First Circuit Declines to Stay District Court Order Vacating the $100,000 H-1B Fee
On July 24, 2026, the U.S. Court of Appeals for the First Circuit denied the Trump Administration's motion to stay the district court's June 8, 2026 order vacating the $100,000 fee imposed on certain new H-1B petitions (State of California v. Mullin, No. 26-1699 (1st Cir.)). The panel found that the government had not shown a likelihood of success on the merits of its appeal. The practical effect of the ruling is that the temporary pause on the district court's order should be lifted, and USCIS should no longer assess the $100,000 fee on H-1B petitions while the underlying appeal proceeds.
The First Circuit's ruling is limited to the stay motion; the merits of the government's appeal remain pending before the same court, and the government may seek further review on the decision denying the motion to stay, including from the full First Circuit or the U.S. Supreme Court.
Background
On September 19, 2025, the President issued a proclamation imposing a $100,000 fee on new H-1B petitions filed for, or only approvable through, consular notification of beneficiaries located outside the United States.
On December 12, 2025, the State of California and 19 other states filed suit challenging the fee (State of California, et al. v. Mullin, et al., No. 1:25-cv-13829 (D. Mass.)), arguing that the fee amounted to an unlawful tax that Congress never authorized and that the Administration bypassed required rulemaking procedures.
On June 8, 2026, Judge Leo Sorokin of the U.S. District Court for the District of Massachusetts granted summary judgment to the plaintiffs and vacated the fee in its entirety.
Shortly after that ruling, Judge Sorokin stayed his own order, allowing USCIS to continue collecting the fee while the government pursued an appeal to the First Circuit.
On June 18, 2026, the government formally moved the First Circuit to stay the district court's order for the duration of the appeal.
On July 24, 2026, a three-judge panel of the First Circuit denied that motion, concluding the government had not demonstrated it was likely to succeed in showing the fee was a valid exercise of executive authority.
What This Means for Employers
The fee should no longer be collected while the appeal is pending. With the stay lifted, USCIS is expected to stop requiring payment of the $100,000 fee on new H-1B petitions subject to the proclamation. USCIS has indicated it will issue updated guidance and filing instructions, though this may take several days to be released.
The scope of relief is still developing. It is not yet clear how the ruling will be implemented with respect to petitions already pending, petitions filed before formal USCIS guidance is issued, or fees already paid. We are monitoring for agency guidance on refunds and processing.
The litigation in State of California v. Mullin is not over. The First Circuit's decision addresses only the stay; the government's appeal on the merits remains pending, and further appellate proceedings — potentially including Supreme Court review — are possible. Employers should not assume the fee is permanently eliminated.
Related litigation continues. Additional lawsuits challenging the fee remain pending in other federal courts including Chamber of Commerce vs. DHS, which could affect the fee's status independently of this case.
We will continue to monitor this case and USCIS's implementation guidance closely and will issue further alerts as developments warrant. Please contact our office with any questions regarding how this ruling affects a specific pending or planned filing.