Bradley and Goldsmith’s Disturbing Editorial About Khulumani

by Kevin Jon Heller

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.

http://opiniojuris.org/2009/04/18/bradley-and-goldsmiths-disturbing-editorial-about-khulumani/

16 Responses

  1. KJH argues, “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.”
    Your argument is laughable on its face.
     
    Bradley and Goldsmith (“B&G”) cite to the democratically-elected South African government for the proposition that permitting this case to go forward would undermine the TRC.  You cite to the “majority of South Africans” as a rebuttal.  Forgive me, but I don’t remember polling results (or whatever was used) being relevant to determining a foreign government’s position.  The South African government has one position and, according to you, a majority of South Africans has the contrary position.  And that makes your opponents’ argument “remarkably disingenuous”?  That is quite funny. 
     
    So, what now?  When US Courts evaluate another country’s interest and position on a case in our courts, our courts should look to or conduct polling in the other country?  After all, citing the foreign government in question is sometimes “remarkably disingenuous” according to you.
     
    Wow, talk about creating friction between national governments . . . 

  2. 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 principle isn’t the same, in that the federal government made it illegal to do business with Al Qaeda, but not with the South African government at the time.  

    As for what we “really want,” do we “really want” 12 random jurors, rather than Congress, to decide whether to impose sanctions on a foreign government?  Because the upshot of this decision is that a federal jury would be deciding whether Americans could do business with various countries, regardless of the considered decision of the Congress and the executive branch.

  3. I agree with David’s comment above, but even ignoring the legal/illegal distinction, I find your analogy laughable. Selling a truck or a computer, two devices which are used for a large variety of things that have nothing to do with violence or human rights violations is vastly different from selling a chemical or biological weapon.

    Tort liability is premised on a finding of some duty of care towards the plaintiff. I am comfortable with some enhanced duty beyond the standard arms-length commercial dealing we normally use when the firm is selling weapons whose primary purpose is to destroy, but computers and trucks?

    I realize the standard is knowingly, and the argument is they “knew” what they were using the merchandise for, but I believe there should be something more, such as altering the design of the products to facilitate the governments actions.

    Also, what about the shareholders of these companies? Why should these companies turn down lucrative contracts which will then be fulfilled by other corporations in foreign jurisidictions anyway?

  4. HLS,

    The only thing laughable is your inability to understand even basic arguments.  B&G discuss the impact of the litigation on the foreign relations between the US and SA and the impact of the litigation on SA’s “efforts to move its society forward.”  I addressed both points, yet you simply ignore everything I said about the latter.  I guess, in your view, social reconciliation doesn’t actually require, you know, reconciliation.  Whatever the government says is good for the country is good for the country.  That’s an interesting view.

    David,

    Fine.  Change the hypothetical: a US corporation sells part of a chemical or biological weapon to the Saudis, knowing that the Saudis willl pass it along to al-Qaeda.  No legality problem.  Stlll think the corporation should be immune from liability?

    Law Student,

    I appreciate your rebutting your own argument in the third paragraph.  As for your argument that you believe there should be something more — so what?  That’s not the customary standard.  But I’m sure the corporations that knowingly supported the Nazi regime would have much preferred yours.

  5. The comments about the legality/illegality distinction also show little understanding of the international community’s reaction to the apartheid regime.  Apartheid was considered a crime against humanity under customary international law for much of the time that the defendants were knowingly doing business with it  (when exactly the norm crystallized is, of course, open to some debate).  So the original al-Qaeda analogy still stands.

  6. KJH,

    I understood your argument just fine; unfortunately, it makes little sense.

    In essence, you are arguing that when a US court determines the interests of the foreign country, it should ignore the foreign government’s opinion when the popular opinion of the other country might suggest a different result.  That is ridiculous! 

    You might have an argument where the foreign government is a totalitarian government but for a democratically elected and accountable government such as South Africa? 

  7. And, you should be careful about criticizing others’ ability to understand arguments.  In only your mind does a specific criticism of a specific body of the UN equate to an “overbroad condemnation of the UN.”  But hey, you get points for trying.

  8. HLS,

    Your lack of reading comprehension never ceases to amaze.  It is patently obvious that B&G were making a political point about SA reconciliation, not a legal one: “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.”

    As for your other “criticism,” my description was based on the entirety of your impressive oeuvre, not on that comment alone.

