Ninth Circuit Allows Human Rights Claims Against Cisco to Proceed
July 19, 2023
There may yet be life in the Alien Tort Statute (ATS). The Ninth Circuit recently held, in Doe I v. Cisco Systems, Inc., that Chinese practitioners of Falun Gong could go forward with claims of aiding and abetting human rights violations against Cisco Systems, which designed and built a surveillance system for the People’s Republic of China.
Over the past decade, the Supreme Court has repeatedly whittled down the ATS cause of action, holding that it does not apply to foreign corporations and that it requires substantial conduct in the United States. But the claims in Doe v. Cisco Systems fit through the narrow space the Court has left for ATS actions. Cisco is a U.S. company, and it designed and built the surveillance system for China in the United States.
Doe v. Cisco Systems also has important things to say about aiding and abetting liability. First, the decision holds that aiding and abetting human rights violations is a violation of international law that is actionable under the ATS. Second, it holds that knowledge, rather than purpose, satisfies the mens rea requirement for aiding and abetting, deepening a split on this question among the circuits. Finally, the decision holds, as a matter of first impression, that the Torture Victim Protection Act (TVPA) allows aiding and abetting claims against Cisco’s corporate officers.
The Narrow ATS Cause of Action
In Sosa v. Alvarez-Machain (2004), the Supreme Court recognized an implied cause of action under the ATS for violations of international human rights norms that are generally accepted and specifically defined. But in a series of cases starting in 2013, the Court has repeatedly narrowed the cause of action.
In Kiobel v. Royal Dutch Petroleum (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 cause of action does not apply to foreign corporations. And in Nestlé, USA v. Doe (2021), the Court held that ATS claims against U.S. corporations must be based on conduct in the United States that goes beyond general corporate decision-making. (For more detail on the evolution of ATS jurisprudence, see our Primer on Human Rights Litigation.)
The Claims in Cisco
The complaint in Cisco alleges that, in 1999, China outlawed Falun Gong organizations and the Chinese Communist Party launched a douzheng (“violent struggle”) campaign against the religious movement. China’s Ministry of Public Security contracted with Cisco to design and build a surveillance system that became known as “Golden Shield.” The system allowed Chinese security services to monitor Falun Gong internet activity and identify users. After the system was up and running, Cisco analyzed and upgraded its operations, for example, by adding a tool to monitor email communication. Cisco engineers in San Jose, California provided support and training to Chinese security officers and Communist Party agents using the Golden Shield system.
In 2011, thirteen Chinese nationals and one U.S. citizen brought a class action against Cisco, its CEO John Chambers, and Fredy Cheung, who served as Vice President of Cisco’s Chinese subsidiary. The plaintiffs alleged that they had been identified by the Golden Shield system, detained, and subjected to forced conversion and other human rights violations. The plaintiffs accused the defendants of aiding and abetting seven human rights violations: torture; cruel, inhuman, and degrading treatment; forced labor; prolonged arbitrary detention; crimes against humanity; extrajudicial killing; and forced disappearance.
The district court dismissed the plaintiffs’ claims after the Supreme Court’s 2013 decision in Kiobel. Appeals were stayed while the Supreme Court decided Jesner and Nestlé. Thus, the plaintiffs had to wait nearly a decade to have the Ninth Circuit hear their appeal.
The Ninth Circuit’s Decision
For anyone interested in the current state of play under the ATS, Cisco is required reading. The Cisco case featured a rematch between the counsel in Kiobel a decade earlier, with Paul Hoffman representing the plaintiffs and Kathleen Sullivan representing the defendants. And, writing for the majority, Judge Marsha Berzon carefully analyzed and synthesized the relevant opinions in Sosa, Kiobel, Jesner, and Nestlé. It is a masterful opinion.
The ATS Claims
The Chinese plaintiffs brought their claims under the ATS, which allows non-U.S. citizens to sue for torts in violation of international law. Judge Berzon first disposed of Cisco’s argument that corporations may not be sued under the ATS, correctly noting that five Justices in Nestlé “concluded that domestic corporations are appropriate defendants under the statute.”
Aiding and Abetting Under the ATS
Turning to aiding and abetting liability, the majority held that such liability met the two-part test that the Supreme Court laid down in Sosa: (1) aiding and abetting liability is generally accepted and specifically defined in customary international law; and (2) no prudential concerns about foreign policy or congressional intent cautioned against recognizing such liability.
For the first part of Sosa’s test, the majority relied on sources of customary international law collected by Judge Katzmann’s concurring opinion in Khulumani v. Barclay National Bank (2d Cir. 2007), including decisions of the Nuremburg Tribunals, decisions of the international criminal tribunals for the former Yugoslavia and Rwanda, the Rome Statute, and “a plethora of treaties and conventions” that recognize accomplice liability for violations of international law. The majority also noted that that Second, Fourth, and Eleventh Circuits have held that aiding and abetting claims may be brought under the ATS and that no circuit has held to the contrary.
