A Significant Immigration Win For Companies And Universities

The ruling represents a significant legal victory for companies and universities. “For companies, the ruling has significant and immediate practical implications,” said Jeff Robins, a senior counsel at BAL, in an interview. “Most notably, it affects H‑1B lottery selectees and employers preparing to file petitions that would otherwise have been subject to the proclamation’s $100,000 fee. In light of the court’s order vacating the proclamation, employers should be able to proceed without incurring that fee, unless and until the ruling is stayed or overturned.”

Universities and nonprofit and government research institutes will now be able to hire individuals without paying the $100,000 fee, unless the judge’s ruling is stayed or overturned. The states bringing the lawsuit cited the significant negative burden of the $100,000 fee imposed on hospitals and state universities, saying it harmed patient care and academic research.

Robins notes that this ruling may not end the matter. “Companies should closely monitor further developments,” he said. “The government is likely to seek a stay of the vacatur pending appeal, and there is a possibility that the order could be paused or reversed in the coming weeks or months. In addition, employers should be alert to other potential responsive actions by the administration.”

Jonathan Wasden of Wasden Law said in an interview that he was not surprised by the ruling and believes the administration may try new legal grounds to justify the fee or it could capitulate. “Based on the trends we have seen lately, capitulation is less likely,” he said.

Analyzing The Legal And Immigration Issues In The Court’s Decision

Plaintiffs argued the $100,000 H-1B fee violated the Administrative Procedure Act’s procedural requirements, violated the APA as an agency action in excess of statutory authority, was “arbitrary and capricious” and “an unconstitutional ultra vires act.”

Judge Sorokin rejected the Trump administration’s argument that the court could not review the policy because of the “consular-nonreviewability doctrine.” The judge stated that the administration’s argument missed the central point of the plaintiff’s claims. “Plaintiffs allege that the President treaded beyond the scope of his discretionary authority under the Immigration and Nationality Act; indeed, one of Plaintiffs’ theories is that the President created (and the Defendants implemented) an unauthorized tax on H-1B petitions. In other words, Plaintiffs’ case centers on their contention that Congress did not leave the challenged actions to the executive’s discretion. Such claims diverge from the types of discretionary actions that the consular-nonreviewability doctrine is designed to shield from judicial review.” He noted the administration cited no cases to support its position on this issue.

Judge Sorokin said the case raised significant constitutional separation-of-powers issues. “Plaintiffs allege both that the Policy exceeds the scope of the President’s authority under the Immigration and Nationality Act, and that it encroaches upon Congress’s exclusive power to tax under the Constitution,” he wrote. “Thus, Plaintiffs do not simply claim that the Executive Branch failed to comply with the terms of the INA. Their allegations implicate weighty constitutional concerns regarding the balance of power between the executive and legislative branches.”

He noted that the Trump administration’s lawyers claimed the $100,000 H-1B proclamation was permissible due to the President’s “inherent” executive power to control foreign affairs. Judge Sorokin said that was “an argument that suggests that the President’s relevant powers exceed his statutory authority under the Immigration and Nationality Act or do not derive from the statutory provisions cited.”

The judge said the plaintiffs’ argument that the president lacked the power to impose an additional $100,000 payment on H-1B applications intruded on Congress’s taxing power fell “plainly” within the scope of judicial review. According to the judge, “The Supreme Court’s reasoning in this pair of precedents supports a finding that the $100,000 payment requirement amounts to a tax, not a penalty.” The two Supreme Court precedents are Bailey v. Drexel Furniture Company and National Federation of Independent Business v. Sebelius.

The Supreme Court precedent that may have most helped the plaintiffs is Learning Resources, Inc. v. Trump, which the judge characterized as finding that “tariffs assessed by DHS amount to taxes for the purposes of the Constitution’s Taxing Clause.” Judge Sorokin wrote, “Applying Learning Resources to the case at hand, the Court finds that INA §§ 212(f) and 215(a) do not delegate taxing power to the President. These sections allow the President to impose ‘restrictions,’ ‘rules,’ ‘regulations,’ ‘orders,’ ‘limitations,’ and ‘exceptions’ to the entry of noncitizens to the United States. Like the powers delineated in the International Emergency Economic Powers Act, none of these terms, by their ordinary meaning, include the power to tax.”

The judge rejected the administration’s argument that the $100,000 fee was “a regulatory payment,” which is “not the same as a tax.” He wrote, “Thus, the relevant inquiry here is whether the provisions of the INA granting the President discretionary powers to regulate the entry of noncitizens reflect a delegation of Congress’s taxing power.”

The Other Immigration Cases On The $100,000 H-1B Fee

Two other lawsuits over the $100,000 H-1B fee remain active. The Chamber of Commerce and the Association of American Universities appealed a Dec. 2025 ruling by a federal district court judge who found the president had the legal authority to impose a $100,000 fee on the entry of new H-1B visa holders. On March 9, the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in the appeal of the district court’s decision on the $100,000 H-1B fee.

A judge in the U.S. District Court for the Northern District of California heard oral arguments in late February in another case against the $100,000 fee. Plaintiffs in Global Nurse Force v. Trump hope to succeed due to declarations showing the fee’s harm and the Supreme Court’s tariff decision in Learning Resources, Inc. v. Trump, which bolstered their argument that the $100,000 fee is an illegal tax.

“With respect to the interaction with other cases, including one in which the administration prevailed, those matters are likely to continue moving forward given the possibility that today’s order could be stayed or overturned on appeal,” according to Jeff Robins. “However, unless and until such relief is granted by Judge Sorokin, the First Circuit or the Supreme Court, this vacatur applies nationwide and governs implementation of the proclamation, including the $100,000 fee requirement.”