A Supreme Court Blunder

(Image from Supreme Court website)

The US Supreme Court was to decide last week whether or not they would hear American Isuzu Motors, Inc. v. Ntsebeza, a highly controversial case where 50 US companies are being sued for $400 billion for doing business in South Africa during its apartheid-era. Rather than deciding one way or the other, however, the majority of the court announced on May 12 that the case could not be heard, as too many justices have dropped out of the decision for personal/financial reasons.

The dropouts come from a federal law that bars judges from hearing cases in which they own even a single stock in companies that are parties to the case.
For American Isuzu Motors, Inc. v. Ntsebeza:

• Chief Justice Roberts owns stock in Hewlett Packard
• Justice Samuel Alito Jr. owns stock in Exxon Mobil
• Justice Stephen Breyer owns stock in several, including Nestle, IBM, and Bank of America
• Justice Anthony Kennedy dropped out due to his son's employment at Credit Suisse.
  

In order for the court to operate, 6 out of 9 judges need to be present. By default, the Supreme Court could not hear this case. Treating the outcome as a deadlock, the court said the case would be allowed to automatically proceed.

Two big inferences can be drawn from this incident.

First, this should be an eye-opener for activists, especially those who have been pressuring high-profile policymakers and government official to divest from companies. Will this open up a pandora's box for new perspectives and tactics for divestment campaigns?

Second, the Supreme Court just let slip what could have become a landmark case regarding the Alien Tort Claims Act (ATCA), a statute from 1789 that attorneys have been using to sue companies for complicity in human rights abuses abroad. The Supreme Court ruled in 2004 (in the case of Sosa v. Alvarez-Machain) that ATCA cases must be treated with great care as it could impose upon US foreign policy and step on the Legislative and Executive branches' toes. However, class action attorneys have been continuing to use ATCA as grounds to uphold corporate responsibility of US companies and pursue justice for human rights. As the Sosa decision left "the door ajar" for these law suits to continue in US courts, many were awaiting how the Supreme Court would rule for this apartheid case.

More on ATCA to come soon. For now:

• See this comprehensive speech by DOJ Legal Advisor John Bellinger for the US government's cautionary view of using ATCA in human rights litigation.
  
• See Human Rights Watch's page for the perspective on defending the use of ATCA in human rights litigation.