As reported in our October 2012 Corporate Alert, President Obama, following a recommendation of the Committee on Foreign Investment in the United States ("CFIUS"), issued a divestment order to reverse an acquisition of four wind farm projects in Oregon by a company owned by Chinese citizens. CFIUS is the interagency Executive Branch committee that considers the impact on U.S. national security of "any merger, acquisition, takeover… by or with a foreign person which could result in foreign control of any person engaged in interstate commerce in the United States."
The U.S. District Court for the District of Columbia upheld the authority of the President to restrict foreign investment in the U.S. through the CFIUS process without judicial review. The court further held that the President may structure divestiture orders to require ancillary remedial actions, provided such actions are reasonably related to implementation of the divestiture order. The court, however, declined to rule on whether CFIUS may unilaterally issue "interim" divestiture orders pending the President's decision to act.
Ralls Corp. v. Comm. on Foreign Inv. in the U.S., Civil Action No. 12-1513(ABJ) (D.C. Dist. Ct. Feb. 22, 2013).