  9. It certainly seems a little to odd to me that we’re essentially asking the civil courts to imply retroactive sanctions to companies doing business with… a country that has immunized itself over the same matter.

    Nevertheless, it may very well fail to prove liability, even after ATS certification, much like the Talisman Energy case; which was dismissed for lack of evidence, primary, regarding linking the injuries the plaintiffs suffered to actions by Talisman.

  10. KJH,

    I am studying for finals and I wrote that comment quickly, what I am saying is, if the standard is substantially assist, then something beyond selling a truck or computer knowing it may be used for some nefarious purpose should be required.

    I would be careful analogizing between the current case and the WWII cases. For example, I’m sure when IBM sold machinery to the Nazis, it was a much more heavily negotiated and customized deal, simply because of the nature of the technology. When IBM sold computers to the South African government, it was probably the sale of fungible machines and software that were then partially used to track segregated individuals.

    I am not arguing that the court should have dismissed the case for lack of jurisdiction as some commentators on other blogs have suggested, I think the ATS is pretty clear on this point. However, I do think that summary judgment for the defendants is appropriate since the plaintiffs have failed to state a claim, i.e. they have not met the substantial assistance prong. I think that the court will end up adopting a higher standard for substantial assistance in the end.

  11. Hey guys:

    I just want to congratulate everyone for their congenial comments, particularly those who refrain from attacking the author from the safety of anonymity. 

    You all are exemplars of that law school mandate:  if you disagree, do so agreeably. 

  12. I agree, I apologize for my tone in the earlier post, I am just stressed right now.

  13. Law Student,

    For the record, I had no problem with the tone of your post.  I never mind being criticized, even strenuously.  And although I never enjoy having an argument described as “laughable,” you at least had the courtesy to explain why you thought so.  Many other commenters on this blog simply engage in mindless fact- and argument-free diatribe.  That bothers me, not comments like yours.

    Good luck on your finals!

    Kevin

  14. “does anyone really believe that Germany will be upset that German corporations are being sued for aiding-and-abetting gross human rights violations?”
    Are you kidding me? There were already tons of negative reactions in Germany with respect to American Holocaust Litigation. The problem is not whether they can be sued or not.
    The issue is “legal imperialism”: who the hell do these Americans think they are?? With respect to the Holocaust Litigation, American involvement was still more or less accepted, considering the US won WWII and freed Germany after all.
    But South Africa? Why on earth should American courts impose billions of dollars of sanctions on business done between Germany and South Africa, when these two governments have agreed to move forward with Germany supplying lots of investment + development aid in S.A. ???
    The outcry would be more muted if we were talking about normal lawsuits. but here we are (mostly) talking class actions: the plaintiffs lawyers purport to speak and negotiate in the name of the (then suppressed) black majority – but how can an American court designate a lead plaintiff and a lawyer to basically represent the people of South Africa, if the democratically elected government is opposed to the law suit ???

  15. A few years ago the Norwegian prosecution authorities investigated a similar case in connection with alleged torture on Guantanamo. The question was whether Aker Kværner, a Norwegian company, was liable under the Norwegian Penal Code for aiding and abetting through its wholly-owned, American subsidiary Aker Kværner Process Services Inc. This company was the main supplier of electricity and water and provided maintenance (and, reportedly, it also provided fuel for the airplanes were used for conducting extraordinary renditions). 

    As I understand it, the case was dropped on basis of jurisdiction (corporate veil). I am not certain that sounds very convincing, though.

     At least there seems to have been agreement among criminal lawyers that supplying electricity/fuel/water to “torturers” in general (provided that they knew/should have known) may incur criminal liability for a company under the Norwegian penal code.

    http://uk.reuters.com/article/oilRpt/idUKL2086557220070920

Trackbacks and Pingbacks

  1. […] Newsweek’s Stuart Taylor and Evan Thomas preview the issues likely to define the debate on the Senate floor concerning Koh’s nomination. The National Review’s Ed Whelan characterizes Koh’s legal philosophy favoring transnational law as a bait and switch on the American people. Curtis Bradley and Jack Goldsmith reference Koh’s deference to international law in their Washington Post guest column criticizing a Southern District of New York’s refusal to grant a motion to dismiss in a lawsuit brought by the victims of apartheid against companies who did business with the South African apartheid regime. Opinio Juris’s Kevin Jon Heller calls the column “utterly perverse.” […]