The NAM joined with 5 other business groups 2/11/08 urging the Supreme Court to review a Second Circuit decision that allows a lawsuit against dozens of American companies under the Alien Tort Statute (ATS). That statute allows foreign nationals to use U.S. courts to sue for violations of international law, but there is no clear statement of what international law is. It is up to the courts to try to divine the scope of ATS suits. This case arose when individuals from South Africa sued American companies that simply did business with the South African government, contending that such activity constituted "aiding and abetting."
Our brief urged the Supreme Court to step in and rule that this issue should not be decided by U.S. courts. First, the U.S. Government had a policy that encouraged American companies to engage in commerce in South Africa in accord with the Sullivan Principles that promoted racial integration and social justice. Were our courts to impose liability on companies for doing so, that action would directly conflict with the international relations policy of our government. The Executive Branch is responsible for U.S. foreign policy, and litigation under the ATS interferes with that function.
Second, the lower courts have not adopted a consistent position on whether and to what extent international law punishes activity that might be considered "aiding and abetting." Supreme Court review is essential to sort out this potentially wide-ranging inquiry into the international trade activity of domestic companies.
The lower court's ruling in this case seriously threatens the ability of the Executive Branch to carry out foreign relations policies that rely on the cooperation of the private sector. Courts that refuse even to consider the views of the Executive Branch at an early stage of ATS litigation raise the risk of liability for American companies trying to do business in countries approved by the Executive Branch for commerce and trade.
On May 12, four Justices of the Court recused themselves from the case, and since a quorum of 6 was lacking, the lower court decision was affirmed as if by an equally divided court. The case will now go back to the trial court for continued proceedings. The issue of aiding and abetting liability under the Alien Tort Statute remains unresolved.