Replies

"The South Carolina bill only prohibits the enforcement of foreign law "if it would violate a constitutionally guaranteed right of this State or of the United States."

First, you're right. Despite how it's described in the article (and it's described poorly, if not entirely inaccurately), this particular state statute isn't as crazy those passed in Tennessee and Oklahoma (OK might have actually been a Constitutional Amendment).

Neither can I.

Although, I would stipulate that this is South Carolina, so who knows what kind of crazy-ass provisions are secreted away in that state constitution. Of course, even with this state statute, any limitations or prohibitions on binding arbitration established by state law would (I believe) be superseded by the Federal Arbitration Act (see: Southland Corp. V. Keating, 465 U. S. 1).

Which of course begs the question, why. Why go through this ridiculous legislative circus, to prevent something that is already clearly prohibited by existing federal law and volumes of Supreme Court precedent?

After the Legislative body of South Carolina remedies the problems of Sharia Law being forced upon their frail citizens and whatnot, maybe they can then pass additional laws forbidding mad-scientist from creating earth swallowing vortexes, and stuff - 'cause you know, that's a big problem, too.

In any event, can you think of any private arbitration agreement that would be enforceable under existing US federal law, or South Carolina state law in instances where contractual obligations violate "constitutionally guaranteed right(s)"?

Neither can I.

Besides that, US courts already decline to apply foreign law when doing so would be repugnant to the public policy of the forum state. That is a well-established exception to the general rules of judicial comity, and requires no special, hastily-written statutes.

One issue that has popped up in recent years is "libel tourism", where a foreign or sometimes even an American plaintiff will sue an American defendant for defamation in a foreign court under foreign law - usually in England - and then seek to enforce the judgment in American court. Obviously, they do this in order to get around the First Amendment and the NY Times v. Sullivan line of cases and to take advantage of Britain's increasingly plaintiff-friendly libel laws.

Congress unanimously passed a law last year addressing the issue, making foreign defamation judgments unenforceable in the U.S. if the claim would have been barred by the First Amendment had it been brought under U.S. law. Of course, even before that statute and similar recent state statutes were passed, courts were already declining to enforce such judgments on the grounds that they violated the forum state's public policy.

In any event, can you think of any private arbitration agreement that would be enforceable under existing US federal law, or South Carolina state law in instances where contractual obligations violate "constitutionally guaranteed right(s)"?

Actually, come to think of it, I just thought of one. Lets say Joe the Software Engineer, a South Carolina citizen, does some independent contract work for a German company. His employment contract includes a choice of law clause providing that German law will apply, and a nondisclosure agreement.

Now, such an agreement is generally enforceable in the United States, but it does obviously restrain a constitutional right - freedom of speech. Under the South Carolina bill, would the German company be able to sue Joe in South Carolina court for breach of contract if Joe, say, divulged sensitive details of his work in his blog? I don't think it would be a totally unreasonable interpretation of the plain language of the bill to say that they couldn't, especially when you read section 2(C)(1) of the bill:

(C) Notwithstanding another provision of law, if any contractual provision or agreement:

(1) provides for the choice of a foreign law to govern its interpretation or the resolution of a dispute between the parties and the enforcement or interpretation of the contractual provision or agreement would result in a violation of the constitutional rights of a person, the contractual provision or agreement must be modified or amended to the extent necessary to preserve the constitutional rights of the parties.

Maybe I'm reading it all wrong, but can you see where that provision might be construed as rendering Joe's non-disclosure agreement unenforceable even though it would be perfectly enforceable if the contract chose South Carolina law?

Of course, it could mean that the term "violation" does not include rights voluntarily contracted away, but I don't know any way a contract could "violate" a right that doesn't involve some voluntary forbearance of that right by a party. And doesn't every 1L learn when reading Hamer v. Sidway one of the basic tests of consideration is the forbearance of some right, and do not all rights one could forbear in a contract in some way enjoy at least some Constitutional protection?

Perhaps I am engaging in reductio ad absurdum, but this bill seems to lend itself well to that.