Martha:

With regard to your specific negotiation issue, maybe you should ask to talk to the lawyers "downtown" and explain that the language proposed is not only unacceptable to Auburn but presumably to any other governmental agency outside of that state.  You might want to add that typically, most universities solve the problem by remaining silent on the issue rather than attempt to force unacceptable language on a research partner.  After all, as they stated, it's not a real world issue anyway.  So why won't they back off?

Just as an aside to the larger conversation, at UT-Austin we occasionally permitted an agreement's terms to be constued under the law of another state but never governed.  I'm not certain why "construed" was acceptable but not "governed".  

At any rate, good luck with your negotiation. It sounds like you're dealing with some people who don't negotiate with out of state entities very often.  (Incidentally, if it's the state of CA that you're working with, let me know.  They have been silent on governing law in a contract I negotiated.)

Rochelle Athey
Director, Sponsored Programs
805-756-1123/805-756-5588 (fax)
http://www.cpfoundation.org/SP/

-----Original Message-----
From: taylomm [mailto:taylomm@MAIL.AUBURN.EDU]
Sent: Friday, March 31, 2000 10:01 AM
To: RESADM-L
Cc: taylomm
Subject: venue, jurisdiction, and laws of another state

I recognize that not all public institutions have the same constraints
placed on them by their state constitution or governing board but I think
what may be discussed on this topic through this list will benefit several
people who have questions about liability, sovereignty, venue and
jurisdiction.

We have the following in our state constitution:   "The State of Alabama
shall not be made a defendant in any court of law or equity."  That is all
it says.  Case law has brought Auburn University in and shown that we share
in the sovereignty of the state.  The sole remedy for claimants against
Auburn is to go through our State Board of Adjustments.  This certainly
does not prevent someone from trying to sue the institution, however, it
would be dismissed by any court in Alabama and hopefully by most courts in
other states because of sovereign immunity.

We have a contract with the following clause to which we have objected:

"This Contract shall be governed by and construed in accordance with the
laws of the State of ---------------(not ALABAMA).  The Contractor agrees
that it will be subject to the exclusive jurisdiction of the courts of the
State of ------------- and the courts of the United States which are
located within the State of ---------- in actions that may arise under this
Contract.  The Contractor acknowledges and agrees that any rights or claims
against the State of --------- or its employees hereunder, and any remedies
arising therefrom, shall be subject to and limited to those rights and
remedies, if any, available under (state name) Code Annotated, Sections
9-8-101 through 9-8-407."  (basically their version of the state board of
adjustments)

We objected initially to many clauses and they changed all but this one.
We objected finally to this one and received the following response:

"The paragraph to which you refer is not a negotiable item according to the
legal staff downtown. They feel that they have made concessions along the
way to make this contract work, but this is standard language in all state
contracts now and they have negotiated all they can.
If Auburn cannot do the overlooking in this case, I'm afraid we will not be
able to work with the university. We have contacted XYZ University and they
can and will do the work.
We also have a contract with Auburn for the AAA Project. When this comes up
for renewal, I fear we will find ourselves deadlocked again even though it
is at least a 20+ year association.   [editorial comment - the previous 20
years contracts didn't have this clause in them]
I think it is very unfortunate that state and university personnel are past
ready to get on with this, but we are being hamstrung by contract verbiage
that we both know has no meaning in the real world."

Our General Counsel is just as adamant for changing the language to Alabama
as their is in keeping it as their own state.  We offered to take it out
all together and remain silent.  That way, it would be an issue only if
something really bad happened.  After all, this has "no meaning in the real
world." as far as they are concerned.

What I would like to say to them in response is not polite and thus not
effective.  SO I appeal to this group to help me figure out what I am
overlooking and what universities out there would agree to their language.
If you could accept this language, please tell me if it is something in
your charter or constitution or policies or what that makes this
acceptable.  Do you have gobs of insurance and a huge general counsel
staff?  I am honestly wanting to learn the risks involved.  Thank you.
-----------------------------------------------------------------
Martha M. Taylor, Director
Office of Sponsored Programs
310 Samford Hall
Auburn University, AL 36849-5131

334-844-4438
334-844-5953 (fax)

(taylomm@auburn.edu)

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