The Supreme Court’s Socially Responsible Nondecision

The U.S. Supreme Court’s nondecision May 12 in a case involving major global corporations and victims of apartheid has several socially responsible investing twists and turns.

Corporations, including Barclay National Bank, British Petroleum, ChevronTexaco, Citigroup, Credit Suisse, Exxon Mobil, General Motors, IBM, J.P. Morgan Chase and at least a dozen more, had asked the high court to toss out a lower court ruling that enables victims of apartheid in South Africa to sue these companies for damages in U.S. federal courts.

The class action lawsuits can now proceed, although the Supreme Court did not issue an opinion, pro or con.

The nondecision occurred and the companies’ appeal failed because the Supreme Court declined to hear the case.

Why? It turns out that three members of the 9-member court recused themselves because they own stock in the defendant corporations and a fourth, Justice Anthony Kennedy, would have had to sit out this proceeding because his son works for defendant Credit Suisse, according to published reports.

Because of these justices’ stock holdings in companies that allegedly profited from ties to the racist regime, which transitioned to democracy in 1994, the Supreme Court couldn’t convene a six-justice quorum, which would have been necessary to hear an appeal.

So, the lawsuits can proceed.