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Will The Lawsuit Based On South African Apartheid Prevail?

Monday, Jul. 15, 2002

This column is Part One of a two-part series by Professor Sebok on the Alien Tort Claims Act, indirect injury, and joint action. - Ed.

On June 19, Ed Fagan and a number of American and South African lawyers filed suit under the Alien Tort Claims Act. The plaintiffs are the class of persons alive in South Africa between 1948 and 1993 who were affected by the apartheid regime. The defendants are Citibank, Union Bank of Switzerland, and Credit Suisse. Moreover, the complaint indicates that the suit's scope will soon broaden: the plaintiffs expect to add Western technology, transportation and weapons companies as additional defendants.

The suit demands damages for personal injuries that were inflicted on the plaintiffs through a variety of means during the apartheid era, ranging from torture to death squad attacks, on the theory that the defendants' actions caused the injuries by perpetuating the apartheid system. It also seeks a "disgorgement" (the legal term for a court-ordered repayment) of all the profits made by the defendants resulting from their business dealings with South Africa's apartheid regime.

Plainly, the suit raises important questions about the scope of private human rights suits in American courts.

Fagan was one of the lawyers who helped pioneer the pathbreaking lawsuits against insurance companies, banks, and corporations that were alleged to have profited from property and labor stolen during the Holocaust.

Currently, Fagan is bringing a suit to recover for damages caused by slavery to all African Americans enslaved in the U.S. between 1619 and 1865. (I discussed both the slave labor lawsuits and the African-American slavery suit in earlier columns; Anita Ramasastry also wrote a recent column for this site addressing the recently-filed South Africa suit.)

Through these three suits, Fagan and those he works with have forced us to rethink the limits of law in a new world of globalized jurisdiction. Yet there are both similarities and differences among them.

All three target large private corporations. For example, the theme of the recent South Africa lawsuit is that the multinational corporation defendants profited from acts which violated recognized international human rights standards.

All three also seek to make corporations liable through the Alien Tort Claims Act (and related laws) for acts that violate customary international law - but did not necessarily the contemporaneous laws of the regimes where the acts took place.

But in other ways, the South Africa suit is different. Unlike the other two cases, it includes no claim that the defendant corporations directly violated the human rights of the plaintiffs. Rather, the claim is wholly rooted in a claim of indirect injury.

This new wrinkle raises questions about how the Alien Tort Claims Act (ATCA) should measure responsibility for indirect injury.

The Alien Tort Claims Act and the "Under Color of Law" Requirement

The complaint also mentions other possible bases for the court's jurisdiction besides the ATCA: diversity of citizenship (since some of the class representatives live in the United States), and the Torture Victims Protection Act. However, courts have treated the elements of subject matter jurisdiction are virtually the same in all three cases. Thus, I will focus on the complaint's structure as it relates to the Alien Tort Claims Act.

Under the ATCA, jurisdiction exists when an alien sues for a tort committed in violation of the law of nations or a treaty of the United States. The tort does not necessarily have to be committed "under color of law" - that is, it need not be committed under government auspices, according to the Second Circuit.

Rather, some crimes against humanity - including war crimes, torture, and slave trading - have independent force and individuals may be liable for them under the ATCA regardless of whether they were acting in concert with an oppressor state. (Others do not, and cannot form the basis of an ATCA suit unless the "under color of law" requirement is satisfied).

The question of whether the defendants acted under color of state law - often referred to in the law as the question of whether there was "state action" - did not arise in the German slave labor case, and it may not in the American slave labor case either. That is because, in both regimes, many of the defendants actually controlled the slaves on whose behalf (or on behalf of whose estates) the suit are brought, and used state law to protect that control.

Other ATCA State Action Cases

In other ATCA suits, on the other hand, the question of state action has been heavily litigated and has sometimes been central to the ultimate result of the case

In the Southern District of New York case Wiwa v. Royal Dutch Petroleum, et. al., for example, the question arose when Nigerian plaintiffs brought an ATCA claim against two European oil companies. The plaintiffs alleged the companies had aided the Nigerian government to suppress local resistance to a large petrochemical project in Nigeria, and thus been accomplices in Nigerian security forces' rape, beatings, and in a handful of cases, state-sanctioned executions for local activists.

