A small Chinese firm has sued President Barack Obama for squashing its bid to build wind farms close to a naval training site.
Ralls Corp, which is owned by two Chinese nationals, was installing wind turbines close to the training site in Oregon, which, according to the facility's website, is used to test unmanned drones - a highly sensitive and prized US technology.
The US Navy says the training site's airspace is also the only restricted area in western United States where fighter jets conduct training maneuvers at high speed and very low altitudes.
Mr Obama put the brakes on the project last week and ordered Ralls to sell off the four planned wind farms due to national security risks, the first time since 1990 that a US president has formally blocked a business transaction or required a sale on such grounds. Ralls Corp has until December 27th to comply.
In its legal action, made public yesterday, Ralls Corp alleges Mr Obama exceeded his power by dictating the terms of the sale, by allowing the government to inspect all aspects of its operations, and by not treating the firm equally as required by law.
The lawsuit comes in the final weeks of the US presidential campaign, during which Mr Obama's Republican rival, Mitt Romney, has accused the president of not pushing back against China's trade and investment practices.
Mr Obama's order followed a recommendation from the Committee on Foreign Investment in the United States (CFIUS), an inter-agency group headed up by the treasury secretary that evaluates the national security risks of foreign investments in US companies or operations.
Ralls Corp initially sued CFIUS in September for ordering the company to halt operations temporarily while the committee completed its investigation and made its recommendation to Mr Obama.
Its chances of winning the suit are slim given the president's broad authority on national security matters and the fact that courts do not often second guess the executive branch on security issues, experts say.
In issuing the rare presidential order, the US president said there was credible evidence that led him to believe that Ralls Corp and the Chinese Sany Group executives who own the company might take actions that posed a risk to US security.
The statement did not get into the specifics of the risk, but experts have said that the government was likely to have been wary of any potential for espionage. Ralls Corp said the government had not provided any evidence or explanation.
CFIUS experts said the deal was likely doomed from the start. They said Ralls Corp miscalculated by not asking CFIUS to review its plans to acquire wind-farm projects before closing the deal and embarking on plans to install turbines made in China
Reuters