Passage Of Controversial Law Could Tarnish Florida’s Reputation As International Dispute Resolution Center

by Bilzin Sumberg Baena Price & Axelrod LLP
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http://www.newmiamiblog.com/files/2013/02/international-law.jpgSenate Bill 58 and House Bill 351 Seek to Prohibit Florida Courts from Applying Foreign Laws in Family Law Disputes

You may not have heard of the think tank called the American Public Policy Alliance (APPA), or its “American Laws for American Courts” initiative, which “was crafted to protect American citizens’ constitutional rights against the infiltration and incursion of foreign laws and foreign legal doctrines, especially Islamic Shariah Law.” But APPA has been aggressively promoting model legislation that would prevent American courts, as well arbitral tribunals sitting in the United States, from applying foreign laws or foreign legal doctrines — even if the parties themselves have chosen to have foreign law apply to the resolution of their disputes. For Miami, which is a city that is trying to establish itself as a center for international litigation and arbitration, the passage of this sort of legislation would be devastating — and it may occur during this year’s legislative session in Tallahassee.

Senate Bill 1294

A bit of context: On March 8, 2011, Florida State Senator Alan Hays (Republican — Eustis, FL) introduced Senate Bill 1294, which would have restricted or eliminated the applicability of foreign laws and foreign legal principles, including choice of law and choice of venue provisions, in nearly all cases and arbitrations pending in Florida. The Florida Senate version of the bill passed in the Florida Judiciary Committee on a 5-2 vote, and international litigation and arbitration practitioners in Florida, among other constituencies, mobilized to prevent its passage into law. Thanks in no small part on the lobbying efforts of Florida lawyers, SB 1294 died in the Commerce and Tourism Committee.

Senate Bill 58 & HB 351

Unfazed, in November 2012, Senator Hays introduced Senate Bill 58, a bill that, essentially, would create a Florida rule of civil procedure prohibiting the application of foreign laws in the context of family law disputes (including, but not limited to, disputes covered by Chapters 61 and 88 of the Florida Statutes — which govern marriage, child custody, and divorce).  A companion bill has been introduced in the Florida House of Representatives in the form of HB 351.

On December 5, 2012, SB 58 was referred to several committees. On March 6, 2013, an amended, yet still problematic, version of SB 58 was approved by the Senate Judiciary Committee and now has been referred to the Governmental Oversight and Accountability Committee, the Children, Families, and Elder Affairs Committee, and the Rules Committee. Action is required because, although the scope of SB 58 is much narrower than SB 1294, its impact on Florida’s and Miami’s reputations as places that are open for business to handle international disputes will be tarnished.

Opposition to SB 58 and HB 351

Importantly, the American Bar Association (“ABA”), as well the International Law Section of The Florida Bar, the Anti-Defamation League, the Council on American-Islamic Relations, the American Civil Liberties Union, as well as other professional, civic, and religious organizations, have opposed, and continue to oppose, proposed legislation such as SB 58 and HB 351. In its August 8-9, 2011 House of Delegates Resolution, the ABA succinctly noted that proposed laws such as SB 58 and HB 351 “are inconsistent with some of the core principles and ideals of American jurisprudence,” “are unnecessary, as existing law and judicial procedure have already proven sufficient to deal with the concerns that such [proposed laws] were designed to address,” and are “likely to have an unanticipated and widespread negative impact on business, adversely affecting commercial dealings and economic development in the states in which such a law is passed and in U.S. foreign commerce generally.”

Impact of SB 58 on Legal Community

The impact that SB 58 may have on our legal community is real. For example, let’s take the hypothetical example of an Argentine couple living in Miami. The couple wants to dissolve their marriage in Florida, but they have a prenuptial agreement (called an “antenuptial” agreement in Florida) that holds that Argentine law applies and that the dispute will be resolved by arbitration. Currently, this is not a problem — Florida law governing the dissolution of marriages states that “[t]he court may enforce an antenuptial agreement to arbitrate a dispute in accordance with the law and tradition chosen by the parties.” Fla. Stat. § 61.052(5) (emphasis added). Importantly, however, if the Florida judge or arbitrator finds that the foreign law provision that in question violates Florida’s public policy, then the judge and arbitrator need not enforce it.

If SB 58 is passed into law, the outcome may be different — SB 58 holds that “[a]ny court [or] arbitration [tribunal]. . . decision violates the public policy of this state and is void and unenforceable if the court [or] arbitration [tribunal] . . . bases its ruling or decision in the matter at issue in whole or in part on any foreign law, legal code, or system that does not grant the parties affected by the ruling or decision the same fundamental liberties, rights, and privileges guaranteed by the State Constitution or the United States Constitution.”

In sum, unless the Argentine body of law that governs the prenuptial agreement in question grants the Argentine couple “the same fundamental liberties, rights, and privileges guaranteed by the” Florida and U.S. Constitutions — which is highly unlikely — then a Florida court’s decision applying Argentine prenuptial law will be void and unenforceable. Leaving for another day the likely unconstitutional nature of this law as well as its sheer impracticability — our already overworked judges will have to become experts in comparative law — the impact on Miami’s reputation as an international city will be substantial. Foreign businesses and investors will think twice about coming to Florida if they believe that certain disputes, which they believed would be governed by agreed-upon foreign laws, now will be resolved according to Florida law.

International law practitioners in Florida should be concerned about the momentum that SB 58 and HB 351 have received in the Florida legislature. If you believe that passage of this legislation will impact your practice, or if you are concerned that the passage of this law will hurt Florida’s pro-international investment and business image, then you should contact your local representative or senator immediately.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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