International corporations may be sued for apartheid-era violations in South Africa

The apartheid form of government in South Africa may be dead, but litigation arising from the racially-based social structure that fell nearly 20 years ago rages on. On October 12, in
Khulumani v. Barclay National Bank, the Court of Appeals (Katzmann, Hall and Korman) revived a lawsuit against various corporations alleged to have collaborated with the government of South Africa in maintaining its authoritarian system of government.

The opinion opens with the following intriguing statement:

The plaintiffs in this action bring claims under the Alien Tort Claims Act, 28 U.S.C. § 1350, against approximately fifty corporate defendants and hundreds of “corporate Does.” The plaintiffs argue that these defendants actively and willingly collaborated with the government of South Africa in maintaining a repressive, racially based system known as “apartheid,” which restricted the majority black African population in all areas of life while providing benefits for the minority white population.

The Alien Tort Claims Act allows the district court to exercise "jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” In 2004, the Supreme Court ruled that the law allows "for a relatively modest set of actions alleging violations of the law of nations."

In the apartheid case, The Second Circuit ruled that "in this Circuit, a plaintiff may plead a theory of aiding and abetting liability under the ATCA." In other words, corporations and other non-governmental actors that were accomplices to the violation of human rights and international law may be sued under the Alien Tort Claims Act.

Judge Korman dissented, summarizing the majority's holding as well as his objections to how the Court of Appeals interpreted the Act:

Today, the majority allows three class actions on behalf of all persons who lived in South Africa between 1948 and the present and who suffered damages as a result of apartheid to go forward in a United States court against American, Canadian, and European corporations that sold goods and materials or made loans to the Union of South Africa during the apartheid era. It does so over the vigorous objections of the United States, its allies, and, most notably, the Republic of South Africa, which is justifiably proud of the ability of its legal system to adjudicate legitimate human rights claims. In doing so, the majority also ignores a direct signal from the Supreme Court of the United States regarding the non-viability of these claims.