Narrowed
GM, Ford, IBM Apartheid Lawsuits 'Narrowed' by Judge
Lawsuits accusing companies including General Motors Corp., Ford Motor Co. and IBM Corp. of aiding South Africa’s former apartheid regime were narrowed by a federal judge in New York.
U.S. District Judge Shira Scheindlin today issued a ruling that she said made the cases "much narrower" than they were when initially filed.
What survives "is vastly different from the dozen of actions first filed in 2002 and 2003," the judge wrote in a 136-page opinion.
The suits were first filed in 2002. Those who sued, including people who were tortured or relatives of those killed, invoked the U.S. Alien Tort Claims Act, a 200-year-old law that lets federal courts hear suits by non-citizens claiming violations of international law.
The South African plaintiffs sought billions of dollars in compensatory and punitive damages, saying the companies knowingly helped the former South African regime by selling it weapons, providing it financing and otherwise doing business there.
Scheindlin’s ruling "is extremely significant in the human-rights field generally," said Michael Hausfeld, a lawyer for the plaintiffs at Hausfeld LLP in Washington. "It applies for the first time the standard for aiding and abetting human- rights violations. As a whole, I believe it will be received in the international human-rights community as being a material advancement."
UBS, Barclays
The only defendants whose claims against them were dismissed entirely were UBS AG and Barclays Plc.
"That presents a very complex issue," Hausfeld said. "What is the role of financial institutions in terms of lending money to regimes that unlawfully abuse their population? I think the court struggled with that."
Jayant Tambe, a lawyer for GM at Jones Day in New York; Keith Hummel, a lawyer for IBM at Cravath, Swaine & Moore in New York; and John H. Beisner, a lawyer for Ford at O’Melveny & Myers in Washington, didn’t immediately return calls for comment.
The case was initially before another judge in Manhattan federal court, who tossed it out on legal grounds. A federal appeals court in 2007 reinstated claims against IBM and dozens of other companies. The case was returned to the lower court and is now before Scheindlin.
The case is Khulumani v. Barclay Bank, 05-2141, U.S. Court of Appeals for the Second Circuit (New York).
(Published by Bloomberg - April 8, 2009)