International Labor and Employment Law:  The Continuing Conflicts

By Joseph Z. Fleming n1

October 2007

Introduction – Part I:  The World We Live In
Thomas L. Friedman in his book, The World is Flat: A Brief History of the 20-First Century (FARRAR STRAUS AND GIROUX, New York 2005) at page 114 quoted the following African proverb:

Every morning in Africa a gazelle wakes up.
It knows it must run faster than the fastest lion or it will be killed.
Every morning a lion wakes up.
It knows it must outrun the slowest gazelle or it will starve to death.
It doesn't matter whether you are a lion or a gazelle. When the sun comes up, you better start running.
If this is not a sufficient metaphor in connection with the difficulties the transportation systems have had with their competition, then another quote from Friedman's book, discussing the ability of the United States to obtain a competitive advantage because of its labor laws, certainly is:
The United States also has among the most flexible laws in the world. The easier it is to fire someone in a dying industry, the easier it is to hire someone in a rising industry that no one knew would exist five years earlier. This is a great asset, especially when you compare the situation in the United States to inflexible, rigidly regulated labor markets like Germany's, full of government restrictions on hiring and firing. Flexibility to quickly deploy labor and capital where the greatest opportunity exists, and the ability to quickly redeploy it if the earlier deployment is no longer profitable, is essential in a flattening world.
If you survive competition within the United States you can then address the competition outside of the United States. The matter of survival of the fittest is becoming even more complicated.
Just recently the President of the United States urged Americans to welcome, rather than fear, India as an economic competitor; and, the President defended the outsourcing of American jobs to India as the reality of a global economy stating that

n1 The views expressed are solely those of the author and should not be attributed to the author's firm or its clients.

the United States should focus on new markets and noting:
"People do lose jobs as a result of globalization, and it's painful for those who lose jobs." Mr. Bush said at a meeting with young entrepreneurs at the Indian School of Business, one of the premier schools of its kind in India. Nonetheless, the president said, 'globalization provides great opportunities'". See Elizabeth Bumiller "Bush, in High-Tech Center, Urges Americans to Welcome Competition from India", NEW YORK TIMES, Saturday, March 4, 2006 page A-5, column 1.
There are major factors impacting the US transportation industry due to globalization:
1. US airlines are increasingly forced to compete with not only new entries within the US, but, also, new entries in international transportation. With the cost of fuel increasing, the nation states which have had a lock on fuel may, increasingly, become even more important competitors. Insofar as governmental entities controlling other markets are considering opening up markets they are demanding access to not only the US but the right to ownership of US business, including carriers. Not only will European Union states be negotiating with the US, but they will be among others negotiating with the US. Thus, controls as to aviation in the US are being deregulated and regulated at the same time.
2. The transportation industry within the United States on the rails is equally impacted, as market centers which chose the rails have been impacted because of international events.
Business dealings in the globalized marketplace, and their accompanying labor-management relationships, were becoming complex and evolving so rapidly, before September 11, 2002, that they blurred concepts of nationality and citizenship, which historically had influenced the determination of applicable law. In a "post 9/11 world" there are new considerations. The results create a new meaning for the term conflicts law.
Recently attention has focused on the questions as to whether global capitalism is an ailing system. A recent review of new books discussing this, by Michael Hirsch "Dollars without Borders", in the New York Times Book Review, Sunday, March 5, 2006 at page 13, noted the following:
"Global capitalism is an ailing system. The main question is whether the illness is curable or terminal. What has become especially worrisome in recent years is the increasingly unequal relationship between labor and capital. These two old rivals have long been at odds, of course, often violently. But there have also been extended periods of peace."
As Jeffry Frieden writes in his magisterial history, 'Global Capitalism,' during the high-growth decades after World War II labor and capital existed in an uneasy but prosperous equilibrium. And during the earlier golden age of globalization before World War I, he reports, labor and capital 'worked beautifully' together on a worldwide scale. As free trade supplanted mercantilism in the mid- to late 19th century, barriers to trade and immigration fell at roughly the same time. 'Unproductive Polish and Portuguese peasants who could not compete with Canadian and Argentine grain farmers,' Frieden says, 'became productive urban workers in Warsaw and Lisbon or immigrated to become productive factory workers in Toronto or farmworkers on the pampas.' Streams of investment followed.
In the last quarter-century or so, however, capital has left labor behind to choke in the dust of those pampas. Or so Jeff Faux argues in 'The Global Class War,' a much darker book that characterizes the present era as a struggle between a 'global governing class' and everybody else. Faux is clearly correct that the balance of power between labor and capital has shifted dramatically. Today, investment capital moves at blinding speed, while labor still must go by boat, train and plane--and that's if it's lucky. With much tougher immigration restrictions than existed a century ago, labor is more often confined to its home markets, waiting anxiously to see if globe-hopping capital deigns to come its way.

Introduction – Part II:  The World Unions and Plaintiffs’ Desire
The world we live in involves globalization, and the movement of capital to other areas where markets and means of production (including labor) may be more cost-effective, than in those areas where there are higher labor expenses. The basic objectives of unions and plaintiff-employees, in cases where they want to proceed against management, are similar to those of management; and, they are motivated by economics. Unions often seek to control their labor monopoly, that U.S. labor laws provide them; and, they cannot do so, unless they control the representation of the employees, and the ability to protect the employees and promote their interests. Unions benefit through increased membership and dues revenue. The employees who feel that they have disputes with management, such as those which relate to employment discrimination claims that are either civil rights claims, or sometimes claims against the management and the unions, want to be able to sue and reach the deep pockets of management. They also do not want to be barred by any barricades which could prevent them from obtaining their objectives (which, in part, are remedies to eliminate their problems and which may be not just elimination of discrimination but, also, monetary relief payment of their attorneys' fees).
This generally means that unions and management want to expand the laws of the United States beneficial to them where they are operating, and employed, to cover employment issues impacting them in other areas of the world.
Set forth below are illustrations of basic union objectives as shown by cases and authorities:
1. Union desire to follow the work, and not allow the shift of work abroad to reduce, or eliminate, the labor management relationships which the unions have. A basic desire of unionization is to apply the law that is most favorable to that of the unions, and those they represent. U.S. unions want U.S. labor laws to apply to American companies and those that are operating within the United States not only in the United States, but abroad. Unions argue that the interests of the United States and their members are adversely affected if management can escape responsibilities to unions. Most unions seek extraterritorial application of U.S. laws and decisions that cover operations, and support court jurisdiction over activities which have occurred outside the territorial limits of the United States. The reality is that even examination of the union position involves a certain amount of recognition that the case law does not favor the union position. Most court decisions have severely limited the scope of U.S. laws, as shown by this article, as to operations outside of the United States. For the basic analysis of the union position and analysis, see, Applicability of U.S. Labor Laws to Issues, Disputes and Relationships that Include Foreign Conduct or Components by Stephen B. Moldof (the article is in the Course Materials of the ALI-ABA Airline, Railroad and Employment Course Book, October 2007). As demonstrated here, union desires are generally limited by virtue of the legal and factual realities. The legal realities involve the fact that the United States Supreme Court is quite conservative and increasingly conservative, and that is (for unions) going to be an increasing reality as has been shown by legal analysis and cases. See e.g. Ronald Dworkin "The Supreme Court Phalanx" New York Rev. of Books, Sept. 27, 2007 at pg. 92 (Vol. LIV. No. 4). In addition, foreign carriers are operating outside of the United States; and, the United States is not the sole airline market in the world. This means that even if the U.S. carriers through case law, or even legislation, were required to recognize unions on all U.S. systems, that would not be as significant a victory as it might have been several decades ago. It might even cause the further decline of the influence of American carriers.
2. The plaintiffs' position is demonstrated by the basic concept in Ofori-Tenkorang vs. American Intern. Group, Inc., 460 F.3d 296 (2nd Cir. 2006), (the "AIG case") a significant decision of the Second Circuit. Appendix A. A plaintiff working in South Africa maintained that he could bring an action under 42 U.S.C. §1981; and, he lost as to activity abroad which was not covered by the U.S. law. However, the court did ruled that to the degree that certain employment actions occurred within the United States, which might have impacted the plaintiff (since he was posted in foreign nation but had originally been employed in the United States and certain benefits were controlled within the United States), the court could have jurisdiction. This is a similar type of analysis applied to the case law interpreting union agreements, as is noted. Certain civil rights claims have been expanded by legislation, overruling court cases that have restricted jurisdiction over foreign employees of U.S. companies posted in foreign locations. That analysis is provided below. Nevertheless, as with the unions, the harsh reality is that the more control employees can exercise over their conditions abroad, the less employers may tend to use American employees posted abroad. The global economy and the internet allow setting up operations abroad, which several decades ago could not have occurred.
Introduction – Part III:  The World – The Management May Want to Live In
Most U.S. employers, despite their ability to move abroad, recognize that there are advantages to utilization of the U.S. workforce. The advantages are too long to list in this article, but include: continuity of service; and, ability to work under U.S. standards (which while expensive also are beneficial in terms of providing protection). An example of the difficulties of being able to ship something abroad, in terms of problems, arises in connection with the daily headlines about problems with merchandise from China. Mark Landler and Ivar Ekman, "Bucking An Industry Trend, Industries Remain in Europe" New York Times pg. C-1, col. 2, Tues., Sept. 18, 2007 (discussing "recalls of millions of Chinese-made toys, mostly because of lead paint"). There are also security issues in other countries. Some countries have privacy restrictions, which preclude obtaining information that the employer might want in a way of background; and, other countries lack ability to police the background, to ensure that the employees are who they indicate they are. The United States experiences the same situation, in connection with obvious daily reports about immigration issues, and recent social security match letters--which are discussed elsewhere in these materials--demonstrate that identities are not that easy to determine in the United States. See Martha Schoonover and Alix Mattingly article on "Social Security No-Match Regulations" in these materials. The United States, however, is still far ahead of many other countries in connection with many such areas and standards. Thus, there are advantages for retaining operations in the United States and, also, ensuring that the standards in the United States apply abroad. In an article by, Eric Lipton and Gardiner Harris, "In Turnaround, Industries Seek U.S. Regulations," The New York Times, Sunday, September 16, 2007, pg. 1A, Col. 5, it was noted U.S. industries sought standards (albeit for various reasons; and motives):
The consequences for consumers, though, are not yet clear. The tactical shift by industry groups is motivated by a confluence of self-interests: growing competition from inexpensive imports that do not meet voluntary standards, and a desire to head off liability lawsuits and pre-empt tough state laws or legal actions that were a response to laissez-faire Bush administration policies. Concerns that Democrats could soon expand their control in Washington have also prompted manufacturers or producers to seek regulations that they consider the least burdensome, regulatory experts say.
See, also, Stephen Castle and Dan Bilefsky "Europe Reconsiders Plan to Relax Consumer Safety Rules" New York Times, Tuesday, Sept. 18, 2007 pg. C4, col. 1 ("Like the United States the European Union is considering requiring toy manufacturers to have all their new products tested in independent laboratories--a move that would add to costs.")
Nevertheless, there are tradeoffs for all. The various investment potentials are complex too. Foreign carriers and foreign companies can set up businesses that enter into the United States, and other areas. See Jeff Bailey "A New Low-Fare Airline on a Web-Only Approach" NY Times, Wed., April 25, 2007 pg. C-12, col. 1 (discussing Skybus Airlines and Ryannair); Daniel Michaels "Qatar Airways Orders 80 Jets from Airbus" Wall Street Journal, Thurs, May 31, 2007, pg. B-6, col. 1; and see Leslie Wayne "The Real Owner of All Those Planes" NY Times, Thurs, May 10, 2007 pg. C-1, col. 2 (discussing Steven Udvar-Hazy head of International Lease Finance which leases nearly "half of the airplanes flying today" and who does more business with non-U.S. carriers).
There also are increasing situations in which foreign capital invests in U.S. companies which, then, create businesses and entities abroad. A recent example of this was the investment by the Chinese government in Blackstone. See, "China Puts Cash To Work in Deal with Blackstone," Wall Street Journal, Monday, May 21, 2007, pg. 1A, Col. 5 ("China said it would invest $ 3 billion in Blackstone.") Recently China gave Blackstone the opportunity to take over a major industry in China. See, Deutsche Presse-Argenturg GmbH 2007 confirming that:
"The U.S. Private Equity Firm, The Blackstone Group, on Monday, September 10, 2007 was granted an investment of up to $ 600 Million for a 20% stake in Chinese chemicals, The China National Bluestar Corporation known as ("Bluestar").
Bluestar was a wholly owned subsidiary with China National Chemical Corporation (Chemchina), and the article pointed out that this is the first investment since the "Beijing government paid around 3 billion dollars in May for a 9.4% stake in the U.S. investment group."
U.S. investment groups can be a source of funding and attractive investments for those in foreign nations. Foreign nations may then allow entities which they have invested in to have access to their markets as an additional way of obtaining American know-how and management skills. There is no reason why business entities, or even foreign countries, cannot invest in U.S. entities, or create entities abroad that trade in their markets, which are controlled by U.S. investors (and which, in turn, may run or have some interest in international operations).
Unions have recognized this; and, they are increasingly analyzing how to cope with such issues. See, "What's Offline: Outsourcing the Picket Line," NY Times, Sat., March 11, 2006 pg. B5, col. 3. (SEIU President Stern "envisions a federation of worldwide unions, organized by sector, which would bring to bear cross-border union leverage to organize entire industries rather than individual companies, thereby lifting standards of workers"). See also Tim Johnson "Labor Unions: U.S. Labor Leaders Woo China's Federation, Miami Herald, Wed. May 23, 2007 pg. 1-C, col. 2.
For the foregoing reasons, there are ways by which U.S. investors and businesses may be as aggressive as their counterparts are. No doubt unions have all engaged in international organizing; and, no doubt businesses will encounter such organizational efforts. Thus, the following analysis is of the existing law, but it may change. Even the positions of the parties may change. There are periods when unions and plaintiffs seem to have the advantage, or seem to lose the advantage. There will, also, be periods when the management will seem to have the advantage, or lose the advantage. The key is to appreciate, the various laws that can apply and the ways by which they can be impacted.
Notwithstanding issues raised by the foregoing it is becoming increasingly important to understand that the concept of globalization which is affecting markets and, in turn, labor, takes place in the context of different nation states which have different laws. The result creates conflict.
This is an analysis of extraterritorial application of employment laws, including those which regulate collective bargaining and individual rights, with an emphasis on the laws of the U.S. A gridlock, or what we even could refer to here as a "law lock", can result--in that each country can seek to regulate the affairs of multi-national corporations and corporations in global commerce (based upon the new technologies) in a manner that creates a new need for resolving what were traditional conflict questions.
I.	The U.S. Labor and Employment Overview
In a classic text book on the Conflicts of Law by E.E. Cheatham, E.N. Griswold, W.L.M. Reese, M. Rosenberg (University Casebook Series, Brooklyn, The Foundation Press, Inc. 1964), the authors, using a sense of humor, introduced their text with a photograph of the Courthouse on the island in Tobago with a quotation from a leading English case, Buchanan v. Rucker Court of Kings Bench 1808, 9 East 192, in which Lord Ellenborough, C.J. asks:
 
Can the island of Tobago pass a law to bind the rights of the whole world?
 
Would the world submit to such an assumed jurisdiction?
In the process of examining the laws of the United States and their extraterritorial application, as an illustration, we are not attempting to be provincial but, rather, recognizing that this seminar is sponsored by the American Law Institute-American Bar Association. If we are going to analyze a legal system and do so in a manner that is not only analytical but critical (and intended to cause debate) the author proposes to use the author's country as an illustration as opposed to offending others.
The purpose of this initial outline is to discuss concepts. Case citations for discussion of specific extraterritorial issues are also in other articles in this course book.
Set forth below is an initial outline of the basic United States legal concepts that relate to "extraterritoriality":
A. Unless a statute is specifically given extraterritorial effect, the presumption is that it does not apply outside of the United States. EEOC v. Arabian American Oil Co., 499 U.S. 244, 55 FEP 449 (1991). In EEOC v. Arabian American Oil Co., supra, the Supreme Court held that Title VII of the Civil Rights Act of 1964, as amended, did not apply extraterritorially to regulate the employment practices of United States employers employing U.S. Citizens abroad. Overriding this Supreme Court decision, Congress amended Title VII to reverse the Court's decision and included within Title VII protection U.S. citizens who work overseas for U.S. businesses. See Section 109(a) of the Civil Rights Act of 1991, Title VII, 42 U.S.C. § 2000e(f) 1991). See, also, Carnero v. Boston Scientific, 433 F3d 1 (1st Cir. 2006) (Sarbanes-Oxley did not have extra-territorial application).
B. When Congress legislates with an intent to express extraterritorial impact, the courts in the United States will recognize that intent but only if the work is for a U.S. controlled company. See, e.g., Gantchar v. United Airlines, 1995 U.S. Dist. LEXIS 5358 (N.D. Ill. Apr. 20, 1995).
C. When there is a gray area, the Courts will also determine the results by judicial interpretation. Id. See, also, Denty v. SmithKline Beecham Corp., 907 F. Supp. 879 (E.D. Pa., Nov. 6, 1995).
D. When there has not been a Congressional expression, judicial interpretation can result in application of laws in a fashion that still impacts in an extraterritorial manner. See ALPA v. TACA, 748 F. 2d 965 (5th Cir. 1984), cert. denied, 417 U.S. 1100 (1985). See also, the AIG case (Appendix A).
E. When there has been an intent to have extraterritorial impact, the courts can interpret the law in a manner that allows defenses and qualifications:
1. There can be qualifications within the law. The classic case is the decision not to apply civil rights laws prohibiting religious discrimination to an airline's pilot qualifications when they would apply to an airline that flies into Mecca which cannot allow non-Muslim pilots, because they will be beheaded. See also Kern v. Dynalectron Corporation, 577 F. Supp. 1196 (N. Tex. 1983), aff'd, 746 F.2d 810, 40 EPD 36,317 (5th Cir. 1984) (holding conversation to Islam was a B.F.O.Q. for a pilot flying helicopters to Mecca since non-Moslems flying into Mecca are, if caught, beheaded.)
2. The courts can eliminate extraterritorial effect when it would create a conflict with laws of other countries to enforce legal disputes based upon United States law under the Constitutional theory involving the Act of State Doctrine. See, e.g. Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964)(applying the "Act of State Doctrine"). The Act of State Doctrine precludes inquiry into the validity of public acts of a recognized foreign power committed within its own territory.
3. There can be other defenses. See the "Foreign Compulsion" defense. ALPA v. TACA, supra at 971-972.
The difficulty that we have in terms of accessing the need to avoid global gridlock is that we have as our starting place our experiences as attorneys in the United States. It is important to understand the international flavor of the issue that goes with the international laws relating to labor and employment disputes. This can be done by appreciating the concept of multi-national bargaining and litigation arising out of it as well as the factors that cause this type of bargaining and, then, understanding the factors that relate to the bargaining. These points are outlined below.
II.	The Pre-9-11 Concepts Relating to Cross-Border Collective Bargaining
Two interesting books provide some insights as to the importance of cross-border bargaining and related issues.
A. In the first book Faster:  The Acceleration of Just About Everything by James Gleick (Pantheon Books, New York 1999), the author analyzes the acceleration of our age in not only global terms but, also, as to technological factors changing our lives. As an ironic and rather perverse humorous insight, the author starts with a quotation from Woody Allen (which provides the ultimate irony in terms of the way speed can enable us to be in different locations for the purpose of getting things done but in a manner that might be self-defeating):
 
I'm going to kill myself. I should go to Paris and jump off the Eiffel Tower. I'll be dead. You know, in fact, if I get the Concorde, I could be dead three hours earlier, which would be perfect. Or wait a minute. It -- with the time change, I could be alive for six hours in New York but dead three hours in Paris. I could get things done, and I could also be dead. -- Woody Allen
In the second book, The Lexus and Olive Tree by Thomas L. Friedman (Farrar Straus Giroux -- New York 1999), there is comprehensive analysis of the process of globalization and the integration of capital technology and information across national borders -- that not only affects multi-national bargaining but all other facets of our lives. The author makes the point that globalization is a term that can be demonized and misunderstood and that multi-national bargaining can be much more than what is presented at the bargaining table; since it may depend upon society's perceptions of a very complicated process. As Friedman describes it:
 
Politicians have to be aware that, for a lot of reasons, it is very easy to distort and demonize globalization and end up, as Clinton did, where even if you are right on the economics, you lose control of the politics, so it works against you instead of for you. People who are the biggest losers from globalization, workers who have lost their jobs to robots or foreign factories, know exactly who they are. This makes them very easy to mobilize against more integration, technology or free trade. People who are beneficiaries of globalization, of more open trade and of foreign investment, often don't know it. They often don't make the connections between globalization and their rising standards of living, and therefore they are difficult to mobilize. Have you ever heard a worker in a microchip factory say, "Boy, am I lucky. Thanks to globalization, soaring demand for American high-tech exports, the labor shortage for skilled workers in this country, and rising expectations in the developing world, my boss had to give me a raise."
 
Another reason globalization is easy to distort is that people don't understand that it is largely a technology-driven phenomenon, not a trade-driven one. We had a receptionist at the Washington bureau of The New York Times, but the company eliminated her job. She didn't lose her job to a Mexican, she lost it to a microchip--the microchip that operates the voice-mail device in all of our office phones. The fact is, that microchip would have taken away her job if we had had no trade with Mexico. That microchip would have taken away her had we had a thirty-foot-high wall stretching from one end of the Mexican-American border to the other. But politicians don't want to acknowledge this. None of them is going to stand up and say: "I want you to get up now, unplug your phone, go to your window, throw your out phone out and shout: 'I'm not going to take it anymore! Save American jobs! Ban voice mail! Potato chips, yes! Microchips, no!" That's not a winning political message. It's much easier instead to rail against Mexicans and foreign factories. And, of course, foreign factories do, in some instances, take away jobs (but not nearly as many as technology destroys and creates), so there is just enough truth there to make for some very emotive, dangerous politics. And because foreign workers and factories are easy to see, and microchips are not, they loom much larger in our consciousness as the problem.
 
