Boston College Law Review Volume 8 Article 1 Issue 4 Number 4
7-1-1967 The Exercise of Concurrent International Jurisdiction: "Move with Circumspection Appropriate" John M. Raymond
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Recommended Citation John M. Raymond, The Exercise of Concurrent International Jurisdiction: "Move with Circumspection Appropriate", 8 B.C.L. Rev. 673 (1967), http://lawdigitalcommons.bc.edu/bclr/vol8/iss4/1
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O UME III SUMME 6 UM E 4
E E E CISE O CO CU E I E A IO A U IS IC IO : "MO E WI CI CUMS EC IO A O IA E"
O M. AYMO
I. I O UC IO Much has been written about the legal bases of jurisdiction, and there have been a number of articles criticizing the assertion of juris- diction in particular cases or in types of cases.' This article will ex- amine the infrequently treated underlying problem of how a State which claims jurisdiction should exercise that jurisdiction in a case where its exercise may conflict with the legitimate jurisdiction of an- other State. 2 One must start with the basic principle that the territorial sovereign has jurisdiction in every case. "It is an essential attribute of the sovereignty of this realm, as of all sovereign independent States, that it should possess jurisdiction over all persons and things within its territorial limits and in all causes civil and criminal arising within these limits." This universally recognized principle of international A. ., r n t n Un v r t , 6 . ., rv rd Un v r t , 2 M b r, Un t d St t S pr C rt, Un t d St t C rt f App l f r th r t nd rth C r t , nd M h tt r l Adv r t th U.S. M l t r G v rn r f G r n , 48 4 p t l Adv r, p rt nt f St t , 6 60 r r Ch r n, S t n n Int rn t n l nd C p r t v f th A r n r A t n t r r n Int rn t n l , Un v r t f S nt Cl r S h l f . E. ., nh ff, Int rn t n l nd l n Int rn t n l r d t n, 0 C rn ll .Q. ( 64 . An xt n v nd h l rl d n f th bj t f nd n p p r pr p r d b d t n h d r t h th r t , r. . A. M nn, n h h n b r f th d n t n d h r n r r t z d b h x d n th j r d t n f th Un t d St t nd r nt rn t n l l . M nn, h tr n Of r d t n n Int rn t n l , l d C r , A d d r t Int rn t n l ( 64 . 2 S l l , r d t n, I n t nd A t f St t : S t n f r M d f d Appr h, n E n Int rn t n l ( 6 . C p n v r n d v. S.S. "Cr t n " [ 8] A.C. 48 , 4 6 . h pr n pl h b n d r b d b Mr. t Wh t "th d pl b dd d p t l t n nt rn t n l l f th t rr t r l pr f th v r n, p t l t th t h 6 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW l th f nd t n p n h h ll j r d t n l d tr n t b b lt. r dl p n , nfl t r b th r l l pr n pl p r t St t l t t l t x r j r d t n n nv lv n t tt d r t t n x t n n th t rr t r f n th r St t . S n th t th r St t h j r d t n th t rr t r l v r n, t d ff r nt St t ht l j r d t n v r th t t n. h j r d t n l pr n pl h h ht l d t h nfl t nd h h r p rt n nt t th d n r th f ll n : . A St t h j r d t n h n n t t nt l nt f n ff n t pl th n t t rr t r . h ntr v r l pr n pl , rr n l r f rr d t t t th " ff t d tr n ," fr ntl nv d b th Un t d St t ? 2. A St t bj t n t n l t t l h r v r th n t n l h lf b . Mr. Ch f t h , p n f r th S pr C rt, l rl nn n d th t n A r n t z n l v n br d " nt n d t ll n t th Un t d St t . v rt f th bl t n f t z n h p, th Un t d St t r t n d t th r t v r h , nd h b nd b t l d ppl bl t h n f r n ntr ." . A h p h th n t n l t f th St t h fl t fl .° C n ntl , h l h p n th h h th fl St t h x l v j r d t n v r t nd v r th n b rd. Wh n th h p th n th t rr t r l t r f f r n v r n, th fl St t n x r j r d t n th r p t t " ll tt r f d pl n nd ll th n d n n b rd h h ff t d nl th v l r th b l n n t h r"— t r f rr d t th " nt rn l ff r " f th h p— pr v d d th t th tt r "d d n t nv lv th p r d n t f th ntr , r th tr n ll t f th p rt. 4. r n l j r d t n v r p rt b pl d t rd r th p rt t t r t t n n th t rr t r f n th r St t .° b n h r t r z d th t h t n f pr v t nd p bl nt rn t n l l ." n n l d C b v. S bb t n , 6 U.S. 8, 44 46 ( 64 (Wh t , ., d nt n . 4 [ ]h rt f n ntr ... h h h v v n th r r n l l l t n tr tl t rr t r l h r t r, nt rpr t r n l l n th n th t ff n , th th r f h h t th nt f n r n th t rr t r f n th r St t , r n v rth l t b r rd d h v n b n tt d n th n t n l t rr t r , f n f th n t t nt l nt f th ff n , nd r p ll t ff t , h v t n pl th r . h S.S. " t ," .C.I. ., r. A, . 0, t 2 ( 2 . l r v. Un t d St t , 284 U.S. 42 , 4 6 ( 2 . 6 C nv nt n n th h S , Apr l 2 , 8 [ 62] U.S. . & 0.I.A. 2 2, rt. 6. Ib d. S l z , l f C nv n n 8 ( 62 . 8 W ld nh C , 20 U.S. , 2 ( 88 . In M C ll h v. S d d n l d M r n r d nd r , 2 U.S. 0, 2 ( 6 , th C rt r f rr d t "th ll t b l h d r l f nt rn t n l l th t th l f th fl t t rd n r l v rn th nt rn l ff r f h p," t n W ld nh C . Oth r b f j r d t n, n t p rt n nt t th pr nt d n, r th "pr t 6 4 CONCURRENT INTERNATIONAL JURISDICTION
The last situation differs from the first three, because in this fourth situation a tribunal issues an ad hoc order to bring about certain ac- tion abroad, whereas in the other situations general legislation is made applicable to foreign acts. In all four situations, however, there may be a conflict with foreign law or policy. How can these conflicts be avoided? Certain situations may be governed by a treaty giving one or the other State "primary" juris- diction." Even in the absence of such a treaty, some foreign authori- ties take the position that a State may not exercise its jurisdiction in a way that would infringe upon the jurisdiction of the territorial sovereign, and there is some indication in cases that certain of our own courts share this view. This position would certainly minimize unfortunate conflicts and may well become accepted as the rule." On the other hand, the Second Restatement of Foreign Relations Law (hereinafter the Restatement) takes the view that jurisdiction is a fundamental attribute of sovereignty, that a State's sovereignty can- not be limited by dogma unless the principle is widely accepted and firmly established, and that there is no principle of law so accepted and established denying a State the exercise of its legitimate jurisdic- tion, even though such exercise may conflict with the jurisdiction of another sovereign." Accepting the Restatement concept as indicative of the present state of our law, the problem to which this article is addressed is what should be done in practice to alleviate or eliminate the conflicts and hardships that can arise as a result of the exercise of conflicting international jurisdiction. The problem straddles two disciplines—political science and law—but it has been discussed far more often in legal circles. Quite frequently it arises in the area of antitrust. A number of other countries have antitrust laws and policies diametrically opposed to ours and permit, encourage, or even require that which this country prohibits. t v pr n pl ," h v. Un t d St t , 288 .2d 4 ( th C r. , rt. d n d, 66 U.S. 48 ( 6 , nd th " n v r l t pr n pl ," Att rn G n r l v. E h nn, t. Ct. r l , Cr n l C . 40 6 , . , 6 , r p rt d n Ol v r, d l n , 6 A . . Int l . 80 , 808 ( 62 . th f th pr n pl r r n z d nd f ll d b th Un t d St t . In dd t n, th r St t f ll th "p v p r n l t pr n pl ." S Ebb, l t n nd r t t n f Int rn t n l n 82 84 ( 64 . r x pl f v n r xtr d tr n , nh ff, pr n t I, t . h d tr n r n t n d r d l t t b f j r d t n b th Un t d St t . 0 E. ., A O St t f r A r nt, n , , [ ] 4 U.S. . & O.I.A. 2, rt. II, § . A l t n nv lv n n r n l r th r th n tr t t n pr p d b th W r n Gr p n Ant tr t l n Int rn t n l r d f th C tt n Int rn t n l r d nd Inv t nt, S t n f Int rn t n l nd C p r t v , A r n r A t n. 6 r d n , S t. Intl & C p. ., A A 0. S Opp nh , Int rn t n l § 28 (8th d. t rp ht M nn, An l A r n C nfl t f Int rn t n l r d t n, Int l & C p. .Q. 460 ( 64 . 2 t t nt § , nt ( 6 d. § , nt b. 6 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
h r f r , h n th Un t d St t tr t xt nd t nt tr t l t r nd r " ll l" t h h r tt d br d— ft n t f f r n n t n l tt d n th r n ntr —th d f r nfl t h v b n n. h bj t th f l p nt f d l d d r p rt v n b tt f th Int rn t n l A t n t t C nf r n n 64. h r l t n h h f n ll d pt d b th A t n n th bj t ff r d th t "th t n f St t n th f ld r bj t t r l f nt rn t n l l ." S n f ntl , h v r, t r t d t tt n t nl t d f n th ppl bl r l f l b t l t r nd "pr t l th d f r l n t n , r d n r r lv n nfl t b t n St t r n t f th xtr t rr t r l ppl t n f h l l t n."" h Int rn t n l A t n l tr d th pr t l n n r bl l t n. h A r n In t t t , n th th r h nd, h t t d t l t n, r p rt l l t n, principle of law, t f rth n bl l tt r d . S t n 40 f th t t nt pr v d : Wh r t t t h v j r d t n t pr r b nd nf r r l f l nd th r l th pr r b r r n n t nt nd t p n th p rt f p r n, h t t required by international law t n d r, n d f th, d r t n th x r f t nf r nt j r d t n, n th l ht f h f t r ( v t l n t n l nt r t f h f th t t , (b th xt nt nd th n t r f th h rd h p th t n n t nt nf r nt t n ld p p n th p r n, ( th xt nt t h h th r r d nd t t t pl n th t rr t r f th th r t t , (d th n t n l t f th p r n, nd ( th xt nt t h h nf r nt b t n f th r t t n r n bl b xp t d t h v pl n th th r l pr r b d b th t t t . (E ph dd d. It n nd rl n pr f th pr v n th t b th St t h v j r d t n. S t n f th t t nt d l r th t " t t h v n j r d t n . . . x r [ t] . . . n t th t nd n th f t th t n th r t t l h j r d t n, x pt th r
p rt f ft r t C nf r n , Intl . A n 48 ( 64 . 4 Id. t xx x. h rr p nd n r l t n, d pt d n 66, d th tt t pr p "n t hn r pr d r f r th v d n r r l t n f h d p t ." Adv n p rt b th A r n r n h f th l t n Ad pt d t th ft S nd C nf r n , Int l . A n ( l n 66 . 6 6 CONCURRENT INTERNATIONAL JURISDICTION provided by the rules stated in § 40. . . ." This seems to mean that a State which has jurisdiction may exercise it only if it complies with the legal rules set forth in section 40; that if a State fails "to consider, in good faith, moderating the exercise of its enforcement jurisdiction, in the light" of the enumerated factors, it has violated section 40, and is, therefore, exercising its jurisdiction illegally. Since a right of the other State is thus infringed, the latter has an international claim which could be prosecuted through diplomatic or perhaps legal channels against the offending State. Such a result is, to say the least, extremely novel. No authority is cited to support this approach. The cases re- ferred to in the Reporters' Notes on the section deal with considera- tions of comity, fairness, and practicality rather than law. It would seem more in accord with the precedents of international law and the realities of international relations and judicial procedures to say, not that "each state is required by international law" to give consideration to such matters, but that each State should consider them, in the inter- ests of maintaining harmony in international relations, preventing unjust hardship on parties, and avoiding the futile and injudicious act of issuing unenforceable orders. Regardless of whether section 40 should state law or reflect practical policy, its enumeration of the factors to be considered seems woefully deficient. Although it mentions the need to consider whether there will be hardship on a party and whether the desired result can be achieved, it fails to require consideration of the broad problem of whether there will be possible international complications arising from the infringement of another's sovereignty. Section 40 speaks only of two peripheral aspects of the problem—the nationality of the person, and the place where an act to be required in the future will take place. True, it allows consideration of whether the vital national interests of the State are involved, but this would be a very rare case indeed. Furthermore, section 40 deals only with the situation where two States impose conflicting requirements of law. The problem is just as real, however, when a statute or a judicial decision of State A declares illegal an act done in State B by a national of State B that was per- fectly legal there and quite possibly encouraged by State B at the time it was done, even though it may not have been required by law. There is yet another facet that has been overlooked in the drafting of section 40. A state may have certain deeply rooted policies or customs, infringement of which can touch a sensitive nerve of the sovereign and cause perhaps a more severe reaction than infringement of its law. The approach to be followed in this article involves an examina- tion and analysis of situations that have arisen in the past, in order 677 OS O CO EGE I US IA A COMME CIA AW E IEW
to see what considerations influenced the decision makers in exercising their discretion and, in some cases, what considerations should have influenced them. The techniques used to try to avoid conflict will be noted, and their effectiveness discussed. The philosophy and rationale of the decision, rather than the actual holdings, will be stressed. On the basis of such analysis, suggestions will be made as to the most appro- priate and practical solutions to the problem. In considering the situations presented below, two points should be borne in mind. First, the discussion will not involve choice-of-law problems or other matters within the realm of conflict of laws. In choice-of-law questions, the issue is whether the laws of one jurisdic- tion or those of another should be applied to govern the disposition of the case. In the cases to be discussed hereafter, the law to be applied, if any is to be applied, is American law, and the issue is whether, and how, to apply it. Second, except as otherwise made clear by the context, references to jurisdiction do not relate to "personal" jurisdiction over a party in order to adjudicate a dispute, but rather to "legislative" jurisdiction to apply our law or orders to a particular act or situation."
