10.6092/issn.2531-6133/11542
This article uses the research from Kal Raustiala’s book, Does the Constitution Follow the Flag? : The Evolution of Territoriality in American Law, and the research from several of my articles on extraterritorial applications to explain how the United States has used the regulatory tool, extraterritoriality, since the time of the American Founding and how such use has differed as the United States gained power. The manner by which the United States has relied on extraterritoriality has differed depending on a particular era of history. For instance, this article articulates five eras that have characterized the U.S. decision-making process for extraterritoriality: cautionary, progressive, indiscriminate, withdrawal, and arbitrary. The United States within each era has embraced certain customary principles more than others such as sovereignty, territorialism, international comity, and global constitutionalism. Its reliance on these principles is volatile and changes in each era. What is remarkable is the extent to which the United States has and has not considered international issues as a part of its practice of utilizing extraterritoriality. As a young nation, the United States greatly clung to notions of sovereignty and territorialism and eschewed extraterritoriality because it was not strong enough to exert such power nor could it handle an invasion from another foreign power. Sovereignty and territorialism gave the United States the peace of mind and security against an uprising. International considerations were prominent and commonplace in the early eras. But as the nation grew in strength throughout each successive era, it no longer needed the bedrock of sovereignty and territorialism to safeguard it from other foreign powers. The United States instead sought to inject its laws extraterritorially and engage in global policing. Its rise in economic and political power gave it the strength to do so. Extraterritorial regulation was on the rise. However, the more its use of extraterritoriality rose, the more domestic struggles the United States encountered, which led to arbitrary judicial decisions and policy-making. Further, during the later eras, the United States relied less and less on international considerations and engaged in withdrawal tactics, causing some to view its behavior as hegemonic. There is a great imperative of examining history with the law. How U.S. history and politics can inform the future of the law is critical. The findings laid out within this article will serve a starting point for future research regarding potential future eras.
application/pdf
2531-6133
11542
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Alina Veneziano
https://creativecommons.org/licenses/by/4.0
University of Bologna Law Review
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The Eras of Extraterritoriality in the United States
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2020-09-21
2020-09-17
2020-09-19
2020-10-14
240-267
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Alina Veneziano
2020/09/21
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The Eras of Extraterritoriality in the United States
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5
    llVOLUME 5                                      llISSUE 2                           ARTICLES & ESSAYS



                                UNIVERSITY OF BOLOGNA LAW REVIEW
                                h ps://doi.org/10.6092/issn.2531-6133/11542
                                                      A

               The Eras of Extraterritoriality in the United States
                                               ALINA VENEZIANO †


                                                    ABSTRACT

    This article uses the research from Kal Raustiala’s book, Does the Constitution Follow the Flag? : The
    Evolution of Territoriality in American Law, and the research from several of my articles on
    extraterritorial applications to explain how the United States has used the regulatory tool,
    extraterritoriality, since the time of the American Founding and how such use has differed as the
    United States gained power.           The manner by which the United States has relied on
    extraterritoriality has differed depending on a particular era of history. For instance, this article
    articulates five eras that have characterized the U.S. decision-making process for
    extraterritoriality: cautionary, progressive, indiscriminate, withdrawal, and arbitrary. The
    United States within each era has embraced certain customary principles more than others such
    as sovereignty, territorialism, international comity, and global constitutionalism. Its reliance on
    these principles is volatile and changes in each era. What is remarkable is the extent to which the
    United States has and has not considered international issues as a part of its practice of utilizing
    extraterritoriality. As a young nation, the United States greatly clung to notions of sovereignty
    and territorialism and eschewed extraterritoriality because it was not strong enough to exert
    such power nor could it handle an invasion from another foreign power. Sovereignty and
    territorialism gave the United States the peace of mind and security against an uprising.
    International considerations were prominent and commonplace in the early eras. But as the
    nation grew in strength throughout each successive era, it no longer needed the bedrock of
    sovereignty and territorialism to safeguard it from other foreign powers. The United States
    instead sought to inject its laws extraterritorially and engage in global policing. Its rise in
    economic and political power gave it the strength to do so. Extraterritorial regulation was on the
    rise. However, the more its use of extraterritoriality rose, the more domestic struggles the United
    States encountered, which led to arbitrary judicial decisions and policy-making. Further, during
    the later eras, the United States relied less and less on international considerations and engaged
    in withdrawal tactics, causing some to view its behavior as hegemonic. There is a great
    imperative of examining history with the law. How U.S. history and politics can inform the future
    of the law is critical. The findings laid out within this article will serve a starting point for future
    research regarding potential future eras.


                                                    KEYWORDS
              Extraterritoriality; International Comity; Regulatory Tool; Citizenship; U.S. Constitution




†
     Alina Veneziano is a Ph.D. Candidate at King’s College London (UK). She received an LL.M., New York
    University School of Law, 2019 (US); a J.D., Georgetown University Law Center, 2018 (US); an M.B.A., Western
    Governors University (US); and a B.S. in Accounting, Western Governors University (US). Alina Veneziano is a
    registered attorney of the Bar of the State of New York.




                                                        240
2020]                                UNIVERSITY OF BOLOGNA LAW REVIEW                                                         [Vol: 5:2


                                                 TABLE OF CONTENTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   241
1. Presenting the Eras of Extraterritoriality in the United States . . . . .                  .   .   .   .   .   .   .   .   .   .   .   242
         1.1. Cautionary with International Focus (founding – early 1900s)                    .   .   .   .   .   .   .   .   .   .   .   242
         1.2. Progressive with International Focus (early 1900s – 1950s) .                    .   .   .   .   .   .   .   .   .   .   .   247
         1.3. Indiscriminate without International Focus (1950s – 1990s)                      .   .   .   .   .   .   .   .   .   .   .   251
         1.4. Withdrawal without International Focus (1990s – 2010) . .                       .   .   .   .   .   .   .   .   .   .   .   254
         1.5. Arbitrary without International Focus (2010 – present) . . .                    .   .   .   .   .   .   .   .   .   .   .   261
2. Significance of the Era-Classifications . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   265
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                .   .   .   .   .   .   .   .   .   .   .   267




        INTRODUCTION

The United States is not the same country it was at the time of the Founding. It has
grown substantially as a global power and leader. From asserting its independence to
domestic funding to international policing, the United States is a pioneer country. A
large part of its dominance, both internally and abroad, has been the proliferation of
federal legislation beginning in the 1930s and the use of the regulatory tool,
extraterritoriality.1 Extraterritoriality involves the application and use of U.S. law to
regulate foreign conduct. The key to this tool is that some part of the regulable conduct
must take place outside the territory of the United States.                                 As can be imaginable,
extraterritorial applications create foreign friction, harm international relations efforts,
and conjure up multiple issues with another state’s sovereignty, determination, and
territoriality. What is interesting about this article is that it tells the story of the United
States’ use of extraterritoriality in a series of stages – eras – each of which is
accompanied by certain attendant circumstances such as evolved notions of territoriality
and citizenship, differing attitudes about the international realm, and varying degrees of
coordination and uncertainty between the U.S. branches of government.
             This Article proceeds in the following manner. Part II presents the eras of
extraterritoriality in the United States and describes the attendant circumstances
associated with each era.                 The United States has proceeded through five eras: (1)
1
    For Kal Raustiala’s book see KAL RAUSTIALA, DOES THE CONSTITUTION FOLLOW THE FLAG? : THE EVOLUTION OF
    TERRITORIALITY IN AMERICAN LAW (2009). See also Alina Veneziano, Applying the U.S. Constitution Abroad, from the
    Era of the U.S. Founding to the Modern Age, 46 FORDHAM URB. L.J. 602 (2019) [hereinafter Veneziano, Applying the
    U.S. Constitution Abroad]; see also Alina Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities
    Laws : What It Means for Foreign Investors, Foreign Markets, and Efforts at Harmonization, 17 GEORGETOWN J.L. & PUB.
    POL’Y 343 (2019) [hereinafter Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws];
    see also Alina Veneziano, A New Era in the Application of U.S. Securities Law Abroad : Valuing the Presumption Against
    Extraterritoriality and Managing the Future with the Sustainable-Domestic-Integrity Standard, 23 ANN. SURV. OF INT’L
    & COMP. L. 79, 111 (2019) [hereinafter Veneziano, A New Era in the Application of U.S. Securities Law Abroad].


