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DOJ Files Landmark Court Action to Enforce Divestment of Chinese-Owned Tech Firm

By  |  February 11, 2026

The United States has initiated a federal court action to enforce a presidential directive blocking a Chinese company’s acquisition of a California-based technology business, marking the first time such a measure has been pursued through litigation.

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    According to a statement, the complaint was filed under Section 721 of the Defense Production Act of 1950 to uphold a presidential order prohibiting Suirui Group’s purchase of Jupiter Systems, a California company specializing in video communications technology. The filing also seeks to compel Suirui to divest its ownership stake in the company.

    The action stems from a July 8, 2025 order issued by the President, who determined that the transaction “threatens to impair the national security of the United States.” The administration concluded that the acquisition raised concerns significant enough to warrant intervention under federal law. This marks the first time the government has brought such an enforcement action in federal district court.

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    Foreign direct investment plays a substantial role in the U.S. economy, but officials have emphasized that certain transactions — particularly those involving defense-related businesses or critical infrastructure — may present national security risks. Under Section 721, the President is authorized to suspend or prohibit transactions that are deemed harmful to national security and to take action for as long as considered necessary.

    The Committee on Foreign Investment in the United States (CFIUS), an interagency body tasked with reviewing foreign acquisitions for security risks, examined the deal. According to a statement, Suirui Group, a China-based firm, acquired Jupiter Systems in 2020 through its Hong Kong subsidiary, Suirui International. Jupiter Systems supplies video communications hardware and software to both commercial clients and U.S. government customers.

    Following its review, the President ordered Suirui to divest its interests in Jupiter Systems within 120 days. According to the complaint, CFIUS granted two deadline extensions, ultimately moving the compliance date to Feb. 3. However, officials allege that Suirui and Jupiter Systems did not complete the required divestment.

    According to a statement, the government filed the lawsuit in order to safeguard U.S. national security interests and ensure compliance with the presidential order.

    The matter is being handled by the Justice Department’s Civil Division through its Federal Programs Branch. The case, titled United States v. Suirui Group Co., Ltd., et al., No. 26-cv-00369, has been filed in the U.S. District Court for the District of Columbia.

    Source: Justice Gov