|Two Trump Administration measures to strike at the PRC remain unimplemented.|
The Trump Administration has suffered more setbacks in its efforts to move forward with its bans on applications from the People’s Republic of China (PRC). United States’ (U.S.) courts continue to block enforcement of orders prohibiting TikTok and WeChat on national security grounds. Courts have been skeptical of the rationale and reasons offered by the Trump Administration and have not allowed a single portion of either order to take effect.
In a decision late last month, a magistrate judge in San Francisco rejected the Trump Administration’s request to essentially reverse the injunction on the ban of WeChat. Magistrate Judge Laurel Beeler explained:
The government moved to stay the preliminary injunction, and it submitted additional information (that it could not have reasonably submitted earlier) that the Secretary of Commerce considered in identifying the prohibited transactions. The plaintiffs submitted additional information too. On this record, the court denies the motion to stay. The government’s additional evidence does not alter the court’s previous holding that the plaintiffs are entitled to a preliminary injunction.
Beeler said the Department of Commerce presented additional evidence on the threats to national security posed by WeChat and Tencent, chiefly because of the PRC’s access to the data amassed and used by PRC companies, and the Department of Homeland Security’s Cybersecurity Infrastructure and Security Agency presented evidence on potential threats the app poses, including as a vehicle for PRC misinformation, a means of introducing malicious code, and the exposure of data of Americans to the PRC.
One of the plaintiff’s experts identified “four targeted measures to address the government’s concerns about WeChat:
- First, WeChat could partner with a U.S. cloud provider to store data, which would allow a relatively secure place for user data and easy audits to detect unauthorized access to data.
- Second, regular compliance audits would mitigate data-security risks.
- Third, it is industry best practice to have stringent corporate or external oversight over management and personnel with access to user data.
- Fourth, WeChat could use end-to-end encryption. These measures do not eliminate all risks of data leaks to the Chinese government, but they meet the industry’s current standards.
This expert further noted
that the government’s concern about WeChat’s surveillance capabilities could be addressed by an independent third party’s review and audit of WeChat’s source codes. Banning WeChat downloads is dangerous because it increases security risks to users: software needs updates to fix bugs, and if bugs are not fixed, WeChat users’ devices and data are subject to attack. Security concerns about government employees are addressed through narrower bans of those employees’ use of the WeChat app. Otherwise, data protection generally requires best practices such as end-to-end encryption, protecting consumer data and metadata (in the manner of Europe’s General Data Protection Regulation or California’s Consumer Privacy Act), and supporting research into making traffic analysis more difficult. Tech companies such as Facebook and Google, which collect data and sell it to data brokers, also pose surveillance concerns. If China wants U.S. users’ private information, it can buy it from those data brokers. Effectively banning WeChat does not protect U.S. user data from criminals or China.
The government’s new evidence does not meaningfully alter its earlier submissions. The court’s assessment of the First Amendment analysis and the risks to national security — on this record — are unchanged.
[T]he record does not support the conclusion that the government has “narrowly tailored” the prohibited transactions to protect its national-security interests. Instead, the record, on balance, supports the conclusion that the restrictions “burden substantially more speech than is necessary to further the government’s legitimate interests.”
Consequently, Beeler denied the motion to lift the injunction against the WeChat order.
Moreover, the United States Court of Appeals for the Ninth Circuit declined to stay’s Beeler’s injunction barring implementation of the WeChat ban, as requested by the Trump Administration.
On 19 September, Beeler granted a preliminary injunction against the Trump Administration’s implementation of the WeChat order. As explained in a footnote, “[t]he plaintiffs are U.S. WeChat Users Alliance, a nonprofit formed to challenge the WeChat Executive Order, and individual and business users.” In short, they contended that the WeChat ban
(1) violates the First Amendment to the U.S. Constitution,
(2) violates the Fifth Amendment,
(3) violates the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb(1)(a),
(4) was not a lawful exercise of the President’s and the Secretary’s authority under IEEPA— which allows the President to prohibit “transactions” in the interest of national security — because the IEEPA, 50 U.S.C. § 1702(b)(1), does not allow them to regulate personal communications, and
(5) violates the Administrative Procedures Act (“APA”) because the Secretary exceeded his authority under the IEEPA and should have promulgated the rule through the notice-and-comment rulemaking procedures in 5 U.S.C. § 553(b).
The judge granted the motion for a preliminary injunction “on the ground that the plaintiffs have shown serious questions going to the merits of the First Amendment claim, the balance of hardships tips in the plaintiffs’ favor, and the plaintiffs establish sufficiently the other elements for preliminary-injunctive relief.” The judge seemed most persuaded by this claim and summarized the plaintiffs’ argument:
- First, they contend, effectively banning WeChat — which serves as a virtual public square for the Chinese-speaking and Chinese-American community in the United States and is (as a practical matter) their only means of communication — forecloses meaningful access to communication in their community and thereby operates as a prior restraint on their right to free speech that does not survive strict scrutiny.
- Second, even if the prohibited transactions are content-neutral time-place-or-manner restrictions, they do not survive intermediate scrutiny because the complete ban is not narrowly tailored to address the government’s significant interest in national security.
