As we previewed earlier this week, Huawei filed a lawsuit late Wednesday evening against the US over a law banning government agencies and contractors from buying equipment made by Huawei and fellow Chinese telecoms firm ZTE Corp. The suit accused Congress of unconstitutionally punishing Huawei with Section 889 of the 2019 National Defense Authorization Act, which Huawei said had deprived it of business because the law not only restricted Huawei from serving US customers, but also some of its international customers as well (the law bars US government agencies from contracting with or awarding grants or loans to third parties who buy Huawei equipment and services).
Huawei Chairman Guo Ping – who last week mocked perceived US hypocrisy by reminding the crowd of some of the more scandalous claims from the Snowden leaks – said Thursday in a statement circulated to US and Chinese media that, by passing the NDAA, Congress had opted to play “judge, jury and executioner” without giving Huawei the opportunity to defend itself, per the Wall Street Journal.
“In enacting the NDAA, Congress acted unconstitutionally as judge, jury and executioner,” said Guo Ping, one of Huawei’s chairmen, in Shenzhen on Thursday. “Regrettably, the NDAA was enacted to restrict Huawei without giving us the opportunity to defend ourselves.”
The suit, filed in the Eastern District of Texas, the district court where Huawei’s Plano, Texas, US headquarters is based, accused the government of passing an unconstitutional “bill of attainder”, a term for when an individual or corporation finds somebody guilty of a crime via legislation. The lawsuit seeks an injunction on the law until a ruling can be reached. In addition to the harm done to Huawei’s business (though the suit acknowledges that only a tiny fraction of Huawei’s revenue is generated in the US), Huawei accused the US of causing unnecessary reputational damage.
Authorities in Beijing said the lawsuit was “totally reasonable,” according to the Global Times, a newspaper with ties to the Chinese government.
It’s “totally reasonable” for companies to protect their legitimate rights and interests through legal means, Global Times cites China Foreign Ministry spokesman Lu Kang as saying at briefing Thursday.
However, fortunately for lawmakers hoping to put Huawei at a disadvantage in the global competition to dominate int he 5G space, Bloomberg reported on Thursday that Huawei’s lawsuit probably won’t succeed in getting the law thrown out.
“I don’t see the U.S. backing away from these cases,” said Peter Henning, a former federal prosecutor who is now a professor at Wayne State University Law School in Detroit.
Offering a point of comparison, experts cited a similar “bill of attainder” lawsuit brought by Russian software firm Kaspersky Labs last year after the federal government banned Huawei software from being used in government offices. The court found that the order wasn’t sufficiently punitive against Kaspersky.
However, it’s possible that Huawei isn’t seeking a legal victory so much as a win in the court of public opinion. As WSJ affirmed, the US’s campaign to encourage its allies to exclude Huawei equipment from their domestic 5G networks has caused significant reputational damage. The two DOJ indictments against the firm, as well as the arrest of its CFO in Canada, certainly haven’t helped.
But by suing the US government, Huawei could be trying to publicize information that might help undo some of this damage.