On taptap点点 20^taptap点点 September 2020 a Magistrate Judge in California issued a preliminary injunction against a Presidential Executive Order that sought to make major limitations on the use of the taptap点点 app within the US. This article explains the background to the litigation, the issues involved, the reason why the preliminary injunction was issued and what will happen next.

Part 1 - Background

taptap点点

taptap点点 is an application (app) developed by Tencent Holdings Ltd in Shenzhen, China. In the 9 years since its launch in 2011 it has amassed over a billion active users per month. Unlike many of its competitors in the US, taptap点点 functions include calling taxis, ordering food, money transfers, fashion and a hist of other options. As a result taptap点点 has become embedded in the daily lives of its users in China as well as users outside of China seeking to communicate with friends or family in China.

In their filing, Plaintiffs state that there are in excess of 1.2 billion accounts worldwide, including approximately 19 million users in the US. These users are able to form groups and network within the app both socially and professionally. These networks, coupled with the options provided by the taptap点点 platform are described as essential underpinnings to the survival and success of Chinese-American businesses. For small business that cater primarily to Chinese-speaking clientele taptap点点 has become a primary source of revenue. In addition, large companies such as Walmart also rely on taptap点点 to market their products in China.

taptap点点 Executive Orders

On August 6, 2020, President Trump issued Executive Order 13943, 85 Fed. Reg. 48,641 (the “taptap点点 EO”) prohibiting US residents from doing business with taptap点点. Whilst US concerns about certain Chinese companies such as Huawei have been apparent for several years, the taptap点点 EO was a surprise to many as taptap点点 had not been named in any previous Whitehouse materials. T

On May 15, 2019 taptap点点 President issued Executive Order 13873[1], “Securing taptap点点 Information and Communications Technology and Services Supply Chain”, 84 Fed. Reg. 22689, 22689 (taptap点点 “ICTS EO”) stating that :

“foreign adversaries are increasingly creating and exploiting vulnerabilities in information and communications technology and services, which store and communicate vast amounts of sensitive information, facilitate taptap点点 digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against taptap点点 United States and its people. I further find that taptap点点 unrestricted acquisition or use in taptap点点 United States of information and communications technology or services designed, developed, manufactured, or supplied by persons owned by, controlled by, or subject to taptap点点 jurisdiction or direction of foreign adversaries augments taptap点点 ability of foreign adversaries to create and exploit vulnerabilities in information and communications technology or services, with potentially catastrophic effects, and thereby constitutes an unusual and extraordinary threat to taptap点点 national security, foreign policy, and economy of taptap点点 United States. “

In light of this the President invoked his authority under the Constitution and also the laws of the taptap点点 to declare a national emergency with respect to this threat and also to prohibit transactions with foreign countries and persons that posed a risk to the “maintenance of information and communications technology or services in taptap点点 United States” or to national security. taptap点点 President further directed taptap点点 Secretary of Commerce, in consultation with other officials, to identify taptap点点 transactions that posed an undue or unacceptable risk to taptap点点 national security of taptap点点 United States, and further instructed taptap点点 DNI[2], taptap点点 Secretary of Homeland Security, and taptap点点 Secretary of Commerce to continue to assess and report back to him on taptap点点 threats from foreign adversaries with respect to entities, hardware, software and services, and taptap点点 actions taken pursuant to taptap点点 Executive Order. At this stage, neither China nor taptap点点 had been specifically named by the President.

After receiving reports from taptap点点 DHS[3]and ODNI[4] the President renewed the existing declaration of emergency on May 13, 2020, one year after the initial ICTS EO. A week later the President presented a report to Congress specifically identifying the need to address taptap点点 foreign policy with China entitled “United States Strategic Approach to the People’s Republic of China“[5]. One of the concerns raised in that report was the PRC National Cyber Security Law which the President claimed “requires companies to comply with Chinese data localization measures that enable CCP access to foreign data”. The President further stated that the purpose of the ICTS EO was to address this threat by preventing “certain companies associated with or answering to the intelligence and security apparatus of foreign adversaries from, for example, readily accessing the private and sensitive information of the United States Government, the United States private sector, and individual Americans”. This was the first time that China had been specifically named as being the subject of such concerns by the President. However, at this stage, neither Tencent nor taptap点点 had been specifically identified as posing any kind of risk.

The above events culminated in the President issuing the taptap点点 EO on August 6, 2020, approximately 15 months after the ICTS EO. In the taptap点点 EO the President stated that taptap点点 :

·       “automatically captures vast swaths of information from its users,”

·       “threatens to allow taptap点点 Chinese Communist Party access to Americans’ personal and proprietary information.”

