USCIS would probably answer this question in the affirmative. However, throughout much of the country, federal judges have rejected this position. The 2nd, 4th, 7th, 8th and 9th Circuits have all held that the district court has exclusive jurisdiction over a naturalization petition once a 1447(b) action is filed. Once such a lawsuit is filed, the judge has authority over the petition and can decide or remand it back to USCIS with instructions. By denying the petition while the lawsuit is pending, however, USCIS cannot take back authority over the petition from the judge. Therefore, at least in those select circuits mentioned above, a denial by USCIS issued after a 1447(b) lawsuit is filed should not be considered binding because USCIS does not have jurisdiction over the petition to deny it.

The 2nd Circuit case of Bustamante v. Napolitano lays out the rationale in great detail.