Federal Judge Strikes Down $100,000 H-1B Visa Fee in Second Major Nationwide Legal Defeat for Administration

The Northern District of California vacated agency policies enforcing the six-figure fee on high-skilled technology visas, ruling the administration bypassed mandatory notice-and-comment rulemaking.

SAN FRANCISCO — In a significant legal rebuff to the administration’s economic immigration restrictions, a federal district judge in California on September 30 issued a nationwide preliminary injunction dismantling the federal government’s controversial $100,000 fee on new H-1B specialty occupation visa petitions.

The ruling, issued by U.S. District Judge Haywood S. Gilliam, Jr. of the U.S. District Court for the Northern District of California, vacates the agency enforcement guidelines utilized by U.S. Citizenship and Immigration Services (USCIS) and the Department of State to collect the prohibitive six-figure assessment. Judge Gilliam found that the agencies enacted the fee structure in direct violation of the Administrative Procedure Act (APA) by bypassing mandatory public notice-and-comment rulemaking requirements.

The decision marks the second major federal court ruling to strike down the administration’s H-1B fee architecture. In June 2026, a federal judge in Massachusetts similarly enjoined the policy in a lawsuit brought by a coalition of twenty state attorneys general—an injunction that remains actively in force after the First Circuit Court of Appeals rejected the Justice Department’s request for an emergency stay.

Core Legal Findings: Administrative Procedure Violations

The litigation, brought by a broad coalition of technology trade associations, regional chambers of commerce, and research universities, challenged the administration’s deployment of emergency executive proclamations to alter statutory visa fees. In his 42-page opinion, Judge Gilliam held that federal agencies cannot bypass statutory administrative requirements under the guise of presidential proclamations:

• Lack of Notice-and-Comment: Federal law strictly mandates that substantive regulatory changes altering financial burdens on regulated entities must undergo a formal 60-day public comment period under the APA before taking effect.
• Exceeding Statutory Authority: Judge Gilliam noted that Congress established explicit fee schedules under the Immigration and Nationality Act, restricting agency fees to cost-recovery amounts rather than prohibitive financial penalties designed to suppress visa utilization.
• Arbitrary and Capricious Enforcement: The court observed that the administration failed to provide an empirical economic record justifying how the $100,000 figure was calculated or addressing its disruptive impact on healthcare systems, research laboratories, and advanced technology enterprises.

Economic Stakes for the Technology and Healthcare Sectors

The $100,000 fee had sent shockwaves through the American technology sector and specialized academic institutions since its announcement. Major tech employers in Silicon Valley, semiconductor manufacturers, and specialized hospital networks rely heavily on the annual cap of 85,000 H-1B visas to recruit international engineers, data scientists, and specialized medical researchers.

Industry plaintiffs submitted declarations demonstrating that imposing a $100,000 surcharge per petition would have forced small and mid-sized technology startups to eliminate specialized hiring entirely, while driving multinational engineering projects to offshore research campuses in Canada, the United Kingdom, and India.

Conversely, administration officials argued that the fee was an essential mechanism to protect American workers from wage suppression, asserting that major corporations have historically abused the H-1B visa program to replace domestic computer science graduates with lower-cost foreign contractors.

Distinction From Proposed DHS Regulatory Overhaul

Legal analysts emphasized that Judge Gilliam’s injunction specifically targets the immediate $100,000 fee implemented through executive proclamations. The ruling does not directly halt a separate, formal proposed rule published by the Department of Homeland Security in August 2026, which proposes a revised fee of $103,265 through formal notice-and-comment procedures.

However, the legal reasoning articulated in the Northern District of California decision signals formidable judicial headwinds for the administration’s broader fee strategy. By affirming that fee levels must bear a rational nexus to actual processing costs, the ruling establishes a legal precedent that business plaintiffs are expected to deploy against the DHS proposed rule once it reaches final publication.

Next Steps and Appellate Review

The Department of Justice is expected to file an expedited appeal with the U.S. Court of Appeals for the Ninth Circuit. However, with parallel adverse rulings standing in both the First and Ninth Circuits, the administration faces a coordinated judicial consensus restricting executive alterations to statutory visa structures.

For American technology employers and immigrant professionals preparing petitions for the upcoming adjudication window, the preliminary injunction provides immediate operational stability, allowing petitions to be filed under standard statutory filing fees while federal appellate review proceeds.

The Major Questions Doctrine and Statutory Fee Constraints

Judge Gilliam’s ruling reinforces a growing body of federal jurisprudence applying the “major questions doctrine” to executive immigration actions. Under this judicial principle, federal courts require explicit statutory authorization from Congress before allowing executive agencies to impose regulations with vast economic and political significance. Imposing a $100,000 assessment—representing an unprecedented several-thousand-percent increase over historical filing fees—was found to exceed the reasonable cost-recovery limits intended by lawmakers when crafting the Immigration and Nationality Act.

The decision severely constrains the administration’s ability to use executive fee mechanisms as de facto economic entry barriers. For the broader business community, the ruling establishes that major immigration policy restructuring cannot be achieved through administrative fiat without adhering to statutory procedural constraints and legislative intent.