In Re Maxwell Communication Corporation Plc

The demise of the late British media magnate Robert Maxwell and that of the corporation bearing his name, the Maxwell Communication Corporation plc, followed a similar and scandalous path, spawning civil and criminal litigation in England and around the world. This case illustrates that some positive consequences have resulted from these parallel demises. From Maxwell's mysterious death, which forced his international corporation into bankruptcy, was born a unique judicial administration of the debtor corporation by parallel and cooperative proceedings in the courts of the United States and England aimed at harmonizing the laws of both countries and also aimed at maximizing the benefits to creditors and the prospects of rehabilitation.

We have before us a small but significant piece of the swirling legal controversy that followed the collapse of Robert Maxwell's media empire. The question to be addressed is whether Maxwell Communication, as a debtor estate in Chapter 11, may recover under American law millions of dollars it transferred to three foreign banks shortly before declaring bankruptcy. It has sought such relief in adversary proceedings in the bankruptcy court under those sections of the United States Bankruptcy Code, 11 U.S.C. §§ 101-1330 (1994) (Bankruptcy Code or Code), providing for what is known as "avoidance" of pre-petition transactions. Because, in our view, the doctrine of international comity supports deferring to the courts and laws of England, we affirm the dismissal of the Chapter 11 debtor's complaints.

The facts underlying this appeal have been described in the opinions of the bankruptcy court, see Maxwell Communication Corp. v. Barclays Bank plc (In re Maxwell Communication Corp.), 170 B.R. 800, 801-07 (Bankr.S.D.N.Y.1994) (Brozman, B.J.) (Maxwell I ), and the district court, see Maxwell Communication Corp. v. Societe Generale plc (In re Maxwell Communication Corp.), 186 B.R. 807, 812-15 (S.D.N.Y.1995) (Scheindlin, J.) (Maxwell II ), and we assume the readers' familiarity with them. For purposes of clarity, we highlight those background aspects most helpful to understanding this appeal.

The debtor was originally incorporated in England over 60 years ago as a limited company. Robert Maxwell acquired control of this limited company 15 years ago. The following year, the company was re-registered under English law as a public limited company and, in 1987, it became Maxwell Communication Corporation plc (hereafter Maxwell or the debtor). Before filing for bankruptcy protection, Maxwell functioned as a holding company for Robert Maxwell's "public side" holdings--as distinguished from Maxwell's private holdings, which at one time included the New York Daily News--and controlled a variety of media-related companies. Although Maxwell was headquartered and managed in England and incurred most of its debt there, approximately 80 percent of its assets were located in the United States, most notably its subsidiaries Macmillan, Inc. and Official Airlines Guide, Inc.

Maxwell alleges that in the fall of 1991, less than 90 days before its Chapter 11 filing, it made several transfers--transfers it now seeks to avoid--to three European banks (collectively, the banks) with whom it had credit arrangements. Two of these banks are Barclays Bank plc (Barclays) and National Westminster Bank plc (National Westminster), both of which have their headquarters in London and maintain an international presence, with branches in New York and elsewhere. The other bank is Societe Generale, a French Bank headquartered in Paris with offices, among other places, in London and New York.

From 1985 until 1991 Maxwell obtained credit from Barclays under the terms of a credit arrangement known in England as an "overdraft facility." This written agreement, negotiated in London, stated that any disputes arising under it would be governed by English law. Maxwell drew $30 million under the overdraft facility, none of which had been repaid on November 24, 1991, the agreed-upon maturity date. Two days later, under pressure from Barclays' banking director in London, Maxwell repaid the $30 million from the proceeds of the sale of Que Computer Books, Inc. (Que), a subsidiary of Macmillan in New York. The Que proceeds had originally been deposited in a Maxwell account at the New York branch of National Westminster and subsequently credited to Maxwell's U.S. dollar account with National Westminster in London. On November 26, 1991 repayment was effected by transferring $30 million from Maxwell's dollar account in London to Barclays' New York branch, which was then credited the following day against the balance in the appropriate Maxwell overdraft account at Barclays in London. In addition to this transfer from the Que proceeds, Maxwell alleged in its amended complaint that 11 other transfers of funds were made to Barclays during the 90 days preceding Maxwell's bankruptcy filing, amounting to a total of pounds sterling2,110,970 (net of various payments by Barclays to or on behalf of Maxwell during the same period). No connection between these other transfers and the United States was alleged in the complaint.

