Supreme Court Will Consider New Curbs on Human-Rights Suits

The US Supreme Court will consider putting new limits on lawsuits against companies over atrocities abroad, agreeing to hear Cisco Systems Inc.’s bid to stop claims that it was complicit in China’s torture of Falun Gong adherents.

The justices will review a federal appeals court decision letting the suit by 12 Chinese nationals and one US citizen go forward under a centuries-old law that human-rights advocates have tried to wield against multinational corporations.

The Supreme Court has curbed the 1789 Alien Tort Statute in recent years but left open the possibility of so-called aiding-and-abetting lawsuits against American companies. Cisco’s appeal asks the high court to outlaw those claims as well, arguing that the law applies only in rare circumstances including piracy and attacks on ambassadors.

The Trump administration joined Cisco in urging Supreme Court review, as did companies including Chevron Corp., International Business Machines Corp. and Merck & Co.

The 13 people say Cisco worked closely with China to create the country’s “Golden Shield” surveillance system, allowing officials to identify, apprehend and torture Falun Gong believers.

Cisco has denied allegations of wrongdoing, saying it doesn’t customize products to facilitate repression. China declared the Falun Gong spiritual movement illegal in 1999.

The legal clash centers on a 33-word statute that gives federal courts jurisdiction to hear suits by non-citizens over some violations of international law. The measure was enacted in part as a reaction to an attack on a French diplomat in Philadelphia.

Cisco contends the law applies only to international norms that were broadly accepted in 1789 and to claims explicitly authorized later by Congress. “There is no basis to infer congressional intent to create such aiding-and-abetting liability under the ATS,” Cisco argued in its appeal.

Lawyers for the suing people say aiding-and-abetting liability has a centuries-old pedigree under international law. “Before and after the founding, individuals were held accountable for aiding-and-abetting law of nations violations,” the group argued.

The Supreme Court also will consider dismissing similar allegations against former Cisco Chief Executive Officer John Chambers and another executive under a separate law, the Torture Victim Protection Act.

Corporate trade groups told the justices that companies are feeling the burden of more than 200 Alien Tort Statute lawsuits that have been filed over the last three decades.

The suits impose “substantial legal and reputational costs on US companies that do business abroad,” trade groups including the US Chamber of Commerce argued.

The people pressing the long-running suit urged the Supreme Court not to hear the case. They said that only a handful of Alien Tort Statute cases are still pending after earlier Supreme Court decisions sharply limited the possible grounds for suit.

“Given the decline in ATS litigation, the question is of limited importance,” the group argued.

The court will hear arguments, probably in April, and rule by July.

The case is Cisco v. Doe, 24-856.

To contact the reporter on this story:
Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story:
Elizabeth Wasserman at ewasserman2@bloomberg.net

Steve Stroth

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