If we don't education the public about the real nature of the world today and demystify globalization--the Separatists will always exploit this confusion for their own ends. In 1998, President Clinton could not get NAFTA expanded to Chile because of a union-led minority, who believed that they were not benefiting from more free trade, were very active in opposing the expansion of NAFTA, while the majority that was benefiting from expanded free trade never understood who they were and therefore never got mobilized to defend their interests.
Friedman, supra, at pages 357-358.
It is also important to understand what causes the need to be concerned about cross-border bargaining implications. While the airline and railroad industries are not enjoying affluent times, there are other industries that are much worse off. This brings us to the second concept in terms of factors which might cause cross-border bargaining and application of laws.
B. Factors That Are Relevant For Evaluation In Connection With Cross-Border Bargaining.
John McPhee in Looking for a Ship (Farrar Straus Giroux, New York 1990), at pages 11-13, noted that the United States Merchant Marine, a collective enterprise of competing private companies flying the American flag on sterns of their ships and employing American citizen crews and transporting cargo throughout the world, once had ships numbering in the thousands. It was competitively outbid by ships under foreign flags; and, it was reduced to carrying less than five percent of all ocean-going American cargo in the mid-1980's. McPhee described his interview at the National Maritime Union Hall (which had moved in the late 1980's from Manhattan to Savannah) showing the disaster suffered by the private companies was also suffered by the union (at page 13):
 
The N.M.U. hall in Savannah is a quarter the size of the one in the warehouse in New York -- a small freestanding building a few blocks from the Savannah River. You step in off the street and show your killer card. If a sailor doesn't have one, he may be in some difficulty. When I was there one time, Barbara Evans, the dispatcher, said, "Someday I'm going to be a social worker, because that is what I am now." She mentioned sailors who came looking for ships and slept on park benches until they moved to the Inner City Night Shelter. She mentioned a sailor living under a house.
The situation in connection with the Merchant Marine exists in connection with other operations. Douglas Frantz in an article titled Cruise Lines Profit From Friends in Congress, New York Times, Friday, February 19, 1999, page 1, noted the following:
 
The world's largest cruise company, the Carnival Corporation, earned $ 2 billion in profits over the last three years. But the company, with headquarters here in two multistory buildings on Carnival Place, paid less than 1 percent in income taxes even though its earnings exceeded those of many Fortune 500 companies.
 
Royal Caribbean Cruises, the second-largest cruise company, whose headquarters overlook the Port of Miami, reported profits of $ 657 million over the same time. Its financial statements do not even include a line for income taxes.
 
Doing business under a decades-old loophole in the Federal tax code, and protected by an increasingly powerful lobbying force, the 17 major cruise lines pay practically no income tax even though they are based in this country and 90 percent of their passengers are Americans. The cruise lines, all of them registered in foreign countries, do not observe the nation's labor laws, minimum wage law and many environmental and safety regulations.
 
Just last fall, by having a senator insert a single word in the Federal budget bill, the 17 cruise lines won an exemption from immigration fees worth $ 20 million a year. In an amendment to another bill, a Congressman protected the foreign-registered cruise lines' monopoly on coveted permits to sail into Glacier Bay National Park in Alaska.
* * *
 
In Congress, a potential battle is brewing on several fronts, including the foreign cruise ships' major advantage: while they earn their profits from the United States, they avoid nearly all income taxes by registering as foreign corporations and sailing under foreign flags. They also build their giant floating resorts overseas.
There are, as the foregoing article notes, legislative reviews to evaluate the situation. There are, also, other types of actions. As an illustration, the BNA's DAILY LABOR REPORT No. 43, "Union Group Urges Worldwide Standards for Minimum Wages, Conditions on Ships," Friday, March 5, 1999, reported:
 
In a dramatic bid to boost wages and working conditions for seafarers worldwide, the International Transport Workers' Federation is visiting ports throughout the world with a former "flag of convenience" cargo vessel that has been transformed into a floating exhibit depicting what union officials termed FOC ships' "deplorable" record on safety and workers' rights.

There is a pattern developing to challenge overseas operations by using consumer complaints and public pressure. For example, BNA's DAILY LABOR REPORT No. 49, Nike Agrees to Independent Monitoring of Overseas Facilities if Competitors Go Along, Friday, March 15, 1999, noted:
 
Shoe giant Nike Inc., one of many manufacturers that has been criticized by university students for using overseas sweatshops to manufacture products that carry university logos, has agreed to reveal the locations of its overseas factories and to allow independent monitors to inspect them if its competitors agree to do the same.
The irony, of course, is that what happened in the United States could happen in any other nation-state's shipping operation. Ultimately, the reality is that the same interrelationship which allows such cross-border movement provides those who have lost the opportunity to serve as employers or labor organizations (or employees) opportunities to seek redress when the global interrelationship returns to the venue to market goods or services, in which they are still located. As, the humorist, James Thurber, noted "Man is moving too fast moving in a world that is round. Soon there will be a great rear-end collision and man will find that what hit him from behind was mankind." Everybody is entitled to the equal opportunity to have a rear-end collision, if they are not careful as to how they work out their issues. Speeding beyond the control of the laws may be possible, but there is always the reality that the laws may catch up, in a manner that is a collision rather than a negotiated arrangement acceptable to all.
There are a number of factors outlined below that should be considered in connection with evaluation of bargaining in the airline and railroad industries in terms of international implications.
C. Factors That Relate to Cross-Border Bargaining and Impact Such Bargaining.
1. The Regulatory Factors.
a. Controls, such as route controls initially established by the CAB or now the DOT for airlines and open skies issues, ICC issues, or licensing for technological communications systems.
b. Antitrust controls.
c. Employment and labor law controls.
(1) Illustrations in the United States are collective bargaining laws such as the Railway Labor Act and the National Labor Relations Act.
(a) The unionization of the labor force.
(b) The collective bargaining agreement controls, such as through scope clauses.
(2) United States illustrations for individual employment are also contained in other employment and workplace laws.
d. Market limitations.
e. Technological limitations.
f. Legal systems and political systems.
2. The Factors that Eliminate Controls and Create a "Free-Market".
a. Deregulation.
b. Electronic and technological developments which enable use of the Internet.
c. An unorganized and dispersed labor force.
d. Privatization.
3. New Developments.
a. Industry examples: The Airline Industry.
(1) Code sharing.
(2) Alliances.
(3) Regional flying.
b. Mergers and consolidations.
c. Lack of antitrust enforcement.
d. Global financing.
e. Equipment.
f. Limits to the U.S. law jurisdiction.
4. New Factors Involving Legal Systems Which May Expand Opportunities to Operate With Minimal Controls.
a. Treaties and bilaterals.
b. Deregulation.
c. Antitrust laws which are pro-free market.
d. Labor and employment law provisions and extraterritorial limitations.
e. Nation-state laws and attitudes (including state laws).
f. Open skies and market agreements and professional (accounting) standards.
g. Privatization of industries, public facilities and the workforce.
5. The Various Factors That Relate to Operations.
a. Labor, including labor organizations on an international and domestic level.
b. Collective bargaining agreements.
c. Lack of agreements, including scope clauses and other issues.
d. Matters which affect operations--technology, including the Internet, electronic "e" business, e-leasing, e-outsourcing, and expanded global communications.
e. Markets, including mergers and acquisitions.
f. The European Union and other Regional alliances and treaties.
g. International organizations including the World Trade Organization and the International Labor Organization. n2 
 
n2 See, eg. BNA Daily Labor Report, Dec. 13, 2005, pg. A-3 "International union files complaint with ILO alleging state violates international labor laws" (noting the UE complaint filed with the ILO protesting North Carolina's from collective bargaining between state and local entities and unions due to UN conventions 87, 98 and 151 relating to association and bargaining rights.)
 
h. Public willingness to obtain low cost products and services without loyalty to companies or "brand identification" based on the point of origin, or location of operations, or history or prior experiences.
i. Technology and equipment.
j. Availability of economic resources (including labor, fuel and energy at lower costs).
k. Fuel.
There are some illustrations which demonstrate not only the details with regard to the foregoing, but the types of changes that have occurred in the past, and continue to occur, because of the interrelationship of the laws and events.
A. Alliance Illustrations Using the Airline Industry as a Prime Example.
1. Financial Times, Monday, February 1, 1999, page 8, col. 1, in an article titled "Oneworld, lots of benefits" by Roger Bray, noted that:
 
Oneworld, a tie-up between British Airways, American Airlines and three other international carriers, comes into effect today offering huge benefits to business travelers.
* * *
Oneworld's other members are Canadian Airlines, Cathay Pacific and Quantas. (A sixth partner, Finnair, joined late and will not introduce service changes until later this year.) The five airlines will offer through check-in on most services, although it is still not possible to check bags to onward destinations within the U.S. without passing through customs at a gateway airport. Wherever possible, the airlines will move arrival and departure gates close together to cut hassle for connecting passengers.
* * *
There are complications, however. Oneworld is designed to avoid U.S. antitrust objections because it does not involve any new attempt to standardize fares or juggle with capacity or flight frequencies. But while argument about the BA-American deal rumbles on, points earned with one on North Atlantic flights will not count towards top tier membership with the other.
 
And while other carriers within the group may be able to dovetail connecting flight times, American says it is not yet allowed to do that with BA. A spokesman says: "Without antitrust immunity there are four things we can't talk to BA about: scheduling, pricing, frequency, capacity."
2. In an article by John Mason in the Financial Times, "Court rules Heathrow slots can be sold," Friday, March 26, 1999, page 10, col. 1, stated the following:
 
The liberalization of civil aviation in the European Union advanced yesterday when the High Court in London rules that slots at Heathrow airport could be sold. Heathrow in the western suburbs of London is the biggest UK airport.
 
The ruling, which could have widespread implications for international aviation, goes against the European Commission's long-standing insistence that the buying and selling of slots is illegal. The trade in air slots has been a covert, but established, practice and its legality has never been tested before.
* * *
British Airways welcomed the judgment, saying it clarified the law and the rights of airlines to freely exchange slots. This was essential for investment, it said.
 
Brusssels' insistence that slots cannot be sold was one of the reasons behind the delay in British Airways' plans to form an alliance with American Airlines. The Commission recommended that the two airlines surrender 267 weekly slots at Heathrow and Gatwick airports in return for approval of their alliance.
3. An article by Paul Betts and Gordon Cramb titled Alitalia, KLM poised for co-operation, Financial Times, Friday, November 27, 1998, page 21, col. 1, noted:
 
Alitalia and KLM Royal Dutch Airlines are to sign today a wide-ranging co-operation agreement that is expected to come close to a full operational merger.
 
The alliance, which at this stage does not envisage any equity exchanges between the two airlines, will involve the creation of two separate jointly-held companies to control passenger and cargo operations.
 
Alitalia, which reached a preliminary agreement with KLM last year, sees the partnership as an essential step ahead of its planned privatization. The Italian government, which controls the airline, is hoping to sell its remaining 67 per cent stake in the carrier before next spring.
* * *
The KLM-Alitalia link-up, which will also include KLM's US partner Northwest Airlines, will challenge the Star Alliance -- the world's largest alliance, including Lufthansa and United Airlines -- and Oneworld, led by British Airways and American Airlines.
* * *
However, the partnership between KLM, Europe's fourth largest carrier, and Alitalia, the seventh biggest, will stretch beyond the competing alliances by integrating more fully their respective operations rather than simply co-operating on frequent-flyer programmes and code sharing.
 
As an initial step, the two airlines launched last month joint cargo operations to 16 destinations and co-ordinated passenger services to Australia and southern Africa.
* * *
B. Privatization. The Economist, on February 20, 1999, at page 61, Seasonal repentance, noted:
 
Carnival came early this year to SEPI, Spain's state holding company. On February 12th it sealed a deal with British Airways (BA) and American Airlines to take 9% and 1% stakes, respectively, in Iberia, the Spanish national airline that is next in SEPI's rapid-fire privatization programme. Along with 30% of Iberia reserved for a "hard core" of loyal Spanish institutional investors, the BA-American stake will provide a foundation for the public flotation of the airline in early summer.
* * *
But for the reforming Spanish and French, privatization will provide a further tug towards dry ground. The stickiest remaining mud is the patch in which the pilots like to wallow. Iberia's pilots still earn 20% more than their peers at private airlines such as BA. Cosseted by bail-outs and perks that included free flights for their children's nannies, the pilots have gone on strike several times over attempts to impose on them deals similar to those accepted by ground staff, whose pay was cut in 1994.
C. Equipment. An article by Tim Burt, titled SAS plans $ 1.8bn order from Airbus, Financial Times, Monday, April 5, 1999, noted:
 
Scandinavian Airlines System, the three-nation Nordic airline, is likely to place a SKr13bn-SKr15bn ($ 1.58bn-$ 1.82bn) order for long-haul aircraft with Airbus, the European consortium.
* * *
In an interview, Mr. Stenberg said SAS's fleet of Boeing 767s would probably be replaced by Airbus A33O and A340 jets -- the first time that the airline had placed an order with the European manufacturer. "Airbus is ahead with its long-haul combination. It offers more options in terms of size and range."
* * *
SAS's preference for Airbus may have been influenced by its increasingly close ties with Lufthansa, the German carrier and its partner in the Star alliance.
 
Lufthansa and SAS hope to cut costs by sharing procurement and maintenance for parts of their fleet. The German carrier, one of Airbus's largest customers, has already agreed to service the engines for SAS's new Boeing 737s.
D. Open Skies. An editorial, "Open skies," Financial Times, Tuesday, February 26, 1999, at page 15, col. 1, noted:
 
Signs that the US and the UK are ready to agree an "open skies" accord are to be welcomed, mainly because this could help open the door to a transatlantic open skies agreement between the US and the EU. The airline industry should be run to best serve passengers. Too often governments call the shots, allocating the seats at the front to the supposed interests of national carriers, and bumping the consumer interest into steerage.
* * *
The first step towards transatlantic open skies should be the lifting of restrictions on foreign ownership, currently more onerous in the US. Governments will have to acknowledge that good fares and service are more important than the flag on the tail. Indeed, there is no role for government in the airline industry beyond ensuring safety and competition. At a time when automobile, oil and pharmaceutical industries are consolidating, it is absurd that governments remain so determined to promote their national champions in the sky.
E. Relocation. Michael Skapinker, Aerospace Correspondent, in Sabena may move pilots' contracts to Switzerland, Financial Times, Friday, April 3, 1998, page 17, col. 2., discussed consideration given by Sabena Airlines, the national airlines of Belgium, to a shift of its pilots' employment contract to Switzerland in an attempt to avoid higher social security charges and taxes in Belgium and noted that similar concerns are behind possible relocation by Virgin Express, a Brussels-based carrier, to the United Kingdom or Ireland.
The examples in travel and other industries are self-evident. They demonstrate the changes technology can make in terms of combining customer services with very competitive business effort. See e.g. Financial Times Survey, Thursday, September 9, 1999, page I, col. 1, Fight for loyalty fuels expansion: Hoteliers, like airlines, are changing strategies as they strive to entice and keep global travelers', whatever their port of call. Scheherazade Daneshkhu report":
 
The rapid pace of consolidation in the hotel industry shows no sign of flagging. International hotel chains are competing for business travelers" loyalty, and that involves providing a hotel in most places the traveler needs to visit.
F. Outsourcing. The most effective way of bringing the issue of outsourcing home was a dramatic announcement by the Pentagon of its request to Congress for authority to award contracts to foreign airlines to move U.S. troops and equipment, which has been described as a "business that has always been limited to -- and been lucrative for -- American-based carriers". n3 
 
n3 A recent article in The New York Times stated:
 
The proposal, in the Defense Department's budget request for fiscal year 2005, could have its greatest impact on the Civil Reserve Air Fleet, a group of 24 passenger and cargo carriers that sign contracts with the Pentagon each year. These airlines were instrumental in transporting military personnel and equipment to the Middle East last year before and during the Iraq war.
 
In all, American passenger and cargo carriers were paid $ 1.2 billion to fly nearly 500,000 troops to and from the war zone during the formal Iraq conflict. The cargo companies carried more than 161,000 tons of equipment, according to a Pentagon report last fall.
 
But they may not have a lock on the Pentagon's business for long. In its 2005 appropriations request, submitted last month, the Pentagon asked Congress to repeal a law that bars foreign-owned airlines from bidding on its contracts.
 
Micheline Maynard, Pentagon Seeks to Use Foreign Airlines, The New York Times, Saturday, April 10, 2004.
 
Notwithstanding the security issues, the prior Presidential campaign issues (suggesting that outsourcing is a political issue), and other questions that relate to use of foreign carriers, the Pentagon announced that it was considering using foreign carriers for flying our troops because it was cheaper to do so:
 
By allowing foreign carriers to bid against domestic rivals for contracts, the Pentagon could benefit in two ways, said Robert W. Mann Jr., an industry consultant based in Port Washington, N.Y.
 
Competition could bring down the price that the military pays to transport troops, he said. American carriers transport soldiers and equipment from bases in the United States, like Dover, Del., to military installations overseas. The planes do not fly in conflict zones.
 
The Pentagon pays a float 8.5 cents a seat mile for a round-trip flight. The cost of a typical flight between Dover Air Force Base and Kuwait City was $ 379,965, according to the Pentagon report last year. That was for a 13,546-mile, round-trip flight using a McDonnell Douglas DC-10 with 330 seats.
 
But Mr. Mann said foreign airlines, especially charter companies, have been known to seek as little as 5 cents a seat mile for equivalent trips. The Pentagon 'may feel they can get better pricing from other suppliers,' he said. It was not clear which foreign airlines would participate. But industry experts noted that competition in Europe between low-fare carriers and major airlines has led to excess capacity there. Meanwhile, a decline in flights to the Middle East because of the Iraq conflict could cause carriers based there to become interested in bidding for Pentagon contracts.
 
The Pentagon already has the ability to grant contracts to foreign airlines case by case if no American carrier is willing to assume the risk of a flight. In the past, the Pentagon has chartered flights by Volga Dnepr Airlines or Russia and Ukrainian Cargo Airways.
 
Micheline Maynard, Pentagon Seeks to Use Foreign Airlines, The New York Times, Saturday, April 10, 2004.
If the announcement of the Pentagon does not say enough about where we are n4, other nations have their own carriers and they can compete with the United States carriers as long as they appear to be as effective and safe. The United States is not in a position to preclude such carriers from competing, because the United States wants to be able to obtain access to other locations and there are reciprocal, diplomatic and legal realities n5 since other nations have laws too.
 
n4 "Airlines 'Open Skies' Accord May Not Fly" Wall Street Journal, Mon. Feb. 27, 2006 pg. A4 col. 1 (discussing foreign ownership issues)

n5 "Lufthansa Offers to Cooperate in Antitrust Probe" Wall Street Journal, Wed. March 8, 2006, pg. A3 (regarding US price fixing investigations of the world's largest carriers).
 
