Milestones: Ralls Corp. v. Comm. on Foreign Inv., 758 F.3d 296 (D.C. Cir. 2014)

Summary:

Plaintiff, an American corporation owned by Chinese nationals, purchased four companies in the business of developing wind farms. This transaction triggered scrutiny from the Committee on Foreign Investment in the United States ("CFI") pursuant to Defense Production Act, which allows CFT to review any transaction that could result in foreign control in a manner threatening to national security. CFI determined that the transaction threatened national security and ordered the plaintiff to stop construction of additional wind farms. Plaintiff made a Due Process challenge to the review process, because it did not give the plaintiff the opportunity to review and rebut the evidence that CFI used.

The court first found that the Defense Production Act did not deprive its jurisdiction, and the issue was not a non-justiciable political question. On the merits, the court found that plaintiff was deprived of its Due Process rights to adequate procedure in the course of making a determination that infringed upon the plaintiff's property rights.

Takeaway:

Chinese investment in the United States is a big issue lately, and this case highlights an additional concern that Chinese companies would face when making inroads to the U.S.: national security concerns.