U.S. District Court Holds That Development of Software in U.S. That Was Alleged to Have Facilitated Political Persecution and Torture in China Is "Arguably" a Sufficient Basis for an ATS Claim

The World in U.S. Courts: Spring 2014 - Alien Tort Statute (ATS)/Torture Victims Protection Act (TVPA)/Victims of Trafficking and Violence Protection Act (VTVPA) | February.24.2014

Du Daobin v. Cisco Systems, Inc., U.S. District Court for the District of Maryland, February 24, 2014

Plaintiffs, Chinese citizens, claim to have been persecuted by the Chinese government as a result of information obtained by the government via an Internet monitoring program, called Golden Shield, created for the government by defendant Cisco. Cisco and its chairman were alleged to have known that the system would be used in the pursuit of political persecution and torture, and therefore had violated the ATS.

Citing the Supreme Court’s Kiobel decision, the U.S. District Court in Maryland dismissed the complaint on alternative grounds, including the Political Question Doctrine (because a decision would necessarily second-guess complex rules developed by the U.S. Government for the export of technology to China) and the Act of State Doctrine (because the plaintiffs are essentially asking the court to declare that China has violated international law and to interfere with U.S. foreign policy). However, the court did intimate that corporations could be sued under the ATS, a question not resolved in Kiobel and which has divided the circuits, but did not make a ruling on the point.

On the question whether the case represented an impermissible extraterritorial application of the ATS, the court noted that Cisco was a U.S. corporation and that development of the Golden Shield program occurred predominantly, if not exclusively, in the U.S. The court stated that these facts "may well be distinguishable" from those in Kiobel, and that "arguably ATS claims could be brought against a defendant which has taken certain actions within the United States with respect to products that might be primarily used [outside the U.S.] for violations of the laws of nations." Nevertheless, it declined to decide this issue, citing the dispositive alternative grounds for dismissal described above.

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