American Banana Co. v. United Fruit Co.
213 U.S. 347 (1909)
McConnell bought American
Banana, which was a Columbian company operating on what is now Panama (but
was then part of Columbia).
A competitor, United Fruit,
threatened American Banana, and eventually had Costa Rican soldiers invade
Panama and seize the American Banana plantation.
The plantation was
eventually transferred in a Costa Rican court to United Fruit.
McConnell sued in US Court
under the Sherman Anti-Trust Act.
United Fruit argued that the
US did not have jurisdiction to hear the case.
Thee Trial Court dismissed the
The Trial Court found that
US Courts did not have jurisdiction to hear the case, because the alleged
acts didn't occur on US soil.
The US Supreme Court affirmed.
The US Supreme Court found
that, in general, jurisdiction is territorial.
In this case, since the
alleged acts occurred completely on Panamanian soil, it could only be
tried in a Panamanian court.
McConnell argued that since
he was a US citizen, US Courts had jurisdiction, but the Court disagreed.
"The acts causing the
damage were done, so far as it appears, outside the jurisdiction of the
US and within that of other States. It is surprising to hear it argued
that they were governed by the Act of Congress."
This decision was a very
narrow construction of the limits of jurisdiction. They were later
expanded in United States v. Aluminum Co. of America (148 F.2d 416 (1945)), and Timberlane
Lumber Co. v. Bank of America (549
F.2d 597 (1976)).