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NOTICE: This opinion is subject to formal revision before publication in the
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SUPREME COURT OF THE UNITED STATES
--------
Nos. 91-1111 and 91-1128
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HARTFORD FIRE INSURANCE CO., et al.,
PETITIONERS
91-1111                      v.
CALIFORNIA et al.

MERRETT UNDERWRITING AGENCY MANAGE-
MENT LIMITED, et al., PETITIONERS
91-1128                      v.
CALIFORNIA et al.
on writs of certiorari to the united states court
of appeals for the ninth circuit
[June 28, 1993]

  Justice Souter announced the judgment of the Court
and delivered the opinion of the Court with respect to
Parts I, II(A), III, and IV, and an opinion with respect to
Part II(B) in which Justice White, Justice Blackmun
and Justice Stevens join.
  The Sherman Act makes every contract, combination,
or conspiracy in unreasonable restraint of interstate or
foreign commerce illegal.  26 Stat. 209, as amended, 15
U. S. C. 1.  These consolidated cases present questions
about the application of that Act to the insurance indus-
try, both here and abroad.  The plaintiffs (respondents
here) allege that both domestic and foreign defendants
(petitioners here) violated the Sherman Act by engaging
in various conspiracies to affect the American insurance
market.  A group of domestic defendants argues that the
McCarran-Ferguson Act, 59 Stat. 33, as amended, 15
U. S. C. 1011 et seq., precludes application of the
Sherman Act to the conduct alleged; a group of foreign
defendants argues that the principle of international
comity requires the District Court to refrain from exercis-
ing jurisdiction over certain claims against it.  We hold
that most of the domestic defendants' alleged conduct is
not immunized from antitrust liability by the McCarran-
Ferguson Act, and that, even assuming it applies, the
principle of international comity does not preclude District
Court jurisdiction over the foreign conduct alleged.

                              I
  The two petitions before us stem from consolidated
litigation comprising the complaints of 19 States and
many private plaintiffs alleging that the defendants,
members of the insurance industry, conspired in violation
of 1 of the Sherman Act to restrict the terms of coverage
of commercial general liability (CGL) insurance available
in the United States.  Because the cases come to us on
motions to dismiss, we take the allegations of the com-
plaints as true.
                              A
  According to the complaints, the object of the conspira-
cies was to force certain primary insurers (insurers who
sell insurance directly to consumers) to change the terms
of their standard CGL insurance policies to conform with
the policies the defendant insurers wanted to sell.  The
defendants wanted four changes.
  First, CGL insurance has traditionally been sold in the
United States on an -occurrence- basis, through a policy
obligating the insurer -to pay or defend claims, whenever
made, resulting from an accident or `injurious exposure to
conditions' that occurred during the [specific time] period
the policy was in effect.-  App. 22 (Cal. Complaint -52).
In place of this traditional -occurrence- trigger of coverage,
the defendants wanted a -claims-made- trigger, obligating
the insurer to pay or defend only those claims made
during the policy period.  Such a policy has the distinct
advantage for the insurer that when the policy period
ends without a claim having been made, the insurer can
be certain that the policy will not expose it to any further
liability.  Second, the defendants wanted the -claims-
made- policy to have a -retroactive date- provision, which
would further restrict coverage to claims based on inci-
dents that occurred after a certain date.  Such a provision
eliminates the risk that an insurer, by issuing a claims-
made policy, would assume liability arising from incidents
that occurred before the policy's effective date, but re-
mained undiscovered or caused no immediate harm.
Third, CGL insurance has traditionally covered -sudden
and accidental- pollution; the defendants wanted to
eliminate that coverage.  Finally, CGL insurance has
traditionally provided that the insurer would bear the
legal costs of defending covered claims against the insured
without regard to the policy's stated limits of coverage; the
defendants wanted legal defense costs to be counted
against the stated limits (providing a -legal defense cost
cap-).
  To understand how the defendants are alleged to have
pressured the targeted primary insurers to make these
changes, one must be aware of two important features of
the insurance industry.  First, most primary insurers rely
on certain outside support services for the type of insur-
ance coverage they wish to sell.  Defendant Insurance
Services Office, Inc. (ISO), an association of approximately
1,400 domestic property and casualty insurers (including
the primary insurer defendants, Hartford Fire Insurance
Company, Allstate Insurance Company, CIGNA Corpora-
tion, and Aetna Casualty and Surety Company), is the
almost exclusive source of support services in this country
for CGL insurance.  See id., at 19 (Cal. Complaint -38).
ISO develops standard policy forms and files or lodges
them with each State's insurance regulators; most CGL
insurance written in the United States is written on these
forms.  Ibid.  (Cal. Complaint -39); id., at 74 (Conn.
Complaint -50).  All of the -traditional- features of CGL
insurance relevant to this case were embodied in the ISO
standard CGL insurance form that had been in use since
1973 (1973 ISO CGL form).  Id., at 22 (Cal. Complaint
--51-54); id., at 75 (Conn. Complaint --56-58).  For
each of its standard policy forms, ISO also supplies
actuarial and rating information: it collects, aggregates,
interprets, and distributes data on the premiums charged,
claims filed and paid, and defense costs expended with
respect to each form, id., at 19 (Cal. Complaint -39); id.,
at 74 (Conn. Complaint --51-52), and on the basis of this
data it predicts future loss trends and calculates advisory
premium rates.  Id., at 19 (Cal. Complaint -39); id., at
74 (Conn. Complaint -53).  Most ISO members cannot
afford to continue to use a form if ISO withdraws these
support services.  See id., at 32-33 (Cal. Complaint --97,
99).