III.	The Post 9-11 Concepts of Cross-Border Collective Bargaining
Recent events since September 11th have further complicated matters. In addition to armed conflict recent articles have chronicled the differences between nations. One publication actually described ways by which nations remain tribal as is reflected by their athletic events. There are a number of different interpretations regarding "globalization" after 9/11. One is an interesting book by Franklin Foer, An [Unlikely] Theory of Globalization:  How Soccer Explains the World (HarperCollins Publishers 2004), which in a very bizarre way uses the game of soccer to describe the proposition that globalization has not united the world but, rather, has revived tribalism. There are many other publications which also describe fractionalization and balkanization due to various different national interests. The result is that it is very difficult to predict what will occur. There is every reason to believe that changes will continue, which will cause airlines to carefully evaluate international events. As examples:
A. Airlines are constantly trying to evaluate international protections, because of events or claims or matters that would not normally be predicted but suddenly arise. See e.g. Nikki Tait, Deep Vein Thrombosis: Airlines may face huge claims after court ruling, Financial Times, Friday, February 1, 2002, page 8, col. 1, noting recent damage claims for passengers who maintain that they have suffered blood clots after making long-haul flights. These new issues as to the so-called "economy class syndrome" raise the issue as to whether the international charters and agreements protect carriers from claims of accidents that relate to new emerging tort theories.
B. See Daniel Dombey, Complex EU legal net closes in on aviation deals, Financial Times, Friday, February 1, 2002, page 3, col. 1, discussing the recent ruling of European Court of Justice regarding "open skies" aviation deals between EU countries and the United States and the ban on "open skies" previous policies which might favor a few carriers and the revisions to refer matters to EU representatives. See also Daniel Dombey and Mark Odell, Court finding casts doubt on US aviation agreements, noting that the European Court of Justice indicated that the central feature of such agreements on "open skies" deals between the U.S. and individual EU member states over access to European Airports was illegal and that such "open skies" deals hamper consolidation and liberalization of European aviation by limiting privileges to airlines from only one EU country rather than from the entire air EU. The result not only impacts "open skies" but relates to such alliances as to those between British Airways and American Airlines which have fallen apart and negotiating rights to London's Heathrow Airport. The article notes that some of the prior arrangements made in the international aviation community now have to be rethought. See for the decisions of the Court Internet web site: http://www.curia.eu.int The judgments concern cases C-466/98, C-467/98, C-468/98, C-471/98, C-472/98, C-475/98 and C-476/98.
C. Christopher Adams and Michael Mann, Economic Reform: Employers' Groups Say Guidelines Will Make it Harder to "Hire and Fire", Business attacks Brussels over workers' rights, Financial Times, Wednesday, March 6, 2002, page 8, col. 1, noting that the European Union is now evaluating new directives to provide workers with more rights that will impact on the ability to use temporary workers who will be given comparable rights to permanent employees under some proposals; the European Union Commission involved in this matter is asking employers and unions to negotiate a code of conduct which will be done by the EU representatives and impact on labor and employment matters.
D. A potential issue of major significance involved litigation in Kasky v. Nike, Inc., 2002 WL 827173 (Cal. 2002), protesting the public relations statements by Nike as to its business practices in other nations, based on the ground that if the information provided were not correct, the result would violate the prohibition against unfair and unlawful business practices. Nike was sued by an individual interested in maintaining that using workforces that are exploited, for reasons alleged, could be subject of an action if Nike, explained its position in a manner the individual plaintiff alleged were false, and misleading, so as to create a cause of action, or claim, under California law. Nike and many other related interest groups, including news and media publications, maintained that the Nike communications were part of protected speech under the First Amendment, that could not be the subject of such litigation due to state and federal constitutional reasons. The California Supreme Court ruled that the communications were "commercial speech" and enabled the litigation to proceed. Nike petitioned for, and the United States Supreme Court granted, certiorari review. See Nike, Inc., et al. v. Kasky, 123 S.Ct. 817, 71 U.S.L.W. 3319 (Jan. 10, 2003). However, when the Supreme Court ruled, it chose to dismiss the petition for review as "improvidently granted." See Nike, Inc., et al. v. Kasky, 123 S. Ct. 2554, 539 U.S.     (June 26, 2003) (Appendix B).
E. The trend of nations is to also review matters for purposes of treaties in connection with statutes requiring environmental analysis. For example, the U.S. Department of Transportation was found to have acted arbitrarily and capriciously, by failing to provide an environmental impact statement required under the National Environmental Policy Act and a State implementation plan under the Clean Air Act, in connection with authorizing Mexican trucks to operate in the United States. See the decision of the United States Court of Appeals for the Ninth Circuit in Public Citizen v. Department of Transportation, 316 F.3d 1002 (9th Cir. 2003). See Berriochoa Lopez, et al. v. United States, 309 F.Supp.2d 22 (D.C. D.C. 2004), Mexican truck operators could not sue the United States claiming non-compliance with the North American Free-Trade Agreement ("NAFTA") because NAFTA precluded private suits. See also Moore v. United Kingdom,     F.3d    , 2004 WL 2173311 (9th Cir. 2004), concluding that an individual who attempted to sue the United Kingdom under the Federal Tort Claims Act was barred by the North Atlantic Treaty Organization Status of Forces Agreement (that precluded suits against the United Kingdom under Foreign Sovereign Immunities Act of 1976, 28 U.S.C. Sections 1602 et seq. for non-commercial torts committed by its servicemen while present within the United States). Because of the treaty, the litigation could not proceed. See also Department of Transportation, et al. v. Public Citizen, et al., 124 S.Ct. 2204 (June 7, 2004) for the Supreme Court decision denying efforts by unions and environmental groups to petition for review of the Department of Transportation Federal Motor Carrier Safety Administration's promulgation of regulations, because that agency lacked discretion to prevent cross-border operations of Mexican motor carriers under the National Environmental Policy Act, or the Clean Air Act -- neither statute required the agency to evaluate the environmental affects of such operation due to treaty exemptions. As shown by these decisions, treaties can preempt certain types of litigation.
The combination of reconsideration of international protections for carriers with concerns about safety and considerations which have caused the United States to assist its carriers have global implications and cause reactions among other nation states to various policies. The result is that treaties may also impact labor and employment and workplace laws.
IV.	Conclusion and Factors Impacting Returns and Bargaining.
The antitrust laws have been the most advanced form of extraterritorial legislation. The use of actions occurring abroad have been the basis for legal jurisdiction based on impact and effect. As noted below, while criticized, these remain an applied basis for jurisdiction. The antitrust cases illustrate more than the basis for extraterritorial application of U.S. laws; they illustrate the trend towards gridlock suggesting a harbinger of a restriction of judicial expansionist rulings.
A. The Timberline decision of the Ninth Circuit and its concern regarding conflict. See Timberline Lumber Company v. Bank of America, 549 F.2d 597 (9th Cir. 1976) (Timberline I) (citation omitted), on remand, 574 F.Supp. 1453 (N.D. Cal. 1983), aff'd, 749 F.2d 1378 (9th Cir. 1984) (Timberline II). In Timberline I the Ninth Circuit adopted a "judicial rule of reason" that involved evaluating and balancing a number of factors including:
 
[t]he degree of conflict with foreign law or policy, the nationality or allegiance of the parties and the locations or principal places of business of corporations, the extent to which enforcement by either state can be expected to achieve compliance, the relative significance of effects on the United States as compared with those elsewhere, the extent to which there is explicit purpose to harm or affect American commerce, the foreseability of such effect, and the relative importance to the violations charged of conduct within the United States as compared with conduct abroad.
The Third, Fifth and Tenth Circuits have used similar balancing tests. n6 The D.C. and Seventh Circuits have questioned this approach. n7 
 
n6 See Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1297-98 (3d Cir. 1979); Industrial Inv. Dev. Corp. v. Mitsui & Co., 671 F.2d 876, 885-85 (5th Cir. 1982); Montreal Trading Ltd. v. Amax, Inc., 661 F.2d 864, 869-70 (10th Cir. 1981).

n7 See Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 948-49 (D.C. Cir. 1984) (Timerlane factors "are not useful in resolving the controversy"); In re Uranium Antitrust Litig., 617 F.2d 1248,1255 (7th Cir. 1980) (failure to consider Timerlane test did not constitute an abuse of discretion).
 
B. The U.S. Supreme Court has not been overly concerned about the conflict issue. An excellent analysis of issues related to the Supreme Court's recent decision in Hartford Fire Insurance Co. v. California, 509 U.S. 764 (1993) is found in Joseph P. Griffin, "Extraterritoriality in U.S. and EU Antitrust Enforcement", Antitrust Law Journal, ABA, Vol. 67, Issue 1, 1999, at page 159. Griffin at 164 describes the majority decision in Hartford as follows:
 
Justice Souter's analysis for the 5-4 majority, which included now-retired Justices Blackmun and White, began by noting that although the British defendants conceded that there was jurisdiction under the Sherman Act over their London-based, challenged conduct, they contended that the district court properly declined to exercise jurisdiction under the principle of international comity. He also observed that because the issue arose in the context of a motion to dismiss, plaintiffs' allegations that the British defendants participated in conduct that was intended to and did produce a substantial effect in the U.S. insurance market must be assumed to be true. According to Justice Souter, "[I]t is well established by now that the Sherman Act applies to foreign conduct that was meant to produce and did in fact produce some substantial effect in the United States. Ultimately, however, the Court, like Congress in enacting the FTAIA, specifically declined to express a view on the question whether a court with jurisdiction under the Sherman Act should abstain from exercising such jurisdiction on the grounds of international comity. Justice Souter declared that the Court did not need to decide the question because even assuming an affirmative answer, "international comity would not counsel against exercising jurisdiction in the circumstances alleged here."
Griffin describes the dissent in Hartford as follows:
 
Justice Scalia, writing for the four dissenters, argued that any nation having a basis for jurisdiction to prescribe law must refrain from exercising that jurisdiction if such an exercise of jurisdiction would be unreasonable, under the factors set forth in Section 403 of the Restatement (Third). Application of those factors to the conduct at issue demonstrated that the courts should refrain from exercising jurisdiction:
 
Rarely would these factors point more clearly against application of United States law. The activity relevant to the counts at issue here took place primarily in the United Kingdom, and the defendants in these counts are British corporations and British subjects having their principal place of business or residence outside the United States ... I think it unimaginable that an assertion of legislative jurisdiction by the United States would be considered reasonable, and therefore it is inappropriate to assume, in the absence of statutory indication to the contrary, that Congress has made such an assertion.
 
Arguing that the majority had "completely misinterpreted" the Restatement (Third), Justice Scalia characterized the majority's holding that no "true conflict" exists "unless compliance with United States law would constitute a violation of another country's law" as a "breathtakingly broad proposition." Justice Scalia and his dissenting colleagues thus predicted that the majority's holding "will bring the Sherman Act and other laws into sharp and unnecessary conflict with the legitimate interests of other countries -- particularly our closest trading partners."
Griffin also contends that the principal author of the Restatement (Third), relied on by the Court in Hartford, explained that the majority had "misunderstood" the approach of the Restatement (Third). Griffin notes:
 
In determining whether state A should exercise jurisdiction over an activity significantly linked to state B, one important question, in my submission, is whether B has a demonstrable system of values and priorities different from those of state A that would be impaired by the application of the law of A. I am not suggesting that, if the answer to the question is yes, A must stay its hand. The magnitude of A's interest, the effect of the challenged activity within A, the intention of the actors, and the other factors that I hope will not disappear from view remain important. But conflict is not just about commands: it is also about interests, values and competing priorities. All of these need to be taken into account in arriving at a rational allocation of jurisdiction in a world of nation-states.
 
Andreas F. Lowenfeld, Conflict, Balancing of Interests and the Exercise of Jurisdiction to Prescribe: Reflections on the Insurance Antitrust Case, 89 AM. J. INT'L L. 42, 51 (1995).
There are those who maintain that the Supreme Court of the United States has now changed its position, as a result of F. Hoffman-La Roche Ltd. v. Empagran SA, 124 S.Ct. 2359 (2004), which held that the United States antitrust laws would not apply in an action filed by foreign individuals, or entities challenging alleged anti-competitive conduct that occurred in significant part outside of the United States where these foreign individuals claim only to be injured outside of the United States -- even though others who were not parties to the suit may have been injured by such conduct within the United States. The argument can be made that the Supreme Court is attempting to be more cognizant of, and differential towards, conflict issues. However, the argument will be made by those interested in extending the reach of U.S. Courts that the recent Supreme Court decision does not change the law, because plaintiffs did not include individuals who were United States citizens, or within the United States and affected within the United States.
The issue of competing interests is not resolved. However, assuming the situation does not change drastically, there will be continued requests for extraterritorial application of U.S. laws to bargaining. The result returns us to the need to determine whether the climate in the United States can be changed to favor U.S. operations.
On June 20, 1996, the United States Supreme Court in Brown, et al. v. Pro Football, Inc., 116 S.Ct. 2116, 135 L.Ed.2d 521 (1996), not only reconfirmed the implicit non-statutory antitrust exemption that applies where needed to make the collective bargaining process work but, also, concluded that that exemption continued after an impasse between a labor organization and multi-employer bargaining group. The case is important, because if the decision had applied the antitrust laws, the end of the bargaining process would signify the end of an exemption from antitrust and obviously create major advantages for labor organizations in bargaining. In Brown the professional football players sued the football club owners, because the club owners had bargained with the Players Union over a wage issue until they reached an impasse and the owners had then agreed among themselves (but not with the Union) to implement the terms of their own last best bargaining offer. If the Federal labor laws did not shield such an agreement from antitrust attack after an impasse, multi-employer bargaining (which the Court found accounts for more than 40 percent of the major collective bargaining agreements in such industries as not only entertainment and sports but construction, transportation, retail trade, clothing manufacture and real estate) would be in jeopardy. The Court specifically concluded that its holding was not intended to insulate from antitrust review every joint imposition of terms by employers. The Court left a great deal to be determined in the future but rejected a variety of different theories that would have found the multi-employer bargaining group subject to antitrust laws. This has potential implications for alliances in transportation industries--air and rail--and may be of interest to carriers and labor organization.
Recent illustrations of antitrust issues which may cause this concept to become more valuable, not only for unions which are seeking to organize and retain control, but also, ironically for management is due to antitrust enforcement within the United States. See Barbara De Lollis, "2 airlines guilty of price fixing: British Airlines, Korean Air to pay $ 600M in fees," USA Today, pg. 1B, Thursday, August 2, 2007 (regarding price fixing fines for alleged travel prices for passengers, travel agents and shippers). On Wednesday, July 25, 2007, the Wall Street Journal at page A-12 in an article "American Air, Partners Seek Antitrust Immunity" ("Wall Street Journal") stated:
 
AMR Corp's. American Airlines unit and four of its One-World Alliance Partners applied for antitrust immunity with the Department of Transportation.
 
The Ft. Worth, Texas, airline said the application, asking for immunity effective in March, would allow American Airlines and its partners Iberia, Finnair, Malev, Hungarian Airlines and Royal Jordanian Airlines to increase code sharing, route and schedule planning, frequent flyer programs, price and yield management, cargo services and cooperation in other areas.
American Airlines maintained it and its co-applicants were "comparable with other applicants" such as competing Star Alliance and SkyTeam entities. The article noted:
 
One-World is made up of 10 airlines, including British Airways, PLC, Cathey Pacific Airways Ltd. and Japan Airlines Corp.
 
The move comes less than a month after members of the SkyTeam alliance--Delta Airlines, Inc., Northwest Airlines Corp., Air France-KLM, Ali-Italia Spa and CSA Czech Airlines--applied for immunity.
The article went on to note that Star had "17 airlines, including UAL Corp.'s United Airlines unit and US Airways Group, Inc." and the SkyTeam had earlier applications "rejected in 2005" because the government was concerned about "giving antitrust immunity to an alliance with two U.S. carriers." The article concluded by noting that "the U.S.-European Union "open skies" treaty was reached to liberalize the trans-Atlantic market." Northwest already has a "long standing arrangement with KLM, Royal Dutch Airlines, now owned by AirFrance". Delta and AirFrance, in 2002, "had received antitrust immunity to cooperate across the Atlantic. Alitalia and CSA Czech Airlines, also members of the SkyTeam, also are asking for immunity on transatlantic routes."
It is obvious that co-sharing, which would have been impossible twenty years ago, is now possible because electronic booking not only enables travel without paper, while not in any way eliminating the control over the numbers traveling, but, also, enables instantaneous modifications and routings that never could be achieved before the technological revolution and the advent of the internet.
One of the challenges for governments is that if such governments as the U.S. and those in the E.U. are unwilling to consent to eliminating antitrust restrictions, other governments, or other industry leaders from other portions of the globe not so regulated, may be able to create carriers which can operate without the antitrust area immunity that exists in such locations as the U.S. and E.U. The global situation in the antitrust area may preclude governments from attempting to set up high barriers to lower costs because the interrelationships and interdependences may make antitrust protection, for instance, of the airline industry, in such markets as the E.U. and the United States, a problem which could surface in other areas with other industries. The reality is that nations which are faced with high stakes bargaining with other nations may find it easier to relax their antitrust regulations. This may make it more important for carriers and unions to examine the antitrust implications.
It is not without significance that the easiest analogy for understanding the way that the labor exemption from antitrust can provide for mutual benefits is seen weekly throughout the year in the United States, on the playing fields and courts. Football, basketball, and baseball are examples of situations that only exist in terms of the leagues and their restriction on trades and player movement, because of the labor exemption from antitrust laws which enables the joint participation in a monopoly that is economically beneficial, for the teams and the players. One would suspect, carriers and the unions may catch on and consider playing ball in this arena sooner, or later, in connection with the various alliance and antitrust negotiations, if not, in connection with any other regulatory incentives.
This returns us full circle; and, it suggests that there can be a number of interesting issues discussed to enable ways to resolve problems by unions and management working together to obtain exemptions and additional opportunities not only within the United States under its laws but pursuant to Treaties and other regional and international arrangements.
There also are reasons why there should be recognition of other nation-states laws to avoid legal gridlock. See Fleming, After 9/11/2001, is a "City on a Hill" on a Slippery Slope When It Legislates Inconsistently With Important Nation-State Interests? An Analysis of Missouri Hotel & Motel Ass'n v. City of St. Louis, Mo., 33 Urb. Law. 1059 (Fall 2001), discussing Missouri Hotel & Motel Ass'n v. City of St. Louis, 146 Daily Lab. Rep. (BNA) E-1 (July 31, 2001) (noting a potential conflict between the United States and the European community and other groups of nation-states as well as the potential for conflicts because of technology). See The "United States": An Analysis of Federal Maritime Commission v. South Carolina Ports Authority, 34 Urb. Law. 859 (No. 4, Fall 2002).
While there are those who might argue that the United States law should be applied abroad, the expansion of American power can create international difficulties. Other nation states can try to assert the same type of jurisdiction in a manner which will undermine the United States labor and employment laws. This was noted by William Glaberson in his article U.S. Courts Become Arbiters of Global Rights and Wrongs, New York Times, June 21, 2001, at 1. Glaberson noted that problems result, such as: "The expansion of American legal power has been explained in recent years as the natural outgrowth of an interconnected world. But lately, some lawyers and legal scholars have begun to argue that the cases represent a sweeping change that is transforming American courts into institutions with international sway." Id.
 
One of the additional problematic issues, is that the process works both ways:
 
But globalism means there are two sides to such expansive notions. European regulators have started to apply their own laws to American businesses. Skepticism by European regulators has stalled several recent mergers by American companies, including General Electric's planned $ 45 billion acquisition of Honeywell International.
 
Some courts refuse to get involved in foreign matters. American courts declined, for example, to hear lawsuits against the Prince of Wales and former Prime Minister Thatcher, which claimed they had violated human rights in Northern Ireland and Libya.
 
But American courts are increasingly willing to stretch their authority. Among the cases that opened the door was a Supreme Court ruling in 1992 that said a Mexican charged with killing an American drug enforcement agent could be tried in this country even though agents had kidnapped him from Mexico.
 
Similarly, in 1991, a federal appeals court in Washington approved the trial of a man who federal prosecutors said was a Lebanese militia official, Fawaz Yunis, who was charged with hijacking a Jordanian plane in Beirut and was arrested while on a yacht in the Mediterranean.
 
These cases are a far cry, some lawyers say, from a New York federal court's refusal in 1987 to consider the multibillion-dollar lawsuits against the Union Carbide Corporation over the Bhopal chemical disaster in India.
 
In addition to court rulings, American legal values are also exported informally, Mr. Wallance of Kaye Scholer argued in an article last year. As an example he cited boycotts of clothing brands manufacturing in countries that do not comply with American workplace rules.
 
So far, criticism of expanding ambitions of the American legal system has been muted. But some foreign governments have said they are offended by suits in this country, and some American legal experts warn that the United States is opening what could be a dangerous legal competition with other countries.
 
Other countries are already trying to expand the influence of their legal rules or to fight off the influence of America's legal system. Some European countries are resting a proposed international agreement in The Hague that would make it easier to enforce judgments of American courts abroad.
 
If American diplomats and executives become entangled in lawsuits in other countries, the United States might start to view its legal expansionism in a different light, said Curtis A. Bradley, a law professor at the University of Virginia.
 
In early June, a Chilean judge said he would try to get Henry A. Kissinger, the former United States secretary of state, to testify about the disappearance of an American in Chile when the dictator Augusto Pinochet seized power in the 1970's.
 
