Global Policy Forum

U.S. High Court Allows Apartheid Claims against Multinationals


By Warren Richey

Christian Science Monitor
May 13, 2008

The suit argues that by doing business with South Africa, the companies abetted the racist former regime.

The US Supreme Court has affirmed a lower court ruling that multinational companies can be sued in a US court for allegedly aiding and abetting the former apartheid government in South Africa. The high court announced Monday that it could not hear a case involving 11 consolidated lawsuits against more than 50 international corporations. Four justices recused themselves from consideration of the case apparently due to potential conflict, leaving only a five-justice court to consider whether to take up the suit. In a brief order, the court said it lacked the necessary quorum. "Since a majority of the qualified justices are of the opinion that the case cannot be heard and determined in the next term of the court, the judgment [of the lower court] is affirmed," the unsigned order says. The action returns the massive case to a federal district judge to hash out an array of additional legal issues. And it guarantees another round of extensive, high-stakes litigation over the use of American courts to enforce international human rights standards.

The plaintiffs are South African residents who suffered under the racist regime from 1948 to 1994. At one point in the litigation they reportedly sought $400 billion in damages, not from the South African government or its former officials but from companies that did business in South Africa during that time period. The suit is being brought under the Alien Tort Statute, which permits individuals to sue in American courts for certain violations of international law. The core allegation is that the corporations actively and willingly collaborated with the South African government to perpetuate the repressive, race-based system of apartheid. The corporations deny the charge and are urging the courts to dismiss the case. "None of the plaintiffs' many complaints and amended complaints alleges that [the companies] took specific steps for the purpose of furthering apartheid," wrote lawyer Francis Barron in his brief on behalf of the corporations. He said the companies are being sued for merely doing business in South Africa at a time when the United States and other nations encouraged a policy of commercial engagement with South Africa.

The suit is opposed by the South African government as well as the governments of the United States, the United Kingdom, Germany, and Switzerland. Apartheid was dismantled in a series of steps from 1990 to 1994 and replaced by an elected, democratic government. The legal action runs counter to the approach adopted by South Africa's new government to deal with the country's violent and controversial past. The new government embraced a process of "reconciliation and reconstruction," rather than a version of victors' justice. Mr. Barron's brief quotes South Africa's Minister of Education saying: "South Africa must settle this issue for itself and does not need the help of ambulance chasers." Lawyers for the victims of apartheid had urged the Supreme Court not to take up the case. A New York-based appeals court declined in October to dismiss the lawsuit, upholding the plaintiff's aiding and abetting theory. The panel then sent the case back to trial court to rule on whether the apartheid victims could rely on other legal theories as well.

Chief Justice John Roberts and Justices Stephen Breyer and Samuel Alito declined to participate in the case because they own stock in some of the sued corporations. Justice Kennedy recused himself from the case because his son is an executive with one of the sued companies, according to the Associated Press. The list of defendants in the case reads like a who's who of international business: Bank of America, Barclay's Bank, Bristol-Meyers Squibb, BP, ChevronTexaco, Citigroup, Coca-Cola, Daimler, and Deutch Bank, to name a few. Lawyer Paul Hoffman told the justices in his brief that none of the legal issues in the case were yet ripe for high court review. He said the plaintiff's lawyers were substantially narrowing their aiding and abetting charges and should be allowed to present this new version of the suit to the trial judge before facing appellate review. "Failure to recognize any theory of aiding and abetting liability under the [Alien Tort Statute] would grant those complicit in the most egregious human rights crimes an unwarranted immunity," Mr. Hoffman wrote.

Lawyers for the companies said Hoffman was trying to hide behind procedural maneuvers. Barron said that lawyers for the victims of apartheid have already filed five amended complaints and have had four years since a related Supreme Court ruling in 2004 in which to reconfigure their lawsuit. The corporations and the Bush Justice Department argued in their briefs that the case interferes with US foreign policy and places judges in the role of world legislators deciding which international human rights violations to punish. In his brief, Hoffman said the lower courts have not yet ruled on the foreign-policy implications of the suit. Supreme Court review should await future decisions by the district court and appeals court, he said. In a friend-of-the-court brief, The National Foreign Trade Council, a group of 300 corporations, said the area of international law concerning aiding and abetting is "in complete disarray."

"Immediate resolution of the widespread uncertainty over this issue is vital," wrote Jeffrey Lamken in the NFTC brief. "Firms need to know the risks of doing business in foreign countries." One of the complaints filed by the apartheid victims says in part: "Recent historical evidence demonstrates that the participation of the defendants' companies in the key industries of oil, armaments, banking, transportation, technology, and mining was instrumental in encouraging and furthering the abuses." The complaint adds, "[The companies'] conduct was so integrally connected to the abuses that apartheid would not have occurred in the same way without their participation."

A website maintained by one of the lawyers for the apartheid victims characterizes the case this way: "This complaint seeks to hold those businesses that aided and abetted the apartheid regime responsible for the wrongs they made possible. For example: IBM and ICL [International Computers Ltd.] provided the computers that enabled South Africa to create the hated pass book system and to control the black South African population. Car manufacturers provided the armored vehicles that were used to patrol the townships. Arms manufacturers violated the embargoes on sales to South Africa, as did the oil companies. The banks provided the funding that enabled South Africa to expand its police and security apparatus."

More Information on International Justice
More Information on the Alient Tort Claims Act
More General Analysis on Transnational Corporations


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