UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
VAN NU TU TRUONG, :
:
Plaintiff, : Civil Action No.: 21-316 (RC)
:
v. : Re Document No.: 9
:
UNITED STATES CITIZENSHIP :
AND IMMIGRATION SERVICES, et al., :
:
Defendants. :
MEMORANDUM OPINION
DENYING PLAINTIFF’S MOTION FOR DISCOVERY
I. INTRODUCTION
In this case, Plaintiff Van Nu Tu Truong challenges an administrative denial of her
petition for a visa. Currently before the Court is Plaintiff’s request to take discovery. Plaintiff
acknowledges that discovery is not normally appropriate in Administrative Procedure Act
(“APA”) cases, but argues that one of her claims—that United States Citizenship and
Immigration Services (“USCIS”) impermissibly applied a new policy to her case retroactively—
does not rely on the APA. She is wrong about that, and does not argue that any exception to the
APA “record rule” applies. Therefore, the Court denies the motion for discovery. But it does so
without prejudice to Plaintiff bringing a new motion for discovery that draws upon the correct
legal framework.
II. BACKGROUND
The EB-5 Immigrant Investor Program offers permanent residency visas to individuals
who invest qualifying sums in qualifying businesses in the United States. Compl. ¶ 1; see 8
U.S.C. § 1153 (b)(5); EB-5 Reform and Integrity Act of 2022, Section 103(b)(1), Pub. L. No.
117-103, 136 Stat. 49, 1075. Plaintiff Van Nu Tu Truong, a resident of Vietnam, obtained a
qualifying amount under the relevant regulations—as applicable to her investment, $500,000—
from selling property and by way of “a cash gift from her in-laws.” Compl. ¶¶ 2, 12, 29. She
planned to invest in a qualifying busines entity, CMB Georgia Infrastructure Investment Group
51, LP, which was raising funds to build a lodge in LaGrange, Georgia. Id. ¶ 28. But
Vietnamese law restricts the conversion of Vietnamese currency, so Plaintiff engaged in a
common practice for EB-5 immigrants from countries with conversion restriction laws: she
engaged in a currency swap. Id. ¶ 30; see id. ¶ 21. Specifically, she transferred about $550,000
in Vietnamese currency to a Vietnam-based affiliate of a Singaporean company, VNT Trading
and Investment, Pte. Then, VNT Trading transferred $550,000 from its Singapore bank account
to the Georgia investment entity. Id. at 30.
The investment taken care of, Plaintiff filed an I-526 petition for an EB-5 visa with
USCIS in December 2016. Id. ¶ 31. Mindful of the admonition of 8 C.F.R. § 204.6(e) that
“[a]ssets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not
be considered capital” that qualifies as an EB-5 investment, she included documentation of the
sources of her invested funds: letters confirming her earnings, property sale documents, gift
contracts, and papers documenting the transfer of funds from Plaintiff through VNT Trading.
Compl. ¶¶ 13, 32. USCIS responded with a request for evidence that VNT Trading had
converted and transferred the funds lawfully. Id. ¶ 33. In response, Plaintiff provided evidence
including “a certificate from Singapore’s Accounting and Corporate Regulatory Authority[]
documenting VNT Trading as a registered Singaporean company, as well as bank statements
showing the transfer of funds from VNT Trading’s account to Ms. Truong’s new commercial
enterprise in the United States.” Id. ¶ 34. Some back-and-forth with the agency in November
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2018 resulted in Plaintiff’s submission of further evidence including “a declaration from VNT
Trading’s Deputy Director addressing the company’s operations, its receipt of [Plaintiff’s]
money, and its transfer of funds to the United States on [Plaintiff’s] behalf; bank statements from
VNT Trading to corroborate the capital transfer; evidence of VNT Trading’s lawful operations in
Singapore; a wire-transfer confirmation showing that [Plaintiff’s] capital was fully funded into
her U.S. new commercial enterprise; and a legal opinion from a Vietnamese attorney confirming
that the currency swap was lawful under Vietnamese law.” Id. ¶¶ 35–37. But in March 2019,
USCIS denied Plaintiff’s petition “based . . . on perceived evidentiary gaps regarding the
currency swap.” Id. ¶¶ at 38–39. Plaintiff appealed the denial administratively, id. ¶ 40, but the
USCIS Administrative Appeals Office (“AAO”) held that “further evidence on the swap was
‘necessary . . . to establish the lawful source of the funds invested in the [new commercial
enterprise].’” Id. ¶ 42.
