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Private Litigation as a Foreign Relations Problem

Part of: AGORA: Reflections on RJR Nabisco v. European Community

Published online by Cambridge University Press:  20 January 2017

Paul B. Stephan
Paul B. Stephan*
Affiliation:
University of Virginia School of Law
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In RJR Nabisco v. European Community, the Court added an exclamation point to a long term trend in its jurisprudence. It believes, this trend indicates, that private civil suits pose specific foreign relations issues, at least when the targets are foreign transactions and actors, to which the Court will respond by erecting barriers. To this general point the case adds an unsurprising, but still important codicil: These problems don’t go away when foreign states take advantage of the U.S. civil litigation system by acting as plaintiffs.

Type
AGORA: Reflections on RJR Nabisco v. European Community
Information
AJIL Unbound , Volume 110 , 2016 , pp. 40 - 44
Copyright
Copyright © American Society of International Law 2016

References

1 RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090 (2016).

2 The recent lower court decision In the Matter of a Warrant to Search a Certain E-Mail Account Controlled and Maintained by Microsoft Corporation, (2d Cir. 2016) does not fit within this framework. It applied the presumption against territoriality in a way that limits purely public enforcement authority, namely the scope of search warrants authorized by the Stored Communications Act. The case deserves more careful analysis than I have room for here. Suffice it to note that the Second Circuit and the Supreme Court do not seem to be on the same page with respect to the presumption, as shown by the Court’s reversal, either in reasoning or in judgment, of Second Circuit decisions in Morrison, Kiobel, and RJR.

3 EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991). The presumption was a feature of U.S. jurisprudence for many years, but seemed to pass into desuetude after Foley Brothers, Inc. v. Filardo, 336 U.S. 281 (1949), the last case to incorporate it into its holding until Aramco.

4 Civil Rights Act of 1991, § 109 (amending §§ 701 and 702 of Civil Rights Act of 1964).

5 F. Hoffman-LaRoche v. Empagran, 542 U.S. 155 (2004). Justices Scalia and Thomas concurred in the judgment. Justice Breyer’s opinion for the Court indicated that a different outcome will ensue if the foreign injury was not independent of the domestic injury produced by the same course of conduct. Id. at 175.

6 Specifically, his opinion left open the possibility that the plaintiffs could prove that the conspiracy’s “domestic effects were linked to the foreign harm.” Id . What counts as a link, however, remains extremely murky. For a debate on this issue, compare Michaels, Ralf, Empagran‘s Empire: International Law and Statutory Interpretation in the U.S. Supreme Court of the Twenty-First Century , in International Law in the U.S. Supreme Court 533 (Sloss, David L. et al. eds., 2011)CrossRefGoogle Scholar, with Stephan, Paul B., Response Essay, Empagran: Empire Building or Judicial Modesty? , in International Law in the U.S. Supreme Court 553 (Sloss, David L. et al. eds., 2011)CrossRefGoogle Scholar.

7 Morrison v. Nat’l Australia Bank Ltd., 561 U.S. 247, 255 (2010).

8 Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 989 (2d Cir. 1975).

9 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203, § 929P(b) (2010) (amending the Securities Exchange Act to provide extraterritorial jurisdiction in suits by the government involving significant conduct or substantial effects in the United States). There is some question whether this enactment achieved its object. SEC v. Chicago Convention Center, LLC, 961 F. Supp. 2d 905, 909-917 (N.D. Ill. 2013).

10 Three of the seven members of the Court, of course, rejected the distinction.

11 Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013).

12 Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).

13 For more on this argument, see Buxbaum, Hannah L., Foreign Governments as Plaintiffs in U.S. Courts and the Case Against “Judicial Imperialism”, 73 Wash. & Lee L. Rev. 653 (2016)Google Scholar.

14 RJR, 136 S. Ct. at 2108, slip op. at 22.

15 Pfizer Inc. v. Government of India, 434 U.S. 308 (1978).

16 RJR, 136 S. Ct. at 2110, slip op. at 26.