  Second, primary insurers themselves usually purchase
insurance to cover a portion of the risk they assume from
the consumer.  This so-called -reinsurance- may serve at
least two purposes, protecting the primary insurer from
catastrophic loss, and allowing the primary insurer to sell
more insurance than its own financial capacity might
otherwise permit.  Id., at 17 (Cal. Complaint -29).  Thus,
-[t]he availability of reinsurance affects the ability and
willingness of primary insurers to provide insurance to
their customers.-  Id., at 18 (Cal. Complaint -34); id., at
63 (Conn. Complaint -4(p)).  Insurers who sell reinsur-
ance themselves often purchase insurance to cover part of
the risk they assume from the primary insurer; such
-retrocessional reinsurance- does for reinsurers what
reinsurance does for primary insurers.  See ibid. (Conn.
Complaint -4(r)).  Many of the defendants here are
reinsurers or reinsurance brokers, or play some other
specialized role in the reinsurance business; defendant
Reinsurance Association of America (RAA) is a trade
association of domestic reinsurers.

                              B
  The prehistory of events claimed to give rise to liability
starts in 1977, when ISO began the process of revising its
1973 CGL form.  Id., at 22 (Cal. Complaint -55).  For the
first time, it proposed two CGL forms (1984 ISO CGL
forms), one the traditional -occurrence- type, the other
-with a new `claims-made' trigger.-  Id., at 22-23 (Cal.
Complaint -56).  The -claims-made- form did not have a
retroactive date provision, however, and both 1984 forms
covered -`sudden and accidental' pollution- damage and
provided for unlimited coverage of legal defense costs by
the insurer.  Id., at 23 (Cal. Complaint --59-60).  Within
the ISO, defendant Hartford Fire Insurance Company
objected to the proposed 1984 forms; it desired elimination
of the -occurrence- form, a retroactive date provision on
the -claims-made- form, elimination of sudden and acci-
dental pollution coverage, and a legal defense cost cap.
Defendant Allstate Insurance Company also expressed its
desire for a retroactive date provision on the -claims-
made- form.  Id., at 24  (Cal. Complaint -61).  Majorities
in the relevant ISO committees, however, supported the
proposed 1984 CGL forms and rejected the changes
proposed by Hartford and Allstate.  In December 1983,
the ISO Board of Directors approved the proposed 1984
forms, and ISO filed or lodged the forms with state
regulators in March 1984.  Ibid. (Cal. Complaint -62).
  Dissatisfied with this state of affairs, the defendants
began to take other steps to force a change in the terms
of coverage of CGL insurance generally available, steps
that, the plaintiffs allege, implemented a series of conspir-
acies in violation of 1 of the Sherman Act.  The plain-
tiffs recount these steps as a number of separate episodes
corresponding to different Claims for Relief in their complaints;
because it will become important to distinguish among
these counts and the acts and defendants associated with
them, we will note these correspondences.
  The first four Claims for Relief of the California Com-
plaint, id., at 36-43 (Cal. Complaint --111-130), and the
Second Claim for Relief of the Connecticut Complaint, id.,
at 90-92 (Conn. Complaint --120-124), charge the four
domestic primary insurer defendants and varying groups
of domestic and foreign reinsurers, brokers, and associa-
tions with conspiracies to manipulate the ISO CGL forms.
In March 1984, primary insurer Hartford persuaded
General Reinsurance Corporation (General Re), the largest
American reinsurer, to take steps either to procure desired
changes in the ISO CGL forms, or -failing that, [to]
`derail' the entire ISO CGL forms program.-  Id., at 24
(Cal. Complaint -64).  General Re took up the matter
with its trade association, RAA, which created a special
committee that met and agreed to -boycott- the 1984 ISO
CGL forms unless a retroactive-date provision was added
to the claims-made form, and a pollution exclusion and
defense cost cap were added to both forms.  Id., at 24-25
(Cal. Complaint --65-66).  RAA then sent a letter to ISO
-announc[ing] that its members would not provide reinsur-
ance for coverages written on the 1984 CGL forms,- id.,
at 25 (Cal. Complaint -67), and Hartford and General Re
enlisted a domestic reinsurance broker to give a speech
to the ISO Board of Directors, in which he stated that no
reinsurers would -break ranks- to reinsure the 1984 ISO
CGL forms.  Ibid. (Cal. Complaint -68).
  The four primary insurer defendants (Hartford, Aetna,
CIGNA, and Allstate) also encouraged key actors in the
London reinsurance market, an important provider of
reinsurance for North American risks, to withhold reinsur-
ance for coverages written on the 1984 ISO CGL forms.
Id., at 25-26 (Cal. Complaint --69-70).  As a conse-
quence, many London-based underwriters, syndicates,
brokers, and reinsurance companies informed ISO of their
intention to withhold reinsurance on the 1984 forms, id.,
at 26-27 (Cal. Complaint --71-75), and at least some of
them told ISO that they would withhold reinsurance until
ISO incorporated all four desired changes, see supra, at
3-4, into the ISO CGL forms.  App. 26 (Cal. Complaint
-74).
  For the first time ever, ISO invited representatives of
the domestic and foreign reinsurance markets to speak at
an ISO Executive Committee meeting.  Id., at 27-28 (Cal.
Complaint -78).  At that meeting, the reinsurers -pre-
sented their agreed upon positions that there would be
changes in the CGL forms or no reinsurance.-  Id., at 29
(Cal. Complaint -82).  The ISO Executive Committee then
voted to include a retroactive-date provision in the claims-
made form, and to exclude all pollution coverage from
both new forms.  (But it neither eliminated the occurrence
form, nor added a legal defense cost cap.)  The 1984 ISO
CGL forms were then withdrawn from the marketplace,
and replaced with forms (1986 ISO CGL forms) containing
the new provisions.  Ibid.  (Cal. Complaint -84).  After
ISO got regulatory approval of the 1986 forms in most
States where approval was needed, it eliminated its
support services for the 1973 CGL form, thus rendering
it impossible for most ISO members to continue to use the
form.  Id., at 32-33 (Cal. Complaint --97, 99).
