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Du Daobin v. Cisco Systems, Inc.

United States District Court, D. Maryland

February 24, 2014

DU DAOBIN, et al., Plaintiffs
v.
CISCO SYSTEMS, INC., et al., Defendants

Page 718

For Du Daobin, Zhou Yuanzhi, Liu Xianbin, Does 1-10, Plaintiffs: Daniel Sage Ward, LEAD ATTORNEY, Ward and Ward PLLC, Washington, DC; Taimur Rabbani, PRO HAC VICE, Ward and Ward PLLC, Washington, DC.

For Cisco Systems, Inc., John Chambers, Chairman and CEO, CISCO Systems, Inc., Defendants: Lincoln Owens Bisbee, LEAD ATTORNEY, Morgan Lewis and Bockius LLP, Washington, DC; Faith E Gay, PRO HAC VICE, Quinn Emanuel Urquhart and Sullivan, New York, NY; Isaac Nesser, Kathleen M Sullivan, PRO HAC VICE, Quinn Emanuel Urquhart and Sullivan LLP, New York, NY.

For Electronic Frontier Foundation, Interested Party: Cindy Ann Cohn, PRO HAC VICE, Electronic Frontier Foundation, San Francisco, CA; Jan Ingham Berlage, Gohn Hankey and Stichel LLP, Baltimore, MD.

OPINION

Page 719

PETER J. MESSITTE, UNITED STATES DISTRICT JUDGE.

I.

Introduction

Du Daobin (" Du" ), Zhou Yuanzhi (" Zhou" ), Liu Xianbin (" Liu" ), and Does 1-10 have sued Cisco Systems, Inc. (" Cisco" ) and its Chairman and CEO, John Chambers (" Chambers" ) pursuant to the Alien Tort Statute 28 U.S.C. § 1350, alleging in addition a number of claims under Maryland and California law.[1]

The case was stayed pending the U.S. Supreme Court's rulings in Kiobel v. Dutch Petroleum Co., 133 S.Ct. 1659, 185 L.Ed.2d 671 (2013) and Mohamad v. Palestinian Authority, 132 S.Ct. 1702, 182 L.Ed.2d 720 (2012). Following the Supreme Court's decision in these cases, Plaintiffs filed a First Amended Complaint and Defendants filed a Motion to Dismiss. That Motion, fleshed out by oral argument, is now before the Court for decision.

II.

Parties

Plaintiffs are citizens and residents of the People's Republic of China.

Cisco, one of the world's largest technology corporations, is headquartered in San Jose, California, and has offices and locations worldwide, including in the State of

Page 720

Maryland. First Am. Compl. ¶ 26. John Chambers is the Chairman and CEO of Cisco, not otherwise a resident of Maryland.

III.

Factual Background

According to the First Amended Complaint, Plaintiffs have been and are being persecuted by Chinese Communist Party (" CCP" ) officials acting under color of law in the People's Republic of China (" China" or " PRC" ).

The CCP is said to aggressively monitor the Internet and its users through a nationwide surveillance program called the Golden Shield. Id. ¶ ¶ 45-49. The Golden Shield was designed by Cisco. Id. ¶ 52. While the Golden Shield is ostensibly employed as a method to enhance the ability of the CCP to combat criminal activity, in reality, say Plaintiffs, it is used to detect, monitor, detain, suppress, and torture dissidents, such as themselves. Id. ¶ 47. Each Plaintiff submits that he or she has been unlawfully detained, subjected to forced labor, prosecuted, and tortured for publishing and circulating Internet articles that called for fair treatment of rural farmers (Du) and human rights and democratic reform in China (Zhou, Liu). Du states that he is closely monitored and is restricted to Yingcheng City. Id. ¶ 15. Zhou is under house arrest, and Liu is currently serving a ten-year prison term. Id. ¶ ¶ 18, 21, 22

Among other things, Golden Shield is said to block content on the Internet as common as global current events, including the 2011 revolution in Egypt, as well as any content that mentions Liu Xiaobo, the 2010 Nobel Peace Prize laureate. Id. ¶ ¶ 50-51.

