Under the “The State/this state” hypothesis, the term “The State” is intended to signify any one of the 50 States of the Union (such as “The State of Texas” or “The State of Florida”). The term “this state,” on the other hand, is intended to signify administrative districts (like “TX” or “FL”) of a singular territory that spans the entire U.S.. (For more insight into this hypothesis, see, “The States of the Union vs. The Territory” at http://adask.wordpress.com/2011/06/14/the-states-of-the-union-vs-the-territory/#more-7133).
According to the “The State/this state” hypothesis, the federal gov-co has supplanted “The States” of the Union with the administrative districts of a singular national territory. It is believed that the feds caused this change because, under Article 1 of the federal Constitution, Congress has limited and enumerated powers with regard to “The States” of the Union, but under Article 4.3.2 of the Constitution, Congress has virtually unlimited powers over the territories.
So long as you were within the venue of a State of the Union, Congress had only limited and enumerated powers over you. But if you were within a territory, congressional powers over you might be nearly unlimited.
Thus, if Congress could create circumstances wherein you were presumed to act within the venue of “this state” (a territory) rather than within the venue of “The State” (a State of the Union), you could be presumed to be subject to the virtually unlimited powers of Congress.
Although fantastic and almost impossible to believe, the “The State/this state” hypothesis is about 15 years old—and everything I’ve seen indicates that it is virtually certain to be true.
• Central to the “The State/this state” hypothesis is the concept of “territorial jurisdiction”. In order to avoid confusion, it’s important to understand that even though every State of the Union has its own separate “territorial jurisdiction”—it is not a “territory”. States of the Union and “territories” are two entirely separate concepts. States of the Union are “sovereigns,” while territories are not.
The concept of “territorial jurisdiction” goes to the geographic limits of application of a particular sovereign’s laws. The legislature of Spain cannot (normally) enact laws that apply outside of the geographic borders of Spain. The legislature of Germany cannot (normally) enact laws that apply outside the geographic borders of Germany. The Congress of the United States cannot (normally) enact laws that apply beyond the geographic borders and “territorial jurisdiction” of the United States.
But—sometimes—the Congress of the United States (and other national legislatures) have written laws that are intended to have “extra-territorial” application. That is, such laws are intended to be applied beyond the geographic/territorial limits of the national legislature enacting the particular.
One example of such extraterritorial laws might be seen in the IRS mandate that those of you are are US citizens but who are working outside the United States (say, in Germany) are nevertheless still obligated to pay income taxes. Thus, the U.S. income tax laws might be seen to be inherently “extra-territorial” in that they can supposedly be applied even to activities beyond the “territorial jurisdiction” of the United States government.
• However, the presumption that federal laws could be applied “extra-territorially” was certainly compromised and arguably shattered by The Supreme Court of the United States in A.D. 2010 in the case of Morrison vs. National Australia Bank Ltd (No. 08-1191).
According to the Westlaw, the Supreme Court issued five conclusions in Morrison. I want to conmment on conclusion #5 first. Then I’ll move on to conclusions 1 through 4:
“5) it is only transactions in securities listed on domestic exchanges, and domestic transactions in other securities, to which § 10(b) of the Securities Exchange Act applies; abrogating Schoenbaum v. Firstbrook, 405 F.2d 200; In re CP Ships Ltd. Securities Litigation, 578 F.3d 1306; Continental Grain (Australia) Pty. Ltd. v. Pacific Oilseeds, Inc., 592 F.2d 409; Leasco Data Processing Equip. Corp. v. Maxwell, 468 F.2d 1326; Bersch v. Drexel Firestone, Inc., 519 F.2d 974; IIT v. Vencap, Ltd., 519 F.2d 1001; SEC v. Berger, 322 F.3d 187; Itoba Ltd. v. Lep Group PLC, 54 F.3d 118; Interbrew v. Edperbrascan Corp., 23 F.Supp.2d 425; Europe & Overseas Commodity Traders, S.A. v. Banque Paribas London, 147 F.3d 118; IIT v. Cornfeld, 619 F.2d 909; SEC v. Kasser, 548 F.2d 109; Grunenthal GmbH v. Hotz, 712 F.2d 421; Kauthar SDN BHD v. Sternberg, 149 F.3d 659; Zoelsch v. Arthur Andersen & Co., 824 F.2d 27.”
