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Published online by Cambridge University Press: 20 January 2017
In response to the 1991 Supreme Court decision resuscitating the presumption against extraterritoriality [hereinafter “PAE” or “presumption”], EEOC v. Arabian American Oil Co. (Aramco), Larry Kramer described the presumption as an anachronism—a throwback to the strict territorialist approach to choice of law that prevailed before the mid-Twentieth Century but has been mostly abandoned since then. The title of his scathing article, Vestiges of Beale, referred to Joseph Beale, the Harvard Law professor and reporter of the First Restatement of Conflict of Laws, whose since-discredited theories underlay that Restatement’s approach to choice of law. In the cases since Aramco, the Court has strengthened and expanded the presumption. With its decision in RJR Nabisco v. European Community, it is fair to say, the Court has out-Beale’d Beale.
1 EEOC v. Arabian American Oil Co., 499 U.S. 244(1991)
2 Kramer, Larry, Vestiges of Beale: Extraterritorial Application of American Law, 1991 Sup. Ct. Rev. 179, 184 (1991)Google Scholar.
3 RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090 (2016).
4 See, e.g., Allstate Ins. Co. v. Hague, 449 U.S. 302 (1981).
5 See Symeonides, Symeon, Choice of Law in American Courts in 2015: Twenty-Ninth Annual Survey, 64 Am. J. Comp. L. 221, 291 (2016)CrossRefGoogle Scholar (only 10 states adhere to First Restatement approach in tort cases and 12 in contracts cases).
6 See id. (24 states adhere to Second Restatement approach in tort cases and 23 in contracts cases).
7 Id.
8 See American Banana Co. v. United Fruit Co., 213 U.S. 247 (1909).
9 See, e.g., Lauritzen v. Larsen, 345 U.S. 571 (1953).
10 See Vermilya-Brown Co. v. Connell, 335 U.S. 377 (1948).
11 See Kramer, supra note 2, at 215-217.
12 Hoffman-La Roche Ltd. v. Empagran S.A, 542 U.S. 155, 168 (2004). As the Court explained, “[t]he legally and economically technical nature of that enterprise means lengthier proceedings, appeals, and more proceedings to the point where procedural costs and delays could themselves threaten interference with a foreign nations’ ability to maintain the integrity of its own antitrust enforcement system.”
13 See, e.g., Neumeier v. Kuehner, 31 N.Y.2d 121, 286 N.E.2d 454, 335 N.Y.S.2d 64 (1972).
14 The Court nevertheless made clear that the question under the PAE is not what Congress “would have wanted,” Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247, 261 (2010), which is the lodestar under governmental interest analysis.
15 The Court maintained that it had already established this point in Kiobel, in which it had inquired into whether a federal common law cause of action to enforce certain norms of customary international law norms applied extraterritorially “even though the underlying substantive law consisted of well-established norms of international law, which by definition apply beyond this country’s borders.” RJR, 136 S. Ct. at 2106, slip op. at 19. This seems to be an implicit endorsement of the “modern position” that customary international law has the status of federal law. If customary international law had no status as federal law in the absence of federal incorporation into our legal system, as revisionists maintain, then Kiobel would have involved a single federal law that simultaneously incorporated and created a private right of action for certain substantive rules of customary international law. Under the revisionist view, Kiobel would not have established the need for a separate showing of the extraterritorial effect of a federal law’s substantive and remedial provisions. On the revisionist view, there was no federal law imposing the substantive obligations involved in Kiobel apart from the law creating the remedy.
