More on Jurisdiction to Prescribe: Of Effects and Balancing
The discussion in Chapter 2 of the Insurance Antitrust case before the U.S. Supreme Court may have left the reader in a somewhat dissatisfied state. It is not just that the approach of the Restatement that I have been espousing fell one vote short. More important for our inquiry, the majority accepted effects jurisdiction without any discussion, and by defining 'conflict' in terms of black and white, the majority avoided having to say anything about balancing of competing interests, which is most needed--as well as sharply debated--with respect to the gray areas.
Simply defined, effects jurisdiction is an assertion by a state that its law applies (or may apply) to regulate conduct that has or is intended to have effect within its territory, even when the conduct itself takes place outside its territory. The assertion may be made in court, or by governmental order, and it may be made on private as well as public initiative. Since by definition the challenged conduct takes place in some other state, effects jurisdiction may well involve competing interests, and jurisdiction should not be exercised without some thought. But I have never understood why effects jurisdiction has become as controversial as it has become, why the European Court of Justice, for example, though it seems to accept the effects principle, carefully avoids saying so.
Actually effects jurisdiction is not controversial in the context, for instance, of shots fired from state B into state A.1 Nor, I think, would there____________________
As early as 1826, the British Parliament adopted the following statute: 'Where any Felony or Misdemeanour . . . shall be begun in one county and completed in another, such Felony of Misdemeanour may be dealt with, inquired of, tried, determined and punished in any of the said Counties, in the same Manner as if it had been actually and wholly committed therein': 7 Geo. IV, c. 64, s. XII, quoted also in Jennings, n. 6 infra, at 157.