  The Fifth Claim for Relief of the California Complaint,
id., at 43-44 (Cal. Complaint --131-135), and the virtu-
ally identical Third Claim for Relief of the Connecticut
Complaint, id., at 92-94 (Conn. Complaint --125-129),
charge a conspiracy among a group of London reinsurers
and brokers to coerce primary insurers in the United
States to offer CGL coverage only on a claims-made basis.
The reinsurers collectively refused to write new reinsur-
ance contracts for, or to renew long-standing contracts
with, -primary . . . insurers unless they were prepared to
switch from the occurrence to the claims-made form,- id.,
at 30 (Cal. Complaint -88); they also amended their
reinsurance contracts to cover only claims made before a
-`sunset date,'- thus eliminating reinsurance for claims
made on occurrence policies after that date.  Id., at 31
(Cal. Complaint --90-92).
  The Sixth Claim for Relief of the California Complaint,
id., at 45-46 (Cal. Complaint --136-140), and the nearly
identical Fourth Claim for Relief of the Connecticut
Complaint, id., at 94-95 (Conn. Complaint --130-134),
charge another conspiracy among a somewhat different
group of London reinsurers to withhold reinsurance for
pollution coverage.  The London reinsurers met and
agreed that all reinsurance contracts covering North
American casualty risks, including CGL risks, would be
written with a complete exclusion for pollution liability
coverage.  Id., at 32 (Cal. Complaint --94-95).  In accor-
dance with this agreement, the parties have in fact
excluded pollution liability coverage from CGL reinsurance
contracts since at least late 1985.  Ibid. (Cal. Complaint
-94).
  The Seventh Claim for Relief in the California Com-
plaint, id., at 46-47 (Cal. Complaint --141-145), and the
closely similar Sixth Claim for Relief in the Connecticut
Complaint, id., at 97-98 (Conn. Complaint --140-144),
charge a group of domestic primary insurers, foreign
reinsurers, and the ISO with conspiring to restrain trade
in the markets for -excess- and -umbrella- insurance by
drafting model forms and policy language for these types
of insurance, which are not normally offered on a regu-
lated basis.  Id., at 33 (Cal. Complaint -101).  The ISO
Executive Committee eventually released standard lan-
guage for both -occurrence- and -claims-made- umbrella
and excess policies; that language included a retroactive
date in the claims-made version, and an absolute pollution
exclusion and a legal defense cost cap in both versions.
Id., at 34 (Cal. Complaint -105).
  Finally, the Eighth Claim for Relief of the California
Complaint, id., at 47-49 (Cal. Complaint --146-150), and
its counterpart in the Fifth Claim for Relief of the Con-
necticut complaint, id., at 95-97 (Conn. Complaint
--135-139), charge a group of London and domestic
retrocessional reinsurers with conspiring to withhold
retrocessional reinsurance for North American seepage,
pollution, and property contamination risks.  Those
retrocessional reinsurers signed, and have implemented,
an agreement to use their -`best endeavors'- to ensure
that they would provide such reinsurance for North
American risks -`only . . . where the original business
includes a seepage and pollution exclusion wherever legal
and applicable.'-  Id., at 35 (Cal. Complaint -108).

                              C
  Nineteen States and a number of private plaintiffs filed
36 complaints against the insurers involved in this course
of events, charging that the conspiracies described above
violated 1 of the Sherman Act, 15 U. S. C. 1.  After
the actions had been consolidated for litigation in the
Northern District of California, the defendants moved to
dismiss for failure to state a cause of action, or, in the
alternative, for summary judgment.  The District Court
granted the motions to dismiss.  In re Insurance Antitrust
Litigation, 723 F. Supp. 464 (1989).  It held that the
conduct alleged fell within the grant of antitrust immunity
contained in 2(b) of the McCarran-Ferguson Act, 15
U. S. C. 1012(b), because it amounted to -the business
of insurance- and was -regulated by State law- within the
meaning of that section; none of the conduct, in the
District Court's view, amounted to a -boycott- within the
meaning of the 3(b) exception to that grant of immunity.
15 U. S. C. 1013(b).  The District Court also dismissed
the three claims that named only certain London-based
defendants, invoking international comity and applying
the Ninth Circuit's decision in Timberlane Lumber Co. v.
Bank of America, N. T. & S. A., 549 F. 2d 597 (CA9
1976).
  The Court of Appeals reversed.  In re Insurance Anti-
trust Litigation, 938 F. 2d 919 (CA9 1991).  Although it
held the conduct involved to be -the business of insurance-
within the meaning of 2(b), it concluded that the defend-
ants could not claim McCarran-Ferguson Act antitrust
immunity for two independent reasons.  First, it held, the
foreign reinsurers were beyond the regulatory jurisdiction
of the States; because their activities could not be -regu-
lated by State law- within the meaning of 2(b), they did
not fall within that section's grant of immunity.  Although
the domestic insurers were -regulated by State law,- the
court held, they forfeited their 2(b) exemption when they
conspired with the nonexempt foreign reinsurers.  Second,
the Court of Appeals held that, even if the conduct alleged
fell within the scope of 2(b), it also fell within the 3(b)
exception for -act[s] of boycott, coercion, or intimidation.-
Finally, as to the three claims brought solely against
foreign defendants, the court applied its Timberlane
analysis, but concluded that the principle of international
comity was no bar to exercising Sherman Act jurisdiction.
  We granted certiorari in No. 91-1111 to address two
narrow questions about the scope of McCarran-Ferguson
Act antitrust immunity, and in No. 91-1128 to address
the application of the Sherman Act to the foreign conduct
at issue.  506 U. S. ___ (1992).  We now affirm in part,
reverse in part, and remand.