According to Plaintiff, when she filed her I-526 petition in 2016, “USCIS maintained a
policy and practice of accepting currency swaps without requiring source-of-funds evidence for
the entities that perform them.” Id. ¶ 23. This “policy and practice shifted abruptly at the start of
2017,” when USCS “[f]or the first time . . . invoked 8 C.F.R. § 204.6(e) to question not only the
investors’ lawful acquisition of assets, but also” to require “details on the companies that transfer
and exchange funds using currency swaps.” Id. ¶ 25 (emphasis in original). Plaintiff alleges that
“this sea change in the agency’s adjudicatory practice was prompted by an internal directive by
the Immigrant Investor Program Office and USCIS Headquarters to change the agency’s practice
and policy in cases involving currency swaps and currency exchanges.” Id. ¶ 26.
Plaintiff filed suit against USCIS and two of its officials (together, “Defendants”), asking
this Court to declare USCIS’s denial unlawful and to order USCIS to withdraw the denial and
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either approve or reassess her I-526 petition. Compl. at 17. She styled her Complaint to include
three counts. Count I asserts that the denial must be set aside under the APA, 5 U.S.C. §§
706(2)(A), (D), because it was arbitrary and capricious, issued without observance of required
procedures, and unsupported by substantial evidence. Id. ¶¶ 50–59. Count II is labeled
“Impermissible Retroactive Application of Agency Practice.” Compl. at 14. It asserts that
USCIS’s retroactive application of “its new policy and practice on currency swaps” was
inequitable under Retail, Wholesale & Dep’t Store Union, AFL-CIO v. NLRB, 466 F.2d 380, 390
(D.C. Cir. 1972). Id. ¶¶ 60–68. Finally, Count III alleges that “USCIS’s rule requiring investors
to present lawful-source-of-funds evidence for third parties assisting them with currency swaps is
a substantive rule of general applicability that carries the force of law” and therefore violates the
APA’s requirement that such rules be promulgated after notice and public comment, 5 U.S.C. §
553 et seq. Id. ¶¶ 69–72.
The Court now addresses Plaintiff’s Motion for Leave to Propound Limited Discovery,
ECF No. 9, in which Plaintiff seeks leave to conduct discovery in support of her retroactivity
claim. Specifically, Plaintiff wishes to issue “requests for production of prior agency
adjudications of EB-5 visa petitions (including approvals) issued in cases involving currency
swaps both prior to the filing of Plaintiff’s I-526 petition and while the petition was pending, as
well as internal agency guidance (including instructions, memoranda, orders, e-mails, and policy
directives of supervisory personnel) regarding currency-swap transactions issued prior to the
filing of Plaintiff’s I-526 petition and while Plaintiff’s petition was pending.” Pl.’s Statement of
P. & A. Supp. Mot. for Leave to Propound Limited Disc. (“P. & A.”) at 16–17, ECF No. 9.
Defendants oppose the motion. Defs.’ Opp’n Pl.’s Mot. Leave for Disc. (“Opp’n”), ECF No. 11.
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III. ANALYSIS
The standard governing Plaintiff’s discovery request depends upon the nature of her
claims. Plaintiff expressly relies on the APA for Counts I and III, and accordingly does not
dispute that these claims are subject to the record rule, which generally prohibits the introduction
of evidence outside the administrative record in APA actions: “[I]t is black-letter administrative
law that in an APA case, a reviewing court should have before it neither more nor less
information than did the agency when it made its decision.” Hill Dermaceuticals, Inc. v. FDA,
709 F.3d 44, 47 (D.C. Cir. 2013) (cleaned up). Plaintiff premises her argument that she is
nonetheless entitled to take discovery on the assertion that Count II, her “retroactivity claim[,] is
not brought under the APA’s provision for substantive review and therefore is not subject to the
APA’s ‘record rule.’” P. & A. at 8. Plaintiff does not ground her retroactivity claim in the
Constitution; rather, she characterizes it as “a non-statutory cause of action” that “invok[es] the
Court’s equitable power.” Id. at 11 (citing Retail, Wholesale& Dep’t Store Union, AFL-CIO v.
