http://blogs.wsj.com/chinarealtime/2012/10/01/chinese-owned-ralls-vows-to-fight-obama/
Chinese-Owned Ralls Vows to Fight Obama
One disgruntled Chinese-owned company says it will do all in its power to right what is says is a wrong inflicted by U.S. President Barack Obama. But legal experts say the White House holds a strong hand against Ralls Corp., a Delaware-based, Chinese-owned company backed by leading Chinese construction machinery conglomerate Sany Group.
On Friday, President Obama issued an executive order preventing Ralls from owning four wind-farm projects in Oregon citing national-security concerns.
- Bloomberg News
It was the first time in more than two decades that a U.S. president has stepped in to prevent a foreign acquisition in this way. Two founders of Ralls, Duan Dawei and Wu Jialiang, are Chinese nationals and senior executives of Sany, which has its headquarters in Changsha, Hunan province.
“We’ll seek a fair and square result,” Xinhua quoted Zhou Qing, head of legal affairs of the international development planning department of Sany Group, as saying.
He also accused the Obama administration of wanting to help domestic industry.
“Examine their conscience, and the U.S. administration should find Ralls is not threatening their country’s security,” Mr. Zhou added.
Mr. Zhou told Xinhua there were other foreign-invested wind farms near the training facility but they had not been considered threats to US national security.
A statement by Tim Xia, counsel for Ralls, said Friday the company would “seek redress in U.S. courts,” but did not elaborate on specific steps.
Calls and emails to Sany Group representatives seeking elaboration went unanswered Monday, a national holiday in China. But one legal expert says the company faces “an uphill battle” in its bid for justice.
In an earlier lawsuit filed by Ralls against the Committee on Foreign Investments in the United States (CFIUS), Ralls raised the issue of unconstitutional taking of property rights without due process, said John Zhang, Los Angeles-based partner and senior director, Asia Pacific, at law firm Reed Smith LLP, which isn’t involved in the case.
That suit was withdrawn when the parties reached an interim compromise pending actions by the president.
“In its renewed legal challenges…Ralls can also raise the issue of equal protection under the 14th Amendment of the Constitution, since, after all, Ralls is a U.S. corporation that has been singled out due to the nationality of its shareholders and affiliates,” Mr. Zhang said.
But the lawyer cautioned that section 721 of the Defense Production Act (pdf), under which Cfius operates, clearly bars judicial review of presidential orders based upon recommendations made by the committee.
“Ralls’s lawyers will have to be able to successfully challenge the constitutionality of the legislation itself,” he said in an email interview.
The U.S. administration on Monday also pointed to U.S. law. “They could try to pursue a lawsuit,” U.S. Treasury Department spokeswoman Natalie Wyeth Earnest said. “But the CFIUS statute clearly states that the President’s actions are not subject to judicial review.”
While that could be a formidable challenge, whether or not Ralls is successful in winning judicial redress, it may have already achieved something by refusing to withdraw its Cfius application before the president had to act.
“No other Chinese company has ever achieved that. Up to now, Chinese companies that encountered Cfius objections on the grounds of national security had been persuaded to voluntarily abandon their projects before the issue was escalated to the White Office,” Mr. Zhang said.
“As the legal wrangle between the U.S. government and Ralls—and, by proxy, the Chinese government—continues to unfold in the coming days, we can expect to see more light being shed on the erstwhile opaque inner workings of Cfius and, by extension, U.S. attitudes toward Chinese investments in general,” he said.
– Colum Murphy with contributions from Damian Paletta
Replies
kick Obamas ass and take names later