Re: venue, jurisdiction, and laws of another state Donna Sofaer 03 Apr 2000 14:53 EST
Martha, I have a couple thoughts about this. The contract clause that Auburn has objected to contains three provisions. The first is a governing law clause, which provides that contract is to be construed in accordance with the law of the offeror state. The second is a forum selection clause, which provides that any lawsuits arising under the contract must be brought in the offeror state's courts (and the federal courts in that state). The third clause is a partial waiver of the offeror state' s sovereign immunity, under which it permits claims against it to be adjudicated in an administrative tribunal. Although the first provision is not literally inconsistent with the language in your state's constitution, my experience is that no public agency will knowingly agree to be governed by another state's law. Counsel for the offeror state has undoubtedly been on the opposite side of this clause before, and knows full well that the solution is for the contract to be silent as to the governing law. State institutions all across the U.S. successfully overcome this negotiation hurdle everyday. You might want to rethink your objection to the third provision. It has nothing to do, at least directly, with your state's sovereign immunity. To be sure, it limits Alabama's remedies against the offeror state, but apparently no more than Alabama law limits their remedies against you. Additionally, although it isn't entirely clear from your posting, it sounds as if Auburn is providing services and the offeror state is paying for the services. This means that Auburn's risk of nonperformance by the other party is primarily a risk of nonpayment. Perhaps you could satisfactorily manage this risk through artful drafting of the payment clause. Check with your counsel. That leaves you with the second provision, which your counsel obviously has to evaluate in juxtaposition with Alabama's constitutional sovereign immunity clause. I suppose it would be possible to try to negotiate an addendum stating that the provision shall not be interpreted to waive Auburn's sovereign immunity under Alabama law. I wonder if the offeror state would drop the second provision if you agreed to the third? Jim Simpson, General Counsel Public Health Institute xxxxxx@phi.org ====================================================================== Instructions on how to use the RESADM-L Mailing List, including subscription information and a web-searchable archive, are available via our web site at http://www.hrinet.org (click on "Listserv Lists") ======================================================================