Judge Doubtful Of Authority To Block TikTok's US Restrictions

By Khorri Atkinson
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Law360 (November 4, 2020, 5:46 PM EST) -- A D.C. federal judge appeared skeptical Wednesday over whether he could block another set of government restrictions that would effectively bar TikTok Inc. from operating in the U.S., saying the popular Chinese-owned video-sharing app seemed to be protected by a Pennsylvania district court's nationwide injunction.

U.S. District Judge Carl Nichols expressed this view during an 80-minute teleconference hearing while peppering attorneys for the popular social media platform and the government on what implication the Oct. 30 preliminary injunction that three TikTok users scored has on the case. 

Judge Nichols in September blocked the U.S. Department of Commerce from implementing an executive order that would have removed TikTok from app stores hosted by companies like Apple and Google as of Sep. 27 amid purported national security concerns. The government has filed a bid at the D.C. Circuit to overturn that order.

TikTok seeks to halt the remaining slate of restrictions set to go into effect Nov. 12 until the legal battle concludes. These prohibitions would block companies from providing web-hosting services that make the app accessible in the U.S.

But Judge Nichols on Wednesday said he's uncertain, at least for now, whether TikTok can still establish irreparable harm to win a new injunction in the face of U.S. District Judge Wendy Beetlestone's nationwide injunction that blocked the government's plan. Judge Beetlestone found last month that Commerce's implementation of the executive order likely violates the "informational materials" exception to the International Emergency Economic Powers Act, which President Donald Trump invoked to justify the ban. 

Covington & Burling LLP partner John E. Hall, an attorney for the platform, said Judge Beetlestone issued her order at the request of three TikTok content creators. And while both cases alleged similar claims, there are "distinct interests" at play, the attorney contended.

"There's no guarantee that the injunction will not be lifted," Hall added, saying the government will almost certainly lodge an appeal at the Third Circuit.

"We certainly agree with Judge Beetlestone's decision and her reasoning," the attorney said. "But, in our view, there's very much a live controversy here and the risk of irreparable harm to plaintiff" in the D.C. case if there's a complete shutdown of the app.

Judge Nichols challenged that assertion, saying that in his view, "at least at present, her order is operative ... and forecloses most, if not all, of TikTok's arguments about irreparable harm."

Covington partner Alexander A. Berengaut, who's also representing TikTok, interjected that D.C. district court case law supports his client's position that a separate injunction would be appropriate.

Berengaut pointed to Whitman-Walker v. HHS , a case in which a D.C. federal judge in September issued a nationwide injunction blocking key parts of recent Trump administration regulations that rolled back anti-discrimination protections for LGBTQ patients. That ruling came just two weeks after a New York federal judge made a similar decision in an identical case.

But government attorney Daniel Schwei fired back minutes later that it would be erroneous to enter another injunction because the remaining prohibitions have already been enjoined on a nationwide basis by Judge Beetlestone. 

According to Schwei, TikTok's assertion that the government will seek to overturn the Pennsylvania judge's order is merely speculative.

"It's black letter law that speculative events do not establish irreparable harm," the lawyer said. 

When asked about the status of Judge Beetlestone's order, Schwei told Judge Nichols it's immediately unclear whether the U.S. Solicitor General's Office will appeal.

The Trump administration issued the ban amid claims that TikTok and its Chinese parent, ByteDance Ltd., impose a national security threat, and that the app's use of personal data generated from users could be obtained by the Chinese government to surveil Americans and potentially interfere in elections. TikTok has denied those allegations.

Trump had also issued parallel executive orders to ban certain transactions with WeChat's China-based parent, Tencent Holdings Ltd., also over privacy and national security concerns. In a similar case that WeChat users filed in California, the Ninth Circuit is set to hear oral arguments in January in the government's request to overturn a federal judge's preliminary injunction forbidding the ban.

Meanwhile, TikTok is pursuing a deal with U.S. companies Oracle Corp. and Walmart Inc. that would mitigate the government's data security concerns. This deal, which Trump has blessed "in concept" but has yet to receive formal approval, would create a new U.S.-based company, TikTok Global, to run TikTok's operations in the U.S. Both companies would have a combined 20% stake in the firm.

In Wednesday's hearing, Judge Nichols asked the government whether it would be appropriate for him to convert TikTok's motion for preliminary injunction into a summary judgment motion and decide the merits of the case.

Schwei stated in part that "without knowing the contours of the court's summary judgment opinion," there are issues — which he didn't specify — "lurking in the record that have not been fully addressed."

Moreover, moving forward with summary judgment "could potentially frustrate" the government's appeal of Judge Nichols' September order, which is pending before the D.C. Circuit, the attorney added. The appellate court is hearing the case on an expedited basis. Oral argument is set for Dec. 14.

"I would urge hesitation for the court to do anything that could procedurally complicate the consideration of that appeal,"  Schwei said. 

At the end of Wednesday's hearing, Judge Nichols urged the parties to keep him abreast of any development in Judge Beetlestone's order and to submit supplemental briefing by Friday discussing whether TikTok still faces irreparable harm.

The case is under advisement, but Judge Nichols didn't say when he would issue a ruling. 

TikTok and ByteDance are represented by John E. Hall, Beth S. Brinkmann, Alexander A. Berengaut, Megan C. Keenan, Megan A. Crowley, Anders Linderot and Mitchell A. Kamin of Covington & Burling LLP.

The government is represented by Daniel Schwei, Jeffrey Bossert Clark, August Flentje, Alexander K. Haas, Diane Kelleher, Serena M. Orloff, Michael Drezner, Amy E. Powell and Stuart J. Robinson of the U.S. Department of Justice's Civil Division.

The case is TikTok Inc. et al. v. Trump et al., case number 1:20-cv-02658, in the U.S. District Court for the District of Columbia.

--Editing by Orlando Lorenzo.

For a reprint of this article, please contact reprints@law360.com.

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