In a major challenge to the Trump administration’s latest immigration measure, a diverse coalition of labor unions, employers, healthcare providers, and academic and religious groups has filed a federal lawsuit seeking to block a new proclamation that imposes an unprecedented $100,000 fee on employers sponsoring new H-1B visas.
The lawsuit, filed in the U.S. District Court for the Northern District of California, argues that the fee is unconstitutional, unlawful, and exceeds the President’s executive authority, essentially turning the high-skilled visa program into an illegal “pay-to-play” scheme.
The Controversial Proclamation
On September 19, President Donald Trump issued a proclamation requiring a one-time, additional payment of $100,000 for each new H-1B recipient to enter the United States. This represents a massive increase from the previous statutory fees, which typically ranged from $2,000 to $5,000. The administration defended the order as a necessary action to protect American workers, discourage the alleged abuse of the H-1B program, and ensure that companies prioritize hiring domestic talent.
However, the rapid implementation and the exorbitant nature of the fee, which became effective on September 21, have been described by opponents as “arbitrary and capricious,” immediately causing chaos and uncertainty across numerous sectors of the U.S. economy. The administration later clarified that the fee would not apply to existing H-1B visa holders or those with approved applications filed before the deadline.
Plaintiffs: A Cross-Section of American Life
The coalition of plaintiffs highlights the broad impact of the H-1B program beyond the technology sector, which often dominates the discussion. Key plaintiffs include:
- Labor and Academic Groups: The United Auto Workers (UAW) union and the American Association of University Professors (AAUP), who argue the fee is a barrier to scientific acumen and diligence in research and education.
- Healthcare Providers: A nurse recruitment agency, Global Nurse Force, which warned that the six-figure fee will immediately halt international nurse recruitment, forcing one Louisiana client to leave over 200 critical nursing positions vacant, worsening staffing shortages in non-profit and rural hospitals.
- Religious and Educational Organizations: Churches and educational institutions that rely on the H-1B program to hire pastors, religious professionals, and specialized teachers.
- Individuals: Including an Indian citizen residing in California whose career prospects are directly threatened by the new regulation.
Core Legal Arguments
The lawsuit rests on two principal legal pillars:
1. Overreach of Presidential Authority
The plaintiffs argue that the power to establish and alter a comprehensive statutory scheme like the H-1B visa program, including the imposition of fees or taxes, rests solely with Congress under the U.S. Constitution. They contend that the President, by unilateral proclamation, cannot “rewrite” the law or levy new taxes on a visa category. They assert that while the President has some power under federal immigration law to restrict the entry of foreign nationals deemed detrimental to U.S. interests, this power does not extend to creating a new, massive revenue-generating mechanism outside of the legislative process.
2. Violation of the Administrative Procedure Act (APA)
The coalition claims the administration violated the APA by implementing such a drastic policy change without proper notice-and-comment rulemaking. This legal process requires agencies to inform the public of proposed rules, seek and review public comments, and provide a reasoned justification for the final rule. The plaintiffs argue the fee was introduced with less than 36 hours’ notice, completely sidelining the required regulatory process and public input.
Furthermore, the lawsuit states that the proclamation’s provision for a vague “national interest” exemption invites “arbitrary, pay-to-play decisions” and selective enforcement by the Department of Homeland Security, leading to potential corruption.
Impact on Critical Industries
The plaintiffs emphasize that blocking the proclamation is critical to prevent immediate and devastating harm across key public services:
- Healthcare: Rural and non-profit hospitals, already operating on thin margins, cannot absorb the cost of an extra $100,000 per foreign-born doctor or nurse, risking a worsening of medical staff shortages and longer patient wait times.
- Education and Research: Universities and research institutions, which employ H-1B workers as faculty and researchers, warn the fee will deter top global talent from contributing to U.S. research and innovation, especially in cutting-edge fields like AI and biomedical engineering.
- Small Businesses: Small companies, including start-ups, which depend on highly-skilled foreign workers to grow and innovate, are far less able to afford the fee than large tech giants.
The lawsuit seeks a temporary restraining order and a preliminary injunction to immediately block the order’s enforcement while the case is litigated, thereby restoring the previous statutory fee structure and allowing for predictability for employers and workers.
The White House has defended the policy, stating its actions are lawful and intended to discourage companies from “spamming the system and driving down American wages.” This legal battle is expected to be a key showdown over the limits of executive power in U.S. immigration policy and the fundamental nature of the skilled worker visa program.
