D.C. Circuit Partly Remands Order Placing Hikvision, Dahua Gear on 'Covered List'

The U.S. Court of Appeals for the D.C. Circuit handed Chinese companies Hikvision and Dahua a partial victory Tuesday, holding in an opinion (docket 23-1032) that the FCC’s definition of critical infrastructure is “overly broad.” The three-judge panel rejected arguments that video cameras and video-surveillance equipment the companies manufactured shouldn’t have been placed on the FCC’s “covered list” of unsecure gear. The case was argued in December (see 2312140061).

The court remanded an order addressing products by the companies to the FCC “to comport its definition and justification … with the statutory text” of the National Defense Authorization Act for Fiscal Year 2019. The court otherwise upheld the FCC order.

“We hold that the [Secure Equipment Act] ratified the composition of the Covered List and leaves no room for Petitioners to challenge the placement of their products on that list,” said the opinion, written by Circuit Judge Florence Pan. “The definition of ‘critical infrastructure’ ultimately adopted by the FCC includes any ‘systems or assets’ that are merely ‘connected to’ the sixteen sectors identified by” Presidential Policy Directive 21 “or the fifty-five functions listed by the [Cybersecurity and Infrastructure Security Agency] risk-management,” the court held: “The FCC failed to explain or justify its use of the expansive words ‘connected to,’ and the scope of the definition is therefore arbitrarily broad.”