JURIST Guest Columnist Kenneth S. Gallant of the University of Arkansas at Little Rock, William H. Bowen School of Law says that careful delineation of the application of extraterritorial law is the key to its predictable application ...
n two recent cases, Kiobel v. Royal Dutch Petroleum
and Morrison v. Australia National Bank
, the US Supreme Court reaffirmed the presumption against extraterritorial application of federal statutes. The presumption applies unless there is a demonstration of Congressional intent for the statute to apply extraterritorially.
But the Court did not set out an explicit standard for when the application of a statute is "extraterritorial." So, we have a rather important question: What do we mean by "extraterritorial application" of a statute, or any other law for that matter?
Early English common law, at least the criminal side of it, treated itself as completely territorial. If any matters constituting what we moderns would call "elements" of a crime occurred outside England (or, even more restrictively, the venue of the court hearing the matter), the court could not hear the case. In the famous Lacey's Case of 1583, the defendant attacked a man on board an English ship, but the victim did not die until reaching land. Neither the Admiralty Court nor the common law courts could convict the defendant of murder, because the death did not occur in the Admiral's jurisdiction, and the attack did not occur in the jurisdiction of a common law court. Essentially, the extraterritoriality of one element made the crime itself extraterritorial, and not punishable by the common law. An Act of Parliament was required to create English criminal law as to crimes with any foreign elements, and a presumption against extraterritoriality applied unless the intention of Parliament to do so was clear. [Michael Hirst, Jurisdiction and the Ambit of the Criminal Law (Oxford Univ. Press 2003), pp. 3-10, 29-32. Print Only]
On its own, for an island nation before the age of instant communication and easy transportation, this idea has some logic. In England, the presumption against extraterritoriality is so well known to Parliament that an intent to cover extraterritorial acts is usually made clear. On the other hand, too many crimes and civil wrongs today involve the crossing of borders, and our statute writing tradition is too different from England's to make this very tough version of the presumption practical. Too many cases are likely to fall through cracks, at least if all nations whose territory is involved in a crime or other wrong use a presumption that all elements of a wrong must occur on their own territory before it violates that nation's law.
Some American states, dealing with "result" crimes such as murder and with personal injury torts, came up with the idea that where a crime or tort crosses borders, the wrong could be "localized" to the place where the wrongful force "took effect." For example, the crime of false pretenses might be said to have been committed where the property was obtained rather than where the messages containing the false pretenses were written [Harvard Research, Jurisdiction with Respect to Crime, 29 AJIL Supp. 435, 488-90 (1935). Print Only]. A tort might be said to have occurred where a train coupling injured the rail worker, rather than where the coupling was negligently handled. In each case, the consequence of the localization is that the law of one place was chosen as applicable to the problem.
This is like the fact pattern of Morrison v. National Australia Bank. The plaintiffs there alleged that they were defrauded on stock deals where some of the key lies originated in the US, but the wrongful result of those lies on plaintiffs occurred when they bought shares on foreign stock exchanges. The Court discussed the presumption against the extraterritorial application of statutes, but never said that the foreign effect of the wrong was either necessary or sufficient to invoke the presumption. Because all nine justices agreed that Congress intended to apply the Securities and Exchange Act of 1934 only to trades on US exchanges or other trades in the US, the appropriate result would have been reached without application of the presumption.
It is hard to accept the "presumption" as it emerges from this reading of Morrison. It would mean that Congress is presumed not to prohibit bad conduct in the US, unless the wrongful results of that conduct also occur here; though Congress would also be presumed to prohibit the same conduct overseas, so long as the wrongful results occur here.
This would contradict a central tenet of territorial sovereignty itself. The government of a territory is authorized to make law concern persons and things present in the territory; and acts committed and events occurring there. No modern nation can be presumed to give up this authority; but the presumption, if applied regularly to facts like Morrison's would exclude the application of some statutes to persons and actions in the US. In other words, authority to control acts occurring within the country is at the core of a nation's legislative authority. Many US states accept the view that either criminal acts done or results occurring in the state bring the crime within the ambit of the states' criminal law. [Harvard Research at 494-97. Print Only]
Another reading of the Morrison presumption is that it applies where the "focus" of the federal statute is on either acts or effects in the US. If this is true, then there really is no need for a presumption against extraterritoriality because it has already been determined that there was no Congressional intent to apply the statute extraterritorially. However, the continuing vitality of the doctrine in Kiobel suggests that the presumption does have real, independent meaning.
The following version of the presumption would give it real force. It would also make the presumption appropriate in the context of the tradition of US statute drafting, and the view that a nation or state may treat as territorial a crime or cause of action in which either the wrongful act or prohibited result occur on its territory:
If a federal statute declares certain acts to be bad or prohibited, and certain results of acts to be wrongful, the application of the statute remains in the core of US lawmaking authority if either an act-element or a result-element of a crime or cause of action occurs in the US. The presumption against extraterritoriality, then, would come into play when no element occurs in the US. Once the presumption is invoked, it can be overcome only if there is clear evidence of congressional intent that the statute should be applied in the given circumstances.
In Kiobel v. Royal Dutch Petroleum, an Alien Tort Statute case, the wrongful acts alleged were done in Nigeria and the wrongful results (including death) occurred there as well. Given the history of common law jurisdiction to prescribe as focusing on territoriality, it makes sense to presume that the ATS does not apply, unless there is evidence that Congress intended it to apply to this type of situation. The material in the concurrence in the result suggesting that there are some truly extraterritorial claims that Congress did intend the ATS to cover should go to rebutting the presumption when those cases are brought to court; but a presumption against extraterritoriality should exist as to application of a US statute to a case with no domestic elements. Application of the presumption in these cases will help put to rest the fear of many Europeans that the US will generally apply its own law even where the effects on the US are indirect or remote.
The presumption against extraterritoriality does not prohibit prosecutions of crimes committed outside the US on acceptable bases such as nationality jurisdiction, protective jurisdiction, passive personality jurisdiction (especially where US nationals are victims of terrorism abroad), or even universal jurisdiction. It simply requires that Congress manifest its intent to extend the ambit of the relevant US statute to such cases. Nor does a presumption as stated here upset the common law rules which, in private law cases, allow cases to be adjudicated in federal or state court using foreign rules of decision: i.e., it does not upset general "choice of law" rules.
A carefully delineated presumption against extraterritorial application of US laws can assist those acting outside the US in determining when their acts, and the results of their acts, may subject them to US law. Especially in criminal law, where certainty of application is vital both to fairness to defendants and to the deterrent effect of statutes, this is a good thing.
Kenneth S. Gallant is Professor of Law at the University of Arkansas at Little Rock, William H. Bowen School of Law. He is currently writing a book on jurisdiction over transnational and international crime with the working title Whose Law Must I Obey?
Suggested citation: Kenneth S. Gallant, What Exactly is "Extraterritorial Application" of a Statute?, JURIST - Forum, May 28, 2013, http://jurist.org/forum/2013/05/kenneth-gallant-extraterritorial-application.php.
This article was prepared for publication by Dan DeRight, an associate editor for JURIST's academic commentary service. Please direct any questions or comments to him at firstname.lastname@example.org