498 F.Supp.3d 624
E.D. Pa.2020Background
- President issued Executive Order 13942 (Aug. 6, 2020) under IEEPA directing Commerce to identify transactions concerning Chinese-owned ByteDance/TikTok as national-security risks; Commerce published a "Commerce Identification" listing prohibited transactions with effective dates Sept. 27 (app distribution) and Nov. 12 (hosting, CDN, transit, use of TikTok code).
- Commerce prohibitions target business-to-business services (app stores, hosting, CDN, transit, use of code) but, by the agency’s own memorandum, would "significantly reduce the functionality and usability" of TikTok for U.S. users after Nov. 12.
- Plaintiffs are three prominent TikTok creators/influencers who earn income and engage in expressive activity on the platform; they sued to enjoin enforcement of the Commerce Identification and sought a preliminary injunction.
- The court treated only the Commerce Identification (not the President’s Executive Order) as the operative, reviewable agency action and held a hearing on the motion for preliminary injunctive relief.
- The court concluded plaintiffs were likely to succeed on an APA ultra vires claim because the Commerce Identification, at minimum, indirectly regulates the import/export of informational materials in violation of IEEPA’s informational-materials exception; it granted a nationwide preliminary injunction enjoining the Commerce Identification and waived bond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Commerce Identification reviewable under the APA? | It is final agency action and reviewable. | Review is precluded by IEEPA/NEA or is "committed to agency discretion" under 5 U.S.C. § 701(a)(2). | Reviewable under the APA; §701(a)(2) inapplicable and no statutory bar inferred from IEEPA/NEA. |
| Does the Commerce Identification exceed IEEPA by regulating informational materials? | It indirectly regulates import/export of expressive content (TikTok videos) and thus violates IEEPA §1702(b)(3). | Any burden on speech is incidental; the object is commercial transactions, not regulation of informational materials. | Plaintiffs likely to succeed: the Identification indirectly regulates informational materials and is ultra vires under IEEPA. |
| Will plaintiffs suffer irreparable harm without an injunction? | Loss of followers, sponsorships, and unique platform-based income that cannot be remedied by damages (APA suits do not permit money relief). | Government emphasizes national-security interests and downplays plaintiffs’ irreparable financial/expressive harm. | Plaintiffs likely to suffer irreparable harm; monetary relief unavailable makes economic injury unrecoverable. |
| Do the balance of equities and public interest favor injunctive relief and, if so, what scope? | Nationwide injunction necessary to give complete, workable relief to users and creators. | Relief should be limited to the three named plaintiffs; national-security harms outweigh injunction. | Balance and public interest favor injunction; nationwide relief is appropriate and bond waived. |
Key Cases Cited
- United States v. Amirnazmi, 645 F.3d 564 (3d Cir. 2011) (discusses Berman Amendment and scope of IEEPA’s informational-materials exception).
- Walsh v. Brady, 927 F.2d 1229 (D.C. Cir. 1991) (refused expansive reading of "indirectly" in a travel-to-Cuba context; distinguishable here).
- Department of Commerce v. New York, 139 S. Ct. 2551 (2019) (Supreme Court guidance on reviewability and meaningful standards for judicial review of agency action).
- Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 361 (2019) (presumption of judicial review; §701(a)(2) is narrow).
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (elements and standards for preliminary injunctions).
- Block v. Community Nutrition Institute, 467 U.S. 340 (1984) (statutory preclusion of judicial review requires clear congressional intent).
- Califano v. Yamasaki, 442 U.S. 682 (1979) (injunctive relief must be no more burdensome than necessary to provide complete relief).
- Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) (standards for review of final agency action under APA).