Once again, a lawsuit accuses the Chinese government of mistreating its citizens, and once again, the victims are suing ... an American corporation.
In U.S. federal court last week, the Human Rights Foundation teamed up with members of Falun Gong, or FG, to name Cisco
So why not sue China? U.S. courts are much more amenable to this kind of lawsuit, and thanks to the United States' Alien Tort Claims Act, it's easier to sue a corporation when the real villain is beyond the reach of the law (and sovereignly immune).
Maybe too easy. Even as Cisco got served court papers, Chinese search engine Baidu
Like the Yahoo! lawsuit, the Cisco complaint aims to attack Chinese policies from the flank. Maybe China can't be sued directly, but if the lawyers can embarrass Cisco with a high-profile case, they might force the company to "self-censor" -- refusing to sell even equipment that China might possibly use to oppress its citizens.
Here's hoping Cisco shows more backbone. According to the courts, in order to prove "accessorial liability under the Alien Tort Statute ... a claimant must show that the defendant provided substantial assistance with the purpose of facilitating the alleged offenses." [Emphasis added.] I doubt that was Yahoo's aim. I'm pretty sure it wasn't Cisco's, either.
Does the Falun Gong sound a death knell for Cisco? Add the stock to your Fool Watchlist and see how this plays out.
The Motley Fool owns shares of Yahoo!. The Fool has created a bull call spread position on Cisco Systems. Motley Fool newsletter services have recommended buying shares of Yahoo!, Cisco Systems, and Baidu.
Fool contributor Rich Smith does not own shares of any company named above. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.