Jack L. Goldsmith, a law professor at the University of Chicago, said Americans have not considered the consequences of applying this country's law all over the world.
"The United States loves to export our values," Mr. Goldsmith said, "but not if it gives other countries the power to review what we do." Id. See Nike, supra, discussed above.
C. Another complication is that many individuals in other nations are now suing in the United States. See Neela Banerjee, Lawsuit Says Exxon Aided Rights Abuses, N.Y. Times, June 21, 2001, at C1, (Exxon was sued in Federal Court in Washington for activities allegedly involving human rights abuses committed by state security forces that protect Exxon's large natural gas field in Indonesia); Latin bottlers sued by union: Coke denies rights violations, Miami Herald, July 21, 2001, at page C1, (describing a suit against Coca Cola in Federal District Court in Miami, Florida alleging Colombian bottlers were working with death squads to kill, threaten and intimidate plant workers and noting that the Steel Workers Union attorney who was involved in promoting the case along with the International Rights Fund, which backs these types of lawsuits under the Alien Tort Claims Act, concluded that although Coca Cola did not own the bottling plants in Colombia, the company was named because it "exercised its considerable control" over such plants and allegedly benefits from "labor repression"). See also, Christina Hoag, Latin Plaintiffs Prefer U.S. Courts:, Miami Herald, June 25, 2001, at 6.
Individuals in nations outside of the United States have the right to bring suits in the United States to complain of actions by individuals and companies abroad under the Alien Tort Claims Act, 28 U.S.C. Section 1350. In recent years there has been an increase in litigation in federal and state courts in the United States by individuals in other nations, who maintain that companies doing business there violated the rights of such individuals by torts, which create a basis for a claim or suit in the United States against companies in the United States -- including employers, which were engaged in activities abroad. In connection with transnational bargaining the result means that there can be additional exposure, that has to be evaluated by companies doing business abroad, insofar as they are involved in the contracts which require them to provide protection and safety for their employees. Companies which initiate requests to foreign governments to provide such protection to those working abroad under labor agreements may find that they are arguably subject to being sued in the United States -- by individuals who were damaged by governmental activities abroad, if it can be shown that such governmental activities somehow related to requests of the company and allegations can establish that, as a result, individuals abroad were the subject of torts. This is a very complex matter. A recent letter from the State Department of the United States requesting that a federal court decline jurisdiction and a Ninth Circuit decision involving the Alien Tort Claims Act, raise important questions relating to international labor and employment law and collective bargaining. The Alien Tort Claims Act allows citizens of foreign countries ("aliens in the U.S.) to sue in U.S. Federal District Courts for torts committed outside of the U.S. "in violation of the law of nations or a treaty of the United States." The State Department Letter illustrates the complexity.
1. The U.S. State Department Letter and the Ninth Circuit Decision
 (a) The Letter
The U.S. State Department, in a letter dated July 29, 2002 from William H. Taft, IV, asked The Honorable Louis F. Oberdorfer, U.S. District Court Judge ("the Letter") to decline jurisdiction in a significant case involving, among other tort claims, labor and employment issues.
The Letter requested that the Federal Court deny jurisdiction, in response to the Federal District Court Judge's request for the position of the State Department (as a result of Defendant Exxon's motion asking that the Judge consider requesting a letter from the State Department as to its opinion whether to allow a case against Exxon and other entities to proceed). This is one of several cases filed against multi-national companies in United States Courts under the Alien Tort Claims Act, a federal law used since the late 1970s by victims to sue alleged individual torturers. The concept of the law when, originally enacted, was reported to be to prevent the United States from becoming a safe haven for seafaring pirates. See Timothy Mapes, Rights Suit May Undermine War on Terror, U.S. Warns, The Wall Street Journal, August 7, 2002. The Letter states:
(1) The Department of State's opinion is that adjudication of the case would adversely impact on the "interests of the United States". The Letter stated it would not address legal issues before the Court, but that the United States Department of State "believes that adjudication of this lawsuit at this time would in fact risk a potentially serious adverse impact on the significant interests of the United States, including interests related directly to the on-going struggle against international terrorism. It may also diminish our ability to work with the Government of Indonesia ("GOI") on a variety of important programs, including efforts to promote human rights in Indonesia."
(2) The Department's concern, in its "considered opinion", is that the GOI may "respond to the litigation by curtailing cooperation with the United States on issues of substantial importance to the United States" and "the litigation's potential effects on Indonesia's economy could in turn adversely affect important United States interests."
(3) The Department anticipates that "adjudication of this case will be perceived in Indonesia as a U.S. court trying the GOI for its conduct of a civil war in Aceh."
As media reports have indicated, this litigation involved a movement to establish that multi-national companies are liable in United States Courts for alleged human rights abuses committed abroad. This particular case involved a lawsuit by individuals and representatives of deceased filed by counsel, including counsel for the International Labor Rights Fund ("ILRF"), active in such litigation. The lawsuit alleges among other assertions that "the world's biggest energy company was complicit in the murder, torture and rape of villagers living near its natural-gas operations in northern Indonesia." To obtain a copy of the Letter and additional information relating to the background of the case (including pleadings) and the position of the ILRF, you can consult: http://www.laborrights.org/ which has copies of pleadings in the Court file, media reports and ILRF position statements on this matter. See also Timothy Mapes, Rights Suit May Undermine War on Terror, U.S. Warns, The Wall Street Journal, Wednesday, August 7, 2002; Peter Waldman and Timothy Mapes, White House Sets New Hurdles For Suits Over Rights Abuses, The Wall Street Journal, Wednesday, August 7, 2002 ("Waldman and Mapes, WSJ"); and, Edward Alden, US tries to halt rights lawsuit, Financial Times, Wednesday, August 7, 2002.
It has been reported that this Letter was the second time in a year that the State Department has submitted such communications on the side of a major corporation, seeking to dismiss a human-rights suit brought by foreign plaintiffs. In the initial reported case, the District Court Judge in Los Angeles declined to adjudicate a similar human rights suit against Rio Tinto filed by plaintiffs on the Island of Bougainville in Papua New Guinea. In that case, a Federal Court Judge based her decision on the letter from Mr. Taft at the State Department, also indicating that hearing the case would "risk a potentially serious adverse impact" as to the conduct of foreign relations. See Waldman and Mapes, WSJ, supra.
(b) The Ninth Circuit Decision
The Ninth Circuit decision in John Doe I, etc., et al. v. Unocal Corp., 2002 WL 31063976 (9th Cir. Sept. 18, 2002), reversed, in part, a summary judgment in favor of Unocal involving claims under the Alien Tort Claims Act for alleged forced labor, murder and rape. The federal court had previously dismissed certain other state claims, which were pending in the state court and set for trial. The matter was ultimately resolved by a settlement. The Ninth Circuit also affirmed, in part, the summary judgment in favor of Unocal on plaintiffs' claims for torture and, also, affirmed dismissal of all the claims against the governmental entities (the military and the oil entity connected with the government Myanmar). The RICO claims were also dismissed, based upon the conclusion that RICO was not extraterritorial.
The Ninth Circuit had however found that if the facts in issue as alleged by plaintiffs were correct, there was sufficient information to preclude a summary judgment in favor of defendants. Without reading the entire record, it is difficult to reach a conclusion as to what the factual analysis should be, because of the differences in the federal court's interpretation and the Ninth Circuit's interpretation of the facts. The reader should, as a result, consult the website references: for the federal court decision see John Doe etc., et al. v. Unocal Corp., 110 F.Supp.2d 1294 (CD. Cal. 2000); John Doe etc., et al v. Unocal Corp., 963 F.Supp. 880 (C.D. Cal. 1997); and, for the Ninth Circuit decision see John Doe etc., et al. v. Unocal Corp., 2002 WL 31063976 (9th Cir. Sept. 18, 2002) (also at http://www.laborrights.org/). The reader should also consult an excellent overview of the legal analysis in the BNA Overview, Daily Labor Report No. 187, at A-1, International Labor Ninth Circuit Lets Burmese Citizens Bring ATCA Suit Against Unocal for Forced Labor, at A-1 (September 26, 2002). These cases raise issues extremely troublesome to resolve.
In Republic of Austria v. Altmann, 124 S.Ct. 2240 (June 7, 2004), the plaintiff claimed the ownership of paintings and sued the Republic of Austria alleging that the paintings had been taken by the Nazis in violation of international law. Although Austria moved to dismiss, the District Court denied the motion. The Ninth Circuit affirmed and remanded. The Supreme Court took jurisdiction and held that the Foreign Sovereign Immunities Act applied to conduct that occurred prior to its enactment and before the United States' adoption of a restrictive theory of sovereign immunity. As a result, the litigation was allowed to proceed.
The Supreme Court thereafter, in Sosa v. Alvarez-Machain, 124 S.Ct. 2739 (June 29, 2004), held that an allegation that the Drug Enforcement Administration instigated abduction of an individual from Mexico for a criminal trial in the United States did not support a claim against the government under the Federal Tort Claims Act and the individual could not recover under the Alien Tort Claims Act.
Complications are much more pronounced because of the events of 9-11. If a nation perceives that there is a threat and, to suppress the threat, declares war on terrorists, there may be innocent victims. If a corporation doing business in such a nation to protect its property and personnel asks for military protection (or is dependent upon military protection), the corporation should be aware that military protection accomplished through a war on terrorism is not the same as implementation of due process of law in connection with a trial of those who may be adversely affected. If you add to this differences in national philosophies and, then, the Ninth Circuit conclusions (that the United States has declared that Myanmar is a military regime that does not respect human rights, and the corporation doing business in Myanmar understood that it had certain obligations to individuals doing work for the corporation but that the military was approaching people in a different manner when it perceived them to be the enemy), a very complicated situation results. The Ninth Circuit discussed the Nuremberg trials and the responsibility of nations, and corporations or others dependent upon protection of nations. It is not possible here to raise all of the issues that are included in, or related to, these cases. As noted, the cases cited are important to read. If you apply some of the principles raised in them to different sections of the world today, you may find that you are going to come up with different answers. For the reasons noted, it is not possible based on fact dependent issues to reach rules which are usually generally applicable. The analysis therefore that follows is based upon an effort at raising some important questions and, then, finally predicting some results.
2. Issues Raised.
Issues raised by the Letter and the Ninth Circuit decision and the litigation include the following:
(a) Since the federal court requested the opinion of the State Department, should a federal court as a result of the Letter dismiss the case and, if it does as noted below, what will occur in connection with appellate review?
(b) If this Letter suggests a trend, for defendants to seek State Department opinion letters (and there is pressure on the Courts to seek such letters), will this be a substitute for intervention by the U.S., and create a new type of defense -- to stay proceedings at least until there have been appellate rulings?
(c) Ultimately, what will the appellate courts and the Supreme Court of the U.S. do with these types of cases, in view of not only separation of powers issues but international issues raised?
(d) What if the Supreme Court, which has emphasized sovereignty of states within the U.S., is asked by the Federal government to preclude such jurisdiction -- what ultimate test will be established by the Supreme Court for not only the review process but reconciliation with the statutory provisions providing for such jurisdiction?
(e) What are the implications of this Letter in terms of not only the war on terrorism but other extraterritorial labor and employment laws of the United States, which if any, impact other nation states?
(f) What are the long-run implications of not only the war on terrorism but the concerns of the United States that its military operations not be subjected to litigation of a similar nature, not only in the U.S. Courts, but in Courts of other nation-states?
(g) What implications will this U.S. State Department letter have on the concerns of the United States about avoiding jurisdiction under the International Criminal Court being established as a "permanent forum to try individuals charged with genocide and crimes against humanity"?
(h) What are the implications for this type of litigation in the long-run in terms of not only protecting global corporations against suits arising out of labor and employment matters but, also, the implications for such corporations seeking to institute arrangements in collective bargaining negotiations (and other agreements) that might be more protective of their interests in courts of the U.S. and other tribunals?
(i) What are the moral obligations and, if they are not the same as the legal obligations, then:
i) why not?
ii) should they be?
iii) who will determine if they are?
iv) when and how will that occur?
Would your opinion on this change if your employees, or relatives, were flying into a country's airport near a war zone and you would be able to protect them by an increased military effort? Or as an alternative, would your opinion change if you had employees, or relatives, living in the country in the area of such a war zone and they were adversely impacted by the military's attempt to protect someone else's employees, or relatives, flying commercially near their homes by virtue of increased military security, such as may exist according to the allegations in the area described in the cases, or such as might exist in areas in the Middle East?
For additional issues raised by the author of this material see: for the trend of the U.S. Supreme Court to strike down federal laws which intrude on a state's sovereignty, If Abraham Lincoln Died For Federalism Did He Die in Vain? Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank and United States, 31 Urb. Law. 777 (Fall 1999); and, for the concern about local governmental actions which could have global implications, see After 9/11/2001, Is a "City on Hill" on a Slippery Slope When It Legislates Inconsistently With Important Nation-State Interests? An Analysis of Missouri Hotel and Motel Assn v. City of St. Louis, Mo., 33 Urb. Law. 1059 (FALL 2001).
3. Potential Results.
In view of rulings of the United States Supreme Court and, in addition, the U.S. State Department Letter, the following are potential results:
(a) Review of the Ninth Circuit decision, or some similar type of decision by the United States Supreme Court -- The timing is impossible to predict because the Supreme Court does not have to take certiorari, or review, the Ninth Circuit decision. The Supreme Court also could deny certiorari and allow matters to be remanded to the federal district court for further discovery and possibly trial. The legal issues pending could be resolved later (in either the Ninth Circuit case, or the case arising out of the U.S. State Department Letter, or some alternative case). However, these types of cases will ultimately require Supreme Court review.
(b) The State Department Letter -- It would appear (based on what is occurring now) that the U.S. State Department will continue to write letters and communicate with the judicial branch, to provide its opinion. The opinion is probably going to be similar to the Letter that is described in this analysis. The U.S. State Department will, in all probability, request that courts not take jurisdiction over these types of cases, because of the international implications and specifically due to the war on terrorism.
(c) The Alien Tort Claims Act -- Regardless of what the State Department does, the courts will make the final decisions. They will have a hard time, even if they reach the conclusion that there should not be jurisdiction. The provisions of the Alien Tort Claims Act were written in the late 1700's (to stop privacy abroad from being rewarded in the U.S.) under circumstances that were different from those existing after 9-11; but, they will continue to be used by plaintiffs to raise questions. The U.S. State Department Letter is an ad hoc approach. It is also difficult to conceive of Congress' amending, or modifying, the Act to minimize jurisdiction, due to the political pressures that exist. The Supreme Court ruling in Republic of Austria, supra, is just the beginning. Thus, it is impossible to determine what will occur in the future, since it is likely that there will be a great deal of additional conflicts and rulings.
However, these possibilities and others only suggest some of the potential results. The one clear point is that these matters are going to be important for those involved in international labor, employment and workplace environment and safety law cases and will create more issues to monitor.
There are more and more litigants choosing venues in legislative and judicial contexts. Just as unions may "cherry pick" and choose a locale for an ordinance, plaintiffs can select the United States as a friendly forum, because of the ability to have more process, trial by jury, punitive damages and larger awards. See Donald C. Dowling, Jr., Mutiny for a Bounty: Overseas Workers' Class Actions Against U.S. Multinationals, 29 Int’l. News., Fall 2000, at 1.
D. The National Mediation Board before 9-11 was asked to expand its jurisdiction over a carrier in a single carrier proceeding in response to a request maintaining that because of code sharing and because of an alliance a number of airlines were operating as a single transportation system. The Board in reviewing the application concluded that it would not exercise jurisdiction and dismissed the single carrier application. See Appendix C, LACSA and TACA/IBT, 28 NMB No. 72, Case No. R-6819 (May 9, 2001). The points to consider (after 9-11) in evaluating what may occur, as a result, are as follows:
1. It should be assumed that unions would like to cover as much scope as they can in a class or craft. It should also be assumed that carriers would like to restrict unionization.
2. There have been a number of a cases in which carriers have relocated bases, or processes, to another country in a manner that unions have maintained violates existing collective bargaining agreements (or certification during a period after expiration of an agreement but before a release); and, matters have been litigated and, in certain cases, carriers have been prevented from taking certain actions which have been found to be within the scope of an agreement by virtue of arbitration and court decisions.
3. There are situations in which employees in labor organizations after expiration of agreements may question matters that they disagree with, by asserting them in other jurisdictions. If the assertions involve an attempt to relitigate matters that were concluded in the United States, or to create results which are inconsistent with the collective bargaining agreements and United States laws regulating bargaining and agreements, unions can find that they and their members end up asserting positions that are somewhat different from those that normally would be expected. Carriers contend that an agreement that they entered into under the Railway Labor Act in the United States which could not be the subject of modifications outside of the United States should not be totally ignored in such cases, when there is an attempt to second-guess the results by unions or union members after the agreements have expired in accordance with the provisions of the Railway Labor Act.
The reality of the situation is that international law is a series of disparate and conflicting rules of law which have to be balanced and reconciled. Ironically, one thing that we can import from India is the irony that resulted from Ghandi's being asked what he quote "thought of Western civilization?". In response Ghandi stated "It would be nice."
It would be nice if there were some way of reconciling all the different conflicting laws; but, for now we just need to appreciate the potential for conflicts. If in the US we cannot control what is going on abroad, we will see an increasing effort by labor organizations to impose restrictions on companies which deal abroad in a manner that may adversely impact the labor organizations as well as the management. As is noted in these materials there are tools which enable litigation and public relations battles; and US labor organizations are also becoming more active in finding coalitions with trade unions and labor organizations in other areas of the world and also with other interests which have international objectives, See, e.g. BNA Daily Labor Report, Mon., Feb. 13, 2006 c-1 "Union's Labor Leaders, Researchers Recommend Expanded Efforts to Cooperate Globally" (labor leaders seek "expansion of efforts to use international alliances and coordination to advance workers' rights"). As a result, it is important to understand and appreciate the conflicts and the ways they will be used for, and against, you.
APPENDIX A
United States Court of Appeals, Second Circuit.
John OFORI-TENKORANG, Plaintiff-Appellant, v. AMERICAN INTERNATIONAL GROUP, INC., AIG Financial Products Corp., AIG International, Inc. and AIG Trading Corp., Defendants-Appellees.
Docket No. 05-5272-cv.
460 F.3d 296
Argued: May 9, 2006.
Decided: Aug. 15, 2006.
 
*297 Anne C. Vladeck (Rebecca J. Osborne, on the brief), Vladeck, Waldman, Elias & Engelhard, P.C., New York, NY, for Plaintiff-Appellant.
P. Kevin Connelly, Connelly Sheehan Harris, Chicago, IL (Kristine Aubin, Connelly Sheehan Harris, Chicago, IL and Marc E. Bernstein, New York, NY, on the brief), for Defendants-Appellees.
 
Before WINTER, CABRANES and RAGGI, Circuit Judges.
JOSE A. CABRANES, Circuit Judge.
The issue presented is whether the Civil Rights Act of 1871, as amended, 42 U.S.C. § 1981 ("Section 1981"), n1 may be applied to *298 prohibit an employer's allegedly discriminatory conduct arising from the overseas assignment of plaintiff, a non-citizen. We review here the dismissal by the United States District Court for the Southern District of New York (Denise Cote, Judge) of claims against American International Group, Inc., AIG International, Inc., AIG Financial Products Corp., and AIG Trading Group, Inc. (collectively "AIG" or "defendants") of unlawful discrimination on the basis of race brought under Section 1981. Presumably because other discrimination statutes reaching the employment relationship, such as Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq. ("Title VII"), limit pertinent aspects of their coverage to U.S. citizens, n2 plaintiff's federal law claims rest entirely on Section 1981, which protects "persons." But unlike those other civil rights statutes, which have been amended deliberately to reach conduct occurring outside the United States, n3 Section 1981 protects only "persons within the jurisdiction of the United States," 42 U.S.C. § 198l(a).
 
n1 42 U.S.C. § 1981 reads as follows:
(a) Statement of equal rights
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.
(b) "Make and enforce contracts" defined For purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
(c) Protection against impairment
The rights protected by this section are protected against impairment by nongovernmental discrimination and impairment under color of State law.

n2 Both Title VII, 42 U.S.C. § 2000 et seq., and the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., provide, in pertinent part, that "[w]ith respect to employment in a foreign country, [the term 'employee'] includes an individual who is a citizen of the United States." 42 U.S.C. §§ 2000e(f), 12111(4). Similarly, the Age Discrimination in Employment Act of 1967 provides that "the term' employee' includes any individual who is a citizen of the United States employed by an employer in a workplace in a foreign country," 29 U.S.C. § 630(f).
 
n3 See Civil Rights Act of 1991, Pub.L. No. 102-166, § 109, 105 Stat. 1071, 1077 (codified at 42 U.S.C. § 2000e-l(c), 12111(4), 12112(c)) (amending Title VII and the ADA to include the provisions reproduced ante note 1); Pub L. No. 98-459, § 802, 98 Stat. 1767, 1792 (1984) (codified at 29 U.S.C. §§ 630(f), 623(h)) (amending the ADEA to include the provision reproduced ante note 1).
 
Based on the text and legislative history of Section 1981, we conclude, as a matter of first impression in this Circuit, that Congress has not extended the coverage of Section 1981 beyond the territorial jurisdiction of the United States. Accordingly, we affirm the holding of the District Court dismissing plaintiff's Section 1981 claims to the extent that those claims arise from alleged discriminatory conduct that occurred while plaintiff was living and working in South Africa. We conclude, however, that the District Court erred in dismissing plaintiff's claims insofar as he alleges discriminatory conduct that occurred while he was in the United States. We therefore vacate the judgment of the District Court insofar as it dismissed those claims, and we remand the cause for further proceedings consistent with this opinion.
 
We set forth the facts as alleged by plaintiff, mindful that on a motion to dismiss we accept all factual allegations as true and draw all reasonable inferences in plaintiff's favor. See Twombly v. Bell All. Corp., 425 F.3d 99, 106 (2d Cir.2005).
 
Plaintiff-appellant John Ofori-Tenkorang ("Ofori") is a black man who has been employed by AIG and who maintains his *299 permanent residence in Connecticut. Ofori, a non-citizen, began working in AIG's Connecticut offices in September 1996 as a Research Analyst. "By September 2003, Ofori held the position of Structurer and Marketer in AIG's Financial Services Division." Compl. P 8. At that time, senior AIG executives based in Connecticut and London decided to reassign Ofori to work on a temporary basis in one of the company's offices in South Africa. According to a "Confirmation of Assignment Letter" signed by Ofori on September, 2, 2003, South Africa was designated as Ofori's "host country," while the United States remained his "home country." AIG promised, among other things, to (a) pay Ofori's salary in U.S. dollars, which were to be directly deposited into Ofori's bank account in Connecticut, (b) cover his housing and transportation costs in South Africa, (c) prepare all necessary paperwork pertaining to his South African employment, and (d) reimburse him for certain travel expenses to and from the United States. Id. PP 10-12.
 
Ofori alleges that before and after his arrival in South Africa he was singled out for discriminatory treatment on account of his race. Specifically, Ofori asserts that before he left the United States, AIG personnel decided to send him to South Africa and made arrangements with respect to his work environment in South Africa. Ofori's workplace in South Africa was allegedly situated in an office with a white colleague of questionable ethics, apart from the office where a majority of his white, soon-to-be colleagues worked. See id. PP 16-17. Upon his arrival, Ofori allegedly was subjected to greater scrutiny than his white colleagues when attempting to obtain reimbursement for business-related expenses, see id. P 18, blamed for poor business performance that was unrelated to his work, see id. P 20, threatened with termination after only a single poor performance review, see id. P 23, given a smaller bonus than similarly-situated colleagues, see id. P 24, wrongfully accused of stealing funds from the South African businessman with whom he shared an office, see id. PP 25-26, improperly suspended from work, see id. PP 27-31, and required to provide more documentation than his white colleagues to justify his request for medical leave, see id. PP 36, 39.
 
In March 2005, Ofori brought an action in the United States District Court for the Southern District of New York against AIG and its subsidiaries, alleging that he was (1) subjected to discrimination and retaliated against on the basis of his race, in violation of 42 U.S.C. § 1981 and New York State Human Rights Law, N.Y. Exec. Law § 290 et seq. ("NYHRL"), and (2) subsequently defamed by AIG. Defendants-appellees moved to dismiss Ofori's claims under Federal Rule of Civil Procedure 12(b)(6), arguing that despite Ofori's many contacts with the United States, neither Section 1981 nor the NYHRL applies to discriminatory conduct that took place outside the territory of the United States.
 
In an Opinion and Order dated September 20, 2005, the District Court concluded that "nothing in the text, structure, or history of Section 1981 indicates that Congress intended it to apply to events outside the territorial jurisdiction of the United States, and it is therefore presumed that Congress did not intend Section 1981 to apply extraterritorially." See Ofori-Tenkorang v. Am. Int'l Group, Inc., No. 05 Civ. 2921, 2005 WL 2280211, at *6 (S.D.N.Y. Sept. 20, 2005). In reaching this conclusion, the District Court adhered to the Supreme Court's teaching in EEOC v. Arabian American Oil Company (Aramco), 499 U.S. 244, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991), that courts must "look to see whether language in the relevant Act gives any indication of a congressional *300 purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control," and must adopt the presumption that "legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States." Ofori-Tenkorang, 2005 WL 2280211, at *5 (quoting Aramco, 449 U.S. at 248, 111 S.Ct. 1227).
 