II. E A E I O IA A ICA IO O S A U ES A. M l t r C ° In successive terms, the Supreme Court adopted two contradictory approaches to the question of whether local legislation which limited the working hours of laborers should be applied to our military bases located abroad. The two approaches demonstrate the contrasting philosophies which have persisted in our courts to the present day, one of which tends to provoke international repercussions, while the other deliberately avoids them. r r r n C . v. C nn r raised the question whether the requirement of the Fair Labor Standards Act, which provided for maxi- mum hours of work in interstate and foreign commerce,' applied to labor on our military base at Bermuda. The act expressly applied to the commerce of "any . . . possession of the United States.' The
narrow , question required the construction of the word "possession,"
t t nt § (2 t t : "A t t d n t h v j r d t n t nf r r l f l pr r b d b t nl t h d j r d t n t pr r b th r l ." It n th n f "j r d t n t pr r b th r l " ( . ., "l l t v j r d t n" th t th t r "j r d t n" n r ll b n d h r n, d t n h d fr j r d t n v r p rt ( . ., "p r n l j r d t n" . A t th l tt r, v n M hr n & r t n, r d t n t Adj d t : A S t d An l , rv. . v. 2 ( 66 . l S n r ll Gr n, Appl b l t f A r n t Ov r Ar C n tr ll d b th Un t d St t , 68 rv. . v. 8 ( . U.S. ( 48 . 8 2 St t. 06 ( 8 , nd d, 2 U.S.C. § 20 ( 64 . 2 St t. 06 ( 8 , nd d, 2 U.S.C. § 20 ( ( 64 . 6 8 CONCURRENT INTERNATIONAL JURISDICTION b t th br d r t n h th r C n r nt t xt nd th t nd rd f th t t l b r pl d n l t r b br d. h l f th b n t n h d v n th Un t d St t " ll th r ht , p r nd th r t th n th d Ar h h r n r f r th t bl h nt, , p r t n nd d f n th r f, r ppr pr t f r th r ntr l. . . 2 2° At th t f th n t nt f th r b r St nd rd A t, C n r h d n t n d r d t ppl t n t r v r l t r b . In th b n f n d rn bl n r n l nt nt n th tt r, th C rt r h d th nn r nd nf rt n t n l n th t " t d ff lt t f r l t b nd r t [th t ] . . . v r h rt f r v r h h th p r f C n r xt nd . . . ." 2 . It h ld th t th r d b h ld b d d "p n" f th Un t d St t , nd th t th t ppl d th r .22 Mr. t n r t tr n d nt n p n n n h h thr th r t j n d. In h d nt, h nt nd d th t th Un t d St t h d n t r d, n r d , " h r p n b l t ld r r t p rt t th l nd r l , n t t t n nd l nd t n b nd th n t f ntr ll n l t r b ." h f ll n r, th C rt h d v r l r , b t d d ff r nt nd h r ppr h. Foley Bros. v. Filardo' r d th t n h th r th E ht r ppl d t r d n n A r n l t r b n Ir nd Ir n p r nt t ntr t f th Un t d St t . h l pr v d d th t " v r ntr t t h h th Un t d St t ... p rt . . . h ll nt n" pr v n p f n n ht h r r n d ." In h ld n th t th E ht r d d n t ppl t ntr t f r r n th r , th C rt d v r n f nt ppr h. h n n f n tr t n h h t h th t l l t n f C n r , nl ntr r nt nt pp r , nt t ppl nl th n th t rr t r l j r d t n f th Un t d St t . .. v l d ppr h h r b n xpr d n r n l nt nt b rt n d. It b d n th p t n th t C n r pr r l n rn d th d t n d t n . W f nd n th n n th A t t lf, nd d, n r n th l l t v h t r , h h ld l d t th b l f th t
20 St t. 60 ( 4 . 2 U.S. t 8 . 22 h tr t d th t t t r l t n th t n f r t z n pl r h n br d ll h r , v n th h th pl d nd ntr ll d b th t ht b l n . Id. t 8 . 2 Id. t 4. 24 6 U.S. 28 ( 4 . 2 E ht r , h. 4, St t. ( 2 . 6 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
Congress entertained any intention other than the normal one in this case...... An intention so to regulate labor conditions which are the primary concern of a foreign country should not be attributed to Congress in the absence of a clearly expressed purpose." The Court distinguished r l r n, noting that it only involved construction of the term "possession." Mr. Justice Frankfurter wrote a concurring opinion, joined by Mr. Justice Jackson, in which he said that r l r n should be overruled. He noted that in an applica- tion for rehearing of that case, the Secretary of the Army had pointed out that a number of countries had a scale of maximum wages with which our minimum-wage scale might well conflict.' In r l r n, therefore, the Court had adopted an approach which, by importing American labor standards into a British Crown Colony where labor conditions and policies were entirely different, had created the danger of international complications. l r ., on the other hand, took the view that congressional legislation is meant to apply only within the territorial jurisdiction of the United States un- less a contrary intent is evident. In particular, as that case clearly indicates, courts should not impute to Congress an intent to extend our own social and economic legislation to control aliens in foreign territory. B. S n A t C Although the Seamen's Acts cases are not new, they are presented here because they state principles which should have been followed later in other areas. They involve the question whether these statutes applied to foreign vessels in our ports, and whether they were in- tended to affect transactions which had occurred prior to the ship's
28 6 US. t 28 86. A th S r t r f St t d nl r r t : "W h v n th r th th r t n r th p r— nd I h p n t th d r —t r l t th ff r f th r t f th rld." Addr b n , G r W h n t n Un v r t , 2 p t St t ll. 0 0, 0 ( 6 . 2 A th rd nv lv n r l t r b v r r th r. Un t d St t v. Sp l r, 8 U.S. 2 ( 4 , r d th t n h th r r f ndl nd b "f r n ntr " f r th p rp f th d r l rt Cl A t, h. , 60 St t. 842 ( 46 ( d f d n tt r d t n f 28 U.S.C. , h h x l d d fr t v r l r n n "f r n ntr ." h S pr C rt, h l r f n t v rr l Vennilya-Brown, d t n h d t b n th t th t "p t l t th t th x t v r nt nd l ff t d n tr n f r f v r nt ," 8 U.S. t 22 , nd t h ld th t th f ndl nd b f r n ntr . It th nf r d th t Vermilya-Brown h d p rt d r l b r l l t n nt f r n ntr h v n d ff r nt v r nt . A n t n nd r n f rt r r t n rr n p n n t t n th C rt f r t p t n n Vermilya-Brown. 28 On th bj t f ppl t n f r l t f r n h p nd th r p r nn l, n r ll nd, h Appl t n f O r t r n M r h nt Sh p , 6 . . v. 28 ( 6 . 680 CONCURRENT INTERNATIONAL JURISDICTION entry there. As noted above,' it has been the practice, if not the law, for the territorial sovereign to refrain from exercising jurisdiction over such vessels when the matter related only to the internal affairs of the ship. "A merchant vessel . . . is deemed to be a part of the territory of [the flag State] . when in navigable waters within the territorial limits of another sovereignty,' even though the territorial sovereign may exercise its own jurisdiction if disturbances on the vessel affect the peace of the port. The Dingley Act at one time contained the following provisions: (a) It shall be ... unlawful in any case to pay any sea- man wages ... in advance of the time when he has actually earned the same.... [Such payment] ... shall in no case ... absolve the vessel . . . from full payment of wages after the same shall have been actually earned. . . . (e) This section shall apply as well to foreign vessels as to vessels of the United States. . . . In tt r n v. r E d r ," this section was held applicable, be- cause of its express language, to a British ship which was advancing payments to seamen in one of our ports. However, in S ndb r v. M n ld," when a seaman on a foreign vessel had received an advance abroad, according to his contract, and tried to collect the amount again here, the Court significantly rejected the claim: Conceding . . . that Congress might have legislated to annul such contracts as a condition upon which foreign vessels might enter the ports of the United States, it is to be noted, that such sweeping and important requirement is not found specifically made in the statute. Had Congress intended to make void such contracts and payments a few words would have stated that intention, not leaving such an important regulation to be gathered from implication.' Thereafter Congress amended the statute to provide that advance payment of wages, "whether made within or without the United States," should not absolve the vessel from full payment of the wages after they were earned." Nevertheless, in n v. S.S. "Ar h
2 S t xt p n n n t 8 pr . n Un t d St t v. l r , 28 U.S. , 6 ( . n l A t § 0, 2 St t. , 6 ( 884 , 46 U.S.C. § ( , ( ( 64 . 2 0 U.S. 6 ( 0 . 248 U.S. 8 ( 8 . t Id. t . r h r h nd t n r tt n nt th t t t , Str th rn S.S. C . v. ll n, 2 2 U.S. 48 ( 20 . S l l, Str th rn S.S. C . v. ll n—An Unp bl h d Op n n b Mr. t r nd , 6 M rv. . v. , ( 6 . 4 St t. 006 ( 20 , nd d, 46 U.S.C. § ( ( 64 . 68 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
medes," th C rt, n r f n t ppl th t t f r n v l f r dv n d br d, t t d: " h nd nt . . . d n r f r n h t v r t f r n v l —l ft n h n d nd n f ll f r ll f p r r ph ( h h ... h ld n th Sandberg , nd t d th t th pr h b t n ... nt nd d t ppl t f r n v l nl h l n t r f th Un t d St t . . . ." ° On n th r v nt t nd th t f rth r t v r th p nt, b t th r " t r f d pl t pr t t," nd th b ll ll d. h r l rl l t f t l r n b nd h h th r n t n ll ff r pr t t nd, p bl , r t l t n h n th Un t d St t tr t x t nd t l t t t n d d b th n t n t b r pr p rl th n th r n j r d t n. In S n A t h r th l l t v nt nt n t bl l r, th rt ppl d th t t f r n v l h h r n r p rt . Q t pr p rl , h v r, th h v r t d n nt r pr t t n h h xt nd d th v r f th t t tt r r n br d nl t r r d b th n b l n f th t t t . It h b l r th t h n th r n xt n n, r thr t n d xt n n, f Un t d St t j r d t n t tt r th t n t nl r th n th j r d t n f n th r St t b t h h th t St t b l v r f pr r n rn t t, h t n r pr p d t n n d t rb nt rn t n l r l t n nd r lt n d pl t pr t t nd th r pr r n r t n . C. Prohibition Act Cases h t n l r h b t n A t pr r b d "tr n p rt t n f nt x t n l r th n, th p rt t n th r f nt , r th xp rt t n th r f fr th Un t d St t nd ll t rr t r bj t t th j r d t n th r f f r b v r p rp .. . ."" In Cunard S.S. Co. v. Mellon," t h ld th t th pr v n d t ll l f r f r n h p t nt r r t rr t r l t r nd p rt f, t r , th rr d l r t b ld r d p n d t p n r nd r r r f r th r p rt , th h n d dl t ld n t b ld, d p n d, r nl d d th n r j r d t n. h d n pr v d fl d f d pl t pr t t . A th nl r t St t th pr h b t n p l , th Un t d St t n v t bl t dd th th r t f th nt rn t n l r t n t h n t f rb d th r h p t nt r r t r th l r n b rd. h tt r f n ll r lv d b r f tr t th th ntr nv lv d, tr t h h nt n d pr v n p r tt n th r v l
