WASHINGTON, DC (AP) -- The Supreme Court said Monday that it can't 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.
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 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.
The case is American Isuzu Motors v. Ntsebeza, 07-919.
Copyright 2008 by The Associated Press. All Rights Reserved
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U.S. top court lets apartheid claims proceed
May 12, 2008
By James Vicini
http://uk.reuters.com/article/allBreakingNews/idUKN1253696120080512
WASHINGTON, May 12 (Reuters) - The U.S. Supreme Court on Monday cleared the way for lawsuits to go forward by apartheid victims seeking damages exceeding $400 billion from more than 50 major corporations.
With four justices recused from the case and therefore lacking a quorum, the high court issued a brief order simply affirming a ruling by a U.S. appeals court in New York. The appeals court had reinstated the lawsuits by the plaintiffs, who claim the companies violated international law by assisting the apartheid system in South Africa.
Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer and Samuel Alito did not take part in the case, apparently because they own stock in some of the companies.
Because they did not participate, the Supreme Court said it lacked a quorum, which requires at least six of its nine members. The affirming of the lower-court ruling allows the lawsuits to proceed, but does not represent a decision by the justices on the merits of the dispute.
A majority of the justices who considered the case said it could not be heard and determined in the court's next term because of the lack of a quorum, which happens rarely.
The corporations named in the lawsuits included oil companies such as BP Plc (BP.L: Quote, Profile, Research) and Exxon Mobil Corp (XOM.N: Quote, Profile, Research), banks such as Citigroup (C.N: Quote, Profile, Research), Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research) and UBS AG (UBSN.VX: Quote, Profile, Research), as well as other multinationals like IBM (IBM.N: Quote, Profile, Research), General Motors Corp (GM.N: Quote, Profile, Research) and Ford Motor Co (F.N: Quote, Profile, Research).
The U.S. and foreign corporations appealed to the Supreme Court. The Bush administration and business groups supported the appeal.
The lawsuits, filed in 2002 by three separate groups of plaintiffs, were brought on behalf of all persons living in South Africa between 1948 and 1994 who were apartheid victims.
One set of plaintiffs, a South African human rights organization called the Khulumani Support Group, represents some 36,000 claimants who suffered during apartheid.
"We are delighted. It's a victory and we are very, very happy," said Shirley Gunn, a Khulumani board member who says she was tortured during apartheid.
'MERIT IN THE CLAIMS'
"This is obviously extremely good news. It certainly shows that there is absolute merit in the claims that were filed against the corporations and we now look forward to this matter unfolding further in the New York District Court," Charles Abrahams, a South African lawyer acting on behalf of the group, told Reuters.
Apartheid ended in 1994 when South Africa held its first all-race elections, bringing Nelson Mandela and the African National Congress to power.
A federal judge in New York initially dismissed the lawsuits on the grounds that the court lacked jurisdiction over the cases. But the appeals court ruled the lawsuits brought under the Alien Tort Claims Act (ATCA) could go forward.
The Bush administration took the position the lawsuits should be dismissed. It said the South African government repeatedly has opposed the lawsuits as an infringement of its sovereignty.
The administration had urged the Supreme Court to rule that a private defendant may not be sued under the ATCA for aiding and abetting a violation of international law by a foreign government in its own territory.
But attorneys for the plaintiffs said the case was not ready for Supreme Court review and that it should be allowed to go back to the federal judge.
The high court's action means the case will go back to the federal judge for more proceedings. Any eventual ruling by the judge then could be appealed by the losing side to the appeals court and ultimately to the Supreme Court. (Editing by Lisa Von Ahn and Tim Dobbyn)