By Jan Wolfe
WASHINGTON, June 23 (Reuters) - The U.S. Supreme Court further limited the reach of a federal law used to hold corporations liable for human rights abuses committed abroad, as it issued a ruling on Tuesday ending a lawsuit by members of the Falun Gong movement accusing Cisco Systems of facilitating religious persecution in China.
The justices reversed a lower court's decision that had breathed new life into the 2011 lawsuit, which was brought under the Alien Tort Statute of 1789. The suit had alleged
that Cisco knowingly developed technology that allowed China's government to surveil and persecute Falun Gong members.
The Alien Tort Statute had been dormant for nearly two centuries before lawyers began using it in the 1980s to bring international human rights cases in U.S. courts. The Cisco case posed the question of whether the law creates liability for corporations that "aid and abet" human rights abuses, a form of what is called accomplice liability.
The lawsuit accused San Jose, California-based Cisco of knowingly designing and implementing the "Golden Shield," an internet surveillance system used by the Chinese Communist Party to target dissidents. The plaintiffs said China used the system to track and then torture Falun Gong members.
Cisco called the allegations unfounded and offensive.
President Donald Trump's administration sided with Cisco in the case.
The Human Rights Law Foundation, a nonprofit organization in Washington, sued Cisco on behalf of a group of Falun Gong members. A judge dismissed the lawsuit in 2014, saying the alleged conduct was not sufficiently connected to the United States for the case to proceed.
The lawsuit stalled for many years, in part because of a series of Supreme Court decisions since 2013 limiting the Alien Tort Statute's reach, making it more difficult to hold U.S. corporations legally liable for human rights abuses.
Falun Gong, founded in China in 1992, was banned by China's government in 1999 after thousands of members appeared at the central leadership compound in Beijing in silent protest. The group has called for people to renounce the ruling Chinese Communist Party. Falun Gong members founded a right-leaning U.S. media outlet called The Epoch Times that has been heavily critical of the Chinese Communist Party and supports Trump.
The San Francisco-based 9th U.S. Circuit Court of Appeals revived the case in 2023 and allowed it to move toward discovery, the evidence-gathering phase before a trial.
The 9th Circuit decided that the plaintiffs had plausibly alleged "that Cisco provided essential technical assistance to the douzheng (crackdown) of Falun Gong with awareness that the international law violations of torture, arbitrary detention, disappearance and extrajudicial killing were substantially likely to take place."
The Supreme Court in 2013 and 2018 cases limited the ability of plaintiffs to sue corporations in U.S. courts under the Alien Tort Statute for overseas human rights violations. The court said in those rulings that there needed to be a strong connection between the alleged conduct and actions that took place in the United States.
In a 2021 opinion, the U.S. Supreme Court threw out a lawsuit accusing Cargill Inc and a Nestle SA subsidiary of knowingly helping perpetuate slavery at Ivory Coast cocoa farms, ruling that the plaintiffs did not show that any of the relevant conduct took place within the United States.
(Reporting by Jan Wolfe; Editing by Will Dunham)
