U.S. Asks Judge to Dismiss Sany Affiliate Wind-Farm U.S.

An affiliate of Sany Group Co., China’s biggest machinery maker, shouldn’t be able to challenge President Barack Obama’s decision blocking a planned Oregon wind-farm project on national-security grounds, the U.S. said.

The Justice Department, in a filing today in federal court in Washington, asked a judge to throw out a lawsuit by Ralls Corp., arguing the Defense Production Act bars judicial review of presidential orders suspending or prohibiting an acquisition of a U.S. business by a foreign person.

“Neither the president’s findings nor his actions in the presidential order fall outside his extremely broad discretion, and Ralls’s constitutional claims are nothing more than disguised challenges to his exercise of that discretion,” Joel McElvain, a Justice Department lawyer, wrote in the filing.

Obama’s Sept. 28 order blocking Ralls from acquiring the wind-farm assets was the first time in 22 years a president has blocked a transaction on national security grounds. Obama was added as a defendant to a lawsuit filed Sept. 12 that challenged an earlier ruling by the Committee on Foreign Investment in the U.S., known as CFIUS, blocking the project.

Ralls, based in Delaware, is “actually controlled” by Sany, even though the listed legal owners are two of the group’s executives, Zhou Qing, Sany’s in-house lawyer, said in an Oct. 3 telephone interview. He declined to say why wind-farm company had been set up that way.

Tim Xia, a lawyer with Morris, Manning & Martin LLP, who represents Ralls, didn’t immediately respond to an e-mail seeking comment on the filing.

Navy Airspace

Ralls was seeking to place Sany-made wind turbines at the Oregon installations after purchasing land and other rights earlier this year. The assets consist of four locations, all of which are near or within restricted Navy airspace, the Treasury Department, which heads CFIUS, said Sept. 28.

Ralls said Obama’s decision could cost the company $20 million in lost design and construction costs. It will also miss out on $25 million in federal investment tax incentives if the wind farms aren’t in service by Dec. 31, according to a court filing.

The case is Ralls Corp. v. Committee on Foreign Investment in the U.S., 1:12-cv-01513, U.S. District Court, District of Columbia (Washington.)

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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