Alien Tort Statute: Litigation

ATS/TVPA Suit Against Cisco Systems Dismissed on Political Question and Act of State Grounds

By John Bellinger
Thursday, March 13, 2014, 9:25 PM

Another belated post: last week, a district court in Maryland dismissed a ATS and TVPA lawsuit filed in 2011 by members of the Chinese Falun Gong a group of Chinese dissidents against Cisco Systems, the California-based Internet technology provider, and its CEO, John Chambers, for allegedly aiding and abetting the arbitrary detention and torture of the plaintiffs by the Chinese Government.  The litigation had been closely watched by U.S. companies who sell publicly available Internet security software that is then used by foreign governments to commit human rights violations. [Correction: a reader has pointed out that the plaintiffs in this case were not members of the Falun Gong.]

Judge Peter Messitte dismissed the suit against John Chambers for lack of personal jurisdiction and against Cisco as non-justiciable under the political question and Act of State doctrines and for failure to allege that Cisco had acted with the purpose of helping the Chinese government to commit human rights violations.  Judge Messitte declined to reach the issues of whether the ATS applies to corporations and whether the presumption against extraterritorial application of the ATS announced in Kiobel should apply to the facts in this case.  The court's analysis of the issues relevant to Cisco is noteworthy in several respects, as I discuss below the break.

Political Question.  Judge Messitte concluded that the suit was non-justiciable under the political question doctrine because adjudication would implicate the fourth, fifth, and sixth Baker factors (respectively, “[4] the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or [5] an unusual need for unquestioning adherence to a political decision already made; or [6] the potentiality of embarrassment from multifarious pronouncements by various departments on one question.”)  The court noted that the Commerce Department has specifically licensed for sale to Chinese security agencies the type of  technology sold by Cisco.  Thus, the court declined to adjudicate the suit because it “asks the Court to decide the extent to which apparently neutral technology can be used in other ways by foreign governments” and “would require the Judiciary to determine whether the U.S. rules and regulations surrounding the export of products to China are sound.”  This analysis may give U.S. technology companies some level of comfort that they cannot be sued for human rights violations if the technology they sell has been licensed by the Executive branch.

Act of State Doctrine.  Judge Messitte also held that adjudication of the suit would violate the Act of State doctrine because it “would require judging official actions of the Chinese government and its officials in enforcing Chinese law against Chinese citizens in China.”  His conclusion here highlights an important and unresolved tension between much human rights litigation and the Act of State doctrine: Is it appropriate for federal judges -- and ultimately the Supreme Court -- to decide whether China or Russia or Iran have committed human rights violations against their own citizens?  The Supreme Court said in Underhill v. Hernandez, 168 U.S. 250 (1897), “[e]very sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of the government of another, done within its own territory.”

Mens Rea.  As an additional justification for dismissing the suit, Judge Messitte held that the plaintiffs had not alleged that Cisco sold technology in China with the “purpose” that it be used by the Chinese government to commit human rights violations, as required by the Fourth Circuit’s decision in Aziz v. Alcolac, Inc., which followed the Second Circuit’s decision in Talisman.  The court said: “From all that appears, Cisco technology remains a neutral product that can be used in innumerable non-controversial ways. Although Plaintiffs allege that this technology was somehow customized for CCP officials for use in nefarious ways…they simply have failed to indicate with any logic what it means to customize technology that would permit the sort of human rights violations alleged here, such as torture.”

Corporate Liability.  Judge Messitte declined to reach the still much-debated question of whether corporations may be subject to liability under the ATS.   Of note, he said: “[C]andidly, this Court harbors doubt that corporations are immune under the ATS….”

Extraterritoriality.  The court similarly declined to decide whether the suit was barred by Kiobel, stating:

 The present case may well be distinguishable from Kiobel. First, Cisco is an American company with offices throughout the United States, including in this state. Second, Plaintiffs allege that Cisco’s developmental actions relevant to the Golden Shield took place predominantly, if not entirely, within the United States. Arguably, Kiobel notwithstanding, ATS claims could be brought against a defendant which has taken certain actions within the United States with respect to products that might be primarily used for violations of the laws of nations.

Judge Messitte's reluctance to decide the extraterritoriality issue surprises me somewhat, given that other courts have reached the issue after Kiobel.   Given his conclusion that there was no evidence that Cisco executives inside the United States intended to aid and abet human rights violations in China, he might reasonably have also concluded that no violation of international law had occurred inside the United States.