A US federal court began preliminary hearings on Friday into a multibillion-dollar lawsuit brought by South African apartheid victims against a host of multinational corporations and banks.
Leading the class action — filed against the likes of US firms Citigroup and IBM, Swiss banks UBS and Credit Suisse, and Germany’s Commerzbank and Deutsche Bank — is flamboyant US attorney Ed Fagan.
Fagan, who netted a $1,25-billion payout in 1998 for
Holocaust survivors from Swiss banks, told the court that the apartheid victims’ claims focused on ”the single worst human rights violation in history”.
Figures of anywhere between $50-billion and $100-billion have been bandied around in the apartheid lawsuit, which accuses foreign companies of helping to prop up the former white minority regime in South Africa.
Friday’s hearing under Judge Richard Casey in US District Court here marked only the first stage in the legal process, with any trial still at least six months away.
Fagan was seeking to consolidate his clients’ claims into one single case, arguing that the charges against the multiple defendants rested on a common foundation.
”The facts are identical. The conspiracies are identical,” Fagan said, adding that all the defendants had supplied either equipment or money to a political system, knowing that the system would use them to oppress people.
The class action was filed under the Alien Tort Statute, under which alleged victims of human rights abuses, perpetrated in other countries by non-US citizens or corporations, can file in US courts.
It is being closely monitored in industry circles, amid concerns it could trigger a wave of similar lawsuits against other multinationals that have operated in countries with poor human rights records.
Other companies targeted by Fagan’s team include US computer giants IBM and Unisys, as well as oil major Mobil.
So far only Citigroup, Credit Suisse (US) and UBS have actually been served with suits, and lawyers for all three requested the right to file a motion to dismiss the case as soon as possible.
Opposing Fagan’s request for 45 days to serve all remaining notices and consolidate all the claims, the three firms said the charges required immediate rebuttal given the publicity surrounding the class action.
”These allegations are being used to attack the character and reputation of these corporations,” said Owen Pell, representing Citigroup.
”We believe Mr. Fagan has misstated international law and all these claims can be dismissed.”
Members of the defence team also accused Fagan of using the case as a ”platform for a publicity campaign”.
Judge Casey gave all sides until August 23 to prepare their arguments on how best to proceed with the lawsuit. The five initial plaintiffs — expected to rise in number — have highlighted gross human rights violations such as torture or murder in their claims.
Their main challenge will be to persuade the court of the defendants’ intent to cause human rights violations. Behind the scenes, divisions are widening between Fagan’s team and another alliance representing victims, which accuses Fagan of steamrolling claims through and raising victims’ expectations of large payouts.
Fagan (49) is a controversial figure, who has been variously described as a champion of lost causes and a gold-digging opportunist.
Critics deride him as a publicity hound and his combative character has alienated fellow lawyers in previous class actions.
Admirers, however, call Fagan’s aggressive style in shaming companies and governments the golden key to winning settlements that many had considered impossible. – Sapa-AFP