Nineteen states and numerous private parties brought antitrust suits against U.S. insurers, U.S. and foreign reinsurers based in London, and insurance brokers. The insurers, reinsurers, and brokers were alleged to have agreed to boycott commercial general liability (CGL) insurers that refused to change the terms of their standard domestic CGL insurance policies to conform to the policies the defendant insurers wanted to sell. The plaintiff states asserted that as a practical matter, the policies that the defendant insurers wanted to sell would (1) make occurrence CGL coverage unavailable for many risks; (2) make pollution liability coverage almost entirely unavailable for the vast majority of casualty insurance purchasers; and (3) limit coverage of seepage, pollution, and property contamination risks.
The U.S. District Court for the Northern District of California dismissed the suits because it refused to exercise Sherman Act jurisdiction over foreign reinsurers under principles of international comity. The Court of Appeals for the Ninth Circuit reversed this decision of the District Court.
1. Do you think Justice Scalia would have spoken out the same way if, like the majority, he had read English and U.S. law not to be in conflict?
2. In determining whether the Sherman Act applies to a business outside of the United States, if Congress' intent is not clear, to whom should courts give the benefit of the doubt?