Massive apartheid case on way to the Court

By Lyle Denniston
on Nov 28, 2007 at 6:36 pm

A massive group of lawsuits, seeking upwards of $400 billion in damages from corporations located in the U.S., Canada and Europe, is on its way to the Supreme Court, surrounded by an intriguing question: has the Court already indicated that the case should not proceed? One federal judge has drawn that conclusion, but others have said that conclusion is premature.

The case is about the harms done by decades of apartheid in South Africa; it was brought in federal court in this country as part of a worldwide movement to hold someone accountable for human rights abuses; closely parallel lawsuits have been pursued — not very successfully — over the wrongs done by slavery in this country. The Second Circuit Court has allowed the apartheid case to move forward — though perhaps not to a full-scale trial on the merits — in the face of vigorous objections by the government of South Africa, with fervent backing from the U.S. government, and opposition, of course, from the businesses involved.

Lawyers for the corporations have begun preparing an appeal to the Supreme Court; the government of South Africa is not a party and thus has no right to appeal. The petition is due at the Court no later than Jan. 10. Preparing the case is complicated, because there are perhaps four dozen companies involved, and coordinating among the clients the arguments to be made may be difficult. The attorneys have not yet decided whether to ask the Justices to postpone the Second Circuit’s Oct. 12 ruling; the Circuit Court itself, in a 2-1 ruling on Nov. 9, refused to stay its decision. The judge in dissent urged lawyers to rush the case on to the Supreme Court, so that it might be decided this Term.

The dissenting judge, U.S. District Judge Edward R. Korman of Brooklyn (sitting on the Circuit Court by special assignment), said the Supreme Court had already telegraphed its skepticism about this case and thus had indicated it may well agree to hear the companies’ appeal seeking to head off further development of the case. Judge Korman was citing a highly unusual footnote in the Court’s June 2004 decision in Sosa v. Alvarez-Machain (docket 03-339). The main ruling of Oct. 12 and Judge Korman’s dissent can be found here, and Tuesday’s opinion explaining its Nov. 9 denial of a stay, with Korman again dissenting, is here. The lead case is Khulumani v. Barclay Nat’l Bank (Circuit docket 05-2141).  The litigation had been dismissed by a U.S. District judge five months after the Supreme Court’s Sosa decision, relying heavily upon that ruling. But the Second Circuit has now revived the lawsuit, insisting it was not ruling on the merits of any part of it.

The case — actually it is ten separate lawsuits combined into one — is a class-action claim for reparations, representing the interests of anyone who has lived in South Africa between 1948 and the present and who suffered harms from the apartheid policies of the former government there. The primary claim in the case is that, by doing business with the apartheid government, the corporations share in the legal blame for the wrongdoing, and so must provide remedies. As one of the lawyers described the theory when filing one of the first cases four years ago this month, computer manufacturers “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, and the banks provided the funding that enabled South Africa to expand its police and security apparatus.”

The core complaint is that the businesses “aided and abetted” a vast array of human rights abuses, enabling apartheid to persist for nearly a half-century — until the early 1990s. What remains of the case, in the wake of the Second Circuit’s October ruling, are claims under the Alien Tort Claims Act — a U.S. law that dates to 1789, but in its first 170 years provided jurisdiction in federal court for only one case. It has been used most actively in recent years as human rights groups sought to hold foreign corporations to account in U.S. courts for violations of the norms of international law, especially violation of individual rights. The Act’s entire content is: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”

The coming appeal to the Supreme Court will give the Justices an opportunity to clarify its most recent and most comprehensive ruling on what the Act covers — its June 2004 ruling in the Sosa case. That decision clearly left the courthouse door ajar to claims of human rights abuses, if they were confined to “a relatively modest set of actions alleging violations of the law of nations…a small number of international norms.” The Court, in the main opinion written by Justice David H. Souter, called for “judicial caution” and for “great caution in adapting the law of nations to private rights.” Souter also commented that “we have no congressional mandate to seek out and define new and debatable violations of the law of nations.”

In a vigorous dissent from that part of the decision, Justice Antonin Scalia suggested that the claim of discretionary power in the U.S. courts to create rights to sue to enforce international law was deeply flawed. The Court, Scalia wrote, “wags a finger at the lower courts for going too far, and then — repeating the same formula the ambitious lower courts themselves have used — invites them to try again.”

At the time that ruling came down, the South Africa apartheid cases already were pending in federal courts in New York. And one of the lawyers involved, visiting in South Africa, told news reporters there that the ruling “considerably strengthened” the claims in those cases and had “provided a climate of hope for the survivors of gross human rights vioilations during the apartheid era.”

But apparently little noticed at the time was a footnote in which Justice Souter added some clarity to the opinion’s suggestions for “judicial caution.” Footnote 21 explicitly noted the pending South Africa apartheid cases, added that the current South African government had claimed they interfered with its policy of dealing with the effects of apartheid, and cited a letter from the U.S. State Department supporting the claim of interference. The footnote suggested that “in such cases, there is a strong argument that federal courts should give serious weight to the Executive Branch’s view of the case’s impact on foreign policy.”

There is no question where the Executive Branch stands on the South African cases. In an  amicus brief in the Second Circuit, filed in October 2005, the Justice Department argued that the reparations case was an “extraordinary” attempt to “regulate conduct of a foreign state over its citizens” by making private corporations “liable for the sovereign acts of the apartheid government of South Africa.”   Courts, it added, “should be very hesitant evere to apply their federal common law powers to resolve claims, such as the ones here, centering on the mistreatment of foreign nationals by their own government.”  The aiding-and-abetting claims should be dismissed, it asserted.

South Africa’s present government, too, has called for dismissal. In its own amicus brief, also filed in October 2005 in the Circuit Court, the Pretoria government contended that “these foreign litigations fundamentally interfere with South Africa’s independence and sovereignty and intervene in its internal affairs.”  It said that it is following a policy of assuming responsibility for the wrongs done by the apartheid government, and wishes to develop its own plans of rehabilitation and reconciliation.” Part of its policy in that regard, it added, depends upon encouraging foreign direct investment in the South African economy — a process that, it argued, would be disrupted by the lawsuits against corporations that deal with South Africa.  It said it does not want to pursue reparations or punishment against “corporations that may have profited from or cooperated with the apartheid regime.”