H-1B Fee Blocked, What Attorneys Do Now

You have probably seen that the H-1B fee blocked for a second time on September 30. That is true. It is also not the whole story. Three federal courts have now ruled on the $100,000 payment and they did not agree. The payment cannot be collected today, the proclamations behind it still stand, and a bigger fee is already moving through rulemaking.

Where Things Stand

Proclamation 10973 came out on September 19, 2025. It said certain H-1B workers could not enter unless the petition came with a $100,000 payment.

Proclamation 11069, signed September 18, 2026, extended that for another year, through September 21, 2027.

Both are still in force. What the courts struck down is the layer underneath them, meaning the DHS and State Department guidance, memos and FAQs that actually made employers pay.

Three Courts, Two Answers

In Chamber of Commerce v. DHS, 815 F. Supp. 3d 73 (D.D.C. 2025), the court upheld the fee. It found the President acted within his authority and the agencies followed the law. That case is on appeal to the D.C. Circuit.

In California v. Mullin, 833 F. Supp. 3d 50 (D. Mass. 2026), the court went the other way. Twenty states sued in December 2025. They did not attack the proclamation head on. They went after the ten actions DHS and the State Department took between September 19 and October 20, 2025 to put it into effect, including a State Department FAQ and a revised DHS fee schedule.

The states argued the payment would make it harder to staff their public colleges, their schools and their hospitals. The court agreed with them on every claim. On June 8, 2026 it declared the policy unlawful and vacated it in its entirety.

The government asked the First Circuit to pause that ruling during its appeal. The court refused. It focused on a single question, whether the agencies had exceeded their statutory authority, and found the government had not made a strong showing that it would win. See 183 F.4th 42 (1st Cir. 2026). As the California court later put it, the result is that the $100,000 fee is no longer in effect.

Then came Global Nurse Force v. Trump, No. 4:25-cv-08454-HSG (N.D. Cal.), decided September 30, 2026 by Judge Haywood S. Gilliam, Jr.

What the September 30 Order Says

The court vacated the agency policies and sent them back to the agencies. It barred DHS, State and anyone working under them from enforcing those policies until two things happen. They have to run notice-and-comment rulemaking under the APA. They also have to do the small-business analysis the Regulatory Flexibility Act requires.

The court refused to dismiss the case and denied class certification for now.

How the Two Rulings Interact

The timing matters more than it first looks. By the time Judge Gilliam ruled, the fee was already unenforceable. The Massachusetts vacatur had done that, and the First Circuit had refused to disturb it. He said so in his order, noting the plaintiffs in front of him were already protected and using that as one reason to deny class certification.

So the California ruling did not stop the fee. It did something more durable. It created a second, independent reason the fee cannot be collected, and the two courts got there by different routes.

Massachusetts is the harder one for the government. That court held the agencies went beyond their statutory authority, and the reasoning is straightforward. A $100,000 charge behaves like a tax. Taxing is a power the Constitution gives Congress. So Congress has to say clearly that the executive may impose it, and the court found nothing in the immigration statutes that does. See Skinner v. Mid-America Pipeline Co., 490 U.S. 212 (1989). The government argued otherwise on appeal. The First Circuit was not persuaded.

California is the easier one to fix. Judge Gilliam rested on process. The policies were arbitrary and capricious, and the agencies never ran notice and comment. He deliberately did not decide whether the President had authority to impose the payment at all.

Put them together and the picture is clear. The California problem is fixable. The agencies can run the rulemaking they skipped, and the proposed rule is them doing exactly that. The Massachusetts problem is not. If Congress never gave the executive this power, no amount of paperwork creates it. There the government has to win its appeal or get Congress to act.

Both courts also stopped short of the biggest question. Neither squarely held that the payment is an unconstitutional tax. They resolved on statutory authority and administrative procedure, which is what courts usually do when a narrower ground decides the case. The constitutional question is still sitting there.

The courts are also watching each other. Judge Gilliam acknowledged that the District of Columbia reached the opposite result, and he told the parties to come to the October 27 conference ready to discuss where this goes in light of both Chamber of Commerce and Mullin. Two appeals are now running in two circuits on opposite outcomes. That is the kind of split that tends to travel further up.

The Fee May Still Be Coming

On August 25, 2026, DHS proposed a $103,265 fee on every cap-subject H-1B petition, including those using the advanced degree exemption. See 91 Fed. Reg. 54,817, Docket No. USCIS-2026-0298.

It would be paid at filing, on top of every other fee. DHS expects it to raise roughly $8.8 billion a year from a projected 85,000 petitions. Cap-exempt petitions are not covered, so certain nonprofit research organizations, government research organizations and universities would be left out.

The California Court told the agencies to go through rulemaking. DHS had started just that five weeks earlier, likely in expectation of this kind of holding from the Court.

That makes the proposed rule the most likely route back to a six-figure cost. It does not make it a safe bet. The rule is a separate legal instrument, and it will draw its own lawsuits the moment it moves toward final, including challenges to the small-business analysis it is meant to cure.

What to Tell Clients

• Nothing is owed today. The policies are vacated and enforcement is blocked.
• Do not call it over. The proclamations stand, one court upheld the fee, and two appeals are live.
• Plan for the proposed rule without promising it. A final rule would not need the proclamations at all, but it will be litigated too.
• Expect refund questions. More than 700 petitions already paid the $100,000 under the 2025 proclamation. The order does not address getting that money back.
• Watch both appeals. The D.C. Circuit and the First Circuit are reviewing opposite outcomes on the same program.

Position as of October 5, 2026. This is live litigation in three courts and two circuits, so check before you rely on it.

If you have not come across us before, Drafty AI is a case preparation platform for immigration firms, built by a practicing immigration attorney. It covers the work that sits around the forms, meaning evidence analysis, case outlines, drafting, RFE responses, exhibit lists, expert letters and translation.

If employment-based volume is where your firm feels the pressure, see how Drafty AI is priced or start a free trial.