Japan Line, Ltd. v. County of Los Angeles

The case of Japan Line, Ltd. v. County of Los Angeles demonstrates a problem that affects any company involved in international commerce. The symptom demonstrated in Japan Line is the problem of multiple taxation by different sovereign nations. However, the fundamental issue underlying the case is the political nature of the process that makes the rules that govern international commerce. The primary causal factor of problems of international commerce is the sovereignty of states and nations and the power each has to regulate trade and business within its jurisdiction. Any response to the problem of negative and contradictory regulations affecting international commerce requires a company's active role in the governing institutions.

 Justification for Problem Definition

The case of Japan Line is instructive of the problem because it demonstrates that rules governing local trade can affect the home-country's relationships with other nations. The U.S. Supreme Court addressed this issue when it stated that:

If a novel state tax creates an asymmetry in the international tax structure, foreign nations disadvantaged by the levy may retaliate against American-owned instrumentalities present in their jurisdictions. Such retaliation of necessity would be directed at American transportation equipment in general, not just that of the taxing state, so that the Nation as a whole would suffer

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flow of capital and technology, and the equitable and nondiscriminatory treatment of foreign firms, individuals and products.  Alternative Courses of Action The first alternative course of action to merely relying on the government to determine the rules of international trade is for a company involved in international business to become an active voice in the Chambers of Commerce in states in which that company does business, particularly in states with ports. The company should not only be active in looking out for its own short-term interests, however. The company should actively agitate for laws and rules by that state that do not negatively affect its foreign trading partners. A second alternative is that companies must become involved in the legislative and political process. They must actively seek out and support Congresspeople who understand and support the delicate nature of international commercial relations. In addition, they must agitate the Office of the President on matters that affect their relations with their trading partners. They must also educate themselves on the nature of the legislative process for matters affecting international commercial relations and the current laws affecting such relation
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Approximate Word count = 1386
Approximate Pages = 6 (250 words per page)