                             II
  The petition in No. 91-1111 touches on the interaction
of two important pieces of economic legislation.  The
Sherman Act declares -[e]very contract, combination in the
form of trust or otherwise, or conspiracy, in restraint of
trade or commerce among the several States, or with
foreign nations, . . . to be illegal.-  15 U. S. C. 1.  The
McCarran-Ferguson Act provides that regulation of the
insurance industry is generally a matter for the States,
15 U. S. C. 1012(a), and (again, generally) that -[n]o Act
of Congress shall be construed to invalidate, impair, or
supersede any law enacted by any State for the purpose
of regulating the business of insurance.-  1012(b).
Section 2(b) of the McCarran-Ferguson Act makes it clear
nonetheless that the Sherman Act applies -to the business
of insurance to the extent that such business is not
regulated by State law,- 1012(b), and 3(b) provides that
nothing in the McCarran-Ferguson Act -shall render the
. . . Sherman Act inapplicable to any agreement to
boycott, coerce, or intimidate, or act of boycott, coercion,
or intimidation.-  1013(b).
  Petitioners in No. 91-1111 are all of the domestic
defendants in the consolidated cases: the four domestic
primary insurers, the domestic reinsurers, the trade
associations ISO and RAA, and the domestic reinsurance
broker Thomas A. Greene & Company, Inc.  They argue
that the Court of Appeals erred in holding, first, that
their conduct, otherwise immune from antitrust liability
under 2(b) of the McCarran-Ferguson Act, lost its immu-
nity when they conspired with the foreign defendants,
and, second, that their conduct amounted to -act[s] of
boycott- falling within the exception to antitrust immunity
set out in 3(b).  We conclude that the Court of Appeals
did err about the effect of conspiring with foreign defend-
ants, but correctly decided that all but one of the
complaints' relevant Claims for Relief are fairly read to
allege conduct falling within the -boycott- exception to
McCarran-Ferguson Act antitrust immunity.  We therefore
affirm the Court of Appeals's judgment that it was error
for the District Court to dismiss the complaints on
grounds of McCarran-Ferguson Act immunity, except as
to the one Claim for Relief that the Court of Appeals
correctly found to allege no boycott.

                              A
  By its terms, the antitrust exemption of 2(b) of the
McCarran-Ferguson Act applies to -the business of insur-
ance- to the extent that such business is regulated by
state law.  While -business- may mean -[a] commercial or
industrial establishment or enterprise,- Webster's New
International Dictionary 362 (2d ed. 1942), the definite
article before -business- in 2(b) shows that the word is
not used in that sense, the phrase -the business of
insurance- obviously not being meant to refer to a single
entity.  Rather, -business- as used in 2(b) is most
naturally read to refer to -[m]ercantile transactions;
buying and selling; [and] traffic.-  Ibid.
  The cases confirm that -the business of insurance-
should be read to single out one activity from others, not
to distinguish one entity from another.  In Group Life &
Health Ins. Co. v. Royal Drug Co., 440 U. S. 205 (1979),
for example, we held that 2(b) did not exempt an insur-
ance company from antitrust liability for making an
agreement fixing the price of prescription drugs to be sold
to Blue Shield policyholders.  Such activity, we said,
-would be exempt from the antitrust laws if Congress had
extended the coverage of the McCarran-Ferguson Act to
the `business of insurance companies.'  But that is precise-
ly what Congress did not do.-  Id., at 233 (footnote
omitted); see SEC v. National Securities, Inc., 393 U. S.
453, 459 (1969) (the McCarran-Ferguson Act's -language
refers not to the persons or companies who are subject to
state regulation, but to laws `regulating the business of
insurance'-) (emphasis in original).  And in Union Labor
Life Ins. Co v. Pireno, 458 U. S. 119 (1982), we explicitly
framed the question as whether -a particular practice is
part of the `business of insurance' exempted from the
antitrust laws by 2(b),- id., at 129 (emphasis added), and
each of the three criteria we identified concerned a quality
of the practice in question: -first, whether the practice has
the effect of transferring or spreading a policyholder's
risk; second, whether the practice is an integral part of
the policy relationship between the insurer and the in-
sured; and third, whether the practice is limited to
entities within the insurance industry.-  Ibid. (emphasis
in original).
  The Court of Appeals did not hold that, under these
criteria, the domestic defendants' conduct fell outside -the
business of insurance-; to the contrary, it held that that
condition was met.  See 938 F. 2d, at 927.  Nor did it
hold the domestic defendants' conduct to be -[un]regulated
by State law.-  Rather, it constructed an altogether
different chain of reasoning, the middle link of which
comes from a sentence in our opinion in Royal Drug Co.
-[R]egulation . . . of foreign reinsurers,- the Court of
Appeals explained, -is beyond the jurisdiction of the
states,- 938 F. 2d, at 928, and hence 2(b) does not
exempt foreign reinsurers from antitrust liability, because
their activities are not -regulated by State law.-  Under
Royal Drug Co., -an exempt entity forfeits antitrust
exemption by acting in concert with nonexempt parties.-
440 U. S., at 231.  Therefore, the domestic insurers, by
acting in concert with the nonexempt foreign insurers, lost
their McCarran-Ferguson Act antitrust immunity.  See
938 F. 2d, at 928.  This reasoning fails, however, because
even if we were to agree that foreign reinsurers were not
subject to state regulation (a point on which we express
no opinion), the quoted language from Royal Drug Co.,
read in context, does not state a proposition applicable to
this case.
