I L S V XVIII, N. , F 

MIL Editorial Staff hosted by Wayne State University Law School Letter from the Chair P J E. M, Faculty Editor P J Y. Q, Faculty Editor C A. P, Senior Editor Dear Members and Colleagues: B S, Junior Editor N M. S, Junior Editor S A. T, Junior Editor As my term as Chair- professional services and man of the State Bar of multidisciplinary practice. Michigan International Law Also, we participated in a In This Issue Section comes to an end, very informative session U.S. Government approves CAFTA to Promote I would like to express my on bar section leadership Free Trade with Central America – sincere appreciation for the and management. Andrew Doornaert ...... 2 opportunity and privilege At the Sections stra- Section Meetings at a Glance ...... 3 it has been to serve you. I tegic planning meeting Foreign Corrupt Practices Act: Th e Impact of Sarbanes-Oxley and Other New Developments – will pass the gavel to Bruce this summer we launched Stuart H. Deming ...... 4 D.Birgbauer at the Sec- initiatives to enhance Th e Intesifying Confl ict between State and Federal tions Annual Meeting at member participation Government Procurement Policy – the Sheraton Detroit-Novi Hotel on (including participation in meetings Paul J. Carrier ...... 9 October 6, 2005 and join the ranks and events via the internet), expand International Law Moot Court Competition to be held in Detroit ...... 15 of the Ex-Offi cio. the committee structure, continue Th e Section has a long tradition the law school scholarship program, Changes in India's Patent Law and its Repercussions on the Global Drug Industry – of strong support and participa- and add a law student international Ashish S. Joshi ...... 16 tion by its Ex-Offi cio members. At summer intern program. Enforcement of Investors' Rights Under many of the meetings and events I write this letter on the fourth Investment Treaties – over the past few years, a majority anniversary of the September 11th Grant Hanessian & Peter Swiecicki ...... 20 of the participants were Ex-Offi cio attacks on our country, and in the Law Student Essay: Medical Malpractice Liability members. Th e Section benefi ts from midst of dealing with the tragedy on Under Chinese and American Law – Samuel Saks ...22 the cumulative wisdom during their the Gulf Coast. Th e incredible resolve Treasurer's Report ...... 26 participation, and they help preserve of the victims of both to rebuild Minutes of Regular Section Meetings ...... 27 and perpetuate the quality of spirit their lives, and the generosity of all Section Tours Detroit Airport– Nathaniel Schmidt 30 and camaraderie that is so evident at Americans to insure that happens is Calendar of Events ...... 31 our meetings. very heartwarming. Leadership Roster 2004-2005 ...... 33 Bruce Birgbauer and I represent- One of the reasons that our coun- Disclaimer: Th e opinions expressed here in are solely ed the Section at the 2005 State Bar try continues to be secure against those of the authors and do not necessarily refl ect those of Michigan Leadership Forum this both natural disasters and its enemies of the International Law Section or the Editors. summer. Th e Forum focused on issues is the Department of Homeland Se- Th e Michigan International Lawyer is published three times per year by the International Law Section, State Bar of Michi gan, that impact the profession such as 306 Townsend Street, Lansing, Michigan 48933-2083. increased taxation on revenues from Continued on page 3 Copyright 2005 International Law Section, State Bar of Mich igan. © All rights Reserved. 1
ichigan International Lawyer

