Reaching tipping point

Author: | Published: 1 Oct 2007

In recent years, the US Supreme Court has breathed new life into the previously forsaken doctrine of prescriptive comity: that, ordinarily, statutes should be read in accord with the customary deference to the application of foreign countries' laws within their own territories. As a result of Supreme Court rulings in the patent and antitrust contexts, there now exists the established presumption that US law governs domestically and does not extend beyond the limits of the US.

An emerging question from this centres on the role of prescriptive comity in construing the territorial scope of the federal securities laws when applied to predominantly foreign conduct that harms foreign purchasers of foreign securities. Recent developments in private securities litigation, such as in the Parmalat, Vivendi and Shell matters, show with mixed results how courts are reacting to considerations of prescriptive comity when confronted with the expansive use of the federal securities laws...