Last month saw a US Court of Appeals decision that could have implications not only for a significant number of the world’s leading multinationals, but also for the US itself.
Cravath Swaine & Moore led the charge for the defendants, while litigators from Cohen Milstein Hausfeld & Toll (including Michael Hausfeld) represented the plaintiffs.
At stake is a $400bn (£194.2bn) class action centred on the apartheid regime in South Africa between 1960 and 1993. As one lawyer involved with the case puts it: “The plaintiffs purport to represent all of the non-white citizens living in South Africa during apartheid.”
The suit is predicated on the Alien Torts Claims Act, which grants US courts jurisdiction over certain violations of international law. The law dates back to 1798 and was considered redundant for most of the previous two centuries. But according to another lawyer involved, “ATS [or Alien Tort Statute] claims are exploding – they’re everywhere”.
Sensationally, in the apartheid case, the three groups of plaintiffs – Khulumani, Ntzebesa and Digwamaje – unexpectedly won the right last month to take the matter back to the district court, from which it was originally dismissed in November 2004.
In the meantime lawyers for the defendants have now begun petitioning for a writ of certiorari, or judicial review, in the Supreme Court.
“The issue at stake as to whether a corporate can be held liable for the acts of a repressive government as a result of it doing business in that country are monumentally important,” says a lawyer who prefers not to be named. “Take China: is every company doing business in China responsible for the repressive attributes of that government?”Cohen Milstein partner Agnieszka Fryszman rejects this point, claiming the suit was not aimed at companies doing business in South Africa, only at those that aided and abetted the apartheid regime.
“It’s a qualitatively different matter selling goods in a country from contributing to human rights violations,” adds Fryszman.