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