Hong Kong Apparel Company Denied Injunction Against Entity List Placement

Hong Kong-based apparel company, Changji Esquel Textile (CJE), was denied a preliminary injunction against its placement on the Commerce Department's Entity List, the U.S. District Court for the District of Columbia ruled in an Oct. 6 order. Since CJE "cannot establish a likelihood of success on the merits sufficient to establish their entitlement to preliminary injunctive relief," the move for a PI was denied. CJE failed to show that Commerce acted ultra vires and in excess of its authority, Judge Reggie Walton said (Changji Esquel Textile Co. Ltd., et al. v. Gina M. Raimondo, et al., D.D.C. #21-01798).

The Trump administration placed CJE on the Entity List for allegedly using forced labor from the Muslim Uyghur minority population in China's Xinjiang region. Arguing it was erroneously placed on the list, CJE launched its suit in the U.S. District Court for the District of Columbia (see 2107070022).

A battle over the injunction motion commenced, with CJE arguing that Commerce can only place a company on the Entity List if it is engaging in five specific types of behavior, of which human rights abuses is not one. The Justice Department countered by arguing that this was not a proper interpretation of the law, and that the law does not limit the type of behavior warranting of placement on the Entity List to these just five categories (see 2109130021).

CJE also argued that it was likely to succeed in its case due to Commerce's lack of "specific and articulable facts" supporting the listing. The absence of such facts in CJE's case prompts a reversal of the list designation, the company argued. The court, which had previously granted injunctions against placements on the Entity List for forced labor concerns, did not buy this argument, ultimately ruling against the injunction order.