Hartford Fire Insurance Co. v. California
509 U.S. 764 (1993)
Various reinsurance companies
in the UK conspired to coerce US insurers into abandoning certain policy
practices that were beneficial to consumers, but costly to the reinsurers.
All of this conspiracy occurred
in the UK, none of it occurred in the US.
The conduct the UK companies
were accused of was perfectly legal within the UK.
Some States (including
California) sued, claiming that the UK companies had violated the Sherman
The UK companies argued that
the US lacked jurisdiction over their acts, and that principles of comity
dictated that they should not be sued in the US.
The Trial Court found that
there was no jurisdiction and dismissed the case. California appealed.
The Appellate Court reversed
and found they had jurisdiction. The UK companies appealed.
The US Supreme Court affirmed
and found the US had jurisdiction.
The US Supreme Court found
that foreign companies acting in foreign countries could nevertheless be
held liable for violations of the Sherman Anti-Trust Act if they conspired to restrain trade within
the US, and succeeded in doing so.
The Court looked to the Restatement
of Foreign Relations Law §415(j),
and noted 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 laws, even where the foreign
state has a strong policy to permit or encourage such conduct."
Basically this case said that
US laws can apply, so long as those law do not conflict with the laws of
the country in question (in this case the UK).
Under the reasoning in this
case, if it would be possible to comply with both UK and US anti-trust
laws, you may apply US laws in a US court, even if the alleged acts took
place in the foreign country.
On the other hand, if US
law was contrary to the laws in the foreign country, and it is
impossible to comply with both, then comity dictates that US law cannot apply.