The District Court specifically rejected Ofori's contention that his Section 1981 claims should survive, notwithstanding that most of the allegedly discriminatory acts occurred in South Africa, because the "center of gravity" of his employment relationship with AIG was supposedly in the United States. Noting that in similar contexts "[w]here statutes do not apply extraterritorially, courts have rejected the application of a 'balancing of contacts' test to permit U.S. jurisdiction over foreign actions with substantial U.S. contacts," the District Court concluded that "the fact that the alleged discrimination occurred outside the territorial jurisdiction of the United States is fatal to [Ofori's] claim[s]" under Section 1981. Id. at *6-7.
 
Following its decision to dismiss Ofori's Section 1981 claims with prejudice, the District Court declined to exercise supplemental jurisdiction over Ofori's remaining state law claims. See 28 U.S.C. § 1367(c)(3) (permitting a district court to decline to exercise supplemental jurisdiction where "the district court has dismissed all claims over which it has original jurisdiction"). Those claims were dismissed without prejudice to their revival in state court.
 
We review de novo a district court's decision to grant a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "accepting as true all facts alleged in the complaint and drawing all inferences in favor of the plaintiff." Twombly, 425 F.3d at 106. "[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80(1957).
 
A. Section 1981 and Employment Discrimination
 
Section 1981 sets forth a remedy for employment discrimination that is independent of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000 et seq. See Johnson v. Ry. Express Agency, 421 U.S. 454, 459-60, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975). Specifically, Section 1981 provides that "[a]ll persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts ... as is enjoyed by white citizens." 42 U.S.C. § 1981(a) (reproduced ante note 1). In Patterson v. McLean Credit Union, 491 U.S. 164, 174-78, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989), the Supreme Court read the then-applicable version of Section 1981 to "prohibit[] racial discrimination in the making and enforcement of private contracts," id. at 171, 109 S.Ct. 2363 (internal quotation marks omitted), but not to apply to "conduct which occurs after the formation of a contract and which does not interfere with the right to enforce established contract obligations," id. Section 1981 was not therefore able to reach conduct such as "breach of the terms of the contract or imposition of discriminatory working conditions." Id. at 177, 109 S.Ct. 2363. Partly in response to Patterson, see Lauture v. Int'l Bus. Machs. Corp., 216 F.3d 258, 260 (2d Cir.2000) (citing H.R.Rep. No. 102-40, pt. II, at 2 (1991), reprinted in 1991 U.S.C.C.A.N. 694, 694-95), Congress *301 passed the Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071, which added the language now contained in subsections (b) and (c) of Section 1981. See id. § 101, 105 Stat. at 1071-72.
 
Subsection (c) explicitly applies Section 1981 to private discrimination and subsection (b) explicitly asserts that the term "'make and enforce contracts' includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms and conditions of the contractual relationship." Accordingly, to determine whether Ofori's claims fall within the scope of Section 1981, we must assess whether at the time that he allegedly was denied "the enjoyment of all benefits, privileges, terms and conditions of the contractual relationship" on account of his race, 42 U.S.C. § 1981(b), he was, as the statute expressly requires, a "person[] within the jurisdiction of the United States," id. § 1981 (a).
B. Extraterritorial Application of Section 1981
 
In evaluating whether 42 U.S.C. § 1981 applies to Ofori's claims, we begin with the "legal presumption that Congress ordinarily intends its statutes to have domestic, not extraterritorial, application." Small v. United States, 544 U.S. 385, 388-89, 125 S.Ct. 1752, 161 L.Ed.2d 651 (2005); see also Aramco, 499 U.S. at 248, 111 S.Ct. 1227 ("We assume that Congress legislates against the backdrop of the presumption against extraterritoriality."). "[A]bsent clear evidence of congressional intent to apply a statute beyond our borders, the statute will apply only to the territorial United States." United States v. Gatlin, 216 F.3d 207, 211-12 (2d Cir.2000) (internal quotation marks omitted). We first "look to see whether language in [the relevant Act] gives any indication of a congressional purpose to extend its coverage beyond places over which the United States has sovereignty or has some measure of legislative control." Aramco, 499 U.S. at 248, 111 S.Ct. 1227 (alteration in original). If necessary to ascertain Congress's intent, we may also consider "all available evidence about the meaning of the statute, including its ... structure[] and legislative history." Gatlin, 216 F.3d at 212 (internal quotation marks omitted).
 
The plain text of Section 1981 manifests Congress's intent to confer on "persons within the jurisdiction of the United States ... the same [enumerated] right[s] in every State and Territory." 42 U.S.C. § 1981(a) (emphases added). Far from evincing any intent on the part of Congress to "apply [the] statute beyond our borders," Gatlin, 216 F.3d at 211, the "language" of Section 1981 unambiguously confirms the opposite. Moreover, nothing in the structure or history of Section 1981 suggests that Congress intended the statute to reach discrimination against individuals outside the territorial jurisdiction of the United States. Instead, as Judge Cote aptly explained, [w]hat was eventually codified as Section 1981 originated in 1866 as part of "a major piece of Reconstruction legislation" in the wake of the Civil War. Runyon v. McCrary, 427 U.S. 160, 168 n. 8, 96 S.Ct. 2586, 49 L.Ed.2d 415 (1976). See Civil Rights Act of 1866, ch. 31, 14 Stat. 27 (1866). The object of that legislation was to make "all persons born in the United States" citizens of the United States, and to ensure that all citizens retained the same basic rights "in every State and Territory in the United States" as "white citizens" regardless of their "race and color" and "without regard to any previous condition of slavery or involuntary servitude." Civil Rights Act of 1866, ch. 31, sec. 1, 14 Stat. 27, 27 (1866) (emphasis supplied).
 
*302 Ofori-Tenkorang, 2005 WL 2280211, at *5 (footnote omitted).
 
Four years after enacting the Civil Rights Act of 1866, n4 which introduced the provision that would later become Section 1981, Congress re-enacted the provision in the Voting Rights Act of 1870. That statute broadened the scope of the law to cover not merely "all persons born in the United States and not subject to any foreign power," n5 see Civil Rights Act of 1866, § 1, but rather, "all persons within the jurisdiction of the United States," see Voting Rights Act of 1870, § 16. The 1870 Act also retained the language referring to the provision of equal rights "in every State and Territory in the United States." Id. 
 
n4 Section 1 of the Civil Rights Act of 1866 states, in relevant part, that all persons born in the United States and not subject to any foreign power... are hereby declared to be citizens of the United States; and such citizens, of every race and color, without regard to any previous condition of slavery or involuntary servitude ... shall have the same right, in every State and Territory in the United States, to make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property, and to full and equal benefit of all laws and proceedings for the security of person and property, as is enjoyed by white citizens, and shall be subject to like punishment, pains, and penalties, and to none other, any law, statute, ordinance, regulation, or custom, to the contrary notwithstanding. Civil Rights Act of 1866, ch. 31, § 1, 14 Stat. 27, 27 (emphasis added).
n5 Section 16 of the Voting Rights Act of 1870 states, in relevant part, that all persons within the jurisdiction of the United States shall have the same right in every State and Territory in the United States to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of person and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and none other, any law, statute, ordinance, regulation, or custom to the contrary notwithstanding.
Voting Rights Act of 1870, ch. 114, § 16, 16 Stat. 140, 144 (emphasis added).
 
Like the 1870 version of this statute, Section 1981 limits its application to persons within U.S. territory. The statute not only restricts coverage to conduct taking place in our "State[s]" or "Territor[ies]," but also confines the availability of its protections to "persons within the jurisdiction of the United States."
 
None of our sister circuits has addressed in a published decision whether 42 U.S.C. § 1981 applies extraterritorially, but those district courts that have considered the question have unanimously agreed that the statute does not apply outside the United States. See, e.g., Ortiz-Bon v. Universidad Autonoma de Guadalajara, 382 F.Supp.2d 293, 296-97 (D.P.R.2005); de Lazzari Barbosa v. Merck & Co., No. Civ. 01-CV-2235, 2002 WL 32348281, at *2 (E.D.Pa. Mar. 11, 2002); Mithani v. J.P. Morgan Chase & Co., No. 01 CIV 5928, 2001 WL 1488213, at *1 (S.D.N.Y. Nov. 21, 2001); Gantchar v. United Airlines, No. 93 C 1457, 1995 WL 798600, at *2 (N.D. Ill. Apr. 21, 1995); Theus v. Pioneer Hi-Bred Int'l, Inc., 738 F.Supp. 1252, 1255 (S.D.Iowa 1990).
 
It is noteworthy that in other contexts where Congress has decided to extend the application of civil rights statutes to cover conduct occurring outside the jurisdiction of the United States, it has done so through explicit legislative amendments. For instance, Section 109 of the Civil Rights Act of 1991, Pub.L. No. 102-166, 105 Stat. 1071, 1077, amended the definition of "employee" for purposes of Title VII and the ADA to provide that "with *303 respect to employment in a foreign country, [the] term includes an individual who is a citizen of the United States." 42 U.S.C. §§ 2000e(f), 12111(4); see also Torrico v. Int'l Bus. Machs. Corp., 213 F.Supp.2d 390, 399 (S.D.N.Y.2002) ("The language of the 1991 amendments to the ADA and Title VII ... appl[ies] those statutes extraterritorially to U.S. citizens "'with respect to employment in a foreign country' ...") (quoting 42 U.S.C. § 2000e(f)), 12111(4))). Similarly, in 1984, Congress amended the definition of employee in Section 11(f) of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. ("ADEA"), to "'mak[e] provisions of the [ADEA] apply to citizens of the United States employed in foreign countries by U.S. corporations or their subsidiaries,'" Aramco, 499 U.S. at 259, 111 S.Ct. 1227 (alteration in original) (quoting S.Rep. No. 98-467, at 2 (1984)). SeePub L. No. 98-459, § 802, 98 Stat. 1767, 1792 (1984) (amending the definition of the term "employee" in the ADEA to include "any individual who is a citizen of the United States employed by an employer in a workplace in a foreign country" (codified at 29 U.S.C. § 630(f))). n6 
 
n6 Congress limited the extraterritorial force of Title VII, the ADA and the ADEA by providing that (1) with respect to an expatriate U.S. citizen employee, actions of employers that would otherwise be unlawful are not unlawful if compliance with the relevant statute would cause the employer to violate the laws of the country in which the employee works, see 42 U.S.C. §§ 2000e-l(b), 12112(c)(1); 29 U.S.C. § 623(f)(1); and (2) these statutes do not apply to the foreign operations of a foreign corporation unless the corporation is "controlled" by a U.S. employer, see 42 U.S.C. §§ 2000e-1(c)(2), 12112(c)(2); 29 U.S.C. § 623(h)(2).
 
C. Alleged Discrimination in South Africa
 
We consider first whether the District Court properly dismissed claims involving alleged discrimination that occurred while Ofori was living and working in South Africa. See, e.g., Compl. P 16 (alleging that, after his transfer to South Africa, Ofori was forced to work in a less desirable office than other South African employees); id. P 18 ("From the time that he began working in South Africa, Ofori [was]... singled ... out for particular scrutiny and ridicule.") (emphasis added); id. P 23 (Ofori received his "only poor performance review" while working in South Africa); id. PP 25-36 (claiming that Ofori was improperly suspended after having been wrongly accused of stealing from the businessman whose office he shared).
 
Ofori contends with respect to these and all of his allegations that Section 1981 need not be applied extraterritorially in order for him to prevail because under a "center of gravity" test, his employment contract placed him within the jurisdiction of the United States despite the fact that "some of the events" occurred overseas. Br. of Pl.-Appellant ("Pl's Br.") at 23, 25. In particular, he claims, inter alia, that the contract was formed in the United States and that the alleged discriminatory acts affecting him while he was overseas were directed by executives at AIG's offices in the United States. See id. at 13-14. Ofori contends that the District Court erroneously declined to engage in a "balancing of contacts" analysis with respect to aspects of his employment relationship having roots or effects within the United States. See id. at 35. He therefore argues that his claims, including those arising out of conduct occurring entirely while he was living and working in South Africa, were improperly dismissed. These arguments are unavailing for several reasons.
 
First, as noted above, the plain text of Section 1981 unambiguously requires *304 that a person be "within the jurisdiction of the United States," 42 U.S.C. § 1981 (a), in order to assert rights under the statute. We can find nothing in the statutory language indicating Congress's intent to allow those outside the territorial jurisdiction of the United States to raise Section 1981 claims merely because the relevant employment contract was initially formed in the United States or because the relevant discrimination was directed by persons who were themselves in the United States. Accordingly, we hold that absent a "clear statement," Aramco, 499 U.S. at 258, 111 S.Ct. 1227, of congressional intent to extend coverage "beyond places over which the United States has sovereignty or has some measure of legislative control," id. at 248, 111 S.Ct. 1227 (internal quotation marks omitted), the statute's language providing rights to "persons within the jurisdiction of the United States," 42 U.S.C. § 1981 (a), only protects persons within the United States' territorial jurisdiction. See Pfeiffer v. Wm. Wrigley Jr. Co., 755 F.2d 554, 556 (7th Cir.1985) (applying the presumption against extraterritoriality to the ADEA prior to the 1991 amendments, see ante at 302-303, because "[t]he normal basis of national sovereignty is territorial").
 
Second, the mere decision by a defendant in the United States to discriminate against employees abroad cannot serve as the basis for a claim pursuant to Section 1981. The statute prohibits acts of discrimination committed against "persons who are within the jurisdiction of United States," 42 U.S.C. § 1981 (a) (emphasis added). See Ortiz-Bou, 382 F.Supp.2d at 296-97 (holding that discriminatory acts that "manifested themselves" in a foreign country are not covered by Section 1981); Theus, 738 F.Supp. at 1253 ("A decision to discriminate [made in the United States] ... does not create a claim under the civil rights acts-there must be an act." (citing Landrigan v. City of Warwick, 628 F.2d 736, 742 (1st Cir. 1980))). Accordingly, Section 1981's territorial limitation is defined by the location of the subject of the discrimination, not by the location of the decisionmaker. We agree with those courts that have held "that an individual, whose primary workstation is abroad, cannot characterize otherwise extraterritorial employment as domestic solely because employment decisions were made ... in the United States." Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 68 (D.D.C.2002); see also Pfeiffer, 755 F.2d at 559 (holding, before the amendment providing the ADEA with extraterritorial force, see note 2 ante, that an ADEA claim by an American employee against an American employer was properly dismissed because the employee "lived and worked" overseas); DeYoreo v. Bell Helicopter Textron, Inc., 785 F.2d 1282, 1283 (5th Cir. 1986) (same). Notwithstanding Ofori's arguments that various decisions concerning his treatment in South Africa were made by executives in the United States and that he "feels the effects of AIG's discrimination against him in the U.S.," Pl's Br. at 31, we hold that the actual discriminatory acts that Ofori allegedly experienced while he was living and working in South Africa took place outside the United States. See de Lazzari Barbosa, 2002 WL 32348281, at *2 ("The key factor in determining the applicability" of Section 1981 to an employee who spends time abroad is "the employee's relevant work station." (internal quotation marks omitted)).
 
Third, the statute's focus on "persons" (as opposed to "contracts" or "employment") "within the jurisdiction of the United States" supports Section 1981's purely domestic application. In particular, we find unpersuasive plaintiff's argument that we should overlook his physical presence outside the United States because the *305 "center of gravity" of his employment contract was in the United States. The cases relied upon by plaintiff in which courts have applied a "center of gravity" analysis have arisen in statutory contexts that did not require personal presence in the United States. In Torrico, for example, the District Court applied the "center of gravity" test to an employment contract to determine whether the plaintiff's work abroad constituted "employment in a foreign country" under the amended ADA. Torrico, 213 F.Supp.2d at 400 (quoting 42 U.S.C. § 12111(4)). Moreover, in In re Maxwell Communication Corp., 186 B.R. 807 (S.D.N.Y.1995), the court conducted a similar analysis in gauging whether a fund "transfer" was domestic or extraterritorial under 11 U.S.C. § 547. Id. at 815-20. In neither case did the statute at issue require that the allegedly aggrieved "person[]" be "within the jurisdiction of the United States," 42 U.S.C. § 1981 (a).
 
Fourth, we agree with the District Court's conclusion that permitting Section 1981 claims to proceed whenever a plaintiff asserts substantial "contacts" with the United States-even where the conduct of which plaintiff complains occurred while plaintiff was overseas-would greatly expand the scope of Section 1981 in a manner contrary to the statute's plain language. As the Court of Appeals for the Third Circuit concluded in an analogous circumstance involving the extraterritorial application of the National Labor Relations Act ("NLRA"), reliance on a "balancing of contacts" test to determine, as a threshold matter, whether extraterritorial application of the statute is required would effectively "manufacture jurisdiction in the absence of a clearly expressed congressional intent to extend [the statute] to United States citizens temporarily working abroad for a United States employer." Asplundh Tree Expert Co. v. NLRB, 365 F.3d 168, 178 (3d Cir.2004) (declining to adopt the "balance of contacts" test and rejecting the argument that extraterritorial application of the NLRA was proper because there was a U.S.-based "employment relationship" between a U.S. corporation and two of its discharged employees who were on a temporary work assignment in Canada).
 
Finally, we underscore that it is not our role to decide whether 42 U.S.C. § 1981 should, as a matter of public policy, apply extraterritorially to employees of U.S. corporations stationed overseas. We are not free to ignore the clearly-stated purpose of Congress and expand Section 1981 to protect persons outside the "jurisdiction of the United States," no matter how sympathetic these persons or their claims may be.
 
For the foregoing reasons, we decline to adopt a "center of gravity test" or engage in a "balancing of contacts" analysis that would introduce much uncertainty into the law. Cf. Kaczmarek v. Allied Chem. Corp., 836 F.2d 1055, 1057 (7th Cir.1987) (Posner, J.) (noting, in choice of law context, that proponents of "new, flexible standards, such as 'interest analysis' "had accorded" too little weight to the virtues of simplicity" and that interest analysis had "caused pervasive uncertainty, higher cost of litigation, [and] more forum shopping"). Instead, the relevant inquiry is whether particular acts of discrimination occurred while plaintiff was "within the jurisdiction of the United States," 42 U.S.C. § 1981 (a), or whether they occurred when plaintiff was outside the jurisdiction of the United States and therefore beyond the prescribed reach of Section 1981. The above acts of alleged discrimination that Ofori experienced in South Africa occurred when he was no longer "within the jurisdiction of the United States." 42 U.S.C. § 1981 (a). Accordingly, the District Court properly dismissed *306 Ofori's Section 1981 claims insofar as they were predicated on these allegations.
D. Alleged Discrimination in the United States
 
We consider next whether the District Court properly dismissed claims involving alleged discrimination that occurred while Ofori was in the United States. Ofori claims, inter alia, that AIG (1) discriminated against him in the "formation" and the "modification" of his employment contract before he left for South Africa, Reply Br. For Pl.-Appellant ("Pl's Reply Br.") at 8; Compl. PP 8, 10; and (2) took action while he was "still physically present in the U.S.," Pl's Reply Br. at 13, to segregate him from his white colleagues in South Africa and "arrang[e] for him to work in the office" of a disreputable South African businessman, Compl. PP 8-12, 16-17. n7 
 
n7 In his reply brief Ofori contends that the decision to segregate him from other white colleagues was made while he was still working in the United States. While certain paragraphs of the complaint support this assertion, see Compl. P 17 ("Before he began working in the office of the businessman, Ofori discovered that the businessman had been implicated in a number of questionable business deals ..."), other paragraphs suggest that the decision was made after Ofori arrived in South Africa, see Compl. P 16 ("When AIG transferred Ofori to South Africa, Cassano and Jones decided that Ofori would not work in the main office in Johannesburg."). Construing all allegations in the light most favorable to Ofori, see Makarova v. United States, 201 F.3d 110, 113 (2d Cir.2000), we assume for the purposes of this motion, that the decision to segregate Ofori from other AIG employees was made while Ofori was still in the United States. Nevertheless, we highlight this apparent ambiguity, which we assume the parties will resolve during discovery.
 
Applying the foregoing analysis of the statute's wording and history, we conclude that the District Court improperly dismissed plaintiff's Section 1981 claims insofar as they relate to these allegations. In categorically concluding that "the alleged discrimination occurred outside the territorial jurisdiction of the United States," the District Court did not take account of plaintiff's allegation that he was present in the United States when these particular acts of alleged discrimination occurred. Conduct that occurred while plaintiff was within the United States clearly satisfies the statute's requirement that a person be "within the jurisdiction of the United States," 42 U.S.C. § 1981(a), and therefore may serve as the basis for a claim under Section 1981 that plaintiff was not afforded the "same right [as white citizens] within [a] State [or] Territory" to "make and enforce" his employment contract, id. In the circumstances presented here, a reasonable jury might conclude that AIG's alleged decision to relocate Ofori to South Africa to work in unfavorable conditions amounted to racial discrimination while Ofori was still "within the jurisdiction of the United States." n8 42 U.S.C. § 1981 (a).
 
n8 Although Ofori's complaint appears to allege that the decision to send him to South Africa was partially finalized or confirmed while he was in London "en route from New York to Johannesburg on a business trip," see Compl. PP 9, 15, the complaint also suggests that the decision to transfer him to South Africa had already been made before he arrived in London, see id.(alleging that "[AIG executives] Cassano and Jones agreed with Ofori's impending temporary relocation to South Africa) (emphasis added). The facts alleged in the complaint thus indicate that the decision to send Ofori abroad was made while he was "within the jurisdiction of the United States." Accordingly, we need not decide here whether alleged discrimination that occurs while a plaintiff who resides and works in the United States happens to be traveling abroad can support a claim under Section 1981. Cf. Torrico, 213 F.Supp.2d at 403 ("[It] appears obvious in the case of a two-week business trip abroad ... that the employee's place of employment is the United States and that an employer cannot evade the application of the antidiscrimination laws."); de Lazzari Barbosa, 2002 WL 32348281, at *7 (holding that "[t]he key factor in determining the applicability" of Section 1981 to an employee who spends time abroad is "the relevant work station") (quotation marks omitted).
 