                                                            241
                     THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


Cautionary with international focus, (2) Progressive with international focus, (3)
Indiscriminate without international focus, (4) Withdrawal without international focus,
and (5) Arbitrary without international focus.         Part III explains the significance of
classifying the United States into these eras of extraterritoriality.             As will be
demonstrated, it is important to understand how the United States began and continued
to use extraterritoriality to regulate foreign conduct as well as how its use of this tool
differed throughout history depending on factors such as power, attitudes on
international law, security, and territoriality/citizenship. Lastly, Part IV presents the
conclusions of this article.




        1.     PRESENTING THE ERAS OF EXTRATERRITORIALITY IN THE
        UNITED STATES

The history of the United States has proceeded through a series of eras regarding the
judiciary’s practice of utilizing the tool, extraterritoriality. Each era is characterized by a
rise in global power and differing attitudes towards international law and relations. The
eras are outlined below:

       • Cautionary with international focus.

       • Progressive with international focus.

       • Indiscriminate without international focus.

       • Withdrawal without international focus.

       • Arbitrary without international focus.

These five era classifications are important because they demonstrate how the United
States as a nation reacted to an increase in power and handled international
considerations as it began and continued to use the regulatory tool, extraterritoriality.



      1.1.    CAUTIONARY WITH INTERNATIONAL FOCUS (FOUNDING – EARLY
      1900S)

The Treaty of Westphalia of 1648 declared that each sovereign state has its own exclusive
territory.2 Little did many know at the time of the American Revolution, but America –
2
    See RAUSTIALA, supra note 1.

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2020]                           UNIVERSITY OF BOLOGNA LAW REVIEW                          [Vol: 5:2


a new, unstable, and uncertain young nation – would slowly but progressively become
a world dominator of politics, finance, and regulation. The year 1776 “foreshadowed a
range of future rebellions by peoples who chafed under imperialism and sought ultimately
to control their own political destiny”.3 And this is exactly what America sought to do.
With only thirteen colonies, the nation arduously expanded by “conquest, purchase, and
treaty”.4 This power to conquer territory was a power possessed by all states as a part of
their sovereignty.5
          The theory of strict territorialism and its limited constitutional reach dates back
to the nineteenth century notion that the United States had no legal obligations outside
its territory. At this time, the scope and extent of the “U.S. law” was more like the scope
and extent of the U.S. Constitution. While extraterritorial applications were uncommon,
it was not unheard of. The Constitution itself outlines several instances of authority for
congressional regulation of matters beyond the U.S. territory. For instance, Article I
grants Congress the power ‘‘to define and punish Piracies and Felonies committed on the
High Seas”.6 This reference to such crimes “on the High Seas” certainly implies some
authority to regulate beyond the territory of the United States.7                   Thus, the U.S.
Constitution was both the symbol of the United States’ power and a tool utilized for its
increased regulation and expansion.                     Nevertheless, extraterritorial applications
embraced a very cautionary approach. The impact of U.S. law took the same reasoning.8
To extend a law extraterritorially at this time was seen as a “dangerous repudiation of
Westphalian principles”.9 The Supreme Court has held in the early nineteenth century
that U.S. law applies within the “full and absolute territorial jurisdiction”10 of the United
States; however, it had “no force to control the sovereignty or rights of any other
nation”.11 International considerations were very much a top consideration.
          Decisions on territorial expansions were not always to make. For instance,
President Thomas Jefferson had doubts regarding the constitutionality of the Louisiana
Purchase of 1803, despite its immense addition to the territory of the United States.12
Throughout the decades (and centuries as we shall see later on), America was always
plagued by territorial distinctions when expanding. Even as early as the 1800s, America

3
   Id. at 31.
4
   Id.
 5
   Id. at 36.
 6
   U.S. Const. art. I, § 8, cl. 10.
 7
   See RAUSTIALA, supra note 1, at 34.
 8
   Id. at 239.
 9
   Id.
10
   The Exchange v. McFaddon, 11 U.S. 116, 137 (1812).
11
   The Apollon, 22 U.S. 362, 370 (1824).
12
   RAUSTIALA, supra note 1, at 37.


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                    THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


was facing tensions between its “global ambition and constitutional tradition”.13 But to
expand globally, America had to be cognizant of international law. All its new territories
became fully sovereign U.S. territory to other nations.14 And once new territory was
acquired, constitutional law came into play, meaning that the United States had to
decide which rights applied in its newly acquired territories vis-à-vis its states. For
instance, as the nation discovered all too well, an area where less constitutional rights
apply allows the government to have more power and greater flexibility.15 In other
words, the fact that a territory was “unequivocally under U.S. control” did not
automatically mean that the protections of U.S. law such as the guarantees of the U.S.
Constitution were fully applicable.16
           America’s territorial expansion virtually eliminated the Indian tribes and soon
created further internal territorial distinctions during the Civil War between the North
and South, “slave” or “free”.17 Nevertheless, the nation’s expansion after the Civil War
displayed a “cautious approach” regarding other great foreign powers.18                                       But
simultaneously, the United States still managed to “engage more closely and forcefully in
international relations” beginning in the years of the Reconstruction.19                                   Further
complicating matters at this point in this era was whether there were any exceptions to
the applicability of U.S. law in foreign areas that are occupied by the U.S. military. In Ex
parte Milligan, the Supreme Court held in 1866 that using military tribunals to try citizens
during the Civil War, while civilian courts were still in operation, was unconstitutional.20
But the applicability of the Constitution outside the territory of the United States was
non-existent. In 1891, the Supreme Court in In re Ross held that “[t]he Constitution can
have no operation in another country”, meaning that U.S. nationals who are abroad
cannot enjoy the same constitutional guarantees as U.S. nationals within the U.S.
territory.21 The Supreme Court adopted a “completely formalistic approach” to confine
constitutional protections within the territory of the United States only.22 Its outlook
was cautionary, but nevertheless exhibited reference and care to international concerns.

13
   Id. at 38.
14
   Id. at 44.
15
   Id. at 44, 46:
                 From the vantage point of the outside world, the sovereignty of the United States
                 enjoyed the greatest territorial ambit. But as an internal matter, American land was
                 differentiated intraterritorially: there was a core where the Constitution and all laws
                 applied fully, and there was a periphery where American law applied only partially.
16
   Id. at 32.
17
   Id. at 43.
18
   Id. at 27.
19
   Id. at 60.
20
   Ex parte Milligan, 71 U.S. (4 Wall.) 2 (1866).
21
   In re Ross, 140 U.S. 453, 464 (1891).
22
   See Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 610.


                                                        244
2020]                             UNIVERSITY OF BOLOGNA LAW REVIEW                                      [Vol: 5:2


Between 1901 and 1922, the Supreme Court decided several cases that dealt with the
status of territories that the United States acquired in and after the Spanish-American
War, known as the Insular Cases.23 These series of cases are significant because they
articulated the distinction between incorporated and unincorporated territories and the
types of constitutional protections that are applicable.                       Specifically, Justice White’s
concurrence described in detail that incorporated territories that are entitled to
statehood have full constitutional rights while unincorporated territories only have
those constitutional rights that are deemed fundamental.24 The Insular Cases “played a
critical role in America’s move toward empire” by giving the federal government more
territorial control even though the residents of such “unincorporated” territories had
less constitutional rights than those in the colonies.25
           Therefore, whether the United States could regulate a certain area depended on
the location of the territory. These principles were consistent with the judiciary’s stance
on acquired territories. The Marshall Court has generally held that land acquired at this
time traditionally retained its pre-existing law and was not automatically subject to the
provisions of the U.S. Constitution.26 At this time, it was not necessary to apply U.S. law
everywhere indiscriminately. The limited and restricted approach still allowed America
to expand. For instance, the executive branch was given flexibility, which helped fuel
American expansion and its growth as a global power.27 In other words and in a peculiar
way, the Insular Cases “enabled American empire by limiting the reach of the
Constitution”,28 albeit in a cautious manner.
           As America expanded westward, it gained territory but not overseas territory.29
Theories of the empire were gaining in popularity. Not only was the empire regarded as
“force for good”, but America’s expansion of islands, as opposed to contiguous
expansions, was very attractive.30 However, whether this expansion or empire of the
United States – American imperialism – would prevail in the long-run, was uncertain.31
But following World War I, the United States retracted from its imperialistic attitude.32
The nation had begun “a reallocation of territorial possessions” and “a reallocation of

23
   De Lima v. Bidwell, 182 U.S. 1 (1901); Goetze v. United States, 182 U.S. 221 (1901); Dooley v. United States, 182
   U.S. 222 (1901); Armstrong v. United States, 182 U.S. 243 (1901); Downes v. Bidwell, 182 U.S. 244 (1901); Huus
   v. N.Y. & P.R.S.S. Co., 182 U.S. 392 (1901).
24
   See Downes, 182 U.S. at 311-12.
25
   RAUSTIALA, supra note 1, at 87.
26
   Id. at 50.
27
   Id. at 24.
28
   Id.
29
   Id. at 72.
30
   Id. at 73, 75.
31
   Id. at 81.
32
   Id. at 90.


