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

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.