'Arbitrary' Export Restrictions Hindering Huawei's Trial Prep, Company Says

U.S. export controls are blocking Huawei's access to evidence that it needs to prepare for its upcoming trial on racketeering, trade secret theft and other charges (see 2002130045), the Chinese technology company said in a court filing last week.

Huawei used the Aug. 5 filing to defend its bid to get a New York federal court to help the company address export restrictions imposed on Huawei's access to over 536,000 documents that were the subject of discovery in the case. The company said the discovery is subject to "arbitrary and unnecessary restrictions" that violate the case's protective order and "fails to satisfy" the government's discovery obligations (United States v. Huawei Technologies Co., E.D.N.Y. # 18-00457).

Because Huawei and some of its affiliates are on the Commerce Department's Entity List, the company has faced restrictions on technology contained in the discovery documents without a license from the Bureau of Industry and Security, the company said. BIS issued a license, which allowed the tech company's counsel to share any technology found in the discovery with Huawei "only if it is treated as Sensitive Discovery Material" under the case's protective order. DOJ said the 536,000 documents merit only "standard discovery material," or SDM, protections but still have technology subject to the Export Administration Regulations.

Huawei argued that the EAR "arbitrarily and without cause restricts Huawei’s access to the approximately 536,000 documents at issue even though the government has already determined that such protections are unnecessary to serve any legitimate government interest. The company asked the court to intervene, though the U.S. opposed this bid.

In response, Huawei said the government's objection violates the case's protective order since it "subjects the discovery to restrictions extraneous to the Protective Order, contrary to the Court’s command." It also "effectively imposes SDM restrictions on the discovery without any 'good cause' to do so."

Regardless of the restrictions imposed on Huawei's access to the discovery, the U.S. said it satisfied its discovery obligations by producing the discovery to Huawei's counsel. The tech company said the government's cases cited in support of this claim "provide no support for this remarkable assertion" and at most say that narrow restrictions on the company's access are justified if they are supported by a "specific and demonstrable need and do not unduly impinge on the defendant's constitutional rights."

Instead of going over the 536,000 documents to find which might contain technology covered by the EAR, as the government suggests, Huawei said that the government should be the party to sort through the documents and apply for a license for its discovery.

It's the U.S. "that has the obligation under Rule 16 to provide these materials to Huawei, and to do so without unwarranted restriction or delay," the brief said. Huawei emphasized that no one in the U.S. government "has ever contended that the production to Huawei of any of the discovery materials at issue in fact implicates the national security of the United States."