National Westminster's relationship with the debtor began in the 1930s and continued through the bankruptcy filing. As of late 1991 Maxwell maintained several accounts with National Westminster, with overdraft facilities to help it meet its cash needs. These arrangements were similar to those it had with Barclays in that they were negotiated in England and provided for the governance of English law. In October 1991 Maxwell received $145 million from the sale of Macmillan Directories, Inc. (another Macmillan subsidiary in the United States) and used the proceeds--which had been paid into a Maxwell account at Citibank in New York and thereafter credited to an account at Citibank in London--to purchase British pounds. Maxwell then paid pounds sterling>>>15 million from these proceeds to an account it maintained at National Westminster's London branch. Maxwell then applied the pounds sterling>>>15 million to satisfy an overdraft balance with National Westminster.

In November 1991 Maxwell converted a portion of the $157.5 million of Que proceeds (originally deposited in National Westminster's New York branch but then transferred to its London branch) into pounds sterling27.5 million. It used this sum to cover its overdraft balances in National Westminster's London branch. The purchase of pounds sterling and subsequent credits to the National Westminster overdraft accounts occurred in London. Maxwell also alleges it made eight other transfers to National Westminster from accounts at Midland Bank in London shortly before Maxwell's bankruptcy filing, payments which amounted to pounds sterling29,046,738 (net of payments by National Westminster to Maxwell during the same period).

Societe Generale also extended credit to Maxwell under an agreement negotiated and administered in England. On October 7, 1991, in satisfaction of principal and interest on a $10 million loan extended under that credit arrangement, Maxwell made a payment of roughly pounds sterling5.765 million to Societe Generale. The funds were transferred from an account Maxwell maintained at Marine Midland Bank in London to Societe Generale's London branch. Although the debtor did not allege that the transfer was connected to the United States, the district court assumed for purposes of its decision that the funds came from the sale of Macmillan Directories because that sale also occurred on October 7, 1991. See Maxwell II, 186 B.R. at 814.

On December 16, 1991 Maxwell filed a petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court for the Southern District of New York. The next day, it petitioned the High Court of Justice in London for an administration order. Administration, introduced by the Insolvency Act 1986, is the closest equivalent in British law to Chapter 11 relief. Acting under the terms of the Insolvency Act, Justice Hoffman, then of the High Court (now a member of the House of Lords), appointed members of the London office of the accounting firm of Price Waterhouse as administrators to manage the affairs and property of the corporation.

Simultaneous proceedings in different countries, especially in multi-party cases like bankruptcies, can naturally lead to inconsistencies and conflicts. To minimize such problems, Judge Brozman appointed Richard A. Gitlin, Esq. as examiner, pursuant to 11 U.S.C. § 1104(c), in the Chapter 11 proceedings. The order of appointment required the examiner, inter alia, to investigate the debtor's financial condition, to function as a mediator among the various parties, and to "act to harmonize, for the benefit of all of [Maxwell's] creditors and stockholders and other parties in interest, [Maxwell's] United States chapter 11 case and [Maxwell's] United Kingdom administration case so as to maximize [the] prospects for rehabilitation and reorganization."