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                   THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


power in world politics”.33 The federal government grew stronger as a force of power in
the lives of the American people.34 This trend continued into the progressive era, as
discussed in the next Part.
            But again, this era was not devoid of considerations of international issues such
as foreign states and foreign law. In fact, one can easily assert that this early era
exhibited the highest preoccupation with international concerns compared with the
later and present-day eras.        Its focus on sovereignty, territoriality, and respect for
international comity illustrates this assertion. A nation’s sovereign jurisdiction was
regarded as “exclusive and congruent with demarcated political borders”.35
Additionally, as a young nation, the United States focused much attention on both
international law and strict territorialism.        Westphalian territoriality provided the
United States with security. Specifically, the nation could not handle an invasion at this
time from either Britain or France and was thus comforted by international law, which
“denied one sovereign influence or control in another”.36
            The strict territorialism approach also enabled America to grow as a global
power because it prevented foreign powers, such as the stronger European powers, from
“threaten[ing] to intrude on the domestic domain of the United States”.37 Had this
approach not been the norm, it would have been both easy and legitimate for other
nations to exert their dominance over America. In a sense, America greatly relied on
strict territorialism and sovereignty to grow as a young nation until it no longer needed
this security to expand.
            American constitutionalism during this era demonstrated that the U.S.
Constitution applied to anyone as long as they were on U.S. soil.38 The trickier question
was whether the U.S. Constitution followed the people – U.S. national or not – into an
area that was not U.S. territory.39 Thus, the U.S. Constitution was largely citizen-blind,
but not territorially-blind. Any extensions of U.S. law beyond these mandates would not
be a cautious means of regulation and would certainly cause international interference,
something America could not risk at the time. Post-war U.S. practices used and viewed
extraterritoriality differently and relied on different forms, the forms of which
“reflected the dramatic extent of postwar U.S. hegemony”.40             The following Part
elaborates on this successive era.
33
   Id. at 93.
34
   Id.
35
   Id. at 32.
36
   Id. at 137.
37
   Id. at 35.
38
   Id. at 57.
39
   Id.
40
   Id. at 91.

                                              246
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     1.2. PROGRESSIVE WITH INTERNATIONAL FOCUS (EARLY 1900S – 1950S)

Beginning in the twentieth century, the United States had a firm footing as an
international power. The Federal Government gained strength and took on a great role
at mending the nation from the repercussions of the Great Depression. The New Deal
under the Roosevelt Administration led a series of economic and industrial reforms and
laws aimed at repairing America from the financial crisis.41 However, these reforms were
effectively a means of “subjecting economic and social activity to government power”.42
The notion that U.S. extraterritoriality was limited to U.S. territory was “a relic from
another era”.43 This era struck the most impact around the mid-twentieth century with
the “decline of strict interpretations of Westphalian territoriality and the rise of
effects-based extraterritorial jurisdiction”.44 The nation had well begun a new era of
progressive development characterized by a fuelled economy and desire for power. The
United States’ economic progress provided the necessary financial assistance by
significantly funding the progression of American power internationally.
           While the reach of U.S. law had expanded, it was accompanied by debates as to
whether it should protect actors abroad.45           At the time, it was very common for
constitutional protections to vary depending on location and this was well-known. The
same held true for federal legislation.46 Sometimes U.S. nationals enjoyed different
rights abroad compared to the rights guaranteed had they been on U.S. territory. This
“more unusual form of extraterritoriality” involved the “fictional projection of U.S.
territory abroad” by which U.S. law – constitutional or federal – was applied abroad to
“insulate American citizens from foreign law”.47 Overseas policing was attractive for a
variety of reasons but began to take force as federal courts became “increasingly
solicitous” of the Constitution’s reach over defendants’ rights.48 This attentive and
considerate stance of U.S. regulation easily involved considerations of international law
and foreign impact.
           Specifically, such practice began as a policy and nationalistic decision. The
United States ought to protect its nationals when they travel outside the territory of the
United States by not only guaranteeing the protections of its law to those U.S. nationals
abroad, but also by protecting those U.S. nationals against the possible application of

41
   RAUSTIALA, supra note 1, at 93-94.
42
   Id. at 94.
43
   Id. at 95.
44
   Id. at 28.
45
   Id. at 29.
46
   Id. at 6.
47
   Id.
48
   Id. at 29.


                                               247
                    THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


foreign law. The nation had the power and monetary means to accomplish this task via
extraterritorial applications. This regulatory tool of extraterritoriality was a method “to
control and manage the interests of Western powers in foreign lands”.49 It was certainly
powerful and viewed as a progressive form of international regulation. But it was also
more than a policy decision. As the United States realized that it could not or did not
want to conquer foreign land, it resorted to “extraterritoriality” to achieve the same
result, albeit to promote trade and protect its citizens abroad.50
           While U.S. extraterritoriality may seem like it would disrupt the potential for
harmonization of any sort, it was used to create consistency in the international realm
or, in other words, to “manage and minimize legal difference”.51 On this point, scholars
have noted that “[t]he desire for territorial security thus encouraged extraterritorial
regulation”.52 Extraterritoriality would have no purpose if the laws of nations were
already harmonized on a legal matter. Its use allowed the United States to inject its laws
into a foreign state’s – usually a weaker foreign state – sovereign territory.53          The
extraterritoriality experiment by the United States was a great success story, especially
during the progressive era. The United States used this regulatory tool to weed out and
eliminate differences that would have been applied against its own nationals. Therefore,
because of this, U.S. nationals abroad were protected from “the strange, the different,
and the dangerous” laws of the foreign nation to which they visited.54
           The proliferation of legislation passed in this era beginning in the 1930s with the
U.S. federal securities laws gave the United States ample options and “extensive
opportunities” to regulate foreign actors and foreign conduct.55 The primary focus of
such regulation began with protecting U.S. markets and the economy.56 Thus, foreign
cartels that took advantage of U.S. markets were regulable under U.S. law in order to
protect the economy of the United States. This phenomenon is most noticeable in the
area of antitrust regulation, which took a progressive approach to foreign regulation. In
United States v. Aluminum Company of America, decided by the Second Circuit in 1945, Judge
Learned Hand discussed foreign agreements in restraint of trade under the Sherman
Antitrust Act, such as monopolies, and held that any state may regulate conduct and
actors outside its borders that have consequences within.57 About four years later, the

49
   Id. at 20.
50
   Id.
51
   Id. at 21.
52
   Id. at 184.
53
   Id. at 21.
54
   Id.
55
   Id. at 117.
56
   Id. at 94.
57
   United States v. Alcoa, 148 F.2d 416, 427 (2d Cir. 1945).


                                                        248
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Supreme Court in Foley Brothers v. Filardo stressed on the importance of employing the
presumption against extraterritoriality when adjudicating cases with cross-border
elements.58 Simply put, the presumption is a judicially-invented tool that holds that
courts must start with the presumption in cross-border cases that “Congress is primarily
concerned with domestic conditions”.59 Use of the presumption was to prevent the
abuses of applying a law abroad when this was not the intent of Congress. Another
purpose was to uphold international comity and avoid instances where international
friction could occur with the extension of U.S. law abroad. Therefore, international
considerations were also a priority in this era. Additionally, as this is a presumption, it is
also rebuttable.60          The most common means of rebutting the presumption is by
congressional indication in the statute to the contrary, though the presumption is
frequently overcome, either because Congress’ intent is not clear or courts loosen the
presumption’s standards.61               Therefore, as will also be shown in the later era, the
presumption is highly malleable.
           When a nation extends its laws abroad to regulate the conduct of another nation,
an interesting issue arises as to whether that area of law should be harmonized or
whether it is better for the dominant nation to utilize extraterritorial application of its
laws. Harmonization is usually accomplished by negotiating international agreements.62
Logically, extraterritoriality is not a multilaterally agreed upon practice. It is instead
better understood as “an alternative to more familiar cooperative efforts”.63                     This
alternative entails unilateral application.                  Many in this era considered the use of
extraterritoriality to be “not only wrong, but dangerous” as well as a direct repudiation
of the doctrine of territoriality, which had long been promoted as the optimal means to
avoid infringements upon other nations’ sovereignty.64 Foreign nations did not consent
to its practice and often found it an infringement of their sovereignty. The United States
used it to influence its Western allies.65 But instead of consent to regulate based on
treaty power, it was based on statutes66 – statutes with explicit provisions or
judicially-implied provisions primarily for effects-based extraterritorial applications.
During the 1940s, effects-based extraterritoriality was “a rational response” as the costs
of this practice decreased, and the benefits increased.67

58
   Foley Bros., Inc. v. Filardo, 336 U.S. 281 (1949).
59
    Id. at 285.
60
   See Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra note 1.
61
   RAUSTIALA, supra note 1, at 99.
62
   Id. at 120.
63
   Id. at 121.
64
   Id.
65
   Id. at 23.
66
   Id.
67
   Id. at 124.

