CHANGJI ESQUEL TEXTILE CO. LTD. v. RAIMONDO
1:21-cv-01798
| D.D.C. | Nov 4, 2021Background
- Changji Esquel Textile Co. Ltd. (part of the Esquel group) was added to BIS’s Entity List on July 22, 2020 based on BIS’s finding of forced-labor practices involving Muslim minorities in Xinjiang.
- Plaintiffs (Changji and related Esquel entities) sued the Department of Commerce and BIS officials in July 2021 and moved for a preliminary injunction to remove Changji from the Entity List.
- Plaintiffs’ legal theory: the listing was ultra vires because (a) ECRA does not authorize listings for human‑rights reasons apart from §4811(2)(A)’s five enumerated concerns, and (b) BIS failed to base the listing on the "specific and articulable facts" required by 15 C.F.R. §744.11(b).
- Defendants relied on the ECRA (including §4813(a)(16) and §4811(2)(D)) and the EARs, arguing the Entity List may address human‑rights/foreign‑policy objectives and that the published rationale (forced labor in Xinjiang) satisfied the regulatory standard.
- The district court held a hearing, found plaintiffs unlikely to succeed on the merits, and denied the preliminary injunction (Order Oct. 6, 2021; memorandum issued Nov. 4, 2021).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether listing an entity for alleged human‑rights abuses exceeded ECRA authority | ECRA limits Entity List listings to the five categories in §4811(2)(A); human‑rights listings are outside that scope | ECRA’s broader provisions (e.g., §4813(a)(16) and §4811(2)(D)) authorize lists and other measures to carry out foreign‑policy goals, including human‑rights protection | Court: Held defendants acted within statutory authority; §4813(a)(16) and §4811(2)(D) permit listings for human‑rights reasons |
| Whether BIS violated its regulation requiring “specific and articulable facts” under 15 C.F.R. §744.11(b) | Plaintiffs: BIS did not disclose or rely on the required specific and articulable facts to justify listing Changji | Defendants: EARs do not require public disclosure of detailed facts to the listed party; BIS gave a sufficient public basis (forced‑labor practice) and APA review is precluded by ECRA | Court: Held plaintiffs failed to show likelihood of prevailing on this regulatory ultra‑vires theory |
| Whether plaintiffs showed entitlement to a preliminary injunction (irreparable harm, balance of equities, public interest) | Plaintiffs: Listing has caused irreparable reputational and economic harm and removal would not harm government interests | Defendants: Plaintiffs bear the heavy burden and cannot show likelihood of success on merits; injunction would alter enforcement and raise public‑interest concerns | Court: Denied injunctive relief because plaintiffs failed to show a likelihood of success on the merits |
Key Cases Cited
- Lyng v. Payne, 476 U.S. 926 (agency authority limited to what Congress delegates)
- Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (statutory language must be read in context of the overall statutory scheme)
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837 (agency interpretations may receive deference when statute ambiguous)
- Nitro‑Lift Techs., LLC v. Howard, 568 U.S. 17 (the specific governs the general canon)
- Adirondack Med. Ctr. v. Sebelius, 740 F.3d 692 (expressio unius is weak in administrative contexts)
- Farrell v. Blinken, 4 F.4th 124 (statutory‑authority analysis in the administrative context)
- Griffith v. Fed. Lab. Rels. Auth., 842 F.2d 487 (ultra vires review standard)
- Leedom v. Kyne, 358 U.S. 184 (limited judicial review where an agency exceeds delegated powers)
- Winter v. Natural Resources Def. Council, 555 U.S. 7 (standards for preliminary injunctions)