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A federal judge in New York has dismissed a series of cases in which plaintiffs sought to recover billions of dollars from a host of companies who did business with the regime in South Africa during the days of apartheid. Southern District Judge John E. Sprizzo found there was no jurisdiction to entertain the cases because there had been no showing that the companies violated international law. The cases were brought under the Alien Tort Claims Act against companies including IBM and CitiGroup Inc. Judge Sprizzo said the plaintiffs, victims of apartheid who sought more than $400 billion in damages through eight cases, had shown “little that would lead this Court to conclude that aiding and abetting international law violations is itself an international law violation that is universally accepted as a legal obligation.” The 43-page opinion disposes of actions filed under the Alien Tort Claims Act in different federal courts and then consolidated before Sprizzo by the Judicial Panel on Multidistrict Litigation, under MDL No. 1499. The complaints alleged that the companies, at a minimum, benefitted from the apartheid system’s emphasis on maintaining a pool of cheap black labor to serve the interests of the ruling white minority. The plaintiffs also charged that the companies supplied resources such as technology, money and oil to the South African government, or entities controlled by the government, and thereby sustained and fostered the oppressive regime. Another allegation was that companies, whose sites of operations were considered “key points” by the regime, were required to provide high levels of security to guard against civil unrest and uprisings. The companies also were required to provide storage facilities for arms and cooperate with the South African Defense Force. The Alien Tort Claims Act (ATCA) was passed in 1789 and gives district courts jurisdiction over civil actions filed by aliens for torts “committed in violation of the law of nations or a treaty of the United States,” such as piracy or offenses involving ambassadors. In recent times, the 2nd U.S. Circuit Court of Appeals has taken a prominent role in interpreting a more expanded view of the act, beginning with its conclusion that torture by state officials violates the law of nations and is thus actionable under the act in Filartiga v. Pena-Irala, 630 F.2d 876 (1980). Courts in the 2nd Circuit have since found that genocide committed by private actors is also actionable under the act. MISSING LINK The U.S. Supreme Court case of Sosa v. Alvarez-Machain, 124 S.Ct. 2739 (2004), is the most recent case to confront the issue of how far a statute that began as purely jurisdictional can be extended in the modern context. It also outlined several considerations for district court judges to consider in analyzing jurisdiction under the act. “While it would have been unquestionably preferable for the lower federal courts if the Supreme Court had created a bright-line rule that limited the ATCA to those violations of international law clearly recognized at the time of its enactment,” Judge Sprizzo said, “the Supreme Court left the door at least slightly ajar for the federal courts to apply that statute to a narrow and limited class of international law violations beyond those well-recognized at the time.” However, he said, “while the Sosa decision did not deliver the definitive guidance in this area that some had come to expect, nevertheless, it does dispose of the issues” raised by the defendants’ motions to dismiss in the apartheid cases. The plaintiffs, Sprizzo said, “alleged a virtual cornucopia of international law violations,” including genocide and torture. But they failed to link the companies in any meaningful way to those violations, he said. Concerning the defense of “key points,” the judge said that “this activity alone does not constitute joint action with the apartheid regime to commit the slew of international law violations that are complained of.” And because the defendants “did not engage in state action,” he said, they had to show either that the companies aided and abetted international law violations or that simply doing business in apartheid South Africa amounted to violations of the law of nations that are, in the words of the Sosa court, “accepted by the civilized world” and defined with a specificity comparable to the problems that led to the passage of the act, such as piracy and crimes against ambassadors. The plaintiffs in the apartheid cases, Sprizzo said, had done neither. The judge first rejected that the act allows for aiding and abetting liability. And then, even though the companies did business in South Africa at a time when the United Nations General Assembly was passing non-binding resolutions telling them to stop, he said, “it is clear from history and from the factors announced by the Court in Sosa … that the opinions expressed in these resolutions never matured into customary international law actionable under the ATCA.” Among the firms representing the three plaintiffs groups were Cohen, Milstein, Hausfeld & Toll in New York; Fagan & Associates in Short Hills, N.J.; and Nagel Rice Dreifuss & Mazie of Livingson, N.J. A host of law firms represented dozens of defendants. Among them were White & Case for Citigroup and Cravath, Swaine & Moore for IBM.

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