Chinese Billionaire Got A US Court To Issue An Unconstitutional Gag Order On A Critic

from the this-is-bad dept

Eugene Volokh has an incredible -- and incredibly disturbing -- story about how Jia Yueting, a Chinese billionaire, appears to have convinced a Washington state court to issue an unconstitutional gag order against a critic who lives in Washington state. Jia is famous for his company LeEco in China, as well as his attempt to create an electric car giant competitor to Tesla in the US called Faraday Future. Almost exactly a year ago, we wrote about how Faraday Future was flailing with a series of incredible stories leaking out of the company. A large number of top execs were fleeing the company and there were reports of questionable activities, including Jia demanding that Faraday Future employees design a car for LeEco, without payment or credit. In the past year, it does not appear that things have gotten much better for Jia, and he was just ordered to return to China to deal with debts that appear to be piling up.

China has ordered a tech tycoon to come home and face the music.

The country's markets watchdog on Monday demanded LeEco founder Jia Yueting return to China before the end of the year to fix his business empire's financial woes.

The China Securities Regulatory Commission said that Jia, whose whereabouts are unknown, has not made good on earlier promises to provide interest-free loans to the embattled company.

Not surprisingly, there are many online critics of Jia. One of them is a resident of Washington state, named Yingqiong Gu who criticized Jia on WeChat, the ever-present social network/communications app that is insanely popular in China. Back in October, Jia sued Gu to try to get the criticism to stop. As Volokh notes, it is entirely possible that Gu made defamatory statements about Jia. But the First Amendment tends to reject any attempt to silence speech. While some states will allow injunctions against defamatory speech, that tends to be only after the content has been determined by a court to actually be defamatory. Here, however, the court agreed first to a temporary restraining order less than a week after the complaint was filed, and a preliminary injunction a few weeks later.

Now, some of what's described in the complaint goes beyond speech, and includes what could be considered harassing behavior:

Defendant has further followed Mr. Jia while he goes about his daily activities, including investor meetings Mr. Jia attends and the Los Angeles-area restaurants he has visited. Finally, Defendant has identified and publicized sensitive personal information, including Mr. Jia's current address and photos of his family.

I'm not sure if that's enough to constitute "harassing" behavior, but maybe. If the restraining order were limited to that, perhaps it would be acceptable. But it appears the real target of the gag order is to silence Gu and his criticism of Jia. Here's the crux of Jia's complaint:

Defendant has been publishing defamatory statements concerning Plaintiff on social media platforms and to journalists, in an effort to harm Mr. Jia's reputation and sow distrust among potential investors and employees of Faraday while Mr. Jia is in the process of trying to raise capital to fund Faraday's continued growth. These defamatory statements include claims that Plaintiff has engaged in money laundering, cheated investors as part of a Ponzi scheme, attempted to evade Chinese authorities by relocating to the United States, created shelters to protect assets from creditors, and raised money from Chinese-national investors in a purported racist scheme to transfer wealth to non-Chinese individuals. The publication of these false statements has harmed Mr. Jia's and Faraday's reputation at a critical time for the company as it continues to raise capital needed to begin mass production of its vehicles.

The filing in Washington follows on a similar filing Jia made against Gu in California, in which another temporary restraining order was put in place against Gu's apparent "harassing, harmful activities." Jia's complaint in Washington claims that Gu is violating that order because he "continued to publish defamatory statements." But, again, speech and actions are not the same. Publishing criticism is not harassment, and if the content has not yet been judged to be defamatory, a court can't block it.

But it did.

The restraining order is quite broad. Rather than just barring any harassing activities it orders Gu to remove content he's posted:

Defendant, including his agents, employees, or representatives or anyone acting on their behalf, are required to immediately remove posts on WeChat.com that contain defamatory statements concerning Plaintiff and/or reveal private information concerning Plaintiff and his family...

And it blocks him from writing more:

Defendant including his agents, employees or representatives or anyone acting on their behalf, are further enjoined from publishing or causing to be published any posts or commentary concerning Plaintiff or his family on WeChat.com, TouTiao.com or any other internet location or website.

