Plaintiffs are using an obscure 18th century law - the Alien Tort Claims Act (ATCA) - to hold multinational corporations liable for human rights abuses committed by government officials around the world. The ATCA, originally used to combat piracy, gives U.S. courts jurisdiction to hear cases brought by non-U.S. citizens for events that occurred outside the United States. After laying dormant for 200 years, labor and human rights activists, religious groups, and plaintiffs lawyers state that the 1789 statute provides the only means of redress for victims of human rights abuses overseas. The article describes how groups on both sides are preparing for a legal battle and monumental lobbying effort. Michael Hausfeld of Cohen, Milstein, who sued 23 corporations for allegedly aiding and abetting the apartheid regime in committing crimes, is quoted in the excerpt below.
In one complaint, filed last November by D.C.-based partner Michael Hausfeld of Cohen, Milstein, Hausfeld & Toll, 23 major corporations are named for aiding and abetting the apartheid regime in crimes including forced labor, genocide, murder, torture, sexual assault, and unlawful detention.
For example, the IBM Corp. is charged with supplying computers that enabled the South African government to create the "pass book system" used to control the black population. The Ford Motor Co., the General Motors Corp., and Daimler-Chrysler are named for providing the armored vehicles used to patrol the townships. Banks including Citigroup, J.P. Morgan Chase & Co., and Credit Suisse Group are being sued for providing the funding that enabled South Africa to expand its police and security apparatus.
"We didn't pick any companies willy-nilly," says Hausfeld. "We did a year of research on which companies materially provided aid" to the regime, a standard that he says is based on precedent set by the Nuremberg trials after World War II.
A series of class action complaints against 40 companies has also been filed by Edward Fagan, who is best known for bringing Holocaust lawsuits against Swiss banks and German companies.
In addition, a suit by Connecticut lawyers Paul Ngobeni, Kweku Hanson, and Medi Mokuena initially named 84 companies, including some, such as the Sara Lee Corp., without any obvious link to the crimes of the regime. Since then, says Hanson, they've winnowed the list to 34. The suit, a class action, includes claims of wage discrimination, targeting companies that "reaped profits illegally, paying subhuman wages" to black South Africans, he says.
One consequence of the apartheid litigation has been to "energize" the corporate world to fight back, says William Reinsch, president of the National Foreign Trade Council. "The fact that so many defendants and corporate John Does are named puts us in the position of telling people truthfully when they ask, 'Why should we care?" that they stand a good chance of being sued under the law.
Agrees Meyer of Foley & Lardner: "The breadth of the lawsuits and the number of companies sued have made a lot more people pay attention." But, he adds, "The plaintiffs lawyers have tried to push too far. It could be counterproductive for them."
Now, the business community is trying to figure out the best strategy to counter the snowballing litigation.
The immediate challenge is changing the terms of the debate.
"The moral framing of this issue has been disastrous for us," said Smith of the Competitive Enterprise Institute at a recent Chamber of Commerce-sponsored forum on the law. The perception, he continued, is "we want to make money, and they want human rights. We have yet to find an effective argument to counter [this]."
Nor does it help, notes Reinsch, that "these are enormously sympathetic plaintiffs, people who have had terrible things happen to them. It's difficult for judges to dismiss the cases, even though the legal nexus between the crimes and the U.S. companies as perpetrators is usually zero, and at best tenuous.
"We're wrestling with the best course of action," he continues. "We've got some people who think the only way to deal with it is to get a case in the Supreme Court, and do what we can to make sure they make the right decision. But, at best, that will take awhile."
Right now, business advocates are focusing on educating members of Congress on the issue. But some are pushing for a legislative fix, perhaps a clarification that ATCA provides jurisdiction only.
It could be a risky tactic. Covington & Burling partner Stuart Eizenstat, who as the special representative of President Bill Clinton brokered the Holocaust-related settlements, has warned USA Engage members that once you open up the statute, you never know how it's going to come out, he says. "And the attendant fight will be a donnybrook. The statue could even get tighter."
Collingsworth of the ILRF says his organization and colleagues from groups such as Amnesty International and the Lawyers' Committee for Civil Rights Under Law are well aware of the maneuvering.
"They don't have any legs at all to get [the law] repealed," he says. "We're more concerned about the classic 'page 3,004 of the Omnibus Funding Act' move-that they'll do something sneaky in the fine print. We've got a lot of people watching in Congress."
