness.’ Defendants abruptly departed from this
policy in adopting their collateralization rule and applying it
retroactively to pending petitions like Plaintiffs.’”); J.A. 38
 18
(“Defendants’ collateralization rule, public[ly] announced for
the first time on April 22, 2015, is a rule of general applicability
that carries the force of law.”). The plaintiffs’ class-
certification and summary-judgment motions repeatedly made
similar characterizations. None of this suggested any challenge
to agency actions more than six years before the complaint was
filed, much less to agency actions some three decades earlier.

We recognize that USCIS expressed a different view as to
the novelty of its 2015 position. USCIS claimed that the
comments made in the April 2015 conference call, as well as
its orders denying the petitions of Zhang and Hagiwara, reflect
a consistent agency position dating back at least to the 1998
INS decisions. But the plaintiffs are the masters of their own
complaint, which focused entirely on assertedly novel agency
actions undertaken in 2015. And the district court correctly
rejected USCIS’s contention that its present position was
supported by any past agency action. See 344 F. Supp. 3d at
53–55.3

We also recognize some fuzziness in determining which
denials can fairly be tied to “the collateralization test described
in the USCIS 2015 IPO Remarks announcement.” The class
must encompass some denials that occurred before the April

3
None of the 1998 precedential decisions supports USCIS’s
current position. Soffici held that a loan to the enterprise, whether
from the foreign investor or a third party, does not qualify as an
investment of capital. See 22 I. & N. Dec. at 162–63. That case does
not speak to whether loan proceeds constitute cash or indebtedness.
Izummi and Hsuing both recognized that a promissory note from the
investor to the enterprise, if secured by the investor’s assets, can
constitute an investment of indebtedness. See Izummi, 22 I. & N.
Dec. at 192–93; Hsuing, 22 I. & N. Dec. at 202. Those cases support
our conclusion that indebtedness under the regulation means a
promissory note as opposed to the cash proceeds of a loan.
 19
2015 conference call, for Hagiwara’s petition was denied in
March 2015, and he is a class representative. But on appeal,
USCIS rests its entire argument on the purported inclusion in
the class of investors whose claims are time-barred. USCIS
does not make any independent argument that the class, if
limited to plaintiffs with timely claims, is not sufficiently
ascertainable. To reject USCIS’s position, we thus need only
conclude that the class does not include investors whose
petitions were denied before June 23, 2009.

Finally, we reserve the question whether class certification
under Rule 23(b)(2) is appropriate when an agency denies
benefits in many individual adjudications resting on a common
legal rationale. Rule 23(b)(2) permits certification if the
defendant has acted “on grounds that apply generally to the
class, so that final injunctive relief or corresponding
declaratory relief is appropriate respecting the class as a
whole.” The appropriate relief must be “indivisible,” Wal-
Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360 (2011), as it is in
the paradigmatic case of a school desegregation injunction, see
Fed. R. Civ. P. 23(b)(2) advisory committee’s note to 1966
amendment. USCIS does not raise the question whether these
requirements are satisfied in cases like this one. Accordingly,
we simply note the point for consideration in a future case.

IV

The district court correctly rejected USCIS’s interpretation
of 8 C.F.R. § 204.6(e), and it did not improperly sweep into the
class investors whose challenges to their visa denials are time-
barred.

Affirmed.