After Cisco v. Doe I, Human Rights Diligence Loses Its Cheapest Justification

On June 23, 2026, the Supreme Court held in Cisco Systems, Inc. v. Doe I that federal courts have no authority to create new private causes of action under the Alien Tort Statute, and that the Torture Victim Protection Act does not reach aiding-and-abetting claims ^[1]. That removes the single litigation exposure that has done the most to justify human-rights due diligence spending at multinationals, because until the end of June those companies faced suits in US federal courts alleging they aided and abetted abuses by foreign governments even where the conduct occurred entirely overseas ^[2].

The case came from Falun Gong practitioners who sued Cisco and two of its executives in the Northern District of California, alleging Cisco knowingly built and maintained a surveillance system that let Chinese authorities identify, detain and torture them in violation of international law ^[3]. The procedural history is a useful reminder of how long these matters run: the district court dismissed in 2014, holding aiding-and-abetting actionable under the ATS but not the TVPA ^[4]; the Ninth Circuit reversed in 2023, allowing the claims under both statutes ^[5]; the Supreme Court reversed the Ninth Circuit 6-3, in an opinion by Justice Barrett, and held both sets of claims must be dismissed ^[6]. That is roughly twelve years of docket between the first dismissal and the final reversal ^[7], and the Freshfields authors note that ATS and TVPA cases are expensive to defend and can drag on for years regardless of their merits ^[8].

The doctrinal move is narrow but decisive. Sosa v. Alvarez-Machain in 2004 established that the ATS is jurisdictional and creates no cause of action by itself, while leaving open a two-step test under which courts might recognise new claims ^[9]. The Court in Cisco, in the Freshfields summary, "close[d] the door that Sosa cracked," reasoning that fashioning new theories of liability intrudes on the congressional power to define and punish offences against the law of nations, and that judicially created causes of action offend the separation of powers in almost every circumstance ^[10]. The practical read from the same memorandum is that companies operating in regions prone to terrorism and armed conflict now have greater legal certainty and less exposure to open-ended ATS litigation from commercial activity in high-risk jurisdictions ^[11].

For an operator, the awkward part is budgetary rather than doctrinal. A programme sold internally as insurance against a US federal complaint has lost its named risk. What remains is everything the source does not address: reputational exposure, customer and investor conditions, and non-US regulatory regimes, none of which the ruling touches, and none of which produce the kind of clean number a litigation hold does. The statutes themselves are still on the books, and the Court's reasoning rests on deference to Congress rather than on any finding that the underlying conduct is lawful ^[10]; the power to create the cause of action was located in the legislature ^[10], not extinguished.

Two things to watch. First, whether any general counsel treats this as licence to reduce screening of government customers in surveillance-adjacent product lines, and whether that shows up in the next round of high-risk-market disclosures. Second, whether Congress takes up the invitation implicit in the majority's separation-of-powers logic ^[10]. Absent legislation, the diligence case has to be made on grounds that do not depend on a US courtroom.