American Banana Co. v. United Fruit Co
In American Banana v. United Fruit Co., 213 U.S. 347, 29 S.Ct. 511, 53 L.Ed. 826 (1909), the plaintiff sued for treble damages under the Sherman Act alleging that his banana plantation had been seized and his business destroyed by the confiscatory acts of the Costa Rican government, which had acted at the defendant's instigation in furtherance of his anti-competitive behavior.
The Supreme Court, in an opinion authored by Mr. Justice Holmes, held, in reliance on Underhill v. Hernandez, 168 U.S. 250, 18 S.Ct. 83, 42 L.Ed. 456 (1897), that since the seized plantation was within the de facto jurisdiction of Costa Rica, its seizure by that state was an act of sovereign power which could not be litigated in our courts.
The opinion further held that since the acts complained of occurred outside of the United States they were beyond the jurisdictional scope of the Sherman Act.
In American Banana Co. v. United Fruit Co., 213 U.S. 347, 29 S.Ct. 511, 53 L.Ed. 826 (1909), the Court considered the application of the Sherman Act in a civil action concerning conduct which occurred entirely in Central America and which had no discernible effect on imports to the United States.
Starting with what Justice Holmes termed "the general and almost universal rule" holding "that the character of an act as lawful or unlawful must be determined wholly by the law of the country where the act is done," id. at 356, 29 S.Ct. at 512, and the ancillary proposition that, in cases of doubt, a statute should be "confined in its operation and effect to the territorial limits over which the lawmaker has general and legitimate power," id. at 357, 29 S.Ct. at 513, the Court held that the defendant's actions abroad were not proscribed by the Sherman Act.