Bridging the Divide: The Case for Harmonizing State and Federal Extraterritoriality Principles after Morrison and Kiobel
43 Pages Posted: 13 Oct 2013 Last revised: 13 Feb 2014
Date Written: February 2014
The Supreme Court’s recent expansion of the federal presumption against extraterritoriality in Morrison v. National Australia Bank Ltd. and Kiobel v. Royal Dutch Petroleum has had an unexpected consequence: In many circumstances, state law may apply abroad far more broadly than does federal law. Thus, even as the Supreme Court has significantly scaled back the reach of federal law abroad, advocates and litigators have awakened to the potential use of state law to obtain relief in disputes occurring partially or largely outside U.S. borders. While procedural difficulties may exist in bringing such cases, those who surmount these hurdles are likely to find that, at the choice-of-law stage, many state courts readily apply their own law or the law of a different U.S. state to disputes with foreign elements.
Thus, in the wake of Morrison and Kiobel, it appears that state law may have greater extraterritorial application than federal law. This result is surely not what anyone would have intended, much less desired. State law applied abroad indiscriminately raises concerns similar to those present when federal law is applied too broadly to foreign disputes. Moreover, extraterritorial application of state law raises issues of unpredictability and lack of uniformity that are present to an even greater extent than when federal law is involved. Because of this, to the extent that U.S. law is to be applied abroad, sound reasons exist for such law to be predominately federal.
Existing state choice-of-law doctrine, however, slights such considerations, giving courts little doctrinal guidance in how to navigate the special issues that are present when an otherwise routine conflicts problem involves foreign rather than sister-state law. At the same time, the federal presumption against extraterritoriality leaves little or no room for taking into account the possibility that state law may apply where federal law does not. With this background in mind, this Article argues that , even as state-law and federal-law approaches regarding extraterritoriality have been growing farther apart, a strong case can be made for greater convergence.
Keywords: conflict of laws, jurisdiction, extraterritoriality
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