Fifteen cases were, in part, expressly “abrogated” by the Morrison decision. Fifteen.
I don’t recall reading another Supreme Court case that included a laundry list of cases that were expressly “abrogated” by the Court’s current case. Maybe the court routinely provides lists of abrogated cases and I’ve never before noticed. This list of abrogated cases isn’t proof, but it strikes me as evidence that that the Morrison case may have significant constitutional implications.
Westlaw reports conclusion #1 as:
“1. Canon or presumption that federal law is not meant to have extraterritorial effect is applicable in all cases, whenever party seeks to give any federal legislation extraterritorial effect, including cases arising under the Securities Exchange Act;”
In other words, any previous presumption that a federal law had an “extraterritorial effect” was no longer valid. Instead, it will now be presumed that all federal laws do not have an “extraterritorial effect” beyond the borders and territorial jurisdiction of the United States.
This declaration does not preclude the enactment or application of “extraterritorial legislation”. In theory, Congress can still enact and enforce “extraterritorial” laws, but the extraterritorial application of the law will no longer be presumed. Instead, Congress will apparently have to expressly declare within each law that that particular law be enforced “extraterritorially”. If Congress fails to expressly declare its intention that a law be enforced “extraterritorially,” the courts will hereafter presume the law to have application only within the geographic borders and territorial jurisdiction of the United States.
If the “The State/this state” hypothesis is correct, the Morrison decision may have profound implications. Under that hypothesis, the “territories” (TX, NY, FL, CA, etc.) and Washington DC are absolutely within the “territorial jurisdiction” of the United States. Under Article 4.3.2 of the Constitution, all of such territories (and the persons inhabiting them) are subject to the virtually unlimited powers of Congress. Congress can make any damn law or regulation it wants—within the “territorial jurisdiction” of the territories and Washington DC.
However, each of the States of the Union also has its own “territorial jurisdiction” and, except for those limited and enumerated powers granted to Congress by Article 1 of the Constitution, Congress can have no lawful power to enact or enforce “any damn law or regulation it wants” within the territorial jurisdiction/geographic limits of a State of the Union.
Territorial jurisdictions are by definition mutually exclusive. France and Germany share a common border. That border limits both nation’s territorial jurisdiction. The territorial jurisdiction of France does not extend into Germany. The territorial jurisdiction of Germany does not extend into France. Normally, when a nation (Germany) attempts to apply its laws “extraterritorially” beyond its own geographic borders and into another territorial jurisdiction (France), that extraterritorial application of law constitutes an act of war.
All of this suggests that, under the Morrison decision, many (perhaps most) of the federal laws that currently bedevil the “states” (actually, “territories” like TX, FL, CA, etc.) may be rendered void an inapplicable within the territorial jurisdictions of the several States of the Union.
Thus, it is conceivable that any of the statutes that underlie Title 26 (income tax code) which are not expressly declared by Congress to have “extraterritorial effect,” might no longer be lawfully applied within the borders of the 50 States of the Union. I.e., whether you were obligated to pay income taxes might depend on whether you received your income in “TX” (a territory) or within “The State of Texas”—a member-State of the perpetual Union styled “The United States of America”.
(As an aside,note that the phrase “Canon or presumption” (in Item #1, supra) implies that the word “canon” may be synonymous with “presumption”. If so, all judicial “canons” (which seem so strong as to be irrefutable) may be properly understood to be mere “presumptions”. But if a “canon” is merely a “presumption,” judicial “canons” should be rebuttable.)
Westlaw on Morrison:
“2. definition of “interstate commerce” in the Securities Exchange Act, to expressly include “trade, commerce, transportation, or communication between any foreign country and any State,” was insufficient to rebut presumption against extraterritorial application;”
For several generations, the federal gov-co has relied on the “commerce clause” to apply its federal laws “extraterritorially” into the otherwise “territorial jurisdiction” of the States of the Union. The Morrison decision appears to have broken, or at least compromised, the presumption that federal laws can be applied extraterritorially based on “interstate commerce”.
Although the Morrison case expressly applies to “interstate commerce” only under the Securities Exchange Act, it seems virtually certain that a similar challenge to the “interstate commerce” basis for the extraterritorial application of almost any federal law.
