XIA BI; NIAN CHEN; YUANYUAN CHEN; QINGLI CHENG; YING CHENG; DONGSHENG HU; JUN HUANG; KUI LE; CHUNGSHENG LI; ZHONGHUI LI; LIN LIN; LAN LIU; LING LIU; ZHENG QIN; MEIMING SHEN; YUNPING TAN; BIXIANG TANG; XIAONAN TANG; CHUN WANG; RUI WANG; YAHONG WANG; YUE WANG; JIAN WU; LEI YAN; JUNPING YAO; JIN YOU; ZHEN YU; HOUQIAN YU; NIANQING ZHANG; XUEMEI ZANG; HUIBIN ZHAO; YAN ZHAO, Plaintiffs - Appellants,
TERRY MCAULIFFE; ANTHONY RODHAM, Defendants - Appellees and XIAOLIN CHARLES WANG; AMERICAN IMMIGRATION CENTERS, LLC, a Virginia limited liability company; CAPITAL WEALTH HOLDINGS LIMITED, a British Virgin Islands company; GREENTECH AUTOMOTIVE CAPITAL A-3 GP, LLC, a Delaware limited liability company; GREENTECH AUTOMOTIVE, INC., a Mississippi corporation; GULF COAST FUNDS MANAGEMENT, LLC, a Louisiana limited liability company; WM INDUSTRIES CORP, a Virginia corporation; DOES 1-100, Defendants.
Argued: May 7, 2019
from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:17-cv-01459-CMH-IDD)
Patrick Fox, Marina Vladimir Bogorad, GERARD FOX LAW P.C.,
Los Angeles, California, for Appellants.
Erik Elias, PERKINS COIE LLP, Washington, D.C., for
M. Abeles, GERARD FOX LAW P.C., Washington, D.C., for
V. Spiva, Amanda R. Callais, PERKINS COIE LLP, Washington,
D.C., for Appellees.
WILKINSON and NIEMEYER, Circuit Judges, and DUNCAN, Senior
WILKINSON, CIRCUIT JUDGE:
Chinese investors appeal from the dismissal of their claims
against Terry McAuliffe and Anthony Rodham stemming from
failed investments in an electric vehicle startup. For the
reasons that follow, we affirm.
accept as true the following facts, which come from
plaintiffs' amended complaint. Plaintiffs-Appellants are
a group of twenty-seven Chinese citizens who invested $500,
000 each in a partnership that loaned their money to
GreenTech Automotive. GreenTech, founded in 2008, was a
Mississippi corporation that wanted to enter the hybrid and
electric vehicle markets. Initially, GreenTech planned to
produce the "MyCar," a vehicle that would travel at
low speeds and thus be subject to lower levels of regulatory
ambitious plan required a great deal of capital. GreenTech
sought to raise some funds from foreign investors who might
qualify under the Employment-Based Immigration Fifth
Preference, or EB-5, Program. See 8 U.S.C. § 1153(b)(5).
This program offered a path to permanent residency for
foreign investors whose investments in American projects
created or preserved at least ten jobs for American workers.
While the program ordinarily required a $1 million
investment, investments of $500, 000 in certain rural areas
or areas with high unemployment may also qualify under the
thus planned to build a new manufacturing facility in Tunica,
Mississippi to take advantage of the lower investment
threshold. The company collected funds from potential EB-5
immigrants through several different investment platforms.
Some Chinese investors, for example, purchased preferred
shares directly from GreenTech. The plaintiffs in this
lawsuit, however, invested their money in GreenTech
Automotive Partnership A-3, LP (the "A-3
partnership"), which was created to collect capital and
then loan it to GreenTech. Plaintiffs' investments were
governed by a series of documents, including "the
private placement memorandum, the subscription agreement, the
limited partnership agreement, a construction loan agreement,
[and] a power of attorney agreement." J.A. 155. These
documents were distributed to plaintiffs in English only, not
allege that they signed the subscription documents
"without reviewing any version" and do not claim to
have translated the documents into their native language.
Id. at 181, 186. Pursuant to those written
agreements, each of the twenty-seven plaintiffs paid $500,
000 for a partnership share in A-3 sometime between July 2012
and December 2013. They each also remitted an
"Administrative Fee" of $60, 000 or $61, 000 to
Gulf Coast Funds Management, LLC, a GreenTech affiliate that
managed the A-3 partnership.
total, the A-3 partnership collected $500, 000 from each of
eighty-six investors, and then loaned the total of about $43
million to GreenTech. The loan terms were "not the
result of arm's length negotiations." Id.
at 169. The Private Placement Memorandum reveals that the
loan, which was non-recourse, "specifically exclude[d]
customary provisions designed to protect the interests of
lenders." Id. at 278. GreenTech would make
interest-only payments to the A-3 partnership at a 4%
interest rate; of that amount, 1.5% would be used to pay Gulf
Coast yearly management fees. Id. at 257.
are Terry McAuliffe and Anthony Rodham. McAuliffe was the
co-founder and former Chairman of GreenTech. Rodham was the
CEO of both the A-3 partnership and another entity that was
formed to serve as A-3's general partner, GreenTech
Automotive Capital A-3 GP, LLC. Rodham also served as
President and CEO of Gulf Coast, the management company that
received plaintiffs' administrative fees.
claim that Rodham and McAuliffe made a series of false
statements relating to the A-3 partnership's fundraising
efforts. The complaint alleges that Rodham made the following
(1) On April 25, 2011, Rodham claimed that EB-5 funds
accounted for only 7.8% of GreenTech's capital during an
event in Beijing, China.
(2) At this same event, Rodham expressed that Gulf Coast
"chose" GreenTech as a suitable ...