## Facts

- Ralls Corporation, a U.S. company owned by two Chinese nationals, purchased four U.S. limited liability companies formed to develop wind farms in north-central Oregon.
- The project sites were located near restricted U.S. Navy airspace and bombing ranges, making the acquisition a “covered transaction” subject to review under § 721 of the Defense Production Act (Exon–Florio).
- After Ralls filed notice, CFIUS determined the acquisition threatened national security and issued temporary mitigation orders restricting Ralls’s access and halting further construction.
- The matter was submitted to the President, who issued an order prohibiting the transaction and requiring Ralls to divest the project companies.
- Ralls was not given access to the evidence or specific rationale supporting the national-security determination, and was not afforded a meaningful opportunity to rebut the government’s factual basis (other than receiving general statements about national security and proximity to military facilities).
- Ralls sued, alleging (among other claims) that the CFIUS and presidential actions violated Fifth Amendment due process.
- The district court dismissed the challenge to the CFIUS order as moot and dismissed the due-process challenge to the presidential order for failure to state a claim, reasoning Ralls lacked a protected property interest and assumed the risk by closing without pre-clearance.
- Ralls appealed.

## Issues

1. Whether statutory language making the President’s Exon–Florio determinations “non-reviewable” bars judicial review of constitutional due-process claims.
2. Whether the due-process challenge is nonjusticiable under the political question doctrine because it arises from a national-security determination.
3. Whether Ralls had constitutionally protected property interests in the acquired entities and related rights sufficient to trigger due-process protections.
4. Whether due process required notice and access to at least unclassified evidence relied upon, plus an opportunity to respond, before a final divestiture deprivation.
5. Whether the challenge to the CFIUS mitigation orders was moot or instead fit the “capable of repetition, yet evading review” exception.

## Decision

- The D.C. Circuit reversed in part and remanded.
- The court held that the statutory bar on reviewing presidential determinations did not clearly preclude judicial review of facial or as-applied constitutional claims.
- The court held the political question doctrine did not bar adjudication of whether the government provided constitutionally sufficient process, even though the substantive national-security judgment remained insulated from review.
- The court held Ralls possessed protected property interests, including ownership of the project companies and associated state-law rights of use, access, and control.
- The court held due process required notice, access to the unclassified evidence relied upon, and an opportunity to respond before the deprivation became final.
- The court held the challenge to the CFIUS orders was not moot because the controversy was capable of repetition yet evaded review.
- The court remanded with instructions that Ralls be afforded the required process, including access to unclassified evidence and an opportunity to respond.

## Legal Principles

- Statutes limiting or barring judicial review of executive determinations do not foreclose constitutional claims absent clear and convincing evidence of congressional intent to do so.
- Courts may review whether the procedures used to implement a national-security divestiture satisfy the Fifth Amendment, while declining to review the merits of the national-security determination.
- Protected property interests are defined by state-law rules and understandings; federal authority to regulate or unwind a transaction does not by itself negate those interests.
- When the government orders divestiture of acquired property under the Exon–Florio process, procedural due process requires, at minimum:
  - notice of the action,
  - access to unclassified information forming the basis for the action, and
  - a meaningful opportunity to rebut that information.
- Short-lived mitigation measures that are likely to end before judicial resolution may fall within the “capable of repetition, yet evading review” exception to mootness.

## Conclusion

The D.C. Circuit held that although the President’s substantive national-security determination under Exon–Florio is not subject to judicial second-guessing, affected parties may obtain judicial review of whether the government provided constitutionally adequate procedures, including access to unclassified evidence and an opportunity to respond before final divestiture.


Ralls Corp. v. Comm. on Foreign Inv. in the U.S., 758 F.3d 296 (D.C. Cir. 2014)