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CORRECTION: We erroneously referred to footnote 21 of Sosa v. Alvarez-Machain as footnote 16 in the ninth paragraph. We regret the error. With varying success, alien tort plaintiffs have linked Western corporations to ethnic cleansing in Sudan and pollution in the Amazon Basin. Now, in a case pending in the U.S. Court of Appeals for the Second Circuit, multinationals are in the dock for propping up apartheid. But if the defendants prevail, South Africa could be Waterloo for the notion that companies can be accountable for human rights abuses outside the United States. The U.S. first authorized damages for overseas torts in 1789, when Barbary pirates preyed on American ships. The Alien Tort Act was imaginatively revived in 1979 by the Center for Constitutional Rights and directed, with mostly symbolic effect, against generals and dictators from countries like Indonesia or the Philippines. Only when a group of Burmese villagers filed against Unocal Corporation in 1996 did the theory begin to target corporations. The villagers alleged that, to build a gas pipeline, the energy company became complicit in a mid-1990s campaign of murder and enslavement by the Burmese military regime. Burma promised to be a generation-defining battle. Unfortunately for those who like their law and morals pure, Unocal settled in 2004. Nor did the U.S. Supreme Court clarify the law on corporate atrocities in its long-awaited construction of the statute. Sosa v. Alvarez-Machain (2004) only rejected an idiosyncratic claim against an individual, and its oracular conclusion that “the door is still ajar” to alien torts is open to interpretation. Ten years after Unocal was sued, the most consequential alien tort question � whether a company can be liable for aiding and abetting human rights abuses � is still unresolved. Without fanfare, the battle over business responsibility renewed in the Second Circuit this winter. The South African Apartheid Litigation seeks a sweeping $400 billion in corporate damages and affirmative action programs on behalf of all nonwhites in South Africa from 1948 to 1994. It has been consolidated with a more carefully designed suit called Khulumani v. Barclay National Bank, Ltd. Khulumani was filed by Michael Hausfeld of Cohen, Milstein, Hausfeld & Toll on behalf of specified apartheid victims against 23 blue-chip companies, including International Business Machines Corporation and Ford Motor Company, that allegedly violated U.S. sanctions and supported apartheid security forces. In late 2004 Judge John Sprizzo of the Southern District of New York dismissed both suits on far-reaching grounds. Borrowing from the Federalist Society bag of fusty metaphors, the judge deplored the potential for “blunderbuss” foreign actions. Sprizzo conceded that U.S. courts must accept alien tort claims based on wrongs, like torture or genocide, that are universally recognized as violations of the law of nations. But he categorically rejected claims based on a corporation aiding and abetting human rights abuses, because “aiding and abetting” is not universally prohibited conduct. Of course, virtually all corporate rights abuses are indirect � rare is the CEO who personally beats a day laborer. If Sprizzo’s logic prevails, corporate counsel can likely kiss one of their favorite bugaboos good-bye. On appeal, plaintiffs counsel Hausfeld urged courts to pursue a two-step inquiry on indirect liability. First, a court should ask whether the underlying violation (like apartheid) is universally condemned. Then, having found jurisdiction, the court should enforce the norm by asking whether a company aided and abetted the violation. David Greenwald of Cravath, Swaine & Moore, who authored the defense brief in the apartheid appeal, scoffs that Hausfeld’s approach is absurdly permissive. “The Supreme Court said that ‘the door is still ajar’ [to alien tort suits],” says Greenwald. “It didn’t say that there are two doors and one is wide-open.” The rejection of indirect liability isn’t the only aspect of Sprizzo’s ruling that worries the human rights bar. The judge gave special weight to the views expressed by the South African and U.S. governments. South Africa wrote in its amicus brief that, as a society, it has rejected reparations in favor of a truth commission and the encouragement of foreign investment. The U.S. echoed South Africa, while frankly adding that America should be free to encourage trade with human rights abusers such as China. In footnote 21 to the Sosa ruling, the Supreme Court suggested that the U.S. president’s views might deserve “case-specific deference” � and it specifically invoked the pending apartheid case as an example. In practice, rights advocates fear that judges will rubber-stamp the views of the U.S. Department of Justice. On appeal, Hausfeld argued that the Sosa footnote was dicta, based on an incomplete understanding of the South African Apartheid Litigation (and not the Khulumani claim). To rebut South Africa’s official position, Hausfeld produced a statement by Archbishop Desmond Tutu that the South African truth commission, which Tutu chaired, did not preclude damage suits against corporations. Putting aside the content of the argument, Hausfeld argued that ” ‘specific deference’ is a radical and dangerous new doctrine,” which gives the executive more power than accepted principles of prudence, at a time when the president needs to be checked. Plaintiffs hope to smother Sosa footnote 16 before it takes on a life of its own. Realistically, the corporate alien tort is in greater danger than footnote 16. Essentially, South Africa has told the plaintiffs lawyers to butt out, and the Supreme Court in Sosa suggested that South Africa has a point. “It’s hard to imagine a case surviving when it has already been rejected by the Supreme Court in a footnote,” says Beth Stephens, a tort professor at Rutgers, The State University of New Jersey School of Law. If Sprizzo is affirmed, plaintiffs will likely seek a rehearing and then a Supreme Court appeal. The precedent might well be hostile to human rights. “I think it’s headed to the Supreme Court,” says tort professor Anthony Sebok of Brooklyn Law School, “and the Supreme Court is sensitive to the needs of corporate America.” The future does not look bright for the corporate alien tort. As Unocal showed, it’s perilous to predict the timing of high noon. But sooner or later the question of aiding and abetting will reach the Supreme Court. The next likeliest case is Galvis Mujica v. Occidental Petroleum Corporation, now on appeal in the Ninth Circuit. Mujica alleges that a 1998 bombing raid on a Colombian village was planned in the oil company’s facilities and aided by a private security company hired by Occidental. As it happens, the lawyer for the Burmese in the Unocal case � Paul Hoffman, of Schonbrun DeSimone Seplow Harris & Hoffman � represents plaintiffs in both Mujica and the apartheid litigation. He isn’t waving a white flag. “Sosa is the absolute beginning of the fight over the alien tort statute,” he says. “We’re going to fight for our lives.” But with the current composition of the Supreme Court, any test claim may be doomed. If aiding and abetting liability is eliminated, plaintiffs could still allege that a corporation committed a tort directly, or that it engaged in state action. But such facts are more easily alleged than proved. Opponents of corporate misconduct may have to fall back on layman’s tactics, like divestment, once employed by antiapartheid protesters. Setting up a shantytown outside IBM or Ford headquarters has a certain raffish appeal. Of course, under prevailing theories of eminent domain, it wouldn’t last long. This article originally appeared in Corporate Counsel’s sibling publication The American Lawyer.

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