Submissions Guidelines U.S. Government approves

The Michigan International Lawyer, which is published three times per year by the Interna- CAFTA to Promote Free Trade tional Law Section of the State Bar of Michigan, is Michigan's premiere international law journal. Our with Central America mission is to enhance and contribute to the public's Andrew Doonaert, Miller Canfi eld Paddock and Stone PLC knowledge of world law and trade by publishing articles on contem po rary inter na tion al law topics and issues of general interest. The Michigan International Lawyer invites In August 2005, the U.S. Govern- so the duty-free privileges have unsolicited manuscripts in all areas of international ment approved the Central American lapsed on some occasions; interest. Manu scripts should be available in hard 2. To originate for CBERA and copy and electronic format. Manuscripts submit- Free Trade Agreement (“CAFTA”, ted for consideration cannot be returned unless which will remove trade barriers be- GSP, a part imported from accompanied by a $5 check or money order made tween the U.S. and Costa Rica, El Sal- non-benefi ciary country may payable to Wayne State University Law School for shipping and handling. vador, Guatemala, Honduras, Nicaragua have to undergo a “double sub- All submissions may be forwarded to the editor and the Dominican Republic. stantial” transformation which at the following address: Professor Julia Ya Qin, Editor CAFTA will reduce the duty rates can be more diffi cult to deter- Michigan International Lawyer for goods imported into the U.S. that mine compared to a tariff shift Wayne State University Law School 471 W. Palmer qualify as “originating” from one of the allowed under CAFTA which Detroit, Michigan 48202 countries above under the new coun- compares the Harmonized (313) 577-3940 Tariff Schedule Code (“HTS”) [email protected] try rules of origin. Th e rules of origin provide for tariff shifts and regional of the imported material to the value content formulas similar to the HTS code of the fi nished good; North American Free Trade Agreement and (“NAFTA”). Th ere are signifi cant dif- 3. The record-keeping require- ferences between some of the individual ments and eligibility require- CAFTA rules of origin compared to ments of CAFTA may be more compatible with a company’s Publication Deadline Dates the NAFTA rules of origin for similar imported items. Some CAFTA rules business and accounting prac- Michigan International of origin allow for lower regional value tices compared to the require- Lawyer content requirements, for example ments of CBERA and GSP. If you know of any upcoming event, 35% or greater, and in some cases the U.S. companies should give the please let us know. decision to transition serious Contact: regional value content requirement can Professor Julia Ya Qin, Editor be met through the “build-up method” consideration and may seek Michigan International Lawyer outside counsel to consider the Wayne State University or “build-down method.” Law School The Caribbean Basin Economic advantages and disadvantages 471 W. Palmer of participating in each trade Detroit, MI 48202 Recovery Act (“CBERA”) or General- (313) 577-3940 ized System of Preferences (“GSP”) program. [email protected] are special U.S. government trade It is not yet clear when CAFTA Winter Issue programs that currently exist, which will actually enter into force because Articles due December 1 allow goods from the CAFTA countries the language of the implementing Spring Issue to realize duty free status for qualify- Articles due March 1 legislation specifi cally avoids naming ing goods imported in the U.S. U.S. Fall Issue a date but it does indicate the U.S. Articles due August 1 companies currently taking advantage will enter into the agreement with of CBERA and GSP should consider each of the other countries as they transitioning to using CAFTA for the adopt it. following reasons: In addition to CAFTA, the Bush 1. CBERA and GSP have to be pe- Administration has overseen the riodically renewed by Congress implementation of Free Trade Agree-

2 VOLUME XVII, NO. 3, FALL 2005

ments with Australia, Chile, Jordan, Morocco and Singapore. Section Meetings On the horizon are Free Trade at-a-Glance Agreements with Bahrain, Th ai- October 6, 2005 land and the Andean countries in South America. Annual Meetng For more information about November 8, 2005 CAFTA and other free trade Meeting — Oakland County agreements, contact Andrew Doornaert, Esq.
January 24, 2006 Meeting — Detroit Andrew P. Doornaert is a se- nior attorney in the Detroit offi ce April 18, 2006 of the law fi rm of Miller, Canfi eld, Meeting — Law School Paddock and Stone P.L.C. where he provides expertise in the area of June 20, 2006 customs and international trade Planning Session law. He reduces the costs and liabil- ity risks associated with import and September 2006 export transactions. His experience Annual Meeting includes tariff classifi cation, rates of duty and valuation of imported merchandise, Free Trade Programs (NAFTA, GSP, AGOA, CAFTA), From the Chair country-of-origin marking and Continued from page 1 labeling requirements, NAFTA verifi cations, customs compliance curity. Th e fact that a delegation from our Section toured the US Customs and assessments, customs penalty cas- Border Security area at the Detroit Metropolitan Wayne County Airport speaks es, foreign trade zones, customs volumes about the unit’s organization and confi dence. Also, the delegation was bonded warehouses, maquiladoras, be briefed by representatives from the Airport Authority on airport operations, value added taxes and other cus- expansion and preparations for Super Bowl XL. toms considerations that arise in Please plan on joining us at the Section’s Annual Meeting this year. Follow- the shipment of goods between the ing the business meeting there will be a program on the topic Business and United States and foreign markets. Legal Challenges in China and India for Automotive Suppliers. Of course, He also advises companies on ex- we would like you attend all meetings and events during the year. However, port control regulations and assists if you only attend one, please join us at the Annual Meeting. It is an excellent companies to secure export licenses opportunity for you to meet your Section’s leadership and members. through the Department of Com- Finally, I would like to thank all of you that supported my tenure as Chair merce, Department of State and of the Section this year, especially those involved in speaking at various events, Department of Treasury. writing articles and publishing the Michigan International Lawyer. Th e talent, diversity and professionalism of our Section’s membership are very evident and appreciated.