N. L. R. B., 466 F.2d 380, 390 (D.C. Cir. 1972). In Retail, Wholesale, the D.C. Circuit held that
whether an agency may retroactively apply a new rule against a party to an adjudication depends
on the consideration of equitable factors, including:
(1) whether the particular case is one of first impression, (2) whether the new rule
represents an abrupt departure from well established practice or merely attempts to
fill a void in an unsettled area of law, (3) the extent to which the party against whom
the new rule is applied relied on the former rule, (4) the degree of the burden which
a retroactive order imposes on a party, and (5) the statutory interest in applying a new
rule despite the reliance of a party on the old standard.
Id.
The Retail, Wholesale panel did not clearly identify the source of this standard, and
courts evaluating Retail, Wholesale claims often do not identify their precise legal nature.
However, the D.C. Circuit has made clear that a Retail, Wholesale claim is “ultimately . . .
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founded upon the requirement of the [APA] that agency action not be ‘arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law.’” Cassell v. FCC, 154 F.3d 478,
483 n.4 (D.C. Cir. 1998) (quoting 5 U.S.C. § 706(2)(A)); see Yakima Valley Cablevision, Inc. v.
FCC, 794 F.2d 737, 745–46 (D.C. Cir. 1986); Chiayu Chang v. United States Citizenship &
Immigr. Servs., 254 F. Supp. 3d 160, 163 (D.D.C. 2017). Therefore, Count II’s retroactivity
claim arises under the APA and is subject to the record rule.1
Plaintiff’s mischaracterization of her retroactivity claim as a non-APA claim causes her
to miss the opportunity to argue that one of the exceptions to the APA record rule should apply.
See CTS Corp. v. EPA, 759 F.3d 52, 64 (D.C. Cir. 2014) (noting that “narrow” exceptions to the
record rule may exist when “the procedural validity of the agency’s action remains in serious
question . . . or the agency affirmatively excluded relevant evidence” from the administrative
record (cleaned up)). She does argue briefly in a footnote that the record rule admits of an
exception when a party seeks discovery “of an agency’s contemporaneous construction of
relevant regulations.” P. & A. at 14 n.3 (quoting Richard McMillan, Jr. & Todd D. Peterson, The
Permissible Scope of Hearings, Discovery, and Additional Factfinding During Judicial Review
of Informal Agency Action, 1982 Duke L.J. 333, 373 (1982)). To support the existence of this
exception, Plaintiff cites only a 1982 law review article that discussed discovery in the context of
determining whether an agency interpretation was subject to deference under the framework that
existed before Chevron, and a 1987 district court case that did not cite or discuss the APA’s
record rule. Id. (citing McMillan & Peterson, The Permissible Scope of Hearings, Discovery,
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Plaintiffs’ argument to the contrary relies heavily on Carlsson v. U.S. Citizenship &
Immigr. Servs., No. 12-CV-07893, 2015 WL 1467174, at *12 (C.D. Cal. Mar. 23, 2015), but the
court in that case, without explanation, treated the plaintiff’s retroactivity challenge to a visa
denial as an “independent claim” rather than an APA claim, id. at 9. Therefore, Carlsson is not
persuasive.
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and Additional Factfinding During Judicial Review of Informal Agency Action, supra, at 373–75
and United States v. Exxon Corp., 87 F.R.D. 624, 633 (D.D.C. 1980)). Other courts in the D.C.
Circuit have not recognized this exception to the record rule; indeed, the D.C. Circuit’s general
trend has been toward narrowing the range of exceptions to the record rule. See United Student
Aid Funds, Inc. v. Devos, 237 F. Supp. 3d 1, 3–4 (D.D.C. 2017) (collecting cases).