6 2 U.S. 46 , 4 0 ( 28 . nz v. C p n v r d l , U.S. 8, 46 ( . 8 t n l r h b t n A t § , 40 St t. 0 0 ( . 262 U.S. 00 ( 2 . 682 CONCURRENT INTERNATIONAL JURISDICTION p n t r fr r p rt , r p n thr h r t rr t r l t r , "t h v n b rd l h l l r l t d t r r r d t n d f r f r n p rt, pr v d d th t h l r pt nd r l h l th n th j r d t n f th Un t d St t ." S h tr t , f r , p r d d n pr r n n t nt pr v n ." nt rr nt d. In th f r t pl , C n r h ld h v b n n t v n h t h v nt p t d th f r n r t n, nd h ld h v d p f x pt n l r t th t l t r n rp r t d n th tr t . h ld h v n n nfr n d p n th p rp t b h v d. S nd, th C rt n C n rd h ld h v f nd t v d th nt rf r n th th nt rn l ff r f f r n h p. A th d nt n t t t d: [I]nt rf r n th th p r l nt rn l ff r f f r n h p f d l t n t r , f ll f p b l t f nt r n t n l nd r t nd n nd l l t nv t r t l t n th t n ff r t v n l n n r p t th r f h ld r t p n n th n l th n th l rl xpr d nt nt n f C n r t th t ff t, nd th I n bl t f nd n th l l t n h r nd r r v . . Ant tr t C h rl t n f nt n th nt tr t f ld th f A r n n n C . v. Un t d r t C .," n h h th p n n f th C rt d l v r d b Mr. t l . h p rt r p t n A r n rp r t n . h Sh r n A t r nd r d ll l " v r ntr t ... n r tr nt f tr d r r . . . th f r n n t n ." 4 In h ld n th t t n ppl bl t th t f th d f nd nt n C t , th C rt d th v r p rt nt pr n n nt: In th f r t pl th t n th d r d n , f r pp r , t d th j r d t n f th Un t d St t nd th n th t f th r t t . • • • • [Wh l v l z d] ... ntr tr t r l t n
42 S C v. Un t d St t , 288 U.S. 02, 8 ( . S l [ 2 r n . U.S. ( 8 rth, t f Int rn t n l 6 4 ( 40 . 4 C v. Un t d St t , pr n t 40, t 8 . 42 C n rd S.S. C . v. M ll n, pr n t , t (S th rl nd, J., d nt n . 4 r n x ll nt tr t nt f th bj t, n r ll r t r, Ant tr t nd A r n n Abr d ( 8 . r n th r x ll nt b , v n th G v rn nt p t n, b n h v n h d l n xp r n th th Ant tr t v n f th p rt nt f t , t , r n C r nd th Ant tr t ( 8 . r r pl t b bl r ph f r d l n th th xtr t rr t r l ppl t n f r nt tr t l , p rt, pr n t , t 4 2. 44 2 U.S. 4 ( 0 . 4 26 St t. 20 ( 8 0 , nd d, 15 U.S.C. § 1 (1964). 683 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
b t n th r t z n v rn d b th r n l , nd p t xt nt th ld n t n f p r n l v r nt l v . th n r l nd l t n v r l r l th t th h r t r f n t l f l r nl f l t b d t r n d h ll b th l f th ntr h r th t d n . . . r n th r j r d t n, f t h ld h pp n t l h ld f th t r, t tr t h rd n t t n n t n r th r th n th f th pl h r h d d th t , n t nl ld b nj t, b t ld n nt rf r n th th th r t f n th r v r n, ntr r t th t f n t n , h h th th r t t n rn d j tl ht r nt. . . . . h f r n n d r t n ld l d n f d bt t n tr t n f n t t t nt nd d t b nf n d n t p r t n nd ff t t th t rr t r l l t v r h h th l r h n r l nd l t t p r. "All l l t n pr f t rr t r l. "" Gr nt d th t Mr. t l v r pl f d th h n h r th r ll d p d f j r d t n v r n t n l b ll n t "th ld n t n f p r n l v r nt ," h ppr h t th pr bl f t t t r n tr t n n v rth l v r nd. h r l h ppl d—th t " ll l l t n pr f t rr t r l"—h d b n t bl h d l t nt r rl r n h Ap ll n, 4 nd h d l b n d n l r . It l t r r l th t t ppl . It nd nd l l nd fl x bl n h t p r t ppr pr t x pt n . Wh t h n t b n n v r ll d pt d th t rt n p nt n th n tr t n f t t t d ff lt t nd r t nd. r ft r A r n n n , n Un t d St t v. A r n b C ., th C rt h ld th t th Sh r n A t ppl d t n A r n p n h h h d d r tr t v r nt br d th f r n p n . W th n d n f th , th C rt ppl d th t xtr t rr t r ll . h pp r nt d p rt r fr A r n n n d rv d r f l n d r t n nd d n b th C rt. h l f th d n n nl b ttr b t d t f l r f n l pr p rl t tr th p nt nd t v r ht n th p rt f th C rt. It l v n nf rt n t p n th d v l p nt f r nt tr t d tr n .
46 2 U.S. t . 4 22 U.S. ( Wh t. 62 ( 824 . h C rt th r t t d: " h l f n n t n n j tl xt nd b nd t n t rr t r , x pt f r r rd t n t z n And h v r n r l nd pr h n v th phr d n r n p l l b , th t l b r tr t d n n tr t n, t pl nd p r n , p n h th l l t r h v th r t nd j r d t n." Id. t 0. 48 22 U.S. 06 ( . 684 CONCURRENT INTERNATIONAL JURISDICTION
Extraterritorial application of the Sherman Act was confined to agreements of our own nationals until 1945." In that year, the Second Circuit Court of Appeals decided Un t d St t v. Al n C . f A r , which represents the extreme limit to which the courts have gone in applying our statutes extraterritorially. It is submitted that there was no legitimate basis for the assertion of jurisdiction;" how- ever, for the present it shall be assumed that there was the necessary jurisdiction, and attention will be focused on the question whether the court wisely exercised its discretion when it construed the Sherman Act so as to encompass the Al case. The Al decision held a foreign corporation responsible for contracts, made abroad with other foreign corporations, which es- tablished for each contracting party a production quota for the alumi- num it would produce abroad. The court justified its action on the ground that the production quotas were intended to affect and did affect our import trade.' The decision applied the statute to foreign corporations acting abroad, even though such corporations are not mentioned in the act. This contrasts sharply with the S ndb r and n cases discussed above, where the statutory provision ex- pressly applied to "foreign vessels" but was construed as governing such vessels only while within our territorial jurisdiction.' 40 r r v f th nt tr t nv lv n f r n p t p t 4 , O , Ant tr t r t n f Int rn t n l n , 0 C rn ll .Q. 42 ( 44 . 0 48 .2d 4 6, 4 4 (2d C r. 4 ( n rt f t n fr th Un t d St t S pr C rt f r f l r f r f l f d t . • S nd, A t th r d t n n Al , 6 A . . Int l . 8 ( 6 . 2 It v r d btf l th t C n r , t th t f th n t nt f th Sh r n A t, v n th ht t h th r th t h ld b ppl d t t f f r n rp r t n tt d br d. S n, Extr t rr t r l Appl t n f Ant tr t , r d n , S t. Int l & C p. ., A A 4 , 4 . In nt rpr t n th t n th p nt, th Alcoa rt d: [ ]h nl t n p n h th r C n r nt nd d t p th l b l t , nd h th r r n C n t t t n p r tt d t t d : rt f th Un t d St t , nn t l b nd r n l . v rth l , t t tr th t r n t t r d n r l rd , h th n th A t, th t r rd t th l t t n t r l b rv d b n t n p n th x r f th r p r ... . W h ld n t p t t C n r n nt nt t p n h ll f h t rt n t h, f r nd t h h h n n n th n th Un t d St t . . . On th th r h nd, t ttl d l — [th d f nd nt] . . . t lf r —th t n t t p l b l t , v n p n p r n n t th n t ll n , f r nd t t d t b rd r th t h n n th n t b rd r h h th t t r pr h nd . . . Al t n l t t n f th ppl f d n E r p . . . h v r p r n n th Un t d St t f th r tr d b t n th t . . . . [W] h ll th t th A t d n t v r r nt , v n th h nt nd d t ff t p rt r xp rt , nl t p rf r n h n t ll t h v h d ff t p n th . 48 .2d t 44 44. h rt l d th t th r nt " r nl f l, th h d br d, f th r nt nd d t ff t p rt nd d d ff t th ." Id. t 444. S t xt p n n n t 6 pr . 68 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
There was no American party involved in this aspect of the case, and no act took place within our territory, as the court stated the case. There was not even a positive effect in this country, but only a possible negative effect—a potential failure to have as much aluminum shipped here by the defendant and those with whom it had contracted as might otherwise have been voluntarily shipped. This, of course, was a situation in which we could not require any shipment of aluminum. It would seem that there could not be a more obvious case of reaching out to deal with a matter that was clearly of primary interest to other States—those States where the agreements were made, those States where they were to be performed and where the limitation on produc- tion brought about by the quotas would become effective, and those States of which the parties to the agreements were nationals. In all those States, the agreements were perfectly legal and enforceable. The American Tobacco case had started the departure from the sound precedent of American Banana. By employing the unfortu- nate philosophy of Vermilya-Brown, Alcoa greatly extended this de- parture and interpreted the antitrust laws as applying to matters obviously reached only at the most extreme limits of our legitimate legislative jurisdiction if not, as many believe, beyond them. The wisdom of so doing was, to say the least, very dubious. There is a further objection to an exercise of jurisdiction based, as it was, solely on the claim of adverse effect on our foreign com- merce. In this world of competitive international trade, there is seldom anything that benefits the commerce of one country that does not ad- versely affect the commerce of another. Something more than merely an adverse effect upon our foreign commerce should be shown if our laws are to govern extraterritorial activities of a foreign corporation. It should be remembered that if this country establishes such a principle, it can be invoked by other countries against us." Assume that an American company which had previously been shipping certain goods to Canada, among other countries, made a con- tract to increase its production of such goods and ship all of its output to a concern in Germany—an act which would be beneficial to our foreign commerce, and a contract which was perfectly legal both in this country and in Germany. How would this country react to a decree of a Canadian court ordering the American company, over which it had secured personal jurisdiction, to cancel the contract, assigning as its reason the fact that the transaction adversely affected the foreign commerce of Canada? The doctrine in the Alcoa case would justify foreign legislation subjecting United States nationals to criminal and civil liabilities for such adverse effects. This country could well fall
4 r tz n v. r n, 4 U.S. , 82 ( .
