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Behring Regional Center, LLC v. Wolf

Facts

Behring Regional Center, LLC, a California-based entity involved in the EB-5 Immigrant Investor Program, challenged a final rule issued by the Department of Homeland Security that increased investment thresholds for the program. The plaintiff argued that the rule was invalid because it was issued by Kevin McAleenan, who was not lawfully serving as Acting Secretary at the time. The court examined the succession order and determined that McAleenan's appointment was invalid, which led to the conclusion that the final rule lacked legal authority.

As relevant here, the last Senate-confirmed Homeland Security Secretary under the Trump administration, Kirstjen Nielsen, resigned on April 10, 2019. Prior to her resignation, Secretary Nielsen purportedly amended the Order of Succession for Homeland Security Secretary to move the Commissioner of Customs and Border Protection from 14th to third in line for succession to assume the position of Acting Secretary after Deputy Secretary and Under Secretary for Management.

Issue

Whether the final rule promulgated by the Department of Homeland Security was valid given that the Acting Secretary who issued it was not lawfully serving in that capacity.

The issue presented is whether the Final Rule must be set aside as contrary to law because neither Mr. McAleenan, Mr. Wolf, nor Mr. Cuccinelli was lawfully serving in his role at the time the Final Rule issued.

Rule

Under the Federal Vacancies Reform Act (FVRA), actions taken by an individual not lawfully serving in a vacant office have no force or effect and cannot be ratified.

Under the FVRA's vacant-office provision, if a person is not lawfully serving in conformity with the FVRA, '[a]n action taken' by that person 'in the performance of any function or duty of [the] vacant office … shall have no force or effect' and 'may not be ratified.'

Analysis

The court analyzed the validity of McAleenan's appointment as Acting Secretary and concluded that he was not lawfully serving due to a flawed succession order. Consequently, the issuance of the final rule, which increased investment thresholds for the EB-5 Program, was deemed an action taken without proper authority. The court emphasized that the FVRA prohibits ratification of actions taken by individuals not lawfully in office.

This Court joins the numerous other courts which have held that because Secretary Nielsen amended the wrong Order of Succession when she purported to place the Customs and Border Protection CommissionerMr. McAllenanthird in line after the Deputy Secretary of Homeland Security and the Under Secretary of Management for succession to the Acting Secretary of Homeland Security position, Mr. McAllenan's appointment was invalid.

Conclusion

The court granted summary judgment in favor of Behring Regional Center, LLC, declaring the final rule void due to the invalid appointment of the Acting Secretary who issued it.

Accordingly, at the time the Final Rule was approved, Mr. McAleenan was not properly serving as the Acting Secretary of Homeland Security.

Who won?

Behring Regional Center, LLC prevailed in the case because the court found that the final rule was issued without lawful authority, as the Acting Secretary was not properly appointed.

Behring Regional Center, LLC prevailed in the case because the court found that the final rule was issued without lawful authority, as the Acting Secretary was not properly appointed.

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