Sincerely,

Randolph M. Wright Chair

3
ichigan International Lawyer

Th e Foreign Corrupt Practices Act: Th e Impact of Sarbanes-Oxley and Other New Developments Stuart H. Deming, Deming PLLC

Prohibiting the payment of bribes the FCPA. However, unlike the anti- FCPA. Issuers are required to include to foreign offi cials is generally viewed bribery provisions, the accounting in their annual reports an assessment as the sole focus of the Foreign Cor- and record-keeping provisions apply by management of the adequacy of rupt Practices Act (“FCPA”).1 Yet, in to the operations of majority-owned their internal controls.7 An attestation reality, its provisions have far greater foreign subsidiaries of an issuer.4 is also required by an issuer’s outside implications than simply prohibit- Signifi cantly, the record-keeping auditor as to management’s assess- ing the payment of bribes to foreign provisions apply to all payments, not ment of the adequacy of the issuer’s offi cials. To address practices associ- merely sums that would be mate- internal controls. ated with the making of improper rial in a traditional fi nancial sense. payments, the FCPA placed new and Even if the amount of a transaction Expansion of Criminal Sanctions signifi cant affi rmative obligations on would not aff ect the “bottom line” To give added impetus to the issuers to maintain systems of internal of an issuer in quantitative terms, degree to which Congress views a vio- controls and to maintain records that it could still constitute a violation lation of U.S. securities laws, the pen- accurately refl ect transactions and dis- of the record-keeping provisions if alties for a criminal violation of the positions of assets. Th ese obligations not accurately recorded. As a result, accounting and record-keeping pro- are known as the “accounting and transactions involving small amounts visions were dramatically increased. record-keeping provisions.”2 of money, if not properly recorded, Incarceration was increased from 10 can have serious ramifi cations. to 20 years.8 Fines for individuals The Accounting and Record-Keep- Historically, except for disclosures were increased from $1 million to $5 ing Provisions as to certain aspects of an issuer’s million and from $2.5 million to $25 Th e FCPA’s accounting and re- activities, materiality was the overrid- million for entities. Th e penalties for cord-keeping provisions constitute ing consideration as to what required a violation of the anti-bribery provi- the FCPA’s second and less-known disclosure and what constituted a sions, which were already less severe, mechanism for deterring bribes to violation of U.S. securities laws. Th e remained unchanged.9 foreign officials. While their ap- record-keeping provisions represented plication is limited to issuers, the a dramatic departure from the tradi- Protection of Informants accounting and record-keeping provi- tional approach taken by U.S. securi- Individuals who provide infor- sions constitute the far more potent ties laws. Th e concept of materiality mation relative to a violation of U.S. mechanism. Unlike the anti-bribery does not control what constitutes a securities laws, including the FCPA, provisions,3 they are not limited to violation of the core part of the re- were given added protection by Sar- the making of improper payments. cord-keeping provisions.5 However, banes-Oxley. It is a criminal off ense Regardless of whether an issuer is materiality does control disclosure for any individual or entity to know- engaged in international business, obligations to shareholders. ingly retaliate against any person for they apply to all aspects of an issuer’s providing information relating to the practices relating to the preparation The Impact of Sarbanes-Oxley commission or possible commission 10 of its fi nancial statements. In the wake of the accounting of a federal off ense. In addition, Officers, directors, employees, scandals involving Enron and other these protections are expressly in- and agents acting on behalf of an is- U.S. companies, Congress adopted a tended to apply to situations outside 11 suer are subject to the FCPA. To the range of remedial measures common- of the United States. degree that they may be complicit, ly referred to as “Sarbanes-Oxley.”6 “Retaliation” can consist of “in- privately-held companies as well as in- Foremost among these measures were terfering with the lawful employment 12 dividuals not affi liated with an issuer the heightened obligations associated or livelihood” of the informant. can be subject to the prohibitions of with the accounting provisions of the Along these same lines, new criminal