In a decision from last week, a new federal court has found reason to block the TikTok ban on new grounds. Three TikTok influencers had filed suit and lost their motion for a preliminary injunction. However, after District Court of the District of Columbia granted TikTok’s request to stop the Department of Commerce from enforcing the first part of the order implementing the ban, the three influencers revised their motion and refiled.
Judge Wendy Beetlestone found that the Trump Administration exceeded its powers under the International Emergency Economic Powers Act (IEEPA) in issuing part of its TikTok order effectuating the ban set to take effect on 12 November:
- Any provision of internet hosting services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[;]
- Any provision of content delivery network services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[;]
- Any provision of directly contracted or arranged internet transit or peering services, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, enabling the functioning or optimization of the TikTok mobile application[; and]
- Any utilization, occurring on or after 11:59 p.m. eastern standard time on November 12, 2020, of the TikTok mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the land and maritime borders of the United States and its territories.
Beetlestone found that the limit on the use of IEEPA powers to regulate information is clearly implicated by Commerce’s order, which proposes to do just that. Consequently, this is not a legal use of IEEPA powers. The judge also found the plaintiffs would be irreparably harmed through a loss of their audiences and brand sponsorships
Plaintiffs challenge the Commerce Identification on both statutory and constitutional grounds. First, they contend that the Commerce Identification violates both the First and Fifth Amendments to the U.S. Constitution. They then contend that the Commerce Identification violates the Administrative Procedure Act,5 U.S.C. §701 et seq.,as it is both arbitrary and capricious, see id.§706(2)(A), and ultra vires, see id. § 706(2)(C). Plaintiffs’ ultra vires claim consists of three separate arguments: (1) the Commerce Identification contravenes IEEPA’s “informational materials” exception, 50 U.S.C. § 1702(b)(3); (2) the Commerce Identification contravenes IEEPA’s prohibition on the regulation of “personal communication[s] . . . not involv[ing] a transfer of anything of value,” id. § 1702(b)(1), and (3) the Commerce Identification is not responsive to the national emergency declared in the ICTS Executive Order, and therefore requires the declaration of a new national emergency to take effect, see id. §1701(b).
In the first injunction granted against the TikTok ban, the court found that TikTok’s claims on the misuse of IEEPA , 50 U.S.C. §§ 1701–08, the primary authority President Donald Trump relied on in his executive order banning the app, were unpersuasive. The court conceded “IEEPA contains a broad grant of authority to declare national emergencies and to prohibit certain transactions with foreign countries or foreign nationals that pose risks to the national security of the United States.” But, the court noted “IEEPA also contains two express limitations relevant here: the “authority granted to the President . . . does not include the authority to regulate or prohibit, directly or indirectly” either (a) the importation or exportation of “information or informational materials”; or (b) “personal communication[s], which do not involve a transfer of anything of value.” The court concluded:
In sum, the TikTok Order and the Secretary’s prohibitions will have the intended effect of stopping U.S. users from communicating (and thus sharing data) on TikTok. To be sure, the ultimate purpose of those prohibitions is to protect the national security by preventing China from accessing that data and skewing content on TikTok. And the government’s actions may not constitute direct regulations or prohibitions of activities carved out by 50 U.S.C. 1702(b). But Plaintiffs have demonstrated that they are likely to succeed on their claim that the prohibitions constitute indirect regulations of “personal communication[s]” or the exchange of “information or informational materials.”
After considering the risks of irreparable harm to TikTok and the equities and public interest, the court decided:
Weighing these interests together with Plaintiffs’ likelihood of succeeding on their IEEPA claim and the irreparable harm that Plaintiffs (and their U.S. users) will suffer absent an injunction, the Court concludes that a preliminary injunction is appropriate.
On 18 September, the Trump Administration issued orders barring TikTok and WeChat pursuant to the “Executive Order on Addressing the Threat Posed by TikTok” and “Executive Order on Addressing the Threat Posed by WeChat” that bar any transactions with the companies that made, distribute, and operate TikTok and WeChat respectively. The U.S. Department of Commerce (Commerce) issued orders effectuating the executive orders.
In a press release, Commerce explained:
As of September 20, 2020, the following transactions are prohibited:
- Any provision of service to distribute or maintain the WeChat or TikTok mobile applications, constituent code, or application updates through an online mobile application store in the U.S.;
- Any provision of services through the WeChat mobile application for the purpose of transferring funds or processing payments within the U.S.
As of September 20, 2020, for WeChat and as of November 12, 2020, for TikTok, the following transactions are prohibited:
- Any provision of internet hosting services enabling the functioning or optimization of the mobile application in the U.S.;
- Any provision of content delivery network services enabling the functioning or optimization of the mobile application in the U.S.;
- Any provision directly contracted or arranged internet transit or peering services enabling the function or optimization of the mobile application within the U.S.;
- Any utilization of the mobile application’s constituent code, functions, or services in the functioning of software or services developed and/or accessible within the U.S.
Any other prohibitive transaction relating to WeChat or TikTok may be identified at a future date. Should the U.S. Government determine that WeChat’s or TikTok’s illicit behavior is being replicated by another app somehow outside the scope of these executive orders, the President has the authority to consider whether additional orders may be appropriate to address such activities. The President has provided until November 12 for the national security concerns posed by TikTok to be resolved. If they are, the prohibitions in this order may be lifted.
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