President Orders Ralls to Divest Oregon Wind Farms, Raising CFIUS Questions
The President has ordered Ralls Corporation to divest its interest in four Oregon wind farms. The decision, made by the Committee on Foreign Investment in the United States (CFIUS), has raised questions about the process and potential changes. Ralls had acquired the companies in 2012 and installed Chinese-origin wind turbines.
In 2012, Ralls acquired four U.S. wind farm companies in Oregon. The company began installing Chinese-origin wind turbines, which later drew concerns from the U.S. Navy due to restricted airspace and bombing zones. CFIUS reviewed the transaction and determined it posed a national security threat, leading to the President's order.
Ralls challenged the CFIUS order and the presidential order in U.S. District Court, claiming due process violations. The D.C. Circuit Court of Appeals reversed the District Court's decision, finding that due process requires access to unclassified evidence and an opportunity to rebut it. This decision may incentivize parties to create 'property interests' in advance of CFIUS filings to invoke constitutional protections.
The President's order to Ralls to divest its interest in the Oregon wind farms has sparked uncertainty about the CFIUS process. While the decision does not change the President's authority to block transactions based on CFIUS recommendations or classified information, several unsettled issues remain. The government has not yet announced whether it will appeal the decision, which will dictate how CFIUS implements the decision and any changes to its process. The full impact of the Ralls decision on the CFIUS process remains unclear.
