Congress

Huawei accuses Congress of ‘tyranny’ in suit over federal contracting ban

The Chinese company faces legal and regulatory actions threatening access to U.S. markets and is fighting back in U.S. courts

The Huawei Technologies Co. logo is displayed at the Huawei Technologies Co. headquarters on March 29, 2019, in Shenzhen, China. Huawei, the worlds largest telecommunication equipment maker, reported on Friday its annual profit rose 25% to 59.3 billion yuan ($8.7 billion) despite being at the center of global scrutiny. Huawei Technologies faces a barrage of legal and regulatory actions threatening its access to U.S. markets, but it is fighting back with a lawsuit in U.S. courts challenging congressional authority. (Billy H.C. Kwok/Getty Images)

Chinese telecommunications giant Huawei Technologies faces a barrage of legal and regulatory actions threatening its access to U.S. markets, but it is fighting back with a lawsuit in U.S. courts challenging congressional authority to bar the federal government from contracting with the company as an unconstitutional bill of attainder.

The fiscal 2019 defense authorization law prohibits federal agencies from buying, or contracting with companies that use, certain Huawei equipment and services. The company contends that Congress violated Article I of the Constitution by engaging in a “trial by legislature.”

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“In the way that it targets, adjudicates facts about, and sanctions Huawei, Section 889 so accumulates all governmental powers in one body, and produces the very tyranny which the framers feared,” Huawei lawyers contend in the lawsuit filed in U.S. District Court in Texas. Section 889 refers to the portion of the 2019 law that mentions Huawei.

The defense team for the Chinese telecommunications provider filed a motion for summary judgment on Wednesday, seeking a decision from the court solely on the basis of the law, without a fact-finding stage. The judge will hear arguments on Sept. 19.

Section 9 of Article I imposes prohibitions on the exercise of congressional power, including that “No Bill of Attainder or ex post facto Law shall be passed.” Huawei’s brief traces the provision to acts of the British Parliament that imposed penalties on specific persons.

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A 1965 Supreme Court decision in United States vs Brown, on whether Communist Party members could serve as officials in labor groups, held that Congress must accomplish such results by rules of general applicability. It cannot specify the people upon whom the sanction it prescribes is to be levied. “Under our Constitution, Congress possesses full legislative authority, but the task of adjudication must be left to other tribunals,” the Huawei lawsuit says.

Section 889 not only sanctions Huawei, and fellow Chinese telecom ZTE, by name, but also punishes the company by prohibiting federal agencies from purchasing its equipment or services or contracting with companies that do so, thereby imposing a “permanent disability.”

Huawei’s lawyers underlined the bipartisan desire to punish the company. The brief quotes Sen. Tom Cotton, R-Ark, labeling Huawei “untrustworthy” and asserting that “the only fitting punishment would be to give them the death penalty.” Senate Minority Leader Charles E. Schumer, D-N.Y. said Congress should “bring the hammer down.”

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Huawei’s lawyers say that the law also violated the due process clause by a selective deprivation of liberty and property interests, thereby violating the “principle of generality.” In addition, the congressional action violated Supreme Court precedent and the separation of powers by assuming executive and judicial powers, the brief asserts.

A successful challenge in a summary judgment would permit the company to beat the contracting prohibition without the fact-finding stage of a trial, a key advantage given that the Chinese telecom faces two criminal prosecutions, one in Seattle for the theft of trade secrets from T-Mobile, and a second in Brooklyn for fraud, sanctions violations, and money laundering, a case that also swept up Huawei Chief Financial Officer Wanzhou Meng.

Both parties asked the judge to decide the case solely on the basis of the law in a motion to which the court agreed.

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