Mass. Court Vacates $100,000 H-1B Fee Proclamation Nationwide

A federal judge in Boston has vacated the Trump administration’s proclamation requiring employers to pay a $100,000 fee on each H-1B petition filed on behalf of a worker abroad, ruling that the charge functions as a tax that the executive branch had no constitutional authority to impose without Congress.

The decision, issued on summary judgment by the U.S. District Court for the District of Massachusetts in a coalition lawsuit brought by 20 state attorneys general — with the State of California as the lead plaintiff by alphabetical order — vacated the policy in its entirety and ordered the relief to apply nationwide. The 42-page opinion grants the plaintiff states judgment under the vacatur authority of 5 U.S.C. § 706(2) of the Administrative Procedure Act.

The court’s final order, on page 42 of the opinion, is unequivocal:

The ruling is the most significant judicial rebuke yet of the proclamation, which the administration had grounded in the President’s broad entry-restriction authority under 8 U.S.C. § 1182(f) — the same statutory hook the Supreme Court upheld in Trump v. Hawaii, 585 U.S. 667 (2018), as authorizing entry bans on national-security grounds.

The Massachusetts court drew a sharp line between barring entry — which the Supreme Court has recognized as within the President’s § 1182(f) authority — and conditioning entry on a six-figure payment to the Treasury. The latter, the court held, is a tax, and the power to tax belongs to Congress alone under the Taxing Clause of Article I, § 8.

The opinion’s central holdings track a tax-and-spending analysis the court spelled out across pages 18 through 33. On page 18, the court characterized the charge as a revenue measure, not a regulatory penalty or an adjudication fee:

On page 19, the court found the revenue effect undisputed, observing that every $100,000 payment “made pursuant to the policy does raise revenue.” On page 25, the court anchored its constitutional analysis in the separation of powers:

And on page 33, the court rejected the government’s fallback characterization of the charge as a USCIS adjudication fee, finding that the agency’s biennial fee-setting authority under the Immigration and Nationality Act has never produced — and could not lawfully produce — a charge of this magnitude. Adjudication fees are set to recoup the cost of processing a petition, not to raise general revenue.

The procedural posture of the ruling is as consequential as its reasoning. The Massachusetts court did not act on a preliminary injunction motion — the typical vehicle for early relief on a limited factual record. It ruled on cross-motions for summary judgment, after the full administrative record was developed.

That distinction matters for what comes next. The government is expected to seek a stay pending appeal in the First Circuit, but the showing required to obtain a stay against a final judgment on a full record is far higher than against a preliminary injunction. The government must show a likelihood of success on the merits — against a court that has already worked through the merits — and irreparable harm from not being permitted to continue collecting an unlawful charge. The 60-day appeal window under the federal rules begins running from entry of judgment.

The Massachusetts ruling also navigates the ongoing fight over the geographic scope of district-court relief in the wake of Trump v. CASA, Inc., 605 U.S. ___ (2025). The Supreme Court’s CASA majority sharply limited the use of universal injunctions but expressly reserved the question of whether courts may vacate agency action under APA § 706. Justice Brett Kavanaugh’s concurrence pointed at the two scenarios where nationwide relief still made sense after CASA — APA vacatur, and suits by state plaintiffs whose injuries cross state lines. This case sits at the intersection of both.

The ruling does not exist in isolation. An earlier challenge to the same proclamation — Chamber of Commerce v. United States in the District of Columbia — had been decided in the government’s favor, and that case remains on appeal in the D.C. Circuit. The Massachusetts court walked through the Chamber of Commerce opinion and distinguished it on both the record and the legal theory the plaintiffs there had advanced. The result is the not-uncommon scenario in which two district courts have reached opposite conclusions about the same agency action — a posture the courts of appeals, and eventually the Supreme Court, will be asked to resolve.

For employers and beneficiaries, the practical question is what to do in the 22-day window before the FY2026 cap-subject H-1B filing deadline of June 30. The proclamation had effectively repriced every cap-subject filing from abroad at six figures, and many employers — facing a $100,000 line item per worker — had walked away from offers to selected beneficiaries who could not enter the country to start work without a consular-processed visa stamp.

The cases reached by the vacatur are broader than cap filings. The proclamation also applied to consular processing of H-1B amendments, H-1B transfers from one employer to another that required a new visa stamp abroad, and conversions from out-of-status workers seeking to return through consular processing. Each of those scenarios, under the Massachusetts ruling, is no longer subject to the $100,000 charge:

• Cap-subject petitions filed from abroad. Selected beneficiaries outside the United States can be petitioned through consular processing without the $100,000 surcharge — provided the petition is filed before the June 30 cap-filing deadline.
• H-1B amendments through consular processing. Material-change amendments that require a new visa stamp abroad are no longer surcharged.
• Transfers from Company A to Company B. Where the transfer requires consular processing — typically because the worker is abroad at the time of filing — the surcharge does not apply.
• Out-of-status conversions. Workers seeking to remedy a lapse through consular processing rather than reinstatement are likewise relieved of the charge under the ruling.

The fee-refund question is its own emerging issue. The administration has stated that approximately 85 employers had paid the $100,000 charge since the proclamation took effect — an aggregate collection in the range of $8.5 million. Counsel for the plaintiff states have indicated that the unlawful-collection finding ordinarily entitles those employers to a refund, with the federal Court of Federal Claims as the typical forum for monetary recovery against the United States. A parallel pattern played out in the recent tariff litigation, where unlawfully collected duties produced refund proceedings after the underlying authority was struck down.

The proclamation could yet be revived by Congress — only Congress, the court repeatedly emphasized, has the constitutional authority to impose a charge of this character. A bill setting a per-petition fee of any amount on H-1B filings from abroad would lie within the legislative taxing power. As a practical matter, the prospect of either party moving such a bill before the November cycle is widely regarded as remote.

For the moment, employers and their immigration counsel are watching three near-term inflection points: whether the First Circuit grants a stay pending appeal; whether USCIS issues compliance guidance, or continues — as it has in some prior post-vacatur postures — to operate on agency Twitter rather than a published memo; and whether the parallel D.C. Circuit appeal in Chamber of Commerce produces a divergent panel ruling that accelerates Supreme Court review.

The opinion’s analytical core is durable. A federal court has now held, on a full record, that the $100,000 charge was a tax, that the executive cannot levy taxes, and that nationwide vacatur is the appropriate APA remedy. Each of those holdings will need to be overturned on appeal for the proclamation to return.