¹ Hartford Fire Ins. Co. v. California, 113 S.Ct. 2891 (1993).

² See Antitrust & Trade Reg. Rep. (BNA) No. 1684, at 434 (Oct. 13, 1994).

³ Lest there be any misunderstanding, I want to make clear that this brief Editorial is written to the extent possible from the point of view of a scholar, not of an advocate. I speak neither for the American Law Institute and my fellow reporters of the Restatement, nor for the London underwriters and their permanent counsel.

⁴ 88 AJIL 109 (1994).

⁵ For contrasting views on this point, see, e.g., Symposium: Perspectives on the Insurance Crisis, 5 Yale J. on Reg. 367 (1988); also George L. Priest, The Current Insurance Issues and Modern Tort Law, 96 Yale L.J. 1521 (1987).

⁶ Interestingly, it was the attorneys general and not the insurance commissioners who filed the action; in many instances, the state insurance commissioners were opposed to bringing the suit. But since the action was brought under federal law and no allegations were made of violation of state law, the insurance commissioners were not responsible for the decisions to file or join the suit.

⁷ An insurance policy based on occurrence during the effective period of the policy has the effect that the issuer cannot close its books on policies written for a given period until long after the end of the term of the policy. In the 1980s, insurers and reinsurers that had written occurrence-based policies for the United States found themselves confronted with massive claims arising out of the use of asbestos in the construction of buildings, and also with claims arising out of underground chemical pollution. Defendants in the Insurance Antitrust Case contended that whatever they had done was intended only to stanch the losses arising as a result of such claims. Plaintiffs asserted that, nevertheless, the agreements were unlawful under U.S. antitrust law.

⁸ 549 F.2d 597 (9th Cir. 1976).

⁹ 595 F.2d 1287 (3d Cir. 1979).

¹⁰ Restatement (Second) of the Foreign Relations Law of the United States §§18, 40 (1965); Restatement (Third) §§403, 415 (1987).

¹¹ United States v. Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945).

¹² Timberlane, 549 F.2d at 611–12.

¹³ Id. at 613.

¹⁴ Kingman Brewster, Antitrust and American Business Abroad 446 (1958), quoted in Timberlane, 549 F.2d at 614 n.31.

¹⁶ See, e.g., Mannington Mills, 595 F.2d at 1297–98; Restatement (Third) §403(2).

¹⁶ In re Insurance Antitrust Litigation, 723 F.Supp. 464, 490 (N.D. Cal. 1989) (emphasis added).

¹⁷ In re Insurance Antitrust Litigation, 938 F.2d 919, 933 (9th Cir. 1991).

¹⁸ Id. at 934.

¹⁹ The U.S. Government, which had declined to become involved in the case earlier, submitted a brief amicus curiae on behalf of the plaintiffs, primarily devoted to the domestic aspects of the case. The brief of the Solicitor General also argued, however, that application of U.S. law should be stayed only in case of a direct conflict, defined as existing only if (1) the foreign government has directed the defendants to engage in the challenged conduct, or (2) the defendants would have frustrated clearly articulated policies of the foreign government if they had not engaged in the disputed conduct. Brief for the United States as Amicus Curiae at 28, Hartford Fire Ins. Co. v. California (Nos. 91-1111, 91-1128).

²⁰ The domestic issues turned on the scope of the McCarran-Ferguson Act, 15 U.S.C. §§1011–1015 (1988), which essentially exempts insurance companies from the operation of the federal antitrust laws if they come under state insurance regulation meeting certain minimum criteria, but provides that the exemption is not applicable in respect of agreements to boycott, coerce or intimidate. Plaintiffs charged that the defendants had engaged in unlawful boycotts, thus losing their exemption. The district court had dismissed, and the court of appeals, reversing the lower court, had reinstated, the complaint on this ground against Hartford and the other domestic defendants. The court of appeals also held that the domestic defendants had lost their immunity by conspiring with foreign nonexempt parties. 938 F.2d at 928. The Supreme Court unanimously reversed this holding.

²¹ 159 U.S. 113 (1895). As in Insurance Antitrust, the Court in Hilton split five to four, with a result that declined to give effect to the foreign interest. The statement by the Court about comity, however, has far outlived the holding of the case denying recognition to the judgment of a French court on the basis of lack of reciprocity:

“Comity,” in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.

Id. at 163–64.

²² 113 S.Ct. at 2910. The phrase in quotation marks refers to the opinion of Justice Blackmun in Société Nationale Industrielle Aérospatiale v. United States District Court, 482 U.S. 522, 555 (1987).

²³ Restatement (Third) §415 comment j.

²⁴ 113 S.Ct. at 2910 (quoting Restatement (Third) §403 comment e).

²⁵ See the decree in United States v. Imperial Chemical Industries, 105 F.Supp. 215 (S.D.N.Y. 1952), as quoted in British Nylon Spinners, Ltd. v. Imperial Chemical Industries, Ltd., [1953] Ch. 19, 28 (UK Ct. App.), [1955] 1 Ch. 37, 53 (Chancery Ct.); United States v. General Electric Co., 115 F.Supp. 835, 878 (D.N.J. 1953). See also Restatement (Third) §441.

²⁶ 113 S.Ct. at 2911.

²⁷ Id. at 2918–19 (quoting Murray v. The Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804)).

²⁸ Id.

