Unreported / Non-Citable
Background
Congress created the Diversity Visa Program in 1990 to promote immigration from countries with traditionally low immigration rates. The INA directs the State Department to run it annually and award up to 55,000 visas. The process begins with a lottery registration period, which in past years opened in early October. Selectees remain eligible only through the end of the fiscal year for which they were chosen, so a missed year cannot be recovered. For fiscal year 2027, which began October 1, 2026, the Department never opened registration. A November 2025 website notice said it was implementing changes and would announce dates as soon as practicable. Nearly a year later it had done nothing, which the court found effectively canceled the program.
Red Eagle Law, an immigration law firm founded in 2023, sued the Secretary of State in his official capacity under the Administrative Procedure Act. Its uncontested declarations showed growing Diversity Visa work, at least 7% of revenue in 2023 and 29% of gross revenue as of September 2026. It asserted arbitrary-and-capricious action, action unlawfully withheld (raised in its motion but not pleaded in the complaint), and ultra vires action. The court granted the preliminary injunction motion at an October 14, 2026 hearing and issued injunctive relief by separate order. This written order explains its reasoning. The findings are preliminary, made on a motion rather than after final adjudication.
The Court’s Holding
The court first found Article III standing. Lost prospective clients and revenue are a concrete economic injury. The injury is traceable to the failure to open registration, because people who cannot enter the lottery will not seek legal help. It is redressable because reopening restores the client pool. The court rejected the argument that the firm must show the program exists to protect its billing, treating that as a zone-of-interests question rather than a standing one. It then found the firm's interest within the INA's zone of interests. Its services facilitate the immigration the program promotes, and the INA elsewhere contemplates a role for legal service providers, even though the Diversity Visa provisions do not mention them.
On the merits, the court found the firm likely to succeed on its arbitrary-and-capricious claim. The Department offered no reasoned explanation, including no consideration of reliance interests, for turning a postponement into an indefinite suspension, and it did not even argue otherwise in its briefing. Having reached that conclusion, the court declined to address the withholding and ultra vires claims. It found irreparable harm because APA plaintiffs cannot recover damages and the 2027 allocation cannot be carried forward. It found that the equities and public interest favored relief because the Department identified no burden and already has a registration process.
The court rejected the argument that registration is now too late. Courts cannot extend a statutory eligibility cutoff such as the fiscal-year deadline. But ordering belated registration leaves applicants' substantive eligibility unchanged, and the timing provisions serve the goal of issuing up to 55,000 visas each year. The court also held the relief was not an impermissible universal injunction, because complete relief to the firm could not be structured individually and the Department proposed no narrower alternative. It ordered the Department to reopen the program beginning with the registration period and take all lawful steps to administer it. The injunction's specific terms are in a separate order.
Key Takeaways
- A business that loses prospective clients because of agency inaction can show concrete economic injury for Article III standing, even without retained clients for the affected cycle.
- A for-profit legal service provider can satisfy the APA zone-of-interests test when its interests align with those of the immigrants the statute is meant to benefit.
- An agency that postpones a statutory program indefinitely without any explanation risks a finding that its action was arbitrary and capricious.
- Courts may compel belated performance of a missed statutory step when it does not alter the benefit Congress defined, but they cannot extend a statutory eligibility cutoff.
Why It Matters
This is a preliminary ruling by a district court, not a final judgment, and it does not bind other courts. Whether the firm ultimately prevails, and the withholding and ultra vires claims the court did not reach, remain open.
Practically, the order requires the government to open a delayed registration period for fiscal year 2027, preserving a visa allocation that would otherwise be lost. Selectees must still apply for and receive visas before the fiscal year ends on September 30, 2027. The order also reasons that Trump v. CASA's limit on universal injunctions does not narrow relief available under the APA.