The International Work of the California Attorney General: A New Era for California and Federalism

By Emilio E. Varanini^*

California’s economy, the eighth largest in the world,¹ is closely linked to international commerce in an era with companies relying on global supply-chains² and a great amount of foreign investment and export activity.³ In our federalist system, states such as California can end up playing a far from insignificant role in foreign affairs and foreign commerce.⁴

Federal law is not inhospitable to that role. The United States Supreme Court has found not only that federal laws should be interpreted to avoid usurping state law even if those federal laws result from international treaties,⁵ but also that state laws impacting foreign commerce should not be nullified if Congressional intent indicates an acceptance of that law.⁶ And states such as California have played a key role in the implementation of international treaties and norms of customary international law in the domestic sphere.⁷ In fact, the extraterritorial impact of California’s laws, as furthered by the work of such state actors as the California Attorney General, provides some of the best illustration as to the important and appropriate role that a state like California can play in furthering international commercial norms within our constitutional scheme.⁸

For example, California’s antitrust laws have provisions that countenance its extraterritorial application,⁹ including its specific application to foreign firms doing business in this state.¹⁰Accordingly, the California Attorney General has brought cases against foreign cartels with members that directly or through subsidiaries do business in this state.¹¹ In turn, the United States Department of Justice has viewed the ability to file and prosecute such state-law civil claims as being important to the ability of victims to recover damages flowing from these cartels.¹² A recent series of settlements by the California Attorney General in the international price-fixing Cathode Ray Tubes (CRTs) case—that just received preliminary approval—involved substantial monetary and non-monetary relief, including unprecedented cooperation from foreign companies, compliance training and reporting requirements applicable to foreign companies and domestic subsidiaries, and injunctive relief applicable across multiple product lines.¹³