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Appeals court weighs case over China-born physicist’s wrongful espionage charges

After being falsely tagged as a Chinese spy by the FBI, a professor seeking to revive his malicious prosecution claim appeared to garner sympathy from a Third Circuit panel.

PHILADELPHIA (CN) — A lawyer for a Temple University physics professor falsely accused of being a Chinese spy appealed to the Third Circuit Wednesday, saying that his client’s federal claims should be put before a jury.

“This is a case about accountability,” Xiaoxing Xi's lawyer David Rudovsky of Kairys, Rudovsky, Messing & Feinberg told a Third Circuit panel Wednesday.

A superconducting technology expert, Xi’s life was turned upside down seven years ago by now-withdrawn espionage charges that accused him of relaying sensitive “pocket heater” technology belonging to the company Superconductor Technologies to Chinese researchers. 

As part of the investigation, a team of agents stormed Xi’s Pennsylvania home at dawn on May 21, 2015, saying he could be imprisoned for 80 years on such charges.

“His house is searched. He's stripped searched. He's accused of being a technological spy… and that's the information that defamed him nationally,” recounted Rudovsky Wednesday.

As agents led Xi away in handcuffs, his wife and children were allegedly held at gunpoint. Xi said it took just four months for the basis of the government’s complaint to collapse. He subsequently filed suit in 2017 against Andrew Haugen, the FBI’s Chinese counterintelligence agent who he has said fabricated the entire controversy.

Xi’s lawyer argued Wednesday that Haugen knew that the pocket heater technology in question was not revolutionary and was publicly available. And that while Xi did discuss technology with Chinese scientists, it was Xi’s own, and Haugen knew it, referencing emails to the scientists introduced as evidence.

“There's nothing in any of these emails that implicate or reveal secrets about the pocket heater,” Rudovsky said, adding that after finding this out, Haugen was “left with nothing,” but proceeded anyway — even after having been informed by the inventor of the pocket heater that nothing in the emails had anything to do with a pocket heater. The subject related to an instrument Xi had invented himself.

“There's no reliable evidence that agent Haugen had to support the claim that professor Xi had shared confidential information with colleagues in China,” the lawyer continued.

While Leif Overvold, a Department of Justice attorney who represented the FBI Wednesday, argued that Haugen hadn’t fabricated evidence, he faced scrutiny from the Third Circuit panel. 

“If you look at the actual factual allegations, this is much closer to a malicious prosecution case,” Overvold argued.

“He made up stuff. That's very different from your standard, malicious prosecution case,” U.S. Circuit Judge Marjorie Rendell, a Bill Clinton appointee, said. 

“There's not an allegation in the complaint of any particular factual statement that was made up,” Leif responded.

A point of order U.S. Circuit Judge Cheryl Krause, an Obama appointee, took issue with.

“They specifically plead that special agent was advised by the inventor that these emails did not relate to this device. It was a different device,” Krause replied.

Philadelphia-based U.S. District Judge R. Barclay Surrick ruled previously that the FBI’s investigation and prosecution of Xi were matters of discretion, dismissing his allegations of malicious prosecution, unlawful search and seizure, and an equal-protection rights violation. Surrick left just one of the 10 counts Xi filed, a surveillance claim, in tact.

A U.S. citizen born in China, Xi also argues his ethnicity likely played a role in his arrest, alleging it is part of a pattern when it comes to FBI investigations, although the panel appeared skeptical of this argument Wednesday.

“What gives us that inference, the inference is just as easy that [the agent] just didn't like him,” Rendell said as she questioned Xi’s lawyer.

Krause likewise echoed that Xi has failed to provide evidence that Haugen showed a pattern of discriminatory animus.

In addition to suffering embarrassment and an invasion of his privacy, Xi has argued in federal court that the bogus charges “have and will continue to have an adverse impact on his academic career.”

After his arrest, the professor was forced to take administrative leave, suspended as interim chair of the Physics Department of Temple University, and banned from communicating with his students or directly accessing his lab. 

According to Xi’s original complaint, two days prior to his arrest, he had been told by the dean of the university that he would be appointed the permanent chair of the Physics Department.

Just before his arrest, Xi was the co-principal investigator overseeing nine research projects worth more than $1 million a year in U.S. government funding. By the time Xi could resume conducting research in September, when charges against him were dropped, he says he had lost valuable time and summer salaries.

Xi also contended in his original complaint that his prosecution has put a cloud over any future work he might undertake, “including advising Chinese students, hosting Chinese visitors, recommending students for employment in China, engaging in joint research projects and exchanging ideas and samples with Chinese colleagues, and serving on proposal review panels in China.”

Because the stakes are high, Xi’s lawyer argued, “the case must go on to discovery.” 

“It'll be reviewed again in summary judgment, but a jury can make a decision if they want to argue that agent Haugen was just negligent at some point and didn't deliberately violate professors civil rights,” Rudovsky said. “They're free to argue that.”

U.S. Circuit Judge Stephanos Bibas, a Donald Trump appointee, rounded out the three-judge panel Wednesday.

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