In recent litigation involving foreign plaintiffs and foreign conduct, U.S. courts have shown increasing concern that they not become, in the words of Justice Antonin Scalia, “the Shangri-La of class-action litigation for lawyers representing those allegedly cheated in foreign securities markets.” This applies even when the defendant is a U.S. corporation or has a U.S. subsidiary. Two lines of cases illustrate this trend. The first line springs from the landmark U.S. Supreme Court decision Morrison v. National Australia Bank Ltd., 130 S. Ct. 2869, 2886 (2010), in which the court firmly established the primacy of the presumption against extraterritorial application of U.S. securities laws. This presumption has also recently been extended to other federal statutes and state statutes, such as federal and state RICO statutes. And while Congress prospectively gave certain government entities the ability to pursue certain federal securities claims based on foreign conduct or effects in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, it did not extend this new provision to private plaintiffs or other statutes.
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