686 CO CU E I E A IO A U IS IC IO v t t n n , f n t n nd, l l d tr n f t n n ." rt n t l th r r n r nt rn t n l r p r n fr Al , b t t rv d th pr d nt f r xtr ppl t n f r nt tr t l n l t r , f h h n t t d tr n bj t n b f r n v rn nt . Un t d St t v. W t h r f S tz rl nd Inf r t n C nt r, In . 6 n nt tr t t b d n ntr t b t n S rp r t n nd th r f r n rp r t n , d nd t b p rf r d n S tz rl nd nd th r E r p n n tr . h S G v rn nt, r , d th f ll n r pr nt t n n th : h f t t n rn t th S C nf d r t n. h tt pt h r b n d t ppl th nt tr t l f th Un t d St t t h ld ll l t n t n ( n S tz rl nd, (b t th b h t nd th th n r nt f th S C nf d r t n nd n nf r t th S l , ( b th S t h nd tr , (d h h b th v rn nt r l t d nd ff t d th p bl nt r t. h t n f th S t h nd tr d n t d r n t n n n t th Un t d St t nd n t d nl t th Un t d St t r th r th t n ff t th rld t l r . h tt pt l b n d t ppl th nt tr t l t h ld ll l ntr t ( d b th S t h n d tr th t h n f t r r n Gr t r t n, r n nd ll dl n G r n nd (b h h d n t nv lv n p rf r n n th Un t d St t . . . .
Cf. t t nt § 8, ll tr t n 8. h G r n C rt l , h h b ff t v n n r , 8, pr v d n § 8(2 : "[ ]h l ppl t ll r tr nt f p t t n, h h h v ff t th n th r t h h th l ppl , v n f th r d fr t d f h r ." p rt, pr n t , t 44 . It pp r th t r Al d tr n lr d h v b n nv d b n th r v r n n th t ht ll pl . rh p t n f nt th t Al d d d n 4 , nd th t r thr r l t r th S pr C rt d d d r l r n. h r t h v x t d n th t d t p t r p r d j d l ppr h t t t t r n tr t n th t nv d th l t r l nt rpr t t n f th rd d f th r r n x pt n p ll d t, t d th t C n r nt nd d t x rt t p r t v r th r t t r l ll p bl . rh p th ppr h th r lt f ff rt b th rt t n tr th r t p r f th r d nt nd th C n r . h r tt nt n h d b n f d n th xt nt t h h v rn nt l p r ld b rr d, r th r th n n th n r l p t x r f th . A lr d n t d, n 48, pr b bl b f nd th ht n th t n, th S pr C rt n l r ., th h nfr nt d th t t t r l n f ll br d th t f th Sh r n A t (th Sh r n A t d th t " v r ntr t . .. n r tr nt f tr d " ll l th E ht r d th t " v r ntr t . . . t h h th Un t d St t p rt " h ll nt n rt n pr v n , n v rth l r t rn d t th pr n pl f A r n n n , th t l l t n pr f d t rr t r l. t Al nd r l r n h v n t t b n xpr l v rr l d. 66 6 Trade Cas. 0600 (S. , .Y. 62 . 68 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
S h ppl t n, n th r th n , ld nfr n S v r nt , ld v l t nt rn t n l l nd ld b h r f l t th nt rn t n l r l t n f th Un t d St t . h rt r t n t th n b n n th f ll n xtr t: If, f r , th d f nd nt t v t h d b n r r d b S l . .. n A r n rt ld h v ... n r ht t nd n th v rn nt l t v t f n th r v r n n t n. In th pr nt , h v r, th d f nd nt t v t r n t r r d b th l f S tz rl nd . . . . In th b n f d r t f r n v rn nt l t n p ll n th d f nd nt t v t , Un t d St t rt x r t j r d t n t t nd ntr t br d, f, n th t b r, h t nd ntr t h v b t nt l nd t r l ff t p n r f r n nd d t r . h t f St t d tr n pr h b t r rt fr x n n th v l d t f t t n b f r n v rn nt th n t t rr t r ." It "r t . . . p n th h h t n d r t n f nt rn t n l t nd xp d n . p r t th v l d t f th t f n v r n St t t b r x n d nd p rh p nd n d b th rt f n th r ld v r rt nl p r l th bl r l t n b t n v rn nt nd v x th p f n t n . "" Wh th r th t r t n b , r r r d b th l f, r t n t th b h t f, r v n f th r r l n r d nd r l t d b th f r n v rn nt, t ld t l ttl d ff r n tt r f pr n pl . r r rt t d l r th t t t n b l n n th r n ntr r ll l h n th t r r r d, ll d f r, r n r d nd r l t d b th r v rn nt t p r l fr ndl nt rn t n l r l t n . Int rn t n l pr t t l r fr In th M tt r f Gr nd r Inv t t n f th Sh pp n Ind .," n h h r nd j r nv t t n th ff t p n th r f th Un t d St t f th h pp n tr d f f r n rp r t n b t n M x n nd p n p rt . h p rt nt f St t r v d d pl t pr t t fr n n n t n nd tr n tt d th t th rt. A t th n
p rt, pr n t , t . 8 6 r d C . t 0600, t 4 6 . t t nt § 4 . 60 O tj n v. C ntr l th r C ., 246 U.S. 2 , 0 04 ( 8 , t d nd f ll d n n n l d C b v. S bb t n , 6 U.S. 8, 4 8 ( 64 . 6 86 . S pp. 2 8 ( . .C. 60 . S t t xt p n n n t 4 nd nfr . 62 p rt f ft r t C nf r n , Int l . A n 8 ( 64 . 688 CO CU E I E A IO A U IS IC IO t nt n th t th n r pr p rl d r t d t rd tr ff n t nv lv n A r n p rt , th rt n t d th t A r n tt n b n h pp d fr M x n p rt , nd th t b r f th n r n l b tt n d r d th v l t v f th Sh r n A t, n th f r n r f th ntr l rl " ff t d. h rt t d Al th r t f r th pr p t n th t n tr ff b f r n rr r b t n M x n nd p n p rt " ff t " A r n f r n r , t n nd r th Sh r n A t ht b r d. h d n n th l t t r bj t t ll th bj t n n t d th r p t t Al . Wh n th Un t d St t d l r l l l f r n ntr t b t n t f r n rp r t n , ntr t h h r l t d nl t t n t b t n br d n ntr h r t p rf tl l l, h n t d l r ll l rr n nt d b f r n n rr r b t r, f r tr n p rt t n b t n t f r n p rt , h h rr n nt r p rf tl l l nd r th l f th St t f r tr f th h p nd nd r th f th p rt n v lv d, h n t th nj t t lf nt ff r l rl th n th j r d t n f th r St t nd f pr r nt r t t th , t t r l nt rn t n l pr t t, nd lt t l r t l t n. E. nh A t C " h nh A t pr v d th t " n p r n h h ll . . . n r ," nfr n r t r d tr d r h ld b bj t t th l b l t pr v d d " r " d f n d t n l d " ll r h h l f ll b r l t d b C n r ." 6 In St l v. l v W t h C .," th d f nd nt St l , n A r n t z n, h r d th nfr n n th pl nt ff tr d r h h r t r d n th Un t d St t b t n t n M x . St l pr d d t h b r n th pl nt ff tr d r h h St l h d r t r d n M x th t h r d nd ld n M x . It ll d th t th d f nd nt t v t dv r l ff t d th pl nt ff b n n th Un t d St t . h S pr C rt, h v r, d d n t, r l n th " ff t " d tr n b t t t d th t "C n r n pr r b n t nd rd f nd t f r A r n t z n pr j t th p t f t l b nd th t rr t r l b nd r f th Un t d St t . 6 h C rt h ld th t th r n nfl t ff nt t pp rt th r nt th t r l f ld " p n f r n l ." h t b n d r d l n th n t r M ll , In . v.
6 86 . S pp. t 4. 4 S n r ll Ol v r, Extr t rr t r l Appl t n f Un t d St t l t n A n t tr t v r Unf r r d r t , A . . Int l . 80 ( . 6 60 St t. 4 , 44 ( 46 , nd d, U.S.C. §§ 4( ( , 2 ( 64 . 66 44 U.S. 280 ( 2 . 6 Id. t 282. 68 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
. E t n C ." In n t r th d f nd nt C n d n rp r t n h h h ld C n d n r t r d tr d r nd n t n C n d . It ll d th t th r nfr n d th pl nt ff r r t r d n th Un t d St t , nd th t, n th l n f th t t t , t "h d b t nt l ff t n r h h l f ll b r l t d b C n r . " h S nd C r t p nt d t th t th d ff r d fr St l n t n f nt r p t : th d f nd nt f r n r, nd t h d d l r t r d tr d r n th ntr h r th nfr n nt t pl ." h j d f lt "th t th r t n l f th C rt [ n St l ] th r hl b d n th p r f th Un t d St t t v rn th nd t f t n t z n . . . n f r n ntr h n th r ht f th r n t n r th r n t n l r n t nfr n d, th t th b n f n f th b v f t r ht ll b d t r n t v nd th t th b n f b th rt nl f t l. h rt th n d lt th th r nt f " ff t n r r "—th Al pr n pl . h t t lf, th rt d, v " l t n nd t n f th xt nt t h h C n r nt nd d t x r t p r n th r " th r , h v r, nd t n f "C n r n l r rd f r th b pr n pl f th Int rn t n l C nv nt n , . ., l ppl t n t t z n nd f r n n t n l l f th t rr t r l l f th pl h r th t rr d." It h ld th t th t n t t b v n "th xtr nt rpr t t n r d p n h r ." 2 h v h ld th r ld bv l h v d nt rn t n l pl t n , n n A r n rt ld h v h ld C n d n rp r t n l bl n d f r h v n d, n C n d , tr d r h h th C n d n G v rn nt h d d ld b d b t th rt ld l h v d n nj n t n pr v nt n t f t r b th rp r t n x pt t th r f b n f nd n nt pt f th A r n rt. h d n r l t r r tr t fr th xtr p t n f th nt tr t nd r l l t d t bv t th d ff lt d b th ."
