As many expected, today President Obama issued an Order exercising his statutory authority to block foreign investment in the United States that he finds to impair national security – in this case, the acquisition of wind farms in Oregon by Ralls Corporation, a firm owned by Chinese nationals. As previously reported, following CFIUS’ interim measures to prevent Ralls from moving forward with the investment (as CFIUS claimed, to maintain the status quo), Ralls filed suit in federal court. Though Ralls and the Committee reached an agreement that effectively suspended the court challenge, the relief for the Chinese investors was short-lived: the President’s Order not only requires divestiture and removal of all equipment, it also prohibits the Ralls owners and their representatives from physically entering the site.

For Ralls, the options moving forward appear limited. By statute, the President’s decisions are not subject to judicial review – any attempts by Ralls to challenge that provision would like run directly into the President’s inherent authority over national security. Perhaps more likely, Ralls may pursue monetary relief under the Constitution’s Takings Clause, under the theory that its private property (investment in the wind farms) has been seized and that just compensation is owed.

For the CFIUS process generally, this high-profile denial of seemingly innocuous investment may make Chinese purchasers more skittish about the uncertainties of U.S. investment. Whether it will ultimately curtail investment remains to be seen. But it is likely, especially in the short term, that nearly all purchases of U.S. businesses that include a real estate component will be notified to CFIUS. Given the experience of Ralls, and Firstgold before it, why would the parties take the chance?