Allegedly, at least as early as 2002, Cisco and Chambers assisted in the creation of the Golden Shield, despite knowing that the technology was being used and would be used to identify and torture dissidents. Id. ¶ 75. Specifically, the Golden Shield, based on Cisco technology including Cisco " mirroring routers," was known to Defendants to allow the CCP to monitor information transmitted through Internet gateway routers into and out of China. Id. ¶ 54. In fact, Cisco and CEO John Chambers are said to have proposed to CCP officials a system that would link a person's identity, voice patterns, Internet patterns of use and history, political tendencies, family background, and work history to their cell phone, then to make that information instantaneously accessible to CCP officials via a mobile device. Id. ¶ 55. Cisco thereafter supposedly designed, created, and/or implemented just such a system. In 2011, Cisco is said to have specifically agreed to provide the CCP with networking equipment that would facilitate city-wide surveillance. Id. ¶ 57. To this day, Cisco technology and training purportedly continues to comprise the backbone of the CCP's surveillance systems and capabilities. Id. In sum, Plaintiffs allege that Defendants not only knew and know that CCP officials would use and have been using Cisco technology to oppress and jail dissidents; Cisco in fact supposedly " created its technology specifically for the purpose of facilitating the CCP in this campaign of torture" and human rights violations. Id. ¶ 78.

Plaintiffs argue that, at all relevant times, in working with the CCP, Cisco acted predominantly in the United States. Id. ¶ ¶ 7, 27, 80, 81.

IV.

Kiobel v. Dutch Petroleum Co.

Of the eleven counts asserted by Plaintiffs, the first five are framed as violations

Page 721

of either international or federal law. All, however, are brought pursuant to the Alien Tort Statute, 28 U.S.C. § 1350, which provides in pertinent part that: " The 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."

Because the validity of that statute was under review by the Supreme Court while this suit was pending, the parties and this Court deemed it appropriate to await the High Court's decision in this case before going forward. The Supreme Court's decision in Kiobel, essentially holding " that the presumption against extraterritoriality applies to claims under the ATS, and that nothing in the statute rebuts that presumption" Kiobel v. Dutch Petroleum Co., 133 S.Ct. 1659, 1669, 185 L.Ed.2d 671 (2013), obviously does have considerable impact on this case, in ways that will be discussed more particularly as the contentions of the parties are analyzed.

V.

Legal Standard

" To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). " The plausibility standard requires a plaintiff to demonstrate more than 'a sheer possibility that a defendant has acted unlawfully.'" Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). " It requires the plaintiff to articulate facts, when accepted as true, that 'show' that the plaintiff has stated a claim entitling him to relief, i.e., the 'plausibility of entitlement to relief.'" Id. (quoting Iqbal, 556 U.S. at 678).

A Rule 12(b)(1) motion should be granted " only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law." Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991). " The plaintiff has the burden of proving that subject matter jurisdiction exists." Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999). When a defendant challenges subject matter jurisdiction pursuant to Rule 12(b)(1), " the district court is to regard the pleadings as mere evidence on the issue, and may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Id. at 647 (quoting Richmond, 945 F.2d at 768). Although the court " must generally accept as true all factual allegations pled in the complaint . . . [the court] is 'not bound to accept as true legal conclusions couched as factual allegations.'" Doe v. Sebelius, 676 F.Supp.2d 423, 428 (D. Md. 2009) (quoting Iqbal, 556 U.S. at 662) aff'd sub nom. Doe v. Obama, 631 F.3d 157 (4th Cir. 2011).

A motion to dismiss under Rule 12(b)(6) for failure to state a claim tests the sufficiency of a complaint, but does not resolve factual contests, the merits of a claim, or the applicability of defenses. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.1992) (citing 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure ยง 1356 (1990)). In considering such a motion, the court ordinarily accepts the complaint's factual allegations and draws any reasonable ...


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