*307 In addition, Ofori alleged that "[i]n December 2003, [he] was told that he would not receive a bonus from AIG for the work that he had performed for AIG in 2003," and that he subsequently received a bonus only one-sixth of the amount he received in 2002. Compl. P 24. There is no dispute that Ofori was living in South Africa in December 2003, and he has not alleged any specific discriminatory act relating to the bonus that occurred before then. At oral argument, Ofori's counsel contended that because the bonus was meant to reward performance for all of 2003, much of which Ofori spent living and working in the United States, the awarding of a diminished year-end bonus was necessarily an act of alleged discrimination that occurred in the United States. We disagree. In the absence of evidence of a relevant discriminatory action taken against Ofori before his work location changed to South Africa, he would not be able to recover under Section 1981 for the allegedly discriminatory bonus decision. Nevertheless, because Ofori was living and working in the United States for most of the period that the bonus was intended to cover, it is reasonable to infer that a discriminatory act with respect to the bonus may have been taken against him while he was still in the United States. Since all reasonable inferences must be drawn in Ofori's favor at this preliminary stage of the litigation, see Twombly, 425 F.3d at 106, the District Court should not have dismissed his Section 1981 claims insofar as he alleges that the decision to award him a diminished bonus constituted racial discrimination while he was still in the United States. See Eternity Global Master Fund Ltd. v. Morgan Guar. Trust Co. of N.Y., 375 F.3d 168, 177 (2d Cir.2004) ("At the pleading stage ... the issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.") (internal quotation marks omitted).
 
Accordingly, we vacate the District Court's dismissal of Ofori's claims insofar as they assert discrimination relating to (1) Ofori's initial assignment overseas, including any preparations or arrangements made in the United States before his departure, and (2) the bonus he received for 2003.
 
To summarize: We hold that
 
(1) Congress has not extended Section 1981 to apply to claims arising from discrimination that occurred while a plaintiff was not "within the jurisdiction of the United States," 42 U.S.C. § 1981 (a);
(2) the District Court properly dismissed plaintiff's Section 1981 claims insofar as they seek recovery for alleged discriminatory acts that occurred while he was living and working in South Africa; and
(3) the District Court erred in dismissing plaintiff's Section 1981 claims insofar as they seek recovery for alleged discriminatory acts that occurred while he was in the United States.
* * * *
 
We thus affirm in part and vacate in part the judgment of the District Court and remand the cause for further proceedings consistent with this opinion.

APPENDIX B
Supreme Court of the United States
NIKE, INC., et al., Petitioners, v. Marc KASKY.
No. 02-575.
539 U.S. 654, 123 S.Ct. 2554, 156 L.Ed.2d 580, 71 USLW 4602,
June 26, 2003.
 
Walter Dellinger, O'Melveny & Myers LLP, Washington, DC, David J. Brown, James N. Penrod, Morgan, Lewis & Bockius, LLP, San Francisco, CA, Laurence H. Tribe, Cambridge, MA, Thomas C. Goldstein, Amy Howe, Goldstein & Howe, P.C., Washington, DC, for petitioners.
 
Patrick J. Coughlin, Randi, Dawn, Bandman, Albert H. Meyerhoff, Frank J. Janecek, Jr., Sylvia Sum, Milberg, Weiss, Bershad, Hynes & Lerach, San Francisco, CA, Paul R. Hoeber, San Francisco, CA, Alan M. Caplan, Philip Neumark, Roderick P. Bushnell, April M. Strauss, Bushnell, Caplan & Fielding, LLP, San Francisco, CA, for respondents. For U.S. Supreme Court briefs, see:2003 WL 898993 (Pet.Brief) 2003 WL 1844849 (Resp.Brief)2003 WL 1922453 (Reply.Brief)
 
*655 PER CURIAM.
The writ of certiorari is dismissed as improvidently granted.
 
*656 Justice STEVENS, with whom Justice GINSBURG joins, and with whom justice SOUTER joins as to Part III, concurring.
 
Beginning in 1996, Nike was besieged with a series of allegations that it was mistreating and underpaying workers at foreign facilities. See App. to Pet. for Cert. 3a. Nike responded to these charges in numerous ways, such as by sending out press releases, writing letters to the editors of various newspapers around the country, and mailing letters to university presidents and athletic directors. See id., at 3a-4a. In addition, in 1997, Nike commissioned a report by former Ambassador to the United Nations Andrew Young on the labor conditions at Nike production facilities. See id., at 67a. After visiting 12 factories, "Young issued a report that commented favorably on working conditions in the factories and found no evidence of widespread abuse or mistreatment of workers." Ibid.
 
In April 1998, respondent Marc Kasky, a California resident, sued Nike for unfair and deceptive practices under California's Unfair Competition Law, Cal. Bus. & Prof.Code Ann. § 17200 et seq. (West 1997), and False Advertising Law, § 17500 et seq. Respondent asserted that "in order to maintain and/or increase its sales," Nike **2555 made a number of "false statements and/or material omissions of fact" concerning the working conditions under which Nike products are manufactured. Lodging of Petitioners 2 (P 1). Respondent alleged "no harm or damages whatsoever regarding himself individually," id., at 4-5 (P 8), but rather brought the suit "on behalf of the General Public of the State of California and on information and belief," id., at 3 (P 3).
 
Nike filed a demurrer to the complaint, contending that respondent's suit was absolutely barred by the First Amendment. The trial court sustained the demurrer without leave to amend and entered a judgment of dismissal. App. to Pet. for Cert. 80a-81a. Respondent appealed, and the California Court of Appeal affirmed, holding that Nike's statements *657 "form[ed] part of a public dialogue on a matter of public concern within the core area of expression protected by the First Amendment." Id., at 79a. The California Court of Appeal also rejected respondent's argument that it was error for the trial court to deny him leave to amend, reasoning that there was "no reasonable possibility" that the complaint could be amended to allege facts that would justify any restrictions on what was-in the court's view-Nike's "noncommercial speech." Ibid.
 
On appeal, the California Supreme Court reversed and remanded for further proceedings. The court held that "[b]ecause the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker's own business operations for the purpose of promoting sales of its products, ... [the] messages are commercial speech." 27 Cal.4th 939, 946, 119 Cal.Rptr.2d 296, 45 P.3d 243, 247 (2002). However, the court emphasized that the suit "is still at a preliminary stage, and that whether any false representations were made is a disputed issue that has yet to be resolved." Ibid.
 
We granted certiorari to decide two questions: (1) whether a corporation participating in a public debate may "be subjected to liability for factual inaccuracies on the theory that its statements are 'commercial speech' because they might affect consumers' opinions about the business as a good corporate citizen and thereby affect their purchasing decisions"; and (2) even assuming the California Supreme Court properly characterized such statements as commercial speech, whether the "First Amendment, as applied to the states through the Fourteenth Amendment, permit[s] subjecting speakers to the legal regime approved by that court in the decision below." Pet. for Cert. i. Today, however, the Court dismisses the writ of certiorari as improvidently granted.
 
In my judgment, the Court's decision to dismiss the writ of certiorari is supported by three independently sufficient *658 reasons: (1) the judgment entered by the California Supreme Court was not final within the meaning of 28 U.S.C. § 1257; (2) neither party has standing to invoke the jurisdiction of a federal court; and (3) the reasons for avoiding the premature adjudication of novel constitutional questions apply with special force to this case.
I
 
The first jurisdictional problem in this case revolves around the fact that the California Supreme Court never entered a final judgment. Congress has granted this Court appellate jurisdiction with respect to state litigation only after the highest state court in which judgment could be had has rendered a final judgment or decree. See ibid. A literal interpretation of the statute would preclude our review whenever further proceedings remain to be determined in a state court, "no matter how dissociated from the only federal issue" in the case. Radio Station WOW, Inc. v. Johnson, 326 U.S. 120, 124, 65 S.Ct. 1475, 89 L.Ed. 569 (1945). We have, however, abjured such a "mechanical" construction of the statute, and accepted jurisdiction in certain exceptional "situations in which the highest **2556 court of a State has finally determined the federal issue present in a particular case, but in which there are further proceedings in the lower state courts to come." Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 477, 95 S.Ct. 1029, 43 L.Ed.2d 328 (1975). n1 
 
n1 Notably, we recognized in Cox that in most, if not all, of these exceptional situations, the "additional proceedings anticipated in the lower state courts ... would not require the decision of other federal questions that might also require review by the Court at a later date." 420 U.S., at 477, 95 S.Ct. 1029.
 
Nike argues that this case fits within the fourth category of such cases identified in Cox, which covers those cases in which "the federal issue has been finally decided in the state courts with further proceedings pending in which the party seeking review" might prevail on nonfederal grounds, "reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action," *659 and "refusal immediately to review the state-court decision might seriously erode federal policy." Id., at 482-483, 95 S.Ct. 1029. In each of the three cases that the Court placed in the fourth category in Cox, the federal issue had not only been finally decided by the state court, but also would have been finally resolved by this Court whether the Court agreed or disagreed with the state court's disposition of the issue. Thus, in Construction Laborers v. Curry, 371 U.S. 542, 83 S.Ct. 531, 9 L.Ed.2d 514 (1963), the federal issue was whether the National Labor Relations Board had exclusive jurisdiction over the controversy; in Mercantile Nat. Bank at Dallas v. Langdeau, 371 U.S. 555, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963), the federal issue was whether a special federal venue statute applied to immunize the defendants in a state-court action; and in Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974), the federal issue was whether a Florida statute requiring a newspaper to carry a candidate's reply to an editorial was constitutional. In Cox itself, the federal question was whether the State could prohibit the news media from publishing the name of a rape victim. In none of those cases would the resolution of the federal issue have been affected by further proceedings.
 
In Nike's view, this case fits within the fourth Cox category because if this Court holds that Nike's speech was noncommercial, then "reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action." 420 U.S., at 482-483, 95 S.Ct. 1029; see also Reply Brief for Petitioners 4; Reply to Brief in Opposition 4-5. Notably, Nike's argument assumes that all of the speech at issue in this case is either commercial or noncommercial and that the speech therefore can be neatly classified as either absolutely privileged or not.
 
Theoretically, Nike is correct that we could hold that all of Nike's allegedly false statements are absolutely privileged even if made with the sort of "malice" defined in New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), thereby precluding any further proceedings or amendments that might overcome*660 Nike's First Amendment defense. However, given the interlocutory posture of the case before us today, the Court could also take a number of other paths that would neither preclude further proceedings in the state courts, nor finally resolve the First Amendment questions in this case. For example, if we were to affirm, Nike would almost certainly continue to maintain that some, if not all, of its challenged statements were protected by the First Amendment and that the First Amendment constrains the remedy that may be imposed. Or, if we were to reverse, we might hold that the speech at issue in this case is subject to suit only if made with actual malice, thereby inviting respondent to amend his complaint to allege such malice. See Tr. of Oral Arg. 42-43. Or we might conclude that some of Nike's speech is commercial and some is **2557 noncommercial, thereby requiring further proceedings in the state courts over the legal standards that govern the commercial speech, including whether actual malice must be proved.
 
In short, because an opinion on the merits in this case could take any one of a number of different paths, it is not clear whether reversal of the California Supreme Court would "be preclusive of any further litigation on the relevant cause of action [in] the state proceedings still to come." Cox, 420 U.S., at 482-483, 95 S.Ct. 1029. Nor is it clear that reaching the merits of Nike's claims now would serve the goal of judicial efficiency. For, even if we were to decide the First Amendment issues presented to us today, more First Amendment issues might well remain in this case, making piecemeal review of the Federal First Amendment issues likely. See Flynt v. Ohio, 451 U.S. 619, 621, 101 S.Ct. 1958, 68 L.Ed.2d 489 (1981)(per curiam) (noting that in most, if not all, of the cases falling within the four Cox exceptions, there was "no probability of piecemeal review with respect to federal issues"). Accordingly, in my view, the judgment of the California Supreme Court does not fall within the fourth Cox exception and cannot be regarded as final.
 
The second reason why, in my view, this Court lacks jurisdiction to hear Nike's claims is that neither party has standing to invoke the jurisdiction of the federal courts. See Whitmore v. Arkansas, 495 U.S. 149, 154-155, 110 S.Ct. 1717, 109 L.Ed.2d 135 (1990) ("Article III, of course, gives the federal courts jurisdiction over only 'cases and controversies,' and the doctrine of standing serves to identify those disputes which are appropriately resolved through the judicial process"). Without alleging that he has any personal stake in the outcome of this case, respondent is proceeding as a private attorney general seeking to enforce two California statutes on behalf of the general public of the State of California. He has not asserted any federal claim; even if he had attempted to do so, he could not invoke the jurisdiction of a federal court because he failed to allege any injury to himself that is "distinct and palpable." Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Thus, respondent does not have Article III standing. For that reason, were the federal rules of justiciability to apply in state courts, this suit would have been "dismissed at the outset." ASARCO Inc. v. Kadish, 490 U.S. 605, 617, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989). n2 
 
n2 Because the constraints of Article III do not apply in state courts, see ASARCO, 490 U.S., at 617, 109 S.Ct. 2037, the California courts are free to adjudicate this case.
 
Even though respondent would not have had standing to commence suit in federal court based on the allegations in the complaint, Nike-relying on ASARCO-contends that it has standing to bring the case to this Court. See Reply Brief for Petitioners 5. In ASARCO, a group of taxpayers brought a suit in state court seeking a declaration that the State's law on mineral leases on state lands was invalid. After the Arizona Supreme Court "granted plaintiffs a declaratory judgment that the state law governing mineral *662 leases is invalid," 490 U.S., at 611, 109 S.Ct. 2037, n3 the defendants sought to invoke the jurisdiction of this Court. In holding that the defendants had standing to invoke the jurisdiction of the federal courts, we noted that the state proceedings had "resulted in a final judgment altering tangible legal rights," id., at 619, 109 S.Ct. 2037, and we adopted the following rationale: 
 
n3 The Arizona Supreme Court also remanded the case for the trial court to determine what further relief might be appropriate. See id., at 611, 109 S.Ct. 2037. Thus, while leaving open the question of remedy on remand, the state-court judgment in ASARCO finally decided the federal issue. See id., at 612, 109 S.Ct. 2037 (holding that the federal issues had been adjudicated by the state court and that the remaining issues would not give rise to any further federal question).
 
**2558 "When a state court has issued a judgment in a case where plaintiffs in the original action had no standing to sue under the principles governing the federal courts, we may exercise our jurisdiction on certiorari if the judgment of the state court causes direct, specific, and concrete injury to the parties who petition for our review, where the requisites of a case or controversy are also met." Id., at 623-624, 109 S.Ct. 2037.
 
The rationale supporting our jurisdictional holding in ASARCO, however, does not extend to this quite different case. Unlike ASARCO, in which the state-court proceedings ended in a declaratory judgment invalidating a state law, no "final judgment altering tangible legal rights" has been entered in the instant case. Id., at 619, 109 S.Ct. 2037. Rather, the California Supreme Court merely held that respondent's complaint was sufficient to survive Nike's demurrer and to allow the case to go forward. To apply ASARCO to this case would effect a drastic expansion of ASARCO's reasoning, extending it to cover an interlocutory ruling that merely allows a trial to proceed. n4 Because I do not believe such a *663 significant expansion of ASARCO is warranted, my view is that Nike lacks the requisite Article III standing to invoke this Court's jurisdiction.
 
n4 Justice BREYER would extend ASARCO-which provides an exception to our normal standing requirement-to encompass not merely a defendant's challenge to an adverse state-court judgment but also a defendant's motion to dismiss a state-court complaint alleging that semicommercial speech was false and misleading. See post, at 2561-2562 (dissenting opinion). Regardless of whether the "speech-chilling injury" associated with the defense of such a case may or may not outweigh the benefit of having a public forum in which the defendant may establish the truth of the contested statements, such an unprecedented expansion would surely change the character of our standing doctrine, greatly extending ASARCO's reach.
 
III
 
The third reason why I believe this Court has appropriately decided to dismiss the writ as improvidently granted centers around the importance of the difficult First Amendment questions raised in this case. As Justice Brandeis famously observed, the Court has developed, "for its own governance in the cases confessedly within its jurisdiction, a series of rules under which it has avoided passing upon a large part of all the constitutional questions pressed upon it for decision." Ashwander v. TVA, 297 U.S. 288, 346, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (concurring opinion). The second of those rules is that the Court will not anticipate a question of constitutional law in advance of the necessity of deciding it. Id., at 346-347, 56 S.Ct. 466. The novelty and importance of the constitutional questions presented in this case provide good reason for adhering to that rule.
 
This case presents novel First Amendment questions because the speech at issue represents a blending of commercial speech, noncommercial speech and debate on an issue of public importance. n5 See post, at 2565-2566. On the one hand, *664 if the allegations of the complaint are true, direct communications with customers and potential customers that were intended to generate sales-and possibly to maintain or enhance the market value of Nike's stock-contained significant factual misstatements. The regulatory interest in protecting market participants from being misled by such misstatements is of the highest order. That is why we have **2559 broadly (perhaps overbroadly) stated that "there is no constitutional value in false statements of fact." Gertz v. Robert Welch, Inc., 418 U.S. 323, 340, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). On the other hand, the communications were part of an ongoing discussion and debate about important public issues that was concerned not only with Nike's labor practices, but with similar practices used by other multinational corporations. See Brief for American Federation of Labor and Congress of Industrial Organizations as Amicus Curiae 2. Knowledgeable persons should be free to participate in such debate without fear of unfair reprisal. The interest in protecting such participants from the chilling effect of the prospect of expensive litigation is therefore also a matter of great importance. See, e.g., Brief for ExxonMobil et al. as Amici Curiae 2; Brief for Pfizer Inc. as Amicus Curiae 11-12. That is why we have provided such broad protection for misstatements about public figures that are not animated by malice. See New York Times Co. v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964).
 
n5 Further complicating the novel First Amendment issues in this case is the fact that in this Court Nike seeks to challenge the constitutionality of the private attorney general provisions of California's Unfair Competition Law and False Advertising Law. It apparently did not raise this specific challenge below. Whether the scope of protection afforded to Nike's speech should differ depending on whether the speech is challenged in a public or a private enforcement action, see post, at 2566, is a difficult and important question that I believe would benefit from further development below.
 
Whether similar protection should extend to cover corporate misstatements made about the corporation itself, or whether we should presume that such a corporate speaker knows where the truth lies, are questions that may have to be decided in this litigation. The correct answer to such questions, however, is more likely to result from the study of a full factual record than from a review of mere unproven allegations in a pleading. Indeed, the development of such *665 a record may actually contribute in a positive way to the public debate. In all events, I am firmly convinced that the Court has wisely decided not to address the constitutional questions presented by the certiorari petition at this stage of the litigation.
 
Accordingly, I concur in the decision to dismiss the writ as improvidently granted.
 
Justice KENNEDY, dissenting.
I dissent from the order dismissing the writ of certiorari as improvidently granted.
 
Justice BREYER, with whom Justice O'CONNOR joins, dissenting.
During the 1990's, human rights and labor groups, newspaper editorial writers, and others severely criticized the Nike corporation for its alleged involvement in disreputable labor practices abroad. See Lodging of Petitioners 7-8, 96-118, 127-162, 232-235, 272-273. This case focuses upon whether, and to what extent, the First Amendment protects certain efforts by Nike to respond-efforts that took the form of written communications in which Nike explained or denied many of the charges made.
 
The case arises under provisions of California law that authorize a private individual, acting as a "private attorney general," effectively to prosecute a business for unfair competition or false advertising. Cal. Bus. & Prof.Code Ann. §§ 17200, 17204, 17500, 17535 (West 1997). The respondent, Marc Kasky, has claimed that Nike made false or misleading commercial statements. And he bases this claim upon statements that Nike made in nine specific documents, including press releases and letters to the editor of a newspaper, to institutional customers, and to representatives of nongovernmental organizations. Brief for Respondent 5.
 
The California Court of Appeal affirmed dismissal of Kasky's complaint without leave to amend on the ground that *666 "the record discloses noncommercial speech, addressed to a topic of public interest and responding to public criticism of Nike's labor practices." App. to Pet. for Cert. 78a. The Court of Appeal added that it saw "no merit to [Kasky's] scattershot argument that he might still be able to state a cause of action on some theory allowing content-related abridgement of noncommercial speech." Id., at 79a.
 
**2560 Kasky appealed to the California Supreme Court. He focused on the commercial nature of the communications at issue, while pointing to language in this Court's cases stating that the First Amendment, while offering protection to truthful commercial speech, does not protect false or misleading commercial speech, see Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n of N. Y., 447 U.S. 557, 563, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). Kasky did not challenge the lower courts' denial of leave to amend his complaint. He also conceded that, if Nike's statements fell outside the category of "commercial speech," the First Amendment protected them and "the ultimate issue is resolved in Nike's favor." Appellant's Brief on the Merits in No. S087859 (Cal.), p. 1; accord, Appellant's Reply Brief in No. S087859 (Cal.), pp. 1-2.
 
The California Supreme Court held that the speech at issue falls within the category of "commercial speech." Consequently, the California Supreme Court concluded, the First Amendment does not protect Nike's statements insofar as they were false or misleading-regardless of whatever role they played in a public debate. 27 Cal.4th 939, 946, 969, 119 Cal.Rptr.2d 296, 45 P.3d 243, 247, 262 (2002). Hence, according to the California Supreme Court, the First Amendment does not bar Kasky's lawsuit-a lawsuit that alleges false advertising and related unfair competition (which, for ease of exposition, I shall henceforth use the words "false advertising" to describe). The basic issue presented here is whether the California Supreme Court's ultimate holding is legally correct. Does the First Amendment permit Kasky's false advertising "prosecution" to go forward?
 