4 VOLUME XVII, NO. 3, FALL 2005

statutes were added for the destruction, are required to be made at the highest to the prospect of criminal and civil alteration, or falsifi cation of records to levels of an issuer relative to material enforcement action. impede a federal investigation or in violations of U.S. securities laws.18 What appear to be de minimis anticipation of such an investigation Disclosure to the SEC may also be payments or isolated events can have and for the destruction of audit records required.19 A material violation can far greater ramifi cations than what in violation of rules and regulations include a material violation by an may initially be perceived. Even with promulgated by the SEC.13 offi cer, director, employee, or agent an immaterial amount and an absence of an issuer. of management involvement, the Added Responsibilities for To be subject to these obligations, payment of a bribe can be material.20 Audit Committees an attorney need not be employed However, no per se rule exists. Courts Sarbanes-Oxley imposed added or retained by an issuer. Attorneys have typically looked to the circum- responsibilities for audit committees. practicing before the SEC include at- stances of a particular situation.21 Audit committees are required to torneys communicating with the SEC, Materiality can be premised upon establish procedures for the receipt, representing anyone before the SEC, how a set of circumstances may bear retention, and treatment of com- providing legal advice with respect to on a key segment or prominent sub- plaints received by an issuer regarding submissions to the SEC, and providing sidiary of an entity.22 An affi rmative accounting, internal accounting con- legal advice to an issuer as to whether duty is generally not recognized with trols, or auditing matters. Procedures a submission or other information is respect to making immediate disclo- are also required to be established required to be furnished to the SEC sure of material non-public informa- for the confi dential and anonymous under U.S. securities laws. Th e obliga- tion or to correcting or updating submission by employees regarding tions can also apply to supervising and previous disclosures.23 But disclosure questionable accounting or auditing subordinate attorneys. of material non-public information 14 practices. may be required with respect to pe- 24 Private Right of Action for Whistleblowers New Developments riodic and episodic fi lings. Sarbanes-Oxley established a new One of the most challenging is- Section 21(a) Report in Titan cause of action for retaliation against sues presented to an issuer is whether Th e SEC’s recent Section 21(a) whistleblowers who provide infor- a disclosure to shareholders must be report arising out of its investigation mation to federal law enforcement made of a suspected violation of the of the Titan Corporation provides an agencies, to Congress, to supervisors, anti-bribery or accounting and record- example of how the payment of bribes to those conducting internal investi- keeping provisions of the FCPA or of may not be material in a quantitative gations, or to any litigation involving the anti-bribery prohibitions of other sense but material from a qualitative various violations of federal law or countries. Frequently misunderstood, perspective.25 Titan affi rmatively rep- any provision of federal law relating or overlooked, is the obligation to resented in its merger agreement with to fraud against shareholders.15 Provi- make timely disclosures in fi nancial Lockheed that it was not aware of sion is made for reinstatement, back statements or fi lings with the SEC. any information of it having violated pay, and litigation costs. But a short Th ese disclosures are required to be the FCPA. Th e representation was 90-day statute of limitations is im- made regardless of whether an investi- included in its proxy statement and posed along with a requirement that gation is launched or any other action a copy of the merger agreement with administrative remedies be exhausted is taken by enforcement authorities. the same representation was attached with the Department of Labor. Disclosure in financial state- ments or fi lings is dependent upon an to its proxy statement. Disclosure by Attorneys issuer’s obligations under U.S. securi- Even though the merger agree- Following a framework similar ties laws to make timely disclosure of ment was amended to take into ac- to that for auditors under the Private information that may be material to count SEC and Department of Justice Securities Litigation Reform Act of shareholders. A failure to make timely investigations of Titan for FCPA 1995,16 Sarbanes-Oxley imposed dis- disclosure of material information can violations, FCPA representations closure obligations on attorneys who also expose an issuer to civil liability associated with the proxy statement practice before the SEC.17 Disclosures to claims brought by its shareholders were never changed. Th e failure to under U.S. securities laws as well as qualify or correct the representation 5
ichigan International Lawyer

