Courts Without Borders: Domestic Sources of U.S. Extraterritoriality in the Regulatory Sphere

Abstract

Regulating private transactions across international boundaries has long posed a challenge to states+ Extraterritoriality-the direct regulation of persons and conduct outside a state's borders-is an increasingly common mechanism by which strong states attempt to manage problems associated with transnational activities+ This article seeks to account for variation across issues in the willingness of U+S+ courts to regulate extraterritorially by focusing on the potential for external conduct to undermine domestic legal rules+ It suggests further how attention to domestic-level regulatory processes, with particular focus on the role of private actors, can shed new light on transnational rulemaking and enforcement+ Regulating the conduct of transnational actors has long posed a challenge for states+ Global economic integration, however, has given questions of regulatory convergence and divergence new scope and urgency+ Governance problems arise because states' legal rules generally operate only within their respective territories, whereas a single transnational act can, by definition, have consequences in several states+ Segmenting cross-border conduct into location-specific components for regulatory purposes is often impossible+ While governments can sometimes agree on the desirability of regulatory harmonization, achieving it on a practical level is difficult+ 1 One approach to regulating transnational conduct that has become increasingly common in recent decades involves courts and other domestic-level institutions claiming direct authority over entire transactions, including those elements out-I would like to thank two anonymous reviewers for comments and suggestions+ I would also like to thank participants in the

Foreign Affairs and Enforcement of the Foreign Corrupt Practices Act

“…Our broad distinction between extraterritorial regulation undertaken for parochial reasons as opposed to concerns about foreign affairs is similar to a distinction drawn by Putnam (). Her analysis suggests that parochial concerns, specifically the desire to prevent domestic policies from being undermined or to uphold basic rights “at the core of U.S. political and legal identity,” provide the best explanations of U.S. courts' decisions on whether to assert extraterritorial jurisdiction across a range of subject areas.…”

Domestic drivers of transgovernmental regulatory cooperation

“…We do not explore other dimensions of institutional variation, such as for instance the degree of concentration or fragmentation of domestic regulatory authority. 5 Putnam (2009). For a review, see Frieden and Martin (2002).…”

The European Union as hardening agent: soft law and the diffusion of global financial regulation

“…The dynamics we have uncovered suggest that domestic rule-making forms part of the broader institutional fabric surrounding global soft law, and that domestic structures can give soft law a much 'thicker' degree of institutionalization than initially meets the eye (Helleiner and Pagliari 2011;Shaffer and Pollack 2009). The contribution adds to a growing literature that explores how private international law increasingly mixes with domestic regulation (Kaczmarek and Newman 2011;Lavelle 2011;Putnam 2009). …”

“…It couples two dynamics that increasingly receive attention in research on international regulation and yet have been discussed largely separately: the EU as a global regulatory actor and the rise of international soft law in finance (Bach and Newman 2007;Brummer 2011;Büthe and Mattli 2011;Mügge 2011;Posner 2009a;Underhill and Zhang 2008). Moreover, it highlights the links between domestic rules and global standards, broadening the discussion of soft law and private governance (Bach and Newman 2010;Helleiner and Pagliari 2011;Kaczmarek and Newman 2011;Putnam 2009). Finally, it helps resolve an important empirical puzzle concerning the widespread use of soft law: the remarkable resilience of many international soft law standards despite their demonstrably shallow institutionalization at the global level.…”

“…There are, of course, exceptions. Work on extraterritoriality and diffusion, for example, demonstrates the important and growing interdependencies of domestic law in global governance (Bach and Newman 2010;Kaczmarek and Newman 2011;Powell and Staton 2009;Putnam 2009;Raustiala 2002;Simmons and Elkins 2004;Zaring 2004).…”