The Supreme Court in its opinion on Monday also adopted a view that appears to tally with the stand taken by Microsoft and its backers on the international implications of a decision against the company.
The court noted that there are several reasons for the presumption that a statute does not have an extraterritorial implication if it gives no clear indication of one, including that “it serves to avoid the international discord that can result when U.S. law is applied to conduct in foreign countries.” Although the risk of conflict between an American statute and a foreign law is not a prerequisite for applying the presumption against extraterritoriality, where such a risk is evident, the need to enforce the presumption is at its apex, the court observed elsewhere in its opinion.
Tech companies are worried that if the appeals court decides against Microsoft, it would scare European cloud and other customers who would be wary of the long arm of U.S. law, particularly after revelations by former National Security Agency contractor Edward Snowden about large-scale domestic and foreign surveillance by the U.S.
The case before the Supreme Court arose from allegations that tobacco and food company RJR Nabisco and related entities participated in a global money-laundering scheme in association with various organized crime groups. The European Community and 26 of its member states first sued RJR in the Eastern District of New York in 2000, alleging that RJR had violated RICO.
Nothing in the text of RICO establishes that Congress meant to allow a provision for private lawsuits to recover for injuries outside the U.S., the Supreme Court ruled. “A private RICO plaintiff therefore must allege and prove a domestic injury to its business or property,” it added.
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