[DEBATE] : South Africa Apartheid Case May Hinge On ‘Political Question’ Test

[Riaz K Tayob]

South Africa Apartheid Case May Hinge On ‘Political Question’ Test

The Supreme Court’s announcement this month that it will not hear an 
appeal of a landmark consolidated case against U.S. multinationals that 
traded with and invested in South Africa during apartheid sets the stage 
for the resumption of a trial which both sides say could revolutionize 
U.S. trade and investment practices.

Sources said that key to the outcome of the case will be the 
interpretation by the U.S. District Court for the Southern District of 
New York of an established “political question doctrine,” under which 
courts may decide not to rule on a case because a matter is 
fundamentally political rather than judicial in nature.

At issue is a suit brought by a group of South African plaintiffs 
against more than dozens of U.S. and multinational companies for their 
alleged collaboration with that country’s government during the 
apartheid regime. The case, In re South African Apartheid, will come 
before the U.S. Federal Court on July 8 with instructions to examine the 
case in light of the political question doctrine.

This test is crucial now that an appellate ruling allowing the Alien 
Tort Statute (ATS) to apply to the cases has been allowed to stand by 
the Supreme Court decision.

On this point, plaintiffs in the case argue that the case centers on a 
wrongdoing carried out by multinationals that needs to be addressed in a 
court of law.

But defendants—which run the gamut of U.S. multinationals from Ford 
Motor Company, General Electric, Coca-Cola, DuPont, Xerox and 
IBM—counter that the issue of with whom companies can conduct trade is a 
political question rather than a legal that should be settled in a court 
of law. The executive branch has the right to make such decisions, and 
engaging in business with South Africa was not illegal during apartheid, 
business groups filing amicus briefs in the case have argued.

Business groups such as the National Foreign Trade Council and U.S. 
Chamber of Commerce argue that the primary effect of this lawsuit will 
be to deter investment in poor countries and disrupt trade flows 
impairing worldwide economic growth. Business advocates argue that a 
ruling in favor of the plaintiffs in the South African cases could open 
the floodgates of lawsuits against U.S. companies, and in particular 
would open the door to suits against companies trading with China, which 
has long been accused of human rights abuses.

But one human rights advocate this week said the political question 
doctrine test, while applicable in this case, would limit the broader 
effects of a ruling in favor of plaintiffs to appropriate situations. 
This source pointed out that the case known as Corrie v. Caterpillar was 
dismissed by the Ninth Circuit last September.

That case was brought by the family of Rachel Corrie, an American aid 
worker killed during an Israeli bulldozing of a Palestinian encampment, 
against the maker of the bulldozers used. Sources said the court found 
that the questions were not of the jurisdiction of the court by virtue 
of being matters of foreign policy handled by Congress and the president.

According to scholars, the modern formulation of the political question 
doctrine came in the 1962 Supreme Court case of Baker v. Carr, which 
concerned voting rights in Tennessee. In that case, the Court laid out 
criteria by which the courts could decide not to rule on a case because 
a matter is political rather than judicial in nature.

Under precent from the Baker case, cases involving a political question 
have “a textually demonstrable constitutional commitment of the issue to 
a coordinate political department; or a lack of judicially discoverable 
and manageable standards for resolving it; or the impossibility of 
deciding without an initial policy determination of a kind clearly for 
nonjudicial discretion; or the impossibility of a court’s undertaking 
independent resolution without expressing lack of the respect due 
coordinate branches of government; or an unusual need for unquestioning 
adherence to a political decision already made; or the potentiality of 
embarrassment from multifarious pronouncements by various departments on 
one question.”

The Supreme Court refused to hear an appeal of the In re South African 
Apartheid case, and thereby let stand a Second Circuit appeals court 
decision that sent the case back to the district court which had 
originally dismissed it.

The plaintiffs in the case had appealed the district court dismissal and 
argued that the ATS provides for liability for corporations that aid and 
abet egregious abuses of human rights.

The district court had ruled that the 200-year-old ATS, which allows 
foreign plaintiffs to sue in U.S. court over crimes committed abroad, 
does not apply to the case. But the Appeals Court ruled that the 
district court had erred in its ruling and cases of corporations aiding 
and abetting can fall under the ATS.

The district court must now, by order of the Appeals Court, analyze the 
cases based on jurisprudence that has led similar cases to be dismissed 
over the so-called “political question” doctrine and on the basis of a 
tradition of “ international comity” by which the U.S. recognizes the 
applicability of foreign law in a foreign jurisdiction.

Judge Sprizzo of the District Court may ask the defendants to refile 
their case on July 8, and sources said that in light of the “political 
question” test, they expect the plaintiffs to pare down the number of 
corporate defendants. The case against some defendants such as IBM and 
Fujitsu, which supplied technology used to identify blacks for 
persecution, appears to observers to be stronger than the case against 
oil companies that sold fuel to the South African military and banks 
which facilitated investment more broadly in the country prior to the 
end of apartheid in 1993.

Michael Hausfeld, the lead attorney for one of the cases, Khulumani, et 
al. vs . Barclays, consolidated into In re South African Apartheid, said 
that if the District Court rules in favor of the plaintiffs, the effect 
will be to “change corporate governance.” He said that when compared to 
the real abuse aided by companies worldwide, the risk of frivolous 
lawsuits based on the precedent in this case pales in comparison. “The 
abuse far outweighs that,” he said.

But he said that it would be a “reasonable inference” to conclude that 
the plaintiffs would pare down their corporate targets.

“Some of the complaints that were filed by others were clearly 
misfocused,” he said. He said that some complaints challenged South 
Africa’s sovereignty by demanding that educational, historical and 
environmental trusts be set up for victims of apartheid, and he 
indicated that these could be dropped.

The Supreme Court could not reach a quorum to hear the appeal, entitled 
American Isuzu Motors v. Ntsebesa apparently due to conflicts of 
interests based upon the stock-holdings of some justices, and declined 
to hear the appeal of the South African apartheid cases on May 12.

According to publicly available financial disclosure forms, as of 2006, 
Chief Justice John Roberts owned stock in one defendant, Citigroup. 
Justice Samuel Alito owned stock in Exxon, and Justice Steven Breyer 
owned stock in Colgate-Palmolive. Justice Anthony Kennedy’s son Gregory 
works for defendant Credit Suisse.