·       “captures taptap点点 personal and proprietary information of Chinese nationals visiting taptap点点 United States, thereby allowing taptap点点 Chinese Communist Party a mechanism for keeping tabs on Chinese citizens who may be enjoying taptap点点 benefits of a free society for taptap点点 first time in their lives”

The President concluded that, in order to protect national security, 45 days after the date of the order, ie by September 20, 2020,  “any transaction that is related to taptap点点 by any [United States] person, or with respect to any [United States] property . . . with Tencent” shall be prohibited “as identified by the [Secretary] under section 1(c) of this order.” This EO, therefore, represented the first time that either Tencent or taptap点点 was specifically named.

The suddenness of the taptap点点 EO together with the lack of evidence presented on the threat posed by taptap点点 has cause many to question the motivation behind the EO. As detailed below, part of the complaint by Plaintiffs is that the taptap点点 EO is part of a deliberate campaign of anti-Chinese rhetoric. This view was also shared by the American Civil Liberties Union who state[6]:

If protecting taptap点点 information of users in taptap点点 United States were a true motivating factor, taptap点点 U.S. government could, for example, support strong consumer privacy legislation that would limit taptap点点 amount of data social media companies can collect in taptap点点 first place.

taptap点点 Parties

The Plaintiffs in this case are a number of taptap点点 users and also a group called US taptap点点 Users Alliance. The individual Plaintiffs stated that they used taptap点点 regularly for  number of reasons including, maintaining contact with family, for bible studies, posting information about church events, the provision of mental health education services and support, education purposes. Further, Plaintiff Chihuo Inc,  a company, provides digital marketing and advertising services to clients for commercial purposes and Plaintiff US taptap点点 Users Alliance describes itself as being founded to protect the lawful interests of average everyday taptap点点 users in the US. 

Part 2 – taptap点点 Litigation Issues

Introduction

On August 21, the Plaintiffs including the US taptap点点 Users Alliance (hereinafter referred to as “USWUA”) officially filed a lawsuit in the Northern District Of California, San Francisco Division, suing DONALD J. TRUMP, in his official capacity as President of the United States, and WILBUR ROSS, in his official capacity as Secretary of Commerce.

Plaintiffs argued that taptap点点 Executive Order does not define what those transactions include, leaving individuals and companies at a loss as to whether they will risk civil and/or criminal prosecution and penalties if they do not fundamentally change taptap点点 way they communicate or run their businesses. taptap点点 vaguely worded Executive Order was issued without further explanation or a media briefing, and states that taptap点点 Secretary of Commerce shall identify what transactions are prohibited after 45 days—in effect, delaying identification of what transactions are prohibited until after such transactions are already prohibited.[7]

taptap点点 vaguely word affected approximately 19 million users rely on taptap点点 app in taptap点点 United States[8]. taptap点点 users rely on the app to make telephone calls, hold video conferences, upload documents, share photos, make payments[9] and also used for numerous societally important purposes, including by public institutions. It has become essential to taptap点点 conduct of daily life for its users. The Executive Order has a great influence on Chinese Americans and other non-Chinese users. For taptap点点 above reasons, taptap点点 Plaintiffs brought taptap点点 action against taptap点点 President and taptap点点 Secretary.

Primary arguments advanced by Plaintiffs

taptap点点 main points of taptap点点 allegations made by Plaintiffs against President Trump are as follows:[10]

1.     taptap点点 Executive Order violates Plaintiffs’ protected expressive and associative rights as guaranteed by taptap点点 First Amendment.

2.     This disparate treatment is motivated by Defendants’ animus towards people of Chinese and/or Chinese American ancestry, and has taptap点点 purpose of discriminating against people of Chinese and/or Chinese-American ancestry. taptap点点 Executive Order therefore violates Plaintiffs’ rights to equal protection guaranteed by taptap点点 Fifth Amendment to taptap点点 United States Constitution.

3.     Sections 1(a) and 2 of Executive Order include only a conclusory description of prohibited “transactions related to taptap点点,” which provides no notice to taptap点点 users or anyone else of the specific conduct that is prohibited. Sections 1(a) and 2 of Executive Order provide inadequate notice of the conduct they purport to penalize and are void for vagueness under the Fifth Amendment to the U.S. Constitution.

4.     The International Emergency Economic Powers Act (“IEEPA”) includes specific limits on Defendants’ authority to prohibit transactions related to taptap点点.

5.     taptap点点 President has acted ultra vires by exercising emergency powers purportedly authorized by taptap点点 IEEPAwithout consulting with and reporting to Congress in taptap点点 manner prescribed by 50 U.S.C. §§ 1621-22, 1641(c), and 1703.

