A panel of the Ninth Circuit of Appeals in San Francisco (composed of Judges Stephen Reinhardt, Wallace Tashima, and Marsha Berzon) will hear oral arguments today in the Alien Tort Statute/Torture Victim Protection Act case of Doe et al. v. Cisco Systems, Inc., John Chambers & Fredy Cheung. (I have provided background on the case here.) I want to highlight some of the issues to be argued in the case by renowned human rights litigator Paul Hoffman, for the plaintiffs, and former Stanford Law School Dean Kathleen Sullivan, now with the law firm of Quinn Emanuel, for the defendants. These include: the standard of complicity under the Alien Tort Statute (ATS), extraterritoriality, and potentially the amenability of corporations to suit under the ATS.
Factual Background
As always, the case presents two competing narratives: The plaintiffs are Falun Gong adherents who were persecuted by Chinese authorities for their religious beliefs. They are arguing that Cisco Systems did not merely sell generic plug-and-play routers and switches in China, but rather customized a fully networked sub-system of the Golden Shield to enable the Chinese security services to better surveil, track, apprehend, and interrogate Falun Gong practitioners and ultimately to subject them to forced religious conversion through torture in prisons and “mental hospitals” run by the public security agencies. This mistreatment was facilitated by the knowledge of plaintiffs’ unique personal vulnerabilities gleaned from the surveillance and interrogation program. By contrast, the defendants—the corporation, its former CEO, and an executive who oversaw Cisco’s public-security related projects in China—claim that the technology they provided merely furthered China’s legitimate security purpose of identifying and thereby apprehending people who violate Chinese law.
The bipartisan U.S. Commission on International Religious Freedom annually tracks Chinese persecution against Falun Gong, including the network of brainwashing centers known to use torture as well as allegations of organ harvesting. Its 2016 report can be found here. Freedom House’s report on repression of Falun Gong is here; Human Rights Watch’s account is here. Amnesty International regularly issues Urgent Actions on behalf of imprisoned Falun Gong practitioners. The Ninth Circuit has confirmed Falun Gong practitioners are eligible for political asylum (Judges Reinhardt and Berzon were on the panel).
The plaintiffs’ opening appellate brief and reply brief are here. Cisco’s answering brief is here.
Complicity Standards
The two components of complicity liability under the Alien Tort Statute are central to the Cisco case. Like almost all circuits, the Ninth Circuit has concluded that it is international law that governs the substantive norm itself as well as forms of responsibility, such as complicity and the question of international law’s reach in terms of state and non-state action. However, other subsidiary issues—addressed to damages computation, whether the acts of corporate officers can be attributed to the corporation, etc.—come from domestic law.
- Actus reus: the conduct of the accused accomplice individual/entity
The international criminal law jurisprudence indicates that a defendant may be held liable for aiding and abetting a violation of international law committed by a principal when the defendant provides practical assistance to the principal that has a “substantial effect” on the perpetration of the crime. Conduct that is not inherently criminal can thus constitute the actus reus of complicity liability. Furthermore, the defendant’s contribution can be made at any stage of the criminal act, including its planning, preparation, execution and even cover-up under certain circumstances. It is not necessary to show that but for the accomplice’s conduct, the crime would not happen.
In Cisco, the San Jose district court ruled that the defendants’ conduct did not have “a substantial effect on the perpetration of alleged violations.” The Cisco plaintiffs argue on appeal that the district court mis-stated the actus reus standard by requiring allegations that the defendant planned or directed the abuses committed against Plaintiffs (which would constitute direct liability rather than accomplice liability). In its appellate brief, Cisco attempts to revive the “specific direction” standard that has been rejected or abandoned by all the international criminal tribunals to consider it. Surprisingly, given ethical obligations on lawyers to acknowledge adverse authority, the brief cites the discredited Perišić case, but does not acknowledge any of the subsequent contrary authority on this point.
The legal framework around complicity liability was relatively stable in international criminal law until the case against Momčilo Perišić, who stood accused before the International Criminal Tribunal for the former Yugoslavia (ICTY) of supplying personnel, weapons, ammunition, and various other materiel to Bosnian Serb forces (VRS) operating in neighboring Bosnia-Herzegovina. On appeal, Perišić argued that he could not be convicted of aiding and abetting without proof that his acts were specifically directed toward assisting the crimes of principal perpetrators. An ICTY Appeals Chamber agreed and, in a thinly reasoned opinion, concluded that an actor who provides generalized assistance, which could support both lawful and unlawful activities, cannot be held liable unless this aid was specifically directed to assist the underlying crimes. It was deemed relevant that the VRS was not an organization whose sole and exclusive purpose was the commission of crimes—it was, rather, “an army fighting a war”—and Perišić could not be shown to have endorsed a policy of assisting VRS crimes. The Appeals Chamber noted that specific direction might be determinative in situations in which the charged accomplice acted in a time and place temporally and geographically remote from the events in question.
