Rachel Browning’s Legal Blog

On Monday, the U.S. Supreme Court affirmed a lower court ruling that certain multi-national corporations could be sued in U.S. court under the Alien Tort Statute for “aiding and abetting” the former apartheid government of South Africa. Actually, it was hardly what I’d call a “ruling.” The Court just said that it couldn’t hear the case because four of the justices had a conflict of interest – in the form of stock ownership – with certain companies named in the suit and had to recuse themselves. With only a five-justice court empanelled to consider the suit, the court lacked the necessary quorum to hear the case. As a result, the action returns to federal district court where the judge will have to consider the voluminous, complex issues involved, much to the dismay of the corporations involved, whose attorneys have been trying to have the entire suit dismissed.

Under the Alien Tort Statute (28 U.S.C. Section 1350), U.S. district courts have jurisdiction to hear any civil action by an alien for any tort committed in violation of the “law of nations or a treaty of the United States.” It’s commonly used by aliens against members of the U.S. government, military and corporate leaders for alleged human rights abuses committed during their presence in foreign countries. The plaintiffs in this case allege that the companies named “actively and willingly collaborated” with the South African government to maintain the racist and oppressive apartheid regime. But whether the plaintiffs can establish the elements necessary to sustain an “aiding and abetting” charge is questionable.

According to Francis Barron, one of the lawyers for the corporations, “None of the plaintiffs’ many complaints and amended complaints alleges that [the companies] took specific steps for the purpose of furthering apartheid.” The companies are being sued simply for doing business in South Africa, he states. Companies listed as defendants in the case include: Bank of America, Barclay’s Bank, Bristol-Meyers Squibb, BP, ChevronTexaco, Citigroup, Coca-Cola, Daimler, and Deutch Bank, among others.
The plaintiffs’ lawyers, of course, see it differently: “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.”

Regardless of the outcome – whether the case proceeds to a lengthy trial in court or concludes with an agreed-to financial settlement – the court’s decision on Monday will have long-term implications in terms of the rights and responsibilities of companies who choose to do business in counties whose governments have track-records of committing human rights abuses.

Questions about international law, immigration or business litigation? Contact the lawyers of Smith & Garg, LLC for more information.