Feeding lawyers

The attempt to extract $400 billion in reparations for apartheid from some 50 multinational corporations via the US courts over the strenuous objections of the South African government won a reprieve this week. The endeavour remains quixotic, nonetheless. The only redistribution of wealth ever likely to result is from shareholders to lawyers. There has been plenty of that already. There will be more.

The US Supreme Court was expected to put American Isuzu Motors, et al., v. Ntsebeza, et al., as the case is now officially known, out of its misery in short order. Then four of the nine justices unexpectedly recused themselves. Three have investments in defendant companies, a corporate who’s who of North America and Europe. The fourth has a son who works in one. It takes a quorum of six to hear an appeal.

So, by default, the case goes back to federal district Judge John Sprizzo in New York who dismissed it in 2004. Last year, the Second Circuit Court of Appeals court found flaws in Sprizzo’s reasoning and told him to try again. That instruction must now be carried out. More years of litigation are in the offing, beginning with a hearing on July 8.

The case is an amalgamation of suits filed six years ago in multiple US courts by and on behalf of South Africans, both as named individuals and as a class of victims. The suits rely on the Alien Tort Claims Act of 1789 as interpreted two centuries later. The statute is as enigmatic as it is is brief: “(Federal) 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.”

In 1980, the Second Circuit agreed this meant that a pair of Paraguayan citizens could seek damages in a US federal court from a Paraguayan policeman who had tortured and killed their relatives in Paraguay. In 2002, the Ninth Circuit allowed villagers in Myanmar to seek damages from Unocal for abuses committed by the military junta while the oil company was building a pipeline.

In 2003, the Second Circuit applied the brakes. Peruvian plaintiffs tried to use ATCA to sue a mining company for causing pollution they alleged was the source of lung disease in their community. The court upheld dismissal: however culpable the company may have been, it had not violated the “law of nations” defined as international law nations actually respected (as opposed to essentially hortatory UN resolutions, ritual condemnations and the like).

Sprizzo applied the same test. Had the defendants, while operating in apartheid SA, directly violated binding international law? He thought not. Had they “aided and abetted” the perpetration of such violations? Using a definition of “aiding and abetting” adopted by the Supreme Court in a securities fraud case, he again thought not. Ergo, case dismissed as beyond US jurisdiction.

In vacating parts, but not all of his ruling, the Second Circuit told Sprizzo to have another look at the definition of aiding and abetting to be applied in ATCA cases. It also supplied him with a definition that would win its support for a second dismissal: the one contained in the Rome Statute of the International Criminal Court.

Under the Rome Statute, you are guilty of aiding and abetting a crime if you render assistance “for the purpose of facilitating the commission” of said crime. It will be hard for the plaintiffs to prove that defendants conducted business in SA with the conscious intent to facilitate torture and judicial murder.

Whatever happens, the case will almost inevitably find its way back to the Supreme Court. In a 2004 decision, Sosa v. Alvarez-Machain, the Supremes sought to narrow the scope for suits under ATCA and explicitly cited the apartheid suits as a matter on which they would rather defer to congress and the executive. The US government has been as clear as the South African in calling for dismissal of what is, is President Mbeki himself has said, judicial imperialism. The Supreme Court will heed the call (having adjusted its portfolios) when the time comes. It has already shown its hand.

One nagging question: what if the next South African administration were to change tack and back the plaintiffs?

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One thought on “Feeding lawyers

  1. Your nagging question “What if the next South African administration were to change tack and back the plaintiffs?” implores a response.I think that such support might well indicate that in 2009 the South African government feels confident of itself and understands the value of advancing corporate practices that respect the codes of basic human rights that have existed in the world for 60 years.The Khulumani International Lawsuit that comes before Judge Duffy on February 26, 2009 is of enormous significance globally in efforts to advance adherence by corporations to international codes of conduct, given their enormous power and political influence in a world in which the assets of individual multinational corporations are often greater than the combined economies of all the countries of Sub-Saharan Africa, including South Africa.So yes, the ‘new’ South African government does need to be asked these questions, remembering the background to this lawsuit – the fact that the South African Truth and Reconciliation Commission found corporations to have much to account for in relation to the ways in which they enabled the “apartheid military machine” to prolong the repression of the resistance to a system that was repeatedly villified at the United Nations; the fact that no multinational corporation made the effort to appear before the Business Hearings of the TRC or to apply for amnesty from legal action that mnight be instituted against them; the fact that government repeatedly reiterated its stance that individuals have the right to seek legal recourse in any court of law competent to hear their complaint and that it would defer from interfering in the lawsuit – a position that was changed following the intensive lobbying by corporations.It should be noted that despite the decision of the U S Supreme Court of Appeal that the Khulumani Lawsuit should return to the New York District Court, and the implications of a possible outcome favourable to the plaintiffs, foreign investment in South Africa in fact doubled in 2008.Khulumani (of which I am the Director) argues that corporations could have been expected to abide by the resolutions of the United Nations made over many years, and that the defendants consciously turned their backs on these resolutions and deliberately continued their profitable direct and exclusive contractual business deals with the apartheid military and security agencies.Success for the plintiffs in this important case will usher in a system in which corporations as states and individuals, all become subject to a system of international customary law that provides protection and opportunities for redress no matter where in the world they operate.

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