The US Court of Appeal for the District of Columbia reversed the decision made in October by the Federal District Court, which said Obama followed correct procedure in refusing Ralls Co. permission to build the Oregon projects and forcing the company to sell them.
Ralls Co., which is owned by Chinese firm Sany Electric, sued the US government in 2012 after Obama's decision. It was the first time since 1990 a US president blocked a foreign business deal.
The president ruled, in 2012, the location of the four projects near the Naval Weapons Systems Training Facility in the US northwest posed a threat to national security.
Obama's decision followed that of the Committee on Foreign Investment in the United States (CFIUS), which said the projects were near restricted airspace and therefore posed the risk to security.
Now, the Federal Court of Appeals has backed Ralls Corp and ordered the company be provided with the evidence the President used to block the application.
In its lawsuit, Ralls said the US government contravened the fifth amendment of the US Constitution, which states, "no person shall be... deprived of life, liberty, or property, without due process of law". The Court of Appeal said the company was denied the "due process of law".
Parent company Sany had tried to sell the four projects to Chinese real estate developer Yeland Group in May 2012. CFIUS only found out about the attempted sale after an article appeared on Windpower Monthly.