Federal Court Vacates $100,000 H-1B Fee as Unlawful Tax

What Happened

On June 8, 2026, U.S. District Judge Leo T. Sorokin of the District of Massachusetts issued a [42-page opinion](https://www.fragomen.com/insights/united-states-district-court-vacates-dollar100000-h-1b-fee-government-expected-to-quickly-appeal.html) vacating the Trump administration's $100,000 supplemental fee on new H-1B visa petitions. The ruling came at summary judgment in *California et al. v. Markwayne Mullin et al.*, No. 1:25-cv-13829 (D. Mass.), a lawsuit brought by 20 state attorneys general.

The court found the fee violated the Administrative Procedure Act on three independent grounds: it constituted a tax levied without Congressional authorization, it exceeded the President's statutory authority under INA sections 212(f) and 215(a), and it was procedurally deficient and arbitrary and capricious. Judge Sorokin wrote that "the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called," and that the President "has no authority to levy a tax unless such a power is delegated by Congress through statute."

Because the court granted APA vacatur, setting aside the implementing policy "in its entirety," the ruling has nationwide practical effect. This is stronger than a plaintiff-specific injunction. The policy is void unless a higher court reverses the ruling or the government obtains a stay pending appeal.

Background: The $100,000 Fee

The fee originated from [Presidential Proclamation 10973](https://www.whitehouse.gov/presidential-actions/2025/09/restriction-on-entry-of-certain-nonimmigrant-workers/), titled "Restriction on Entry of Certain Nonimmigrant Workers," signed on September 19, 2025, and effective September 21, 2025. The proclamation invoked INA sections 212(f) and 215(a), the same broad authorities used for prior travel bans and entry restrictions.

The fee applied only to new H-1B petitions filed on or after September 21, 2025, where the beneficiary required consular processing — meaning entry from outside the United States. It did not apply to extensions of stay with the same employer, petitions filed before the effective date, or workers already in H-1B status in the U.S. Payment was required via [Pay.gov](https://www.pay.gov) before filing Form I-129.

For context, standard H-1B filing fees typically total between $2,000 and $5,000 depending on employer size and premium processing. The $100,000 surcharge was a 20- to 50-fold increase in filing costs, enough to price many smaller employers and nonprofits out of sponsoring new H-1B workers from abroad.

Who's Affected

The ruling matters immediately for several groups:

• Employers filing FY2027 H-1B cap petitions: The filing window closes June 30, 2026. Selected petitioners who have not yet filed can now submit without the $100,000 fee, unless a stay is granted before their filing date.
• Employers with pending H-1B petitions: Petitions already filed with the $100,000 fee should not be affected by the vacatur — USCIS will continue processing them. However, there is no guidance yet on refunds for fees already paid.
• Cap-exempt employers (universities, research institutions, nonprofits): These employers file H-1B petitions year-round without the lottery. The vacatur removes the $100,000 barrier for new hires requiring consular processing.
• H-1B beneficiaries abroad: Workers selected in the FY2027 lottery or offered cap-exempt positions who need to enter the U.S. on a new H-1B visa benefit directly — their sponsoring employer no longer faces the surcharge.

The Litigation Landscape: A Circuit Conflict

Judge Sorokin's decision creates a direct conflict with a December 23, 2025 ruling in the U.S. District Court for the District of Columbia. In [*Chamber of Commerce of the United States v. DHS*](https://www.uschamber.com/cases/labor-and-employment/chamber-of-commerce-v-dhs), No. 25-cv-03675 (D.D.C.), Judge Beryl A. Howell upheld the fee in a 32-page opinion, finding that Congress granted the President "broad statutory authority" under section 212(f) that "plainly encompasses the imposition of fees designed to deter visas that displace U.S. workers."

The Chamber of Commerce has appealed Judge Howell's decision to the D.C. Circuit, where expedited briefing was ordered. A third lawsuit, filed by Global Nurse Force and allied organizations in the Northern District of California, adds another potential circuit to the split.