68 2 4 .2d. 6 (2d C r. , rt. d n d, 2 U.S. 8 ( 6 . 68 In Steele, M x h d r v d th tr d r b f r th S pr C rt h rd th . 0 2 4 .2d t 642 4 . Id. t 642. 2 C p r r z & r d Ch l C . v. l d C ., 46 . S pp. 4 (S. . C l. 6 , ff d p r r , 24 .2d 8 4 ( th C r. , rt. d n d, U.S. 2 ( 8 . S Ebb, l t n nd r t t n f Int rn t n l n 84 ( 64 . h r h v b n th r t p f n h h rt h v r f d t v r t t t xtr t rr t r l ppl t n t f r n r . S , . ., nz v. C p n v r d l , U.S. 8 ( ( ft rtl A t A r n p t h r A n v. t n l M d t n d., 8 .2d 68 ( .C. C r. ( l b r A t , rt. d n d, • 42 U.S. 84 ( rr l v. C nt r, 66 d. S . L. p. 6 (S. . .Y. 6 (S r t Ex h n A t . 6 0 CONCURRENT INTERNATIONAL JURISDICTION
F. n A t C Two Supreme Court cases decided under the Jones Act are the most helpful cases of all. The opinions in these cases develop a phil- osophy and point out certain considerations that should guide all decisions involving conflicting jurisdiction. The Jones Act provides that "any seaman who shall suffer personal injury in the course of his employment may, at his election, maintain an action for damages at law" with a jury trial instead of the usual admiralty proceeding. 4 r tz n v. r n" posed the question whether this procedure could be invoked by a Danish seaman who was injured on a Danish ship while in a Cuban harbor. He contended that the statute gave the right to "any seaman" and could be invoked in a trial in this country. He further contended that there was a basis for applying the American law in this case because of the frequent and regular contacts of the ship with ports of the United States. r v. Int l r n l Op r t n C ." raised a similar question, but the injury was inflicted within the territorial jurisdiction of the United States. In holding that the act could not be invoked in r tz n, the Court used this very significant language: If [the Jones Act be] read literally, Congress has conferred an American right of action which requires nothing more than that plaintiff be "any seaman who shall suffer personal injury in the course of his employment." . . . While some [maritime statutes] have been specific in applica- tion to foreign shipping and others in being confined to Amer- ican shipping, many give no evidence that Congress addressed itself to their foreign application, [leaving it] . . to be judicially determined from context and circumstance. By usage as old as the Nation, such statutes have been construed to apply only to areas and transactions in which American law would be considered operative under prevalent doctrines of international law. . . "[I] f any construction otherwise be possible, an Act will not be construed as applying to foreigners in respect to acts done by them outside the dominions of the sovereign power enacting. That is a rule based on international law by which one sovereign power is bound to respect the subjects
4 4 St t. 00 ( 20 , 46 U.S.C. § 688 ( 64 . 4 U.S. ( . 6 8 U.S. 4 ( . 6 OS O CO EGE I US IA A COMME CIA AW E IEW
and the rights of all other sovereign powers outside its own territory." Lord Russell of Killowen in The Queen v. Jame- son, [1896] 2 Q.B. 425, 430. In Romero, the Court disposed of the contention that the law of the place of the injury should govern by pointing out that such a rule "does not fit the accommodations that become relevant in fair and prudent regard for the interests of foreign nations in the regula- tion of their own ships and their own nationals, and the effect upon our interests of our treatment of the legitimate interests of foreign nations.' In this can be seen the basic philosophy behind the rule that the law of the flag State should govern the internal affairs of a ship in foreign waters, as well as the recognition of the need to respect the legitimate interests of the foreign government in order that our interests may be respected abroad. The latter consideration was presented from a somewhat different angle in Lauritzen, where the Court said: [I] n dealing with international commerce we cannot be un- mindful of the necessity for mutual forebearance if retalia- tions are to be avoided; nor should we forget that any con- tract which we hold sufficient to warrant application of our law to a foreign transaction will logically be as strong a war- rant for a foreign country to apply its law to an American transaction." A truly wise approach to the entire problem of exercise of con- flicting international jurisdiction, stated as only Mr. Justice Frankfurter could state it, appears in the Romero case: "The controlling considera- tions are the interacting interests of the United States and of foreign countries, and in assessing them we must move with the circumspec- tion appropriate when this Court is adjudicating issues inevitably entangled in the conduct of our international relations."" III. USE OF PERSONAL JURISDICTION TO COMPEL ACTION ABROAD Discussion now focuses on an issue peculiarly within the compe- tence of the judiciary or a regulatory agency. This is the problem that arises when the court or agency has personal jurisdiction over a party and uses its power to order the party to take certain action abroad. In the cases discussed up to this point, involving the extraterri- torial applicability of our statutes, the court in some instances could
4 U.S. t 6 8. 8 8 U.S. t 84. 8 4 U.S. t 82. 80 8 U.S. t 8 . 6 2 CONCURRENT INTERNATIONAL JURISDICTION b l t d b th l n f th t t t t lf, h h, f p f ll fr d t th t nd, ld d nd t xtr t rr t r l ppl t n. In th t b d d n th t n, th b f r th tr b n l h th r, nd f h , t x r t p r t nj n r nd f t r p f t br d b p rt v r h t h d p r n l j r d t n. St t t r l n nd l l t v h t r , h h rt ht f l r r d ppl t n f t t t t p f f t t t n, d n t d t t th d t l f j d l d r t n n rd r n f t r t n. S h rd r n, nd h ld, b t p r d n th l ht f p bl nt rn t n l pl t n , h rd h p n pr v t p rt , nd th l t f pr t l t . S rpr n l , h v r, t n th f ld f d h rd r t t t n br d h r th rt nd r l t r n h v pr v d th t r d pl t pl nt nd r t l t v t n b th f r n v rn nt h v r nt h b n f fr nt d. A. Extr Ant tr t Ord r h t n t r , n t nl n th p rt l r r , b t l n th h l f ld f th x r f nfl t n nt rn t n l j r d t n, th f Un t d St t v. I p r l Ch . Ind ., td. h rt h d p r n l j r d t n v r th A r n d f nd nt, nt, nd v r th r t h d f nd nt, I.C.I. It f nd th t nt, I.C.I. nd th r h d v l t d r nt tr t l b r n t d v d th t rr t r f th rld f r p rp f ll n n l n. Und r th r nt, nt h d n d ll r t h xpl t t n r ht n t n l n p t nt t I.C.I., h h t lf th r ft r r d t r nt n x l v l n t n th r r t h rp r t n, r t h l n Sp nn r , td. (Sp nn r , th t n t th n th j r d t n f th A r n rt. h rt f lt th t t h d t nd th ll t n f t rr t r t nt n p t t n n rld r t , nd th r f r th t t h d t t nt b nt th n l n b n n Gr t r t n. pl h th , th rt rd r d n ll t n f th p t nt n nt t I.C.I., nd r v r n f th r t h p t nt r ht t nt. h ld, f r , pr v nt I.C.I. fr v n Sp nn r th x l v l n th r ntr t r r d. Alth h th rt rd r d nt t th p t nt n r ll v l bl f r l n n n Gr t r t n, th ff t f th rd r h l ld b t d tr th x l v h r t r f th p t nt r ht h h Sp nn r h d r d b t n tr t. h ntr t l l nd nf r bl n En l nd, h r t d nd t b p rf r d. h A r n rt rd r th d Sp nn r h rd h p b d pr v n t f t r ht th t h v n h d t d n rt, nd b f r n Sp nn r t br n t f t h d t v d th ff t f th A r n rt rd r. Of r , th order
8 0 . S pp. 2 (S. . .Y. 2 . 6 OS O CO EGE I US IA A COMME CIA AW E IEW
lt n l bj t d I.C.I. t th pr b b l t f b n d b Sp nn r . Sp nn r d d br n t n En l nd n t I.C.I. nd bt n d n nj n t n pr h b t n th t p n fr p rt n th th r t h p t nt th rt l rd r d p f p rf r n f I.C.I. ntr t t r nt n x l v l n t Sp nn r ." h l ft I.C.I. nd r th rd r f n A r n rt t t rt n t n, nd nd r th rd r f r t h rt pr h b t n t fr t n h t n nd d r t n t t d h t th A r n rt h d f rb dd n t t d . h r ld b n l r r f h rd h p n pr v t p rt , r t n t f r th v n l f th rd r f th A r n rt: pr v n f th j d nt h ll p r t n t [th d f nd nt] ... f r t n t n n pl n th n l . f n f r n v rn nt r n tr nt l t th r f, t h h [th d f nd nt] . . . t th t b n bj t nd n rn n tt r v r h h nd r th l f th Un t d St t h f r n v rn nt r n tr nt l t th r f h j r d t n. 8
Wh l th h v t l t p rt ll pr t t d I.C.I. fr h rd h p, 84 t d d n t v d th n r h nt p n r t h v r nt r th r lt n p nt d nt f th r t h j d ."
82 r t h l n Sp nn r , td. v. I p r l Ch . Ind ., td., [ ] Ch , p r n nt nj n t n r nt d, [ ] Ch. . 8 Q t d n [ ] Ch. t 24 n.4. 84 A b tt r t hn n th r rd f nd n th nt rt l d r n th l , h h pr v d d: h nj n t n ... h ll n t ppl n th f ll n : ( Wh r [th t n t n] . . . p r nt t r r nt f l f th f r n n t n r n t n th n h h [ h t n] .. . t [ ] pl (2 Wh r [th t n t n] . . . p r nt t r t r ff l pr n n nt f p l f th f r n n t n r n t n . . . nd h r f l r t pl th h h r t r p l ld xp [th d f nd nt] . . . t th r f pr nt r f t r l f th p rt l r b n . . . h h th bj t f h r t r p l . Un t d St t v. St nd rd O l C . ( . . , 60 r d C . 6 84 , t 40 (S. . .Y. 60 . S l r d r n Un t d St t v. G lf O l C rp., 60 r d C . 6 8 (S. . .Y. 60 Un t d St t v. x , In ., 6 r d C . ¶ 08 (S. . .Y. 6 . h f r f d r h th dv nt f p f ll t t n th t t n t p pl bl h n th r nfl t n l , nd th v d v n th pp r n f nfr n nt n th v r nt f th th r t t . S h d r l r n z th t th r ht b nfl t n p l ll l . 8 In r t h l n Sp nn r , th j d d th t th pl nt ff h d t bl h d " pr f d f r n th t t n t p t nt f r th rt f th Un t d St t . .. t nt rf r th th r ht r t rd r , b rv n f h h b r rt ld r r th t r rt h ld n t x r th j r d t n h h th h v nd h h t th r d t t x r n r rd t th r ht ." [ ] Ch. t 26. h rt, n th t , l b rv d th t "th A r n rt j r d t n n p r n n t p rt n bl t t j r d t n t p l t b ntr t t d f th r ht h h th l f n th r nf r n t n th t th r ntr [ nd 6 4 CO CU E I E A IO A U IS IC IO
Another consideration overlooked by the American court was that it was ordering action to be taken by a foreign corporation in the country of its incorporation and in which country another interested party was located—a party which was not before the American court and which was in a position to take action to frustrate the order. It should have been apparent that the court was in no position to assure the effectiveness of its order. It is demeaning as well as futile for a court to issue an order that is bound to meet resistance and which it has not the power to enforce. In Un t d St t v. l ph n ," the defendant, an American corporation, was charged with having conspired with a British com- pany and a French company, neither of which was before the court, to divide the world market in specialty glass. Holophane, by agree- ments entered into abroad, had agreed not to compete with the other two in the areas allocated to them abroad, and it in turn was given the American market. These agreements were found to be contrary to our antitrust laws. The trial court ordered Holophane to terminate its exclusive marketing agreements and directed it "to use reasonable efforts . . . to promote the sale and distribution of [its] . . . products" in the territories which the agreements assigned to the other two companies. 8 The effect of the order in this case was precisely the same as that in I.C.I. In both cases the party before the court was ordered to act abroad in violation of its contract with a foreign party, a contract that was legal where it was made and where it was to be performed. Thus the court raised the possibility of a suit abroad with its attendant hardships and conflicts. In both cases there was an exercise of juris- diction in personam to attempt to extinguish or at least modify rights of aliens abroad who were not before the court and whose rights would seem to have depended on foreign law. Such use of jurisdiction in personam was quite unwarranted. In both cases the court issued an order which it was in no position to enforce abroad. In both cases the court could have declared the contracts illegal under United States law and thus established the liability of the American defendant in this country. The foreign corporations would then have been free to compete in the United States, if indeed it is the purpose of our anti- trust laws to encourage foreign competition here. th ld] . . . nt rf r th th n p l l f En l nd." Id. t 2 . n ll , n th r nt rth n t n : "Appl d nv r l , I n v th t th A r n rt ld l b l (t th l t t r n z n rt n n th p rt f th r t h rt f j r d t n xt nd n , n ff t, t th b n ff r f p r n nd rp r t n n th Un t d St t ." Id. t 24. 86 . S pp. 4 (S. . Oh 4 , ff d, 2 U.S. 0 ( 6 . W th r rd t th l ph n , Ol v r, pr n t 64 t , 42 C rn ll .Q. 0 ( . 8 4 r d C . ¶ 6 6 , t 6 8 (S. . Oh 4 . 6 OS O CO EGE I US IA A COMME CIA AW E IEW