In subsequent cases, differently constituted ICTY Appeals Chambers soundly rejected this reasoning. In Prosecutor v. Šainović, for example, the Chamber conducted an exhaustive analysis of prior case law dating back to the World War II period, multilateral treaties, and national penal codes and jurisprudence, and came to the ‘‘compelling conclusion that ‘specific direction’ is not an element of aiding and abetting liability under customary international law.’’ Another chamber reached the same result in Prosecutor v. Popović. The Special Court for Sierra Leone (SCSL) followed suit in the Charles Taylor appeal, which involved the provision of means to warring parties in neighboring Sierra Leone. In a subsequent case that resulted in a retrial following an acquittal (Prosecutor v. Stanišić v. Simatović), the ICTY Appeals Chamber rejected the defendants’ lex mitior (the milder law) defense on the theory that there had been no change in the law, because specific direction was never a part of the law. With no supreme court or en banc review capable of resolving disputes among differently constituted appeals chambers, or between different international tribunals, Perišić has been rendered a jurisprudential dead-end.
In any case, the Perišić ruling will forever have an asterisk next to it due to its sordid epilogue, replete with allegations that a judge was beholden to the great powers and exerting undue influence on the bench, prompting a breach of judicial decorum on the part of one of his colleagues.
- Mens rea: the mental state of the accused accomplice individual or entity
A split has emerged in the appellate circuits over the mens rea standard for complicity. On one side are courts that have followed the international criminal law precedent developed by the ICTY (notably Prosecutor v. Furundžija (1998)), and required a showing that the defendant knowingly aided the direct perpetrator. On the other side (notably the 2nd and 4th Circuits) are courts that have looked to language in the Rome Statute to require proof that the defendant acted with the purpose of facilitating the criminal conduct at issue. At issue in Cisco is whether the plaintiffs must allege facts in their complaint that demonstrate that the defendants provided assistance to the Chinese security services in order to further (or with the purpose of facilitating) the mistreatment of Falun Gong practitioners or is it enough that there are allegations in the complaint that the defendants knew that their conduct would in fact further the tortious conduct of the direct perpetrators.
The Cisco district court accepted the knowledge standard of complicity; however, it ruled that the plaintiffs’ complaint did not meet this test. Although the lower court noted that the complaint alleges that defendants knew that their products would be used to apprehend individuals accused of violating Chinese law, it determined that there were insufficient allegations that defendants knew that their products would be used to commit torture and forced religious conversion. On appeal, Cisco has argued that the appeals court need not decide this issue because although the complaint adequately alleges that the company knew their system would be used to assist the security services in identifying and surveilling Falun Gong practitioners, the complaint fails to allege facts suggesting that the company knew that Chinese officials would use the Golden Shield to go beyond mere law enforcement.
The mens rea issue has come before the Ninth Circuit before. Citing an extensive array of international jurisprudence as well as the Restatement of Torts §876, the Ninth Circuit, in Doe v. Unocal (2002), reversed a ruling granting a corporate defendant’s motion for summary judgment and held that in order to prove corporate complicity under the ATS, a plaintiff must show that the corporation provided:
knowing practical assistance or encouragement that has a substantial effect on the perpetration of the crime.
(Judge Tashima—who was interned during World War II—joined the majority opinion in Unocal; Judge Reinhardt penned a concurrence arguing that domestic law, as opposed to international law, should provide the “ancillary legal question” of the standard of complicity). This decision, however, was ultimately vacated when the case settled and Unocal agreed to compensate the plaintiffs, who had sued the company for its complicity in acts of forced labor, rape, and murder in connection with the building of a pipeline in Burma.
Since Unocal, the Ninth Circuit has dodged the issue. Right as the lower court dismissed the plaintiffs’ complaint in Cisco, a different panel of the Ninth Circuit handed down its opinion in the Doe v. Nestle case. That case involves allegations that Nestle is complicit in the widespread exploitation of child slave labor in Côte d’Ivoire to produce the cocoa that goes into Nestlé’s chocolate products. The Nestle opinion runs counter to the district court’s reasoning on extraterritoriality in Cisco. Nonetheless, the Cisco district court denied plaintiffs’ motion for reconsideration. This appeal ensued.
