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Why Huawei's highly 'unusual ' lawsuit against US govt won't win in court

Huawei's brief was filed by real-life lawyers at major US law firms. Somehow they managed to get the complaint up to 49 pages, plus an appendix of five more citing the relevant federal law.

Noah Feldman | Bloomberg 

Huawei
A surveillance camera is seen next to a sign of Huawei outside a shopping mall in Beijing, China. Photo: Reuters

Whatever Technologies Co. is doing by suing the and six cabinet officials, it isn’t trying to win in court. The legal arguments mounted in its brief aren’t based on existing precedent. Although the brief cites the Constitution, as written the arguments are barely legal at all.

The highly unusual lawsuit, filed last week in the Eastern District of Texas, reads more like a moral broadside directed at the US Congress for naming as a Chinese-government affiliate and effectively blacklisting the company’s telecommunications equipment — and others who use it — from contracts.

Yet even as a moral document, the brief isn’t especially compelling. It doesn’t seem like a fundamental rights violation for a government to refuse to do business with a company it sees as a potential national-security threat.

So what’s after? Maybe its owners don’t quite realize how weak their legal case is, although that seems unlikely. More probably, Huawei’s underlying purpose is an attack on the idea that the US is a rule-of-law country.

When Huawei loses the suit, as it certainly will, the company — and the Chinese government — can say that the courts were in the pocket of the rest of the Huawei can then say US interests are arrayed against a company that has the capacity to consolidate China’s position as a global leader in building 5G wireless communications infrastructure.

Huawei’s brief was filed by real-life lawyers at major US law firms. Somehow they managed to get the complaint up to 49 pages, plus an appendix of five more citing the relevant federal law.

That can’t have been easy. The law that Huawei targets, Section 889 of the National Defense Authorization Act of 2019, is pretty straightforward.

The law says that the government can’t contract for telecommunications equipment or services with Huawei or ZTE Corp., another Chinese company. It also says the government can’t contract for similar services with third parties that rely on Huawei or ZTE for “substantial” or “essential” components of their systems.

The law allows for short-term waivers by heads of agencies, and for longer waivers issued by the director of national intelligence.

Nowhere does the law say why Huawei and ZTE are targeted. Ordinarily, Congress doesn’t have to explain itself when it passes a law. Only the executive branch is obligated to give legal reasons for (some of) its actions.

The lawsuit makes three legal claims, all based on the Constitution, rather than any federal law.

First, the suit says Congress has passed an unconstitutional “bill of attainder” by singling out Huawei and ZTE for special prohibition.

A bill of attainder is classically a criminal penalty that a legislature attaches to a specific person without trial. Its origins go back to the British Parliament, which used such bills to identify and punish traitors or others without trial.

The last time the Supreme Court found that Congress had passed a bill of attainder was in 1965, in a case called US v. Brown. The law in question made it a crime for a member of the Communist Party to serve on the board of a labor union.

This classic Warren Court decision, written in fact by Chief Justice Earl Warren, said the constitutional prohibition on bills of attainder was meant to prohibit “trial by legislature” and “legislative punishment of designated person or groups.”

Section 889 isn’t punishing Huawei. It’s just saying the US government won’t contract with it or use its equipment. Punishment is what happens when I am made worse off than I am, by a fine or a jail term or losing a job I already have. Denying me a contract I am bidding for doesn’t make me worse off. I have no right to make money off the US government.

The bill of attainder argument is therefore exceedingly weak, and more or less guaranteed to fail. The only reason it isn’t frivolous is that various Baby Bells challenged the 1996 Telecommunications Act as a bill of attainder, and one federal district court actually agreed with them. That decision was overturned on appeal, and other courts also rejected the argument.

Huawei’s second legal argument is that Section 889 violates due process of law. It isn’t very specific about why, but the complaint does say that Huawei was deprived of its “opportunity to be heard.”

The problem with this theory is that there’s no due process right to be heard by Congress before it passes a law affecting you. Congress isn’t a court that must give you notice and a chance to be heard before affecting your property rights.

Legislative due process consists of both houses of Congress passing the law and the president signing it. That happened here. The due process argument is window dressing at best.

Finally, Huawei says Section 889 violates separation of powers. The theory here is that a law singling out one company isn’t a law, but more like an executive or judicial ruling.

To some extent this argument just restates the first one, about bills of attainder, which the Supreme Court in the Brown case said effectively violate separation of powers. To the extent the Huawei argument would go any further, it is unconvincing. Congress can pass laws that affect only some businesses or some people.

Official Chinese coverage made the point that Huawei wouldn’t have brought the lawsuit without “suggestions from high-ranking people,” implying Chinese government approval or even advice to initiate the suit.

And an editorial in the same state-run newspaper said that Huawei is “facing a politically motivated crackdown by the US government” and so “has enough reason to file the case, even going by a Western perspective.” It concluded that the case “will test the independence of the US judicial system.”

That suggests Huawei is mostly trying to achieve a propaganda win by making the US look as though it is flouting its own Constitution. Coupled with the arrest of Meng Wanzhou, Huawei’s chief financial officer and the daughter of its founder, the suit can be used to say that the US ignores the rule of law when it comes to dealing with China.

That’s not the case, at least with respect to Section 889. But Huawei, and China, may simply not care.

First Published: Tue, March 12 2019. 10:47 IST
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