B. Order to Produce Documents Located Abroad 88 An order to produce records from abroad obviously raises the problem of conflicting jurisdictions if the State where the records are located has a law or policy forbidding their removal from the State. Such a local objection to removal usually stems from one of the three basic causes. In the first place, the State may have a law prohibiting the removal of certain records in which there is a public interest, such as bank records. Second, there are some States, notably Switzerland, which have a general policy prohibiting bank records and certain corporate records from being examined without special permission of the State. They could not be subpoenaed without such permission even for use by a court in Switzerland. Third, the State may be funda- mentally opposed to the substantive objective of the proceeding for which the records are wanted because it feels the proceeding exceeds American jurisdictional competence under international law, will result in an infringement on that State's sovereignty, or is aimed at matters which it considers of primary concern to itself and of little or no con- cern to the United States. It therefore may refuse to permit records to be taken out of its territory." Whether one agrees with the laws and policies of these States or not, one cannot ignore their position. An order for production of records from abroad in a situation where such a conflict of law or policy exists will most certainly result in international complications. It is an order that can be enforced, if at all, only by contempt proceed- ings, and it can easily become an unenforceable order if the other State adheres to its law or policy. In re Grand Jury Subpoena Duces Tecum Addressed to the Canadian Int'l Paper Co.°° was a case in which a grand jury was in- vestigating the newsprint industry in Canada to determine if there were violations of the antitrust laws of this country. Canadian com- panies were ordered to produce their records from Canada. There was an immediate protest from the Canadian Government to the State De-
88 S n r ll M n n, h d f r Int rn t n l A r nt n Obt n n Ev d n fr r n C ntr , 26 d. . . 2 2 ( 66 t , t t n n th d r l d l r t C p l A t l t n r n , 6 C l . . v. 44 ( 6 t , S bp n f nt t d n r n r d t n Wh r f S t r h b t v l, .Y.U. . v. 2 ( 62 C nt, Ord r n r d t n f nt fr Abr d n l t n f r n , U. Ch . . v. ( 64 . 8 h l Adv r f th p rt nt f St t nt d n th t "th r r n b r f fr ndl f r n v rn nt , f r n ff l , nd v n f r n rt , h h b l v tr n l — r v n p n t l , I —th t [ t ] . v l t n [ f nt rn t n l l ] nd nfr n nt [ f v r nt ]" t ppl r nt tr t l xtr t rr t r ll t f r n r . Addr b ft E. r, Ant tr t S t n f th Y r St t r A t n, n. 2 , , r pr d d n 40 p t St t ll. 2 2 ( . 0 2 . S pp. 0 (S. . .Y. 4 . 6 6 CONCURRENT INTERNATIONAL JURISDICTION partment." When this failed and contempt proceedings were threatened for failure to comply with the order, the Government of Ontario took steps to put its policy into law: it passed the Business Records Act,' which barred the production of certain business records for use in foreign courts. After this enactment, any further order by the Ameri- can court would, of course, have been futile. The case illustrates the extent to which the policy of a foreign country may be carried if we persist in trying to concern ourselves with matters of primary concern to a foreign jurisdiction." The Supreme Court adopted a technique to overcome such a difficulty. In S t Int rn t n l v. r " (usually referred to as the Int rh nd l case), the Attorney General held certain property pursuant to the law relating to enemy-alien property, and the former owner filed suit to reclaim the property, as permitted by the statute. The contention of the government was that the corporation which had owned the property (Interhandel), admittedly a Swiss corporation, was in fact controlled by German interests, and therefore the property was enemy property. Interhandel denied this. To prove its contention, the government secured an order that Interhandel produce its records from Switzerland for inspection. As already noted, the Swiss law is perhaps the most strict in the western world regarding the inviolability of corporate records, and they cannot be produced, much less taken abroad, without the consent of the proper government official, which in this case was not secured. Although the Supreme Court held that it was error to nonsuit the plaintiff for failure to comply with the order to produce the records, it also pointed out that a failure to order their production "would undermine congressional policies," for Congress had amended the statute to reach enemy assets masquerading under "innocent fronts" because of its "deep concern" with this problem. It held that the production order was justified, that Interhandel could "plead with its own sovereign for relaxation of penal laws or for adoption of plans which will at the least achieve a significant measure of compliance with the production order [and that it could be required] ... to make all such efforts to the maximum of [its] ... ability....""' The Court
0 p rt, pr n t 62, t 6 . 2 Ont. v. St t. h. 44 ( 60 . 0 r th r n h h th p l tr n l h ld th t t tr n f r d nt l r v rn nt nd t h n A r n rt rd r nfr n d n t, t xt p n n n t 0 , 8, nd nfr . S l th r f r n t th Y l v Cr n l C d n M nt h p n , td. v. d r l M r t d., 2 .2d 4 , 6 ( .C. C r. 6 . 4 U.S. ( 8 . Id. t 20 . h t n th t th S G v rn nt ht b ll n t p r t p rt l rl t rtl n , f r th t G v rn nt h d lr d h p n d th f t n t n l n t nl b d pl t r pr nt t n t r p rt nt f
6 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW justified its position by what it deemed was the mandate of an over- riding congressional policy, and, of course, in such a situation, the courts must follow where Congress leads. The Court expressly stated that its decision should not be considered a governing precedent in other cases where such an overriding policy was absent: We do not say that this ruling would apply to every situa- tion where a party is restricted by law from producing docu- ments over which it is otherwise shown to have control. . . . [W]e hold only that accommodation . . . to the policies underlying the Trading with the Enemy Act justified the action of the District Court in issuing this production order." Unfortunately, however, the case has been treated as a governing precedent by lower courts with no consideration of whether, in the particular case, there was a congressional policy strong enough to be deemed an overriding vital national interest." The technique of Int rh nd l, though employed for the first time by the Supreme Court in that case, was not wholly new. Six years earlier, there was In r Inv t t n f W rld Arr n nt ," a proceeding in which a grand jury was investigating alleged violations of antitrust laws by the oil companies. Subpoenas were issued to foreign corporations to produce their records from abroad. There was im- mediate reaction from the companies and, in some cases, from govern- ments. The defendants claimed that certain foreign governments prohibited the removal of the required papers from their territory. The court reserved its opinion on this point pending a showing that the party concerned had in good faith attempted to get the consent of the foreign government to remove the papers and had been refused. Evi- dence was then introduced that the British Government controlled one of the defendants and that it had directed the company officials, for economic and security reasons, "not to produce any documents which were not in the United States of America and which do not relate to business in the United States ... without, in either case, the authority of Her Majesty's Government."" The court construed this as a claim of sovereign immunity and granted the claim.'"
St t , b t b br n n t n t th Un t d St t n th Int rn t n l C rt f t , n th t b nj n d fr pr d n f rth r n th tt r. Int rh nd l C (S tz rl nd v. Un t d St t , [ ] I.C. . 6. 0 U.S. t 20 06. S n t 26 nfr . 8 . . . 280 ( . .C. 2 . p rt, pr n t 62, t 6 0. rt n nt xtr t fr rr p nd n , t t nt b ff l , d b t n rl nt, t . r r pr d d d. t 6 . t . . . t 288 8 .
6 8 CONCURRENT INTERNATIONAL JURISDICTION
The grand jury proceeding was then considered at the highest level of the United States Government, was discontinued,' and a civil antitrust action was begun against the same defendants. Again the government requested the production of documents "whether located within or outside of the United States, including documents in the files of subsidiaries." 02 Meanwhile, however, The Netherlands, follow- ing a formal protest against a subpoena duces tecum issued to one of its nationals in the grand jury proceeding, had enacted the Economic Competition Act, which prohibited compliance with any "measures or decisions" of a foreign State which related to restraints on competition or to market control in The Netherlands." The court, faced with this development, nevertheless ordered the production of all records re- quested by the government, and required that the companies show that they had, in good faith, tried to secure waivers of any limitations imposed by foreign governments upon their removal.'" It should be noted that here there was no consideration of whether there was an overriding congressional policy which would support this Int r h nd l technique, although the case was decided almost six months after the Int rh nd l decision. It seems obvious that this approach can only result in interna- tional repercussions detrimental to our best interests. An order such as that in Int rh nd l asks a litigant to violate the law of another State, or at least to use his best efforts to avoid its provisions. This is hardly in the best judicial tradition, and better techniques must be available. Two tax suits brought by the Internal Revenue Service involved the contention that production of bank records from Panama, as the government was demanding, would be illegal under Panamanian law, 0 but in both cases the proof of the foreign law was faulty and the courts ordered the records produced. In the first case, r t t l C t n v. Int rn l v n S rv., 06 the court said that, if shown to be illegal, "the production . . . should not be ordered"; it further directed that if it came to a question of contempt for failure to comply, the trial court should "explore . . . the ability of the Bank to comply
0 Ebb, p. t. pr n t 2, t 0 : " h Gr nd r d d n th G v rn nt t n . . . ft r n lt t n th r d nt, C b n t ff l , nd th th Ch r n f th nt Ch f f St ff." 02 Ib d. In Ib d. I" Un t d St t v. St nd rd O l C . ( . . , 2 . . . (S. . .Y. 8 . 0 Wh n th r nt nt n th t pl n th rt rd r ld v l t f r n l , th f r n l t b pr v d n f f t. h r t h v b n n n xpl n d f l r f h pr f n n b r f In b th f th b n d d h r , th pr f f lt t th n t l h r n . 06 2 .2d 6 6 (2d C r. , rt. d n d, 6 U.S. 48 ( 60 .
6 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
without subjecting its personnel to criminal sanctions under Pana- manian law."' The second case, Appl t n f Ch M nh tt n n , 108 in- volved a rehearing at which further evidence of Panamanian law was offered, and the illegality of removal of the records was shown. The court then said that "the law appears to be clear that a Court should not order any party to act in such a way that it would violate the laws of a friendly foreign power.' 0 Another solution was sought. The court told the government that, with the cooperation of the bank, it should try to get authority from the Panamanian courts to have the documents copied for use in the American proceeding. An expert wit- ness testifying on the law of Panama had said that he saw no reason why the courts of Panama would not grant such a request. This dis- position of the case was upheld on appeal.' These demonstrate a much more preferable technique and philosophy than Int rh nd l. Both subscribe to the doctrine that "a Court should not order any party to act in such a way that it would violate the laws of a friendly foreign power," and, as the appellate court added in Ch M nh tt n n , "just as we would expect and require branches of foreign banks to abide by our laws applicable to the conduct of their business in this country, so should we honor their laws affecting our bank branches which are permitted to do business in foreign countries.'"" In v. r n went even further. When it was contended that the production of records from Canada would be illegal under Canadian law, the court refused to order their production by a Canadian bank. Upon fundamental principles of international comity, our courts dedicated to the enforcement of our laws should not take such action as may cause a violation of the laws of a friendly neighbor or, at the least, an unnecessary circum- vention of its procedures. Whether removal of records from Canada is prohibited is a question of Canadian law and is best resolved by Canadian courts. tt The court ordered the subpoenas quashed and suggested the issuance of letters rogatory to get the information, which would put the issue of production of the records before a Canadian court. This seems a
0 Id. t 620. 28 . S pp. 206 (S. . .Y. 6 . 0 4 2 . S pp. 8 , 8 8 (S. . .Y. 6 . 0 2 .2d 6 (2d C r. 62 . Id. t 6 . 2 282 .2d 4 (2d C r. 60 . Id. t 2.
