FedEx sues U.S. Department of Commerce

Yesterday, FedEx filed a suit in U.S. District Court in the District of Columbia against the U.S. Department of Commerce (DOC), which seeks to enforce prohibitions contained in the Export Administration Regulations (EAR). The suit follows FedEx’s accidental diversion of several Huawei packages shipped from the United Kingdom to the United States earlier this month.  

In the filing, FedEx argued that the current EAR violates the Fifth Amendment of the U.S. Constitution and places an unreasonable burden on FedEx to “police” the massive volumes of goods it processes. FedEx argued that the EAR violates common carriers’ rights to due process under the Fifth Amendment of the U.S. Constitution, as they unreasonably hold common carriers strictly liable for shipments that may violate the EAR without requiring evidence that the carriers had knowledge of any violations.  

The integrator further argued that this puts an impossible burden on a common carrier, such as itself, to know the origin and technological make-up of contents of the massive shipments it handles and whether they comply with the EAR. The company said it “is a transportation company, not a law enforcement agency.” 

FedEx stated that it remains committed to complying with all laws and regulations in the countries it serves and has invested heavily in its internal export control compliance program, but seeks the following relief from the court: 

• An order granting permanent relief against the DOC from enforcing the EAR against FedEx; 
• That the court declare the EAR are unlawful as applied to FedEx; 
• An award to FedEx covering its costs and expenses, including reasonable attorney fees; and 
• An award of “further and additional relief as is just and proper.” 

The DOC is required to respond to the complaint in the suit within 60 days of its filing. 

The suit follows the most recent evolution of drama in the U.S.-China trade war. In addition to raising tariffs on $200 billion of Chinese exports last month, the U.S. also blacklisted Huawei Technologies from entering the country. Thus, when FedEx reportedly diverted some Huawei packages to the U.S. without authorization earlier this month, it came under fire from both the U.S. and China. While China said it would probe FedEx, causing speculation in media the company could be “blacklisted” as an unreliable entity by the country, the U.S. DOC sought to punish FedEx for violating the EAR. 

While it is not yet certain how the case will evolve, it is a landmark case in the making for logistics providers across the board. Air Cargo World will provide updates as the situation evolves.