Extraterritoriality and Conflict-of-Laws Theory: An Argument for Judicial Unilateralism

Abstract

Justice Scalia's dissenting opinion in Hartford Fire Insurance Co. v. California called for a "conflict of laws" approach in determining the extraterritorial reach of regulatory statutes like the Sherman Act, which Justice Scalia equated with comparative interest balancing. This article traces the influence of conflicts theory on extraterritoriality and demonstrates that each of the three basic approaches to extraterritoriality -- territorial, effects, and balancing -- is rooted in a different conflicts theory. Borrowing from conflicts terminology, the article further distinguishes between multilateral approaches that attempt to assign legislative jurisdiction exclusively to one state and unilateral approaches that permit concurrent jurisdiction. Finally, the article makes two process-based arguments for a unilateral, effects approach to extraterritoriality (like that adopted by the Hartford majority). First, such an approach corrects for failures in the legislative process that result in underregulation in areas like antitrust. Second, the "conflict" with foreign law created by such an approach promotes negotiation by the political branches, which are better equiped to resolve such conflicts than courts.