Lungisile Ntsebeza et al. v. Citigroup, Inc., et al.

Court	United States District Court Southern District of New York, United States
Case number	1499 (JES)
Decision title	Memorandum Opinion and Order
Decision date	29 November 2004
Parties	Lungisile Ntsebeza, and others Citigroup, Inc., and others Hermina Digwamaje, and others IBM Corporation, and others Frank Brown, and others Amdahl Corp., and others Oerlikon Contraves AG, and others Holcim Ltd., and others Schindler AG, and others EMS AG, and others Exxon Mobil Corporation, and others American Isuzu Motors Inc., and others Khulumani, and others Barclays National Bank Ltd, and others
Categories	Genocide, Human rights violations, Torture, War crimes
Keywords	genocide, jurisdiction, torture, war crimes, aiding and abetting, apartheid, corporate liability, extrajudicial killing, including forced labour, racial discrimination, sexual assault, unlawful detention
Links	Memorandum Opinion and Order

Summary

Who can be held responsible in a Court of law for human rights violations? In this case, victims and relatives of victims of the South African apartheid regime sued several corporations for their involvement in South Africa in the period between 1948 and 1994. They were liable, the plaintiffs reasoned, because the police shot demonstrators “from cars driven by Daimler-Benz engines”, “the regime tracked the whereabouts of African individuals on IBM computers”, “the military kept its machines in working order with oil supplied by Shell”, and so forth. The main legal issue to be solved by the District Court was whether it had jurisdiction over this case under the Alien Tort Claims Act (ATCA), which allows non-Americans to sue in federal Court for a violation of a small group of international norms. The District Court ruled that this case did not fall within the scope of the ATCA for several reasons. They could not be qualified as state agents carrying out illegal state actions, business activities in South Africa during the apartheid era could not be defined as a breach of the ‘law of nations’ under the ATCA and neither could aiding and abetting to an international norm violation.

Procedural history

Three groups of plaintiffs filed actions against several multinational corporations that did business in South Africa during apartheid. The actions were consolidated and transferred to the District Court of New York. The three groups of plaintiffs (the Ntsebeza, Digwamaje and Khulumani) argued that the defendants had violated international law by doing business in South Africa during the era of Apartheid and by providing the government with resources.

Therefore, they argued, defendants could be subjected to a suit under the Alien Tort Claims Act (ATCA, 28 U.S.C., para. 1350) and other jurisdictional provisions. They sought equitable relief (including production of defendants’ documents and creation of an international historical commission), injunctive relief to prevent defendants from destroying documents and monetary relief.

In July 2003 the majority of defendants appealed to dismiss the actions for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted. The Government of South Africa declared that the suit was interfering with matters in its sovereign interests, although they later decided to support the plaintiffs. The US declared that the case, if continued, would risk “potentially serious adverse consequences for significant interests of the United States”.

Related developments

The plaintiffs appealed, and on 12 October 2007, the Second Circuit Court of Appeals ruled by majority that the District Court “erred in holding that aiding and abetting violations of customary international law cannot provide a basis for ATCA jurisdiction”. This judgment was affirmed by the Supreme Court, on the grounds that it lacked quorum, due to the recusal of four judges with financial interests in some of the defendant companies. On 9 April 2009, the US District Court for the Southern District of New York dismissed the claims against certain companies against whom the plaintiffs sought direct liability for the tort of apartheid, on the basis that international law has yet to definitively establish such liability for non-state actors. Claims against IBM, Daimler, Ford, General Motors and Rheinmetall Group were allowed to proceed. The case has been pending before the Second Circuit Court of Appeals since January 2010, awaiting the Supreme Court’s decision in Kiobel v. Royal Dutch Petroleum Co.. The latter case was decided on by the Supreme Court on 17 April 2013. The Supreme Court ruled that the Nigerian plaintiffs, who had claimed that the Royal Dutch Petroleum Company had been complicit in violating their human rights, may not continue their litigation in US Courts using the ATCA. The impact of this ruling on the Apartheid Litigation case is unclear. A settlement between General Motors and victims of Apartheid was finalised in May 2012.

Legally relevant facts

Between 1948 and 1994, South Africa was ruled by the National Party Government. This party erected a system of Apartheid, under which the rights of the majority black inhabitants were curtailed and white supremacy was maintained. The black inhabitants were repressed as any demonstration or resistance movement was cracked down. The corporations sued in this case did business in South Africa during the Apartheid era (pp. 5-7). The plaintiffs held that “[a]t the least, defendants benefitted from a system that provided a glut of cheap labor” and that the defendants frequently “supplied resources, such as technology, money, and oil, to the South African government or to entities controlled by the government” (p. 8).

Core legal questions

The Court had to rule on the defendants’ motion to dismiss, based on the argument that the Court did not have jurisdiction under the ATCA and that there were no claims stated upon which relief could be granted.

The plaintiffs argued that the Apartheid regime committed international law violations, including forced labor, genocide, torture, sexual assault, unlawful detention, extrajudicial killings, war crimes and racial discrimination, and that the corporations could be linked to these violations in three ways:

Defendants engaged in state action by acting under color of law in perpetrating international law violations;
Defendants aided and abetted the apartheid regime in the commission of these violations;
Defendants’ business activities alone are sufficient to make out an international law violation.

The Digwamaje plaintiffs also alleged defendants’ liability under the Torture Victim Protection Act and the Racketeer Influenced and Corrupt Organizations Act.

Specific legal rules and provisions

Alien Tort Claims Act (ATCA).
Torture Victim Protection Act (TVPA).
Racketeer Influenced and Corrupt Organizations Act (RICO).
Paragraph 1332(a)(3) of Title 28 of the US Code.

Court's holding and analysis

In order to determine the scope of the ATCA, the Court referred to the Supreme Court’s ruling in the Sosa v. Alvarez-Machain. Although the Supreme Court in that case stated that the ATCA could be applied to a narrow and limited class of international law violations, it did not define the violations which fell within the scope of the ATCA (pp. 12-13). Still, the Supreme Court provided some guidelines (pp. 14-15).

The Court ruled that it did not have jurisdiction under the ATCA for several reasons. Firstly, the defendants cannot be regarded as state actors in the commission of international law violations (p. 17). Secondly, the Court did not consider aiding and abetting international law violations as a legal obligation under the law of nations (p. 19). Lastly, the Court held that the plaintiffs had failed to establish that doing business with the Apartheid regime has matured into customary international law actionable under the ATCA (p. 27).

Liability under the TVPA was rejected because the defendants were not operating under the color of law (pp. 30-31). Liability under RICO was rejected, because of lack of jurisdiction and failure to state a claim (pp. 32-33).

Further analysis

Although not referring to this particular case, Martin wrote an article on corporate liability under the Torture Victim Protection Act. Cassel wrote an article on corporate aiding and abetting of human rights violations. Handl also discusses this matter and refers specifically to the apartheid litigation cases. Jenkins wrote on this case from a transitional justice perspective. Simcock also addressed the issue of transitional justice, and assessed whether litigation is consistent with the work of the Truth and Reconciliation Commission. The Court of Appeal’s ruling that indirect liability (such as aiding and abetting) falls within the scope of the ATCA, led to an article written by Knutson.