HB 88-USE OF FOREIGN LAW  8:07:26 AM CHAIR LYNN announced that the first order of business was HOUSE BILL NO. 88, "An Act prohibiting a court, arbitrator, mediator, administrative agency, or enforcement authority from applying a law, rule, or provision of an agreement that violates an individual's right under the Constitution of the State of Alaska or the United States Constitution." 8:07:41 AM KAREN SAWYER, Staff, Representative Carl Gatto, Alaska State Legislature, presented HB 88 on behalf of Representative Gatto, sponsor. She said the intent of HB 88 is to prevent a court or other enforcement authority from enforcing foreign law in Alaska. Ms. Sawyer stated that the U.S. has "unique values of liberty," which do not exist in foreign legal systems, and foreign laws are increasingly finding their way in to U.S. court cases, particularly in the area of family law involving divorce and child custody. She noted that included in the committee packet is a document showing the types of foreign law in various countries. MS. SAWYER said HB 88 would provide a statutory framework to prohibit constitutionally objectionable foreign laws and legal systems from finding their way into the state judicial system. She said one example of transnational law is shari'a, which is Islamic law that is applied as the law of the land in many countries around the world. She noted that in the committee packet is a handout listing the various legal systems of countries around the world. Ms. Sawyer said many Muslim countries apply shari'a as the law of the land in specific legal areas such as family law and inheritance. She indicated that a copy of "Representative Civil Legal Cases Involving shari'a Law," by the American Public Policy Alliance, would be made available to committee members. 8:10:16 AM MS. SAWYER stated that shari'a is offensive to U.S. and Alaska constitutional law, because it criminalizes [the exercise of freedom of religion] and blasphemy against Islam, Mohammed, and shari'a, and violates principles of due process and equal protection by discriminating against non-Muslims and women. She said almost all Muslim countries - including Egypt, Jordan, Afghanistan, and Iraq - have a shari'a supremacy clause, which "effectively does not allow any secular law to violate shari'a's fundamental principles of Islamic supremacy." MS. SAWYER said the intent of HB 88 is neither to inhibit freedom of religion nor to isolate shari'a. She explained that she brought up the topic of shari'a because "its religion and civil law is linked" and "it is the foremost foreign law that is slowly impacting our legal system in the U.S." She concluded as follows: Alaska, like other states, recognizes a growing need to emphasize the fact that our state and U.S. constitutions are the fundamental basis for civil law for everyone in our country. To those who are accustomed to their religion and their civil laws being inextricably connected, we must clarify that all individual rights are guaranteed and protected under our constitutions. 8:12:40 AM CHAIR LYNN, regarding the law of the land, asked if precedent from court cases in other countries could be used in U.S. court cases. MS. SAWYER said she cannot answer that question. CHAIR LYNN remarked that he would not want foreign cases cited in a U.S. court. 8:15:22 AM REPRESENTATIVE JOHANSEN ventured that U.S. law was most likely originally based on foreign law, and he questioned the purpose of the proposed legislation. 8:16:04 AM REPRESENTATIVE CARL GATTO, Alaska State Legislature, as sponsor of HB 88, related that there were many cultures represented in his childhood neighborhood, but the law of the foreign countries from which those neighbors originally hailed was never used in U.S. courts. He offered his understanding that typically when people come to the U.S. from the Middle East they establish their own laws. He said HB 88 would not allow that to happen. He said a majority in a state may decide that it wants to pass state laws that are in violation of the [U.S.] Constitution. REPRESENTATIVE JOHANSEN asked if that is something that is happening in Alaska. REPRESENTATIVE GATTO offered his understanding that there are large populations of Filipino Americans in Kodiak, but specified that he is not accusing them of anything. He clarified that HB 88 is a preventative measure for the state. MS. SAWYER added that the understanding of the Department of Law (DOL) and the family courts is that Alaska has not had foreign law invoked into any of its cases. She said there is a larger group of foreign nationals growing in Anchorage. She said the intent of the bill is to preempt any future court cases [related to the issue of foreign law]. 