With respect to the second, prudential part of the test, the majority reasoned that “recognizing aiding and abetting liability does not trigger Sosa’s principal foreign policy concern—that ATS claims could impose liability on sovereign nations for behavior with respect to their own citizens.” Accomplice liability claims are most likely to be brought against non-governmental actors and—because Jesner bars claims against foreign corporations—specifically against U.S. corporations. Permitting such claims serves the original purposes of the ATS, Judge Berzon wrote, because failure to provide a remedy for violations of international law by U.S. citizens and corporations could create foreign relations problems. Nor did the majority see any case-specific reason to bar plaintiffs’ claims, noting that no foreign government nor the U.S. executive branch had filed an amicus brief or otherwise objected to the suit.
The majority also saw no reason to think that Congress would doubt the need to recognize aiding and abetting liability under the ATS. Specifically, the majority rejected the oft-made argument that Central Bank of Denver N.A. v. First Interstate Bank of Denver, N.A. (1994) establishes a presumption against aiding and abetting liability in civil statutes. The majority also declined to read Congress’s failure to regulate computer software or hardware exports to China as preempting such liability. (Although the Ninth Circuit did not mention it, the executive branch last year dramatically limited such exports to China, in part because of human rights concerns.)
Judge Morgan Christen dissented on the second part of the Sosa analysis. Although holding Cisco liable would not directly impose liability on the Chinese government, she argued that “a finding of liability in this case would necessarily require a showing that the Chinese Communist Party and Ministry of Public Security violated international law with respect to the Chinese-national Plaintiffs.” “Such a finding,” she continued, “could have serious ramifications for Sino-American relations, fraught as they already are.”
The Requirements for Aiding and Abetting Liability
The majority next held that the requirements for aiding and abetting liability under the ATS must be determined by customary international law. Joining the Second, Fourth, and Eleventh Circuits, the court held that the actus reus for such liability is providing substantial assistance to international law violations by the principal. The court held that such assistance need not be “specifically directed” towards the violations and could take a variety of forms including “supplying computer hardware, software, or technological support that enhances the capacity of the principal to coordinate and facilitate operations in which crimes are committed.” The court found that the plaintiffs’ allegations satisfied the actus reus requirement because they alleged that Cisco provided substantial technological assistance that was used to identify, detain, and torture Falun Gong practitioners at a time when China lacked equivalent technological tools.
Turning to the mens rea requirement for aiding and abetting liability, the majority noted that the circuits are split. The Second and Fourth Circuits have held that customary international law requires that the defendant acted with the purpose of facilitating the crime, whereas the Eleventh Circuit has held that customary international law requires only knowledge that the defendant’s actions will facilitate the crime. After a careful review of the sources, the Ninth Circuit agreed with the Eleventh that only knowledge is required.
The court began by observing that all the Nuremburg prosecutions for aiding and abetting used a knowledge standard. So have more recent international criminal tribunals like those for the former Yugoslavia and Sierra Leone. Judge Berzon noted that the Second and Fourth Circuit reached a contrary conclusion by giving great weight to the Rome Statute’s provision on aiding and abetting, which adopts a purpose standard. But, the Ninth Circuit pointed out, the Rome Statute was not intended to codify or affect existing customary international law but rather to adopt a “least common denominator” standard to which no country could object. “A treaty may appear to be a helpful shortcut,” Judge Berzon wrote, “but adopting a single provision at odds with nearly every other authority subverts the international law inquiry required by Sosa.” (Having examined this question in detail when I served as Counselor on International Law to the Legal Adviser at the U.S. State Department, I agree with Judge Berzon’s analysis of customary international law.)
Plaintiffs had clearly alleged that Cisco acted with knowledge that its services would be used against practitioners of Falun Gong. The complaint alleges that Chinese authorities told Cisco that they were primarily concerned with whether the technology could be used against Falun Gong. “Cisco’s marketing materials and internal reports reflect this goal,” the court noted, “repeatedly mentioning the connection between Cisco’s technological assistance and the crackdown on, or ‘douzheng’ of, Falun Gong adherents.” A series of shareholder resolutions between 2002 and 2010 also brought the issue to Cisco’s attention, while the U.S. State Department’s human rights reports documented actions taken against Falun Gong. In footnote 22 of the opinion, the majority noted that it would likely have concluded that the allegations were sufficient even under a purpose standard.
