United States: U.S. Court Rejects Challenge To CFIUS National Security Review 美国法院驳回三一集团国家安全审查之诉

Last Updated: November 12 2013
Article by John J. Burke

This blog previously reported in July 2013 on a lawsuit that Ralls Corporation brought against the President of the United States and the Committee on Foreign Investment in the United States challenging the President's order for Ralls to divest its interest in four wind farm projects in Oregon. The United States District Court for the District of Columbia,on February 26, 2013, dismissed most of Ralls' claims on the grounds that the merits of the President's decision were not subject to judicial review, but allowed to proceed Ralls's claim that the divestiture order was an unconstitutional deprivation of property without due process. On October 10, 2013, U.S. District Judge Amy Berman Jackson issued an opinion dismissing the constitutional claim.

Ralls alleged that the President's Order violated the due process clause of the Fifth Amendment to the United States Constitution because it deprived Ralls of property without giving it an adequate opportunity to be heard or providing the reasons behind the President's decision. In effect, Ralls claimed it had a Constitutional right to a detailed explanation of why the President ordered divestiture. The U.S. Government filed a motion under Rule 12(b)(6) of the Federal Rules of Civil Procedure  to dismiss Ralls's remaining claim for failure to state a plausible claim for relief. Both sides submitted briefs and participated in oral argument before the Court on the motion to dismiss. 

Judge Jackson dismissed the case based on her findings that Ralls failed to allege that: (1) it had a protected property interest; and (2) the government did not afford it sufficient procedure. The Court found that Ralls did not have a protected property interest because it acquired the wind farm projects subject to the known risk of a Presidential veto. Ralls also waived the opportunity provided in the Foreign Investment National Security Act to obtain a determination from CFIUS before the acquisition. 

Judge Jackson found that Ralls received sufficient process because it had notice and an opportunity for a hearing appropriate to the nature of the case. CFIUS informed Ralls in June of 2012 that if it were not to file the voluntary notice, the Department of Defense would file an agency notice that would trigger committee review. 

Ralls then filed a "voluntary" notice of the transaction with CFIUS in which it set forth its reasons why the acquisition did not raise national security concerns. Ralls also attended a meeting with CFIUS and made a presentation on July 11, 2012. 

CFIUS informed Ralls that, if it were not to divest voluntarily, CFIUS would recommend that the President order divestiture. Judge Jackson, therefore, determined that Ralls's constitutional claim was based solely on its assertion that it was entitled to know the President's reasons for prohibiting the transaction and to have an opportunity to rebut those reasons specifically. 

Judge Jackson disposed of Ralls' constitutional claim as follows:

In this case, involving the application of this particular statutory scheme, the President has a valid interest, grounded in the national security of the United States, to withhold the particular evidence that gave rise to his concern about a national security threat from the entity that he believes might pose the threat. And that conclusion is bolstered by the fact that Congress specified that the President's determination would not be subject to review.

The key take-away from this case is that foreign companies, particularly Chinese, seeking to acquire U.S. businesses, should take advantage of the opportunity to obtain a CFIUS determination in advance of the acquisition. We have recommended in prior articles on this blog published in December 2009, January 2010 and February 2011 that companies take advantage of this opportunity. Ralls did not do so, and was forced to divest. Detailed information that can help companies decide whether to file a CFIUS notification and on the process can be found in Chapter 14 of MERGERS & ACQUISITIONS IN THE UNITED STATES A Practical Guide for Non-U.S. Buyers

Ralls undoubtedly lost money in this transaction, not only because of its investment in the deal, but because it had to remove wind towers whose value surely was diminished when they no longer could be installed in a nearby location. The land, which a domestic company might have been able to use for a wind farm, became limited in its potential use and therefore its value. Yet, Ralls made no claim about just compensation under the Fifth Amendment to the Constitution, and so the legal case was concluded on a procedural dispute where Ralls was unable to hold the President accountable to explain a national security decision. 

Other recent Chinese acquisitions have been able to go forward with careful attention in advance to the CFIUS process. For example, this blog also reported in July 2013 about congressional and other opposition to the proposed Chinese acquisition of Smithfield Foods. The parties to that transaction made a voluntary notification to CFIUS before the transaction was completed and received CFIUS's blessing. Even Chinese acquisitions in the sensitive energy sector have received CFIUS approval. Sinopec received CFIUS approval for its $1 billion purchase of a 50 percent share of Chesapeake Energy Corp.'s natural gas shale operations in Oklahoma. Similarly, when CNOOC Ltd. sought to acquire Nexen Inc., a Canadian company with substantial U.S. assets, it was able to receive CFIUS approval by structuring the deal to alleviate concerns that some of those assets were in areas of the Gulf of Mexico that were close to sensitive military installations and subsea telecommunications cables. 

Had Ralls taken the same approach as Sinopec and CNOOC, a voluntary notification in advance of its transaction, it might have been able to work with CFIUS to structure the deal in such a way as to mitigate the national security concerns short of a full divestment. We may never know, but at a minimum, by failing to make a voluntary disclosure in advance of the transaction, Ralls found itself in the middle of an expensive failure that might have been avoided.

