China's Ralls presses court case against Obama

Ralls Corp., the Chinese-owned company President Obama blocked from building a wind farm near a U.S. Navy air base in Oregon, urged a federal district judge to reject the White House's motion to dismiss the company's lawsuit against the president.

In a brief filed Monday with U.S. District Judge Amy Berman Jackson, Ralls' law firm, led by Bancroft LLC partners Paul Clement and Viet Dinh, argued that because the company is alleging that its constitutional rights were violated by the president's decision, the government's arguments for throwing out the case are invalid.

Last month the Department of Justice lawyers filed a motion to dismiss the lawsuit on grounds that legislation governing presidential rulings on recommendations by the Committee for Foreign Investment in the U.S. stipulates that the president's decisions are not subject to judicial review. The government also said that the Constitution grants the president great deference in making decisions affecting national security. A hearing on the government's dismissal motion is scheduled for Nov. 28.

Ralls' lawyers also said the seemingly clear-cut language of CFIUS's enabling legislation does not insulate the president's rulings from judicial review if an injured party's constitutional rights have been violated.

There is as "unbroken line" of Supreme Court precedent ensuring that no constitutional claim can be denied a court hearing, they told Judge Berman. Citing several cases over which, they said, "[l]egal scholars are in universal agreement that 'due process would be violated' if 'no court ... could hear a constitutional claim.'"

Denying Ralls' day in court would raise at least two constitutional questions they said. First, "precluding any judicial review of constitutional claims is flatly inconsistent with the doctrine of separation of powers implicit in our constitutional scheme," they wrote. Second, "the denial of any forum in which to assert constitutional claims raises serious due process concerns."

Among the cases they cited was a 1986 Supreme Court ruling in Bowen v. Michigan Academy of Family Physicians, in which the justices held that constitutional challenges to Medicare Part B benefits decisions were not foreclosed by a provision in the enabling legislation that shields decisions of the Secretary of Health and Human Services from subsequent review. Ralls lawyers noted that despite the "sweeping language" of the legislation, the justices rejected the government's argument that Congress intended no review at all of constitutional challenges to Medicare Part B.

Ralls' lawyers added that the government failed in its attempt to find Supreme Court precedents backing its position. "None of the cases the government cites (save one) even involved constitutional claims," they said. "Decisions involving the preclusion of non-constitutional claims do not support the government's motion in the least." The one constitutional case the government cited does not apply in this case, they said.

As to the government's claim that the moving forward with Ralls' lawsuit would infringe on the deference due to presidential decisions regarding national security, the company's lawyers called that line of argument "flatly wrong,"

The federal district court for the D.C. circuit "has squarely held that even where Congress has conferred authority upon the president to exercise discretion, claims alleging a violation of the president's duty to comply with the Constitution and statutes in exercising that discretion are reviewable."

Finally, the lawyers argued that the government's claim that Ralls' property rights were not violated -- and therefore no constitutional harm occurred -- is absurd.

The government claimed that because CFIUS approval had not been obtained, Ralls' acquisition of the Oregon property was not completed and consequently the company was not entitled to exercise property rights until CFIUS had approved the acquisition.

The government's argument is "wonderfully circular," they said. It's also wrong, they said, because premerger CFIUS filings are voluntary and foreign investors are entitled to close transactions without gaining prior approval. CFIUS does have authority to investigate and break up consummated deals.