Barnes & Thornburg | First Circuit Denies Government’s Request to Stay Decision Striking Down $100,000 H-1B Fee

• On July 24, the U.S. Court of Appeals for the First Circuit denied the federal government’s motion to stay a lower court order that vacated the $100,000 supplemental fee on certain H-1B visa petitions.
• The court found the government failed to make a strong showing of likely success on the merits, concluding that the Immigration and Nationality Act does not clearly authorize the executive branch to impose a $100,000 H-1B fee.
• With the stay denied, the district court’s nationwide vacatur is reinstated — employers are not currently required to pay the $100,000 fee in connection with covered H-1B petitions, including consular-processing petitions.
• The government’s appeal on the merits remains pending, and the legal landscape could shift with further rulings — potentially including U.S. Supreme Court review.

Background: Challenge to the $100,000 H-1B Fee 

In September 2025, President Trump issued Presidential Proclamation 10973, imposing a $100,000 supplemental fee on new H-1B visa petitions for beneficiaries outside the United States (i.e., petitions subject to consular processing), with limited exceptions for national interest cases. Twenty state attorneys general challenged the fee in State of California, et al. v. Mullin, et al., Civil No. 25-13829-LTS (D. Mass.). On June 8, U.S. District Judge Leo T. Sorokin granted summary judgment for the plaintiffs, vacating the $100,000 fee policy in its entirety. The court held that the payment requirement is an unconstitutional tax imposed without proper congressional delegation to the president, and that the implementing agencies violated the Administrative Procedure Act (APA). Because APA vacatur operates on the unlawful agency action itself, the court’s order has nationwide effect — relieving all employers, including cap-exempt institutions such as universities and nonprofit research organizations, of the $100,000 obligation.

As we have previously explained, the proclamation did not apply to H-1B extension/change of status petitions or to H-1B cap petitions filed inside the United States, provided the employee remains in the U.S. through adjudication and the change of status is approved. The fee was generally limited to certain new H-1B petitions requiring consular processing abroad.

Government Appeal and Request to Reinstate the Fee 

The government appealed and moved for a stay pending appeal. Judge Sorokin denied a full stay but temporarily stayed his order, conditioned on the government seeking a stay from the First Circuit by June 18. The government did so, temporarily reinstating the fee while the appellate court considered the request.

First Circuit Analysis: Why the Court Denied the Stay 

On July 24, a three-judge panel of the First Circuit denied the government’s motion for a stay pending appeal. The court found the government failed to make a strong showing that it was likely to succeed on the merits — specifically, that the Immigration and Nationality Act does not expressly grant the agencies the fee-imposing power the administration relied on, and Congress did not clearly authorize the executive branch to impose a $100,000 H-1B fee. The court noted the district court’s reasoning that “the substance and application of the $100,000 payment reveal that it is a tax, regardless of what the payment is called.” The appellate court did not rule on the merits of the underlying appeal; it held only that the government did not meet the standard for emergency relief pending appeal.

What Employers Should Know About the Current H-1B Fee Rules 

Because the First Circuit denied the stay, the district court’s June 8 order vacating the fee policy is reinstated and remains in effect nationwide while the underlying appeal proceeds. USCIS and the Department of State cannot currently enforce the $100,000 fee for covered H-1B petitions. Employers should treat this ruling as a meaningful — but not final or permanent — development. The government’s appeal on the merits remains pending, separate fee challenges are proceeding in other courts, and a conflict with an earlier D.C. district court decision upholding the fee raises the prospect that the issue could reach the U.S. Supreme Court. Employers should stay alert to further developments and consult their immigration counsel before making filing decisions based on the fee’s current status.