8:20:12 AM CHAIR LYNN asked how HB 88 would relate to tribal law. REPRESENTATIVE GATTO related that in Canada it is a timely process to get permission to develop resources, because permission must be obtained from each group within the First Nations people. CHAIR LYNN clarified that he wants to know the possible interaction between Alaska tribal law and HB 88. REPRESENTATIVE GATTO said he cannot make that determination "because they were here first." 8:22:44 AM MS. SAWYER, in response to Representative P. Wilson, explained that the handout in the committee packet entitled "American Laws for American Courts (ALAC)" contains frequently asked questions, which originate from the American Public Policy Alliance (APPA). In response to a follow-up question, she said both Tennessee and Louisiana have enacted statute similar to what is being proposed in HB 88. She said Oklahoma amended its state constitution and a lawsuit was filed by an Islamic American group. The judge has put a hold on the enactment of that constitutional amendment. She said, "That was a real shock to a lot of states." 8:24:15 AM REPRESENTATIVE KELLER observed that there is no language to prevent a judge from invoking foreign law in his/her decision. He suggested a business contract be utilized. MS. SAWYER said although the sponsor recognizes that there are businesses that may do business that invokes some type of foreign law, HB 88 would focus on the protection of individuals' rights. She said the sponsor is particularly concerned because there have been a lot of cases in which shari'a has been invoked in relation to children, divorce, and women's rights. 8:26:59 AM DAVID YERUSHALMI, General Counsel, Center for Security Policy, stated that HB 88 is similar to the Uniform American Laws for American Courts Act, which was drafted by his office and was passed in modified form by the State of Louisiana. He indicated that other states are also using various forms of that legislation. He said typically this type of legislation deals with problems that arise in a global environment, where individuals and businesses are far more likely to come in contact with foreign jurisdictions and foreign laws. He said the application of foreign law judgment and jurisdiction in state court is far more likely to occur today. He said in the matter at hand foreign law clearly refers to law that is outside the territory of the U.S. MR. YERUSHALMI listed the following three ways that foreign law insinuates itself in state court matters: when foreign judgment is sought to grant comity; in matters related to choice of law; and in matters related to jurisdiction or venue questions. He offered examples of each. 8:33:07 AM MR. YERUSHALMI stated that the Uniform American Laws for American Courts Act deals with all three instances, but HB 88 deals only with choice of law and choice of venue. He paraphrased language from HB 88, beginning on page 1, line 12, to page 2, line 1, which read as follows: Sec. 09.68.140. Foreign law prohibited. (a) A court, arbitrator, mediator, administrative agency, or enforcement agency may not apply a foreign law if application of the foreign law would violate an individual's right guaranteed by the Constitution of the State of Alaska or the United States Constitution. MR. YERUSHALMI set up a hypothetical situation in which an Alaskan company has a business contract with a Chinese company, and in the contract there is a choice of law provision, which states that any disputes must be determined by Chinese law. He said in general Chinese law does not provide for all the fundamental constitutional liberties that Alaskan law does. He continued: But that will not allow the Alaskan to avoid that provision. The only way the Alaskan could avoid the provision and have Chinese law apply is if in that particular case, that particular dispute, the Chinese law at issue would [violate] his fundamental constitutional liberties. MR. YERUSHALMI said the question of freedom of contract has been raised by the American Civil Liberties Union (ACLU), which argued that a person should have the right to waive his/her constitutional liberties at any time, but especially in a business context. He said this is true, but not always. He said the federal government and all states abide by a rule, under which if two parties enter into a contract that would violate the public policy of the state, the contract is void and unenforceable. He said in order to determine whether parties entering into a contract can waive a fundamental right, it is necessary to consider the analysis of the fundamental right jurisprudence. Mr. Yerushalmi noted that