“American Laws for American Courts” and Civil Jury Trials

I’ve blogged quite a bit about why broad bans on the use of foreign law in American courts are improper. But what about narrower limitations, such as the American Laws for American Courts proposal that has been enacted in some form in Arizona, Louisiana, and Tennessee?

I think that particular proposal is less problematic, and some aspects of it might well be sound. For instance, I support laws — such as the recent federal SPEECH Act — that limit domestic enforcement of foreign judgments that are based on speech that would be protected in the U.S. At the same time, it seems to me that there’s one pretty serious potential problem in it.

Briefly, the “American Laws for American Courts” is aimed not at banning all application of foreign law or of religious law — indeed, it might not apply to purely religious law at all, see below — but just to enforcement of foreign judgments or of arbitrations where the decisionmaker

bases its rulings or decisions in in the matter at issue in whole or in part on any law, legal code or system that would not grant the parties affected by the ruling or decision the same fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

If read to mean that the judgment is unenforceable to the extent it relies on a particular legal rule that “would not grant” American fundamental rights — as opposed to the judgment being unenforceable if it’s based on any legal rule that comes from a legal system in which other rules don’t grant such rights — this is a pretty narrow proposal. Moreover, the proposal does “not apply to a corporation, partnership, limited liability company, business association, or other legal entity that contracts to subject itself to foreign law in a jurisdiction other than this state or the United States,” and thus won’t cover the bulk of international commercial disputes.

Nonetheless, it seems to me this has one pretty substantial potential problem: Nearly all foreign countries do not provide for a civil jury trial. It’s not completely clear whether the civil jury trial in damages cases is treated as a “fundamental” right under the U.S. Constitution — though it’s not incorporated against the states, and that’s sometimes linked to a right’s supposedly not being fundamental, it sometimes has been labeled by courts as fundamental even though it is applicable only to the federal government. But in any event, the right is secured in all state constitutions, and is labeled “fundamental” by many state courts, including Louisiana courts.

Read literally, this suggests that pretty much all foreign judgments (and possibly all arbitral judgments) entered against individuals — or entered in non-contract cases — would be unenforceable, simply because they were entered without a jury trial. After all, such a judgment does “not grant the parties affected by the ruling or decision the same fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions [i.e., the civil jury trial], including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state” (emphasis added).

That seems bad for international commerce. It also seems unnecessary; while the civil jury trial has a long American history, and plausible arguments in its favor, I don’t think that absence of a civil jury is especially likely to make a trial unfair. Indeed, American law generally doesn’t call for civil juries in injunction cases, restitution cases, family law cases (except in Texas), admiralty cases, and more.

To be sure, the force of this provision, for good or ill, is dramatically limited by paragraph 5, which excludes cases in which the losing party is a business organization that has contracted for the application of foreign law. Still, the seeming the enforcement of foreign non-jury verdicts would be unsound, for instance when there’s a lawsuit against a wealthy American individual, or when there’s a lawsuit against an American company on a tort cause of action rather than a contractual one.

I’m not sure whether this is an intended effect of the proposal; but it seems to me a problem. There is also at least one other potential problem with the proposal, as it bears on divorces; I’ll mention that in a separate post.

Note also that the proposal is limited to the laws of “a jurisdiction,” which suggests a country or state. It thus might well not apply to religious law — whether Sharia, Jewish law, or some other legal system — to the extent that it is applied in an arbitration under that religious law, as opposed to when it’s applied as the law of a foreign country. (I say “might” because one could argue that Sharia or Jewish family law, even applied as solely religious rather than national law under an arbitration agreement, might be treated as the law “of a jurisdiction” because some other countries — even ones quite unrelated to the arbitrators — treat those legal rules as binding.)

Here’s the full text of the proposal:

The [general assembly/legislature] finds that it shall be the public policy of this state to protect its citizens from the application of foreign laws when the application of a foreign law will result in the violation of a right guaranteed by the constitution of this state or of the United States, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

The [general assembly/state legislature] fully recognizes the right to contract freely under the laws of this state, and also recognizes that this right may be reasonably and rationally circumscribed pursuant to the state’s interest to protect and promote rights and privileges granted under the United States or [State] Constitution, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

[1] As used in this act, “foreign law, legal code, or system” means any law, legal code, or system of a jurisdiction outside of any state or territory of the United States, including, but not limited to, international organizations and tribunals, and applied by that jurisdiction’s courts, administrative bodies, or other formal or informal tribunals For the purposes of this act, foreign law shall not mean, nor shall it include, any laws of the Native American tribes in this state.

[2] Any court, arbitration, tribunal, or administrative agency ruling or decision shall violate the public policy of this State and be void and unenforceable if the court, arbitration, tribunal, or administrative agency bases its rulings or decisions in in the matter at issue in whole or in part on any law, legal code or system that would not grant the parties affected by the ruling or decision the same fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

[3] A contract or contractual provision (if capable of segregation) which provides for the choice of a law, legal code or system to govern some or all of the disputes between the parties adjudicated by a court of law or by an arbitration panel arising from the contract mutually agreed upon shall violate the public policy of this State and be void and unenforceable if the law, legal code or system chosen includes or incorporates any substantive or procedural law, as applied to the dispute at issue, that would not grant the parties the same fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

[4]

A. A contract or contractual provision (if capable of segregation) which provides for a jurisdiction for purposes of granting the courts or arbitration panels in personam jurisdiction over the parties to adjudicate any disputes between parties arising from the contract mutually agreed upon shall violate the public policy of this State and be void and unenforceable if the jurisdiction chosen includes any law, legal code or system, as applied to the dispute at issue, that would not grant the parties the same fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions, including but not limited to due process, freedom of religion, speech, or press, and any right of privacy or marriage as specifically defined by the constitution of this state.

B. If a resident of this state, subject to personal jurisdiction in this state, seeks to maintain litigation, arbitration, agency or similarly binding proceedings in this state and if the courts of this state find that granting a claim of forum non conveniens or a related claim violates or would likely violate the fundamental liberties, rights, and privileges granted under the U.S. and [State] Constitutions of the non-claimant in the foreign forum with respect to the matter in dispute, then it is the public policy of this state that the claim shall be denied.

[5] Without prejudice to any legal right, this act shall not apply to a corporation, partnership, limited liability company, business association, or other legal entity that contracts to subject itself to foreign law in a jurisdiction other than this state or the United States.

[6] This subsection shall not apply to a church, religious corporation, association, or society, with respect to the individuals of a particular religion regarding matters that are purely ecclesiastical, to include, but not be limited to, matters of calling a pastor, excluding members from a church, electing church officers, matters concerning church bylaws, constitution, and doctrinal regulations and the conduct of other routine church business, where 1) the jurisdiction of the church would be final; and 2) the jurisdiction of the courts of this State would be contrary to the First Amendment of the United States and the Constitution of this State. This exemption in no way grants permission for any otherwise unlawful act under the guise of First Amendment protection.

[7] This statute shall not be interpreted by any court to conflict with any federal treaty or other international agreement to which the United States is a party to the extent that such treaty or international agreement preempts or is superior to state law on the matter at issue.