Ninth Circuit Denies Rehearing in Doe v. Cisco Systems
September 11, 2024
On September 3, 2024, the Ninth Circuit denied rehearing en banc in Doe v. Cisco Systems. The panel had held that Chinese practitioners of Falun Gong could sue Cisco, a U.S. company, for aiding and abetting human rights violations by building a surveillance system for the People’s Republic of China. Judge Patrick Bumatay (joined by five other judges) dissented, arguing that the panel was wrong to recognize a cause of action for aiding and abetting under the Alien Tort Statute (ATS). A petition for Supreme Court review seems likely.
Death by a Thousand Cuts
The ATS was part of the First Judiciary Act that established the federal courts in 1789. As codified today, it says: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”
In Sosa v. Alvarez-Machain (2004), the U.S. Supreme Court recognized an implied cause of action under the ATS for violations of modern human rights norms that are as well defined and generally accepted as the violations the First Congress had in mind—specifically, violations of safe-conducts, infringement of the rights of ambassadors, and piracy. The Court specifically rejected the position, urged in Justice Scalia’s concurring opinion, that ATS claims should be limited to those three eighteenth-century torts.
During the twenty years since, the Court has repeatedly cut back the ATS cause of action. In Kiobel v. Royal Dutch Petroleum Co. (2013), the Court applied the presumption against extraterritoriality to the ATS cause of action. In Jesner v. Arab Bank (2018), the Court held that the ATS cause of action does not apply to foreign corporations. And in Nestlé USA, Inc. v. Doe (2021), the Court held that the ATS cause of action requires substantial conduct in the United States. But the allegations in Cisco satisfy the limits that the Supreme Court has imposed: Cisco is a U.S. company, and it engaged in substantial conduct—designing and building the surveillance system—in the United States.
In each of these three cases, the Supreme Court originally granted cert to decide whether corporations could be sued under the ATS. Each time, the Court avoided that question and disposed of the case by narrowing the cause of action in other ways. In Nestlé, five justices opined that corporations are subject to suit under the ATS (Alito, Breyer, Gorsuch, Kagan, and Sotomayor), albeit in different opinions. In other words, rather than cutting off corporate liability with a clean blow, the Court has reduced it in slices.
Cisco presents the Justices with a chance to take another whack at corporate liability. ATS suits against corporations usually do not allege that the defendant corporation violated human rights directly (though there are exceptions). Instead, such suits generally allege that the corporation helped a foreign government violate human rights. The question of aiding and abetting liability is, therefore, central to corporate liability under the ATS.
As I discussed in an earlier post, the panel in Cisco held that claims for aiding and abetting human rights violations can be brought under the ATS. Judge Berzon reasoned that aiding and abetting liability is generally accepted and specifically defined in customary international law and that no prudential concerns about foreign policy cut the other way since the defendant is a U.S. company, not a foreign government. She went on to hold that the mens rea requirement for aiding and abetting under customary international law is knowledge rather than purpose. And she held, as a matter of first impression, that aiding and abetting claims may also be brought by U.S. citizens under the Torture Victim Protection Act (TVPA).
Judge Bumatay’s Dissent from Denial of Rehearing
In his dissent from denial of rehearing en banc, Judge Bumatay took aim at the panel’s central holding—that claims for aiding and abetting are cognizable under the ATS. In his view, the Ninth Circuit made “three main errors” in refusing to rehear the case:
First, we failed to restrict ATS liability to causes of action comparable to historically recognized torts. Second, we violated the separation of powers in pronouncing a new cause of action—even though Congress has continued to legislate in this very area. And third, we ignored serious foreign-policy concerns—permitting federal courts to intrude in the delicate relations with another world superpower.
History
It is a little hard to makes sense of Judge Bumatay’s first point. Initially, he suggests that the ATS cause of action should be limited to the eighteenth-century paradigms that the First Congress had in mind—violations of safe-conducts, infringement of the rights of ambassadors, and piracy. He quotes Justice Scalia’s concurrence in Sosa and Justice Thomas’s plurality opinion (joined by Justices Gorsuch and Kavanaugh) in Nestlé. But as Judge Berzon notes in her response to the dissent, this view has never commanded a majority of the Supreme Court. Indeed, Sosa expressly rejected Justice Scalia’s position, holding that federal courts may recognized claims “based on the present-day law of nations [that] rest on a norm of international character accepted by the civilized world and defined with a specificity comparable to the features of the 18th-century paradigms.”
Later, Judge Bumatay faults the panel for endorsing “universal aiding-and-abetting liability without first assessing whether accomplice liability attached to the underlying conduct at issue for each tort.” It seems clear that there should be no aiding-and-abetting liability under the ATS for violations of international law norms that do not meet Sosa’s requirements of acceptance and definition. Four of the seven alleged violations clearly do, and the Ninth Circuit panel directed the district court to consider the other three on remand. Judge Bumatay’s suggestion that a court must go further and establish that aiding-and-abetting liability has been recognized individually for each tort seems at odds with his own assertion that “aiding and abetting is not a tort by itself, but a type of liability that attaches to the commission of one.”
