Trade Court Mostly Keeps Record Confidential in Challenge to UFLPA Entity List Placement

In addition to asking for the court to unseal the record, Ninestar challenged the government's assertion of privilege over swaths of information, which the U.S. used to keep it from the exporter's counsel on the grounds that it risked revealing the identity of its informant. Katzmann largely maintained this informant privilege claim, though he ordered references to the years of the informant's activities and "generalized information about Uyghur workers" be made available to Ninestar's lawyers.

The exporter said the U.S. waived its informant privilege claim given that both the Office of the U.S. Trade Representative and the State Department included an identifying word in response to Ninestar's Freedom of Information Act requests. Katzmann said that the FOIA responses led to a partial waiver of the privilege for the identifying word, but that this word, along with the other unredacted information, shall only be revealed to the exporter's counsel and not the company itself.

Katzmann also ordered Ninestar's counsel to destroy the FOIA productions from USTR and the State Department. The court said it could issue the order since it can exercise "the same inherent powers as a U.S. district court" and that those powers allow for orders to destroy "inadvertently disclosed documents." Katzmann said the move was necessary since Ninestar's counsel is free to send the information in the FOIA productions to whomever they please, while the same is not true of the identical, unredacted information.

The court also refused to supplement the record with a document Ninestar alleged was considered by FLETF members because it wasn't among the "materials that were before the agency at the time its decision was made."

Katmzann also refused to redact a statement from Ninestar's counsel made during oral argument, in which the arguing attorney said there are no documents from Ninestar, any media outlet or Chinese authorities establishing that Ninestar hired Uyghur laborers. While the court said the statement didn't reveal any confidential information, Ninestar's counsel is not free to say what's not in the record, as the arguing attorney claimed. Statements that reveal the confidential record, "either expressly or by implication, will be deemed violations of the" administrative protective order, the opinion said.

The court urged the parties to "tread carefully when making public statements."

Motion to Unseal

The trade court rejected Ninestar's motion to make the first 219 pages of the confidential record public on the grounds that it's "law enforcement sensitive." Katzmann said the government "accurately" described the information as containing information shared by a confidential source, open-source documents, communications with the confidential source, analysis of information shared by the source and an assessment that Ninestar met the UFLPA Entity List criteria.

The U.S. claimed that the information would reveal how FLETF conducts its investigations and carries out its decision-making, thus establishing the information as law enforcement sensitive. Ninestar's claim that unsealing the information wouldn't be a problem since it's no secret that FLETF uses confidential informants is "unconvincing," since the record would reveal "FLETF's deliberative process and judgment," Katzmann said.

What the court did unseal is a document describing FLETF's "standard operating procedures," which break down the "step-by-step logistics of how the FLETF's member agencies add entities to the Entity List and reconsider such additions." The information would only reveal "logistical information" on how the task force's member agencies communicate and wouldn't likely "reveal techniques and procedures used by law enforcement that could be used to circumvent the law," the decision said.

Katzmann also sustained the decision to break up the confidential record into confidential information accessible by all parties and information only accessible to Ninestar's counsel. The court said that keeping certain information from Ninestar itself -- namely "(1) sources over which the Chinese government exercises control and (2) internal agency documents" -- is necessary to keep the confidential informant safe.

The government established that all Chinese organizations are required to aid national intelligence efforts under China's National Intelligence Law, Data Security Law and Anti-Foreign Sanctions Law, the court held. "Disclosure of either open-source sources or internal agency documents to Plaintiffs’ directors and officers would be susceptible to demands by the Chinese government," the decision said.

While Ninestar said this would hamper communication with its client, the court said "there appears to be no authority compelling a level of disclosure to the client greater than what is provided here.” Ninestar is a foreign company "with insufficient contacts in the United States to accrue constitutional rights" and the Administrative Procedure Act "does not appear to demand a particular level of disclosure to the client as opposed to counsel.

Motion to Unredact

The court assessed whether to unredact three categories of information: "words that describe the informant, statements supplied by the informant, or descriptions of the time and place of statements by the informant." Katzmann said the first two types of information plainly fall within the government's assertion of informant privilege.

Katzmann then said not all references to the dates of the informant's activities are subject to the privilege. Rather, the U.S. was told to unredact the years of the informant's activities since "they are likely to aid the recall of Plaintiffs' personnel in attempting to identify the information."

The court said that per the principle of "fairness," the government must unredact generalized information on the Uyghur workers since the privilege here yields to the direct relevance of the informant's communications to the transaction charged. Katzmann clarified that none of the unredacted information shall be made available to Ninestar itself.

The judge also sided with Ninestar regarding its claim that the FOIA productions from the USTR and the State Department led to a partial waiver of the informant privilege. Katzmann said that while the disclosure of an identifying word about the informant was "inadvertent," the circumstances around State's FOIA production "reflect a failure to take reasonable steps to prevent disclosure" of the word.

Katzmann noted that the fact that the State Department's disclosure happened a month after USTR's, coupled with two "gaps" in the State Department's disclosure process, led to this conclusion. The judge offered the case as a lesson for "thinking about paths for institutional coordination."

(Ninestar Corp. v. United States, Slip Op. 24-76, CIT # 23-00182, dated 07/10/24; Judge: Gary Katzmann; Attorneys: Gordon Todd of Sidley Austin for plaintiffs led by Ninestar; Monica Triana for defendant U.S. government)