Supreme Court Allows Apartheid Victims' Lawsuit Against US Companies To Proceed
The Supreme Court said Monday that it cannot intervene in an important dispute over the rights of apartheid victims to sue U.S. corporations in U.S. courts because four of the nine justices had to sit out the case over apparent conflicts.
The result is that a lawsuit accusing some prominent companies of violating international law by assisting South Africa's former apartheid government will go forward.
Apartheid was a system of legal and racial separation that dominated South Africa from 1984 to 1993.
The court's hands were tied by federal laws that require at least six justices to hear any case before them.
Short of the required number by one, the court took the only path available to it and upheld an appeals court ruling allowing the suit to proceed.
The justices have ties to Bank of America, Bristol-Myers Squibb, Colgate-Palmolive, Credit Suisse, Exxon Mobil, Hewlett-Packard, IBM and Nestle, among nearly three dozen companies that asked the high court to step in.
The justices' latest financial disclosures show:
- Chief Justice John Roberts owned Hewlett-Packard stock.
- Justice Stephen Breyer owned stock in Colgate-Palmolive, Bank of America, IBM and Nestle.
- Justice Samuel Alito holds shares in Exxon Mobil, which caused him to sit out the still-pending dispute over the $2.5 billion (Ã‚â‚¬1.6 billion) punitive damages award for the Exxon Valdez disaster. Alito also owns Bristol-Myers Squibb.
Justice Anthony Kennedy does not hold stock in any affected company, but his son, Gregory, is a managing director at Credit Suisse. He sat out a case last term involving the investment bank.
Business groups, the Bush administration and the current South African government also sought the high court's intervention. They argued that the lawsuit is damaging international relations, threatening to hurt South Africa's economic development and punishing the companies using a fuzzy concept of aiding violations of international law.
Last year's ruling by the 2nd U.S. Circuit Court of Appeals in New York "allows an unprecedented and sprawling lawsuit to move forward and represents a dramatic expansion of U.S. law," the administration said in court papers.
Lawyers for the South Africans bringing the complaint said it was premature for the Supreme Court to get involved. The lawyers said they plan to narrow their complaint, perhaps omitting some corporations and showing more clearly how the companies assisted the apartheid government.
The case involves the Alien Tort Claims Act, an 18th-century law that allows foreigners to sue in U.S. courts over international law violations. It was originally intended to allow foreigners to have a place to make claims against pirates, but the law has been increasingly used in the last 15 years to sue corporations for their alleged involvement in human rights abuses overseas.
The lawsuit raises sticky questions about U.S. policy toward governments accused of repression. For example, the administration said the government may impose targeted sanctions while still allowing commerce in order to encourage reform. The suit could undermine that policy.
© 2008 The Associated Press