100,000 dollars H1 B Visa Judgment Summary

H1 B Visa Judgment Summary

Case Name: State of California et al. v. Markwayne Mullin et al. (Civil No. 25-13829-LTS).

Court: United States District Court, District of Massachusetts.

Judge: Hon. Leo T. Sorokin.

Date of Decision: June 8, 2026.

Facts

On September 19, 2025, President Trump signed Proclamation 10973. Citing sections 212(f) and 215(a) of the Immigration and Nationality Act (INA), the Proclamation instituted a massive $100,000 supplemental payment requirement for employers submitting petitions for new H-1B visas. The administration claimed the H-1B program was being exploited to replace American workers with lower-paid foreign labour, artificially suppressing wages primarily in critical STEM fields. Executive departments (DHS, USCIS, CBP, and the State Department) swiftly implemented this directive by publishing memoranda, updated fee schedules, FAQs, and creating a dedicated payment website.

Prior to this policy, H-1B petition costs totaled between $960 and $7,595 in regulatory and statutory fees. Twenty U.S. states sued the executive departments to halt the policy. Due to this scheme, there was shortage of staff in various organizations, especially high educational institutions and those run on non-profit, as the margin was more than 93,000 dollars to the prior visa scheme.

Key Legal Issues

1. Do the Plaintiff States have Article III standing, and are the claims barred by the doctrine of consular non-reviewability?
2. Did the $100,000 payment constitute an unauthorized tax that encroached upon Congress’s exclusive power of the purse?
3. Was the policy a legislative rule that required notice-and-comment rulemaking?
   • Did the agencies exceed their statutory authority?
   • Was the agency action arbitrary and capricious?
4. Did a previous defense-favorable ruling in a similar case (Chamber of Commerce v. DHS) preclude this lawsuit because some public universities belong to the associations involved in that case?

Contentions of the Parties

The Plaintiffs (The States)

The $100,000 fee would cause severe, cascading harm to state public health systems, primary/secondary schools, and public universities by triggering crippling shortages of medical professionals, teachers, and academic researchers. The massive exaction is functionally a tax, a core power reserved strictly for Congress that was never delegated to the President via the INA.

The Executive agencies bypassed the mandatory APA notice-and-comment procedures when implementing the fee. Further, the agencies failed to consider massive reliance interests, explore less drastic alternatives, or explain why human-services sectors (like healthcare and education) were targeted when the Proclamation focused almost entirely on the IT/tech sectors.

The Defendants (The Federal Government)

Executive decisions regarding the entry and exclusion of aliens are insulated from judicial review unless explicitly authorised by Congress. The President has “sweeping” inherent and statutory authority under INA §§ 212(f) and 215(a) to impose “any restrictions” on alien entry deemed appropriate for national/economic security.  The $100,000 charge was a “regulatory payment” or penalty intended to influence conduct and curb visa abuse, not a tax to raise revenue.  Further, the agencies were merely executing a mandatory presidential directive; thus, notice-and-comment was unnecessary or excused under good cause and foreign affairs exceptions.

The states’ public universities are in “privity” with trade groups that already lost an identical challenge, legally barring them from relief on ground of res-judicata.

Judgment

The Court allowed the Plaintiffs’ motion for summary judgment, denied the Defendants’ cross-motion for summary judgment/motion to dismiss, and VACATED the policy in its entirety.

The claims against the DOJ, Attorney General, DOL, and Secretary of Labor were dismissed without prejudice at the parties’ request.

 The Court issued a declaratory judgment and completely vacated the agency rule nationwide, but declined to issue a separate permanent injunction, noting that total vacatur already provided complete relief.

Court’s Analysis and Reasoning

Standing & Justiciability

The Court affirmed the States’ standing due to concrete, imminent threat to state-run institutions. It rejected consular nonreviewability, noting that the plaintiffs were not challenging individual visa denials, but rather a forward-looking, systemic policy that allegedly exceeded statutory boundaries.

The Core Ultra Vires Ruling: A Fee vs. A Tax

The Court utilized Supreme Court precedent (NFIB v. Sebelius) to determine that because hiring H-1B workers is a completely lawful enterprise, the $100,000 fee cannot be construed as a “punishment for an unlawful act” (a penalty). It is, in substance and application, a tax.

While Congress can delegate its constitutional taxing power, it must do so with explicit clarity (Skinner). The ordinary meanings of “restrictions,” “rules,” and “regulations” found in INA §§ 212(f) and 215(a) do not encompass the power to levy taxes. Ambiguous statutory language cannot give the Executive free rein over the “power of the purse”. Therefore, the Proclamation illegally usurped congressional power.

APA Procedural & Substantive Violations

Because the President lacked the authority to levy this tax, his Proclamation did not carry the force of law. It was the subsequent agency policies that actually created new legal obligations. They were therefore legislative rules requiring public notice and comment. The government failed to show any emergency or distinct international consequences to justify good-cause or foreign-affairs exceptions.

The agencies completely failed to provide a reasoned explanation for the sudden massive fee hike, entirely ignored the severe reliance interests of employers, and blindly applied a tech-centric economic rationale to vital, unrelated sectors like public education and healthcare.

Rejection of Res Judicata

The Court ruled that mere membership in a trade association (such as the AAU) does not, in itself, establish legal privity. The federal government provided zero evidence that the public universities actively participated in, financed, or authorized the Chamber of Commerce litigation. Furthermore, public universities are distinct legal entities from the state governments suing in this case.

The Judgment Implications for India

The majority of the people who get work visas are from India and other Asian Countries. For an Indian employee to contribute to the US workforce, employers, in the absence of this judgment, need to pay $ 100,000, which would ultimately cost them more than hiring from their own country. The objective of President Trump was to stop the outsourcing of skills that benefited foreigners. However, without the reasonable exercise of powers and by arbitrary means, the action was taken, thereby rendering it illegal, which attracted the court’s interference to strike it down.

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