The defendant companies argued that, since the complaint did not allege that any of their employees raped, beat, or killed any of the plaintiffs - rather, it alleged that Nigerian security forces who were not defendants did so - they could not be sued under the ATCA. But U.S. District Judge Kimba Wood rejected the argument - finding that the plaintiffs' allegations, if proven, could show that defendants were "joint actors" with the Nigerian government for there was alleged to have been "a substantial degree of cooperative action between" them.

In contrast, in the Central District of California case Doe v. Unocal (II), the plaintiffs failed to establish "joint action." The suit was brought against two multinational oil companies. It alleged that the companies' oil exploration work had been connected, with their knowledge and tacit consent, with Myanmar's gruesome oppression of the residents of the Tennaserim region. However, the court held that plaintiffs had not found sufficient evidence to support their "joint action" claim.

Similarly, in Bigio v. Coca Cola, the Second Circuit upheld a district court's dismissal of a complaint brought under the ATCA based on lack of a connection between the defendant and the rights violators. There, a family alleged that its property was expropriated by the Egyptian government in 1977 and then, in 1993, sold to Coca Cola. But the court noted that "an indirect economic benefit is not sufficient to support jurisdiction over a private party" under the ATCA.

Obviously, there are no easy answers to the question of when a private citizen--whether a corporation or an individual--has acted under "color of state law." The question has occupied civil rights attorneys in this country for many years. But this question must be dealt with openly, and soon, in the ATCA context. To ignore the subtleties of the "joint action" doctrine would leave this new generation of ATCA cases to be decided by emotion and politics.

The question is this: When is indirect participation in human rights abuses by a state a breach of duty under "international tort law"? There are three possible ways to answer it.

Under the first, we would turn to international law to determine what "joint action" means. As Professor Ramasastry has pointed out in an article published this year, international law has been developing, since the Nuremberg trials, a concept of "indirect responsibility" based on the concept of "aiding and abetting" under international law.

Under the second approach, we would directly borrow from American civil rights law, especially as it has developed in the context of litigation under Section 1983 - the federal statute that allows tort suits to be brought based upon violations of constitutional rights. (This is the approach Judge Wood employed in the case discussed above.)

Under the Section 1983 model, the way to determine whether an indirect actor has acted under color of state law would be to apply the "joint action" test from the Supreme Court's decision in Dennis v. Sparks. This test is more demanding than the test provided by international law, since it would require not only that the private actor not only aided the state, but that he had the same specific intent as the state to violate the victim's rights.

There is, however, a third alternative. As I shall argue in my next column, the ATCA is actually primarily about tort, just as its name indicates -- not about international human rights or constitutional law. Accordingly the third approach, and in my view the correct approach, comes from tort law, and not these other sources.

The Alien Tort Claims Act occupies a unique position in the law. It creates a private law claim of extraordinary reach that imposes American tort concepts (such as punitive damages) on the rest of the world. If it is at all a justified exercise of American sovereign power, it must be grounded in our national private law.

Our constitutional law recognizes this. To see this, just look at the Section 1983 cases cited by the courts applying the ATCA. They, in turn, rely on the Restatement of Torts--specifically, Section 876 of the Restatement, which is entitled, felicitously, "Persons Acting in Concert."

With Section 876, tort law has long ago considered and resolved the "joint action" problem, and it is its approach - not those of Section 1983 or international law - that should be applied.

I will also discuss in that column how the answers we can get from tort law can help us insure that the ATCA makes sense not only to us, but to the rest of the world. That is, of course, an important consideration when American courts are trying cases based on wholly on events that occurred abroad, as in the Holocaust slave labor and South Africa apartheid cases.

Anthony J. Sebok, a FindLaw columnist, is a Professor of Law at Brooklyn Law School, where he teaches Torts, among other subjects.

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