“this case has the United States written all over it.”

The Supreme Court's decision not to let the European Community sue RJ Reynolds under RICO act was announced yesterday. The ruling is in line with the presumption against extraterritoriality of U.S. law unless Congress was explicit about such provision. Although parts of the law were found to have extraterritorial provision, the Court decided that the EC would have had to feel the effects of the acts (injuries) in the U.S. So though the conduct was planned in the U.S., the effects of it are rendered invisible to the state.

Ruth Bader Ginsburg, dissenting, wrote that “All defendants are U.S. corporations, headquartered in the United States, charged with a pattern of racketeering activity directed and managed from the United States, involving conduct occurring in the United States.” “In short,” she closed, “this case has the United States written all over it.”

full story on the decision here: Amy Howe, Opinion analysis: In the end, RJR prevails in European Community’s RICO lawsuit, SCOTUSblog

This decision, which ably reflects the ideological divide on the Court, pretty clearly relates to the historical fundamentals of the political economy of extraterritoriality in U.S. policy. A central thrust of U.S. doctrine (in service to policy and economic interests) is to limit the reach of the law in a regulatory frame when it is convenient to do so in service to liberated capital beyond U.S. borders. This has been a consistent and unerring feature of extraterritorial decisions by the Court since American Banana in 1909. What is striking in the cases over time is recognition of the basic justice of the argument but a gymnastic effort to insure that law stays constrained when interest demands. Similarly, law's extraterritoriality is unshackled when it is in the state's interest to extend it directly over the effects of business activity (e.g. ALCOA). The ability of the state to hold both positions is always refreshing, no?

I gave a paper on this subject at the Society of American Foreign Relations meeting about nine years ago and have been working on various issues of extraterritoriality since even though my book was focused more on extraterritoriality in criminal jurisdiction. Heading off to give another focused on related issues of extraterritoriality in trade and resource regimes this weekend.