490 F.Supp.3d 73
D.D.C.2020Background
- In May 2019 the President declared a national emergency under IEEPA (Executive Order 13873) addressing risks from foreign-controlled information and communications technologies; in August 2020 he identified TikTok/ByteDance as a national-security risk and directed the Commerce Secretary to list prohibited transactions.
- On Sept. 18, 2020 the Commerce Department identified five classes of prohibited transactions: (1) app distribution/updates via U.S. app stores (effective 11:59 p.m. Sept. 27, 2020) and (2) four additional prohibitions (internet hosting, CDN, transit/peering, and use of TikTok code) effective Nov. 12, 2020.
- TikTok sued challenging the prohibitions under IEEPA, the APA, the First and Fifth Amendments, and the Takings Clause, and moved for a preliminary injunction to block the immediate prohibition on app distribution/updates.
- The court found TikTok likely to succeed on its IEEPA claim because the Commerce prohibitions likely constitute an indirect regulation of "informational materials" and "personal communications" excluded from IEEPA authority (50 U.S.C. § 1702(b)(1),(3)).
- The court also found TikTok would suffer irreparable economic and reputational harm if the app were removed from U.S. app stores, and that the balance of equities and public interest favored an injunction against paragraph 1 only.
- The preliminary injunction was granted as to paragraph 1 (blocking the immediate prohibition on distribution/updates); the court left the November prohibitions for later proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Commerce's prohibitions are barred by IEEPA's "informational materials" carveout (50 U.S.C. § 1702(b)(3)) | The restrictions will indirectly regulate/import/export user-generated films, photos, art and news on TikTok, which are "informational materials." | The prohibitions target business-to-business transactions and do not directly regulate information or TikTok users. | Held: Likely barred — prohibitions amount to indirect regulation of informational materials; plaintiff likely to succeed on this IEEPA claim. |
| Whether Commerce's prohibitions are barred by IEEPA's "personal communications" carveout (50 U.S.C. § 1702(b)(1)) | Many TikTok communications are personal and not transfers of value; IEEPA therefore cannot authorize their regulation. | Communications have economic value to TikTok/platform and thus fall outside the carveout. | Held: Likely barred — court rejects expansive reading of "anything of value" and finds many TikTok communications protected. |
| Whether Plaintiffs will suffer irreparable harm absent an injunction | Removal from app stores will immediately halt user growth, drive creators and advertisers away, and cause irretrievable reputational and competitive injury. | Government notes national-security harm from delay and urges deference to Executive. | Held: Plaintiffs demonstrated certain, imminent, irreparable harm from immediate prohibition; this factor favors injunction. |
| Balance of equities/public interest and scope of relief | Injunction limited to unlawful action; protecting statutory limits and private interests serves the public interest. | Injunction would interfere with Executive Branch national-security measures. | Held: Equities/public interest favor enjoining paragraph 1 only; no bond required. |
Key Cases Cited
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (standard for preliminary injunctions)
- Nken v. Holder, 556 U.S. 418 (2009) (when government is respondent, harm to government and public interest merge)
- Walsh v. Brady, 927 F.2d 1229 (D.C. Cir. 1991) (interpretation of IEEPA's indirect-regulation language)
- Kalantari v. NITV, Inc., 352 F.3d 1202 (9th Cir. 2003) (IEEPA carveouts must be given broad scope)
- Cobell v. Norton, 391 F.3d 251 (D.C. Cir. 2004) (preliminary injunction is extraordinary remedy)
- Madsen v. Women's Health Ctr., Inc., 512 U.S. 753 (1994) (injunctive relief must be no more burdensome than necessary)
- League of Women Voters of U.S. v. Newby, 838 F.3d 1 (D.C. Cir. 2016) (no public interest in perpetuation of unlawful agency action)
- King v. Burwell, 576 U.S. 473 (2015) (reject implausible statutory interpretation)
- United States v. Menasche, 348 U.S. 528 (1955) (give effect to every clause and word of a statute)