40 F.4th 716
D.C. Cir.2022Background
- The Export Control Reform Act of 2018 (ECRA) charges the Commerce Secretary with maintaining an Entity List of foreign persons who threaten U.S. national security and foreign policy (50 U.S.C. § 4813); ECRA also includes a residual grant to take any action necessary to carry out the subchapter (§ 4813(a)(16)).
- ECRA’s policy provisions list several national-security goals in § 4811(2)(A) and separately reference protection of human rights as a foreign-policy objective in § 4811(2)(D); most ECRA functions are exempt from APA review (§ 4821(a)).
- The Commerce Department has long maintained an Entity List; since 2019 it has added entities for human-rights abuses in Xinjiang, including Changji Esquel Textile Co., which was listed for alleged forced labor.
- Changji challenged its listing in district court, alleging the Department acted ultra vires under ECRA and violated its own regulations; it sought a preliminary injunction, which the district court denied.
- The D.C. Circuit reviewed the denial of the preliminary injunction for abuse of discretion and affirmed, holding Changji was unlikely to succeed on ultra vires claims (statutory and regulatory), and thus injunction was not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ECRA authorizes listing entities for human-rights abuses | ECRA limits listings under §4813(a)(2) to objectives in §4811(2)(A); human-rights (in §4811(2)(D)) is not covered, so listing is ultra vires | §4813(a)(16) authorizes necessary actions to carry out the subchapter, and §4811(2)(D) ties human-rights to carrying out the subchapter; executive deference in foreign affairs supports Commerce | Held: Commerce may list human-rights abusers; no clear and mandatory statutory prohibition shown, so ultra vires claim unlikely to succeed |
| Whether expressio unius, specific-controls-general, or surplusage can supply a clear prohibition on human-rights listings | These canons show §4813(a)(2) excludes other bases | Canons do not overcome §4813(a)(16) or deference; no irreconcilable conflict or clear bar | Held: Canons do not establish a clear, mandatory prohibition; plaintiffs fail ultra vires burden |
| Whether alleged violation of Commerce regulations can be reviewed as ultra vires | Commerce failed to follow the regulation requiring "specific and articulable facts" for listings; that regulatory breach is ultra vires | Ultra vires traditionally addresses statutory exceedance, not routine regulatory errors; factual/measured review would duplicate APA review barred by statute | Held: Regulatory-violation ultra vires claim is not viable; even if it were, plaintiffs cannot succeed because Kyne review is narrow and does not permit fact‑intensive APA-style review |
| Whether other preliminary-injunction factors overcome low likelihood on the merits | Plaintiffs argue equities and irreparable harm favor injunction, so sliding-scale should allow relief despite weak merits | Court notes controlling precedents require at least a serious legal question and gives less weight to sliding-scale when merits are unlikely | Held: Plaintiffs fail to raise a serious legal question; injunction denied |
Key Cases Cited
- Leedom v. Kyne, 358 U.S. 184 (1958) (establishes narrow ultra vires review when agency acts beyond statutory authority)
- Boire v. Greyhound Corp., 376 U.S. 473 (1964) (Kyne is a narrow exception not extending to ordinary factual disputes)
- Griffith v. FLRA, 842 F.2d 487 (D.C. Cir. 1988) (ultra vires review has extremely limited scope)
- Nyunt v. Chairman, Broadcasting Bd. of Governors, 589 F.3d 445 (D.C. Cir. 2009) (Kyne claims are rare and difficult to win)
- Dart v. United States, 848 F.2d 217 (D.C. Cir. 1988) (courts infer Congress expects enforcement of statutory limits against agency overreach)
- Trudeau v. FTC, 456 F.3d 178 (D.C. Cir. 2006) (non-statutory review may be available when APA review is precluded)
- Mittleman v. Postal Regulatory Commission, 757 F.3d 300 (D.C. Cir. 2014) (absence of APA review does not necessarily foreclose all judicial review)
- Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) (framework for judicial review of agency statutory interpretation)
- Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (limited deference to agency interpretations of their own ambiguous rules)
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008) (preliminary-injunction standard requires likelihood of success on the merits)