00 CO CU E I E A IO A U IS IC IO logical procedure designed to avoid the difficulties which have been pointed out above. It deserves far more attention than it has been given. Orders to the shipping industry to produce records from abroad have caused tremendous difficulties, still unresolved. In th M tt r f Gr nd r Inv t t n f th Sh pp n Ind . 4 involved the issu- ance of such subpoenas to over 150 shipping firms. There were protests by the defendants and by the embassies of Canada, Denmark, France, Germany, Great Britain, Italy, Japan, The Netherlands, Norway, and Sweden.'" The court said there could be no objection to producing documents that were physically in the United States, and it so ordered, but as to documents of foreign corporations located abroad, it reserved its opinion until the matter had progressed enough to ascertain the actual need for such an order. Temporizing is sometimes the best means of dealing with difficult problems. The shipping industry has had similar problems with the Federal Maritime Board, now the Federal Maritime Commission. When the industry was ordered to file copies of every contract, here or abroad, relating to "commerce of the United States," eleven countries filed diplomatic protests against the order.'" Two of the carriers brought federal suits to enjoin its enforcement. ' The outcome of these suits was a determination that the Board had a legitimate interest in these documents, even though located abroad; but before the production order was compiled with and before further steps were taken, the Board went out of existence. When the Maritime Commission replaced the Board, certain mem- bers of Congress unsuccessfully attempted to achieve the same goal through legislation. The Commission, however, forced the issue by calling upon carriers to produce documents from abroad. Protests were received by the Department of State from the Governments of Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Japan, The Netherlands, Norway, Sweden and the United Kingdom, asserting that such an order violated their respective jurisdictions, and that they would have to restrain their nationals from compliance."' Great Britain, indeed, enacted a statute which provided that if
4 86 . S pp. 2 8 ( . .C. 60 . p rt, pr n t 62, t 40 0 , 8. 6 Id. t 8 82. h ntr r n r , nl nd, G r n , Gr t r t n, Ind , It l , p n, h th rl nd , r , S d n nd Y l v . M nt h p n , td. v. d r l M r t d., 2 .2d 4 ( .C. C r. 6 K rr S.S. C . v. Un t d St t , 284 .2d 6 (2d C r. 60 , j d nt v t d, 6 U.S. 422 ( 62 . 8 Int l l M t r l 2 2 ( 64 ( t t nt f A t S f St t hn n . 0 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAW REVIEW
any person in the United Kingdom has been or may be re- quired to produce or furnish to any court, tribunal or author- ity of a foreign country any commercial document which is not within the territorial jurisdiction of that country or any commercial information to be compiled from documents not within that jurisdiction; and ... the requirement constitutes or would constitute an infringement of the jurisdiction which, under international law, belongs to the United Kingdom, [then certain specified Ministers of the Crown] ... may give directions to that person prohibiting him from complying. . . .
Criminal penalties were included for noncompliance with any such directions. The entire matter thereafter was discussed in the Organization for Economic Cooperation and Development, and an agreed Minute was issued by that organization and by the United States, in which fourteen nations agreed to use their good offices to facilitate the production of certain statistical information by their shipowners. The United States agreed to consult with the other governments before using the information in formal proceedings before the Commission.'" These shipping cases involved policy differences between the United States and the other major maritime countries as to whether private shipping should be subject to governmental regulation. Fortu- nately, the United States finally recognized that "in the case of both our exports and our imports, there is a concurrent jurisdiction, which we . . . are prepared to discuss." 2 Recognition of this concurrent jurisdiction is the key to an appropriate solution in such circumstances, for a great deal of friction has been caused by the failure to appre- ciate that there is concurrent jurisdiction, and to realize that the other country will not stand idly by if it feels its sovereignty and jurisdic- tion are infringed. Consideration of the issue in the Organization for Economic Cooperation and Development, though leaving many prob- lems still unsolved, has appropriately removed the resolution of the basic policy differences from the realm of judicial and administrative action to that of diplomacy. 22
Sh pp n C ntr t nd C r l nt A t f 64, . 8 Int l l M t r l 62 64 ( 64 . r h h r b f r p n f th t t t , Un t d St t v. An h r n , td., 2 2 . S pp. (S. . .Y. 64 . 20 2 p t St t ll. 88 ( 6 . 2 Int l l M t r l 2 ( 64 ( t t nt f A t S f St t hn n . 22 S 2 p t St t ll. 4 ( 6 . r d n f th v r ll pr bl f r t " nf r n " r t nd th pr nt th d f h ndl n th tt r, G r n, pl t Adj t nt b th M r t t n , 4 p t St t ll. 8 ( 66 . 02 CONCURRENT INTERNATIONAL JURISDICTION
C. Ord r t C A t n Abr d b rt t f r C rt h t n nv lv n h h n A r n rp r t n, v r h h th tr b n l h d p r n l j r d t n, rd r d t p l t f r n b d r , v r h h th tr b n l h d n j r d t n, t t n nn r ntr r t th l r p l f th j r d t n h r th b d r l t d. h f r t nv lv d r l n b th Un t d St t r r p rt nt th t t r n A t C ntr l l t n r ppl bl t f r n b d r f A r n p n . A rd n l , th rd M t r C p n f lt p ll d t rd r t C n d n b d r n t t n d r th l f v h l t C n t Ch n , lth h C n d n p l t pr t h tr d . h d n d t r t n n C n d , nd th M n t r f n n d th t t nt th t "C n d n l nd C n d n l l n t pr v l v r p r n r rp r t n rr n n b n n C n d ." h nt rn l pr r n th C n d n G v rn nt r r r lt f th n d nt th t r d nt E nh r f lt bl d t dv rt t th tt r n n ddr t th C n d n rl nt, n th t " lth h th r t n n p f r p t n ntr l f n nd tr b A r n t z n , th nd tr r , f r , bj t t C n d n l ." h r M n t r nd th d r f th Opp t n n C n d b th p bl l h l d th t t nt n r n th t C n d n v r nt n th tt r n d tt d, b t th Un t d St t r r t ll l th r ht t ntr l h t f b d r 2 A b d r M r h nt f th Un t d St t nd A b d r n f C n d , d n t d r n r p b r d nt hn n nd r M n t r r n, r h r d th r p rt n n n b r f pr bl b t n th t ntr . In th r r p rt f n 28, 6 , th tr n l r nd d "th t th t v rn nt x n pr ptl th n , thr h n b th Un t d St t f n r l l n r d pt n f th r ppr pr t r , b h h th rr t nt t r r l t n h p b r v d, th t n r n th v n f Un t d St t l b t z n f th Un t d St t ." 24 h d pl t ppr h pr p rl nv d nd h ld b p r d f rth r n th t p f t t n. h rd r f th r r p rt nt t n ppr pr t . It d d n t, f r , ppl t th C n d n b d r , b t t d d ppl t th p r nt p n h r th , th Un t d St t , b f t p r v r th p r nt, ht t ntr l th t n f th b d r br d. In h rt, p r n l j r
2 Ebb, p. t. pr n t 2, t 4. S C. . . §§ 00.20 , . 2 ( (4 ( 6 . 24 p t St t ll. , 202 ( 6 .
0 OS O CO EGE I US IA A COMME CIA AW E IEW d t n pl d t v rn t t n n C n d v r h h h d n l l t v j r d t n, nd t t n t b t n th r h h ntr v n d ff l C n d n p l . h C n d n p t n d l r n t t nt b t M n t r f t nd Att rn G n r l, lth h d n nn t n th d ff r nt pr d n : O r bj t n t n t n h th r thr f ld: h t t n rn d n t h th tr t pl n th Un t d St t l n th Un t d St t t n rn d th t n n C n d f C n d n p n h h t n r n rd th C n d n l nd C n d n r l p l th t pl n . . . br n th p n n C n d nt nfl t th C n d n l nd p l nd th rdl th t th nl ff t ld b v n t h [r l t n ] f A r n d r t r f Un t d St t p n v n tr t n t d r t r f C n d n p n t d th n n C n d h h n t n rd th C n d n b n r r l p l b t d t t d b A r n p l . th n ld r l rl ll tr t th bj t n bl xtr t rr t r l ff t f th t n t n. . . . h t t n, t tr , n b p t th : th t th r h nt ff r th t r rd r l t n t r v r nt . h nv lv n th p rt f th Un t d St t r nt rf r n , nd pp r nt rt n f r ht t nt rf r , n r l pr j t n C n d th n f tt n r pt bl b t n t fr ndl b t nd p nd nt ntr . h h v nv lv d f t r f v rr d n v t l n t n l nt r t h h j t f d th t n t n." O r G v rn nt h v
2 r f E. v lt n, M n t r f t nd Att rn G n r l f C n d , r rd n n n l t hn n th nt tr t pr d n n t th ll d "C n d n p t nt p l," CC Ant tr t S p , 46 4 ( . 20 h t r " v rr d n v t l n t n l nt r t" d ff lt t d f n . A rd n t t t nt § 40, nt b, "v t l n t n l nt r t" n " n nt r t h n t n l r t r n r l lf r t h h t t tt h v rr d n p rt n ." v r, " n r l lf r " t rt n rr nt l l t v pr r h h ld h rdl l f v rr d n v t l n t n l nt r t . If th r t v rr d ll th r n d r t n nd ntr l, v n f t n nfr n n th j r d t n f n th r fr ndl v r n nd p rh p v l t n th l f n t n , th t r t l t t th n t n l r t l v l. ll tr t , h l th r tr n n t n l p l f v r n tr t nf r nt f th nt tr t l n th ntr , th v r d ff r nt th n fr n th t th r n v rr d n v t l n t n l nt r t n th r nf r nt th t d nd x rt n f r p r t th nd n t f r n n t n l f r t d n n f r n ntr , v n th h t n p r nt f r nt rn t n l r l t n nd p t n f pr v t h rd h p . On th th r h nd, th n t n l p l , n r nt th r All , f bt n n r r p r t n fr r W rld W r II n b z n nd ppl n t r l th t f n n t n l th t r f nd n th ntr ht ll l f , nd nd d r rd d n v rr d n v t l n t n l nt r t n th Interhandel case. S t xt p n n n t 4 pr . 04 CONCURRENT INTERNATIONAL JURISDICTION
felt that all shipments of automotive material to Communist China had to be stopped at any cost. If that was the case, the better technique would have been to have initiated the discussions between the two coun- tries at the outset. The latest case in this field, Un t d St t v. r t t l C t n , 12 involved a jeopardy assessment for federal income taxes allegedly due from Omar, S.A., a Uruguayan corporation. Although the income involved was received here, Omar had since withdrawn from the United States and transferred its monies to the Montevideo branch of the First National City Bank of New York (Citibank). The branch, though not a separate corporation, was a "separate entity" under New York law. Pending personal service on Omar, the govern- ment asked that the funds held by Citibank for Omar in Montevideo be frozen. Service, for this purpose, was made on Citibank in New York. The district court ordered the freezing on the theory of an attach- ment.' 28 Under New York law, however, accounts in foreign branches were not collectible at the New York office unless the foreign branch had breached its contract by refusing payment. The court of appeals held that under these circumstances the Montevideo account of Omar was not within the jurisdiction of the New York federal court. Citi- bank was liable to Omar only at Montevideo, and there was nothing in New York to be reached by the attachment. "Absent an explicit indication to the contrary, there should not be attributed to Congress an intent to give the courts of this nation, in this highly sensitive area of intergovernmental relations, the power to affect rights to property wherever located in the world." 2° The Supreme Court reversed, holding that since the New York headquarters of Citibank admittedly could give orders to the Monte- video branch, it was appropriate for the district court to order the New York headquarters to have its branch hold the monies due Omar "pending service of process on Omar and an adjudication of the merits.""° New York law provided that personal jurisdiction might be exercised over a nondomiciliary who was outside the jurisdiction if he had transacted any business in the state and the cause of action arose therefrom. There was provision for out-of-state service of process in such a case."' Personal service on Omar had not been obtained at the time of the hearing. A dissenting opinion by Mr. Justice Harlan, joined by Mr. Justice
2 U.S. 8 ( 6 . r r t f th , K ff , r t n r G d t th C rr nt M z n , A. .A. . 4 ( 6 . 28 Un t d St t v. O r, S.A., 2 0 . S pp. (S. . .Y. 62 . 2 Un t d St t v. r t t l C t n , 2 .2d 4, 24 (2d C r. , ff d n b n , 2 .2d 020 (2d C r. 6 . 8 U.S. t 8 . N.Y. C v. r . § 02( , (M K nn 6 . 0 OS O CO EGE I US IA A COMME CIA AW E IEW
Goldberg, is directly in point. After noting that "the Court does not decide the quasi in rem issue on which the District Court relied," the dissent proceeded: The Court upholds the freeze order on the basis that the District Court, pending acquisition of personal jurisdiction over Omar, had authority to enjoin Citibank (over which it did have personal jurisdiction) from allowing its Montevideo branch to transfer the funds to Omar. There can be no doubt that the enforcement powers available to the District Court were adequate to accomplish that much of the end in view . . . . But "jurisdiction" is not synonymous with naked power. It is a combination of power and policy.... The real problem with this phase of the case is therefore this: Granting that the District Court had the naked power to control the Montevideo account by bringing to bear coercive action on Citibank, ought the court to have exercised it? Or to put the question in the statutory terms, was the court's order "appropriate" for the enforcement of the in- ternal revenue laws? 2 The opinion further noted that Omar's property "has been taken from its control by a court having jurisdiction neither over the corporation nor over the property. . . ." " It then proceeded to deal with the pro- priety of the freeze order, pointing out that unless funds to pay the government's claim could be realized, the freeze should not be ordered. The government contended that, acting under the New York statute, personal jurisdiction could be obtained over Omar, judgment could be rendered, and an order entered to pay the judgment from the funds in Montevideo. It was contended that, if this failed to get the funds, a court officer could be sent to Montevideo to make a direct demand on the bank. If the branch failed to release the funds, this would make the debt payable in New York, where it could be gar- nished. But the dissent pointed out that in international practice, States do not recognize tax judgments of foreign courts, and it would probably be improper for the branch of Citibank to pay the judgment. If this were so, the debt could not be garnished and the freeze order would have been issued improperly. Furthermore, Citibank, "an inno- cent stakeholder," would be put to undue hardship, and should have doubts resolved in its favor. "It would subject Citibank to the possi- bility of double liability if Uruguay did not recognize the United