The Supreme Court appears to have badly compromised the federal gov-co’s ability to use “interstate commerce” as a pretext for “extraterritorial application” of federal laws. Without such pretext, the extraterritorial application of federal laws might technically constitute an act of war.
And note also that, since the Morrison case includes the National Australia Bank, we might suppose that the case might turn on issues of “foreign” or “international” trade between Morrison (in the US) and the Bank (in Australia). But instead of giving this case an “international commerce” flavor, the Supremes have expressly referenced “interstate commerce” and thereby clearly implicated the relationship of territorial jurisdictions between the U.S. and the several States of the Union.
“3. section of the Securities Exchange Act indicating that its provisions would not apply “to any person insofar as he transacts business in securities without the jurisdiction of the United States,” unless he does so in violation of regulations promulgated by the Securities and Exchange Commission “to prevent evasion” of the Act was apparently directed at actions abroad that might conceal a domestic violation, and was insufficient to rebut presumption against extraterritorial application;”
Item #3 is a little harder for me to interpret. I read it to indicate that:
1) Congress knew that it could not lawfully give extraterritorial application to the Securities Exchange Act of A.D. 1934 and therefore included an express proviso against extraterritorial application (“its provisions would not apply ‘to any person insofar as he transacts business in securities without the [territorial] jurisdiction of the United States.’”);
2) But. Congress nevertheless tried to provide some extraterritorial “wiggle room” with the additional qualification of “unless he does so [transacts business securities] in violation of regulations”. If Congress and/or the SEC enacted enough regulations, no one would be capable of knowing and complying with all SEC regulations and therefore, all would be subject to the extraterritorial applications of the Securities Exchange Act.
3) However, the Supremes apparently ruled in Morrison that the pretext of “violating the regulations” in a foreign jurisdiction would no longer be sufficient to “rebut the presumption against extraterritorial application” of the relevant laws.
“4) anti-fraud provision of the Securities Exchange Act did not apply extraterritorially to provide cause of action to foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign exchanges;”
What’s good for the goose is good for the gander. Just as defendants outside the territorial jurisdiction of the United States might not be subject to the extraterritorial application of US laws, plaintiffs outside the territorial jurisdiction of the United States could also not apply the US anti-fraud laws.
This seems consistent with the idea that territorial jurisdictions should be mutually exclusive. You’re either in or you’re out. If you’re in a particular territorial jurisdiction, you are both subject to its laws as a defendant and able to invoke its laws as a plaintiff. If you are outside of a particular territorial jurisdiction, you are both free from being subject to its laws, but you’re also prevented from invoking its laws for your own benefit.
If this interpretation is correct, and if the “The State/this state” hypothesis is valid, then it appears that if you want to be treated as a man within the borders of a State of the Union, you’d better be very freakin’ wary of suing or consenting to be sued in a United States District Court (USDC) since the USDC’s are territorial courts under Article 4.3.2 of the federal Constitution. (The original “District Courts of the United States” (DCUS) were Article 3 courts intended to be located within and ultimately serve the States of the Union and the people therein.)
Likewise, you might want to be wary of suing or defending under any federal statute. Insofar as you attempt to use a federal statute “extraterritorially” and for your own benefit, you might be deemed to have also consented to be subject to the extraterritorial application of other federal laws against you.
This interpretation creates a serious impediment to litigating under the “The State/this state” hypothesis since “this state” (and all of its governmental functions including the courts) are deemed to be courts of a territory and thus (under Article 4.3.2) subject to the exclusive legislative jurisdiction of Congress. Insofar as you voluntarily consent to be sued in the territorial courts of “this state,” you may be presumed to have consented to be subject to the “territorial jurisdiction” of the United States/Congress.
As a defendant, that’s not a problem. In fact, it’s an advantage. While applying federal law within a territory is constitutional, applying that same law within a State of the Union may be extraterritorial and presumptively unconstitutional.
If so, then so long as a defendant can maintain that he is one of the People of his State of the Union, a beneficiary to the Constitution of that State of the Union, and establish that all of his acts relevant to the charges took place within the venue of the State of the Union–then, in theory, it should be very difficult if not impossible for him to be prosecuted “extraterritorially” in the courts of “this state”.
But, if you claim to be one of the People of The State, how can you sue as a plaintiff in the extraterritorial courts of “this state”? Again, when it comes to territorial jurisdiction, you’re seemingly either in or you’re out.
