United States Supreme Court Hears Oral Argument on the “Extraterritorial” Application of the Securities Exchange Act


Today the United States Supreme Court heard oral argument on the question of whether “Foreign-Cubed” securities class actions — private actions brought on behalf of foreign purchasers of the securities of foreign companies on foreign exchanges — may be litigated in United States courts.

The “extraterritorial” reach of the federal securities laws is the central focus of Morrison v. National Australia Bank, No. 08-1191. Morrison is the third in a series of fairly recent Supreme Court cases reviewing the extraterritorial application of federal statutes, following the Court’s consideration of the reach of antitrust law in F. Hoffmann-LaRoche Ltd. v. Empagran S.A., 542 U.S. 155 (2004), and patent law in Microsoft v. AT&T Corp., 550 U.S. 437 (2007). In Empagran (a unanimous decision) and Microsoft (an 8-to-1 decision), the Court concluded that the extraterritorial scope of the federal antitrust and patent statutes was a matter for Congress to decide. In the face of statutes that were ambiguous or silent on the issue, the Court applied a “presumption that United States law governs domestically but does not rule the world.”

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