  The full sentence from Royal Drug Co. places the quoted
fragment in a different light.  -In analogous contexts,- we
stated, -the Court has held that an exempt entity forfeits
antitrust exemption by acting in concert with nonexempt
parties.-  440 U. S., at 231.  We then cited two cases
dealing with the Capper-Volstead Act, which immunizes
from liability under 1 of the Sherman Act particular
activities of certain persons -engaged in the production of
agricultural products.-  1 of the Capper-Volstead Act,
42 Stat. 388, 7 U. S. C. 291; see Case-Swayne Co. v.
Sunkist Growers, Inc., 389 U. S. 384 (1967); United States
v. Borden Co., 308 U. S. 188 (1939).  Because these cases
relied on statutory language referring to certain -persons,-
whereas we specifically acknowledged in Royal Drug Co.
that the McCarran-Ferguson Act immunizes activities
rather than entities, see 440 U. S., at 232-233, the
analogy we were drawing was of course a loose one.  The
agreements that insurance companies made with -parties
wholly outside the insurance industry,- id., at 231, we
noted, such as the retail pharmacists involved in Royal
Drug Co. itself, or -automobile body repair shops or
landlords,- id., at 232 (footnote omitted), are unlikely to
be about anything that could be called -the business of
insurance,- as distinct from the broader -`business of
insurance companies.'-  Id., at 233.  The alleged agree-
ments at issue in the instant case, of course, are entirely
different; the foreign reinsurers are hardly -wholly outside
the insurance industry,- and respondents do not contest
the Court of Appeals's holding that the agreements
concern -the business of insurance.-  These facts neither
support even the rough analogy we drew in Royal Drug
Co., nor fall within the rule about acting in concert with
nonexempt parties, which derived from a statute inapplica-
ble here.  Thus, we think it was error for the Court of
Appeals to hold the domestic insurers bereft of their
McCarran-Ferguson Act exemption simply because they
agreed or acted with foreign reinsurers that, we assume
for the sake of argument, were -not regulated by State
law.-

                              B
  That the domestic defendants did not lose their 2(b)
exemption by acting together with foreign reinsurers,
however, is not enough reason to reinstate the District
Court's dismissal order, for the Court of Appeals reversed
that order on two independent grounds.  Even if the
participation of foreign reinsurers did not affect the 2(b)
exemption, the Court of Appeals held, the agreements and
acts alleged by the plaintiffs constitute -agreement[s] to
boycott- and -act[s] of boycott [and] coercion- within the
meaning of 3(b) of the McCarran-Ferguson Act, which
makes it clear that the Sherman Act applies to such
agreements and acts regardless of the 2(b) exemption.
See 938 F. 2d, at 928.  I agree with the Court that,
construed in favor of the plaintiffs, the First, Second,
Third, and Fourth Claims for Relief of the California
Complaint, and the First and Second Claims for Relief of
the Connecticut Complaint, allege one or more 3(b) -act[s]
of boycott,- and are thus sufficient to survive a motion to
dismiss.  See infra, at 23; post, at 13.
  In reviewing the motions to dismiss, however, the Court
has decided to use what I believe to be an overly narrow
definition of the term -boycott- as used in 3(b), confining
it to those refusals to deal that are -unrelated- or -collat-
eral- to the objective sought by those refusing to deal.
Post, at 4-5.  I do not believe that the McCarran-
Ferguson Act or our precedents warrant such a cramped
reading of the term.
  The majority and I find common ground in four proposi-
tions concerning 3(b) boycotts, as established in our
decisions in St. Paul Fire & Marine Ins. Co. v. Barry, 438
U. S. 531 (1978), and United States v. South-Eastern
Underwriters Assn., 322 U. S. 533 (1944).  First, as we
noted in St. Paul, our only prior decision construing
-boycott- as it appears in 3(b), only those refusals to deal
involving the coordinated action of multiple actors consti-
tute 3(b) boycotts: -conduct by individual actors falling
short of concerted activity is simply not a `boycott' within
[the meaning of] 3(b).-  438 U. S., at 555; see post, at
2 (-boycott- used -to describe . . . collective action-); ibid.
(-To `boycott' means `[t]o combine in refusing to hold
relations'-) (citation omitted).
  Second, a 3(b) boycott need not involve an absolute
refusal to deal.  A primary goal of the alleged conspira-
tors in South-Eastern Underwriters, as we described it,
was -to force nonmember insurance companies into the
conspiracies.-  322 U. S., at 535; cf. Joint Hearing on
S. 1362, H. R. 3269, and H. R. 3270 before the Subcom-
mittees of the Senate Committee on the Judiciary, 78th
Cong., 1st Sess., pt. 2, p. 335 (1943) (statement of Edward
L. Williams, President, Insurance Executives Assn.) (-[T]he
companies that want to come into the Interstate Under-
writers Board can come in there.  I do not know of any
company that is turned down-).  Thus, presumably, the
refusals to deal orchestrated by the defendants would
cease if the targets agreed to join the Association and
abide by its terms.  See post, at 3 (-[t]he refusal to deal
may . . . be conditional-) (emphasis omitted).
  Third, contrary to petitioners' contentions, see Brief for
Petitioners in No. 91-1111, pp. 32, n. 14, 34, 38-39, a
3(b) boycott need not entail unequal treatment of the
targets of the boycott and its instigators.  Some refusals
to deal (those, perhaps, which are alleged to violate only
2 of the Sherman Act) may have as their object the
complete destruction of the business of competitors; these
may well involve unconditional discrimination against the
targets.  Other refusals to deal, however, may seek simply
to prevent competition as to the price or features of the
product sold; and these need not depend on unequal
treatment of the targets.  Assuming, as the South-Eastern
Underwriters Court appears to have done, that member-
ship in the defendant Association was open to all insurers,
the Association is most readily seen as having intended
to treat all insurers equally: they all had the choice either
to join the Association and abide by its rules, or to be
subjected to the -boycotts,- and acts of coercion and
intimidation, alleged in that case.  See post, at 10 (de-
scribing South-Eastern Underwriters as involving a -boy-
cott, by primary insurers, of competitors who refused to
join their price-fixing conspiracy-).
