Morrison V. National Australia Bank Ltd.: A Clear Statement Rule Or a Confusing Standard‪.‬

I. INTRODUCTION It is difficult to overestimate the impact that the globalization of securities markets has had on legislative policy and judicial decision-making within the United States. Recently, globalization has raised difficult questions regarding when and to what extent U.S. securities laws will govern multinational securities markets. (1) In addition to legislative policy considerations, procedural, jurisdictional, and equitable considerations must be addressed. These concerns include whether the United States has subject matter jurisdiction, whether a U.S. court can obtain personal jurisdiction over foreign defendants, and whether U.S. courts can create and enforce fair and effective remedies. (2) These concerns--and other considerations (3) --present substantial challenges to the legislature and judiciary, who must determine whether U.S. securities laws have extraterritorial reach. Despite these challenges, courts have allowed extraterritorial reach of U.S. securities laws for more than 40 years. (4) Although there has been a four-decade tradition of allowing the extraterritorial reach of U.S. securities laws in the lower courts, with the recent decision in Morrison v. National Australia Bank Ltd., (5) the Supreme Court stands ready to prohibit such application absent clearly expressed intent to the contrary from Congress. However, Morrison provides more uncertainty than clarity about when U.S. courts should apply U.S. law abroad. The Court's presumption against extraterritoriality has not been consistent, and its reasons for applying--or not applying--the presumption have varied from one area of law to another. Although the Supreme Court in Morrison attempted to clarify that it would apply the presumption against extraterritoriality in the securities context, (6) its decision promotes uncertainty about the presumption's value and general application.