7 dissents as 9th Circuit revives case saying Cisco helped Chinese harm Falun Gong

Over the dissent of seven judges, the 9th U.S. Circuit Court of Appeals on Tuesday affirmed a panel decision reviving a complaint against Cisco Systems Inc. and its executives, accusing the company of designing a security system that allowed the Chinese government to eavesdrop on the communications of the Falun Gong religious group.

The lawsuit was not filed against the People's Republic of China but against the San Jose technology company for designing a surveillance network known as the Golden Shield that was allegedly used by the Beijing government to persecute and torture Falun Gong members.

But 9th Circuit Judge Patrick J. Bumatay, an appointee of President Donald Trump who wrote for six of the dissenters, argued that the panel has wrongly transformed the Alien Tort Statute, or ATS -- adopted in 1789 by the first Congress -- "into a sword to punish foreign nations through their alleged aiders and abettors."

"So rather than promote harmony, we arm the ATS to incite international conflict. And this is a worrisome undertaking -- with real world consequences," he added. "Twenty years ago, the State Department warned us about the foreign-policy implications of confronting China in a case very much like this one." Doe I et al. v. Cisco Systems et al., 2024 DJDAR 8566 (9th Circ., Sept. 24, 2015).

Senior 9th Circuit Judge Marsha S. Berzon, an appointee of President Bill Clinton, defended the panel decision, which she wrote in July 2023, saying it relied on a 2004 U.S. Supreme Court precedent. Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).

Berzon wrote that subsequent decisions never got a majority for Bumatay's argument that judicial recognition of additional causes of action are "extraordinarily disfavored or a dead letter."

Instead, Berzon wrote, the U.S. government has never gotten involved in the case in seven years.

"Thus, it is even clearer now than it was at the time the opinion was filed that the foreign policy implications here are not of sufficient concern to the United States government to trigger its involvement at this juncture," she added.

Cisco and Quinn Emanuel Urquhart Sullivan LLP senior counsel Kathleen M. Sullivan, who represents the company, could not be reached for comment Tuesday about whether they would seek review of the decision by the Supreme Court.

During oral arguments in October 2021, Sullivan argued that a Supreme Court decision that year in favor of chocolate makers Nestle Inc. and Cargill Inc. alleging they used child slaves in Africa also should prompt dismissal of the Alien Tort Statute lawsuit against Cisco and former CEO John Chambers. Nestle USA Inc. v. Doe et al., 2021 DJDAR 5977 (S. Ct., filed Sept. 25, 2019).

"This is a case about exporting technology that is expressly legal under U.S. trade policy," Sullivan told the panel. "We make switchers and routers. We don't sell instruments of torture."

Paul L. Hoffman, a partner with Schonbrun Seplow Harris Hoffman & Zeldes LLP in Hermosa Beach, hailed the decision in an email, adding that he expected Cisco to seek Supreme Court review.

"Although the Court has narrowed Alien Tort Statute jurisdiction over the years, we believe the allegations in our case overcome the Court's restrictions on extraterritorial cases and our claims are at the core of human rights claims found actionable under the ATS," he wrote.

Bumatay also said Cisco Systems violates the separation of powers. "Notwithstanding Sosa contemplating that federal courts could recognize a claim based on present-day international law, the Supreme Court has subsequently signaled that federal courts should be reluctant to recognize federal common law tort liability where Congress has not done so," he wrote.

Berzon countered that none of the post-Sosa decisions foreclosed the possibility of new causes of action under the Alien Tort Statute.

Judges Consuelo M. Callahan and Sandra S. Ikuta, 9th Circuit appointees of President George W. Bush, as well as Judges Ryan D. Nelson, Mark J. Bennett and Lawrence VanDyke, who were Trump appointees, concurred in Bumatay's dissent. Judge Morgan B. Christen, a 9th Circuit appointee of President Barack Obama, also voted to rehear the case en banc but did not join the dissent.

Three 9th Circuit judges - Judge Kim McLane Wardlaw, an appointee of President Bill Clinton; Judge Jacqueline H. Nguyen, an Obama appointee; and Judge Daniel P. Collins, a Trump appointee, did not participate in the deliberations or vote in the case.