  Fourth, although a necessary element, -concerted activ-
ity- is not, by itself, sufficient for a finding of -boycott-
under 3(b).  Were this the case, we recognized in Barry,
3(b) might well -`devour the broad antitrust immunity
bestowed by 2(b),'- 438 U. S., at 545, n. 18 (quoting id.,
at 559 (Stewart, J., dissenting)), since every -contract,
combination in the form of trust or otherwise, or conspir-
acy, in restraint of trade or commerce,- 15 U. S. C. 1,
involves -concerted activity.-  Thus, we suggested, simple
price fixing has been treated neither as a boycott nor as
coercion -in the absence of any additional enforcement
activity.-  438 U. S., at 545, n. 18; see post, at 5 (contend-
ing that simple concerted agreements on contract terms
are not properly characterized as boycotts).
  Contrary to the majority's view, however, our decisions
have suggested that -enforcement activity- is a multifari-
ous concept.  The South-Eastern Underwriters Court,
which coined the phrase -boycotts[,] . . . coercion and
intimidation,- 322 U. S., at 535; see n. 14, supra, provides
us with a list of actions that, it finds, are encompassed
by these terms.  -Companies not members of [the Associa-
tion],'' it states, -were cut off from the opportunity to
reinsure their risks, and their services and facilities were
disparaged; independent sales agencies who defiantly
represented non-[Association] companies were punished by
a withdrawal of the right to represent the members of
[the Association]; and persons needing insurance who pur-
chased from non-[Association] companies were threatened
with boycotts and withdrawal of all patronage.-  322
U. S., at 535-536.  Faced with such a list, and with all
of the other instances in which we have used the term
-boycott,- we rightly came to the conclusion in Barry that,
as used in our cases, the term does not refer to a -`uni-
tary phenomenon.'-  438 U. S., at 543 (quoting P. Areeda,
Antitrust Analysis 381 (2d ed. 1974)).
  The question in this case is whether the alleged activi-
ties of the domestic defendants, acting together with the
foreign defendants who are not petitioners here, include
-enforcement activities- that would raise the claimed
attempts to fix terms to the level of 3(b) boycotts.  I
believe they do.  The core of the plaintiffs' allegations
against the domestic defendants concern those activities
that form the basis of the First, Second, Third, and
Fourth Claims for Relief of the California Complaint, and
the Second Claim for Relief of the Connecticut Complaint:
the conspiracies involving both the primary insurers and
domestic and foreign brokers and reinsurers to force
changes in the ISO CGL forms.  According to the com-
plaints, primary insurer defendants Hartford and Allstate
first tried to convince other members of the ISO that the
ISO CGL forms should be changed to limit coverage in the
manner we have detailed above, see supra, at 5-6; but
they failed to persuade a majority of members of the
relevant ISO committees, and the changes were not made.
Unable to persuade other primary insurers to agree
voluntarily to their terms, Hartford and Allstate, joined
by Aetna and CIGNA, sought the aid of other individuals
and entities who were not members of ISO, and who
would not ordinarily be parties to an agreement setting
the terms of primary insurance, not being in the business
of selling it.  The four primary insurers convinced these
individuals and entities, the reinsurers, to put pressure
on ISO and its members by refusing to reinsure coverages
written on the ISO CGL forms until the desired changes
were made.  Both domestic and foreign reinsurers, acting
at the behest of the four primary insurers, announced that
they would not reinsure under the ISO CGL forms until
changes were made.  As an immediate result of this
pressure, ISO decided to include a retroactive-date provi-
sion in its claims-made form, and to exclude all pollution
coverage from both its claims-made and occurrence forms.
In sum, the four primary insurers solicited refusals to
deal from outside the primary insurance industry as a
means of forcing their fellow primary insurers to agree to
their terms; the outsiders, acting at the behest of the four,
in fact refused to deal with primary insurers until they
capitulated, which, in part at least, they did.
  This pattern of activity bears a striking resemblance to
the first act of boycott listed by the South-Eastern Under-
writers Court; although neither the South-Eastern Under-
writers opinion, nor the underlying indictment, see Tran-
script of Record, O. T. 1943, No. 354, p. 11 (-22(e)),
details exactly how the defendants managed to -cut off
[nonmembers] from the opportunity to reinsure their
risks,- 322 U. S., at 535, the defendants could have done
so by prompting reinsurance companies to refuse to deal
with nonmembers, just as is alleged here.  Moreover,
the activity falls squarely within even the narrow theory
of the 3(b) exception Justice Stewart advanced in dissent
in Barry.  Under that theory, the 3(b) exception
should be limited to -attempts by members of the insur-
ance business to force other members to follow the
industry's private rules and practices.-  438 U. S., at 565
(Stewart, J., dissenting).  I can think of no better descrip-
tion of the four primary insurers' activities in this case.
For these reasons, I agree with the Court's ultimate
conclusion that the Court of Appeals was correct in revers-
ing the District Court's dismissal of the First, Second,
Third, and Fourth Claims for Relief of the California
Complaint, and the Second Claim for Relief of the Con-
necticut Complaint.

  The majority concludes that, so long as the reinsurers'
role in this course of action was limited to -a concerted
agreement to seek particular terms in particular transac-
tions,- post, at 3, the course of action could never consti-
tute a 3(b) boycott.  The majority's emphasis on this
conclusion assumes an artificial segmentation of the course
of action, and a false perception of the unimportance of
the elements of that course of action other than the
reinsurers' agreement.  The majority concedes that the
complaints allege, not just implementation of a horizontal
agreement, but refusals to deal that occurred -at the
behest of,- or were -solicited by,- the four primary insur-
ers, who were -competitors of the target[s].-  Post, at 10
(citations and internal quotation marks omitted).  But it
fails to acknowledge several crucial features of these
events that bind them into a single course of action

recognizable as a 3(b) boycott.
