Yahoo! is being sued by the World Organisation for Human Rights (WOHR), according to the Guardian.
The newspaper reports that WOHR is pursuing the search engine following its decision to disclose the identities of some of its users to the Chinese government.
It is thought a number of people involved in the discussion of democratic reform in the country, including one journalist currently serving a ten-year sentence, had their details passed to authorities and have subsequently been tortured and imprisoned.
The search engine’s international site, as well as Yahoo! China and Alibaba.com are thought to have been involved in the case which a spokeswoman for Yahoo! has called "a political and diplomatic issue, not a legal one".
Kelley Benander of Yahoo! told the Los Angeles Times: "The real issue here is the plaintiffs’ outrage at the behaviour and laws of the Chinese government. The US court system is not the forum for addressing these political concerns."
This week Human Rights in China announced calls for the release of Hangzhou-based writer Lu Gengsong who was reportedly detained on charges of "incitement to subvert state power" and "illegally possessing state secrets".