Alien Tort Cases Put Businesses at Center of Human Rights Violations

Jan 17, 2012

By Kerrie Spencer, staff writer – January 17, 2012

We truly live in a global economy with electronic goods and services being traded back and forth all over the world. There seems to be no borders and no limits to what can and cannot be shipped anywhere until now. There is a quiet, yet predictive trend that is beginning to raise a red flag for companies that export and import globally. It seems foreign plaintiffs are filing lawsuits in U.S. courts under something referred to as the Alien Tort Statute. [1][2]

What do the lawsuits allege? They suggest that technology companies and their U.S. based management are violating international law by encouraging human rights abuses through the use of their various products and should be held accountable in the United States. [3][4]That is a significant allegation, and if found to be credible, will cause a major upheaval in the way business is done in the technology sector. It may also open the door to multimillion dollar settlements and awards, which is something that a fledgling technology company could not afford.

For now, there are not that many lawsuits. However, the dawning of this type of litigation is creating anxiety in the technology sector for financial and practical reasons. Many are wondering just what the Alien Tort Statute is and how it came to be in the first place. It was brought into law in 1789 and its intention was that it would be used as a weapon against piracy and insults to U.S. diplomats around the world.

While piracy still exists today but in a different manner, the statute may be adapted to cover software and technology piracy, including the theft of trade secrets, coveted technical inventions and gadgets that may garner the creator mega bucks. Even though this statute was passed into law in 1789, it is clear it has been enjoying a rebirth over the last three decades as it was not reactivated until the 1990s when it was used to target global corporations in the U.S. [5]

The specific wording the lawsuits rely on is “…district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” (28 U.S.C. § 1350). [6]

The focus of the lawsuits is that the executives of a foreign company based in the U.S. are facilitating illegal, horrendous human rights abuses by virtue of the products they manufacture and sell. Any company slapped with this type of a lawsuit wishes they had never heard of or seen the statute as it takes years to litigate these types of cases.

Additionally, the media clings to this kind of story for the daily news. What more damage could possibly be done to a U.S. based company than to be sued and reviled in the news for alleged human rights abuses? And therein lies the dilemma. While the media report on alleged abuses, the public and consumers assume alleged means they did what they are accused of, when there is a possibility they did not.

Things may be taking a turn for the better. Consider the U.S. Supreme Court’s recent acquiescence to hear an appeal on Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010). [7][8] The specific issue they plan to address is whether or not corporate defendants can indeed face liability under the Alien Tort Statute. Should the Court’s decision be for the corporation, it would end the use of the statute as leverage against corporations accused of human rights violations. While that may sound like a blessing, it may not be the end of the issue.

The next issue to surface is more than likely to be a shift in focus from suing a corporation to suing a specific person. Just as one issue may be resolved legally by the Supreme Court, others may well take its place as they eventually wind their way through lower courts.

It is not just the technology sector that has faced this kind of lawsuit. It seems filing an ATS lawsuit is industry neutral and may include defendants in various industries from industrial and chemical sectors to finance, manufacturing, and technology. None of the plaintiffs appear to be shy about alleging torture, medical experiments on humans, crimes against humanity, inhumane working conditions, human trafficking and environmental pollution. In other words, a veritable potpourri of offenses may find their way into an ATS complaint.

Lately, more technology companies have been the target of these lawsuits, with the first of many suits filed in 2002. Plaintiffs in one suit pointed a finger at Fujitsu and IBM for allegedly assisting the South African apartheid policy by providing them technology that monitored the people. That case is still in the courts, but it is worth reading to get a sense of where the courts may be going, with regard to the law. [9]

One case that many may recall, if not for the large headlines it generated, is the World Organization for Human Rights USA launching a lawsuit against Yahoo. That suit suggested that Yahoo violated international law by giving Chinese bureaucrats online user information, making it easier to find and arrest political naysayers. [10]

It was quite the battle, with Yahoo peppering the court with creative arguments that were phrased in circuitous language that began with words to the effect of “even if Yahoo did surrender information,” the “dissidents” willingly took the risk of being found by going online to promote their views. Yahoo was on the hot seat for a number of months, and even endured questioning by the U.S. House Committee on Foreign Affairs. Yahoo did eventually settle the case.

Of interest is a case waiting to hear what the Supreme Court says in Kiobel, Doe v. Cisco Systems, Inc., (ND CA, filed 5/19/2011). [11] This case alleges Cisco Systems and some of its executive cadre helped China violate human rights by developing a program called Golden Shield. Golden Shield was allegedly designed to act as a surveillance and censorship program for tracking members who practice Falun Gong.

As things stand right now, the Supreme Court has not made a determination if corporations may be held liable under the ATS. The statute does not specify who may be sued, and so far, the answer to that question is not getting any clearer either to lawyers or the courts. [12][13]



[3] Id.











Background Sources
Doe v. Cisco Systems, Inc., (ND CA, filed 5/19/2011)

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