China and most of Continental Europe do not apply jury trials. He said that if a contract [between an Alaskan company and a company in a country without jury trials] made clear that a jury trial was waived, then the foreign law, even without jury trial provision, would be sustained within the Alaskan court. MR. YERUSHALMI then offered a hypothetical situation in which a non-Muslim woman enters into a business contract with a company in Saudi Arabia, with a provision in the contract that states that Saudi laws apply. In the event of litigation, as a woman her testimony would be worth only half of any man's, and as a non-Muslim, her testimony would be discounted almost entirely. He said that is a violation of both equal protection and due process, and there is no jurisprudence in Alaska or the federal courts to allow a party to waive those two fundamental constitutional issues in the context where it was not known and was non-consensual. MR. YERUSHALMI offered a third example, in which an American woman, while in Saudi Arabia, sustained an injury diving into a shallow end of a swimming pool that was not clearly marked. She ended up in a hospital in Massachusetts, which was not her home state, and she filed a law suit. He said the most convenient forum for litigation would have been Saudi Arabia, but the court in the U.S. did not dismiss the case, because of the woman's prospects of going to court in Saudi Arabia as a non-Muslim female. 8:40:08 AM MR. YERUSHALMI talked about laws in other countries that may change after a contract has been signed and the affect that being a non-national can have in carrying forth litigation in a foreign country. Under HB 88, he said, an Alaskan in that circumstance would be protected. Without HB 88, he said, it would be left up to the courts, which would apply the common law rule that if the foreign law or jurisdiction violates fundamental public policy, the court will consider [the contract] void. He said what "our law" does is answers a specific request by the Alaska court, which is that the first place to look when determining state public policy is to the constitution and to the legislature. 8:44:32 AM MR. YERUSHALMI directed attention to a letter from ACLU of Alaska, dated 3/15/11, addressed to Chair Lynn and Vice Chair Keller. He noted that nowhere in the letter does ACLU of Alaska support the proposition that the legislature does not have the authority to provide public policy, and he posited that that is because the legislature has the authority. He offered several examples in which the federal government and the State of Alaska have disallowed waivers in employee contracts that took away state and federal freedoms and protections. 8:48:12 AM MR. YERUSHALMI asked ACLU and those who opposed HB 88 to consider that in cases that are not clear, where the legislature has not drawn a clear line around public policy regarding human rights, the court tends to reach disparate opinions. He said HB 88 is a clear distinction by the legislature that the State of Alaska considers fundamental constitutional liberties "public policy red lines." He concluded that the proposed legislation makes clear that if a person is going to violate those liberties, he/she must do so "in a way that the jurisprudence under that right recognizes the waiver." He offered to answer questions. 8:53:13 AM CHAIR LYNN asked if HB 88 would prohibit courts from using precedence from foreign case law. MR. YERUSHALMI answered that HB 88 deals with applying foreign law in the context of a specific dispute. He said if the Alaska Supreme Court has to determine what the law of Alaska is, it would first look to the Constitution of the State of Alaska, then to statute, common law, and federal jurisprudence relevant to the issue. He said the only time the Alaska Supreme Court would consider foreign law would be in the context of common law doctrine. He said the court could also consider admiralty law and the law of war. He stated, "There are plenty of legitimate occasions, in which foreign law informs what Alaskan law will be; but once the court ... has been informed about what Alaskan law is, it becomes Alaskan law." He said HB 88 does not address the question of whether the Alaska Supreme Court could look to English common law or French Code, for example; that is a broader issue than HB 88. In response to a follow-up question, he confirmed that that could be the subject for a separate bill. He added that that is a problem that would more typically rise at the federal level - in the U.S. Supreme Court. He offered an example. 