BYD units challenge Pentagon designation and lobbying restrictions in court
Two U.S. subsidiaries of China’s BYD Group filed a lawsuit against the Defense Department over a federal statute restricting lobbyists from working for designated Chinese military companies. The companies say they were wrongly labeled as a Chinese military company in June, causing lobbying firms to end their business relationships. The complaint, filed in Los Angeles federal court, argues the measure is unconstitutional.
BYD Motors LLC and BYD America LLC, both Pasadena-based, filed in Los Angeles federal court. They challenge a law effective June 30 that prevents the Defense Department from working with contractors that engage lobbying shops also representing designated Chinese military companies. The subsidiaries say their June designation prompted lobbying firms to end representation.
The complaint says the designation cited BYD Group's connection to China's Ministry of Industry and Information Technology. It argues the measure blocks First Amendment advocacy on pending legislation, transit-fund restrictions, and supply-chain rulemaking. BYD's California electric-bus plant in Lancaster employs more than 1,000 U.S. workers; it also sells batteries, solar panels, and energy storage.
The dispute may affect U.S. subsidiaries of foreign firms, their U.S. employees, lobbying firms, and Defense Department contractors. If the designation stands, companies could lose Washington representation and contracting opportunities, while contractors may avoid clients tied to listed entities. A court ruling could clarify how far lobbying restrictions may reach under the First Amendment, potentially influencing how other designated companies challenge similar limits.