Judge Brozman and Justice Hoffman subsequently authorized the examiner and the administrators to coordinate their efforts pursuant to a so-called Protocol, an agreement between the examiner and the administrators. In approving the Protocol, Judge Brozman recognized the English administrators as the corporate governance of the debtor-in-possession. As the bankruptcy judge later explained, this recognition was motivated not only by the need for coordination but also because Maxwell was "incorporated in England and run ... by [Maxwell] executives out of Maxwell House in London subject to the direction of an English board of directors." Maxwell I, 170 B.R. at 817. Justice Hoffman reciprocated, granting the examiner leave to appear before the High Court in England.

These joint efforts resulted in what has been described as a "remarkable sequence of events leading to perhaps the first world-wide plan of orderly liquidation ever achieved." Jay Lawrence Westbrook, The Lessons of Maxwell Communication, 64 Fordham L.Rev. 2531, 2535 (1996). The administrators, the examiner, and other interested parties worked together to produce a common system for reorganizing Maxwell by disposing of assets as going concerns and distributing the proceeds to creditors. Maxwell I, 170 B.R. at 802. The mechanism for accomplishing this is embodied in a plan of reorganization and a scheme of arrangement, which are interdependent documents and were filed by the administrators in the United States and English courts respectively.

The reorganization plan incorporates the scheme and makes it binding on Maxwell and its creditors. The plan and scheme thus constitute a single and integrated system for realizing the value of Maxwell's assets and paying its creditors. As was set forth in a letter from the administrators to Maxwell's creditors, the proposal was to pay in full all holders of secured claims and of claims enjoying preferential status under United States or English law. The plan and scheme treat all of Maxwell's assets as a single pool and leave them under Maxwell's control for distribution to claimants. They allow any creditor to submit a claim in either jurisdiction. And, in addition to overcoming many of the substantive differences in the insolvency laws of the two jurisdictions, the plan and scheme resolve many procedural differences, such as the time limits for submitting claims.

Following the requisite creditor voting in the United States and England, the plan was approved in the United States and the scheme was approved in England. Judge Brozman entered an order confirming the plan--and, by implication, the scheme incorporated therein--on July 14, 1993. Justice Hoffman thereafter entered an order sanctioning the scheme under § 425 of the Companies Act 1985 on July 21, 1993. Barclays, National Westminster, and Societe Generale each filed a notice of claim with the administrators, seeking pro rata distributions on various unsecured claims against Maxwell.

Despite the unusual degree of cooperation and reconciliation of the laws of the two forums, the plan and scheme predictably did not resolve all the problems that might arise from the concurrent proceedings. For example, these documents did not specify which substantive law would govern the resolution of disputed claims by creditors. More importantly, they did not address the instant dispute regarding the debtor's ability to set aside pre-petition transfers to certain creditors.

In July 1992 Barclays faced the possibility that the administrators would institute litigation in the bankruptcy court to recover the $30 million it had received from Maxwell on November 26, 1991. Barclays therefore obtained an ex parte order in the High Court (not from Justice Hoffman) barring the commencement of such an action. In seeking to prevent litigation in the bankruptcy court, Barclays was apparently motivated by a difference in the American and British "avoidance" rules. Rules governing avoidance generally allow the estate to recover certain pre-petition transfers of property to creditors occurring within a defined period of time. Such rules are sometimes referred to as the law of preferences because such transfers, left unchecked, may put transferees in a better position than other creditors if the debtor becomes insolvent.

Thus, under 11 U.S.C. § 547(b), a trustee may avoid certain transfers to outside creditors made within 90 days before the filing of the petition. The corresponding provision in English law is § 239 of the Insolvency Act 1986. That section is in many respects similar to the American law, but the British law imposes an additional condition--it limits avoidance to those situations where placing the transferee in a better position was something the debtor intended. See Insolvency Act 1986 § 239(5). This seemingly innocuous subjective intent requirement in English law apparently would be a significant or insurmountable obstacle for the administrators were they to litigate the preferences question in London under English law. For obvious reasons, they opposed the anti-suit injunction sought by Barclays, that is, they wanted this issue litigated in the Southern District bankruptcy court.

