Supreme Court Reins In Activist Lawsuits, Major Win for U.S. Businesses..#@#

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The U.S. Supreme Court ruled 6-3 on Tuesday that private plaintiffs cannot sue companies for aiding and abetting violations of international law under two key federal statutes.

The decision in Cisco Systems, Inc. v. Doe rejected claims brought by Falun Gong practitioners against the networking equipment maker for allegedly assisting Chinese government surveillance. The ruling narrows the scope of the Alien Tort Statute and the Torture Victim Protection Act, both of which have been used to bring lawsuits against American firms operating overseas.

What the Court Decided

Justice Amy Coney Barrett, writing for the majority, held that courts cannot create new causes of action for violations of international norms under the Alien Tort Statute. “The power to create causes of action belongs to Congress,” Barrett wrote.

The majority also determined that the Torture Victim Protection Act does not provide for aiding-and-abetting liability, even though it contains an express cause of action for direct violations. Barrett emphasized that creating new liability theories places stress on the separation of powers and risks adverse foreign policy consequences.

Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh joined Barrett’s opinion.

The Lower Court Ruling

The Ninth Circuit had previously allowed claims against Cisco to proceed, determining the company could face liability for selling surveillance equipment to Chinese authorities. The Supreme Court reversed that decision.

The original lawsuit alleged Cisco and its executives knowingly provided networking equipment used to monitor and persecute Falun Gong practitioners in China.

The Dissents

Justice Ketanji Brown Jackson concurred in part and dissented in part, joined by Justice Elena Kagan, arguing that the Torture Victim Protection Act’s text could encompass aiding and abetting in some cases.

Justice Sonia Sotomayor dissented more broadly, joined by Kagan and Jackson in parts. Sotomayor argued the majority “jettisons two decades of settled precedent” and shuts courthouse doors to violations of international law under the Alien Tort Statute. On the Torture Victim Protection Act, she stated the plain text includes individuals who aid and abet torture victims.

What This Means

The ruling narrows legal avenues for plaintiffs seeking to hold American companies responsible for conduct abroad that may violate international norms. Future lawsuits under these statutes face significantly higher legal barriers.

The Trump administration supported the case and participated in oral arguments, urging the Court to reject what it called judicial overreach in foreign policy matters.

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