Background and Parties

GH America Energy LLC, a renewable energy subsidiary of a Chinese company, brought this Section 1983 action against Pablo Vegas, CEO of the Electric Reliability Council of Texas (ERCOT), and other ERCOT officials in their official capacities. The plaintiff challenged the constitutionality of Texas' Lone Star Infrastructure Protection Act (LSIPA) on both Supremacy Clause and Equal Protection Clause grounds, seeking injunctive relief to proceed with a renewable energy facility transaction. The defendants moved to dismiss, and the plaintiff moved to amend the complaint.

The Preemption Claims

GH America advanced multiple preemption theories against LSIPA. The company argued that LSIPA conflicted with the Committee on Foreign Investment in the United States (CFIUS) statutory scheme, which provides federal review of foreign investments for national security concerns. The plaintiff contended that CFIUS's safe harbor provisions were undermined by Texas imposing additional state-level restrictions. GH America also asserted field preemption, claiming Congress had occupied the entire field of foreign investment review, and dormant foreign affairs preemption, arguing that state regulation in this area intrudes on federal foreign policy authority.

The Court's Rulings on Preemption

Judge Robert Pitman systematically rejected each preemption argument. The court held that LSIPA did not conflict with the CFIUS statutory scheme, finding no actual conflict between federal and state law that would trigger conflict preemption. The court similarly held that LSIPA did not conflict with the safe harbor provision of the CFIUS scheme, rejecting the plaintiff's argument that federal approval necessarily precluded state restriction.

On field preemption, the court held that the CFIUS scheme did not field preempt LSIPA, determining that Congress had not manifested a clear intent to occupy the entire field of foreign investment regulation, particularly where state police powers over intrastate infrastructure were implicated. The court also held that the doctrine of dormant foreign affairs preemption did not apply for the CFIUS scheme to preempt LSIPA.

Equal Protection Dismissal

Beyond preemption, the court addressed GH America's Equal Protection Clause claims. The court held that the subsidiary did not show that its owners could vindicate rights under the Equal Protection Clause or that the transaction to develop a renewable energy facility fell within the zone of interests protected by Section 1983. Accordingly, the plaintiff failed to state a claim that LSIPA violated its rights under the Equal Protection Clause.

Outcome

The court granted the defendants' motions to dismiss. The case has been appealed to the Fifth Circuit, with an appeal filed on October 27, 2025.