Top U.S. venture capital firms are suing the Trump administration after it hit the brakes on a widely supported immigration program meant to benefit foreign entrepreneurs.
To the National Venture Capital Association — the Washington, D.C.-based lobbying voice for the industry — the Trump administration violated federal rulemaking laws and harmed a number of companies and their investors when it delayed implementation of the initiative earlier this year.
The court challenge concerns the International Entrepreneur Rule, a program instituted under former President Barack Obama to allow foreigners who seek to build new companies — and already have capital and experience — to stay in the United States on a 30-month trial without obtaining a visa.
Before leaving office, the Obama administration set in motion plans to implement the rule in July 2017. Under Trump, though, the Department of Homeland Security delayed the program — days before it was slated to go into effect — until March 14, 2018. To many, that pause presaged the complete elimination of the program, known as IER, contrary to calls from tech giants and Silicon Valley investors to keep it.
In its lawsuit, NVCA contends that the Trump administration’s decision violated the Administrative Procedures Act because it opted to postpone the International Entrepreneur Rule without first seeking public comment on the change.
And the pause itself harmed NVCA, the lobbying group adds, seeing as its “members have invested, will invest, or would consider investing in new companies that have founders who could apply” under the program as it was originally proposed.
NVCA members include major firms like Accel Partners, Kleiner Perkins Caufield & Byers and Sequoia Capital. Among those affected and named in the lawsuit are Atma and Anand Krishna, two brothers and citizens of the United Kingdom who founded LotusPay, a payments startup.
The duo had planned to continue building their company in the United States after finishing their stint with the incubator Y Combinator this summer, but the delay to the U.S. government’s foreign entrepreneur program has jeopardized their ability to continue hiring and raising money.
A spokesperson for the Department of Homeland Security declined to comment. The Wall Street Journal first reported news of the lawsuit.
This article originally appeared on Recode.net.