The Right Rights for the Right People? The Need for Judicial Protection of Foreign Investors

If the executive branch decides to prevent a foreign investor from acquiring certain assets on national security grounds, that decision has historically not been subject to judicial review. Few scholars have questioned this idea, which Congress enshrined in statute in 1988 and the D.C. Circuit endorsed in Ralls, a 2014 decision. This gap in the literature is particularly surprising in light of other countries’ recent efforts to tighten their foreign investment regimes. Although scholars argue extensively about the role the legislature should play in the regulation of foreign investment, the judiciary receives scant attention. This Note aims to fill the gap by using Ralls as a point of departure. It argues that Ralls deters foreign investors from suing the government by establishing a precedent of accepting the executive’s national security determinations. Plaintiffs’ actions, in other words, no longer serve as a check on arbitrary determinations by the government. As a result, the government carries out arbitrary actions and damages its own legitimacy. Given this state of affairs, foreign investors should have the right to challenge these judgments in court.