With Massachusetts and D.C. district courts now reaching opposite results, the issue is a strong candidate for Supreme Court review if the appellate courts split as well. The timeline is uncertain, likely not before the October 2026 term, but the conflict guarantees more litigation for months.

What Attorneys Should Know

The mechanics of the ruling matter for client advice over the next several weeks:

• APA vacatur vs. injunction: Judge Sorokin vacated the implementing policy under 5 U.S.C. section 706(2), not via injunctive relief. Vacatur sets aside the agency action entirely rather than enjoining its enforcement in specific cases. Practically, USCIS should stop collecting the fee nationwide absent a stay.
• Statutory authority analysis: The court rejected the government's argument that INA sections 212(f) and 215(a) authorize the President to impose fees. The opinion found that "none of these terms, by their ordinary meaning, include the power to tax" — a reading that could have broader implications for future executive fee-setting under section 212(f).
• Tax vs. regulatory fee: The court applied a functional test, noting that "every $100,000 payment made pursuant to the Policy does raise revenue. That is indisputable." The government had argued the payment was a regulatory fee, not a tax, but could not offer a coherent definition for that distinction.
• Stay pending appeal: The government is expected to seek a stay from either the district court or the First Circuit. If granted, the fee obligation could be reinstated during the appeal. Attorneys should monitor daily for stay motions through the June 30 FY2027 filing deadline.

What Applicants Should Do

If your employer is filing a new H-1B petition for you, the ruling changes the filing calculus but does not remove every risk:

• Talk to your employer or immigration attorney now. If your employer delayed filing an H-1B petition because of the $100,000 fee, this ruling removes that obstacle — but the FY2027 cap filing deadline is June 30, 2026. Time is short.
• If your employer already paid the fee, there is no refund guidance yet. The court's opinion does not address retroactive refunds, and USCIS has issued no statement on this. Keep all receipts and payment confirmations.
• Do not assume the fee is gone permanently. The government will appeal. A higher court could reinstate the fee. For now, though, it is not legally required.
• If you are a cap-exempt H-1B worker (employed by a university, nonprofit, or government research organization), the fee no longer applies to your new petition. Your employer can file without the surcharge immediately.

Government Response

The Department of Homeland Security called the ruling "blatant judicial activism." DOJ spokesperson Natalie Baldassarre said "the DOJ is committed to protecting American workers and fully supports President Trump's America First agenda." The government has indicated it will appeal.

As of June 9, 2026, USCIS has not issued formal guidance on how it will implement the vacatur — including whether it will stop collecting the fee immediately, how it will handle pending petitions filed with the fee, or whether refunds will be available for fees already paid.

[Fragomen's client alert](https://www.fragomen.com/insights/united-states-district-court-vacates-dollar100000-h-1b-fee-government-expected-to-quickly-appeal.html) from June 8 advises that "unless and until a further court order is issued, USCIS should not require the $100,000 fee for the approval of any H-1B petition," but warns that "a swift government appeal and further litigation are expected" and employers "should stay in close contact with immigration counsel regarding any developments, including a possible stay."

What to Watch Next

Several developments could change the advice quickly:

• Stay motion: The government is expected to file a motion to stay the vacatur pending appeal. If the district court denies it, expect an emergency motion to the First Circuit. A stay would reinstate the fee obligation.
• USCIS implementation notice: Watch for a formal USCIS alert on how the agency will handle petitions filed without the fee and whether refunds are forthcoming.
• D.C. Circuit decision: The Chamber of Commerce appeal is on an expedited schedule. A D.C. Circuit ruling upholding or reversing Judge Howell's decision will further shape the conflict.
• N.D. California case: The Global Nurse Force lawsuit could produce a third district-level ruling, adding another data point for appellate courts.
• Supreme Court: If the circuit conflict deepens, a petition for certiorari is likely. The earliest the Court could hear the case would be the October 2026 term.