*667 After receiving 34 briefs on the merits (including 31 amicus briefs) and hearing oral argument, the Court dismisses the writ of certiorari, thereby refusing to decide the questions presented, at least for now. In my view, however, the questions presented directly concern the freedom of Americans to speak about public matters in public debate, no jurisdictional rule prevents us from deciding those questions now, and delay itself may inhibit the exercise of constitutionally protected rights of free speech without making the issue significantly easier to decide later on. Under similar circumstances, the Court has found that failure to review an interlocutory order entails "an inexcusable delay of the benefits [of appeal] Congress intended to grant." Mills v. Alabama, 384 U.S. 214, 217, 86 S.Ct. 1434, 16 L.Ed.2d 484 (1966). I believe delay would be similarly wrong here. I would decide the questions presented, as we initially intended.
I
 
Article III's "case or controversy" requirement does not bar us from hearing this case. Article III requires a litigant to have "standing" -i.e., to show that he has suffered "injury in fact," that the injury is "fairly traceable" to actions of the opposing party, and that a favorable decision will likely redress the harm. Bennett v. Spear, 520 U.S. 154, 162, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (internal quotation marks omitted). Kasky, the state-court plaintiff in this case, might indeed have had trouble meeting those requirements, for Kasky's complaint specifically states that Nike's statements did not harm Kasky personally. Lodging of Petitioners 4-5 (P 8). But Nike, the state-court defendant-not Kasky, the plaintiff-has brought the case to this Court. And Nike has standing to complain here of Kasky's actions.
 
These actions threaten Nike with "injury in fact." As a "private attorney general," Kasky is in effect enforcing a state law that threatens to discourage Nike's speech. See Cal. Bus. & Prof.Code Ann. §§ 17204, 17535 (West 1997). This Court has often found that the enforcement of such a *668 law works constitutional injury even if enforcement proceedings are not complete-indeed, even if enforcement is no **2561 more than a future threat. See, e.g., Houston v. Hill, 482 U.S. 451, 459, n. 7, 107 S.Ct. 2502, 96 L.Ed.2d 398 (1987) (standing where there is "'a genuine threat of enforcement'" against future speech); Steffel v. Thompson, 415 U.S. 452, 459, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974) (same). Cf. First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 785, n. 21, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978) (The "burden and expense of litigating [an] issue" itself can "unduly impinge on the exercise of the constitutional right"); Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 52-53, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971) (plurality opinion) ("The very possibility of having to engage in litigation, an expensive and protracted process, is threat enough"). And a threat of a civil action, like the threat of a criminal action, can chill speech. See New York Times Co. v. Sullivan, 376 U.S. 254, 278, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964) ("Plainly the Alabama law of civil libel is 'a form of regulation that creates hazards to protected freedoms markedly greater than those that attend reliance upon the criminal law'").
 
Here, of course, an action to enforce California's laws-laws that discourage certain kinds of speech-amounts to more than just a genuine, future threat. It is a present reality-one that discourages Nike from engaging in speech. It thereby creates "injury in fact." Supra, at 2560. Further, that injury is directly "traceable" to Kasky's pursuit of this lawsuit. And this Court's decision, if favorable to Nike, can "redress" that injury. Ibid.
 
Since Nike, not Kasky, now seeks to bring this case to federal court, why should Kasky's standing problems make a critical difference? In ASARCO Inc. v. Kadish, 490 U.S. 605, 618, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989), this Court specified that a defendant with standing may complain of an adverse state-court judgment, even if the other party-the party who brought the suit in state court and obtained that judgment-would have lacked standing to bring a case in federal court. See also Virginia v. Hicks, ante, 539 U.S., at 120-121, 123 S.Ct. 2191.
 
*669 In ASARCO, state taxpayers (who ordinarily lack federal "standing") sued a state agency in state court, seeking a judgment declaring that the State's mineral leasing procedures violated federal law. See 490 U.S., at 610, 109 S.Ct. 2037. ASARCO and other mineral leaseholders intervened as defendants. Ibid. The plaintiff taxpayers obtained a state-court judgment declaring that the State's mineral leasing procedures violated federal law. The defendant mineral leaseholders asked this Court to review the judgment. And this Court held that the leaseholders had standing to seek reversal of that judgment here.
 
The Court wrote:
"When a state court has issued a judgment in a case where plaintiffs in the original action had no standing to sue under the principles governing the federal courts, we may exercise our jurisdiction on certiorari [1] if the judgment of the state court causes direct, specific, and concrete injury to the parties who petition for our review, where [2] the requisites of a case or controversy are also met." Id., at 623-624, 109 S.Ct. 2037 (bracketed numbers added).
 
No one denies that "requisites of a case or controversy" other than standing are met here. But is there "direct, specific, and concrete injury"?
 
In ASARCO itself, such "injury" consisted of the threat, arising out of the state court's determination, that the defendants' leases might later be canceled (if, say, a third party challenged those leases in later proceedings and showed they were not "made for 'true value'"). Id., at 611-612, 618, 109 S.Ct. 2037. Here that "injury" consists of the threat, arising out of the state court's determination, that defendant Nike's speech on public matters might be "chilled" immediately and legally restrained**2562 in the future. See supra, at 2560-2561. Where is the meaningful difference?
 
*670 I concede that the state-court determination in ASARCO was more "final" in the sense that it unambiguously ordered a declaratory judgment, see 490 U.S., at 611-612, 109 S.Ct. 2037 (finding that two exceptions to normal finality requirements applied), while the state-court determination here, where such declaratory relief was not sought, takes the form of a more intrinsically interlocutory holding, see ante, at 2557-2558, and n. 4 (STEVENS, J., concurring). But with respect to "standing," what possible difference could that circumstance make? The state court in ASARCO finally resolved federal questions related to state leasehold procedures; the state court here finally resolved the basic free speech issue-deciding that Nike's statements constituted "commercial speech" which, when "false or misleading," the government "may entirely prohibit," 27 Cal.4th, at 946, 119 Cal.Rptr.2d 296, 45 P.3d, at 247. After answering the basic threshold question, the state court in ASARCO left other, more specific questions for resolution in further potential or pending proceedings, 490 U.S., at 611-612, 109 S.Ct. 2037. The state court here did the same.
 
In ASARCO, the relevant further proceedings might have taken place in a new lawsuit; here they would have taken place in the same lawsuit. But that difference has little bearing on the likelihood of injury. Indeed, given the nature of the speech-chilling injury here and the fact that it is likely to occur immediately, I should think that constitutional standing in this case would flow from standing in ASARCO a fortiori.
II
 
No federal statute prevents us from hearing this case. The relevant statute limits our jurisdiction to "[f]inal judgments or decrees rendered by the highest court of a State in which a decision could be had." 28 U.S.C. § 1257(a) (emphasis added). But the California Supreme Court determination before us, while technically an interim decision, is a "final judgment or decree" for purposes of this statute.
 
*671 That is because this Court has interpreted the statute's phrase "final judgment" to refer, in certain circumstances, to a state court's final determination of a federal issue, even if the determination of that issue occurs in the midst of ongoing litigation. Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 477, 95 S.Ct. 1029, 43 L.Ed.2d 328 (1975). In doing so, the Court has said that it thereby takes a "pragmatic approach," not a "mechanical" approach, to "determining finality." Id., at 477, 486, 95 S.Ct. 1029 (emphasis added). And it has set forth several criteria that determine when an interim state-court judgment is "final" for purposes of the statute, thereby permitting our consideration of the federal matter at issue.
 
The four criteria relevant here are those determining whether a decision falls within what is known as Cox's "fourth category" or "fourth exception." They consist of the following:

(1) "the federal issue has been finally decided in the state courts";

(2) in further pending proceedings, "the party seeking review here might prevail on the merits on nonfederal grounds, thus rendering unnecessary review of the federal issue by this Court";

(3) "reversal of the state court on the federal issue would be preclusive of any further litigation on the relevant cause of action rather than merely controlling the nature and character of, or determining the admissibility of evidence in, the state proceedings still to come"; and

(4) "a refusal immediately to review the state-court decision might seriously erode federal policy." Id., at 482-483, 95 S.Ct. 1029.
 
Each of these four conditions is satisfied in this case.
A
 
Viewed from Cox's "pragmatic" perspective, "the federal issue has been finally decided in the state courts." *672 Id., at 482, 486, 95 S.Ct. 1029. The California Supreme Court considered nine specific instances of Nike's communications-those upon which Kasky says he based his legal claims. Brief for Respondent 5. These include (1) a letter from Nike's Director of Sports Marketing to university presidents and athletic directors presenting "facts" about Nike's labor practices; (2) a 30-page illustrated pamphlet about those practices; (3) a press release (posted on Nike's Web site) commenting on those practices; (4) a posting on Nike's Web site about its "code of conduct"; (5) a document on Nike's letterhead sharing its "perspective" on the labor controversy; (6) a press release responding to "[s]weatshop [a]llegations"; (7) a letter from Nike's Director of Labor Practices to the Chief Executive Officer of YWCA of America, discussing criticisms of its labor practices; (8) a letter from Nike's European public relations manager to a representative of International Restructuring Education Network Europe, discussing Nike's practices; and (9) a letter to the editor of The New York Times taking issue with a columnist's criticisms of Nike's practices. Ibid; see also Lodging of Petitioners 121-125, 182-191, 198-230, 270, 285, 322-324. The California Supreme Court then held that all this speech was "commercial speech" and consequently the "governmen[t] may entirely prohibit" that speech if it is "false or misleading." 27 Cal.4th, at 946, 119 Cal.Rptr.2d 296, 45 P.3d, at 247.
 
The California Supreme Court thus "finally decided" the federal issue-whether the First Amendment protects the speech in question from legal attack on the ground that it is "false or misleading." According to the California Supreme Court, nothing at all remains to be decided with respect to that federal question. If we permit the California Supreme Court's decision to stand, in all likelihood this litigation will now simply seek to determine whether Nike's statements were false or misleading, and perhaps whether Nike was negligent in making those statements-matters involving questions of California law.
 
*673 I concede that some other, possibly related federal constitutional issue might arise upon remand for trial. But some such likelihood is always present in ongoing litigation, particularly where, as in past First Amendment cases, this Court reviews interim state-court decisions regarding, for example, requests for a temporary injunction or a stay pending appeal, or (as here) denial of a motion to dismiss a complaint. E.g., National Socialist Party of America v. Skokie, 432 U.S. 43, 97 S.Ct. 2205, 53 L.Ed.2d 96 (1977)(per curiam) (denial of a stay pending appeal); Organization for a Better Austin v. Keefe, 402 U.S. 415, 91 S.Ct. 1575, 29 L.Ed.2d 1 (1971) (temporary injunction); Mills v. Alabama, 384 U.S. 214, 86 S.Ct. 1434, 16 L.Ed.2d 484 (1966) (motion to dismiss).
 
Some such likelihood was present in Cox itself. The Cox plaintiff, the father of a rape victim, sued a newspaper in state court, asserting a right to damages under state law, which forbade publication of a rape victim's name. The trial court, believing that the statute imposed strict liability on the newspaper, granted summary judgment in favor of the victim. See Cox Broadcasting Corp. v. Cohn, 231 Ga. 60, 64, 200 S.E.2d 127, 131 (1973), rev'd, 420 U.S. 469, 95 S.Ct. 1029, 43 L.Ed.2d 328 (1975). The State Supreme Court affirmed in part and reversed in part. That court agreed with the plaintiff that state law provided a cause of action and that the cause of action was consistent with the First Amendment. 231 Ga., at 64, 200 S.E.2d, at 131. However, the State Supreme Court disagreed about the standard of liability. Rather than strict liability, the standard, it suggested, was one of "wilful or negligent disregard for the fact that reasonable men would find the invasion highly offensive." Ibid. And it remanded **2564 the case for trial. The likelihood that further proceedings would address federal constitutional issues-concerning the relation between, for instance, the nature of the privacy invasion, the defendants' state of mind, and the First Amendment-would seem to have been far higher there than in any further proceedings here. Despite that likelihood, and because the State Supreme Court held in effect that the First Amendment*674 did not protect the speech at issue, this Court held that its determination of that constitutional question was "plainly final." Cox, 420 U.S., at 485, 95 S.Ct. 1029. California's Supreme Court has made a similar holding, and its determination of the federal issue is similarly "final."
B
 
The second condition specifies that, in further proceedings, the "party seeking review here" -i.e., Nike-"might prevail on the merits on nonfederal grounds." Id., at 482, 95 S.Ct. 1029. If Nike shows at trial that its statements are neither false nor misleading, nor otherwise "unfair" under California law, Cal. Bus. & Prof.Code Ann. §§ 17200, 17500 (West 1997), it will show that those statements did not constitute unfair competition or false advertising under California law-a nonfederal ground. And it will "prevail on the merits on nonfederal grounds," Cox, 420 U.S., at 482, 95 S.Ct. 1029. The second condition is satisfied.
C
 
The third condition requires that "reversal of the state court on the federal issue ... be preclusive of any further litigation on the relevant cause of action." Id., at 482-483, 95 S.Ct. 1029. Taken literally, this condition is satisfied. An outright reversal of the California Supreme Court would reinstate the judgment of the California intermediate court, which affirmed dismissal of the complaint without leave to amend. Supra, at 2559. It would forbid Kasky to proceed insofar as Kasky's state-law claims focus on the nine documents previously discussed. And Kasky has conceded that his claims rest on statements made in those documents. Brief for Respondent 5.
 
I concede that this Court might not reverse the California Supreme Court outright. It might take some middle ground, neither affirming nor fully reversing, that permits this litigation to continue. See ante, at 2556-2557 (STEVENS, J., concurring). But why is that possibility relevant? The *675 third condition specifies that "reversal" -not some other disposition-will preclude "further litigation."
 
The significance of this point is made clear by our prior cases. In Cox, this Court found jurisdiction despite the fact that it might have chosen a middle First Amendment ground-perhaps, for example, precluding liability (for publication of a rape victim's name) where based on negligence, but not where based on malice. And such an intermediate ground, while producing a judgment that the State Supreme Court decision was erroneous, would have permitted the litigation to go forward. Cf. Brief for Appellants in Cox Broadcasting Corp. v. Cohn, O.T.1973, No. 73-938, p. 68, n. 127 (arguing that "'summary judgment, rather than trial on the merits, is a proper vehicle for affording constitutional protection'"). Similarly in Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974), the Court might have held that the Constitution permits a State to require a newspaper to carry a candidate's reply to an editorial-but only in certain circumstances-thereby potentially leaving a factual issue whether those circumstances applied. Cf. Brief for Appellant in Miami Herald Publishing Co. v. Tornillo, O.T.1973, No. 73-797, pp. 26-27, and n. 60 (noting that the State Supreme Court based its decision in part on a conclusion, unsupported by record evidence, that control of mass media had become substantially concentrated). One can imagine similar **2565 intermediate possibilities in virtually every case in which the Court has found this condition satisfied, including those involving technical questions of statutory jurisdiction and venue, cf. ante, at 2556 (STEVENS, J., concurring).
 
Conceivably, one might argue that the third condition is not satisfied here despite literal compliance, see supra, at 2564, on the ground that, from a pragmatic perspective, outright reversal is not a very realistic possibility. But that proposition simply is not so. In my view, the probabilities are precisely the contrary, and a true reversal is a highly realistic possibility.
 
*676 To understand how I reach this conclusion, the reader must recall the nature of the holding under review. The California Supreme Court held that certain specific communications, exemplified by the nine documents upon which Kasky rests his case, fall within that aspect of the Court's commercial speech doctrine that says the First Amendment protects only truthful commercial speech; hence, to the extent commercial speech is false or misleading, it is unprotected. See supra, at 2560.
 
The Court, however, has added, in commercial speech cases, that the First Amendment "'embraces at the least the liberty to discuss publicly and truthfully all matters of public concern.'" Consolidated Edison Co. of N.Y. v. Public Serv. Comm'n of N. Y., 447 U.S. 530, 534, 100 S.Ct. 2326, 65 L.Ed.2d 319 (1980); accord, Central Hudson, 447 U.S., at 562-563, n. 5, 100 S.Ct. 2343. And in other contexts the Court has held that speech on matters of public concern needs "'breathing space'" - potentially incorporating certain false or misleading speech-in order to survive. New York Times, 376 U.S., at 272, 84 S.Ct. 710; see also, e.g., Gertz v. Robert Welch, Inc., 418 U.S. 323, 340, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974); Time, Inc. v. Hill, 385 U.S. 374, 388-389, 87 S.Ct. 534, 17 L.Ed.2d 456 (1967).
 
This case requires us to reconcile these potentially conflicting principles. In my view, a proper resolution here favors application of the last mentioned public-speech principle, rather than the first mentioned commercial-speech principle. Consequently, I would apply a form of heightened scrutiny to the speech regulations in question, and I believe that those regulations cannot survive that scrutiny.
 
First, the communications at issue are not purely commercial in nature. They are better characterized as involving a mixture of commercial and noncommercial (public-issue-oriented) elements. The document least likely to warrant protection-a letter written by Nike to university presidents and athletic directors-has several commercial characteristics. See Appendix, infra (reproducing pages 190 and 191 of Lodging of Petitioners). As the California Supreme Court *677 implicitly found, 27 Cal.4th, at 946, 119 Cal.Rptr.2d 296, 45 P.3d, at 247, it was written by a "commercial speaker" (Nike), it is addressed to a "commercial audience" (potential institutional buyers or contractees), and it makes "representations of fact about the speaker's own business operations" (labor conditions). Ibid. See, e.g., Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 66-67, 103 S.Ct. 2875, 77L.Ed.2d 469 (1983).
 
But that letter also has other critically important and, I believe, predominant noncommercial characteristics with which the commercial characteristics are "inextricably intertwined." Riley v. National Federation of Blind of N. C., Inc., 487 U.S. 781, 796, 108 S.Ct. 2667, 101 L.Ed.2d 669 (1988). For one thing, the letter appears outside a traditional advertising format, such as a brief television or newspaper advertisement. It does not propose the presentation or sale of a product or any other commercial transaction, United States v. United Foods, Inc., 533 U.S. 405, 409, 121 S.Ct. 2334, 150 L.Ed.2d 438 (2001) (describing this as the "usua[l]" definition for commercial speech). Rather, the letter suggests that its contents might provide **2566 "information useful in discussions" with concerned faculty and students. Lodging of Petitioners 190. On its face, it seeks to convey information to "a diverse audience," including individuals who have "a general curiosity about, or genuine interest in," the public controversy surrounding Nike, Bigelow v. Virginia, 421 U.S. 809, 822, 95 S.Ct. 2222, 44 L.Ed.2d 600 (1975).
 
For another thing, the letter's content makes clear that, in context, it concerns a matter that is of significant public interest and active controversy, and it describes factual matters related to that subject in detail. In particular, the letter describes Nike's labor practices and responds to criticism of those practices, and it does so because those practices themselves play an important role in an existing public debate. This debate was one in which participants advocated, or opposed, public collective action. See, e.g., Lodging of Petitioners 143 (article on student protests), 232-236 (fact sheet with "Boycott Nike" heading). See generally *678Roth v. United States, 354 U.S. 476, 484, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957) (The First Amendment's protections of speech and press were "fashioned to assure unfettered interchange of ideas for the bringing about of political and social changes"). That the letter is factual in content does not argue against First Amendment protection, for facts, sometimes facts alone, will sway our views on issues of public policy.
 
These circumstances of form and content distinguish the speech at issue here from the more purely "commercial speech" described in prior cases. See, e.g., United Foods, supra, at 409, 121 S.Ct. 2334 (commercial speech "usually defined as speech that does no more than propose a commercial transaction" (emphasis added)); Board of Trustees of State Univ. of N.Y. v. Fox, 492 U.S. 469, 473-474, 109 S.Ct. 3028, 106 L.Ed.2d 388 (1989) (describing this as "the test"); Central Hudson, 447 U.S., at 561, 100 S.Ct. 2343 (commercial speech defined as "expression related solely to the economic interests of the speaker and its audience" (emphasis added)). The speech here is unlike speech-say, the words "dolphin-safe tuna" -that commonly appears in more traditional advertising or labeling contexts. And it is unlike instances of speech where a communication's contribution to public debate is peripheral, not central, cf. id., at 562-563, n. 5, 100 S.Ct. 2343.
 
At the same time, the regulatory regime at issue here differs from traditional speech regulation in its use of private attorneys general authorized to impose "false advertising" liability even though they themselves have suffered no harm. See Cal. Bus. & Prof.Code Ann. §§ 17204, 17535 (West 1997). In this respect, the regulatory context is unlike most traditional false advertising regulation. And the "false advertising" context differs from other regulatory contexts-say, securities regulation-where a different balance of concerns calls for different applications of First Amendment principles. Cf. Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 456-457, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978).
 
These three sets of circumstances taken together-circumstances of format, content, and regulatory context-warrant *679 treating the regulations of speech at issue differently from regulations of purer forms of commercial speech, such as simple product advertisements, that we have reviewed in the past. And, where all three are present, I believe the First Amendment demands heightened scrutiny.
 
Second, I doubt that this particular instance of regulation (through use of private attorneys general) can survive heightened scrutiny, for there is no reasonable "fit" between the burden it imposes upon speech and the important governmental "'interest served,'" Fox, supra, at 480. Rather, the burden imposed is disproportionate.
 
I do not deny that California's system of false advertising regulation-including its provision for private causes of action-furthers legitimate, traditional, and important**2567 public objectives. It helps to maintain an honest commercial marketplace. It thereby helps that marketplace better allocate private goods and services. See Virginia Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 765, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). It also helps citizens form "intelligent opinions as to how [the marketplace] ought to be regulated or altered." Ibid.
 