8:56:38 AM REPRESENTATIVE SEATON asked if the bill would aid U.S. corporations in their litigation with foreign contracts and foreign countries in leases that have been negotiated. He offered his understanding that HB 88 is a little broader than the committee had previously been told. MR. YERUSHALMI confirmed that HB 88 would "level the playing field" for Alaskan companies. He described a situation in which a foreign country changed from abiding by laws agreeable to the Alaskan company doing business with a business in that country to a new regime that was not agreeable to the Alaskan company. He said that without HB 88, the Alaskan company would have to ask the Alaska court to void any provision requiring that company to do litigation in the foreign country and to allow litigation to take place in Alaska, arguing that under the country's new regime, basic rights and liberties would not be upheld. Mr. Yerushalmi said HB 88 would provide guidance to the court. 9:01:51 AM REPRESENTATIVE SEATON said the testimony is showing that the proposed bill would be a lot broader, because it would address corporate rights, not just individual rights. 9:02:37 AM MR. YERUSHALMI, in response to questions from Representative Gruenberg, confirmed that he is not licensed to practice law in Alaska, and talked about his preparation for the hearing on HB 88. He clarified that the aforementioned Uniform American Laws for American Courts Act was not promulgated by the Uniform Law Commission. He reiterated that the main distinction between the Uniform American Laws for American Courts Act adopted by some states and HB 88 is that the latter does not have a provision for comity. He said he does not know of any other legislation exactly like HB 88; however, he stated that the substantive provisions related to choice of law and jurisdiction questions are similar to the Uniform American Laws for American Courts Act and other states' legislation. He clarified that a certain amendment to the Constitution of the State of Oklahoma sought to prevent any court from applying international law or shari'a, but that the court held that identifying a specific religious law without clearly excising the religious aspect would violate the First Amendment. He said HB 88 is not "a blanket prohibition against international law," but is "a very specific and focused treatment of when that foreign law, if applicable in a specific case, would violate the fundamental state constitutional liberties that have not been weighed." He said HB 88 would be upheld on a First Amendment challenge. REPRESENTATIVE GRUENBERG asked Mr. Yerushalmi to provide the citation for "that case." 9:08:49 AM MR. YERUSHALMI, in response to a question from Representative Johansen, said both Tennessee and Louisiana built into their legislation a "business entity exception." He further relayed that since both Tennessee and Louisiana adopted their statutes within the last year, it is far too early for anything to have happened as a result. 9:13:49 AM REPRESENTATIVE JOHANSEN asked how HB 88 would affect Native Alaskans. MR. YERUSHALMI answered that any existing treaties would trump the statute. Furthermore, he said to the extent that tribal law has been adopted in conjunction with state law, it would not be considered foreign law. He proffered that to the extent that a tribal law could still be considered foreign law under HB 88, the simple solution would be to make an exemption by specifying in the bill that tribal law would not be affected. REPRESENTATIVE JOHANSEN asked Mr. Yerushalmi if he is familiar with the status of Alaska Native tribes as compared to those tribes in the Lower 48. He ventured that there are differences. MR. YERUSHALMI reiterated that the easy solution would be the aforementioned exemption. He added that a more pointed solution would be to determine whether a specific treaty provides for the provisions for the treatment of federal tribal law in a given sovereign way. If it does, he said, that would trump HB 88. REPRESENTATIVE JOHANSEN said although he appreciates Mr. Yerushalmi's suggestion for an easy solution, he guarantees that the power, effectiveness, and might of the tribes in Alaska differ from those in the Lower 48. REPRESENTATIVE GATTO said he thinks the presence of hotels and casinos in the Lower 48 established by tribes is a sign of the strong independence of those tribes. REPRESENTATIVE JOHANSEN ventured that the insertion of exemption language may not be as easy to accomplish for tribes in Alaska. He cautioned the committee to be careful when considering exclusions for tribes. Echoing Representative Seaton's prior remark that the bill's focus is larger than it first appears, he said he wants to understand the far-reaching implications [of HB 88]. 