So, suppose that you’re a man, one of the People of The State of Texas, living within the borders and territorial jurisdiction of The State of Texas (or The State of Florida, etc.)—and it’s your contention that you are therefore not subject to the extraterritorial application of federal laws such as are enforced by the territorial agencies such as IRS, FDA or HUD. Suppose some bozo living in “this state” hits your car, causes $10,000 in damages and refuses to pay. How can you sue to collect your damages without going to a court of “this state”?
If you invoke a court of “this state,” do you compromise your standing as a man living within The State?
I’m not sure. Certainly, you could thereby compromise your claim to be living within The State. But I believe that if you do a very precise dance, you should be able to enter a court of “this state” (territory) as a man of The State of the Union and compel that court to recognize your standing within The State and enforce your rights under the Constitution of The State.
In broad strokes, I think the steps of this “dance” go something like this:
1) As per Genesis 1:26-28, I am a man made in our Father YHWH ha Elohiym’s image and given dominion over all the animals.
2) As per the “Declaration of Independence,” I am endowed by my Creator with certain unalienable Rights; that among these are Life, Liberty and the pursuit of Happiness.
3) As per the “Declaration of Independence,” the primary duty of every government of the officers of the States of the Union is to “secure” those God-given, unalienable Rights to every man, woman and even unborn child.
4) The Constitution of The State of Texas is an express charitable trust; under that trust, the People of The State of Texas are that Constitution’s beneficiaries and the officers of The State of Texas and/or those who have otherwise voluntarily agreed to administer that Constitution are fiduciaries.
5) Although the “state” judge in this case is employed by “this state,” by virtue of his Oath of Office to support and defend express charitable trust called “The Constitution of The State of Texas,” he is bound to act as a fiduciary on behalf of any known beneficiary of said Constitution and administer that trust on the beneficiary’s behalf.
6) I deny that I am domiciled or resident within a territory of the United States.
7) I deny that I am domiciled or resident within Washington DC.
8) I am one of the People of The State of Texas.
9) Under Article 1.2 of the express charitable trust called “The Constitution of The State of Texas,” I am a beneficiary of that trust.
10) Based on his Oath of Office, the judge in this case has a fiduciary obligation to administer “The Constitution of The State of Texas” (express charitable trust) on my behalf.
Assuming these 10 “steps” comprised the proper dance to cause a judge of “this state” to recognize and decide a case within The State, each of these steps would have be supported with evidence (usually, affidavits).
The whole dance hinges on this fundamental conjecture: By virtue of his employment, the judge is a paid fiduciary for “this state”; by virtue of his oath of office, he is an unpaid fiduciary for “The State”. Virtually every litigant appears in the judge’s court in relation to “this state” and therefore the judge acts as fiduciary for “this state”. But if a litigant can appear as one of the People of The State of the Union and identify himself as a beneficiary of the Constitution of The State, I believe that litigant may be able to compel the judge to act as fiduciary under The State rather than under “this state” (territory).
The only evidence I have to support this conjecture is that I tried a simplistic version of this dance in A.D. 2007 when I was sued for $25,000 per day by the Attorney General of Texas. I used other lines of defense as well, and I believe my “man or other animals” defense ultimately caused the Texas AG to drop the case.
But arguing that I was a beneficiary of The Constitution of The State of Texas at least didn’t inspire the court’s contemptuous laughter and may have reinforced (or even been crucial to) my “man or other animals” defense. (For further info on “man or other animals,” see: http://adask.wordpress.com/2008/06/17/man-or-other-animals-1/#more-46, http://adask.wordpress.com/2008/06/16/man-or-other-animals-laws-1/#more-43, and http://adask.wordpress.com/2008/06/17/man-or-other-animals-3/ )
• In sum, although there may be occasional exceptions, the Supreme Court has ruled in the Morrison case that the extraterritorial application of federal laws is no longer to be presumed lawful. Although the decision expressly applies to only Securities Exchange Act, it’s hard to imagine that the same principle does not apply “across the board” to laws being enforced by the IRS, FDA, HUD, DEA and even “Homeland Security”.
If the “The State/this state” hypothesis is valid, then “this state” and “The State” should be extraterritorial to each other. If so, under Morrison, the laws of “this state” may not be applicable to those People who act within The State.
The implications are huge.