|TikTok files a longshot lawsuit that may soon be moot if the company’s operations in the U.S. are sold.|
No one in the White House or Administration should be terribly surprised that TikTok decided to sue over the 6 August “Executive Order on Addressing the Threat Posed by TikTok.” The company is alleging the President and his Administration exceeded the bounds of authority granted by Congress and violated the company’s rights under the United States (U.S.) Constitution. The company wants a court to stop the Trump Administration from moving forward with implementing the executive order (EO) and for the court to deem the EO unconstitutional and illegal. It is possible the court rules on whether it will enjoin the Trump Administration in the short term, but it will likely take much more time to decide on the substance of the case. In any event, this suit could soon be moot if ByteDance sells off its U.S. operations of TikTok to a U.S. company, for the EO would likely be rescinded in such a case.
The EO bars all transactions between U.S. entities and people, starting 45 days after issuance of the EO, with TikTok and their subsidiaries. Specifically, “to the extent permitted under applicable law: any transaction [is prohibited] by any person, or with respect to any property, subject to the jurisdiction of the United States, with [ByteDance], or its subsidiaries, in which any such company has any interest…” The Trump Administration claimed:
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
In the suit filed in United States federal court in Northern California, TikTok is asking for an injunction to stop enforcement of the EO and a declaration that it is illegal. The company specifically asserts:
The executive order and, necessarily, any implementing regulations are unlawful and unconstitutional for a number of independent reasons:
- By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment.
- The order is ultra vires because it is not based on a bona fide national emergency and authorizes the prohibition of activities that have not been found to pose “an unusual and extraordinary threat.”
- The order is ultra vires because its prohibitions sweep broadly to prohibit any transactions with ByteDance, although the purported threat justifying the order is limited to TikTok, just one of ByteDance’s businesses.
- The order is ultra vires because it restricts personal communications and the transmission of informational materials, in direct violation of International Emergency Economic Powers Act (IEEPA).
- IEEPA lacks any intelligible principle to guide or constrain the President’s action and thereby violates the non-delegation doctrine, as the President’s overbroad and unjustified claim of authority in this matter confirms.
- By demanding that Plaintiffs make a payment to the U.S. Treasury as a condition for the sale of TikTok, the President has taken Plaintiffs’ property without compensation in violation of the Fifth Amendment.
- By preventing TikTok Inc. from operating in the United States the executive order violates TikTok Inc.’s First Amendment rights in its code, an expressive means of communication.
In a press release, TikTok contended
To be clear, we far prefer constructive dialogue over litigation. But with the [EO] threatening to bring a ban on our US operations – eliminating the creation of 10,000 American jobs and irreparably harming the millions of Americans who turn to this app for entertainment, connection, and legitimate livelihoods that are vital especially during the pandemic – we simply have no choice.
It bears note that rarely have suits against the use of a President’s use of IEEPA succeeded, notably on many of the same grounds TikTok is using. Courts have rejected claims that a President’s use of these powers violate the Fifth and First Amendments and the non-delegation doctrine.
Additionally, a TikTok employee has filed suit against the Trump Administration, making some of the same arguments against the EO, but contending further
Given the severe civil and criminal penalties in place for violating the Executive Order, and the overbroad nature of its language, it is obvious that TikTok and its employees, as well as other companies involved in the process of distributing wages and salaries to U.S. employees, such as ADP, banks, and credit companies, would not dare to engage in any activity that might be construed as a violation. The broad language of the order necessarily will create a chilling effect for any person or entity that has contracted with or that does business with TikTok.
Of course, there is litigation pending against TikTok for alleged violations, including one case before the same court in Northern California. A college student filed suit, arguing:
Unknown to its users, however, is that TikTok also includes Chinese surveillance software. TikTok clandestinely has vacuumed up and transferred to servers in China vast quantities of private and personally-identifiable user data that can be employed to identify, profile and track the location and activities of users in the United States now and in the future. TikTok also has surreptitiously taken user content, such as draft videos never intended for publication, without user knowledge or consent. In short, TikTok’s lighthearted fun comes at a heavy cost. Meanwhile, TikTok unjustly profits from its secret harvesting of private and personally-identifiable user data by, among other things, using such data to derive vast targeted-advertising revenues and profits. Its conduct violates statutory, Constitutional, and common law privacy, data, and consumer protections.
The plaintiff asserted TikTok violated the following U.S. and California laws and common law legal doctrines:
- Computer Fraud and Abuse Act, 18 U.S.C. § 1030
- California Comprehensive Data Access and Fraud Act, Cal. Pen. C. § 502
- Right to Privacy – California Constitution
- Intrusion upon Seclusion
- California Unfair Competition Law, Bus. & Prof. C. §§ 17200 et seq.
- California False Advertising Law, Bus. & Prof. C. §§ 17500 et seq.
- Restitution / Unjust Enrichment
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