  First, the allegation that the reinsurers acted at the be-
hest of the four primary insurers excludes the possibility
that the reinsurers acted entirely in their own independ-
ent self-interest, and would have taken exactly the same
course of action without the intense efforts of the four
primary insurers.  Although the majority never explicitly
posits such autonomy on the part of the reinsurers, this
would seem to be the only point of its repeated emphasis
on the fact that -the scope and predictability of the risks
assumed in a reinsurance contract depend entirely upon
the terms of the primary policies that are reinsured.-
Post, at 9.  If the encouragement of the four primary
insurers played no role in the reinsurers' decision to act
as they did, then it is difficult to see how one could
describe the reinsurers as acting at the behest of the
primary insurers, an element I find crucial to the 3(b)
boycott alleged here.  From the vantage point of a ruling
on motions to dismiss, however, I discern sufficient allega-
tions in the complaints that this is not the case.  In
addition, according to the complaints, the four primary
insurers were not acting out of concern for the reinsurers'
financial health when they prompted the reinsurers to
refuse reinsurance for certain risks; rather, they simply
wanted to ensure that no other primary insurer would be
able to sell insurance policies that they did not want to
sell.  Finally, as the complaints portray the business of
insurance, reinsurance is a separate, specialized product,
-[t]he availability [of which] affects the ability and willing-
ness of primary insurers to provide insurance to their
customers.-  App. 18 (Cal. Complaint -34).  Thus, contrary
to the majority's assertion, the boundary between the
primary insurance industry and the reinsurance industry
is not merely -technica[l].-  Post, at 9.
  The majority insists that I -disregar[d] th[e] integral
relationship between the terms of the primary insurance
form and the contract of reinsurance,- post, at 9, a fact
which it seems to believe makes it impossible to draw any
distinction whatsoever between primary insurers and
reinsurers.  Yet it is the majority that fails to see that,
in spite of such an -integral relationship,- the interests of
primary insurer and reinsurer will almost certainly differ
in some cases.  For example, the complaints allege that
reinsurance contracts often -layer- risks, -in the sense
that [a] reinsurer may have to respond only to claims
above a certain amount . . . .-  App. 10 (Cal. Complaint
-4.q); id., at 61 (Conn. Complaint -4(f)).  Thus, a primary
insurer might be much more concerned than its reinsurer
about a risk that resulted in a high number of relatively
small claims.  Or the primary insurer might simply
perceive a particular risk differently from the reinsurer.
The reinsurer might be indifferent as to whether a
particular risk was covered, so long as the reinsurance
premiums were adjusted to its satisfaction, whereas the
primary insurer might decide that the risk was -too hot
to handle,- on a standardized basis, at any cost.  The
majority's suggestion that -to insist upon certain primary-
insurance terms as a condition of writing reinsurance is
in no way `artificial,'- post, at 9-10; see post, at 8, simply
ignores these possibilities; the conditions could quite easily
be -artificial,- in the sense that they are not motivated by
the interests of the reinsurers themselves.  Because the
parties have had no chance to flesh out the facts of this
case, because I have no a priori knowledge of those facts,
and because I do not believe I can locate them in the
pages of insurance treatises, I would not rule out these
possibilities on a motion to dismiss.
  Believing that there is no other principled way to
narrow the 3(b) exception, the majority decides that
-boycott- encompasses just those refusals to deal that are
-unrelated- or -collateral- to the objective sought by those
refusing to deal.  Post, at 4-5.  This designation of a
single -`unitary phenomenon,'- Barry, 438 U. S., at 543,
to which the term -boycott- will henceforth be confined,
is of course at odds with our own description of our
Sherman Act cases in Barry.  See ibid.  Moreover, the
limitation to -collateral- refusals to deal threatens to
shrink the 3(b) exception far more than the majority is
willing to admit.  Even if the reinsurers refused all
reinsurance to primary insurers -who wrote insurance on
disfavored forms,- including insurance -as to risks written
on other forms,- the majority states, the reinsurers would
not be engaging in a 3(b) boycott if -the primary
insurers' other business were relevant to the proposed
insurance contract (for example, if the reinsurer bears
greater risk where the primary insurer engages in riskier
businesses).-  Post, at 12.  Under this standard, and
under facts comparable to those in this case, I assume
that reinsurers who refuse to deal at all with a primary
insurer unless it ceases insuring a particular risk would
not be engaging in a 3(b) boycott if they could show that
(1) insuring the risk in question increases the probability
that the primary insurer will become insolvent, and that
(2) it costs more to administer the reinsurance contracts
of a bankrupt primary insurer (including those unrelated
to the risk that caused the primary insurer to declare
bankruptcy).  One can only imagine the variety of similar
arguments that may slowly plug what remains of the
3(b) exception.  For these reasons, I cannot agree with
the majority's narrow theory of 3(b) boycotts.

                             III
  Finally, we take up the question presented by No.
91-1128, whether certain claims against the London
reinsurers should have been dismissed as improper
applications of the Sherman Act to foreign conduct.  The
Fifth Claim for Relief of the California Complaint alleges
a violation of 1 of the Sherman Act by certain London
reinsurers who conspired to coerce primary insurers in
the United States to offer CGL coverage on a claims-made
basis, thereby making -occurrence CGL coverage . . .
unavailable in the State of California for many risks.-
App. 43-44 (Cal. Complaint --131-135).  The Sixth Claim
for Relief of the California Complaint alleges that the
London reinsurers violated 1 by a conspiracy to limit
coverage of pollution risks in North America, thereby
rendering -pollution liability coverage . . . almost entirely
unavailable for the vast majority of casualty insurance
purchasers in the State of California.-  Id., at 45-46 (Cal.
