Bradley and Goldsmith’s Disturbing Editorial About Khulumani

In today’s Washington Post, Curtis Bradley and Jack Goldsmith have an editorial attacking the recent refusal of a federal judge to grant a motion to dismiss in Khulumani v. Barclays National Bank Ltd, the ATS lawsuit brought by victims of apartheid against 23 corporations who did business with the South African government during the apartheid era.  It’s a remarkably unpersuasive editorial — and in at least one respect, utterly perverse.  Let’s begin at the beginning:

As American taxpayers shell out hundreds of billions of dollars to bail out U.S. companies, a federal court in New York recently paved the way for significantly increasing some of these firms’ financial burdens.

It is revealing that Bradley and Goldsmith begin with an argument that has nothing to do with the legal merits of the case.  Yes, times are hard for three of the corporate defendants — Ford, GM, and JP Morgan Chase.  But what about the other 20?  Should Judge Scheindlin have dismissed the case for all of the corporate defendants?  Bradley and Goldsmith strongly imply that she should.  But why?  And since when did the the exercise of legal rights depend on the overall economic health of the defendant?  That is a remarkably pragmatic approach to the law for two judicial conservatives.  Do Bradley and Goldsmith believe that plaintiffs should be barred from suing troubled corporations who knowingly sell dangerous products?  Who intentionally discriminate against women or people of color?  Who break contracts with healthier companies?

These cases are not merely symbolic — the U.S. corporations have deep pockets and U.S. bank accounts — and present enormous opportunities for judicial meddling in foreign relations. The South African case, brought by class-action attorneys many years after apartheid ended, is a dramatic example. The South African government opposed the litigation on the grounds that it would interfere with the policy embodied by its Truth and Reconciliation Commission, which “deliberately avoided a ‘victor’s justice’ approach to the crimes of apartheid.”

This is a remarkably disingenuous argument — implying that permitting the case to go forward somehow undermines the reconciliation process in South Africa.  As anyone familiar with the history of South Africa’s TRC knows, its amnesty provisions prohibited South Africans from suing the government for civil damages, even though the government was fully aware that the overwhelming majority of South Africans preferred the right to sue to forgiveness.  Indeed, the inability to sue the South African government was one of the primary motivations for bringing the Khulumani lawsuit in the first place.

The Bush administration’s State Department opposed the lawsuit, arguing that it “risks potentially serious adverse consequences for significant interests of the United States” by threatening international economic relations as well as political relations with South Africa and other countries whose firms are defendants. This should have been enough for dismissal. Five years ago, the Supreme Court said in reference to the South Africa litigation that “there is a strong argument that the federal courts should give serious weight to the Executive Branch’s view of the case’s impact on foreign policy.”

Bradley and Goldsmith offer no evidence that allowing the lawsuit to go forward will threaten international economic relations or political relations with other countries, and such an effect seems unlikely.  A number of the defendant companies, for example, are German — and does anyone really believe that Germany will be upset that German corporations are being sued for aiding-and-abetting gross human rights violations?  When two of those corporations are Daimler-Benz and the Dresdner Bank, both of which were leading supporters of the Nazi regime?

To be sure, the lawsuit may have some adverse effect on relations with South Africa.  But I think South Africa needs the US more than the US needs South Africa.  And I’m confident that South African politicians are intelligent enough to know that American courts do not simply do the bidding of the Executive, particularly when it comes to enforcing human rights — after all, the South African Constitution is one of the most progressive, if not the most progressive, in the world.

Bradley and Goldsmith’s argument is also internally contradictory.  In the paragraph quoted above, they claim that courts should give “serious weight” to the position of the Executive.   But later in the editorial they acknowledge that the Obama administration is “unlikely to press for reversal,” given that Harold Koh “joined a brief in the South Africa litigation arguing for broad aiding-and-abetting liability.”  So shouldn’t they be applauding Judge Scheindlin’s decision?

Yet the New York court, unpersuaded, concluded that allowing the lawsuit to proceed “would not contradict American foreign policy in a manner that would ‘seriously interfere with important governmental interests.’ ” Thus it supplanted its foreign policy views for those of the federal government and refused to respect South Africa’s efforts to move its society forward.

Again, this argument makes no sense, given the Obama administration’s likely position and the unpopularity of the TRC’s insistence on extinguishing civil claims.  My favorite, though, is referring to the Southern District of New York, widely recognized as one of the best and most important federal district courts, as a “New York court.”  A wonderfully craven attempt to marginalize the S.D.N.Y.!

More significant, the court ruled that firms were liable for a foreign government’s human rights violations, even if they did not engage in the abuses or intend to facilitate them, as long as companies were aware that their business activities would substantially assist the government’s illegal practices. This put GM and Ford on the hook for supplying trucks that the South African government used to attack anti-apartheid activists, and IBM for providing computers and software that the government used to register and segregate individuals.

This is bad how?  Do we really want corporations to knowingly provide murderous governments the resources they need to commit murder?  Something tells me that Bradley and Goldsmith might be singing a different tune if, say, the defendants in the lawsuit were American corporations who knowingly sold parts of a chemical or biological weapon to a state-financed terrorist group such as al-Qaeda.  The principle, however, is exactly the same.

The underlying acts associated with apartheid are abhorrent. But it is crass retroactivity to say that these firms are legally responsible for actions of the South African government.

This is the most perverse argument in the editorial.  There is nothing retroactive about the idea of holding corporations accountable for knowingly facilitating crimes committed by South Africa’s apartheid government.  After all, as both yours truly and Chimene Keitner have explained — and as Judge Scheindlin correctly found — that is the customary international law standard, one derived in large part from the Industrialist Cases at the Nuremberg Military Tribunals.  How can a theory of liability be “retroactive” — much less “crassly” so — if it was used more than 60 years ago?

Describing an argument made by two eminent legal scholars as “perverse” is strong stuff.  But I don’t know what other word to use.  Not only does the theory of liability being used against the corporations in Khulumani date back to World War II, the lawsuit involves some of the same corporations who knowingly did business with the Nazis — Daimler-Benz, Dresdner Bank (some of whose executives were actually convicted by the NMT), Ford, IBM.  If attacking that theory of liability isn’t perverse, I don’t know what is.

P.S. Further to my final point, note the irony that IBM is a defendant in the Khulumani lawsuit for “providing computers and software that the government used to register and segregate individuals.”  That, of course, is exactly how the Nazis used IBM computers and software prior to WW II — something of which IBM was completely aware, as Edwin Black demonstrates in his seminal work “IBM and The Holocaust: The Strategic Alliance Between Nazi Germany and America’s Most Powerful Corporation.”  Sadly, history does indeed repeat itself.