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                    THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


Despite the common acceptance of U.S. extraterritoriality, its practice was nevertheless
debated as a matter of policy and ethics.                        For instance, the U.S. Constitution’s
applicability outside the territory of the United States was an unsettled and debated
issue, which made international issues very much a consideration in this era. And it had
been the U.S. Supreme Court that took on the role of determining the limits and reach of
U.S. extraterritoriality. The Supreme Court confronted the issue of the constitutionality
of habeas petitions for captured enemy combatants in U.S. territory in Ex parte Quirin in
1942.68 The German saboteurs’ trial in the United States had to constitutionally provide
the right to habeas; the trickier question was the extraterritorial reach of habeas, a
question that was confronted later.69
           In 1950, the Supreme Court decided Johnson v. Eisentrager where it held that
German prisoners of war held in a U.S. prison located in Germany could not challenge
their detention in U.S. courts.70 While a foreign nation’s presence on U.S. territory gives
U.S. courts the authority to extend constitutional protections over those foreign
nationals, the claimants in Eisentrager were at no time physically present on the territory
of the United States.71 This case articulated a citizenship distinction when individuals
are not within the territory of the United States. Eisentrager stands for the proposition
that the U.S. Constitution asserts a strong “territorial nexus over one based on
citizenship”.72
           Seven years later, the Supreme Court confronted the issue of constitutional
protections with respect to U.S. nationals abroad. In Reid v. Covert, the issue was whether
civilian wives of military men were entitled to the constitutional right of a jury trial as
opposed to being tried for the murders of their husbands overseas in a U.S. military
court.73 The Supreme Court in Reid held in a plurality opinion that the U.S. Constitution
fully applies to U.S. nationals living abroad in a foreign state.74 Justice Black’s plurality
opinion notably “reject[ed] the idea that, when the United States acts against citizens
abroad, it can do so free of the Bill of Rights”.75 Reid was a seminal holding because it was
an outright “abandonment of the strict, formalistic approach”.76                      But despite the
differing approaches between this era and the last, an international focus was still
adhered to in policy-making and judicial decision-making.

68
   Ex parte Quirin, 317 U.S. 1, 20-21 (1942).
69
   RAUSTIALA, supra note 1, at 135.
70
   Johnson v. Eisentrager, 339 U.S. 763 (1950).
71
   Id. at 771.
72
   Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 613.
73
   Reid v. Covert, 354 U.S. 1, 3-5 (1957).
74
    Id. at 18-19.
75
   Id. at 5.
76
   Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 614.


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While the U.S. Constitution was citizen-blind when individuals are on U.S. territory, this
blindness disappears and creates categories when abroad. As we shall see later, the notion
that wartime detainees could not rely on the U.S. Constitution’s protections when abroad
“helped propel the strategy of offshore detention pursued in Guantanamo Bay”.77 But
for now, suffice to say that World War II and its aftermath changed the extraterritorial
jurisprudence by the United States in that it allowed it to become a progressive world
leader and gave it “both the confidence and power to regulate extraterritorially”.78



     1.3. INDISCRIMINATE WITHOUT INTERNATIONAL FOCUS (1950S – 1990S)

The United States used extraterritoriality and favored it extensively as a new tool to
increase its political and economic interests.79 Its use became widely acknowledged
during the second half of the twentieth century and paved the way for its indiscriminate
application – an application that lacked consideration for international issues and the
impact on foreign states.80 Soon, extraterritorial regulations by the United States no
longer regulated solely the weaker states but began to regulate its “coequal
sovereigns”.81 It was not long before the United States’ use of extraterritorial regulation
became accepted.82 The United States pursued this tool regardless of the resulting
international frictions that it foresaw and ultimately created. Scholars have contended
that the reason for this change in attitude by the United States was the change in its
“global power relations”.83             Specifically, the rise in the United States’ political and
military power allowed it to play a central role in regulating the international realm.84
           The United States made its mark with the new form of extraterritorial regulation
by justifying everything based on the authority to regulate situations which caused
effects within the territory of the United States. Thus, regardless of where such unlawful
acts originated, the United States asserted the authority to regulate it if it caused an
effect within its territorial borders.85 Additionally, the United States was also able to
justify its extraterritorial applications by conduct-based extraterritoriality. Both the
effects and conduct-based forms of exterritoriality comprise the territoriality basis of
prescriptive jurisdiction under international law. There are five bases of prescriptive
77
   RAUSTIALA, supra note 1, at 137-138.
78
   Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 612.
79
   RAUSTIALA, supra note 1, at 35.
80
   Id. at 178.
81
   Id. at 95.
82
   Id. at 113.
83
   Id. at 121.
84
   Id.
85
   Id. at 95.


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                    THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


jurisdiction – the authority to prescribe a rule abroad – and they include territoriality
(objective effects-based and subjective conduct-based), nationality, protective principle,
passive personality, and universality principles.86
          The use of the conduct and effects tests were over-inclusive.87 Cross-border
securities cases from this era serve as an excellent example of the indiscriminate use by
the United States of extraterritoriality. Cases regarding cross-border securities law often
used one form or another of the conduct and effects tests. For instance, the effects test
found extraterritorial jurisdiction appropriate where foreign conduct injured U.S.
investors.88 The effects test was used in securities law cases such as where the unlawful
conduct caused an adverse impact on the domestic capital markets in the United
States.89 The conduct test found extraterritorial jurisdiction where the conduct that
occurred in the United States was an essential link in perpetrating the fraud or where
substantial misrepresentations were made in the United States.90 Decided on the same
day and usually read together as one holding, Bersch and Vencap held that more than
“merely preparatory” is needed to find U.S. extraterritorial jurisdiction,91 while the
“perpetration” of fraudulent conduct would be sufficient to find such extraterritorial
jurisdiction.92 In SEC v. Kasser, the Third Circuit articulated an approach that added the
policy considerations involved in the case to determine that extraterritoriality
necessary.93 For instance, even though the fraud in Kasser had little to no direct impact
on U.S. investors, the Third Circuit nevertheless applied the law extraterritorially
because the defendant’s activities were carried out in the United States.94 Kasser was
significant because the Third Circuit found extraterritorial application appropriate
despite the “lack of domestic impact and little domestic conduct” present in the case.95
Thus, the law applied abroad despite the international considerations that weighed
against such a weak justification.
          Therefore, it is easy to see the subjectivity and unrestrained approach in this era
within the context of cross-border securities regulation and enforcement. Further,
subsequent decisions in the cross-border securities context in the 1980s-90s resulted in
“multiple judicially-created versions and standards of the conducts/effects tests”.96 The
86
   See CURTIS A. BRADLEY, INTERNATIONAL LAW IN THE U.S. LEGAL SYSTEM 186 (2nd ed. 2015).
87
   Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra note 1, at 111.
88
   See Schoenbaum v. Firstbrook, 405 F.2d 200, 206 (2d Cir. 1968).
89
   See Des Brisay v. Goldfield Corp., 549 F.2d 133- 134 (9th Cir. 1977).
90
   See Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326, 1335, 1337 (2d Cir. 1972).
91
   See Bersch v. Drexel Firestone, Inc., 519 F.2d 974, 992 (2d Cir. 1975).
92
   See IIT v. Vencap Ltd., 519 F.2d 1001, 1018 (2d Cir. 1975).
93
   See SEC v. Kasser, 548 F.2d 109, 116 (3d Cir. 1977).
94
   Id. at 110.
95
   Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra note 1, at 124.
96
   Id. at 84.


