Just Call him Antonin Scalia: Anti-Imperialist (in the Extraterritorial Application of U.S. Laws)

by Julian Ku

U.S. courts have long struggled with questions about the extraterritorial scope of U.S. federal law.  Many U.S. laws regulating business activities, most notoriously antitrust law, have been interpreted to apply to conduct outside U.S. territory, even by foreign nationals. And this all has been a constant irritant to foreign nations, who have sometimes complained about the expansive, sometimes imperialistic, application of U.S. law to overseas business activities.

Luckily, that noted supporter of international friendship and comity, Justice Antonin Scalia, has come to rescue with his opinion for the Court in Morrison v. National Australia Bank. Scalia held that the presumption against extraterritoriality applies to federal securities laws, notwithstanding lots of lower court opinions to the contrary in the Second Circuit (the federal appellate court with jurisdiction over New York).  Indeed, the Court seems to be overturning decades of pretty-well entrenched Second Circuit jurisprudence.  (And all members of the court, including the concurring justices, seemed to reject without much regret the U.S. government’s brief that offered an alternative approach to the Second Circuit.  That brief was led by current nominee Elena Kagan).

There is a lot to ponder in this case, which touches on questions of statutory interpretation, federal securities law, and the extraterritorial scope of U.S. statutes. For me, though, the key holding is that, yes, there really is a hard presumption against the extraterritorial application of U.S. laws that requires a very clear statement by Congress to be overcome. As Justice Scalia writes:

The results of judicial-speculation-made-law—divining what Congress would have wanted if it had thought of the situation before the court—demonstrate the wisdom of the presumption against extraterritoriality. Rather than guess anew in each case, we apply the presumption in all cases, preserv­ing a stable background against which Congress can legislate with predictable effects.

It is true most lower courts didn’t seem to believe such a hard clear statement rule existed or that it applied in ALL cases. But they should now.  And I think foreign governments can stop complaining about the expansive imperialistic application of U.S. business law, thanks to Justice Scalia.


3 Responses

  1. Julian,

    Respectfully, I believe you might be overstating things just slightly by characterizing the opinion as requiring a “clear statement.”  After mentioning a ‘clear expression’ by Congress, the opinion states:
    “When a statute gives no clear indication of an extraterritorial application, it has none.”

    I believe there is a distinction between a “clear statement” and a “clear indication.”  If he held a different view of such things — or was less afraid of appearing to encourage forays into legislative history, Justice Scalia might have said clear “intent.” Intent, of course, can be expressly stated in a statute, or clearly implied from the text of a statute and/or the subject being regulated. 

    While I agree that the presumption against extraterritoriality is a strong one and that this opinion reiterates that, I believe there are circumstances where a “clear statement” of extraterritorial applicability is not necessary.  For example, although I have read but not thoroughly searched it, I do not recall any such “clear statement” in the Military Commissions Act, though its extraterritorial application is certainly “clearly indicated” by two provisions. 

    First, 10 USC 948b(a) provides:

    (a) Purpose.— This chapter establishes procedures governing the use of military commissions to try alien unprivileged enemy belligerents for violations of the law of war and other offenses triable by military commission.

    Next, 10 U.S.C. 948c provides

    Any alien unprivileged enemy belligerent is subject to trial by military commission as set forth in this chapter.” (emphasis added)

    “Alien unprivileged enemy belligerents” are more often found outside the U.S. and, if we are lucky, that is where most of their law of war violations occur.  “Any” presumably means regardless of nationality and wherever located.  I am not sure these count as a “clear statement” regarding extraterritorial jurisdiction or applicability, however.  Nothing I can find in the general provisions directly addresses extraterritorial applicability.

    More closely related to this opinion, references to the crimes triable by Chapter 47A military commissions also fail to provide a “clear statement” regarding their extraterritorial applicability.  10 U.S.C. 948d addresses only who and what may be tried (“A military commission under this chapter shall have jurisdiction to try persons subject to this chapter for any offense made punishable by this chapter…or the law of war”) and temporal applicability  (“whether such offense was committed before, on, or after September 11, 2001”).  The provision defining offenses is similar. 10 U.S.C. 950t provides “The following offenses shall be triable by military commission under this chapter at any time without limitation.”

    On the contrary, the Uniform Code of Military Justice clearly says in 10 U.S.C. 805 (Territorial Applicability of this Chapter) that “This chapter applies in all places.”  The referenced “chapter” is the UCMJ, Chapter 47.  The Military Commissions Act is in Chapter 47A and is therefore excluded by this text.  Likewise, the War Crimes Act, as amended and codified at 18 U.S.C. 2441, is also clear (“Whoever, whether inside or outside the United States, commits a war crime…”).

    I suspect even Justice Scalia would find the Military Commissions Act, specifically its offenses, to apply extraterritorially.  It must then be remembered that some of those offenses are “violations of the law of war” or “other offenses triable by military commission” which are definitely or arguably not “war crimes” in customary or conventional international law, and are therefore municipal laws being applied extraterritorially.

  2. I freely admit to that legal naïveté characteristic of scientists (natural lawyers? legal naturalists?) but, while the writ af a nation legitimately may control its own citizens wherever they are, and the citizens of other nations within its (the defining nation’s) borders, it is hard to see how it may control the actions of the latter outwith its borders.  Or have I missed something?

Trackbacks and Pingbacks

  1. […] “While there is no reason to believe that the United States has become the Barbary Coast for those perpetrating frauds on foreign securities markets,” wrote Justice Scalia for the Court, “some fear that it has become the Shangri-La of class-action litigators for lawyers representing those allegedly cheated in foreign securities markets.” And hurray for the presumption against extraterritoriality [Ku/Opinio Juris] […]