Following a hearing, Justice Hoffman vacated the ex parte order Barclays had obtained. Re Maxwell Communications Corp. (Barclays Bank plc v. Homan), [1992] BCC 757 (Ch.) (Homan ), aff'd, [1992] BCC 767 (C.A.). The British judge declined to interfere with the American court's determination of the reach of our avoidance law. He cited the British presumption that in such a situation the foreign judge is normally in the best position to decide whether proceedings are to go forward in the foreign court, and the rule that anti-suit injunctions will issue only where an assertion of jurisdiction in the foreign court would be "unconscionable." Id. at 761-63.

In so doing, Justice Hoffman noted the cooperative course of the parallel insolvency proceedings. Id. at 760. He distinguished recent cases involving the extraterritorial application of American antitrust law, reasoning that injunctive relief is available only if it appears that a foreign court is likely to assert jurisdiction in a manner "contrary to accepted principles of international law." Id. at 762. The High Court's decision did not pass judgment on the merits of whether the application of American law would violate such norms. Id. at 767. It did assume, however, that the bankruptcy court would dismiss the anticipated suit if it found that there was an insufficient connection with the United States. Id. This ruling was affirmed by the Court of Appeal, and leave for further review by the House of Lords was denied.

D. The Adversary Complaints and the Bankruptcy and District

Freed from the constraints of an anti-suit injunction, the administrators commenced adversary proceedings in the bankruptcy court against Barclays, National Westminster, and Societe Generale. The complaints sought the recovery of the above-described transfers to the banks on the theory that they were avoidable preferences under 11 U.S.C. § 547(b) and therefore recoverable under 11 U.S.C. § 550(a)(1). In addition, each complaint sought the disallowance under 11 U.S.C. § 502(d) of any claims made by the defendant, unless the defendant first returns to the debtor the transferred funds, with interest. This subject is discussed and resolved in Part IV, infra. The examiner joined the administrators in instituting these adversary proceedings against National Westminster and intervened in the proceeding against Barclays; he is not a party in Maxwell's suit against Societe Generale.

Defendants filed motions for dismissal under Fed.R.Civ.P. 12(b)(6) (made applicable in adversary bankruptcy proceedings by Bankr.R. 7012(b)) asserting, inter alia, that applying § 547 of the Bankruptcy Code to these transactions would violate the "presumption against extraterritoriality" and that dismissal was also warranted on grounds of international comity. The bankruptcy court granted the motions, holding that the transfers were extraterritorial and that the Bankruptcy Code does not apply to these transfers, whose "center of gravity" lies outside the United States and, in the alternative, that international comity precluded the application of the Code in this instance. Maxwell I, 170 B.R. at 808-18.

Treating comity as a "canon of statutory construction," the bankruptcy court emphasized choice-of-law principles and asked "which jurisdiction's laws and policies are implicated to the greatest extent." Id. at 814, 816. The answer, the court found, was England. Id. at 817-18. It also noted Maxwell's insolvency did not jeopardize United States interests because its holdings were sold as going businesses, because most of its creditors were not residents of the United States, and because the two countries' preference laws in any event serve similar ends, and that England had a greater interest in applying its own laws. Id. at 818.

The district court affirmed on both the extraterritoriality and comity grounds. On the latter question, it held that the "bankruptcy court did not abuse its discretion in finding that traditional choice of law principles 'point decidedly towards the application of U.K. law.' " Maxwell II, 186 B.R. at 822. The district court's analysis of the relative interests was substantially similar to that of the bankruptcy court, but it also underscored the cooperation between the courts of the two countries and found that deference would comport with the previous efforts by both courts to harmonize the dual proceedings. Id. at 823. Judge Scheindlin believed this to be "the unique aspect and the most important feature of this case." Id. at 813.

Maxwell and the examiner appealed. We consolidated the three cases on January 15, 1996 and now address the merits.

