A few years ago, we blogged about a federal jury verdict against Chiquita Brands holding the company liable for financing a Colombian paramilitary group. That blog noted that there are three specific statutes that can provide a basis for imposing liability for companies doing business in troubled parts of the world. The statutes are the Anti-Terrorism Act (ATA), the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA).

This Freshfields blog notes that the SCOTUS recently granted cert in the case of Cisco Systems, Inc. v. Doe I, in order to determine whether two of these statutes, the ATS and the TVPA, allow suits against individuals and entities for aiding and abetting violations of international law. The lawsuit is premised on allegations that Cisco built a nationwide surveillance system that allowed the Chinese government to identify and arrest members of the Falun Gong religious group, and that in doing so, the company aided & abetted violations of these statutes. This excerpt discusses the two statutes and provides an overview of how courts have approached them in recent years:

The lawsuit is based on two separate but related federal statutes. The ATS, enacted in 1789, allows federal courts to hear lawsuits brought by non-US citizens for actions that violate the “law of nations” (customary international law). The TVPA, passed in 1992, creates liability for torture and extrajudicial killings committed by a foreign nation. Unlike the ATS, the TVPA applies only to conduct committed by individual defendants, not corporations.

In recent years, the Supreme Court has significantly narrowed the scope of the ATS. In Sosa v. Alvarez-Machain (2004), the Court concluded that only certain conduct could give rise to liability under the ATS. In addition, the Court held in Kiobel v. Royal Dutch Petroleum (2013) that a plaintiff cannot sue under the ATS when the alleged conduct occurs entirely outside the United States. Relatedly, in Nestlé USA, Inc. v. Doe (2021), the Court determined that corporate decisionmaking is not enough to hold a company liable.

In July 2023, the Ninth Circuit allowed the claims against Cisco to continue. It held that aiding and abetting is actionable under the ATS, and that Cisco’s development of the surveillance system went beyond mere decisionmaking. The Ninth Circuit also held that the TVPA’s text and history permit aiding and abetting claims against Cisco’s executives.

The blog says that the stakes in the case are high – a favorable ruling for the plaintiffs would “create a pathway for holding US corporations and individuals responsible for facilitating human rights abuses,” while a decision in favor of Cisco could effectively shield corporations from liability absent federal legislation.

– John Jenkins