To be sure, there is some intuitive appeal to Plaintiff’s argument that she needs discovery
to determine whether or not USCIS in fact applied a new policy to her case and, if so, whether
the Retail, Wholesale factors would render any such application inequitable. Her case might, for
example, fit into the exception to the record rule for cases in which “the district court cannot
determine from the administrative record whether the agency complied with its procedural
obligations.” United Student Aid Funds, 237 F. Supp. 3d at 4 (citing Esch v. Yeutter, 876 F.2d
976, 991 (D.C. Cir. 1989); CTS Corp, 759 F.3d at 64); see also City of Dania Beach v. FAA, 628
F.3d 581, 590 (D.C. Cir. 2010) (suggesting that a party may supplement the administrative when
“background information [is] needed to determine whether the agency considered all the relevant
factors” (cleaned up)). The court in United Student Aid Funds held that this exception applied to
a case that required the determination of whether a Department of Education Dear Colleague
Letter announced a “new rule,” because the administrative record was “silent about the existing
industry practice at the time DOE issued its Letter.” 237 F. Supp. 3d 1, 4–6. Similarly, the court
in American Bar Association v. United States Department of Education permitted extra-record
evidence under this exception in support of the plaintiffs’ argument that the Department of
Education had applied a changed interpretation of a regulation to deny them eligibility to
participate in a loan forgiveness program. 370 F. Supp. 3d 1, 26, 37–38 (D.D.C. 2019).
Somewhat similarly, Plaintiff says that the administrative record in this case does not by itself
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establish, and that she therefore needs to discovery to show, that USCIS’s treatment of her
petition “represent[ed] an abrupt departure from well-established practice.” P. & A. at 15
(quoting Retail, Wholesale, 466 F.2d at 390).
But Plaintiff has not presented the argument that this posture makes any record-rule
exception applicable; rather, she has largely rested on her incorrect assumption that her
retroactivity claim is not an APA claim at all. The Court will not sua sponte examine whether
any record-rule exception applies. The administrative record has not yet been filed, and the
parties’ sparse citations to it do not resolve whether the record is sufficient to facilitate
adjudication of Plaintiffs’ retroactivity claim. Nor do the public adjudications Defendants collect
necessarily show that USCIS’s treatment of Plaintiffs’ petition followed logically from agency
precedent; none of these discussed any requirement for evidence related to the path of funds
within a currency swap provider. See Opp’n at 20 (citing Matter of C-Y-, 2016 WL 4619963, at
*3 (AAO Aug. 19, 2016); Matter of [Redacted], 2014 WL 4113942, *5 (AAO May 29, 2014);
Matter of [Redacted], 2014 WL 4114100, at *5 (AAO May 12, 2014); Matter of [Redacted],
2009 WL 1742398, at *16 (AAO Mar. 6, 2009)).
Because Plaintiff has not established that a contemporaneous construction exception
exists or argued that any of the recognized record rule exceptions applies, the Court denies her
motion for discovery. However, the Court does so without prejudice to Plaintiff’s filing of a new
motion for discovery that relies on the APA’s record-rule framework if she wishes to do so. The
parties’ arguments on any such motion should address D.C. Circuit case law regarding the record
rule and its exceptions, and should also discuss the extent to which the requirements that an
agency satisfactorily explain its decision and supply a reasoned analysis for a change in course
bear on any renewed request for discovery. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
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Auto. Ins. Co., 463 U.S. 29, 42 (1983); United Student Aid Funds, 237 F. Supp. 3d at 5; Am. Bar
Ass’n, 370 F. Supp. 3d at 32–33. Further, to aid the Court’s consideration, the parties should file
and cite to the administrative record together with the briefing on any renewed discovery motion.
Cf. Chang, 254 F. Supp. 3d at 163.
IV. CONCLUSION
For the foregoing reasons, Plaintiff’s Motion for Discovery (ECF No. 9), is DENIED
without prejudice. An order consistent with this Memorandum Opinion is separately and
contemporaneously issued.
Dated: 03/25/2022 RUDOLPH CONTRERAS
United States District Judge
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