2nd Circuit Tosses IBM & Ford Apartheid Cases

     
     (CN) – Victims of apartheid in South Africa cannot sue IBM and the Ford Motor Co. in New York because there is no evidence any of the corporations’ alleged offenses occurred in the United States, the Second Circuit ruled Monday.
     Sakwe Balintulo and other plaintiffs sued dozens of multinational corporations under the Alien Tort Statute, claiming that they aided and abetted South Africa’s former racist government.
     Most of those corporations have been dismissed from the lawsuit, with the exception of Ford and IBM.
     The ruling, written by U.S. Circuit Judge Jose Cabranes on behalf of the three-judge panel, cites a 2013 decision by the Supreme Court that significantly limits the reach of the 1789 Alien Tort Statute.
     The original law was adopted to deal with piracy claims in the early days of the American Republic; however, more recently, attorneys have sought to use it to seek redress of a wide array of alleged human rights abuses.
     The panel’s ruling Monday upheld decision by U.S. District Judge Shira Scheindlin, who threw out the cases last year — some of them filed as long ago as 2002, against scores of corporations and individuals — because the conduct complained of occurred overseas.
     The lawsuits tossed by the Second Circuit accused IBM of specifically creating technologies that were aided the South African government’s efforts to keep races separate and unequal. Ford, meanwhile, was accused of providing specialized vehicles to South African security forces and police that were used in enforcing apartheid.
     Ford was also accused of using collaborating with the government to squelch union activity at its assembly plants in South Africa.
     Cabranes said Ford could not be held directly responsible for its subsidiary’s actions because to do so, “would ignore well-settled principles of corporate law, which treat parent corporations and their subsidiaries as legally distinct entities.”
     “While courts occasionally ‘pierce the corporate veil’ and ignore a subsidiary’s separate legal status, they will do so only in extraordinary circumstances, such as where the corporate parent excessively dominates its ‘subsidiary in such a way as to make it a “mere instrumentality” of the parent,'” the judge continued.
     “Here, plaintiffs present no plausible allegations – indeed, they present no allegations – that would form any basis for us to ‘pierce [Ford’s] corporate veil,” he said.
     As for IBM, the panel said while “[i]dentity documents, like those allegedly created by IBM and transferred to the Bophuthatswana government, were an essential component of the system of racial separate in South Africa,” the complaint “alleges, at most, that the company with knowledge that its acts might facilitate the South African government’s apartheid policies.”
     “As we noted earlier, mere knowledge without proof of purpose is insufficient to make out the proper mens rea for aiding and abetting liability,” Cabranes wrote. “Moreover, where the language in the complaint seems to suggest that IBM acted purposefully, ‘it does so in conclusory terms and fails to establish even a baseline degree of plausibility of plaintiffs’ claims.”
     “Indeed, plaintiffs do not – and cannot – plausibly allege that by developing hardware and software to collect innocuous population data, IBM’s purpose was to denationalize black South Africans and further the aims of a brutal regime,” the panel said.
     Representatives of the parties did not immediately respond to requests for comment from Courthouse News.

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