2 U.S. t 8 88. Id. t 2.
06 CONCURRENT INTERNATIONAL JURISDICTION
States' judgment, and multiple liability if Uruguay permitted actions for slander of credit."' If the law of Uruguay was unclear, only a suit for the deposit could determine the issue, and it may be impossible for Citibank to establish Uruguayan law before it is too late. If the Government manages to levy on the account, and only afterwards is it established that the bank was liable to Omar, Citibank would be left to sue the United States for recoupment, an eventuality for which no provision has been made and which the Government stated at the oral argument of this case that it would oppose.' The dissent also noted that problems between states of the Union are different from those between two nations, and it noted the possible danger of reciprocal treatment or retaliation by the other nation. It stated: The Court should not lose sight of the fact that our modern notions of substituted service and personal jurisdic- tion were developed within a framework of States whose various processes are governed by the Due Process Clause and whose judgments must be given full faith and credit by the other States within the federal structure. Great care and reserve should be exercised when extending our notions of personal jurisdiction into the international field, both as a basis for asserting federal judicial power with respect to property in foreign countries and for permitting property in this country to be tied up by foreign courts 136 It seems regrettable that this most recent pronouncement by the Supreme Court supports a view of the exercise of congressional and judicial jurisdiction which extends to the limits of congressional and judicial power, and thus harks back to Vermilya-Brown Co. v. Con- n ll,i87 if, indeed, it does not substitute altogether power for jurisdic- tion. Although the courts had personal jurisdiction over Citibank, there was no jurisdiction at all to affect the contractual relationship between Omar and the Uruguayan branch of Citibank, a "separate entity" in Montevideo. The distinction between personal jurisdiction of a tribunal over a party and legislative or judicial jurisdiction over an act or situation abroad, should be scrupulously maintained. It is unwise if not improper to seek to accomplish by indirection what is forbidden and impossible by direct action. Furthermore, as Mr. Justice Harlan
4 Id. t 40 02. Ib d. 6 Id. t 40 04. U.S. ( 48 . S pp. 6 8 80 pr .
0 BOSTON COLLEGE INDUSTRIAL AND COMMERCIAL LAIV REVIEW pointed out, it would very probably be a violation of the legal obliga- tion of the branch of Citibank under Uruguayan law to pay the tax judgment. IV. BASIC CAUSES OF IMPROPER OR UNWISE EXERCISE OF CONFLICTING JURISDICTION In the light of the foregoing, it is suggested that three basic cir- cumstances probably combine to account for much of the trouble that has been encountered in the exercise of conflicting international juris- diction. First: The most basic difficulty seems to have been a failure to recognize the problem or, if it was recognized, to appreciate its signifi- cance and ramifications. The legislative, judicial, and executive branches of the Government (save the Department of State and a few relatively small groups) have all been concerned, by and large, with domestic affairs. Their thinking is conditioned to deal with matters that are wholly within the territorial confines of the United States, where they have full authority to make, interpret, or enforce the law that will govern the situation. Domestic issues of conflicting juris- diction are presented in the context of conflicts between the laws of the states of the Union, and in the framework of the full faith and credit clause of the Constitution, the substantially uniform jurisprudence and the similar policies of the states involved, and the common sover- eignty of the United States of America. An issue of possible conflict with the law or policy of a foreign jurisdiction, however, involves the recognition of the sovereignty of that other State, its independence of and equality with all other sovereignties including our own, its different laws, policies, and concepts of jurisprudence, and its right and ability to control persons and matters within its own territory. Relatively few judges are trained or experienced in international law, and it is not easy for judges to think in terms of issues and condi- tions with which they are unfamiliar, particularly when the case appears to present a situation very much like those in the domestic field with which they are familiar. Furthermore, counsel selected for their competency in, let us say, the field of antitrust law are frequently not fully competent in the field of international law. Certain of the decisions which indicate a failure to comprehend the problems in the area of conflicting international jurisdiction are probably the result of counsel's failure to present the matter properly to the court, intro- duction of dubious points, admissions which eliminate the ground on which a position should have been taken, or other confusion of the pertinent issues. Second: On certain occasions there seems to have been confusion between jurisdiction in personam over a party before a tribunal and
08 CONCURRENT INTERNATIONAL JURISDICTION jurisdiction over an act committed abroad or over subject matter located abroad. Our doctrines •regarding jurisdiction in personam (which have in recent years undergone a marked liberalization) should not be invoked to justify the exercise of jurisdiction over the act or subject matter. A clear expression of the basis of jurisdiction over the foreign subject matter in each case where extraterritorial application of a statute or order is involved would be an excellent way to channel such application in an appropriate direction and to subject it to wise limitations. Third: A fundamental rule of statutory construction has too often been disregarded. It is not arbitrary, but is based upon the soundest assessment of the nature of the problem we are discussing. "All legislation is prima facie territorial."' Too frequently, especially in the antitrust field, the approach has been that of Vermilya-Brown: "[1]t is difficult to formulate a boundary to [the] . . . coverage [of a statute] short of areas over which the power of Congress extends. . . As has been pointed out above, Congress seldom focuses on the issue of the extent of geographical coverage of a statute. That body deals primarily with situations within the United States. When a statute is intended to apply extraterritorially, it is almost always made clear in the language of the statute. Therefore, as Foley Bros. stated, "The canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States . . . is a valid approach whereby unexpressed congressional intent may be ascer- tained." 40 This rule is applicable, in slightly modified form, to cases involv- ing the imposition of our laws upon foreign merchant ships in our ports. Unless the peace of the port is disturbed, the ship should be treated, in respect to matters pertaining to its internal affairs, its crew, and its passengers, as if it were the territory of the State whose flag it flies. In such situations our legislation is prima facie to be applied only to our own territory, not to this quasi-territory of a foreign State.
V. CO C USIO : A SUGGES E A OAC O E E E CISE O CO IC I G U IS IC IO What should be the approach to the problem of how to exercise one's jurisdiction when such exercise may conflict with the jurisdiction of another sovereign? What considerations should be taken into ac- count and weighed by a governmental body, be it executive, legislative,
8 A r n n n C . v. Un t d r t C ., 2 U.S. 4 , ( 0 . r l r n v. C nn ll, pr n t , t 8 . l r . v. l rd , 6 U.S. 28 , 28 ( 4 . 0 OS O CO EGE I US IA A COMME CIA AW E IEW or judicial, which is faced with the question of whether, and how, to exercise its jurisdiction in such circumstances? - Apart from cases in which a vital national interest demands cer- tain action even though it may infringe upon another sovereign, impair our foreign relations, and cause hardship to private parties, the decision maker, in addition to considering statutory language and policy, should weigh the following considerations. 1. The three basic causes of improper or unwise exercise of con- flicting jurisdiction, mentioned above, should, of course, be borne in mind. 2. The possible effect of the proposed action upon the other sovereign and upon our foreign relations should be considered. The decision shoud be framed in the light of the position taken by the other sovereign, its vital national interests, laws, policies and customs, and its interest in its own nationals. Any infringement of strong public policies and ancient customs of the other State, whether or not enacted into law, will most certainly cause a reaction from the other govern- ment. Basic policy differences should be dealt with through diplomatic channels. Attempts to deal with matters which reasonably are thought by the foreign sovereign to be its primary concern likewise will cause a reaction. Not only should one avoid ordering acts to be taken in a foreign country which would be illegal under its law, but every effort should be made to avoid treating as illegal those acts of citizens of the foreign State committed within its borders and legal under its law, particularly when they have the encouragement of the foreign sover- eign. 3. Another point that must be considered, although it will usually arise only in connection with a court order, is the possibility of hard- ship on some private party. Hardships may range from a minor incon- venience to a severe criminal penalty, but if there is any reasonable way to avoid it, no should be placed in the position of being under different and conflicting requirements of two States, each of which may be able to enforce its own order. In addition, the court should take great care not to adversely affect the rights of a party not before it. 4. Consideration should be given to the ability of the issuing authority to make its order effective. It is injudicious and futile to issue an order which will probably meet resistance and cannot be enforced. Furthermore, the manner in which an order might have to be enforced may reflect the inadvisability of issuing it in the first place: if it can be enforced only by action which will produce consequences that are even more undesirable than the failure to issue the order, it clearly should not be issued. 0 CONCURRENT INTERNATIONAL JURISDICTION
. n ll , p rh p th b t t t f ll t n d r h t th ntr r t n ld b f n th r St t d th rd r n t r n f r n t n l . W th r f r h ld t t rd th th r St t nt nd xp t t t t n d l n th ." Ar pr p r d t h v r p t n t bl h d nd j r d t n l d tr n nd n x pl f x r f d r t n? h pr nt Und r r t r f St t , f r r Att rn G n r l f th Un t d St t , r t n pr f r f l , d n 6: "W th n th rld n t . . . th f t th t f r l p r d tr b t d r ph ll , r th r th n f n t n ll , n r t l t n nd r pr l lf r tr nt n t x r ." 42 h th nd rl n ph l ph f ll th t h b n d b v . fl t n p n th p l t l f t, nd n ppr t n f th r l t d pr n pl f v rn nt l p r t n h h n v t bl f ll th r fr , ll l th b f r v d n , r t l t t t n , th pl t n th t h v h r t f r d v l p d n r x r f j r d t n h n t n fl t d th th t f n th r v r n. S lf r tr nt th t th t f t r h ndl n f th t t n. h n d r t n t b b rn n nd h n d l n th h pr bl ll b f n v l nl th v rn nt l b d h h t th d n pr p r d t x r ppr pr t lf r tr nt, nd n t rr t t n t l n th th t ll b nt r pr d t v . It t n f b l n n th v r n d r t n , nd x r n d r t n l nd j d l . 4 "W d j t th t j t b d n n r t rn." n S l t d r t d S v t p bl v. C br r , 2 .Y. 2 , 2 8, .E. 2 , 260 ( 2 . 42 K tz nb h, C nfl t n n Unr l r : pr l Cl nd l r n n Int r t t nd Int rn t n l , 6 Y l . . 08 , 0 ( 6 .