TMBC, LLC v. Robert McKeage, et al.

In a nationwide class action worth tens of millions of dollars, the Eighth Circuit held that a Missouri penal statute regulates the practice of law in other States by requiring that a Missouri lawyer be involved in any retail transaction in any State where a boat dealer charges its customers a fee to help complete basic paperwork necessary to register, title, and insure their boats. It allowed this extraterritorial overreach even though the “Commerce Clause . . . precludes the application of a state statute to commerce that takes place wholly outside of the State’s borders.” Healy v. Beer Inst., 491 U.S. 324, 336 (1989) (quoting Edgar v. MITE Corp., 457 U.S. 624, 642 (1982) (plurality opinion)). According to the Eighth Circuit, a generic choice-oflaw provision in the boat dealer’s form contract suffices to project Missouri’s penal statute across state lines and punish the dealer for transactions that are lawful in the States where they occur. The question presented is: Whether a run-of-the-mill contractual choice-oflaw provision authorizes extraterritorial application of one State’s penal statutes to regulate conduct occurring wholly in other States.