A district court's disposition of an appeal from a bankruptcy court is subject to plenary review, Air Line Pilots Ass'n v. Shugrue (In re Ionosphere Clubs, Inc.), 22 F.3d 403, 406 (2d Cir.1994), and we therefore analyze the bankruptcy court's decision by the same standards the district court followed. The complaints were dismissed for failure to state a cause of action upon which relief may be granted, and such dismissals are ordinarily subject to de novo review. Valley Disposal v. Central Vt. Solid Waste Mgt. Dist., 31 F.3d 89, 93 (2d Cir.1994). In evaluating an order granting dismissal of an action, the non-movants' factual allegations are taken as true and all permissible inferences are drawn in their favor; dismissal is warranted only if it plainly appears that the non-movant "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, 102, 2 L.Ed.2d 80 (1957). With those rules in mind, we examine the propriety of the order of dismissal.

The administrators' first contention is that the July 14, 1993 confirmation order precludes the banks from challenging the application of the Bankruptcy Code to the present proceedings. In so arguing, they rely primarily on § 10.01 of the plan, which provides that "[n]otwithstanding confirmation and consummation of the Plan, the U.S. Court shall exclusively retain such jurisdiction as it had prior to confirmation and consummation ... (e) to determine any and all avoidance or similar actions brought, or which may be brought, under the U.S. Bankruptcy Code, by or on behalf of the Company, including actions pursuant to sections 510, 542, 543, 544, 545, 546, 547, 548, 549, 550, and 553." The administrators assert that the plan, which was made binding upon all creditors by the confirmation order, in that way vested sole and exclusive jurisdiction in the bankruptcy court to decide avoidance actions.

This argument has a superficial plausibility, but upon analysis it lacks substance. An order of confirmation concededly binds the debtor and its creditors whether or not they have accepted the confirmed plan. Thus, it has preclusive effect. See 11 U.S.C. § 1141(a); Sure-Snap Corp. v. State Street Bank & Trust Co., 948 F.2d 869, 873 (2d Cir.1991) (res judicata bars any attempt by parties to reorganization hearing to relitigate matters raised or that could have been raised). But the scope of that preclusive effect is limited by the content of the reorganization plan and the confirmation order. Here the order and plan do not address the specific issue presented, namely, whether the debtor may maintain an avoidance action in the bankruptcy court to recover the pre-petition transfers to the defendant banks.

Section 10.01 of the plan is not helpful to the administrators because it simply assures that confirmation will not reduce the bankruptcy court's jurisdiction over certain matters. The provision does not expand the court's jurisdiction, nor does it purport to give the court exclusive jurisdiction--or any jurisdiction, for that matter--over avoidance actions that are not governed by the Bankruptcy Code. Because the banks prevailed in the bankruptcy and district courts on the theory that the Bankruptcy Code's substantive law does not govern these adversary proceedings, the retention of jurisdiction in § 10.01 is not relevant.

Moreover, the administrators' argument is inconsistent with the position they adopted at the confirmation hearing. On the day of the hearing, Barclays had already made its Rule 12(b)(6) motion in the adversary proceeding, and apparently had threatened to object to confirmation unless its arguments for dismissal were preserved. To avoid this possible difficulty, administrators' counsel stated on the record that "[w]ith regard to ... the Barclays Bank objection to confirmation ... we are pleased to represent to the Court, that the provisions of the Plan in Article 10 ... [were] not intended to prejudice the merits of the arguments presented by Barclays in their adversary proceeding." Under these circumstances, the administrators are estopped from asserting the contrary. Cf. Hurd v. DiMento & Sullivan, 440 F.2d 1322, 1323 (1st Cir.) (per curiam) (litigant estopped from relying on factual allegation directly contrary to representation made to trial court in prior proceeding), cert. denied, 404 U.S. 862, 92 S.Ct. 164, 30 L.Ed.2d 105 (1971).