9:21:50 AM CHAIR LYNN questioned what would happen if one of Alaska's Native corporations entered into a contract with a foreign entity and there was an attempt by the legislature to exclude that corporation. REPRESENTATIVE JOHANSEN noted that Saxman [adjacent to Ketchikan] has its own city, corporation, and tribe, and it is difficult to get all three in agreement. He clarified that saying that the corporation would not be affected would not alleviate the concern regarding the tribe. 9:25:09 AM MR. YERUSHALMI, in response to a question from Representative Keller, said the problem with including corporate waivers is that doing so would put mom and pop operations at risk. He said a provision could be added to allow any corporation or individual who enters into an agreement to "explicitly waive the operation of this statute." He said he does not think that is necessary, because of the language of the bill, and particularly of the Uniform American Laws for American Courts Act, which is "dependent upon the specific existing jurisprudence of the right being infirmed." He offered examples. He said legislation tends to address a given problem in a focused way, and then the courts develop common law under statute that is continent with Alaska jurisprudence. 9:29:35 AM REPRESENTATIVE GRUENBERG ventured that the core reason Mr. Yerushalmi is urging the passage of HB 88 is that apparently the Alaska Supreme Court has said the Constitution of the State of Alaska and the Alaska State Legislature determine public policy, and because the legislature has not defined public policy in this area, there is a lack of guidance to the courts. MR. YERUSHALMI responded that that is a fair summary. REPRESENTATIVE GRUENBERG offered his understanding that that is not what the courts say. He cited AS 01.10.010, which read as follows: Sec. 01.10.010. Applicability of common law. So much of the common law not inconsistent with the Constitution of the State of Alaska or the Constitution of the United States or with any law passed by the legislature of the State of Alaska is the rule of decision in this state. REPRESENTATIVE GRUENBERG said common law states look to judge- made law, and the courts in Alaska have many times enunciated the common law. He said Guin v. Ha is a seminal case, which provides that the courts will look at the rule of law that is the most reasonable public policy. He expressed concern that HB 88 could have exactly the opposite consequence by cutting against the long-standing public policy of Alaska. 9:34:45 AM MR. YERUSHALMI said he is familiar with the case and statute to which Representative Gruenberg referred, but said he disagrees with Representative Gruenberg. He said it is not the case that states which use code law, such as California and New York, do not apply common law. Even Louisiana, which follows Napoleonic code, also has a body of law that its judges have created by interpreting. He said by searching for the words "void" and "public policy" it is possible to find dozens of Alaska Supreme Court cases in which the court voids contractual provisions entered into by two parties. He cited Dillingham v. CH2M Hill Northwest 873 p2nd 1271, a case which quotes AS 45.45.900, which read as follows: Sec. 45.45.900. Indemnification agreements against public policy. A provision, clause, covenant, or agreement contained in, collateral to, or affecting a construction contract that purports to indemnify the promisee against liability for damages for (1) death or bodily injury to persons, (2) injury to property, (3) design defects, or (4) other loss, damage or expense arising under (1), (2), or (3) of this section from the sole negligence or wilful misconduct of the promisee or the promisee's agents, servants, or independent contractors who are directly responsible to the promisee, is against public policy and is void and unenforceable; however, this provision does not affect the validity of an insurance contract workers' compensation, or agreement issued by an insurer subject to the provisions of AS 21, or a provision, clause, covenant, or agreement of indemnification respecting the handling, containment, or cleanup of oil or hazardous substances as defined in AS 46. MR. YERUSHALMI said AS 45.45.900 tells the court that even though there is freedom of contract, an individual's liability for negligent acts cannot be voided. REPRESENTATIVE GRUENBERG said that statute is not on point, because factual situations are being discussed, not the construction of Alaska laws of the past. 9:38:48 AM MR. YERUSHALMI responded that he does not agree. He opined that there is no distinction between the two, other than the subject matter. 