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 Second Circuit stood as the “nationwide leader [in] securities litigation”, as other circuit
 courts either adopted the approach used by the Second Circuit or formulated different
 standards.97
            Sometimes, to avoid being encompassed by U.S. federal law or, more likely at this
 time, constitutional law, U.S. enforcement agents would move offshore to give
 themselves more flexibility.98 This was common when referring to the mandates of the
 U.S. Constitution, which was more territorially-bound compared to the reach of federal
 statutes. Federal statutes, on the other hand, exhibited more of an extended geographic
 reach, as demonstrated by the cross-border securities law cases noted above. The United
 States could police foreign conduct and foreign actors who affected its markets,
 nationals, and other domestic interests via federal legislation.99 During the Cold War, the
 nation’s quest for self-determination increased its efforts to become a global superpower
 and developed the attitude that self-policing – inclusion policing that crossed
 international borders – was necessary.100 This increase in the geographic scope of the
 U.S. was also controversial since it sometimes gave criminal suspect’s legal protections
 outside of U.S. territory.101
            Globalization made it necessary for the United States to enact more legislation and
 for federal agencies to enforce and police actors falling within the legislation’s regulatory
 reach. Many in this era believed that to fail to apply a nation’s regulatory rules outside
 U.S. territory “would weaken or even undermine the regulatory efforts taking place at
 home”.102 Thus, extraterritorial regulation was inevitable. After all, how could goods and
 services cross international borders at an increased rate – both legally and illegally – when
 regulations could not?103
            Globalization and technology not only mandated increased international
 regulation but also facilitated innovative ways at circumventing regulatory requirements
 and engaging in new unlawful enterprises.             But despite the significant impact of
 technology and globalization upon the United States’ excessive use of extraterritoriality,
 the United States itself showed very little concern for international law and the rights of
 foreign states and foreign nationals. The rise of globalization after the war also brought
 with it an increase in international commerce.104 This was beneficial for the United

97
    Id. at 125.
98
    RAUSTIALA, supra note 1, at 159.
 99
    Id. at 22.
100
    Id. at 21.
101
    Id. at 155.
102
    Id. at 177-78.
103
    Id. at 159.
104
    Id. at 179.


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                      THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


 States and continued to fuel its international expansion and economic growth. But there
 was, and continues to be, a dark side of globalization. With the increase in international
 commerce came the increase in international crime.105 For instance, international crime
 took precedence in the 1970s and necessitated foreign policing.106 While a nation would
 normally be expected to cooperate with other nations to combat novel issues of
 transnational crime, unilateral options were more popular for the United States
 especially where “foreign law was more lax than, or simply different from, American
 law”.107 Thus, international issues became weak topics of consideration for the United
 States in its decision-making, even – if not especially – when tackling regulation and
 crime of an international character.
            This was soon labelled “American hegemony” and was characterized by “a
 marked willingness to project power and law, sometimes unilaterally, within the
 territorial borders of other sovereign states to better control and deter transboundary
 threats”.108 Extraterritoriality in this era was “decidedly controversial” and created
 severe friction between the United States and its closest allies.109 In a sense, the rise of
 the United States’ global power and the increase in trade created a globalization
 movement that emphasized an extreme form of competitiveness over cooperativeness in
 the international realm. And it has been the United States, through its indiscriminate
 use of extraterritoriality, that has succeeded in this competitive environment. In short,
 “extraterritorial applications create[d] the golden ticket for U.S. dominance in the
 international sphere”.110



      1.4. WITHDRAWAL WITHOUT INTERNATIONAL FOCUS (1990S – 2010)

 Despite the continued use of extraterritorial regulation, there has been “a moderate
 cut-back and cautionary approach” taken with respect to the extensions of U.S. law
 extraterritorially.111 More generally, the United States in this era continued in its path
 towards world dominance but did so in a peculiar way that involved the withdrawal from
 international law issues, a steep cut-back in extraterritorial applications of U.S. law, and
 the adoption of formalistic standards in certain areas.


105
    Id.
106
    Id. at 162.
107
    Id. at 179.
108
    Id. at 180.
109
    Id. at 115.
110
    See Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 349.
111
    Id.


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 The United States in this era exhibited a curious behavior of lost interest in negotiating
 and concluding international agreements.112 International withdrawal was high and
 extraterritoriality seemed to lose force – if only briefly, though inconsistently. The
 presumption against extraterritoriality was revived during this era to lessen the
 unintended extensions of U.S. law and, therefore, limit extraterritorial applications.113
 The most prominent case that articulated that revitalization was EEOC v.                                   Arabian
 American Oil Company [hereinafter Aramco], decided in                    1991.114    In Aramco, the Supreme
 Court made clear that the presumption against extraterritoriality is a longstanding
 principle of American law and that Congress is primarily concerned with domestic
 conditions when it legislates.115               Had Congress desired to include a provision for
 extraterritorial application, it should have been placed inside the statute; if Congress still
 wishes to do so, it can amend the statute accordingly.116 Such an amendment in this era
 needed a clear statement of the congressional intent to apply that provision
 extraterritorially; if not, the presumption cannot, and will not, be overcome.117
            Statutory interpretation has been very inconsistent where the Court has been
 faced with cross-border claims. Consider the extraterritorial application of the Sherman
 Act. In 1993, the Supreme Court in Hartford Fire Insurance Company v. California, held that
 the Sherman Act applies extraterritorially to foreign conduct and is not subject to the
 presumption,118 but then held in 2004 in F. Hoffmann-La Roche Ltd v. Empagran that the
 Sherman Act does not extend to independent foreign harm.119 Thus, “judges have
 sometimes applied a strict presumption only to render it completely meaningless in
 other similar cases”.120 This is harmful to foreign nations and does not involve an
 adequate and thorough consideration of international law issues.
            While the extended reach of U.S. statutory provisions – or, shall we say, the
 reduced extraterritorial applications of statutory provisions – was an important part of
 this era, issues surrounding the geographic reach of constitutional provisions proved to
 be an even bigger feature in this era.                    The prior era saw expanded uses of U.S.
 extraterritoriality. But after the Supreme Court decided an opinion in 1990 – United States
 v. Verdugo-Urquidez – that significantly curtailed the reach of the Fourth Amendment to

112
    Id. at 350.
113
    Id. at 347.
114
    See EEOC v. Aramco, 499 U.S. 244 (1991).
115
    See Aramco, 499 U.S. at 248; see also Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra
    note 1, at 111.
116
    See Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra note 1, at 111.
117
    Id.
118
    See Hartford Fire Ins. Co. v. California, 509 U.S. 764, 796, 814, 818-20 (1993).
119
    SeeF. Hoffmann-La Roche Ltd v. Empagran S.A., 542 U.S. 155, 159 (2004).
120
    See Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 348.


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                     THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


 foreign criminals searched outside the United States by U.S. agents,121 America entered a
 new era.         This new era of “traditional territoriality” and withdrawal from the
 international realm was “welcomed by the executive branch”.122 While it was certainly
 commonplace for U.S. law to regulate not only the weak states but also America’s strong,
 foreign allies, it was also understood that the reach of the U.S. Constitution was confined
 within U.S. territory. The reason for this was that the United States desired “freedom
 from constitutional restraint” and “flexibility” when dealing with sensitive issues.123
 Such a stance ignored the concerns of other international powers. As two prominent
 examples, consider the war on terror and the U.S.-Mexican border.
            As for the war on terror, the Supreme Court has decided several cases during this
 era that involved a retreat to territorialism and a blind-eye towards international law.
 The 9/11 terrorist attacks and conflicts in Iraq and Afghanistan “have led to a range of
 territorial quandaries” such as whether U.S. law applies to military companies outside
 the United States but working for the United States or, most notably, whether U.S. law
 applies to the foreign detainees at Guantanamo Bay.124 Guantanamo Bay was chosen as
 the site to hold prisoners of war because it was thought to be “beyond the reach of the
 federal courts”.125 But the policy decisions, ethics, and constitutionality surrounding
 Guantanamo made it a very tricky issue, though ripe for judicial review. Cases shortly
 after the turn of the century centered on the “executive authority to designate
 individuals as enemy combatants and hold them without counsel or judicial review”.126
 Cases in this era such as Hamdi v. Rumsfeld,127 Rasul v. Bush,128 Hamdan v. Rumsfeld,129 and
 Boumediene v.          Bush130 are “notorious for their rejection not only of absolute
 territorialism, but also of the Executive’s claim of power to detain these suspects without
 certain Constitutional restraints”.131
            In 2004, the Supreme Court in Rasul held that the federal habeas statute was
 applicable to detainees being held at Guantanamo.132 After Rasul, Congress enacted the
 Detainee Treatment Act of 2005 [hereinafter DTA], which stripped the federal courts of
 jurisdiction from hearing habeas petitions from detainees at Guantanamo.133 In Rasul,

121
    See RAUSTIALA, supra note 1, at 189.
122
    Id.
123
    Id. at 189-90.
124
    Id. at 29.
125
    Id.
126
    See Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 618.
127
    See generally Hamdi v. Rumsfeld, 542 U.S. 507 (2004).
128
    See generally Rasul v. Bush, 542 U.S. 466 (2004).
129
    See generally Hamdan v. Rumsfeld, 548 U.S. 557 (2006).
130
    See generally Boumediene v. Bush, 553 U.S. 723 (2008).
131
    Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 618.
132
    See Bush, 542 U.S. at 484.
133
    See Pub. L. No. 109-148, §§ 1001–06, 119 Stat 2680 (2005).