The administrators assert further that clause 11 of the scheme of arrangement expressly entitles them to object to claims of creditors in the jurisdiction which they select. That clause, which applies only to notices of claim filed with the administrators--not proofs of claim filed with the bankruptcy court--does allow the administrators to object "for any reason under any applicable law." Contrary to the administrators' assertion, however, the document does not permit the administrators to select the forum for resolving such a dispute; in fact, clause 11.6 provides that the dissatisfied creditor--not the administrators--must apply "to the Court" to ascertain liability. The scheme's definition of "the Court," found in Annexure 1--"the English Court or the U.S. Court, as is the more appropriate forum in the particular case"--is not helpful to the administrators, nor does the scheme explain which law is the "applicable" one. The cited portion of the scheme therefore supplies only vague choice-of-forum and choice-of-law rules. Obviously, it does not grant the administrators authority to decide which court is "more appropriate" in the given case, or which law is "applicable." These are matters entrusted to the courts to decide.

The administrators' final contention concerning the binding effect of the plan is that the banks' remaining claims against the debtor will be discharged pursuant to § 1141(d) if the claims are not allowed under § 502 of the Code, because this is a Chapter 11 proceeding and the estate property is subject to the bankruptcy court's jurisdiction. The argument appears to be that Maxwell will be absolved automatically from making any distributions to the banks unless the banks' claims are adjudged "allowed" by the bankruptcy court. We reject this contention as well. First, confirmation of a Chapter 11 plan will ordinarily discharge pre-existing debts whether or not they are "allowed," but the Code predictably does not grant debtors such relief where a plan or confirmation order provides otherwise. See 11 U.S.C. § 1141(d)(1)(A). In other words, discharge under § 1142 does not hinge on whether a claim is "allowed."

Second, even assuming it is relevant whether a claim is "allowed," we believe the banks' claims will be "allowed" if the provisions of the plan are followed. A review of the plan is instructive in this regard. Under § 6.06 of the plan, the administrators are to file in the U.S. copies of notices of claim received from claimants in England. This is sufficient to constitute the filing of a proof-of-claim under 11 U.S.C. § 501. See Liona Corp. v. PCH Assocs. (In re PCH Assocs.), 949 F.2d 585, 605 (2d Cir.1991) (explaining that purpose of notice of claims rules is to keep all parties informed). Under § 502(a), if a proof of claim is filed, it is "deemed allowed" unless there is a timely objection by a party in interest. But here, under the right circumstances, there can be no such objection. Clause 11.6 of the scheme quite clearly states that a creditor filing a notice of claim in England may resort to "the Court" for a determination of liability if the administrators object to the claim. Where "the Court" is the court in England, i.e., where that forum is "the more appropriate" one, clause 11.6 provides that the English court will "determine the amount of the [liability]." If the claimant prevails, the scheme further provides in clause 5 that the creditor will receive a distribution from the estate on a pari passu basis.

Hence, the plan requires claims such as the banks'--assuming the English court is the "appropriate" one, a question that is left for case-by-case determination--to be paid regardless of whether the bankruptcy court adjudicates the claim as "allowed" or "disallowed" under § 502(b). The reorganization plan--which is binding upon the administrators and Maxwell's creditors--states that certain claims will be adjudicated in England under "applicable law," and the administrators are therefore estopped from objecting to such claims in the bankruptcy court. Such objections are utterly inconsistent with the plan negotiated by the parties and the collective action necessary for its successful implementation.

The estate would be free to urge before Judge Brozman that the bankruptcy court is the "appropriate" forum and that American law is "applicable," as the choice of the appropriate forum is a case-specific inquiry. But given the terms of the plan they could not seek disallowance in the bankruptcy court under United States law where the plan contemplates that liability is to be determined elsewhere under different law. Cf. First Union Commercial Corp. v. Nelson, Mullins, Riley and Scarborough (In re Varat Enters.), 81 F.3d 1310, 1316 (4th Cir.1996) (party-in-interest's failure to object before confirmation of Chapter 11 plan barred post-confirmation objection; claim was deemed allowed under § 502(a)). This is true despite the fact that the bankruptcy court retains concurrent jurisdiction over claims disputes under § 10.02 of the plan. That court has jurisdiction to decide objections to the allowance of claims, but equity does not permit the administrators to litigate objections in the bankruptcy court when doing so conflicts with a basic assumption of the plan and scheme. Thus, the banks' claims may be "allowed" despite the absence of a hearing and decision under § 502.

