'' Hartford Fire Insurance Co. v. California'', 509 U.S. 764 (1993), was a controversial

United States Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...

case which held that foreign companies acting in foreign countries could nevertheless be held liable for violations of the

Sherman Antitrust Act The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce. It was passed by Congress and is named for Senator John Sherman, its principal author. ...

if they conspired to restrain trade within the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, and succeeded in doing so.

Facts

Various

reinsurance companies Reinsurance is insurance that an insurance company purchases from another insurance company to insulate itself (at least in part) from the risk of a major claims event. With reinsurance, the company passes on ("cedes") some part of its own insu ...

in the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

had conspired through

Lloyd's of London Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gove ...

to coerce U.S. insurers into abandoning certain policy practices that were beneficial to consumers, but costly to the reinsurers. When

U.S. state In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its sove ...

s (including the named

plaintiff A plaintiff ( Π in legal shorthand) is the party who initiates a lawsuit (also known as an ''action'') before a court. By doing so, the plaintiff seeks a legal remedy. If this search is successful, the court will issue judgment in favor of t ...

California California is a state in the Western United States, located along the Pacific Coast. With nearly 39.2million residents across a total area of approximately , it is the most populous U.S. state and the 3rd largest by area. It is also the m ...

) filed a lawsuit alleging antitrust violations, the defendant companies raised a number of defenses, asserting that the United States lacked jurisdiction over their acts, that various statutes exempted them from liability, and that principles of

comity In law, comity is "a practice among different political entities (as countries, states, or courts of different jurisdictions)" involving the " mutual recognition of legislative, executive, and judicial acts." Etymology Comity derives from the La ...

dictated that they should not be brought before a U.S. court. The

United States district court The United States district courts are the trial courts of the U.S. federal judiciary. There is one district court for each federal judicial district, which each cover one U.S. state or, in some cases, a portion of a state. Each district co ...

in which the case was brought accepted these arguments and dismissed the case. The

Court of Appeals A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of ...

reversed the dismissal.

Result

The Supreme Court, in an opinion by

Justice Souter David Hackett Souter ( ; born September 17, 1939) is an American lawyer and jurist who served as an associate justice of the U.S. Supreme Court from 1990 until his retirement in 2009. Appointed by President George H. W. Bush to fill the sea ...

, stated that "it is well established by now that the Sherman Act applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States." The defendants raise, and the Court rejects the applicability of § 402 of the Foreign Trade Antitrust Improvements Act of 1982 (FTAIA), which states that the Sherman Act does not apply to conduct involving foreign trade or commerce (other than import trade or import commerce), unless "such conduct has a direct and reasonably foreseeable effect" on domestic or import commerce.''Hartford Fire Ins. Co.'', 509 U.S. at 796 n. 23. The Court found that the conduct at issue here clearly had such an effect. The Court also found that, in enacting the FTAIA, the

U.S. Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washin ...

did not intend to write principles of comity into the Sherman Act - but even if they had, this would not affect the outcome. Both the defendant and Hartford argued that the conduct in which the reinsurers had engaged was lawful in the United Kingdom. Nevertheless, the Court looked to the Restatement (Third) Foreign Relations Law, § 415, Comment ''j'' for the principle that: :The fact that conduct is lawful in the state in which it took place will not, of itself, bar application of the

United States antitrust law In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of businesses to promote competition and prevent unjustified monopolies. The three main U.S. antitrust statutes are the Sherm ...

s, even where the foreign state has a strong policy to permit or encourage such conduct. Furthermore, the Court cited Restatement (Third) Foreign Relations Law, § 403, Comment ''e'' for the proposition that no conflict exists "where a person subject to regulation by two states can comply with both."

Dissent

Justice Scalia Antonin Gregory Scalia (; March 11, 1936 – February 13, 2016) was an American jurist who served as an associate justice of the Supreme Court of the United States from 1986 until his death in 2016. He was described as the intellectua ...

dissented, joined in part by Justices O'Connor, Kennedy, and

Thomas Thomas may refer to: People * List of people with given name Thomas * Thomas (name) * Thomas (surname) * Saint Thomas (disambiguation) * Thomas Aquinas (1225–1274) Italian Dominican friar, philosopher, and Doctor of the Church * Thomas the A ...

. Scalia acknowledged that the federal courts had

jurisdiction Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. J ...

over this case, and that the Sherman Act could be applied extraterritorially, so long as the foreign acts complained of were directed into the United States. Nevertheless, Scalia contended that the actions of the U.S. courts showed a lack of judicial respect for the comprehensive regulatory scheme enacted by the UK. Although Congress may have intended the Sherman Act to apply to acts originating abroad, it was unreasonable to assume that Congress intended to apply the antitrust laws where they would be disruptive of another country's legislative scheme.

References

External links

* {{caselaw source , case = ''Hartford Fire Insurance Co. v. California'', {{ussc, 509, 764, 1993, el=no , justia =https://supreme.justia.com/cases/federal/us/509/764/ , loc =http://cdn.loc.gov/service/ll/usrep/usrep509/usrep509764/usrep509764.pdf , oyez =https://www.oyez.org/cases/1992/91-1111 United States Supreme Court cases United States Supreme Court cases of the Rehnquist Court United States antitrust case law 1993 in United States case law 1993 in California Legal history of California ITT Inc. Reinsurance

Facts

Result

Dissent

See also

References

External links