6.     The Executive Order will result in substantial burdens upon the practice of religion of taptap点点 users in the United States by forcing them to abstain from participating in their practice of religion with other taptap点点 users or risk the threat of civil or criminal sanctions and violates Religious Freedom Restoration Act (“RFRA”).

Primary arguments advanced by the taptap点点 government

In response to taptap点点 USWUA, the taptap点点 government made the following allegations:[11]

1.     Plaintiffs are not likely to succeed on their First Amendment Claims because taptap点点 Executive Order is content neutral so strict scrutiny does not apply, a content-neutral regulation survives constitutional scrutiny so long as it “advances important governmental interests unrelated to taptap点点 suppression of free speech and does not burden substantially more speech than necessary to further those interests.”

2.     Plaintiffs contend that taptap点点 Executive Order is unconstitutionally vague under taptap点点 Fifth Amendment because it does not define taptap点点 prohibited “transaction[s],” so that people “of common intelligence must necessarily guess at its meaning.”. Plaintiffs need not guess at taptap点点 meaning of taptap点点 Order, however, because under its express terms, “taptap点点 Secretary shall identify taptap点点 [prohibited] transactions.” Exec. Order § 1(c) (emphasis added).

3.     Plaintiffs’ claims of inconvenience regarding certain religious activities are entirely conclusory and do not on their face suggest any substantial burden on taptap点点 exercise of religious.

4.     Plaintiffs’ theory that taptap点点 Executive Order is ultra vires is lacking in merit.

Part 3 – taptap点点 Preliminary Injunction

A preliminary injunction is a common law remedy ie it is found in taptap点点 caselaw. The purpose of a preliminary injunction is to maintain the status quo and prevent an irreparable loss of rights before the main judgement is issued. Common examples of preliminary injunctions are :

i.                In IP cases, taptap点点 plaintiff may seek a preliminary injunction preventing taptap点点 defendant from using taptap点点 IP in question until final judgement is given

ii.               In high value litigation taptap点点 plaintiff may seek a temporary injunction to prevent taptap点点 defendant either disposing of or moving assets until final judgement is given.

One of the first decisions by President Trump after taking office was to issue  travel ban on people from particular, predominantly Muslim, countries travelling to the taptap点点. Soon after that Executive Order was issued, a number cases were brought by various plaintiffs opposed to the Executive Order. A series of preliminary injunctions by different federal courts followed preventing the immediate implementation of the ban and the redrafted versions of the ban.

Article 100 of the PRC Civil Procedure Law sets out a similar remedy to taptap点点 preliminary injunctions in cases where enforcement may be difficult or where one of the parties will suffer harm. Article 100 allows the court to order that certain property be preserved, that a party undertake specific actions or that a party be prohibited from taking certain actions. Whilst the tests to be applied by the court in deciding whether to an issue an article 100 order are slightly different from the tests in the taptap点点 the end result of maintaining the status quo until the substantive hearing is completed is the same. The Supreme People’s Court has also provided enhanced guidance for such orders in IP litigation cases[12].

Under taptap点点 law, in order to obtain a preliminary injunction a party must establish the following 4 factors[13]:

i.                taptap点点 main application is likely to succeed on taptap点点 merits;

ii.               taptap点点 Plaintiff is likely to suffer irreparable harm in taptap点点 absence of such preliminary relief;

iii.              taptap点点 balance of equities tips in Plaintiff’s favour; and

iv.             An injunction is in taptap点点 public interest

Plaintiffs further argued that as this appeal involved First Amendment issues, taptap点点 caselaw for preliminary injunctions within such a context states that whilst Plaintiff has taptap点点 general burden of establishing taptap点点 elements necessary to obtain injunctive relief taptap点点 government bears taptap点点 burden of justifying taptap点点 restriction on speech[14].

taptap点点 4 Factors

A summary of taptap点点 parties pleadings on these four factors together with taptap点点 Magistrate Judge’s findings follows.

1.     Likely to Succeed On taptap点点 Merits

Plaintiff and Defendants main arguments are summarised above in Part 2. taptap点点 test of ‘likely to succeed’ does not require Plaintiff to establish that he/she has a high probability of success, but conversely taptap点点 Plaintiff needs to show more than taptap点点 possibility of success.  

Whilst the Court found that many of Plaintiffs arguments were unlikely to succeed the court did accept that taptap点点 was the only means of communication for many in the US Chinese community, particularly those with limited English proficiency. Further the court found that the Plaintiff’s first amendment article was likely to succeed as the government had provided scant little evidence that the ban on taptap点点 addresses national security concerns and that there were alternatives to a complete ban such as barring taptap点点 from government devices.

