Chinese-owned Ralls sues Obama over Oregon wind projects

Ralls Corp., owned by Chinese nationals, has sued President Barack Obama over his 28 September decision to force it to divest four wind farm projects whose development he believes may pose a national security threat.

Ralls claims that Obama’s order violates the US Constitution through “unconstitutional deprivation of property without due process,” and violates the company’s right to “equal protection under the law.” The company asserts that it is “unauthorized and unlawful.”

Based in Delaware, Ralls is owned by two executives at SANY Group, the largest construction machinery company in China that also manufacturers onshore and offshore wind turbines.

Ralls on Monday amended a lawsuit filed last month in a federal court in Washington DC, to include Obama. It originally sued the Committee on Foreign Investment in the United States (CFIUS) for having impeded development of projects comprising the High Plateau, Lower Ridge, Mule Hollow and Pine City wind farms, each 10MW.

CFIUS, which reviews potential impact on national security from overseas investment in US companies or operations, had recommended that Obama block acquisition by Ralls of the projects. They are located near the Naval Weapons Systems Training Facility in Boardman, Oregon, which uses electronic warfare aircraft and unmanned drones on training missions in restricted air space.

Planes there can reportedly fly as low as 200-feet (60.9 metres), well within rotor diameter height of SANY turbines that Ralls wanted to install on the wind farms. The Lower Ridge project is located within restricted airspace. Even so, Ralls says that the Federal Aviation Administration in 2010 and last year ruled that none of the five turbines planned for Lower Ridge were a hazard for aircraft.

It also notes that nine other wind farms comprising 37 turbines are located near the Ralls wind projects, and they all use foreign-made turbines – REpower and Vestas.

CFIUS is chaired by Treasury Secretary Timothy Geithner, who is also named as a defendant in the case, and includes six other presidential cabinet secretaries including defense, energy and state. The US trade representative and the president’s chief science advisor are the other panel members.

The lawsuit describes the companies that Ralls purchased with the projects as having assets consisting “solely of wind farm development rights, including land rights to construct them, power purchase agreements and necessary government permits.” It notes they were purchased from a company owned by US citizens.

“The four small Oregon companies represented an ideal opportunity for Ralls to construct Sany turbines because the region in which the turbines would be located is home to hundreds of wind turbines, thereby allowing for direct and immediate comparison of Sany turbines to competitor turbines,” the lawsuit says.

Tim Tingkang Xia, a counsel for Ralls with Morris Manning and Martin law firm in Atlanta, Georgia, sent Recharge a statement saying that the company “continues to show its profound faith in transparency and due process, and seeks only fair treatment under the law and the Constitution.”

It also notes that Obama’s decision would prohibit a project that would create jobs at a time “when American people need more jobs.”

His order requires Ralls to divest all interests in the project companies including assets and operations developed, held, or controlled within 90 days. It also prohibits any further access to the properties except for removal of items and structures.

Citing the time constraints imposed by Obama, Ralls is asking the court to accelerate consideration of the case. “Ralls believes that this case can and should be briefed, argued and decided well before the 90-day deadline,” the amended lawsuit says.

While SANY has invested in a manufacturing plant in Georgia for heavy construction equipment, it has no immediate plans to source wind turbines here.

“The President’s action demonstrates the Administration’s commitment to protecting national security while maintaining the United States’ longstanding policy on open investment,” a Treasury Department statement says.

Obama’s decision was taken against the backdrop of his bid for reelection on 6 November against his Republican Party challenger Mitt Romney, who has accused him of being soft on China on trade and national security issues. Obama recently said he opposes Romney’s pledge to label China a currency manipulator if he wins the White House for allegedly pursuing a policy to overvalue the yuan.

China is the second largest US trading partner after Canada.

The two countries are also locked in an increasingly bitter dispute over clean energy trade. Obama’s administration has slapped tariffs on Chinese-made solar cells and wind turbine towers, and both sides have taken their cases against the other’s sector subsidies to the World Trade Organisation.