The majority turned next to the question of extraterritoriality—specifically, whether plaintiffs had alleged sufficient conduct in the United States. The Supreme Court held in Kiobel that “mere corporate presence” in the United States was insufficient to establish a domestic application of the ATS, and it further held in Nestléthat “general corporate activity” including decisionmaking was also insufficient.
Judge Berzon noted that the Nestlé Court treated the actus reus—the conduct constituting the international law violation—as the relevant conduct for extraterritoriality purposes. Citing Jesner, she also reasoned that “conduct that occurs within the United States and violates customary international law is most relevant to the ATS’s aim of providing a forum to address violations of international norms that take place in U.S. territory.”
The majority had no difficulty concluding that the plaintiffs’ allegations of domestic conduct were sufficient to satisfy the requirements the Supreme Court has articulated.
Plaintiffs allege that Cisco designed, developed, and optimized important aspects of the Golden Shield surveillance system in California; that Cisco manufactured hardware for the Golden Shield in California; that Cisco employees in California provided ongoing maintenance and support; and that Cisco in California acted with knowledge of the likelihood of the alleged violations of international law and with the purpose of facilitating them.
These allegations “well exceeded ‘mere corporate presence’ or simple corporate oversight and direction,” the majority noted.
With respect to the individual defendants Chambers and Cheung, by contrast, the majority held that plaintiffs did not sufficiently allege domestic conduct. Chambers’s general oversight of the project in California was not sufficient, and his meetings with Chinese officials took place in China. Plaintiffs alleged no U.S. conduct by Cheung, who served as Vice President of Cisco’s Chinese subsidiary.
Finally, the majority held that plaintiffs had adequately alleged state action. Some human rights violations (like torture) violate international law only if done under color of state law, whereas other violations (like slave trading and war crimes) do not. In the context of aiding and abetting claims, the court concluded that “Plaintiffs need not establish that Cisco itself acted under color of state law” but that “they must show, for at least some of the alleged international law violations, that Cisco aided and abetted the offenses of a state actor.” Although the court suggested that plaintiffs’ allegations involving the Chinese Communist Party might not be sufficient, it held that their allegations involving the Ministry of Public Security were.
The TVPA Claims
One of the plaintiffs, Charles Lee, is a U.S. citizen who could not bring claims under the ATS. Instead, Lee sued Chambers and Cheung under the TVPA, which provides that “[a]n individual who, under actual or apparent authority, or color of law, of any foreign nation … subjects an individual to torture shall, in a civil action, be liable for damages to that individual.” (The Supreme Court has held that only natural persons may be sued under the TVPA, so Lee could not sue Cisco.)
The Ninth Circuit (with Judge Christen joining this part of the opinion) held, as a matter of first impression, that the TVPA reaches claims of aiding and abetting torture. The court noted that “subjects … to torture” is broader than “tortures” and “encompasses not only individuals who directly torture another but also those who in some respect cause another to undergo torture.” The Supreme Court has also observed that “the TVPA contemplates liability against officers who do not personally execute the torture or extrajudicial killing.” The Ninth Circuit noted that the TVPA was intended to implement the Convention Against Torture, Article 4 of which requires criminal liability for those complicit in torture, and that the Senate Report on the TVPA explicitly notes that the statute provides a cause of action “against persons who ordered, abetted, or assisted in the torture” (Ninth Circuit’s emphasis).
“Plaintiffs allege Chambers and Cheung directly participated in the marketing, design, and implementation of Cisco’s work on the Golden Shield,” the court noted, “and that both were sufficiently high-ranking within Cisco to have the ability to influence Cisco’s work in China.” “Given the internal communications from shareholders and widespread external reporting about the human rights abuses ongoing in Chinese authorities’ targeting of Falun Gong adherents,” the court continued, “as well as the direct statements by Chambers and Cheung alleged in the complaint, Plaintiffs have adequately pleaded that Chambers and Cheung provided their assistance with awareness that international law violations, including torture, were substantially likely.”
I have previously written that, after the Supreme Court’s decision in Nestlé, human rights litigation under the ATS is largely dead. I am happy to be proven wrong. The Ninth Circuit’s Cisco decision shows that some claims against U.S. corporations can squeeze through all the hoops that the Court’s recent decisions have erected.
To be sure, cases like Cisco will be rare. Plaintiffs will have to show that a U.S. corporation engaged in substantial conduct in the United States with knowledge that it was facilitating human rights violations abroad. Shockingly, the Cisco plaintiffs have plausibly alleged such conduct by a prominent U.S. firm in the not-so-distant past.
New export controls on the export of technology are likely to prevent a repeat of such conduct with respect to China. But if a new administration in the United States changes these rules in ways that allow U.S. companies to support domestic surveillance by foreign regimes, the ATS will still be something that U.S. companies will need to worry about.