An unusual and unfortunate development at the U.S. Supreme Court today, as four justices recused themselves in an appeal of lawsuits brought by South African nationals against U.S. companies that did business with the South African government. Three of the justices own stock in the affected companies and another has a son who works for Credit Suisse. (AP story.)
When lacking a quorum, the Supreme Court is required to affirm a lower court [2nd Circuit] ruling that went against the companies, many of them major international corporations. Both the U.S. and South African governments also urged the high court to hear the case.
The South African apartheid appeal could affect more than 50 companies sued in 11 separate lawsuits for damages claims that exceed $400 billion. Among those who signed onto the appeal are American Isuzu Motors Inc., a unit of Isuzu Motors Ltd. (ISUZY), Ford Motor Co. (F), JPMorgan Chase & Co. (JPM), Honeywell International Inc. (HON), General Electric Co. (GE) and 3M Co. (MMM).
The lawsuits represent a major interference with the Executive Branch's conduct of foreign policy and open up U.S. businesses to liability claims for doing business in an entirely consistent fashion with that foreign policy.
The National Association of Manufacturers joined other business groups in an amicus brief (available here); the others are the National Foreign Trade Council, USA*Engage, U.S. Council for International Business, and the Organization for International Investment.
The Solicitor General's brief is available at ScotusBlog here.
In an earlier Point of Law post, The Manhattan Institute's Jim Copland argued, "As I expressed in an interview this spring, before the case was decided, the suits are largely driven by "cowboy law professors who want to hijack U.S. human-rights laws. They exploit U.S. courts to get their preferred policies implemented without having to worry about the State Department or Congress." While the latter class of cases -- those against the multinationals -- are the more typical fee-driven sort, many of these cases are also driven by "a feeling of 'I want to be the secretary of state' among these lawyers."
Also, Michael Krauss commented, "Saudi Arabia's barbaric laws mistreat women and viciously oppress non-Muslims. China enslaves millions, harvests organs from thousands it executes, and is still in denial over Tiananmen Square. Warning to all US companies doing business in those places -- did you know you might be committing an American tort? Talk about a tariff barrier to exports!"