²⁹ The Restatement (Third) §402(1 )(C), for instance, looks at jurisdiction based on effect in the territory of the state exercising jurisdiction as an aspect of territorial jurisdiction, subject, like other exercises of jurisdiction, to the requirement of reasonableness as set forth in §403.

³⁰ 148 F.2d 416 (2d Cir. 1945).

³¹ 549 F.2d 597 (9th Cir. 1976).

³² 595 F.2d 1287 (3d Cir. 1979).

³³ 113 S.Ct. at 2919–20, citing Lauritzen v. Larsen, 345 U.S. 571 (1953); Romero v. International Terminal Operating Co., 358 U.S. 354 (1959); McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10 (1963), all emphasizing the traditional international law looking to the national law of an ocean-going ship’s flag or registry.

³⁴ Id. at 2920–21.

³⁵ Id. at 2921.

³⁶ Id. at 2922.

³⁷ See my forthcoming General Course on Private International Law at the Hague Academy of International Law: International Litigation and the Quest for Reasonableness, 245 Recueil des Cours (1994 I).

³⁸ See Case 89/85, Wood Pulp Case (Dec. of Sept. 27, 1988), 1988 ECR 5193.

³⁹ I do not here address law related to litigation activity, such as banking secrecy, requirements of nondisclosure of economic information, and the like, which are subject to somewhat different evaluation.

⁴⁰ E.g., Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1326 (2d Cir. 1972); also Bersch v. Drexel Firestone, Inc., 519 F.2d 974 (2d Cir. 1975), cert, denied, 423 U.S. 1018 (1979); IIT v. Vencap, 519 F.2d 1001 (2d Cir. 1975).

⁴¹ See the discussion in the last paragraph of this Editorial.

⁴² Of course, the several citations to the Restatement could be marshaled in support of a contention that the Court agrees with that work’s basic approach, but I think the evidence supports only a prediction, not a conclusion in this direction.

⁴³ Société Nationale Industrielle Aérospatiale v. United States District Court, 482 U.S. 522 (1987).

⁴⁴ These read, respectively:

(a) the link of the activity to the territory of the regulating state, i.e., the extent to which the activity takes place within the territory, or has substantial, direct, and foreseeable effect upon or in the territory;

(b) the connections, such as nationality, residence, or economic activity, between the regulating state and the person principally responsible for the activity to be regulated, or between that state and those whom the regulation is designed to protect;

(c) the character of the activity to be regulated, the importance of regulation to the regulating state, the extent to which other states regulate such activities, and the degree to which the desirability of such regulation is generally accepted.

Restatement (Third) §403(2).

⁴⁵ 113 S.Ct. at 2910 (emphasis added).

⁴⁶ Id.

⁴⁷ Compare United States v. First Nat’l City Bank, 396 F.2d 897 (2d Cir. 1968).

⁴⁸ See, e.g., Commerce Cops, Bus. Wk., Dec. 13, 1993, at 69, based largely on an interview with Diane P. Wood, Deputy Assistant Attorney General for Antitrust, U.S. Department of Justice. The example given by Ms. Wood and Assistant Attorney General Anne K. Bingaman concerns glass, but other products are also mentioned. The proposed new Antitrust Enforcement Guidelines for International Operations, released by the Department of Justice in October 1994, generalize the proposed enforcement action in Illustrative Examples C and F to countries Epsilon and Alpha, 59 Fed. Reg. 52,810, 52,816, 52,817 (1994) [hereinafter Proposed Guidelines].

⁴⁹ Remember that since the proposed actions would not “arise out of” the defendants' activities in the United States, the lower threshold of “transacting business” would not be applicable.

⁵⁰ The Restatement avoids the word “comity” except for cross-references, because the reporters believed that comity carries too much of the idea of discretion or even political judgment, as contrasted with the principle of reasonableness, which is conceived of in terms of legal obligation. If agreement can be reached or approached on content, it may not be worthwhile continuing to debate the terminology. See, however, the point made in text at note 55 infra.

⁵¹ See, e.g., Mora v. McNamara, 387 F.2d 862 (D.C. Cir. 1967), cert, denied, 389 U.S. 934 (1967); DaCosta v. Laird, 448 F.2d 1368 (2d Cir. 1971), cert, denied, 405 U.S. 879 (1972), and the many other “Vietnam cases.” One U.S. district judge hearing an antitrust case brought by the Government did, in a footnote, adopt the position advocated by the Justice Department that “it is not the Court’s role to second-guess the executive branch’s judgment as to the proper role of comity concerns under these circumstances,” but then denied the Government’s motion to enjoin the merger of two foreign companies, so that when the decision was appealed, there was no occasion for the appellate court to consider the issue. See United States v. Baker Hughes, Inc., 731 F.Supp. 3, 6 n.5 (D.D.C.), aff’d, 908 F.2d 981 (D.C. Cir. 1990).

⁵² U.S. Dep’t of Justice, Antitrust Enforcement Guidelines for International Operations §6 (1988), reprinted in 4 Trade Reg. Rep. (CCH) §13,109, and 55 Antitrust & Trade Reg. Rep. (BNA) No. 1391 (Nov. 17, 1988).

⁵³ Brief for the United States, supra note 19, at 27.

⁵⁴ Proposed Guidelines, note 48 supra, §3.2.

⁵⁵ See note 50 supra.