Because it wiped out “foreign-cubed” securities class actions, “[p]erhaps no precedent has ever cut down [as] many claims of such great value so rapidly” as the Supreme Court’s decision in Morrison v. National Australia Bank.1 But Morrison’s impact on securities class actions was only the beginning of the story. Litigants and courts now seek to apply Morrison and its underlying presumption against extraterritoriality to different situations under the securities laws, as well as to other statutes, such as RICO and the Alien Tort Statute.2 These efforts have highlighted two important questions about Morrison and the presumption against extraterritoriality. The first relates to how Morrison distinguished between what is extraterritorial and what is not; the second involves how the presumption applies to criminal cases.
‘Focus’ Analysis
Morrison held that Section 10(b) of the Securities Exchange Act of 1934 did not overcome the “presumption against extraterritoriality”—the “longstanding principle of American law ‘that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.’” “When a statute gives no clear indication of an extraterritorial application,” the court explained, “it has none,” and since “there is no affirmative indication in the Exchange Act that §10(b) applies extraterritorially, …it does not.”3
