• Written by  JONATHAN STEMPEL -
  • Published in In the News
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Ford, IBM win dismissal of 12-year lawsuit over apartheid abuses

(Reuters) - A Manhattan federal judge has dismissed a 12-year-old lawsuit accusing Ford Motor Co (F.N) and IBM Corp (IBM.N) of encouraging human rights abuses in apartheid-era South Africa, reluctantly concluding that the case does not belong in U.S. courts.

U.S. District Judge Shira Scheindlin on Thursday said the black South Africans who brought the case did not show "relevant conduct" by Ford and IBM within the United States to justify holding the companies liable.

The plaintiffs had accused Ford, IBM and other companies of having between the 1970s and early 1990s aided South Africa's former apartheid government in abuses such as killings and torture, by having made military vehicles and computers for government security forces.

"That these plaintiffs are left without relief in an American court is regrettable," Scheindlin wrote. "But I am bound to follow [legal precedent], no matter what my personal view of the law may be."

The case had been brought under the Alien Tort Statute, a 1789 law that lets non-U.S. citizens pursue some cases in U.S. courts over alleged violations of international law.

In April 2013, the U.S. Supreme Court said that law was presumed to cover only violations in the United States, or violations elsewhere that "touch and concern" U.S. territory "with sufficient force."

Four months later, the federal appeals court in Manhattan applied that holding, and said the Ford and IBM cases should be dismissed altogether.

In April, Scheindlin nonetheless gave the plaintiffs one more chance, to meet the new standards imposed by those higher courts.

But in Thursday's decision, she said the bar proved too high, and that any alleged international law violations were by Ford's and IBM's South African units, and occurred abroad.

"It has been 12 years. We're really disappointed, devastated by the decision," said Diane Sammons, a partner at Nagel Rice in Roseland, New Jersey, who represents some plaintiffs.

"The end result of the ruling is that corporations can act abroad with impunity, even if they're totally controlling the activities of their foreign subsidiaries," she added. "I don't think the Supreme Court's decision was that narrowly defined."

She said the plaintiffs had not decided whether to appeal.

Jonathan Hacker, an O'Melveny & Myers partner who represents Ford, did not immediately respond to requests for comment. Keith Hummel, a Cravath, Swaine & Moore partner who represents IBM, did not immediately respond to similar requests.

Germany's Daimler AG (DAIGn.DE) and Rheinmetall AG (RHMG.DE) were dismissed as defendants in December.

Apartheid ended in 1994 when South Africa held its first all-race elections, bringing Nelson Mandela and the African National Congress to power.

IBM's full name is International Business Machines Corp.

The case is In re: South African Apartheid Litigation, U.S. District Court, Southern District of New York, No. 02-md-01499.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)


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