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  • Written by  Law.com
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Supreme Court Recusals Hit Home in Controversial Apartheid Suit

For want of a quorum, the Supreme Court on Monday allowed a controversial lawsuit brought by South African citizens to proceed against American and foreign corporations for their role in perpetuating apartheid. The companies, backed by the Bush administration and the South African government, had asked the high court to reverse a 2007 ruling by the 2nd U.S. Circuit Court of Appeals that said the suit could proceed under the Alien Tort Statute.

But in the order released Monday in American Isuzu Motors v. Ntsebeza, four justices -- Chief Justice John Roberts Jr. and Justices Anthony Kennedy, Stephen Breyer and Samuel Alito Jr. -- indicated they had recused themselves from acting on the petition, depriving the Court of the required six-justice quorum. Under the law, when the Court lacks a quorum, the lower court ruling is effectively affirmed -- which means the case remains alive.

Roberts, Breyer and Alito appear to have recused because they own stock in companies that are defendants in the suit, while Kennedy may have bowed out because his son Gregory is a managing partner at Credit Suisse, another defendant.

"We are disappointed that recusals made the Court unable to hear the case and correct the Second Circuit majority's clear legal errors," said a statement from Mayer Brown partner Andrew Pincus, a lawyer for the companies. But Pincus was optimistic that when the case returns to the lower courts, "We believe the district court will quickly dismiss these actions."

Michael Hausfeld, a lawyer representing the South African plaintiffs, said in a statement, "We are pleased with the Court's decision and will do all we possibly can to bring justice to the victims of the horrific apartheid regime." Hausfeld of D.C.'s Cohen, Milstein, Hausfeld & Toll said the lawsuit "seeks to hold those businesses that knowingly aided and abetted the human rights abuses of the apartheid era in South Africa liable for the harms they caused."

More than $400 billion in damages is being sought from companies ranging from Ford Motor Co. to Nestle USA.

Solicitor General Paul Clement had warned in a brief that an affirmance of the 2nd Circuit decision would have "serious consequences for the nation's foreign relations."

As usual, none of the justices stated his reason for recusing. But in Roberts' latest financial disclosure statement, he indicated he owns between $15,001 and $50,000 in stock of Hewlett-Packard Co., a named defendant. Breyer reported owning stock in at least five defendant companies: $50,001 to $100,000 each of Colgate-Palmolive Co. and Bank of America stock; and $15,001 to $50,000 each in BP plc, IBM Corp.; and Nestle stocks. Alito disclosed ownership of less than $15,000 in Bristol-Myers Squibb Co. and $100,001 to $250,000 in Exxon Mobil Corp., also defendants.

In some recent cases Roberts has sold stock to remain in a case, but that did not occur here for unexplained reasons.

It is rare for so many justices to recuse in a single case and thereby prevent a quorum. In recent years, multiple recusals have occurred only in nuisance suits in which the justices themselves were named as defendants or in cases involving judicial pay disputes. In 2001, three justices recused when the death row appeal of Napoleon Beazley came before them, but a quorum was still achieved. The justices who recused had ties to then-4th Circuit Judge J. Michael Luttig, whose father had been murdered by Beazley.

Stock-based recusals have been a long-simmering ethical issue for the justices, prompting occasional calls for them to minimize or eliminate their holdings to guarantee a full Court whenever possible. Because Monday's action had such a dramatic effect on a major case that the Bush administration has said is causing the United States diplomatic embarrassment, the issue may enter the spotlight again.

"Anything that structurally prevents the Court from considering a case like this is unfortunate," says Northwestern University Law School judicial ethics expert Steven Lubet, author of a new book "The Importance of Being Honest."

Lubet says the problem could be alleviated by congressional action to change the recusal law, which now requires judges to step aside even if they own only one share of a conflicting stock. But even that kind of change would not have helped the justices in the apartheid case because their ownership of affected stocks appears substantial.

The other alternative, says Lubet, is for justices to sell their stocks and invest in mutual funds, which in most instances would insulate them from recusal issues.

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