Ralls appealed Judge Jackson's decision on October 16, 2013 by filing a notice of appeal to the U.S. Court of Appeals for the District of Columbia Circuit. The appellate court proceedings are likely to last well into next year. Should Ralls be successful on any of the issues on which it appeals, the case would likely be returned to Judge Jackson for further proceedings in accordance with the appellate court's decision. Should the appellate court uphold Judge Jackson on all issues, then Ralls's challenge to the President's divestment order would end then. Ralls could petition the U.S. Supreme Court to issue a Writ of Certiorari to review the appellate court's decision, but the Supreme Court would not have to take the case. The Court only takes only a very small percentage of the cases brought to it each year.

        本博客已于2013年7月撰文分析Ralls公司(三一集团在美关联公司)起诉奥巴马总统以及美国外资审查委员会一案。经该委员会对Ralls公司投资俄勒冈州风电场项目进行国家安全审查后提议,奥巴马总统下达总统令要求Ralls剥离该资产。美国华盛顿特区联邦地方法院于2013年2月16日援引总统决定无需司法审查为由驳回Ralls公司的多数指控,但允许Ralls针对未经正当法律程序就被剥夺财产违反美国宪法这一项继续寻求法律解决。最近,该特区联邦法院法官Amy Berman Jackson于2013年10月10日做出裁决,驳回违宪指控。

        Ralls指控总统令违反了美国宪法第五修正案中正当法律程序保护这一条款,因为总统在发布总统令剥夺Ralls财产前,未给予Ralls解释机会、也未充分解释总统考虑因素。Ralls声称它享有宪法授予的权利:有权要求总统解释为何下达资产剥离令。美国政府则要求法院下令驳回起诉,因为起诉方未能提供正当理由。在双方书面争辩是否应当批准政府的驳回动议后,法院又开庭审理了这一案件。
Jackson法官驳回起诉,因为Ralls未能证明:(一)它享有受法律保护的经济利益;并且(二)美国政府未能充分给予Ralls程序性保护。然而法院裁定,Ralls并没有受法律保护的经济利益因为当其收购风场时就知道这一收购面临总统否决风险。其次,Ralls在并购前就已经放弃《外资国家安全法案》提供的、获得外资审查委员会批准的机会。

        Jackson法官认为美国政府依法给予Ralls充分保护,因为它曾接到通知而且被授予参加听证会的机会。外资审查委员会于2012年6月通知Ralls,如果Ralls不主动申请审查,美国国防部将提出申请、引发国家安全审查。

         Ralls随即向外资审查委员会"主动"递交申请,阐明为何这一并购项目并无国家安全隐患。Ralls于2012年7月11日与外资审查委员会会面并介绍该项目。

        外资审查委员会通知Ralls,如果Ralls不主动剥离资产,则该委员会将建议总统下令采取措施。因此Jackson法官认为Ralls的违宪指控完全建立在该公司有权了解总统下达禁止并购令的逻辑推理,并可对这些缘由逐项反驳。

        但是Jackson法官驳回了Ralls的违宪起诉:在这一案件中,总统确实拥有建立在美国国家安全基础之上、无需出示所有证据证明他为何担忧某一机构造成国家安全威胁这一正当利益。同时,国会明确指出总统决定无须接受审查,这也充分支持Jackson法官裁决。

        这一案件告诉国外企业,尤其是中国企业,当试图收购美国企业时应当事先获得外资审查委员会批准。我们在2009年12月、2010年1月以及2011年2月的文章中都建议企业应当充分利用这一机会。Ralls未能抓住这一机会,因此被迫采取剥离。本所出版的《外国公司在美国并购实务指南》第14章详细介绍了企业如何决定是否递交外资审查申请以及操作步骤。

        毫无疑问,Ralls在这一并购项目上损失惨重:除投资外,Ralls还得拆除风塔,拆除后的风塔价值大减因为周围无处可以重新兴建风塔。同时,只有美国公司才可购买这一地基并用于兴建风场,有限的使用价值限制了土地转让价值。但是,Ralls并没有根据宪法第五修正案索赔,因此这一案件在程序性环节终结。

        其他中国企业的并购则更小心翼翼。例如,本博客于2013年7月分析了国会以及其他利益集团抵制双汇集团收购史密斯菲尔德公司。双方在并购完成前就主动向外资审查委员会递交申请,并获得批准。即使在敏感的能源领域,中资并购也获得外资审查委员会批准。例如,中石化(Sinopec)以10亿美元收购Chesapeake 能源公司在俄克拉荷马州页岩天然气生产50%的产权。此外,中海油(CNOOC)也通过重组位于墨西哥湾靠近敏感军事设施及海底通信光缆的资产而获得外资审查委员会批准,顺利收购拥有大量美国资产的加拿大尼克森公司(Nexen Inc.)。

        如果Ralls也效仿中石化和中海油,在并购前主动递交申请,它可能可以和外资审查委员会一起携手消除国家安全顾虑而不是被迫剥离资产。虽然我们无法得知这一假设的最后结果是否如此,但是毫无疑问Ralls现在面临的困境原本有机会可以避免。

        Ralls于2013年10月6日向美哥伦比亚巡回区上诉庭上诉Jackson法官裁决。上诉结果需要等至明年才能揭晓。如果Ralls上诉胜利,则案件将返还至Jackson法官案头,她将根据上诉庭裁决处理。如果上诉庭支持Jackson法官的裁决,则Ralls的法律诉讼将就此结束。Ralls可以上诉至美国最高法院,但是最高法院受理案件有限,不一定会受理这一案件。

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