Two lawsuits by three Chinese dissidents and a human rights group accusing Cisco Systems Inc. of abetting imprisonment and torture could have far-reaching impact on how U.S. technology companies conduct business in authoritarian regimes.
The lawsuits filed in May and June target a second technology company for complicity in human rights abuses in China after Yahoo Inc. in 2007 paid to settle a case in which it was accused of aiding the prosecution of dissidents.
Both cases could provide answers to an evolving legal question: Can U.S. companies be held liable if foreign governments use their products for repression?
The first lawsuit, filed in May by the Human Rights Law Foundation in Washington in the Federal District Court in San Jose, California, accuses Cisco of designing products to help the Chinese government persecute members of China's banned spiritual group, Falun Gong.
Last Friday, the rights group amended its original complaint, saying it had new evidence that Cisco customized its products specifically to enable the authorities to persecute members of Falun Gong, some of whom were alleged to have been tortured and killed by the Chinese authorities.
The second suit, filed in June in the U.S. District Court in Maryland, says the company was complicit in the arrests and detentions of political writers Du Daobin, Zhou Yuanzhi and Liu Xianbin.
The lawsuits are drawing broad attention from U.S. companies because these are important test cases of the Alien Tort Claims Act, a law dating back to 1789 that accommodates actions in U.S. courts to uphold international law.
Undoubtedly this is going to be a big case because I think everyone is waiting for the Supreme Court to make a decision, said Farzana Aslam, a law professor who teaches a course on business and human rights at the University of Hong Kong.
The reason you've got the NGOs engaged is they want to push this issue on a broader platform -- the issue of whether corporations should be held accountable for human rights violations.
Marco Simons, legal director for environmental rights group Earth Rights International who has spent 10 years litigating cases against corporations under the Alien Tort Claims Act, said the lawsuits could test the courts on the standards for liability in aiding and abetting human rights abuses.
These cases present what will likely be a fairly clear case of Cisco knowing that it is designing systems that would be used to persecute people, Simons said. But where the plaintiffs might have a harder time is showing that Cisco really intended to persecute people.
That wouldn't really be impossible to show, he said. But it's much easier to show knowledge rather than purpose. These cases could be important for testing that distinction and standard.
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Cisco is the world's biggest maker of Internet networking equipment. Both lawsuits name several Cisco executives, including Chief Executive John Chambers.
David Cook, Cisco's communications director for Asia-Pacific, said the company builds equipment to global standards which facilitate free exchange of information, and we sell the same equipment in China that we sell in other nations worldwide in strict compliance with US government regulations.
Cisco does not operate networks in China or elsewhere, nor does Cisco customize our products in any way that would facilitate censorship or repression, Cook said in emailed comments.
But Daniel Ward, the lawyer representing the three dissidents, said that Cisco built the entire backbone of China's Golden Shield Project, also known as the Great Firewall -- the cloak of Internet security authorities use to censor the Internet and track opponents of the Chinese government.
He called the project the 21st-century version of the deadly crackdown on the Tiananmen Square democracy movement in 1989.
You don't have to drive tanks to fend away protesters, you just need to pick them off one by one before they have a chance to work on it, Ward told Reuters. And they are doing that with technology and software and infrastructure designed and created by Cisco.
The lawsuit said Cisco willingly and knowingly provided Chinese officials with technology and training to access private Internet communications, identify anonymous web log authors, prevent the broadcast and dissemination of peaceful speech, and otherwise aid and abet in the violation of...fundamental human rights.
Both Du and Zhou told Reuters that Chinese security agents had told them during interrogations that they had monitored all their emails.
Du served a three-year prison term starting in June 2004 for inciting subversion of state power -- a broad charge that China often uses to punish dissidents -- while Liu is serving a 10-year sentence on the same charge starting late March. Zhou was detained in 2008 on the pretext of revealing state secrets.
