HF 135 (LSB 1702YH (3) 86)

HOUSE FILE 135

BY  WATTS, SALMON, SHEETS, HEARTSILL, FORRISTALL, VANDER LINDEN, HOLT, BAUDLER, LANDON, GUSTAFSON, KOOIKER, GASSMAN, and FISHER

A BILL FOR

An Act relating to the application of foreign laws, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  537C.1  Public policy of this state.
   1.  It shall be the public policy of this state to protect its citizens from the application of foreign laws when the application of foreign law will result in the violation of a right guaranteed by the Constitution of the United States or the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa. 
   2.  It shall be the public policy of this state to fully recognize the right to contract freely under the laws of this state, and also to recognize 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 Constitution of the United States and the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa.
    Sec. 2.  NEW SECTION.  537C.2  Definition.

   As used in this chapter, “foreign law” 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.
    Sec. 3.  NEW SECTION.  537C.3  Use of foreign laws —— enforceability.

   Any court, arbitration, tribunal, or administrative agency ruling or decision violates the public policy of this state and shall be void and unenforceable if the court, arbitration, tribunal, or administrative agency bases its ruling or decision 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 Constitution of the United States and the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa. 
    Sec. 4.  NEW SECTION.  537C.4  Choice of law.

   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 violates the public policy of this state and shall 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 Constitution of the United States and the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa. 
    Sec. 5.  NEW SECTION.  537C.5  Jurisdiction.

   A contract or contractual provision, if capable of segregation, which provides for jurisdiction for the purpose of granting the courts or arbitration panels in personam jurisdiction over the parties to adjudicate any disputes between the parties arising from the contract mutually agreed upon violates the public policy of this state and shall 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 Constitution of the United States and the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa.
    Sec. 6.  NEW SECTION.  537C.6  Forum non conveniens.

   If a person 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 constitutional rights of the nonclaimant in the foreign forum with respect to the matter in dispute, the claim shall be denied.
    Sec. 7.  NEW SECTION.  537C.7  Applicability.
   1.  Without prejudice to any legal right, this chapter shall not apply to a corporation, partnership, limited liability corporation, 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.
   2.  This chapter shall not apply to a church or to a religious corporation, association, or society, with respect to individuals of a particular religion regarding matters that are purely ecclesiastical, including but not limited to 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 the jurisdiction of the church would be final, and the jurisdiction of the courts of this state would be contrary to the First Amendment to the Constitution of the United States and to Article I of the Constitution of the State of Iowa. This exemption in no way grants permission for any otherwise unlawful act under the guise of the protection of the First Amendment to the Constitution of the United States.
    Sec. 8.  NEW SECTION.  537C.8  Conflict.

   This chapter 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. 
    Sec. 9.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill relates to the application of foreign laws. 
   The bill specifies that it shall be the public policy of this state to protect its citizens from the application of foreign laws when the application of foreign law will result in the violation of a right guaranteed by the Constitution of the United States or the Constitution of the State of Iowa, including but not limited to due process; freedom of religion, speech, or press; and any right of privacy or marriage embodied in the Constitution of the State of Iowa.
   The bill further specifies that it is the public policy of this state to fully recognize the right to contract freely under the laws of this state, and also to recognize 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 Constitution of the United States and the Constitution of the State of Iowa. 
   As used in the bill, “foreign law” 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. “Foreign law” as defined would not include the laws of the Native American tribes of this state as that jurisdiction is within this state.
   The bill establishes that it is a violation of the public policy of this state if any court, arbitration, tribunal, or administrative agency ruling or decision bases a ruling or decision 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 Constitution of the United States and the Constitution of the State of Iowa. The bill specifies such a ruling is void and unenforceable. 
   Under the bill, 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 arising from a contract mutually agreed upon violates the public policy of this state and shall 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 Constitution of the United States and the Constitution of the State of Iowa.
   A contract or contractual provision under the bill, if capable of segregation, which specifies jurisdiction for the purpose of granting the courts or arbitration panels in personam jurisdiction over the parties to adjudicate any disputes between the parties arising from a contract mutually agreed upon, shall 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 Constitution of the United States and the Constitution of the State of Iowa.
   If a person 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 the constitutional rights of the nonclaimant in the foreign forum with respect to the matter in dispute, the bill requires that the claim be denied.
   The bill does not apply to a corporation, partnership, limited liability corporation, business association, or other legal entity that contracts to subject itself to foreign law in a jurisdiction other that this state or the United States. The bill also does not apply to many activities involving a church or religious organization. 
   Additionally, the provisions of the bill 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. 
   The bill takes effect upon enactment.