Chinese Wind Farm Loses Challenge to Gov’t Order

     WASHINGTON (CN) – A Chinese company blocked from building wind turbines near military airspace in Oregon failed to prove the U.S. government deprived it of due process rights, a federal judge ruled.
     In 2012 Delaware-based Ralls Corp., which is owned by the Chinese Sany Group, bought four companies that had the rights to build wind turbines in north-central Oregon.
     The land on which the companies planned to build the turbines sits beside the Naval Weapons Systems Training Facility in Boardman, Ore.
     In September 2012, President Barack Obama said “there is credible evidence” that Ralls, the Sany Group and its owners “might take action that threatens to impair the national security of the United States.”
     He ordered the companies to divest all interest in the projects within 90 days, and remove everything from the properties within two weeks of the order.
     The companies were also ordered to certify their divestment with the Committee on Foreign Investments in the United States (CFIUS), which asked them to stop their operations.
     Ralls challenged the CFIUS order in federal court and later amended its complaint to add the president and Treasury Secretary Tim Geithner as defendants. The defendants then moved for dismissal.
     U.S. District Judge Amy Berman Jackson mostly granted their motion in February 2013, but found that Ralls could still advance its claim that Obama violated its due process rights with his order.
     “The court notes that it is not ruling that the due process claim has merit – simply that it is bound to go on to decide the claim on its merits,” Jackson wrote. “The court will reach that question after further briefing by the parties.”
     On Thursday, Jackson dismissed the remaining claim, explaining that in order to succeed on that claim, Ralls was required to show the government deprived it of a protected interest and that it did not give it a constitutionally sufficient procedure. The judge found Ralls could not prove either of these elements.
     When Ralls obtained certain state property rights, it was subject to the risk of a Presidential veto, Jackson said.
     “And Ralls’s claim cannot be squared with the fact that Ralls waived the opportunity – provided by the very statute that it claims lacks the necessary process – to obtain a determination from CFIUS and the President before it entered into the transaction,” the judge wrote.
     Jackson rejected Ralls’s argument that it had an expectation interest in acquiring the property because Obama’s decision to prohibit the transaction was “entirely discretionary.”
     “The statute as a whole puts foreign-owned companies on notice that they do not have an entitlement to engage in mergers, acquisitions, or takeovers in the United States: they are subject to Presidential review,” Jackson wrote.
     The judge found that even if Ralls had proved it had a protected property interest, it could not prove that it received insufficient process from the government.
     “Even if the Court were to find that Ralls was deprived of some kind of property interest, that property interest is relatively weak in the face of the strong governmental interest in protecting the national security,” Jackson wrote.
     “And while Ralls argues that the national security interest is speculative, the Court emphasizes that the only additional process Ralls is seeking here is to be informed of the grounds for the President’s finding that, in his belief, Ralls might take action that threatens national security through exercising control over the project companies.”
     “The statute as a whole puts foreign-owned companies on notice that they do not have an entitlement to engage in mergers, acquisitions, or takeovers in the United States: they are subject to Presidential review,” Jackson wrote.
     The judge found that even if Ralls had proved it had a protected property interest, it could not prove that it received insufficient process from the government.
     “Even if the Court were to find that Ralls was deprived of some kind of property interest, that property interest is relatively weak in the face of the strong governmental interest in protecting the national security,” Jackson wrote. “And while Ralls argues that the national security interest is speculative, the Court emphasizes that the only additional process Ralls is seeking here is to be informed of the grounds for the President’s finding that, in his belief, Ralls might take action that threatens national security through exercising control over the project companies.”

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