Huawei’s US government lawsuit may lift the air of ‘mystery’ around the Chinese telecoms giant
- The US Congress has banned federal agencies from using equipment made by the Shenzhen-based firm due to national security concerns
- Professor He Weifang says the case ‘would be fantastic’ if it helped reveal details of Huawei’s ownership structure and relationship with the Chinese government
Huawei’s lawsuit against the United States government could end up lifting the air of “mystery” surrounding the Chinese telecommunications equipment manufacturer should details of its ownership structure and relationship with the Chinese government be revealed, according to a leading Chinese law professor.
Huawei, the world’s biggest producer of telecoms equipment, faces intense scrutiny in the West over its relationship with the Chinese government and US-led allegations of enabling state espionage.
“It would be fantastic if the US judicial system could help to reveal Huawei’s ownership structure and its relationship with the Chinese government, which has remained mysterious to the Chinese public,” Peking University professor He Weifang told the South China Morning Post in what has now become a rare interview. “The US doesn’t conceal the judicial procedure from the public. The legal reasoning and adversary system in the United States is charming, the process of the case will be a great legal education to the Chinese public and its authority.”
“Certainly it is reasonable for Huawei to challenge the government’s ban on its products, but American courts are usually reluctant to overrule federal government administrative decisions when it comes to foreign affairs, especially matters involving claims of national security of a technical and often secret nature,” said Jerome A. Cohen, a law professor at New York University.
“However, during the first two years of the Trump administration, the federal courts have in certain types of cases shown greater than usual willingness to challenge the government, at least at the trial level.”
Huawei has been banned from supplying to federal agencies under the 2019 National Defence Authorisation Act (NDAA), which was passed into law in August. Under the law, which specifies budget, expenditures and policies for the US Department of Defense, Huawei is also barred from contracting with or awarding grants or loans to third parties who buy Huawei equipment or services.
“Huawei has been arguing that they have not engaged in any violation of the laws of the country where they are located, and the allegations made by the relevant parties are groundless. If Huawei is proved innocent by US court, it will be a big thing for Huawei, which Huawei cannot buy through mass public activities. However, if the court affirms that Huawei is engaged in these improper transactions, then Huawei should stop defending itself to the public,” added He.
“It’s hard to see why Huawei decided to sue the US government. If there is no chance of winning at all, they would not have taken this action. However, Huawei might also end up with defeating itself if there is enough evidence for the US government to prove it harms US national security.”
The courts in the US have considered it dangerous for the US Congress to punish people or groups suspected of posing a national security risk without a trial, although the Washington-based legislature is bound to protect the government from perceived national security risks.
“Huawei’s case will turn on whether the court thinks the NDAA is a punishment or a prophylactic qualification,” said Nikolas Bowie, an assistant professor at Harvard Law School. “On one hand, this is a classic example of punishment. Members of Congress said they were giving Huawei the corporate death penalty because of fears of what Huawei has done in the past and might do in the future.
“On the other hand, the NDAA can be interpreted as a prophylactic qualification – a regulation – rather than a punishment. Congress certainly has the power to decide that certain types of business are so dangerous to national security that they’re prohibited from working with the government.”
Huawei filed the lawsuit in the US District Court in Plano, Texas, where Huawei’s US headquarters are located, accusing the US government of violating the Bill of Attainder Clause, a legislative act that singles out an individual or group for punishment without a trial. It also argues the US government has violated the Due Process Clause and the separation of powers principles enshrined in the US Constitution.
Steven Schwinn, a professor at the John Marshall Law School in Chicago, pointed out that the Due Process Clause only protects “life, liberty, and property” from government action without due process of law.
“Huawei has not asserted a cognisable life, liberty, or property interest in its complaint, and so probably does not have a due process claim,” he said. “The courts will look to whether the ban is an actual punishment, whether it is the kind of punishment that the Bill of Attainder Clause has previously prohibited, and whether Congress intended to punish Huawei by taking this action. Under all three of those factors, this is almost certainly not a punishment, and therefore not a Bill of Attainder violation.”
Last year, the US Court of Appeals for the District of Columbia Circuit dismissed lawsuits filed by Russian cybersecurity firm Kaspersky Lab over a federal ban on the use of their products. The US government claimed that Kaspersky's products constituted a threat to national security and could be used to facilitate espionage by the Russian government, which was claimed by the company as “unconstitutional”.
“Based on that case, the US will probably file a motion to dismiss before there is discovery or any trial, and will argue that Huawei cannot show that the NDAA does not serve legitimate, ‘nonpunitive legislative purposes’, such as the security of the federal government and its communications infrastructure,” said Ronald Cheng, a partner at O’Melveny & Myers LLP, who works in both Hong Kong and Los Angeles.
“The government will probably rely on evidence and testimony in the legislative record, including Congressional hearings that addressed Huawei and the safety of its telecommunication products. If Huawei cannot make this showing, it could also try to argue that the law is within the ‘historical meaning’ of legislative punishment, or it could argue that the legislative record in fact shows a motive to punish.”
Huawei is contending that the restrictions placed on its equipment, declared in Section 889 of the 2019 NDAA, violate at least three constitutional provisions, with the constitution forbidding Congress to pass such bills.
“If the Texas court follows the DC court in the Kaspersky case, the charges will simply be dismissed. But if the Texas court thinks that Huawei has made a valid claim, then both sides will have the opportunity to ‘discover’ evidence about the US government’s claim and Huawei’s ownership structure,” Bowie said.
“Another legal obstacle for Huawei is that the Supreme Court has never applied the Bill of Attainder Clause to a corporation, as opposed to a person. I don’t know how much this will matter, but the US government could raise the argument.”