That language was in the requested TRO. There's a handwritten, barely legible, exception which states that he can post "objective facts from public records" but "may not include any commentary, editorial comments, or other statements that attack plaintiff's credibility or reputation."

That already appears to be unconstitutional. Commentary and editorial comments that attack someone's credibility or reputation can be perfectly protected free speech -- such as if they are true or are based on stated evidence. It is blatantly unconstitutional for a judge to order someone to stop attacking someone's credibility if those attacks are not defamatory. Even worse, in the preliminary injunction, the judge even removes the exception for posting "objective facts from public records."

As Volokh notes, this is problematic. While some courts will allow injunctive relief against defamatory speech, it first has to be shown to be defamatory, and then can only apply to that specific speech. The order here goes way beyond that:

Here, there was no trial, no "final determination" and no "decision on the merits" — only a judgment of likelihood of success on the merits following a 15-to-20-minute-long hearing. I don't think it's permissible to order someone in such a situation to take down criticism of a prominent businessman's business practices (criticism that might ultimately be proved false, proved true, or found to be opinion).

And this is concerning a well known public figure. We've talked a lot about how the powerful and wealthy are abusing the court systems to silence critics. The courts should not be helping.

Filed Under: criticism, first amendment, free speech, gag order, injunction, jia yueting, temporary restraining order, yingqiong gu
Companies: faraday future, leeco


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • This comment has been flagged by the community. Click here to show it
    identicon
    Anonymous Coward, 2 Jan 2018 @ 9:36am

    "And this is concerning a well known public figure. We've talked a lot about how the powerful and wealthy are abusing the court systems to silence critics. The courts should not be helping."

    Well Mike... they are the experts as you have said to me a few times in the past. The only thing "expert" really means is a mind trapped in a box regurgitating what they have been told to.

    reply to this | link to this | view in chronology ]

    • icon
      Mike Masnick (profile), 2 Jan 2018 @ 11:11am

      Re:

      Well Mike... they are the experts as you have said to me a few times in the past. The only thing "expert" really means is a mind trapped in a box regurgitating what they have been told to.

      What are you referring to? Your comment makes no sense.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 2 Jan 2018 @ 2:58pm

        Re: Re:

        Pretty sure that's the 'the FCC is unconstitutional' person, who is apparently still obsessing over the slapdown you and several others handed out by pointing out that no-one agreed with their interpretation of the constitution.

        Either that or there's two people ranting about 'experts' now.

        reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 2 Jan 2018 @ 9:50am

    It seems to be somewhat of a pattern. Become filthy rich or powerful and your skin gets considerably thinner. Then again in most thin-skin cases there is plenty of valid criticism and shady practices.

    I fail to see the connections... /s

    reply to this | link to this | view in chronology ]

    • identicon
      Machin Shin, 2 Jan 2018 @ 10:01am

      Re:

      I actually think a lot of these people just started out with really thin skin.

      Most of the ways I have seen to become rich all required you to be a total ass who doesn't care about others.

      That means the traditional bullies can exploit these methods.

      Well, bullies tend to be some of the most thin skinned individuals you will ever meet.

      reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 2 Jan 2018 @ 10:18am

      Re:

      Communism was once China's highest ideal, where in the US it was democracy, capitalism and citizens' rights. They've apparently agreed to meet half-way at authoritarian capitalism.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 2 Jan 2018 @ 10:53am

        Re: Re:

        Capitalism always 100% of the time results in Fascism, a very brief look at American history as well as the compromise of the USSR and China will demonstrate this, not every Fascist is a NAZI in fact almost none are, The United states was not founded on capitalism, if was founded on the right of self determination of individuals(well land owners) but the corporation and the implicit and explicit violence that comes with it is something that was only tolerated after WWII before that people had the ability to organize and resist for their own self interest without attack from the state(hell in at least one instance the state protected the people with the national guard), monopolies where broken and the people that benefited most where taxed and held to account for their actions. but with the rise of the national security state, and the implementation and propagandizeation of "fuck you buddy"(see john nash and rand corporation) as a model of social and political interaction in the 60's there is only the choice of which flavor of fascism you want. We are so far down the slippery slope that the only way to climb back up is starving the bacterial infection of capital of water.

