The Second Circuit Court of Appeals dealt a blow to human rights victims when it dismissed Balintulo v. Ford Motor Co. this week. The appellate court distorted Supreme Court precedent, applying an unrealistically and unfairly high pleading standard to a case brought by black South Africans against IBM Corp. and Ford Motor Co. for their roles in facilitating apartheid.
In February, we filed an amicus brief in support of the plaintiffs’ case against IBM. The plaintiffs asserted that IBM aided and abetted the human rights abuses they suffered at the hands of the South African government by creating a computerized national ID system that the white-run regime used for “denationalization.” IBM’s customized technology enabled efficient identification, racial categorization, and forced segregation – the hallmarks of the systematic oppression that stripped South Africa’s native population of its rights.
We believe strongly in innovation and the power of technology to be a force for good. We also believe that technology companies generally should not be liable for what their customers do with their products and services. However, there is a line that some companies cross. As we said in our amicus brief, “U.S. corporations should not enjoy immunity for their purposeful assistance, technological or otherwise, in gross human rights violations . . . Technology has the capacity to protect human rights, but it also can be customized to make violations ruthlessly efficient.”
The Second Circuit upheld the district court’s dismissal of the case with prejudice, which means the plaintiffs cannot refile their complaints. The plaintiffs relied on a law known as the Alien Tort Statute (ATS), which allows a noncitizen to bring a civil claim in U.S. federal court against a defendant that violated human rights laws.
The Second Circuit opinion included two main conclusions, one good and one bad.
On the good side, the Second Circuit rightly concluded that the plaintiffs sufficiently alleged that the defendant took actions in the U.S. that had a “clear link” to the human rights abuses that occurred in the foreign country. The plaintiffs asserted that IBM developed the hardware and software for the national ID system in the U.S. and then transferred the technology to South Africa to be implemented by the government.
This conclusion is consistent with the Supreme Court’s ruling in Kiobel v. Royal Dutch Petroleum (2013) that if a plaintiff wants to hold a defendant liable for human rights violations that occurred in another country under the ATS, the plaintiff must show that the claim “touches and concerns” the United States.
On the bad side, the Second Circuit held that the plaintiffs did not properly plead the state of mind (mens rea) element of an aiding and abetting claim under the ATS. In Mastafa v. Chevron Corp. (2014), the Second Circuit held that a defendant accused of having aided and abetted a human rights violation under the ATS must have had the “purpose” to facilitate the commission of the crime by the principal perpetrator. As the Second Circuit further explained in this case, “Knowledge of or complicity in the perpetration of a crime – without evidence that a defendant purposefully facilitated the commission of that crime – is thus insufficient to establish a claim of aiding and abetting liability under the ATS” (emphasis added).
This stage of the case, however, did not involve the consideration of the merits of the plaintiffs’ claims and the evaluation of evidence. Rather, it was the pleading stage where the courts were obligated to consider whether the plaintiffs’ complaints sufficiently alleged – rather than proved – a violation of the law by IBM and Ford.
In evaluating the sufficiency of the plaintiffs’ complaints on the mens rea element, the Second Circuit cited twin Supreme Court cases, Ashcroft v. Iqbal (2009) and Bell Atlantic Corp. v. Twombly (2007), which held that a civil claim must be “plausible on its face.” Circuit courts have since struggled to interpret these decisions. Legal commentators have critiqued these cases as creating a subjective standard because a claim must be believable at the outset before any hard facts are established. This raises “serious access to justice issues for plaintiffs who must muster the facts without an opportunity to gather evidence through discovery.”
In this case, the Second Circuit took the plausibility pleading standard to its most unjust extreme, using it to justify dismissing the plaintiffs’ complaints. The appellate court stated that the “plaintiffs do not – and cannot – plausibly allege that by developing hardware and software to collect innocuous population data, IBM’s purpose was to denationalize black South Africans and further the aims of a brutal regime” (emphasis added).
Thus, the appellate court said in effect that, at least without smoking gun evidence, under no circumstances would the judges ever believe that IBM could have “purposefully” aided and abetted the human rights abuses perpetrated by the apartheid government. This is an outrageous ruling on a motion to dismiss and creates an unrealistically and unfairly high hurdle for victims of heinous human rights violations – or any plaintiffs seeking justice.
Additionally, as we argued in our amicus brief, “such mens rea can be inferred through circumstantial evidence or potentially proven directly through additional discovery.” It is highly unlikely, given the circumstances at the time, that IBM’s U.S. personnel intended to simply build an “innocuous” computer system:
[The] plaintiffs alleged in their proposed amended complaints that the national identification system was highly customized, requiring close collaboration with the South African government; racial classification was a primary identifying characteristic; and the equipment was leased. Given this, it is certainly plausible that IBM New York understood that the national identification system was built for a client whose goal was to permanently segregate the blacks of the country and deprive them of their rights. The plausibility of purpose gets stronger given IBM New York’s record of taking affirmative steps to enable IBM South Africa or others under IBM’s ambit to service the South African government despite increasing global knowledge and sentiment against the apartheid regime, U.S. sanctions, and the growing public divestment movement.
The Second Circuit wants smoking gun evidence to be recited in the complaints that IBM intended to “further the aims of a brutal regime,” but it is unjust to expect the plaintiffs to have such direct evidence at the outset of the case. That is the purpose of discovery. It is IBM that has the private correspondence and other private documentation that proves the state of mind of its U.S. personnel who approved and worked on the South African project. To expect plaintiffs to have access to evidence at the pleading stage that only IBM possesses is unrealistic and unfair.
The plaintiffs have cited in their complaints the available public evidence – and that alone is sufficiently damning such that the Second Circuit should have allowed the plaintiffs’ case against IBM to move forward. Instead, the Second Circuit dealt a huge blow to human rights victims.