A small Chinese company sued President Barack Obama for squashing its wind farm projects that were close to a military training site, saying the president overstepped his bounds and the law, according to court documents made public on Tuesday.
Ralls Corp. said when Obama ordered the company last week to divest its projects due to national security risks, he exceeded his power by dictating the terms of the sale, allowing the government to inspect all aspects of its operations and not treating the company equally as required under the law.
The lawsuit comes in the final weeks of the U.S. presidential campaign, during which Obama's Republican rival, Mitt Romney, has accused the president of not pushing back against China's trade and investment practices.
Ralls Corp., which is owned by two Chinese nationals, initially sued the Committee on Foreign Investment in the United States (CFIUS) in September for ordering the company to temporarily halt operations while the committee completed its probe and made its recommendation to Obama.
The company's chances of winning the lawsuit are slim given the president's broad authority on national security matters.
"It is going to be a tough battle," said Josh Zive, a lawyer with Bracewell & Giuliani who has handled CFIUS cases for 10 years. Zive said the courts tend to stay away from second guessing the executive branch on national security issues. "There is a large amount of discretion given not only to agencies, but in the context of national security, that will make it difficult to win."
Obama issued the rare presidential order on Friday saying there was credible evidence that led him to believe that Ralls Corp. and the Chinese Sany Group executives that own the company might take action that poses a risk to U.S. security.