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 4 Jan 2018 @ 5:31am

        Re: Re:

        **Communism was once China's highest ideal, where in the US it was democracy, capitalism and citizens' rights. They've apparently agreed to meet half-way at authoritarian capitalism.**

        [Sad but True]

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 9:54am

    Wait, so TWO courts issued an illegal temporary restraining order? And the first one issued it even though they didn't have personal jurisdiction? That's concerning.

    reply to this | link to this | view in chronology ]

  • identicon
    I.T. Guy, 2 Jan 2018 @ 10:14am

    Man, why can't this stuff happen to me? Somebody is getting paid from 2 jurisdictions.

    Somebody's....
    "Defendant including his agents, employees or representatives or anyone acting on their behalf, are further enjoined from publishing or causing to be published any posts or commentary concerning Plaintiff or his family on WeChat.com, TouTiao.com or any other internet location or website." Gettin paid.

    reply to this | link to this | view in chronology ]

  • icon
    Toom1275 (profile), 2 Jan 2018 @ 10:16am

    Inb4 Charles Harder's new favorite state.

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 2 Jan 2018 @ 10:17am

    Well there is yet another Judge who should be facing Judaical review & serious questions about his understanding of the law.

    Prior restraint is bad mmmmkay.
    Perhaps looking at evidence beyond what is claimed would be in order to decide if the harm was caused by posts or by the actions of a company who has over promised & under delivered, & has gotten negative media attention.

    I could see demanding removal of the address, but then people can find these things.
    Telling him he can't talk to past employees... is that just to make sure he can't submit affidavits that back up his claims?

    In the eyes of the law, all men are equal.... unless you're rich then you get special law.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 2 Jan 2018 @ 10:37am

      Re:

      Part of that judicial review should include examining this judge's financial records and bank statements. I'd bet he recently became inexplicably wealthier in one way or another.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 2 Jan 2018 @ 10:40am

    So basically pyramid-scheming functionally bankrupt (but fooling investors into giving him money which he keeps burning through for person stuff) "chinese billionaire" attempts to silence US Citizen?

    reply to this | link to this | view in chronology ]

  • icon
    ysth (profile), 2 Jan 2018 @ 11:04am

    name and shame

    With prior restraint cases, please do try to name the judge at fault in the article.

    That said, it appears Judge McDermott announced his retirement before signing this order, effective January 1.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 2 Jan 2018 @ 3:12pm

      Re: name and shame

      Wait, seriously? I had been doubtful when someone raised the idea of the judge being paid off in comments above, figuring it to be incompetence rather than corruption, but retiring basically right after issuing a suspect and favorable decision to a billionaire is some seriously suspicious timing such that I'm now thinking such an idea may not be so far-fetched.

      reply to this | link to this | view in chronology ]

  • icon
    orbitalinsertion (profile), 2 Jan 2018 @ 11:43am

    Seems like China was asking for the address of this shady character while ordering him home to China. I fail to see the problem. Perhaps the judge would like to issue an injunction against China, then.

    I did particularly enjoy the complaint listing all of this hoser's probable crimes.

    The publication of these false statements has harmed Mr. Jia's and Faraday's reputation at a critical time for the company as it continues to raise capital needed to begin mass production of its vehicles.

    It seems like a bad risk, and China told him to cough up the damn cash himself for LeEco (or whatever else falls in his "empire's" domain). Not sure why he should be enabled to continue scamming in the States for the cardboard Faraday.

    reply to this | link to this | view in chronology ]

  • icon
    Steven W. Giovinco (profile), 2 Jan 2018 @ 7:39pm

    Somewhat Shocked...

    ...But not really. No matter, this is disturbing. As the article points out, there might be borderline stalking, but that still does not warrant suppression and removal of social media comments.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 3 Jan 2018 @ 8:08am

    ni hao

    reply to this | link to this | view in chronology ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Special Affiliate Offer

Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.