Complaint --136-140).  The Eighth Claim for Relief of
the California Complaint alleges a further 1 violation by
the London reinsurers who, along with domestic retro-
cessional reinsurers, conspired to limit coverage of seep-
age, pollution, and property contamination risks in North
America, thereby eliminating such coverage in the State
of California.  Id., at 47-48 (Cal. Complaint
--146-150).
  At the outset, we note that the District Court undoubt-
edly had jurisdiction of these Sherman Act claims, as the
London reinsurers apparently concede.  See Tr. of Oral
Arg. 37 (-Our position is not that the Sherman Act does
not apply in the sense that a minimal basis for the
exercise of jurisdiction doesn't exist here.  Our position is
that there are certain circumstances, and that this is one
of them, in which the interests of another State are
sufficient that the exercise of that jurisdiction should be
restrained-).  Although the proposition was perhaps not
always free from doubt, see American Banana Co. v.
United Fruit Co., 213 U. S. 347 (1909), it is well estab-
lished by now that the Sherman Act applies to foreign
conduct that was meant to produce and did in fact
produce some substantial effect in the United States.  See
Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475
U. S. 574, 582, n. 6 (1986); United States v. Aluminum
Co. of America, 148 F. 2d 416, 444 (CA2 1945) (L. Hand,
J.); Restatement (Third) of Foreign Relations Law of the
United States 415, and Reporters' Note 3 (1987) (herein-
after Restatement (Third) Foreign Relations Law); 1 P.
Areeda & D. Turner, Antitrust Law -236 (1978); cf.
Continental Ore Co. v. Union Carbide & Carbon Corp.,
370 U. S. 690, 704 (1962); Steele v. Bulova Watch Co., 344
U. S. 280, 288 (1952); United States v. Sisal Sales Corp.,
274 U. S. 268, 275-276 (1927).  Such is the conduct
alleged here: that the London reinsurers engaged in
unlawful conspiracies to affect the market for insurance
in the United States and that their conduct in fact
produced substantial effect.  See 938 F. 2d, at 933.
  According to the London reinsurers, the District Court
should have declined to exercise such jurisdiction under
the principle of international comity.  The Court of
Appeals agreed that courts should look to that principle
in deciding whether to exercise jurisdiction under the
Sherman Act.  Id., at 932.  This availed the London
reinsurers nothing, however.  To be sure, the Court of
Appeals believed that -application of [American] antitrust
laws to the London reinsurance market `would lead to
significant conflict with English law and policy,'- and that
-[s]uch a conflict, unless outweighed by other factors,
would by itself be reason to decline exercise of jurisdic-
tion.-  Id., at 933 (citation omitted).  But other factors, in
the court's view, including the London reinsurers' express
purpose to affect United States commerce and the sub-
stantial nature of the effect produced, outweighed the
supposed conflict and required the exercise of jurisdiction
in this case.  Id., at 934.
  When it enacted the Foreign Trade Antitrust Improve-
ments Act of 1982 (FTAIA), 96 Stat. 1246, 15 U. S. C.
6a, Congress expressed no view on the question whether
a court with Sherman Act jurisdiction should ever decline
to exercise such jurisdiction on grounds of international
comity.  See H. R. Rep. No. 97-686, p. 13 (1982) (-If a
court determines that the requirements for subject matter
jurisdiction are met, [the FTAIA] would have no effect on
the court['s] ability to employ notions of comity . . . or
otherwise to take account of the international character
of the transaction-) (citing Timberlane).  We need not
decide that question here, however, for even assuming
that in a proper case a court may decline to exercise
Sherman Act jurisdiction over foreign conduct (or, as
Justice Scalia would put it, may conclude by the employ-
ment of comity analysis in the first instance that there is
no jurisdiction), international comity would not counsel
against exercising jurisdiction in the circumstances alleged
here.
  The only substantial question in this case is whether
-there is in fact a true conflict between domestic and
foreign law.-  Soci-t- Nationale Industrielle A-rospatiale
v. United States District Court, 482 U. S. 522, 555 (1987)
(Blackmun, J., concurring in part and dissenting in part).
The London reinsurers contend that applying the Act to
their conduct would conflict significantly with British law,
and the British Government, appearing before us as
amicus curiae, concurs.  See Brief for Petitioners in No.
91-1128, pp. 22-27; Brief for Government of United
Kingdom of Great Britain and Northern Ireland as Amicus
Curiae 10-14.  They assert that Parliament has estab-
lished a comprehensive regulatory regime over the London
reinsurance market and that the conduct alleged here was
perfectly consistent with British law and policy.  But this
is not to state a conflict.  -[T]he fact that conduct is
lawful in the state in which it took place will not, of
itself, bar application of the United States antitrust laws,-
even where the foreign state has a strong policy to permit
or encourage such conduct.  Restatement (Third) Foreign
Relations Law 415, Comment j; see Continental Ore Co.,
supra, at 706-707.  No conflict exists, for these purposes,
-where a person subject to regulation by two states can
comply with the laws of both.-  Restatement (Third)
Foreign Relations Law 403, Comment e.  Since the
London reinsurers do not argue that British law requires
them to act in some fashion prohibited by the law of the
United States, see Reply Brief for Petitioners in No.
91-1128, pp. 7-8, or claim that their compliance with the
laws of both countries is otherwise impossible, we see no
conflict with British law.  See Restatement (Third) Foreign
Relations Law 403, Comment e, 415, Comment j.  We
have no need in this case to address other considerations
that might inform a decision to refrain from the exercise
of jurisdiction on grounds of international comity.

                             IV
  The judgment of the Court of Appeals is affirmed in
part and reversed in part, and the case is remanded for
further proceedings consistent with this opinion.

                                          It is so ordered.