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 the Court was able to find a “very narrow” reasoning for its holding by distinguishing the
 constitutional appeal right from the statutory right and, thereby, avoided the “thorny
 constitutional questions”.134 The takeaway from Rasul at this point was that the statute
 applied to citizens and aliens – including foreign prison of war detainees; whether there
 was a constitutional right possessed by the individual detainees at Guantanamo was
 “carefully avoided” by the Court and unsettled after Rasul.135 As a last point, Rasul gave
 the executive exactly what it wanted: the power to have freedom and discretion over the
 detainees at Guantanamo without constitutional restraint.136
           The Supreme Court decided Hamdi also in 2004; Hamdi was a U.S. national who
 was alleged to be an enemy combatant.137 The Court’s decision in Hamdi, also decided in
 2004, was significant because it stood for the proposition that “threats to military
 operations posed by a basic system of independent review are not so weighty as to trump
 a citizen’s core rights to challenge meaningfully the Government’s case and to be heard
 by an impartial adjudicator”.138 Two years later, the Supreme Court in Hamdan had to
 decide whether the military commission convened by the President was valid under
 congressional legislation and the laws of war as well as whether the procedures used to
 try Hamdan – a Yemeni national – violated international and martial law.139           The
 Supreme Court held that the DTA of 2005 was inapplicable to cases that were pending at
 the time of the statute’s enactment and that the procedures used by the military
 commission to try Hamdan violated the both the Uniform Code of Military Justice and
 Common Article 3 of the Third Geneva Conventions.140 Again in response to a Supreme
 Court holding that Congress disfavored, Congress passed the Military Commission Act in
 2006; Section 7 of this Act stripped the federal courts of jurisdiction over the pending
 habeas petitions by those individuals determined by the United States to be enemy
 combatants.141
           These cases came to a peak in 2008 with the Supreme Court opinion, Boumediene
 v. Bush. The issue for the Court in Boumediene was whether the Suspension Clause applied
 to the detainees at Guantanamo.142 The Supreme Court held that the detainees held at
 Guantanamo Bay have the constitutional right to challenge their detentions with writs
 for habeas in the U.S. district courts.143 Boumediene was important because it meant that
134
    RAUSTIALA, supra note 1, at 202.
135
    Id.
136
    Id. at 204.
137
    See Hamdi, 542 U.S. at 510.
138
    Id. at 535.
139
    See Hamdan v. Rumsfeld, 548 U.S. 567 (2006).
140
    Id. at 575–76; 613, 635.
141
    See 28 U.S.C. § 2241 (2008).
142
    See Boumediene v. Bush, 553 U.S. 732 (2008).
143
    Id. at 793, 795.

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                     THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


 the U.S. government “was no longer exempt from judicial scrutiny”144 and showed in
 many ways how the U.S. judiciary was “quite uncomfortable with the idea that the
 government can slip its constitutional fetters by choosing the location of detention or
 . . . us[e] international agreements of a dubious nature to allocate sovereignty”.145 What
 we began to see with these cases is a shift from an expanded reach of U.S. law to “a more
 domestic orientation” under the purpose of national security concerns.146           As Kal
 Raustiala rightfully asserted, “[i]n a world in which suspects, soldiers, and special agents
 can be flown around the world in a matter of hours, the idea that legal rights would still
 be tethered to territory is likely to strike at least some members of the federal judiciary
 as highly problematic”.147
            The majority placed great emphasis on the fact that there is a difference
 between formal sovereignty and practical sovereignty. The majority in Boumediene noted
 that sovereignty was not a clear-cut status, and that it was possible for territory to be
 under one nation’s formal sovereignty and under another nation’s practical
 sovereignty.148        Therefore, using a functional approach, the Court determined that
 Guantanamo could not in any sense be considered “abroad”; this made it easy for the
 Court to extend habeas to the area.149 And it was the opinion here in Boumediene where
 the Supreme Court first held that a constitutional right was applicable to a foreign
 national held outside the United States.150
            As for issues regarding the U.S.-Mexican border, it is important to note that
 extraterritorial policing was on the rise beginning before the turn of the twenty-first
 century.      Focus at this time was on “the transnational movement of illegal drugs,
 migrants, and money”.151                    Such scrutiny and context led to the arrest of
 Verdugo-Urquidez, a Mexican drug lord who trafficked drugs into the United States.152
 United States v. Verdugo-Urquidez concerned the extraterritorial application of the Fourth
 Amendment’s prohibition on unreasonable searches and seizures.153 In Verdugo-Urquidez,
 a Mexican national who was prosecuted for narcotics-trafficking into the United States
 and participating in murdering a Drug Enforcement Administration [hereinafter DEA]
 agent was seized by Mexican police and extradited to the United States.154 DEA agents
144
    Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 623.
145
    RAUSTIALA, supra note 1, at 235.
146
    See Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 610.
147
    RAUSTIALA, supra note 1, at 221.
148
    Id. at 215.
149
    Id. at 216.
150
    Id. at 218.
151
    Id. at 168.
152
    Id.
153
    See United States v. Verdugo-Urquidez, 494 U.S. 259 (1990).
154
    Id. at 262–63.


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 2020]                             UNIVERSITY OF BOLOGNA LAW REVIEW                   [Vol: 5:2


 searched his home without a warrant the next day and confiscated records that
 implicated him and his smuggling business.155 The Supreme Court held that this was not
 a violation of the prohibition against warrantless searches and seizures under the Fourth
 Amendment because this constitutional provision only applies to “the people” of the
 United States and does not operate to limit the conduct of the federal government when
 it acts “against aliens outside of the United States territory”.156 What is interesting about
 this case is that Verdugo-Urquidez was on U.S. soil when his home was searched, yet the
 Supreme Court did not provide him the protections of the U.S. Constitution. This was
 hard to rationalize with the common notion that everyone within the territory of the
 United States – even a foreign national – has constitutional rights. The Court obviously
 placed a much greater emphasis on citizenship in this case, but justified its decision by
 noting that the Fourth Amendment does not constrain U.S. government agents when
 they act abroad. Because the search occurred in Mexico, it did not violate the Fourth
 Amendment.
            Thus, the focus was on the U.S. actors and not the foreign national inside the
 United States. Domestic issues clearly played a greater role in this case. Verdugo-Urquidez
 is also heavily focused on territorialism. Kal Raustiala describes this case as “a return to
 older understandings of territoriality”157 – one that is more formalistic and
 internationally withdrawn. Some have promoted Verdugo-Urquidez as a proper response
 to a perceived trend of “globalizing constitutional rights”.158 Others decried it as “an
 anachronistic retrenchment” – a rejection of a liberal reasoning of the Bill of Rights and
 return of the old and outdated territorialism that has been slowly fading throughout the
 twentieth century.159            Kal Raustiala notes that extraterritoriality in this era “was
 increasingly common, though not always consistent”.160
            In addition to the Fourth Amendment, the Fifth Amendment’s extraterritorial
 reach has also been interpreted very formalistically by the Court.161 In 2017, the Court
 decided Hernandez v. Mesa.162 Hernandez involved the extraterritorial application of the
 Fourth and Fifth Amendments. The facts of this case involve the fatal shooting of Sergio
 Adrian Hernandez Guereca in 2010 by a Customs and Border Protection agent.163 The
 U.S. agent was on U.S. soil and Hernandez was on Mexican soil.164 The Supreme Court in
155
    Id.
156
    Id. at 265–66.
157
    RAUSTIALA, supra note 1, at 172.
158
    Id. at 177.
159
    Id.
160
    Id. at 179.
161
    See Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 615.
162
    See Hernandez v. Mesa, 137 S. Ct. 2003 (2017).
163
    Id. at 2004–05.
164
    Id.