In Nestle, the Ninth Circuit panel determined that the plaintiffs’ complaint satisfied both mens rea standards. The Ninth Circuit panel found that defendants acquired knowledge of the use of slave labor on Ivoirian farms through their country visits and from the many reports issued by domestic and international human rights organizations. In addition, it noted that the defendant’s clear profit motive supported plaintiffs’ allegations that the defendant intended to further the system of slave labor in Côte d’Ivoire. This was in contradistinction to Presbyterian Church v. Talisman Energy (2009) in the Second Circuit, in which the direct perpetrators’ use of human rights violations to suppress dissent in Sudan actually harmed the defendants. Accordingly, the court found that the purpose standard was not satisfied because the defendants had nothing to gain from the violations of international law. The Nestle court also noted that the company had the power to stop the use of slave labor in Côte d’Ivoire and it refused to intervene. Instead, the company worked to defeat U.S. legislation that would have required manufacturers to certify that their products are “slave free.”
Interestingly, in its appellate papers, Cisco has gone beyond this particular jurisprudential debate and has argued not only that there must be allegations that the defendants acted with the purpose of assisting the commission of the underlying criminal act but that this is the equivalent of the defendant acting with “specific intent.” Invoking specific intent (dolus specialis) in this context is odd, because the element of specific intent is found in only a handful of domestic and international crimes; it has never been discussed or applied in connection with complicity liability. For example, the crime of burglary is committed when a person enters a building without authorization with the specific intent to commit a crime inside. Under international law, genocide is the classic specific intent crime. To convict for genocide, it must be shown that the defendant intentionally committed any number of acts against members of a protected group with the specific intent of destroying that group in whole or in part. Specific intent crimes are notable for their dual levels of intent: there is a mens rea associated with the particular conduct (the defendant intentionally entered a dwelling without authorization/the defendant intentionally killed members of a protected group) and a specific intent to bring about some further consequence by this conduct (the defendant intended to commit a crime inside/the defendant intended to bring about the destruction of the group in whole or in part). As such, Cisco’s efforts to equate a purpose mens rea with specific intent are unsupported by established criminal law theory or international criminal law.
Kiobel & Extraterritoriality
Also at issue in this appeal is the question of whether the case displaces the presumption against extraterritoriality identified in Kiobel v. Royal Dutch Petroleum Co. (2013). The Plaintiffs’ complaint alleges multiple actions by Cisco that took place in its headquarters in San Jose across the product development, implementation, and support cycle. These include structuring the deal, the design of bespoke systems by a dedicated team of experts, trouble-shooting, the deployment of specialists (including an Advanced Service Team) to China to help with training and implementation, supervision of Chinese employees, and the management of the entire project. Given that Cisco is a California corporation and that key actions and decisions took place in California, this is not a “foreign-cubed” case like Kiobel (which featured foreign plaintiffs, a foreign defendant, and foreign conduct). Nor is it a case like Mujica v. Occidental Petroleum Corp. (2014), also in the Ninth Circuit, which involved two U.S. corporations whose alleged conduct occurred entirely in Colombia. Rather, it is more akin to Al-Shimari v. CACI Premier Technology (2014), where the Fourth Circuit conducted a fact-based inquiry of “all the facts that give rise to the ATS claims, including the parties’ identities and their relationship to the causes of action” and determined that significant conduct of the U.S. defendant took place in the United States.
Defendants, by contrast, argue that all tortious conduct occurred in China at the hands of Chinese officials and personnel with no “plausible or meaningful connection” to the United States. Invoking Morrison v. National Bank of Australia Ltd. (2010), Defendants argue that the conduct that is the specific “focus” of congressional concern must have taken place in the United States. The district court agreed and determined that there was an insufficient nexus between the defendants’ actions and the alleged violations committed in China to meet Kiobel’s “touch and concern” test. The lower court further ruled that the domestic conduct of the defendants would have to violate an international norm to overcome the presumption against extraterritoriality, citing Justice Alito’s concurrence in Kiobel. This is not the test adopted by other courts, which have recognized that the acts of complicity need not themselves violate international law so long as they substantially assist the commission of violations of international law. Moreover, other courts (e.g., Mastafa v. Chevron (2014) in the Second Circuit) have held that acts of aiding and abetting undertaken in the United States can displace the Kiobel presumption.
Corporations & the Alien Tort Statute
Notwithstanding the unambiguous Nestle precedent, the Cisco defendants have attempted to revive the defense that corporations cannot be sued under the ATS. This argument stems from a brief footnote in Sosa v. Alvarez-Machain (2004) directing the district courts to consider:
whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual (emphasis added).