Terri Marsh, a lawyer for the Human Rights Law Foundation, told Reuters that its new evidence includes a PowerPoint presentation from Cisco that describes a specific line of products as the only product on the market capable of recognizing over 90 percent of Falun Gong pictures.
This directly implies that Cisco was involved in the final step of the customization -- configuring its product to recognize and inspect for Falun Gong information, Marsh said in emailed comments.
Marsh also said two Cisco employees were quoted as saying in an online Cisco Q&A in 2006 that a person should use Cisco's equipment in response to a question on how a city-wide network can guard against Falun Gong.
Cisco's Cook said that the company was currently reviewing the amended complaint.
As we said in May when the lawsuit was filed, there is no basis for these allegations against Cisco, and we intend to vigorously defend against them, he said.
In 2008, at a Senate Judiciary Committee hearing, Cisco denied allegations by a human rights activist who said the company had given Chinese authorities technical help in their efforts to censor the Internet.
While civil litigation cases under the act could take up to an average of 10 years, the suit against Cisco could be a major flashpoint in relations between Washington and Beijing, which have tussled on trade, Internet censorship, human rights and U.S. arms sales to Taiwan.
It will be interesting to see politically what the U.S. does in relation to these cases, Simons said. Issues involving human rights abuses in China are very politically sensitive with the U.S. government.
In many of the past cases, the U.S. government has intervened to tell the courts to dismiss the case or to express concerns about potential foreign policy problems with China, he said, adding that most of these were under the Bush administration.
In 2002, the U.S. State Department urged dismissal of a lawsuit against Liu Qi, the Beijing mayor, for human rights abuses committed by Beijing police against Falun Gong practitioners, asking the courts to be cautious when asked to sit in judgment on the acts of foreign officials taken within their own countries.
The Obama administration to my knowledge has not intervened in any Alien Tort cases to suggest that they should be dismissed, Simons said. A case like this could test that.
The suits against Cisco raise a set of tough issues for Western technology companies that want to do business in China, which has the world's largest number of Internet users.
Ward said his firm was lobbying the U.S. Congress about re-evaluating how American companies conduct their business in China. In February 2006, U.S. lawmakers lashed out at Google Inc., Yahoo Inc., Cisco and Microsoft Corp., because of the companies' alleged complicity in human rights abuses by the Chinese government.
China treats political dissent as a crime and heavily filters the Internet to suppress it. Since February, it has waged a crackdown on dissent, detaining dozens of dissidents, including famed artist Ai Weiwei, mostly for writing articles critical of the government.
Microsoft's search engine Bing filters out results in China relating to controversial subjects, such as political dissidents and Taiwan, to be able to operate in the country.
The Alien Tort Claims Act -- passed to combat piracy not long after the United States was founded -- has been used as the basis of litigation mostly against oil companies and mining firms. Only in recent years has the act been used to target technology firms by human rights groups, who say the companies are complicit in abuses when they help regimes intercept emails and block websites.
In 2009, a U.S. judge ruled that lawsuits seeking monetary damages can continue against five large companies including IBM, which is accused of aiding South Africa's former apartheid system of racial segregation.
In 2007, Yahoo Inc settled a lawsuit alleging it aided China's prosecution of several dissidents in a case that prompted criticism of the company for cooperating with an authoritarian government.
Yahoo was criticized by the U.S. Congress when it released to Chinese authorities information relating to the email account of Shi Tao, a Chinese journalist who was arrested in 2004. Shi was sentenced to 10 years in jail for revealing state secrets.
Du, 48, who was jailed for posting articles under a pseudonym on the Internet criticizing the Chinese Communist Party's rule, said Western technology companies should not cooperate with a government that violates civil rights.
This kind of cooperation hurts us as well as the companies' business, he said. The publication of our articles are closely monitored and once they're published, we will end up in jail.
Du said he was interrogated by police in early August about the lawsuit, but added that the case was not only for myself, but also for the freedom of every individual in China, to put an end forever to China's 'literary jail.'
(Reporting by Sui-Lee Wee; Editing by Ken Wills and Jonathan Thatcher)