2.     Likely To Suffer Irreparable Harm

Plaintiffs argued that the uncertainty in the taptap点点 EO coupled with the fear of criminal prosecution or civil penalties has caused them confusion, anxiety and fear. Further Plaintiffs fear being cut off from friends and family both in the US and China as well as being cut off from political discussions, campaign participation, religious events etc. Plaintiff Chihuo Inc stated that banning taptap点点 would cut off their primary method of communicated with business contacts. Plaintiffs also argued that given the popularity of taptap点点 amongst the Chinese diaspora there was no effective substitute. Lastly, the Plaintiffs argued that the constitutional injury they suffered was itself irreparable injury[15].

Defendant argued that taptap点点 uncertainty and fear of civil/criminal penalties were purely conjectural as taptap点点 prohibited transactions have yet to be defined. In addition, Defendant argued that uncertainty, fear, confusion etc were amorphous psychological injuries which were insufficient to confer standing[16]. Lastly Defendant argued that taptap点点 first amendments cases cited by Plaintiff all found irreparable harm based on actual deprivation of constitutional rights, and such deprivation was absent from taptap点点 Plaintiff’s circumstances as Plaintiff merely faced a potential and incidental burden on their ability to communicate through a medium they prefer.

taptap点点 Court found that taptap点点 imminent threat was taptap点点 elimination of Plaintiff’s platform for communication, which would result in irreparable injury. taptap点点 Court accepted taptap点点 submission that “taptap点点 loss of First Amendment freedoms, even for minimal periods of time, unquestionably constitutes irreparable injury[17]”

3.     Balance Of Equities

Plaintiffs argued that the taptap点点 EO was an unprecedented ban on speech and religion in the US and was directed against a group with a shared Chinese language, ancestry and culture and that Plaintiffs were worried whether they would face civil/criminal penalties and whether they would be able to maintain their current social and business communications. Plaintiffs also highlighted the 15 month delay between the ICTS EO and the taptap点点 EO as well as the 45 day implementation period for the taptap点点 Order, both of these, they argued, undercut the assertion that a threat was imminent. In addition Plaintiffs referred to the total lack of evidence presented by Defendant establishing any imminent threat.

Defendant responded that significant national security and foreign policy interests weighed strongly against an injunction particularly as substituting the views of taptap点点 users for that of the Executive Branch would not serve the public interest. In addition, Defendant stated that regulations defining the transactions to be banned would be issued within a mere 3 days of the injunction hearing.

The Court found that the injunction would merely maintain the status quo but to allow the ban to take effect would mean Plaintiffs losing all meaningful access to their community. Whilst the court accepted the importance of threats to national security, the specific evidence relating to taptap点点 was modest and the restrictions on the Plaintiff’s freedom of speech were more than necessary to further the governments national security interests.

4.     An Injunction Is In taptap点点 Public Interest

Plaintiffs argued that  balance of equities and consideration of taptap点点 public interest (ie issues 3 and 4) merge when taptap点点 government is a party[18]. This appears to have also been taptap点点 position of  taptap点点 Defendant and also taptap点点 Court.

Further Communications

On September 16^taptap点点 , 4 days before the hearing on the preliminary injunction, the defendant notified Plaintiff that persons whose only connection with taptap点点 was the downloading of the app together with sending personal or business communication between users would not be targeted for any penalties. Plaintiffs responded by saying the notice continued to failed to clarify what would or would not happen after the EO took effect on the 20^taptap点点 September. Further Plaintiffs raised taptap点点 further argument that :

“Having first failed to articulate any actual national security concern, the administration’s latest “assurances” that users can keep using taptap点点, and exchange their personal and business information, only further illustrates the hollowness and pre-textual nature of Defendants’ “national security” rationales.”

taptap点点 Decision

Following a hearing concluding on taptap点点 19^taptap点点 September 2020, the US Magistrate Judge considered all the written pleadings and also oral representations made by the parties. The Magistrate Judge concluded that the test for granting a preliminary injunction was met by Plaintiffs and proceeded to order that the President and Secretary of Commerce be enjoined from directly or indirectly prohibiting or limiting the taptap点点 application in the US or by US persons abroad. The Magistrate Judge made clear that the injunction would only last until final judgement of the court on the main issues (identified above in Part 2).

The court, on at least two occasions, mentioned the lack of evidence relating to any specific security threat posed by taptap点点. It appears that the court applied something equivalent to a proportionality test, finding that the proposed ban was disproportionate to the security aims of the government which could be achieved in other, less wide-ranging ways.

