Huawei Technologies Co. filed a lawsuit challenging a law signed by President Trump in August that restricts federal agencies from doing business with the Chinese company, the latest in a series of countermoves by the telecommunications giant.
The lawsuit challenges the constitutionality of parts of the National Defense Authorization Act, an annual measure that authorized billions of dollars in military spending and put new limits on federal dollars going to Huawei and its Chinese rival, ZTE Corp. ZTCOY 1.55% The law also barred federal agencies from buying equipment that uses gear from the Chinese companies.
“In enacting the NDAA, Congress acted unconstitutionally as judge, jury and executioner,” said Guo Ping, one of Huawei’s chairmen, in Shenzhen on Thursday. “Regrettably, the NDAA was enacted to restrict Huawei without giving us the opportunity to defend ourselves.”
Huawei filed its suit late Wednesday in the Eastern District of Texas, which includes its Plano-based American headquarters. It says it is the target of an unconstitutional “bill of attainder,” in which a person or entity is found guilty of a crime via an act of legislation.
In its suit, Huawei also argues that the law violates its right to due process and is a violation of the separation of powers between Congress and other branches of government. On Wednesday night, the White House referred questions about the Huawei lawsuit to the Justice Department, which declined to comment.
In its lawsuit, the company is seeking an injunction and asking for a declaration that the provisions are unconstitutional.
The action marks the latest in a series of public-relations and legal countermoves by Huawei, which has been the target of a multifaceted campaign by U.S. officials, who consider the Chinese company a security threat. U.S. officials are seeking to shut it out of next-generation 5G telecommunications networks of American allies—a campaign that was on display at a major industry conference in Barcelona last week.
On Monday, Huawei Chief Financial Officer Meng Wanzhou filed a lawsuit against Canadian authorities challenging her detention there. She is being held at the behest of U.S. authorities who want to extradite her on bank fraud and other charges related to alleged violations of American sanctions on Iran. Ms. Meng denies wrongdoing.
In January, U.S. authorities unveiled a pair of criminal indictments against the company and its executives alleging intellectual property theft and sanctions violations. Huawei has denied all wrongdoing that has been alleged in those cases.
U.S. officials believe Huawei, founded by ex-Chinese army engineer Ren Zhengfei in 1987, could use its equipment to spy for Beijing. Huawei has denied it would spy on behalf of any government and Mr. Ren has said in a series of recent interviews that he would refuse any order to do so.
Huawei executives have said just a fraction of the company’s more than $100 billion in annual revenue comes from the U.S. It doesn’t sell gear to major American carriers, none of which carry its smartphones, though it does sell some equipment to rural operators in the U.S. who rely on Huawei for inexpensive equipment.
Still, Huawei is mounting its legal challenge in part because it feels the need to counter the U.S. cases against it with a courtroom action of its own, according to a person familiar with the matter.
In its suit, Huawei said the provisions have caused harm in a number of ways to its business, including causing customers to decline to sign contracts and to cease business negotiations. In addition, the provisions have caused “immediate injury to Huawei’s reputation.”
“The U.S. Congress has repeatedly failed to produce any evidence to support its restrictions on Huawei products,” Mr. Guo said in a statement. “We are compelled to take this legal action as a proper and last resort.”
The act contains several provisions that limit the ability of executive agencies from doing business with Huawei. One bars federal agencies from buying equipment containing Huawei gear. Another prevents agencies from doing business with contractors who use a substantial amount of Huawei’s equipment, regardless of whether the gear is ultimately used by the government. A third provision prevents federal loans or grants from being used to buy Huawei gear or services.