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                     THE ERAS OF EXTRATERRITORIALITY IN THE UNITED STATES


 this case held that the government had qualified immunity under the Fifth
 Amendment.165 For the Fourth Amendment, the Court avoided determining the extent of
 extraterritorial application and instead noted that such a question is “sensitive and may
 have consequences that are far reaching”.166 Interestingly, the Supreme Court granted
 certiorari again on the facts of this case and has recently heard oral arguments on
 November 12, 2019 over the issue of whether federal courts can recognize a damage
 claim under Bivens167 when the plaintiffs plausibly allege that a federal enforcement
 officer violated the Fourth And Fifth Amendments’ rights with no other alternative.168
            Accompanying the important characteristics of this era such as the
 reinvigoration of the presumption, Guantanamo, and the U.S.-Mexican border, the
 United States displayed a markedly potent aversion from international law. For instance,
 the Bush Administration’s use of Guantanamo as a place beyond the reach of U.S. law
 stood as “a symbol of a larger American disregard for international law”.169 Despite the
 administration’s arguments that this was Cuban and not American territory, the
 international community nevertheless recognized Guantanamo Bay as “American
 territory”. It was not hard for the Court in Boumediene to hold that certain constitutional
 rights cannot be denied there.170
            Upon reflection, it may seem difficult to articulate how to best proceed when
 dealing with cases of either constitutional or statutory extraterritorial applications.
 Regarding constitutional extensions, I had previously urged for a combination of the
 formalist approach from Verdugo-Urquidez and the functional approach of Boumediene to
 form a workable framework that “supports consistency in the application of the
 Constitution abroad, provides a clear standard for lower courts to follow, gives the
 Executive its needed flexibility in dealing with national security matters, respects
 foreign states’ sovereignty by avoiding unnecessary infringements, and affords foreign
 claimants the fair administration of certain constitutional guarantees”.171 Nevertheless,
 whether America ought to extend the protections of its Constitution was and is
 ultimately based on the propriety for extending constitutional protections to foreign
 nationals outside of U.S. territory.172 At this time, there was both tension and confusion
 as to U.S. territoriality and, as a result, the judiciary, namely the Supreme Court, has


165
    Id. at 2007.
166
    Id.
167
    See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971).
168
    See Hernandez v. Mesa, 2019 U.S. LEXIS 3691.
169
    RAUSTIALA, supra note 1, at 190.
170
    Id. at 192.
171
    See Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 640.
172
    Id. at 629.


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 been hesitant to make sweeping holdings; hence, “strict territoriality remained
 attractive”.173
            The question of the Constitution’s applicability and continued viability abroad will
 remain a pressing issue. As I have argued previously, the approach should ultimately turn
 on fairness and practicality but will depend in large part on an individual’s deep-rooted
 opinions on the desirability of an expanded Constitution:

             If one views the Constitution as a rigid document impervious to change, then
             the United States will be forced to justify its decisions with rationales that are
             outdated and ill-suited for a modern world . . . . However, if one views the
             Constitution as a living document that changes with every judicial opinion,
             every president, or every major political era, then its vitality and strength as
             a governing document of stability will be severely undermined.174



      1.5. ARBITRARY WITHOUT INTERNATIONAL FOCUS (2010 – PRESENT)

 “The United States does not occupy the same position it did over 200 years ago”; it is now
 a global leader and easily asserts its dominance “economically, politically, and
 socially”.175 Under present-day realities of U.S. law and the extraterritorial applications
 thereof, territoriality is not rooted in international law, but is instead rooted in the
 notion that “Congress is primarily concerned with domestic conditions”.176 Within the
 first several years of the turn of the century, the United States still seemed to struggle
 “between its constitutional traditions and its global ambitions”.177 The increase by the
 United States in moving sensitive activities offshore demonstrates first-hand how
 manipulable territoriality is to a nation’s advantage.178 Never has this been so apparent
 than with the United States’ behavior in Guantanamo, as the prior Part has shown. To
 this day, one cannot tell for certain where the United States’ constitutional protections
 and territorial jurisdiction begins and ends, as its “constitutional and jurisdictional
 borders remain complex, messy, and contingent”.179 Such an arbitrary approach to
 regulating foreign conduct is characteristic of this era along with continued instances of
 disregarding international considerations.


173
    RAUSTIALA, supra note 1, at 185.
174
    Veneziano, Applying the U.S. Constitution Abroad, supra note 1, at 636-637.
175
    Id. at 635.
176
    See EEOC v. Aramco, 499 U.S. at 262 (quoting Filardo, 336 U.S. at 285).
177
    See RAUSTIALA, supra note 1, at 29.
178
    See id. at 225.
179
    Id. at 224.


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 One of the most monumental decisions of this era was Morrison v. National Australia Bank.
 In Morrison, decided in 2010, a class action lawsuit was filed by foreign investors against
 National Australia Bank alleging violations of the antifraud provisions of the Exchange
 Act in connection with shares purchased on foreign exchanges.180                                    The issue was
 “whether § 10(b) of the Securities Exchange Act of 1934 provides a cause of action to
 foreign plaintiffs suing foreign and American defendants for misconduct in connection
 with securities traded on foreign exchanges”.181 The Supreme Court held in an opinion
 by Justice Scalia that the antifraud provisions of the Exchange Act of 1934 do not apply
 extraterritorially.           Specifically, the Court held that the presumption against
 extraterritoriality will be applied in all cases to preserve “a stable background against
 which Congress can legislate with predictable effects”.182 Because there is no affirmative
 indication in the Exchange Act that the antifraud provisions apply extraterritorially, the
 Court held that “it does not”.183 Petitioners still claimed domestic application because
 National Australia Bank’s subsidiary in Florida, HomeSide, engaged in the deceptive
 conduct of manipulating HomeSide’s financial records.184 The Court in Morrison held that
 courts must look to the “focus” of the statute in question to ascertain if extraterritorial
 application is appropriate. Under the facts of Morrison, the Court determined that the
 focus of the Exchange Act “is not upon the place where the deception originated, but
 upon purchases and sales of securities in the United States”.185 Thus, the transactional
 test was articulated, whereby the Exchange Act applies only to “securities listed on
 domestic exchanges, and domestic transactions in other securities”.186
            Morrison is significant in a broader sense in that it foreclosed the possibility of
 foreign-cubed transactions being litigated in U.S. courts – a situation that arises when a
 foreign plaintiff(s) (or foreign class action suit) sues a foreign defendant(s) in connection
 with alleged unlawful foreign conduct. Nevertheless, Morrison created a situation where
 “foreign transactions by both domestic and foreign investors will fall outside the
 protections of Morrison”.187 In other words, a U.S. investor will not be able to rely on U.S.
 law when they transact on a foreign exchange regardless of where they concluded the
 transaction or where the harm was ultimately felt. Thus, Morrison’s protections “are




180
    See Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 250-51 (2010).
181
    Id.
182
    Id. at 261.
183
    Id. at 265.
184
    Id. at 266.
185
    Id.
186
    Id. at 267.
187
    Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 349.


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 wholly independent of the degree of harmful effects, amount of conduct in the United
 States, and the citizenship of the investor”.188
            In 2013, the Supreme Court applied the presumption against extraterritoriality
 to a jurisdictional statute, the Alien Tort Statute 28 U.S.C. § 1350 (1789) [hereinafter ATS].
 Chief Justice Roberts for the Court held that even though the presumption is usually
 applied to discern whether a statute applies abroad, courts are also similarly constrained
 when considering causes of action under the ATS.189 The standard here articulated by
 the Court was that “even where the claims touch and concern the territory of the United
 States, they must do so with sufficient force to displace the presumption against
 extraterritorial application”.190 It was a very awkward holding when the Court applied
 the presumption to a clear and unambiguously jurisdictional statute. This is significant
 because the presumption againstextraterritoriality is a judicially-invented tool that
 regulates and safeguards against unintended extraterritorial applications only with
 respect to conduct-regulating statutes.                   Jurisdictional statutes are not meant to be
 covered here.
            Implications for the future include the “continued manipulation of the laws” by
 various actors including the courts, the “increase in inconsistent litigation,” and the
 “potential consequences on the state of Canada”.191                            But the arbitrariness of the
 extensions of U.S. law did not stop there. In 2016, the Supreme Court decided RJR Nabisco
 v.    European Community.192              Here, RJR Nabisco allegedly participated in a “global
 money-laundering scheme” which was “orchestrated from their U.S. headquarters”.193
 The complaint alleged a pattern of racketeering with RJR Nabisco as the Racketeer
 Influenced and Corrupt Organizations (hereinafter RICO) “enterprise”.194 All provisions
 in sections §1962(a)-(d) of RICO were alleged to have been violated by RJR Nabisco and
 resulted in harm to the European Community.195 After a long procedural history that
 spanned about 16 years, the Supreme Court granted certiorari.196                                  The Court held
 unanimously that the presumption against extraterritoriality had been overcome
 regarding the substantive provisions of § 1962 only if “each of those offenses violates a
 predicate statute that is itself extraterritorial”; however, the Court held 4-3 that the


188
    Id.
189
    See Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 116 (2013).
190
    Id. at 124-25.
191
    Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 358.
192
    See RJR Nabisco, Inc. v. European Community, 195 L. Ed. 2d 476 (2016).
193
    Id. at 489, 505.
194
    Id. at 490.
195
    Id.
196
    Id. at 489.