Third, the banks' claims--if the English court is the proper forum for determining their validity--are not automatically discharged by § 1141(d) of the Code because, as our foregoing analysis makes clear, the plan provides they must be paid if validated in England. For all these reasons, the confirmation order, binding though it may be, does not preclude the banks from seeking dismissal of Maxwell's complaints.

Analysis of comity often begins with the definition proffered by Justice Gray in Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 143, 40 L.Ed. 95 (1895): " 'Comity,' in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws." Although Hilton addressed the degree to which a foreign judgment is conclusive in a court of the United States, the principle expressed is one of broad application.

Whether a court is applying the common law, as in Hilton, or applying a statute enacted by Congress, as in the present case, "[i]nternational law, ... including ... questions arising under what is usually called private international law, or the conflict of laws, and concerning the rights of persons within the territory and dominion of one nation, by reason of acts, private or public, done within the dominions of another nation--is part of our law." Hilton, 159 U.S. at 163, 16 S.Ct. at 143; see Romero v. International Terminal Operating Co., 358 U.S. 354, 382-83, 79 S.Ct. 468, 485-86, 3 L.Ed.2d 368 (1959) (applying choice-of-law principles to claims asserted under the Jones Act). The doctrine does not impose a limitation on the sovereign power to enact laws applicable to conduct occurring abroad. E.g., Lauritzen v. Larsen, 345 U.S. 571, 581-82, 73 S.Ct. 921, 927-28, 97 L.Ed. 1254 (1953); cf. Hilton, 159 U.S. at 166, 16 S.Ct. at 144. Instead, it guides our interpretation of statutes that might otherwise be read to apply to such conduct. When construing a statute, the doctrine of international comity is best understood as a guide where the issues to be resolved are entangled in international relations.

In Murray v. The Charming Betsy, 6 U.S. (2 Cranch) 64, 118, 2 L.Ed. 208 (1804), Chief Justice Marshall said that a statute "ought never to be construed to violate the law of nations, if any other possible construction remains." And, as Judge Learned Hand observed in United States v. Aluminum Co. of Am., 148 F.2d 416, 443 (2d Cir.1945) (Alcoa ), "we are not to read general words ... without regard to the limitations customarily observed by nations upon the exercise of their powers; limitations which generally correspond to those fixed by the 'Conflict of Laws.' " See also Societe Nationale Industrielle Aerospatiale v. District Court, 482 U.S. 522, 543-44, 107 S.Ct. 2542, 2555-56, 96 L.Ed.2d 461 (1987) (analyzing treaty in light of "concept of international comity").

Moreover, international comity is a separate notion from the "presumption against extraterritoriality," which requires a clear expression from Congress for a statute to reach non-domestic conduct, see Kollias v. D & G Marine Maintenance, 29 F.3d 67, 73 (2d Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1092, 130 L.Ed.2d 1061 (1995). Hence, comity was applied to preclude the application of the Jones Act in Romero, where the conduct at issue was otherwise clearly subject to that statute because it occurred in waters of the United States. See Romero, 358 U.S. at 383, 79 S.Ct. at 486; see also Hartford Fire Ins. Co. v. California, 509 U.S. 764, 815-16, 113 S.Ct. 2891, 2919-20, 125 L.Ed.2d 612 (1993) (Scalia, J., dissenting) (presumption against extraterritoriality was inapplicable to Romero ).

Because the principle of comity does not limit the