In re South African Apartheid Litigation
56 F. Supp. 3d 331
S.D.N.Y.2014Background
- Plaintiffs are South African nationals (putative classes of apartheid victims) suing U.S. corporations IBM and Ford under the Alien Tort Statute (ATS) for aiding and abetting apartheid-era abuses by South African security forces.
- Plaintiffs allege IBM (via its South African subsidiary) supplied databases, software, training, and policy control from the U.S.; IBM allegedly opposed divestment and circumvented sanctions.
- Plaintiffs allege Ford (via South African subsidiaries and SAMCOR) sold specialized vehicles and parts to South African security forces, coordinated management and supply chains to avoid U.S. sanctions, and exercised U.S.-based control over policies.
- After Kiobel II, the Supreme Court held the ATS has a presumption against extraterritorial application but left open claims that "touch and concern" the U.S. with "sufficient force." The Second Circuit in Balintulo interpreted that standard narrowly.
- Plaintiffs sought leave to amend complaints to allege additional U.S. conduct sufficient to overcome Kiobel; the district court denied leave and dismissed remaining claims against Ford and IBM with prejudice because the alleged relevant conduct occurred abroad and at most established vicarious liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proposed amendments plausibly plead U.S. conduct that "touches and concerns" the U.S. with sufficient force to overcome Kiobel II's presumption against extraterritoriality | Alleged U.S.-based decisionmaking, R&D, policy control, sales strategies, sanctions circumvention, and other affirmative U.S. acts tie the abuses to the U.S. | Allegations merely show corporate control/management and indirect ties; relevant wrongful acts occurred in South Africa and do not satisfy Kiobel/Balintulo | Denied. Proposed facts still show foreign conduct or at most vicarious liability; they do not displace the presumption and would fail to state an ATS claim |
| Whether corporations can be sued under the ATS after Kiobel II | Plaintiffs argued Kiobel II left corporate liability unresolved and district court precedent supports corporate ATS liability | Defendants relied on prior appellate rulings (Kiobel I) and Kiobel II extraterritoriality holding | The court held corporate liability remains an open question in the Second Circuit but that even assuming corporate liability plaintiffs’ claims still fail under Kiobel II/Balintulo because of lack of sufficient U.S. conduct |
| Whether Balintulo (Second Circuit) should control or be rejected in favor of Al‑Shimari (Fourth Circuit) | Plaintiffs urged the court to follow Al‑Shimari, which found ATS jurisdiction where U.S. contractors, U.S. government contracts, U.S. hires, and cover-up conduct tied the abuses to the U.S. | Defendants urged adherence to Balintulo and deference to Second Circuit law of the case | The court followed Balintulo as controlling; distinguished Al‑Shimari on facts (more extensive U.S. ties in Al‑Shimari) |
| Whether leave to amend is futile under Rule 15(a) | Plaintiffs contended new, more detailed allegations cure prior defects and should be freely allowed | Defendants argued amendments would be futile because they repeat the same theory rejected by Balintulo and Kiobel II | The court found amendment futile and denied leave; dismissed claims with prejudice |
Key Cases Cited
- Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (Supreme Court: ATS has a presumption against extraterritoriality; claims must "touch and concern" U.S. with sufficient force)
- Balintulo v. Daimler AG, 727 F.3d 174 (2d Cir. 2013) (Second Circuit: narrow interpretation of Kiobel; corporate U.S. ties insufficient where all relevant conduct occurred abroad)
- Al‑Shimari v. CACI Premier Tech., Inc., 758 F.3d 516 (4th Cir. 2014) (Fourth Circuit: found ATS jurisdiction where extensive U.S. government, contractor, personnel, and cover‑up ties linked abuses to the U.S.)
- Presbyterian Church of Sudan v. Talisman Energy, Inc., 582 F.3d 244 (2d Cir. 2009) (Second Circuit: established heightened mens rea standard for aiding and abetting liability under the ATS)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (Supreme Court: plausibility standard for pleading; conclusory allegations not entitled to presumption of truth)