The Principle of Jurisdiction: The Territoriality Principle

Case: American Banana Co. v. United Fruit Co. (1909)

213 U.S. 347, 29 S.Ct. 511, 53 L.Ed. 826

Facts: Before P corp was formed, D, went to measures in order to prevent

competition and monopolize the banana trade. P had a banana plantation in Panama
(under control of Unites States of Columbia), and built a RR which would be the
only means of exportation. Basically, with D's interference and instigation,
events led to Costa Rica holding lands which P's RR was going through.
Plaintiff argued that as a result of defendant's acts it had been deprived of the
use of a plantation and a railway and that the plantation and supplies had been
injured. Plaintiff also alleged a wrongful conspiracy resulting in driving
plaintiff out of business.

Holding: Court said that a conspiracy in the United States to do acts in another
jurisdiction did not draw to itself those acts and make them unlawful, if they
were permitted by the local law. Although the acts were illegal in the United
States, they were permitted by the local law in the foreign jurisdiction at issue.

Notes:

· Law allegedly broken - Sherman Antitrust Act

○ D's actions in trying to monopolize the banana market
· Predates jurisprudence on effects jurisdiction**** - now may go the other way
b/c of effects jurisdiction

· Court says US doesn’t have jurisdiction b/c it doesn’t fit the territoriality
principle
· Supreme court adds on additional bases of jurisdiction later on (after this
case)