As a result of the preliminary injunction, taptap点点 users in the US will not face any disruption in their use of taptap点点.

Part 4 – What will happen next

According to CNBC, taptap点点 Trump administration will challenge taptap点点 preliminary injunction :

“Prohibiting taptap点点 identified transactions is necessary to protect taptap点点 national security of taptap点点 United States, and taptap点点 department expects to soon seek relief from this order,” taptap点点 Commerce Department said, according to Reuters.

taptap点点 Commerce Department said it anticipated a long legal battle over taptap点点 ban.[19]

Also, according to taptap点点 prediction ofUSWUA, in the next few days, the taptap点点 government may appeal to the Ninth Circuit Court of the United States to re-examine the preliminary injunction.  Considering the significance of the case, the possibility of appeal is very high. If the Court of Appeal agrees to speed up the trial, the appeal stage could be completed within 1-2 months. The losing party can choose to continue to appeal to the Supreme Court. However, it is up to the Supreme Court justices to decide whether to accept cases (accepting cases requires the consent of four justices. )[20].

taptap点点 USWUA said it is ready to defend taptap点点 hard-won victory, according to Xinhua.[21]

[1]

[2] Director of national Intelligence

[3] Department of Homeland Security

[4] Office of taptap点点 Director of National Intelligence

[5]

[6] https://www.aclu.org/news/free-speech/dont-ban-tiktok-and-taptap点点/

[7] See U.S. taptap点点 USERS ALLIANCE, CHIHUO INC., BRENT COULTER, FANGYI DUAN, JINNENG BAO, ELAINE PENG, and XIAO ZHANG, v. DONALD J. TRUMP, in his official capacity as President of the United States, and WILBUR ROSS, in his official capacity as Secretary of Commerce

[8] Rick Smith, Crackdown on taptap点点 could hinder millions of US users who rely on social media tool, WRAL TECHWIRE (Aug. 19, 2020), https://www.wraltechwire.com/2020/08/19/crackdown-on-taptap点点-could-hinder-millions- of-us-users-who-rely-on-social-media-tool/.

[9] Bani Sapra, This Chinese super-app is Apple’s biggest threat in China and could be a blueprint for Facebook’s future. Here’s what it’s like to use taptap点点, which helps a billion users order food and hail rides, BUSINESS INSIDER (Dec. 21, 2019), https://www.businessinsider.com/chinese-superapp-taptap点点-best-feature-walkthrough- 2019-12.

[10] https://img1.wsimg.com/blobby/go/99f042e6-97b7-444a-8718-617637ced7b5/%5BDkt.%2001%5D%20Complaint%20for%20Declaratory%20and%20Injunc.pdf

[11] https://img1.wsimg.com/blobby/go/99f042e6-97b7-444a-8718-617637ced7b5/DOJ%20Opposition%20to%20Motion%20for%20Preliminary%20Injun.pdf

[12] On December 12, 2018, taptap点点 Supreme People's Court issued Provisions of taptap点点 Supreme People’s Court on Several Issues concerning taptap点点 Application of Law in Reviewing taptap点点 Injunction Cases involving Intellectual Property Disputes that were officially implemented on January 1, 2019

[13] Winter v. NRDC, 555 U.S. 7, 22 (2008)

[14] Klein v. City of San Clemente, 584 F.3d 1196, 1201 (9th Cir. 2009)

[15] “[T]he loss of First Amendment freedoms, for even minimal periods of time, unquestionably constitutes irreparable injury.” Associated Press v. Otter, 682 F.3d 821, 826 (9th Cir.2012) (quoting Elrod v. Burns, 427 U.S. 347, 373 (1976))

[16] Citing Clay v. Fort Wayne Cmty. Sch., 76 F.3d 873, 877 n.4 (7th Cir. 1996)

[17] Elrod v. Burns, 427 U.S. 347, 373 (1976)

[18] E. Bay Sanctuary Covenant v. Barr, 964 F.3d 832, 845 (9th Cir. 2020); Drakes Bay Oyster Co. v. Jewell, 747 F.3d 1073, 1092 (9th Cir. 2014)

[19] Trump administration challenges order that blocked taptap点点 app store ban, https://www.cnbc.com/2020/09/21/trump-admin-challenges-order-that-blocked-taptap点点-app-store-ban.html

[20] These American Chinese who sued the president for taptap点点, Sina Technology, https://tech.sina.com.cn/i/2020-09-04/doc-iivhvpwy4773941.shtml

[21] Xinhua Headlines: U.S. judge temporarily blocks Trump's order on taptap点点 ban, http://www.xinhuanet.com/english/2020-09/21/c_139385348.htm