Huawei Sues U.S. Over Equipment Ban, Escalating Legal Clash

Huawei Sues U.S. Over Equipment Ban, Escalating Legal Clash · Bloomberg

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(Bloomberg) -- Huawei Technologies Co. sued the U.S. government for barring its equipment from certain networks, delivering a legal riposte to American accusations it aids China in espionage.

The lawsuit is aimed at a U.S. statute that blocks government agencies from using equipment from Huawei and its domestic rival ZTE Corp., according to a complaint filed in federal court in Texas. Huawei argues in the suit that it’s unconstitutional to single out a person or a group for penalty without a fair trial.

The action signals a more aggressive response from the company toward its U.S. accusers, who have been trying to persuade other countries to ban Huawei gear from crucial fifth-generation communications networks. The complaint landed days after finance chief Meng Wanzhou sued Canada’s government for allegedly trampling her constitutional rights during her December arrest -- an effort to discredit the case against her as she awaits potential extradition to the U.S. for bank fraud.

The White House didn’t immediately respond to a request for comment on the lawsuit.

In its U.S. case, Huawei is taking aim at a provision in the 2019 National Defense Authorization Act. That provision bars any executive agency, government contractor or company that receives a government loan or grant from using Huawei and ZTE equipment, according to the complaint. The Chinese company argues that the provision is a bill of attainder, a legislative punishment without trial that’s prohibited by the U.S. Constitution.

“That’s a very hard argument to win but certainly something that they can try in an effort to slow down the federal government,” Peter Henning, a professor at Wayne State University Law School, told Bloomberg on a podcast.

Legal experts give Huawei’s lawsuit little chance of success based on a recent, similar case filed by Moscow-based cybersecurity firm Kaspersky Lab Inc.

In September 2017, the U.S. Department of Homeland Security directed agencies to stop using Kaspersky’s anti-virus software based on concerns the Russian government could use the programs to spy on federal information systems. President Trump signed the ban Dec. 12, 2017.

A Washington DC-based appeals court agreed late last year with a lower court’s rejection of Kaspersky’s argument that the prohibition amounted to an unconstitutional bill of attainder because it addressed a national security vulnerability.

Huawei is increasingly in the crosshairs of the U.S. government and its allies, just as it’s pushing for leadership in supplying fifth-generation wireless technology. Countries are preparing to spend billions on the potentially revolutionary equipment aimed at enabling everything from smart highways to self-driving cars. The world’s top provider of networking gear faces the prospect of being shut out of pivotal infrastructure markets. And the clash has complicated negotiations between Washington and Beijing as they try to hammer out a trade deal.