But a private "false advertising" action brought on behalf of the State, by one who has suffered no injury, threatens to impose a serious burden upon speech-at least if extended to encompass the type of speech at issue under the standards of liability that California law provides, see Cal. Bus. & Prof.Code Ann. §§ 17200, 17500 (West 1997) (establishing regimes of strict liability, as well as liability for negligence); Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 181, 96 Cal.Rptr.2d 518, 999 P.2d 706, 717 (2000) (stating that California's unfair competition law imposes strict liability). The delegation of state authority to private individuals authorizes a purely ideological plaintiff, convinced that his opponent is not telling the truth, to bring into the courtroom the kind of political battle better waged in other forums. Where that political battle is hard fought, such plaintiffs potentially constitute *680 a large and hostile crowd freely able to bring prosecutions designed to vindicate their beliefs, and to do so unencumbered by the legal and practical checks that tend to keep the energies of public enforcement agencies focused upon more purely economic harm. Cf. Forsyth County v. Nationalist Movement, 505 U.S. 123, 134-135, 112 S.Ct. 2395, 120 L.Ed.2d 101 (1992); Bantam Books, Inc. v. Sullivan, 372 U.S. 58, 67-71, 83 S.Ct. 631, 9 L.Ed.2d 584 (1963).
 
That threat means a commercial speaker must take particular care-considerably more care than the speaker's noncommercial opponents-when speaking on public matters. A large organization's unqualified claim about the adequacy of working conditions, for example, could lead to liability, should a court conclude after hearing the evidence that enough exceptions exist to warrant qualification-even if those exceptions were unknown (but perhaps should have been known) to the speaker. Uncertainty about how a court will view these, or other, statements, can easily chill a speaker's efforts to engage in public debate-particularly where a "false advertising" law, like California's law, imposes liability based upon negligence or without fault. See Gertz, 418 U.S., at 340, 94 S.Ct. 2997; Time, 385 U.S., at 389, 87 S.Ct. 534. At the least, they create concern that the commercial speaker engaging in public debate suffers a handicap that noncommercial opponents do not. See First Nat. Bank, 435 U.S., at 785-786, 98 S.Ct. 1407; see also Rosenberger v. Rector and Visitors of Univ. of Va., 515 U.S. 819, 828, 115 S.Ct. 2510, 132 L.Ed.2d 700 (1995).
 
At the same time, it is difficult to see why California needs to permit such actions by private attorneys general-at least with respect to speech that is not "core" commercial speech but is entwined with, and directed toward, a more general public debate. The Federal Government regulates unfair competition and false advertising in the absence of such suits. 15 U.S.C. § 41 et seq. As far as I can tell, California's delegation of the government's enforcement authority to private individuals is not traditional, and may be unique, Tr. of Oral Arg. 42. I do not see how "false advertising" *681 regulation could suffer serious impediment if the Constitution limited the scope of private attorney general actions to circumstances where more purely commercial and less public-debate-oriented elements predominate. As the historical treatment of speech in the labor context shows, substantial government regulation can coexist with First Amendment protections designed to provide room for public debate. Compare, e.g., NLRB v. Gissel Packing Co., 395 U.S. 575, 616-620, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969) (upholding prohibition of employer comments **2568 on unionism containing threats or promises), with Thomas v. Collins, 323 U.S. 516, 531-532, 65 S.Ct. 315, 89 L.Ed. 430 (1945); Thornhill v. Alabama, 310 U.S. 88, 102, 60 S.Ct. 736, 84 L.Ed. 1093 (1940).
 
These reasons convince me that it is likely, if not highly probable, that, if this Court were to reach the merits, it would hold that heightened scrutiny applies; that, under the circumstances here, California's delegation of enforcement authority to private attorneys general disproportionately burdens speech; and that the First Amendment consequently forbids it.
 
Returning to the procedural point at issue, I believe this discussion of the merits shows that not only will "reversal" of the California Supreme Court "on the federal issue" prove "preclusive of any further litigation on the relevant cause of action," Cox, 420 U.S., at 482-483, 95 S.Ct. 1029, but also such "reversal" is a serious possibility. Whether we take the words of the third condition literally or consider the circumstances pragmatically, that condition is satisfied.
D
 
The fourth condition is that "a refusal immediately to review the state-court decision might seriously erode federal policy." Id., at 483, 95 S.Ct. 1029. This condition is met because refusal immediately to review the state-court decision before us will "seriously erode" the federal constitutional policy in favor of free speech.
 
*682 If permitted to stand, the state court's decision may well "chill" the exercise of free speech rights. See id., at 486, 95 S.Ct. 1029; Fort Wayne Books, Inc. v. Indiana, 489 U.S. 46, 56, 109 S.Ct. 916, 103 L.Ed.2d 34 (1989). Continuation of this lawsuit itself means increased expense, and, if Nike loses, the results may include monetary liability (for "restitution") and injunctive relief (including possible corrective "counterspeech"). See, e.g., Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 179, 83 Cal.Rptr.2d 548, 973 P.2d 527, 539 (1999); Consumers Union of U.S., Inc. v. Alta-Dena Certified Dairy, 4 Cal.App.4th 963, 971-972, 6 Cal.Rptr.2d 193, 197-198 (1992). The range of communications subject to such liability is broad; in this case, it includes a letter to the editor of The New York Times. The upshot is that commercial speakers doing business in California may hesitate to issue significant communications relevant to public debate because they fear potential lawsuits and legal liability. Cf. Gertz, supra, at 340, 94 S.Ct. 2997 (warning that overly stringent liability for false or misleading speech can "lead to intolerable self-censorship"); Time, supra, at 389, 87 S.Ct. 534 ("Fear of large verdicts in damage suits for innocent or merely negligent misstatement, even fear of the expense involved in their defense, must inevitably cause publishers to 'steer ... wider of the unlawful zone'").
 
This concern is not purely theoretical. Nike says without contradiction that because of this lawsuit it has decided "to restrict severely all of its communications on social issues that could reach California consumers, including speech in national and international media." Brief for Petitioners 39. It adds that it has not released its annual Corporate Responsibility Report, has decided not to pursue a listing in the Dow Jones Sustainability Index, and has refused "dozens of invitations ... to speak on corporate responsibility issues." Ibid. Numerous amici-including some who do not believe that Nike has fully and accurately explained its labor practices-argue that California's decision will "chill" speech and *683 thereby limit the supply of relevant information available to those, such as journalists, who seek to keep the public informed about important public issues. Brief for American Federation of Labor and Congress of Industrial Organizations as Amicus Curiae 2-3; Brief for Chamber of Commerce of the United States of America as Amicus Curiae 10-12; Brief for ABC Inc. et al. as Amici **2569 Curiae 6-13; Brief for Pfizer Inc. as Amicus Curiae 10-14.
 
In sum, all four conditions are satisfied here. See supra, at 2562. Hence, the California Supreme Court's judgment falls within the scope of the term "final" as it appears in 28 U.S.C. § 1257(a), and no statute prevents us from deciding this case.
III
 
There is no strong prudential argument against deciding the questions presented. Compare ante, at 2558-2559 (STEVENS, J., concurring), with Ashwander v. TVA, 297 U.S. 288, 346-348, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring). These constitutional questions are not easy ones, for they implicate both free speech and important forms of public regulation. But they arrive at the threshold of this case, asking whether the Constitution permits this private attorney general's lawsuit to go forward on the basis of the pleadings at hand. This threshold issue was vigorously contested and decided, adverse to Nike, below. Cf. Yee v. Escondido, 503 U.S. 519, 534-535, 112 S.Ct. 1522, 118 L.Ed.2d 153 (1992). And further development of the record seems unlikely to make the questions presented any easier to decide later.
 
At the same time, waiting extracts a heavy First Amendment price. If this suit goes forward, both Nike and other potential speakers, out of reasonable caution or even an excess of caution, may censor their own expression well beyond what the law may constitutionally demand. See Time, 385 U.S., at 389, 87 S.Ct. 534; Gertz, 418 U.S., at 340, 94 S.Ct. 2997. That is what a "chilling effect" means. It is present here.
 
In sum, I can find no good reason for postponing a decision in this case. And given the importance of the First Amendment concerns at stake, there are strong reasons not to do so. The position of at least one amicus-opposed to Nike on the merits of its labor practice claims but supporting Nike on its free speech claim-echoes a famous sentiment reflected in the writings of Voltaire: "I do not agree with what you say, but I will fight to the end so that you may say it." See Brief for American Federation of Labor and Congress of Industrial Organizations as Amicus Curiae 3. A case that implicates that principle is a case that we should decide.
 
I would not dismiss as improvidently granted the writ issued in this case. I respectfully dissent from the Court's contrary determination.
*685 APPENDIX TO OPINION OF BREYER, J.
 
What follows is a copy of the letter to university presidents and athletic directors at issue in this case, Lodging of Petitioners 190-191:
**2570
 
June 18, 1996
 
Dear President and Director of Athletes,
 
As most of you have probably read, heard or seen, NIKE Lee, has recently came under mark from the Made in the USA Foundation, and other labor organizers, who claim that child labor is used in the production of its goods. While you may also be aware that NIKE has gone on the record to categorically deny these allegations as completely false and irresponsible, I would like to extend the courtesy of providing you with many of the facts that have been absent from the media discourse on this issue. I hope you will find this information useful in discussions with faculty and students who may be equally disturbed by these charges.
 
First and foremost, wherever NIKE operates around the globe, it is guided by principles set forth in a code of conduct that binds its production subcontractors to a signed Memorandum of Understanding. The Memorandum strictly prohibits child labor, and certifies compliance with applicable government regulations regarding minimum wage and overtime, as well as occupational health and safety, environmental regulations, worker insurance and equal opportunity provinces.
 
NIKE enforces its students through daily observation by staff members who are responsible for monitoring adherence to the Memorandum. NIKE currently employs approximately 100 staff members in Asia alone to oversee operations. Every NIKE subcontractor knows that the enforcement of the Memorandum includes systematic, evaluation by third-party auditors. These thorough reviews include interviews with workers, examination of safety equipment and procedures, review of free health-care facilities, investigation of worker grievances and audits of payroll records.
Furthermore, over the past 20 years we have established long-term relationships with select subcontractors, and we believe that our sense of corporate responsibility has influenced the way they conduct their business. After all, it is incumbent upon leaders like NIKE to ensure that these violations do not occur in our subcontractor's factories.
 
**2571 *686
 
We have found over the years that, given the vast area of our operations and the difficulty of policies such a network, some violations occur. However, we have been proud that in all material respects the code of conduct is complied with. The code is not just word. We live by it. NIKE is proud of its contribution in helping to build economies, provide skills, and create a brighter future for millions of workers around the world.
 
As a former Director of Athletes, and currently the Director of Sports Marketing at NIKE, I am indeed sensitive to these issues. I would be more than happy to make myself available to either discuss that issues and/or receive any opinions or insights you may have. We are committed to the world of sports and all that it stands for. I remain at your disposal.
 
Kindest regards,
Steve Miller
Director
NIKE Sports Marketing

APPENDIX C
In the Matter of the Application of the INTERNATIONAL BROTHERHOOD OF TEAMSTERS alleging a representation dispute pursuant to Section 2, Ninth, of the Railway Labor Act, as amended involving employees of LACSA AND TACA
28 NMB No. 72
CASE NO. R-6819
(File No. CR-6710)
FINDINGS UPON INVESTIGATION-DISMISSAL
May 9, 2001
 
This determination addresses an application filed by the International Brotherhood of Teamsters (IBT or Organization). The IBT requests the National Mediation Board (Board) to investigate whether Lineas Aereas Costarricenses S.A. (LACSA), Aviateca S.A. (AVIATECA), Nicaraguense de Aviation S.A. (NICA), and TACA International S.A. (TACA), are operating as a single transportation system known as Grupo TACA. <1> The Organization further requests, that if the Board finds that the airlines are operating as a single transportation system, it conduct an election among Grupo TACA's Fleet and Passenger Service Employees.
 
For the reasons discussed below, the Board finds there is insufficient evidence that the airlines listed in the application are operating as a single transportation system known as Grupo TACA. Therefore, the IBT's application is dismissed.

Procedural Background
 
On January 18, 2001, the IBT filed an application alleging a representation dispute involving the Fleet and Passenger Service Employees of LACSA, TACA, AVIATECA, and NICA. The IBT asserted that the carriers are operating as Grupo TACA, a single transportation system. This application was assigned NMB File No. CR-6710.
 
At the time the application was filed, LACSA's Fleet and Passenger Service Employees were represented by the IBT. The investigation was assigned to Mary L. Johnson.
 
On January 23, 2001, the Board requested LACSA and TACA to provide information necessary to determine the appropriate system for representation purposes. The Board also asked the IBT to provide evidence in support of its position that the airlines operate as a single transportation system. The IBT filed its submission on January 29, 2001, and LACSA filed its submission on February 5, 2001. Additional submissions were filed by the IBT on February 12, 2001, and by LACSA on February 23, 2001. TACA did not file a position statement.

Issues
 
Are LACSA, TACA, AVIATECA, and NICA operating as a single transportation system known as Grupo TACA?
Contentions
IBT's Position
 
The IBT asserts that LACSA, TACA, AVIATECA, and NICA hold themselves out as Grupo TACA. According to the Organization, the Carriers have combined management functions and have combined personnel documents such as training manuals. The IBT asserts that Grupo TACA coordinates flight schedules, reservations systems, marketing and sales, and the bulk purchase of fuel and spare parts for LACSA and TACA. The Organization also asserts that Grupo TACA carriers advertise combined route structure and combined fleet.
LACSA's Position
 
LACSA states that no merger has occurred or will occur. According to LACSA, Grupo TACA is a marketing alliance, but all of the foreign-flag airlines in the Grupo TACA alliance retain separate corporate identities. LACSA states that its management is not and will not be integrated with the other carriers. LACSA maintains that routes and schedules are controlled by the separate carriers, and that three of the carriers in Grupo TACA do not fly U.S. routes.
 
LACSA argues that the Board should dismiss the IBT's application for a number of reasons. First, LACSA asserts that "the single carrier concept does not allow jurisdiction over international carriers . . . especially . . . [where] some of the carriers . . . do not fly into the United States." Second, LACSA states that it is the only carrier in the Grupo TACA alliance with Fleet and Passenger Service Employees in the U.S. (TACA has contracted out its fleet and passenger service work.) Third, although LACSA admits that the Grupo TACA alliance of airlines is held out to the public as a single carrier for marketing purposes, Grupo TACA has no U.S.-based employees and no operating certificates.

Findings of Law
 
Determination of the issues in this case is governed by the Railway Labor Act (RLA or Act), as amended, 45 U.S.C. §§ 151-188. Accordingly, the Board finds as follows:
I.
 
LACSA, TACA, AVIATECA, and NICA are common carriers as defined in 45 U.S.C. § 181.
II.
 
IBT is a labor organization as provided by 45 U.S.C. § 152, Ninth.
III.
 
45 U.S.C. § 152, Fourth, gives employees subject to its provisions, "the right to organize and bargain collectively through representatives of their own choosing. The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this chapter."
IV.
 
45 U.S.C. § 152, Ninth, provides that the Board has the duty to investigate representation disputes and to designate who may participate as eligible voters in the event an election is required. In determining the choice of the majority of employees, the Board is "authorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives . . . by the employees without interference, influence, or coercion exercised by the carrier."
Findings of Fact
I.
Grupo TACA Carriers
 
Grupo TACA is an alliance which includes LACSA, TACA, AVIATECA, and NICA. TACA-Honduras, AVIATECA, and NICA do not fly into the U.S., and do not have U.S.- based fleet and passenger service. TACA's fleet and passenger service work in the U.S. is contracted out to other carriers. LACSA is a Costa Rican airline with U.S. operations, which has fleet and passenger service operations in the U.S.
 
Grupo TACA's web site states it is "an alliance of the principal Central American Airlines (AVIATECA, LACSA, NICA, TACA) and TACA PERU, united under one corporate identity to provide superior service to our customers." LACSA has a separate web site, listing only the LACSA schedule. TACA and LACSA use code sharing, but retain separate routes.
 
According to the World Aviation Directory (WAD), AVIATECA is a Guatemalan airline. TACA International Airlines, S.A. is based in El Salvador. NICA, which is 49% owned by TACA, is based in Nicaragua. The WAD has no listing for Grupo TACA. A review of the WAD's listings for LACSA, TACA, AVIATECA, and NICA establishes insufficient evidence that directors and corporate officers are interlocking.
II.
Management and Control of Labor Relations
 
Manual Montoya, LACSA's Director of the Human Resources, submitted a declaration. Montoya states that he is in charge of labor relations for LACSA, attends negotiations, and is involved in deciding about IBT's grievances. According to Montoya, the work performed by LACSA employees "has not been merged with other carriers. In fact, LACSA has received and resolved numerous grievances from the IBT involving integrity of work in the class or craft in issue here, and LACSA has maintained its separate labor and employment operation." Montoya states that it is his "understanding that TACA has no employees, but if it did have employees in the Fleet and Passenger Service classification . . . those employees could be subject to the certification that exists for TACA with another labor organization. <3>
III.
A.
 
The IBT submitted declarations from several LACSA employees. According to one of these individuals, load control instructions were formerly issued from Costa Rica, but in the last "two years such instructions have come exclusively from TACA at San Salvador. . . ." The individual states further that "all flight schedule changes emanate from TACA . . . [and] travel agencies wishing to book group space . . . must direct requests through the Grupo TACA sales department. . . ."
 
The employee also asserts that attempts to obtain information regarding LACSA through the company computer system are directed to Grupo TACA, and that "outside telephone calls to LACSA . . . at most locations are greeted with a Grupo TACA welcoming identification."
 
Other LACSA employees state that Grupo TACA management personnel such as the Regional Manager, Sales Manager, and Station Manager began to replace LACSA management between 1994 and 1998. The employees also state that their training and dispatch certificates, formerly issued by LACSA, are now issued by Grupo TACA.
B.
 
The evidence submitted by the IBT includes:
 
- A year 2000 calendar with both Grupo TACA and the individual carriers' names; and a year 2001 calendar with Grupo TACA's name only.
 
- A fax cover sheet from December 2000 listing Grupo TACA and AVIATECA, LACSA, NICA, and TACA; and a fax cover sheet from January 2001 with Grupo TACA as the principal name.
 
- A key ring and envelope opener imprinted with Grupo TACA and AVIATECA, LACSA, NICA, and TACA.
 
- Various applications, forms, and manuals with Grupo TACA as the principal name, or Grupo TACA only.
 
- Various training and dispatch certificates issued between 1998 and 2000; those issued earlier show the individual carriers' names alone or the Grupo TACA name, while those issued later show Grupo TACA only.
 
- Old business cards and envelopes imprinted with LACSA and new business cards and envelopes imprinted with Grupo TACA and AVIATECA, LACSA, NICA, and TACA.
 
- Schedule changes for the individual airlines under the heading Grupo TACA.
 
- Baggage tags, plastic bags, and ticket jackets imprinted with the Grupo TACA logo.
 
- Hotel accommodation orders for LACSA passengers imprinted with the Grupo TACA logo. The orders contain "check" boxes for the separate airlines.
C.
 
Signs at ticket counters at various airports display the Grupo TACA logo but also display the specific carrier name. Aircraft are painted with the Grupo TACA logo and the name of the individual carrier.

Discussion
Single Transportation System
 
In Trans World Airlines/Ozark Airlines, 14 NMB 218 (1987), the Board enunciated factors which it examines to determine whether carriers operate or will operate as a single transportation system. The Board cited the following as indicia of a single transportation system:
 
[T]he Board looks into such practical considerations as whether a combined schedule is published; how the carrier advertises its services; whether reservation systems are combined; whether tickets are issued on one carrier's stock; if signs, logos and other publicly visible indicia have been changed to indicate only one carrier's existence; whether personnel with public contact were held out as employees of one carrier; and whether the process of repainting planes and other equipment, to eliminate indications of separate existence, has been progressed.
 
Other factors investigated by the Board seek to determine if the carriers have combined their operations from a managerial and labor relations perspective. Here the Board investigates whether labor relations and personnel functions are handled by one carrier; whether there are a common management, common corporate officers and interlocking Boards of Directors; whether there is a combined workforce; and whether separate identities are maintained for corporate and other purposes.
 
Id. at 236.
 
The Board further stated:
 
One [factor] is whether the . . . systems are held out to the public as a single carrier. We recognize that there may be differences between . . . carriers' intent to hold themselves out to the public as a single carrier and the public's perception of whether there is a single system. That is why the Board looks into practical considerations . . . .
 
Id.
 
Grupo TAC A is an alliance of Central American carriers with combined marketing. There are publicly visible indicia, such as aircraft and signs at stations, which show Grupo TAC A and the names of the individual carriers that comprise the Grupo TACA alliance.
 
While there is some evidence that management is combined at certain U.S. locations, there is no evidence of centralized labor relations. To the contrary, there is evidence that LACSA handles its own labor relations. There is insufficient evidence of interlocking boards of directors or corporate officers.
 
There is no evidence that the carriers are operating under a single operating certificate. There is no evidence of a combined workforce. According to LACSA, there are no plans for a merger.
 
Based on the evidence provided, the Board finds insufficient evidence that LACSA and TACA are a single transportation system or will be a single transportation system by a date certain.

Conclusion
 
The Board finds that LACSA, TACA, AVIATECA and NICA are not operating as a single transportation system for representation purposes under the Railway Labor Act. Accordingly, the IBT's application in NMB File No. CR-6710 is converted to NMB Case No. R-6819 and dismissed.
 
By direction of the National Mediation Board.
 
Stephen E. Crable
 
Chief of Staff
 
1. The Organization also lists TACA Honduras, which is part of TACA, in its application.
 
2. The participants also filed position statements relating to a pending Board mediation case, NMB Case No. A-13069. Those statements were not considered in this determination.
 
3. The International Association of Machinists and Aerospace Workers, AFL-CIO (IAM), is the certified representative for TACA's Clerical Office, Fleet and Passenger Service craft or class, NMB Case No. R-4290. By agreement between TACA and the IAM, TACA subcontracted the work. The IAM's certification remains in effect.