More fundamentally, Judge Bumatay’s tort-by-tort approach is inconsistent with Sosa. Sosa directs federal courts to look to international law to determine if a claim is cognizable under the ATS. International law recognizes aiding and abetting liability for all violations of international law, as Judge Katzmann showed in his exhaustive opinion in Khulumani v. Barclay National Bank Ltd. (2d Cir. 2007), on which the Ninth Circuit panel relied.
Finally, Judge Bumatay invokes the Supreme Court’s opinion in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. (2004), which refused to recognize a presumption in favor of civil aiding and abetting liability under federal law. Central Bank is relevant, he asserts, because “while international law may provide the norms at issue, domestic law supplies the liability for any violation of international norms.” Ironically, this is the approach that many human rights advocates pressed after Sosa, seeking to avoid what they saw as a more stringent international law standard for aiding and abetting liability. But most federal circuits reject this approach and—like the Ninth Circuit panel—treat aiding and abetting as a separate international law violation rather than an expansion of liability for the underlying violation.
Separation of Powers
Judge Bumatay also asserts that recognizing a cause of action for aiding and abetting under the ATS violates the separation of powers by usurping the legislative role. “[A]s always, statutory text should control our analysis,” he writes. “But nothing in the text of the ATS shows congressional intent to advance aiding-and-abetting liability.” This is incorrect. The text of the ATS says that district courts have “jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” This text does not mention aiding and abetting specifically, but neither does it mention torture or, for that matter, piracy and the rights of ambassadors. The text of the ATS refers generally to “torts in violation of the law of nations.” Because, as discussed above, aiding and abetting human rights violations is such a tort, it falls within the language of the ATS.
Judge Bumatay also argues that it is wrong for courts to recognize implied causes of action in an area where Congress is still legislating. He points to the TVPA, which creates an express cause of action for torture and extrajudicial killing, and to the Trafficking Victims Protection Reauthorization Act (TVPRA), which creates an express cause of action for various forced labor and human trafficking offenses. Sosa, however, rejected Judge Bumatay’s approach, reading Congress’s enactment of the TVPA as support for creating an implied cause of action rather than as a reason not to do so.
Moreover, contrary to Judge Bumatay’s assertion, the TVPA does recognize aiding and abetting liability. The panel held in this very case that the TVPA’s phrase “subjects an individual to torture” is broad enough to encompass such liability, a point with which Judge Bumatay expressed no disagreement in his dissent. And the D.C. Circuit has recently held that “the TVPRA’s indirect liability for ‘participation in a venture’ … mirrors the aiding and abetting liability long established at common law.” In short, Congress’s activity in this area seems fully consistent with permitting aiding and abetting claims under the ATS.
Foreign Policy
Finally, Judge Bumatay argues that foreign policy concerns cut against aiding and abetting liability. “In this case,” he writes, “the plaintiffs seek to hold China and its government accountable for purported violations of international law through its alleged aiders and abettors.” But as the panel noted in its original opinion, and as Judge Berzon reemphasizes in her response to the dissent, the plaintiffs are not suing China or Chinese officials—they are suing a U.S. company for building a surveillance system that was used to detain and torture them.
Certainly, this suit is not the biggest irritant in current U.S.-China relations. In my view, lawsuits rarely create real diplomatic problems. But I can certainly think of other cases—such as Missouri’s COVID suit against China—that touch more sharply on Chinese nerves than this one.
The Prospects for Cert
It is likely that Cisco will ask the Supreme Court to review the Ninth Circuit’s decision. There is no circuit split on whether aiding and abetting claims are cognizable under the ATS (though there is a split, as Judge Berzon acknowledged, on the mens rea standard for such liability). Every circuit to have addressed the question has held that aiding and abetting claims can be brought under the ATS, including the Second, the Fourth, and the Eleventh Circuits.
However, the Trump Administration argued against aiding and abetting liability in Nestlé. Traditionally, the Solicitor General’s Office has been reluctant to change positions on issues such as this (although, in Nestlé it did just that, on the question of corporate liability). Thus, even a Harris Administration might support Cisco’s cert petition.
Finally, several Justices have already opined that claims under the ATS should be limited to those known in the eighteenth century. Justice Thomas’s plurality opinion in Nestlé took this view and was joined by Justices Gorsuch and Kavanaugh. Justice Alito dissented in Nestlé but expressed sympathy for limiting the ATS in this way. It takes only four votes to grant cert. And, of course, it would take only five to administer a last, fatal cut to corporate liability under the ATS by excluding aiding and abetting claims.