The U.S. Supreme Court has affirmed a ruling that apartheid victims who seek damages exceeding $400 billion from more than 50 major corporations can go forward with their lawsuits. Four justices recused themselves from the case and as a result the court lacked a quorum. The high court issued a brief order last month simply affirming a ruling by a federal appeals court in New York. That court had reinstated the lawsuits by the plaintiffs, who claim the companies violated international law by assisting the apartheid system in South Africa.

Interestingly, Chief Justice John Roberts and Justices Anthony Kennedy, Stephen Breyer and Samuel Alito didn’t 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. While the affirming of the lower-court ruling allows the lawsuits to proceed, it doesn’t represent a decision by the justices on the merits of the dispute. The corporations named in the lawsuits included oil companies such as BP PLC and ExxonMobil Corp., banks such as Citigroup, Deutsche Bank AG and UBS AG, as well as other multinationals like IBM, General Motors Corp. and Ford Motor Co.

The suits accuse the companies of “aiding and abetting” violations of international law committed by South Africa’s apartheid-era government. Those suing the companies include torture victims and representatives of people who were murdered. The suits name more than 50 companies, some of whom weren’t involved in the Supreme Court appeal. The South African government has called for rejection of the lawsuits. The cases invoke the U.S. Alien Tort Statute, a two-century-old law that lets federal courts hear suits by non-citizens claiming violations of international law.

The U.S. and foreign corporations had appealed to the Supreme Court. The Bush Administration and some 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, said it had 32,700 members who are survivors of apartheid violence. 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 initially dismissed the lawsuits on the grounds that the court did not have jurisdiction over the cases. But the appeals court ruled the lawsuits brought under the Alien Tort Claims Act could go forward. It will be interesting to see how these lawsuits wind up – considering the power and political influence of some of the defendants.

Source: Insurance Journal

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