9:40:10 AM REPRESENTATIVE SEATON said he is confused because the courts said rights cannot be waived, but the proposal being made here is that waivers of specific portions of law are fine. He opined that the big problem is that there is unresolved tension regarding tribal law in Alaska. He said tribal authority is sometimes challenged by the state on the issue of children. He asked Mr. Yerushalmi if excluding tribal law would mean that tribal law has precedence over Alaska statute. In response to Representative Keller, he explained that his question is in response to testimony that suggested an amendment to the bill. 9:44:55 AM MR. YERUSHALMI, regarding the issue of tribal authority, referred to the definition of "foreign law" on page 2, lines 23- 25, of HB 88, which read as follows: (f) In this section, "foreign law" means a law, rule, or legal code or system established and used or applied in a jurisdiction outside of the United States and the territories of the United States. MR. YERUSHALMI said, "So, by definition Indian law is not touched by the statute." In response to Representative Seaton's comment regarding waivers, explained that he had brought up a possible amendment to HB 88, but had said it was not necessary because rights that are being protected by HB 88 have a clear jurisprudence under both federal and Alaska law. Therefore, whether or not a party can waive is included in the jurisprudence of that particular liberty. 9:47:05 AM DAVID HECKERT, Volunteer, Stop Islamization of America, testified in support of HB 88. He said he is a 30-year veteran of the U.S. Army, and he listed the names of several Middle Eastern countries in which he worked within the Army as a civil affairs officer with the local populations, public officials, and international organizations. He relayed that he also worked with the Office of Military Cooperation in the U.S. Embassy in Egypt for 3.5 years. He talked about his experience interacting with other cultures and working with the governmental, legal, and commercial systems in those countries. MR. HECKERT opined, "The enshrining of our rights in the Constitution and ensuring our freedom through the rule of law is by far the best system for government in the world." He said he has seen a disregard for citizens' rights in favor of specific agendas based on legal or governmental concepts from foreign countries and international institutions. He said members of "our supreme court" admit that they look to international law for guidance on issues, and administrative agencies continue to confiscate property and assess fines without any proper regress for the victims to their elected officials. MR. HECKERT said HB 88 would protect citizens from the encroachment of foreign law into the legal system. He said one aspect of foreign law that HB 88 would be especially effective in deterring is Islamic shari'a law. He posited that there is a reluctance to admit that "we" are at war with a large segment of the Islamic community, which "seeks to impose the political, legal, and cultural aspects of Islam on our citizens." He offered some examples. 9:51:20 AM JEFFREY MITTMAN, American Civil Liberties Union (ACLU) of Alaska, testified in opposition to HB 88. He stated that HB 88 is problematic in terms of business law, because it would interfere with contractual issues. Referring to a point made in the sponsor statement that one goal of HB 88 is to prevent the imposition of shari'a law, Mr. Mittman stated that the U.S. Constitution already governs federal and state courts and prevents the imposition of those courts of any religious law. He opined that the bill, as drafted, is over broad and fundamentally unnecessary. In response to a question from Chair Lynn, he confirmed that the written information from ACLU, included in the committee packet, goes into further detail on these points. He said ACLU is not aware of any instance where a court has imposed shari'a law, and he said he thinks that is an issue that should be addressed. 9:55:04 AM REPRESENTATIVE SEATON said he would like the bill sponsor to outline how HB 88 relates to international conventions. 9:55:53 AM REPRESENTATIVE GRUENBERG requested that Ms. Sawyer provide a copy of all legal opinions that relate to this subject. CHAIR LYNN suggested that in-depth discussion of the legal aspect of the bill should be taken up in the House Judiciary Standing Committee. 9:57:53 AM REPRESENTATIVE GATTO remarked that those in Native corporations and tribes are U.S. citizens and are subject to U.S. law. He stated that the proposed legislation would give the courts some boundaries. 10:00:17 AM [HB 88 was held over.]