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 presumption was not overcome regarding the private right of action in § 1964(c) unless
 the private civil claimant proves “a domestic injury to its business or property”.197
            RJR Nabisco illustrates the severe confusion within the branches of the U.S.
 government when dealing with cases with a cross-border character. The RICO statute
 explicitly mentions that it reaches “interstate or foreign commerce”; how could the
 judiciary not see that Congress explicitly provided for extraterritorial application in this
 statute? Justice Ginsburg – who dissented in RJR Nabisco – stated that “[a]ll defendants
 are U.S. corporations, headquartered in the United States, charged with a pattern of
 racketeering activity directed and managed from the United States, involving conduct
 occurring in the United States”; thus, this case, Ginsburg asserts, “has the United States
 written all over it”.198 This was certainly far from a foreign-cubed transaction. Instead,
 the Supreme Court held that the presumption against extraterritoriality was not
 overcome with respect to the private right of action. It should have never gotten to this
 point because the presumption should never come into play when congressional intent
 is clear as to the geographic reach of the statute, as it was in RICO. But the Court in RJR
 Nabisco applied the presumption nevertheless to an express legislative private cause of
 action. This opinion is devoid of the consequences to international issues and the impact
 to foreign states. Nevertheless, RJR Nabisco is the law of the land now and lower courts
 are compelled to require those private civil RICO claimants in its jurisdiction to satisfy
 the domestic injury requirement first. As I have previously contended, this opinion and
 the lack of congressional action thereafter “impl[y] that the courts may have more
 power when deciding whether to apply a provision extraterritorially, even more so than
 congressional power”.199 The reason for this could simply be because congressional
 amendments are very unlikely in this modern era.
            The United States has become increasingly hostile to international
 considerations. This is demonstrated in the Morrison and RJR Nabisco holdings. Morrison’s
 holding, for example, contains very few references to international law and comity.200
 Matters have gotten to the point where infringements between the political branches are
 out of control and repeatedly violate the competence of one another. In a previous
 commentary, I have argued that questions of extraterritorial application in
 congressional statutes that are silent as to their geographic reach should be political
 questions, and therefore, reserved to the executive and legislature to avoid these
 infringements.201 As this is unlikely to happen, all that can be known for certain is that
197
    Id. at 495, 498.
198
    Id. at 508.
199
    See Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 347.
200
    See Veneziano, A New Era in the Application of U.S. Securities Law Abroad, supra note 1, at 111.
201
    See generally Alina Veneziano, Should Extraterritoriality in the Midst of Congressional Silence Be a Political Question?,
    51 N.Y.U. J. INT’L L. & POL. 637 (2019).
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 without further guidance, judicial discretion empowers the courts “to articulate its own
 standards and tests for which to decide cases involving cross-border claims”.202 And this
 trend is likely to continue.




        2. SIGNIFICANCE OF THE ERA-CLASSIFICATIONS

 The eras classifications teach us about the history of the United States, namely, what the
 power of one nation can do to the international world. This is not to say that power is a
 bad thing, but when a nation uses such power to become an international regulator who
 can craft its rules in a way that apply to actors abroad but not to its own federal agents
 abroad, then something unjust arises: hegemonic dominance. The United States was the
 underdog to become a world leader. The United States shocked the world as it swiftly
 evolved into an international leader in record time. But as it grew from its weak and
 newly formed position, it was accompanied by the growth of technology, globalization,
 and changes in global policy-making, politics, war, and mobility.                               All these factors
 dramatically influenced the way the United States utilized extraterritoriality to regulate
 foreign conduct and achieve its objectives.203
            Throughout U.S. history, for example, extraterritoriality has appeared in many
 different forms.204 For instance, what once began as an attempt to conquer more land,
 soon developed into cooperation efforts, and finally to bitter withdrawal from the
 international realm.205 What these different purposes of extraterritorial applications
 had in common was “efforts to manage, minimize, or sometimes capitalize on legal
 differences”.206         The international order has decreased the barriers to using this
 regulatory tool and has also increased the incentives of the United States in using it.207
            One must consider issues of extraterritoriality, including congressional intent
 about the geographic reach of statutes, the presumption against extraterritoriality,
 effects and conduct-based extraterritoriality; one must also consider intraterritoriality,
 including the domestic context used to facilitate growth such as federalism.208 Kal
 Raustiala argues that we cannot understand the history and implications of the United

202
    Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 357.
203
    See RAUSTIALA, supra note 1, at 7.
204
    See generally id. at 6.
205
    Id. at 7.
206
    Id.
207
    Id. at 238-39.
208
    Id. at 6-7.


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 States’ presence without understanding the international and domestic circumstances
 behind every move the United States makes.209 For instance, extraterritoriality and
 intraterritoriality are both domestic tools and national features of the United States.
 Raustiala asserts, “we cannot understand the evolution of extraterritoriality and
 intraterritoriality in U.S. law without understanding the broader international
 context”.210
            How can one best summarize the use of extraterritoriality by the United States?
 Raustiala articulates that these concepts within the United States “cannot be understood
 absent a global context”.211 He argues in his book that high levels of interdependence
 before World War I coincided with strict territoriality and the increase in effects-based
 regulation coincided with less economic interdependence.212 My thesis here presents a
 similar inverse relationship: the United States placed more consideration and emphasis
 on international relations, international law, and international politics when its use of
 extraterritoriality was relatively low or in its infancy stages. As the United States grew
 in power and utilized extraterritorial applications more extensively, it relied upon and
 considered these international concerns much less frequently. “International politics has
 deeply shaped not only domestic politics, but also domestic law”, Kal Raustiala asserts,213
 but somewhere in the middle, it must be added, there lies extraterritoriality.
            The territoriality of the United States can be explained by the actions and
 experiences of other major foreign powers.214 “[T]erritoriality has neither been static
 nor treated as a given”.215 There is no right or wrong way of handling territoriality. It
 changes based on the political, social, and economic exigencies of each successive era. It
 is also affected by the ideology of the individuals leading the political branches and the
 judiciary – the Supreme Court – of the United States.                                   Whether international
 considerations are heeded depends on the context of each era. Sometimes, too, the
 domestic internal struggles can affect the United States’ use of extraterritoriality, as
 demonstrated by the war on terror cases and issues with the U.S.-Mexican border from
 the Withdrawal Era. Therefore, more often than not – and this is becoming truer today –
 “before harmony within the international sphere can take place, the U.S. branches must
 work together to achieve domestic harmony”.216


209
    Id. at 6.
210
    Id. at 7.
211
    Id. at 241.
212
    Id. at 239.
213
    Id. at 241.
214
    Id.
215
    Id. at 7.
216
    Veneziano, Studying the Hegemony of the Extraterritoriality of U.S. Securities Laws, supra note 1, at 347.


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     CONCLUSION

This article presented a series of eras that have characterized the practice of the United
States in utilizing the regulatory tool, extraterritoriality. Throughout each era, we have
seen how the United States grew as a world power and, simultaneously, changed the way
it conducted internal and global affairs. Specifically, the United States no longer had the
need to rely on strict notions of sovereignty and territoriality as it gained more power and
stability in the international realm. Further, to advance its own goals, the United States
over time has found it less necessary to consider foreign impact and evaluate international
law considerations during its policy making and judicial decision-making.
        The desire for economic independence and stability is not bad nor does it
automatically cast the nation as a global dominator. But there comes a point where the
greed for power becomes hegemony, and this is a thin line that the United States tends
to straddle. What makes this trend dangerous for the United States’ use of the regulatory
tool, extraterritoriality, is its consistent denial to consider international comity and
foreign friction possibilities in a world that is becoming increasingly globalized. To
better align with the realities of today’s interconnected world, the United States ought to
return to an era where it fosters its economic and social progression but does so with a
consideration of international-related concerns.
        While this article has presented the facts of U.S. history along with supporting
assertions of U.S. behavior, there is much research to be done to more fully understand
the consequences of U.S. extraterritoriality and implications for the future. It is the hope
that this article has laid a solid foundation for further research on this or subsidiary topics
such as whether such use of extraterritoriality is limited to the United States, what this
means for the future, whether the United States will enter another era soon (e.g., with the
2020 election), or information on what was happening to the major foreign powers in each
successive era. Additional research into the law and history would reveal these responses.




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