Bloomberg News

GM South Africa Apartheid Lawsuit Given Another Chance in U.S.

April 18, 2014

General Motors Co. (GM:US), Ford Motor Co. (F:US) and International Business Machines Corp. lost a bid to stop victims from suing them in the U.S. for allegedly aiding the former apartheid regime in South Africa.

U.S. District Judge Shira Scheindlin in Manhattan ruled yesterday that corporations may be liable for human rights abuses committed overseas under a law that allows non-citizens claiming violations of international laws to sue in the U.S. She rejected the companies’ argument that earlier court rulings interpreting the 1789 Alien Tort Statute shield multinationals from such lawsuits.

No principle of law supports the conclusion “that the norms enforceable through the ATS -- such as the prohibition by international law of genocide, slavery, war crimes, piracy etc. -- apply only to natural persons and not to corporations,” she said.

The U.S. Supreme Court insulated multinational companies from at least some lawsuits over atrocities overseas when it threw out out a lawsuit in 2013 accusing two foreign-based units of Royal Dutch Shell Plc of facilitating torture and executions in Nigeria.

A majority of the justices said the Alien Tort law generally doesn’t apply to conduct beyond U.S. borders. The law has been a favorite legal tool of human-rights’ activists seeking to hold corporations liable in the U.S.

Selling Weapons

The plaintiffs in the South Africa case, including people who were tortured or relatives of those killed, say the companies knowingly helped the former apartheid regime by selling it weapons, providing it financing and otherwise doing business there.

Scheindlin said plaintiffs in the 12-year-old lawsuit could seek to file an amended complaint showing that the companies’ actions touched the U.S. with “sufficient force” to overcome the presumption that they’re not liable under the Alien Tort law. They must also show that the defendants acted not only with knowledge “but with the purpose to aid and abet the South African regime’s” conduct as alleged in the lawsuit.

Greg Martin, a GM spokesman, and Kristina Adamski, a Ford spokeswoman, didn’t immediately respond to e-mails seeking comment yesterday after regular business hours. An e-mail sent to IBM’s media office after regular business hours wasn’t immediately returned.

Racial Segregation

Apartheid, or the institutionalized system of racial segregation, came to an end in South Africa in the early 1990s, in a series of steps that led to the formation of a democratic government in 1994, the U.S. Department of State says on its website.

The case is In re South African Apartheid Litigation, 02-md-1499, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Karen Gullo in federal court in San Francisco at kgullo@bloomberg.net

To contact the editors responsible for this story: Joe Schneider at jschneider5@bloomberg.net Peter Blumberg


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