When confronted with this issue, the Nestle panel re-affirmed its prior norm-by-norm analysis of corporate liability earlier articulated in Sarei v. Rio Tinto (2011):
Rather than adopting a blanket rule of immunity or liability, the Sarei court held that for each ATS claim asserted by the plaintiffs, a court should look to international law and determine whether corporations are subject to the norms underlying that claim.
In Sarei, the Ninth Circuit noted that the norms in question—genocide and war crimes—applied to state and non-state actors alike and so could be alleged against corporate actors. This was the case even though at the time there were no international war crimes tribunals with jurisdiction over legal persons (vice natural persons). It should be noted that a recent ruling by the Special Tribunal for Lebanon establishes a new precedent for corporate criminal liability, which diminishes the strength of any argument in that regard.
The Sarei opinion thus encompassed three key holdings:
- The analysis proceeds norm-by-norm; there is no categorical rule of corporate immunity or liability.
- Corporate liability under an ATS claim does not depend on the existence of international precedent enforcing legal norms against corporations.
- Norms that are “universal and absolute,” or applicable to “all actors,” can provide the basis for an ATS claim against a corporation.
The Nestle panel held that the prohibition against slavery was “universal” and thus could be asserted against the corporate defendant.
The issue of ATS jurisdiction over legal entities has generated a quite unbalanced split in the circuits: The Second Circuit in Kiobel v. Royal Dutch Shell (2011), held that the ATS does not apply to corporations. Besides the Ninth Circuit, four other circuits have reached different results:
- 4th Circuit: Aziz v. Alcolac, Inc., 658 F.3d 388 (4th 2011) & Al Shimari v. CACI Premier Tech., Inc., 758 F.3d 516, 529-31 (4th Cir. 2014) (adjudicating cases against corporate defendants without directly addressing the question).
- 7th Circuit: Flomo v. Firestone Nat. Rubber Co., LLC, 643 F.3d 1013, 1019–21 (7th 2011) (“If a corporation complicit in Nazi war crimes could be punished criminally for violating customary international law, … then a fortiori if the board of directors of a corporation directs the corporation’s managers to commit war crimes, engage in piracy, abuse ambassadors, or use slave labor, the corporation can be civilly liable.”).
- 11th Circuit: Romero v. Drummond Co., 552 F.3d 1303, 1315 (11th 2008) (“the text of the [ATS] provides no express exception for corporations, and the law of this Circuit is that this statute grants jurisdiction from complaints of torture against corporate defendants”).
- D.C. Circuit: Doe. v. Exxon Mobil Corp., 654 F.3d 11, 41, 54-57 (D.C. Cir. 2011), vacated on other grounds by 527 F. App’x 7 (D.C. Cir. 2013).
And, Judge Cabranes’s Kiobel opinion has become controversial even within the Second Circuit.
Readers will recall that the issue of corporate responsibility was originally before the Supreme Court in Kiobel following the 2nd Circuit’s ruling that CIL does not recognize liability for corporations. After a round of briefing and oral arguments, the Supreme Court—in an unprecedented move—asked for a second round of briefing on the extraterritoriality issue. Many observers assume that this surprise jurisprudential pivot reflected a recognition that it would be paradoxical to rule that corporations have no obligations to refrain from the commission of international crimes right on the heels of ruling that corporations enjoy constitutional speech rights in Citizens United v. Federal Election Commission (2010). In the end, Kiobel was largely silent on corporate liability under the ATS, focusing instead on extraterritoriality.
This issue will again be before the Supreme Court next term in Jesner v. Arab Bank, PLC, a case brought by victims of terrorist attacks in Israel, the West Bank, and Gaza who allege that a Jordanian bank, with offices in the United States, helped finance the acts of terrorism. The case was dismissed in reliance on the Second Circuit’s earlier ruling in Kiobel. My colleague Professor Jeffrey Fischer, who runs Stanford’s renowned Supreme Court Litigation Clinic, successfully petitioned the Supreme Court for certiorari in that case.
Procedural Posture & Pleading Standards
In terms of procedural posture, the Cisco plaintiffs have appealed the district court’s dismissal of the case on grounds that their allegations were insufficient to constitute complicity under customary international law (CIL) (FRCP 12(b)(6)). Lurking in the case are the evolving pleading standards required by courts. When ruling on this motion to dismiss, all factual allegations in the complaint are accepted as true and the judge should construe the pleadings in the light most favorable to the plaintiff. At the same time, plaintiffs must allege non-conclusory and facially plausible facts in order to proceed to discovery.
As the Ninth Circuit articulated it:
In sum, for a complaint to survive a motion to dismiss, the non-conclusory ‘factual content,’ and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.
Stay tuned for a dispatch following the hearing…