Apartheid Claims Against Ford, GM, Others, to Go Forward

[WSJ_law_blog]

Should multinational companies be held liable for damages incurred under South Africa’s apartheid regime?

The issue — in the form of a huge consolidated lawsuit involving dozens of companies — has been up and down through the court system, but gained a significant shove forward on Wednesday.

Manhattan federal district court judge Shira Scheindlin allowed some claims under the Alien Tort Claims Act of aiding and abetting the apartheid government to go forward. Generally speaking, the claims allege that the companies did business with the apartheid government and thus helped perpetuate human-rights abuses. Claims to proceed include some against auto makers General Motors, Ford, and Daimler; IBM and Rheinmetall Group, the parent of armaments maker Oerlikon Contraes AG. Click here for the ruling; here and here for earlier LB posts on the case.

“What survives are much narrower cases that this court hopes will move toward resolution after more than five years spent litigating motions to dismiss,” the judge said.

In her decision Wednesday, the judge dismissed other claims of aiding and abetting against Fujitsu Ltd., IBM and the auto makers, but gave the plaintiffs the right to file amended complaints. She also dismissed claims against Barclays Bank PLC and UBS AG.

More than a dozen lawsuits were initially filed against a number of large U.S., European and Canadian companies, seeking billions of dollars in damages. Two cases, filed in 2002, have survived.

In 2007, the U.S. Second Circuit Court of Appeals reinstated some claims in the consolidated cases and remanded them to the district court. The U.S. Supreme Court affirmed the appellate court’s decision last year after several justices recused themselves and it failed to reach a quorum on whether to hear the case.

The plaintiffs filed amended complaints last year, significantly narrowing the number of defendants.

A GM spokeswoman declined comment Wednesday. Spokesmen at Barclays, Fujitsu and Daimler didn’t immediately have a comment. Spokespersons at Ford, IBM and Rheinmetall didn’t immediately respond or couldn’t immediately be reached for comment.

“We are very satisfied with the decision,” said Mark Arena, a UBS spokesman. “We have rejected the lawsuit as unjustified from the beginning.”

Michael Hausfeld, a lawyer for one group of the apartheid victims, said the decision sustains the “viability and the plausibility” of the majority of claims.

“As a general matter, there are still concerns with respect to the viability/accountability to banks that knowingly participated in funding those agencies of the government which abused the population,” Hausfeld said. “We’re considering whether that issue should proceed to the next level.”