16 One of the ambiguities in the RJR opinion is whether a separate showing is also necessary for Sections 1964(a) and (b), which provide for criminal enforcement and civil penalties. Most commentators have assumed that the Court did not contemplate a separate showing of congressional intent for these provisions. But the Court seemed to be drawing a broader distinction between substantive provisions and enforcement provisions. The majority did not say that a separate showing of congressional intent is unnecessary for these governmental enforcement provisions. On the other hand, Justice Ginsburg’s dissenting opinion took the majority to be holding that the no separate showing of extraterritoriality was necessary for those provisions, and the majority did not challenge her reading of its opinion. I will therefore assume that the majority was not contemplating a separate showing of congressional intent for these provisions. The Court did not explain why the PAE permits a distinction between proceedings brought by the U.S. government and others but not between proceedings brought by foreign governmental plaintiffs and those brought by private plaintiffs. See Colangelo, Anthony J., The Frankenstein’s Monster of Extraterritoriality Law, 110 AJIL Unbound 51, 55 (2016)CrossRefGoogle Scholar. For a possible basis for the first distinction, see Stephan, Paul B., Private Litigation as a Foreign Relations Problem, 110 AJIL Unbound 40 (2016)CrossRefGoogle Scholar.
17 See Dodge, William S., The Presumption Against Extraterritoriality in Two Steps, 110 AJIL Unbound 45, 48 (2016)CrossRefGoogle Scholar.
18 Recovery under that section also requires a showing that the defendant committed the predicate acts, engaged in a “pattern” of racketeering activity, etc. If the Court had focused on the place of the conduct causing the injury rather than the injury itself, its holding would have been different. As Justice Ginsburg noted in her dissent, Section 1964(c) incorporated by reference the very same provisions that were incorporated by reference into the substantive provisions of RICO, which the Court found sufficient in that context to rebut the PAE.
19 Spokeo, Inc. v. Robins, 135 S. Ct. 1829 (2015).
20 Such a limitation does not appear to be supported by the majority’s opinion, which discussed the text of Section 1964(c) only to show that it did not reveal a congressional intent that the Section apply extraterritorially. The majority did say that, “if anything,” the fact that Section 1964(c) permits recovery only for injury to “business or property” shows that Congress did not intend this section to be coextensive with the substantive provisions of RICO. See RJR, 136 S. Ct. at 2108, slip op. at 22-23. It is true that Section 1964(c) permits recovery only for a subset of injuries suffered. It is not clear what, if any, relevance this limitation bears on whether the statute further limits recovery to domestic injuries. Nevertheless, the Court’s reliance on this aspect of the RICO right of action might support limiting RJR ‘s requirement of domestic injury to statutes that authorize recovery for only a subset of injuries suffered.
21 See Buxbaum, Hannah L., The Scope and Limitations of the Presumption Against Extraterritoriality, 110 AJIL Unbound 62, 64 (2016)CrossRefGoogle Scholar; Bookman, Pamela K., Doubling Down on Litigation Isolationism, AJIL Unbound 57, 59 (2016)CrossRefGoogle Scholar.
22 Indeed, RJR is reminiscent of the 5-4 decision in Alexander v. Sandoval, 532 U.S. 275 (2001), in which the Court sliced up Title VI for purposes of inferring a private right of action in manner comparable to RJR ‘s slicing up of RICO for purposes of applying the PAE. Congress had expressly created a private right of action for damages under Section 601 of Title VI. Section 602 authorized the Department of Justice to promulgate regulations in furtherance of Section 601, but the Court found insufficient legislative intent to authorize private rights of action for violation of Section 602 and the regulations promulgated thereunder.
23 But cf. Shuette v. Coalition to Defend Affirmative Action and Immigrant Rights and Fight for Equality by Any Means Necessary (BAMN), 134 S. Ct. 1623, 1644-1645 (2014) (Scalia, J., concurring in the judgment) (citing the fact that Carolene Products was decided by a four-Justice majority as a reason not to follow it); North Georgia Finishing, Inc. v. Di-Chem Inc., 419 U.S. 601, 615-19 (1975) (Blackmun, J., dissenting) (similar argument regarding 4-3 decision in Fuentes v. Shevin ).
24 Cf. Seminole Tribe of Florida v. Florida, 517 U.S. 44, 63 (1996) (overruling prior decision because it “reached a result without a rationale agreed upon by a majority of the Court”).
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