in the proxy statement as to there violations of the anti-bribery provi- model used at times with respect to being no evidence of a violation of sions can have a bearing on a merger fraud involving defense contractors. the foreign payment provisions of or acquisition and, in turn, be mate- Deferred prosecutions are almost the FCPA was found to be material rial to shareholders.28 always limited to entities and, in ex- in a qualitative sense and therefore change for not fi ling criminal charges, requiring disclosure. The Absence of a Compliance Program they typically include the same basic Th e SEC issued its report of in- For an issuer engaged in extensive components: vestigation which held that “[w]hen overseas activities, the mere absence 1. Th e acceptance of responsibil- an issuer makes a public disclosure of a company-wide FCPA compliance ity for the misconduct; of information – via fi ling a proxy program may constitute a violation 2. Th e payment of a fi ne; statement or otherwise – the issuer of the internal control provisions. 3. Th e full and affi rmative dis- is required to consider whether addi- Among the allegations in the com- closure to the Department of tional disclosure is necessary in order plaint against Titan, the SEC alleged Justice of evidence of possible to put the information contained in, that Titan failed to devise or main- violations of the FCPA; or otherwise incorporated into that tain an eff ective system of internal 4. The adoption of an FCPA publication, into context so that such controls to prevent or detect FCPA compliance program and a set 29 information is not misleading.”26 It violations. of internal controls designed to found that “a reasonable investor The SEC’s Litigation Release prevent future violations; and could conclude that the statements reported that “[d]espite utilizing 5. Th e retention of an indepen- made in the representation describe over 120 agents and consultants dent compliance expert for a the actual state of aff airs and the in- in over sixty counties, Titan never specifi ed period to ensure that formation could be material.”27 had a formal company-wide FCPA the compliance program and Consistent with the SEC’s Sec- policy, failed to implement an FCPA internal controls are eff ective. compliance program, disregarded or tion 21(a) report, the circumstances circumvented the limited FCPA poli- surrounding Titan and its proposed Implications on Business and cies and procedures in eff ect, failed merger with Lockheed further il- Employment Relationships to maintain suffi cient due diligence lustrate how FCPA violations can be Th e FCPA and the implementa- fi les on its foreign agents, and failed material to shareholders well after an tion by many countries of the inter- to have meaningful oversight over its applicable statute of limitations may national anti-corruption conventions foreign agents.” have expired or after the prospect will increasingly have implications on relationships between and among pri- of enforcement action has abated. The Use of Deferred Prosecutions vate parties.32 Regardless of whether Titan’s FCPA violations were dis- Another set of recent cases relates action is taken by enforcement offi - covered in the course of Lockheed’s to the use of deferred prosecutions cials, a growing body of domestic and due diligence investigation associated by the Department of Justice with with its proposed merger with Titan. respect to FCPA violations. Th e most international law bears on the con- Lockheed would not go forward with recent case involved a company by duct of business as a result of a failure the merger without Titan reaching a the name of Micrus Corporation.30 to comply with the FCPA and other resolution with SEC and Department After a voluntary disclosure to the legal regimes prohibiting improper of Justice offi cials. Department of Justice, it was deter- payments to foreign offi cials. Th e merger eventually failed be- mined that Micrus had paid more Public-Policy Exception to cause a timely resolution could not than $105,000 to doctors employed At-Will Employment be worked out. Hence, from Titan’s by publicly-owned and operated In employment contexts, the shareholders’ standpoint, the FCPA hospitals in Europe in return for the FCPA has been found in the United violations proved to be costly and purchase of Micrus’ products. A de- States to serve as a basis for the appli- thereby material as the value of their ferred prosecution was also the basis cation of the public-policy exception investment was substantially reduced. for resolution in a relatively recent for the termination of at-will employ- case involving Monsanto.31 It also demonstrates that well after ees.33 For employees who are alleged The deferred prosecutions in the expiration of applicable statutes to have been terminated for their re- of limitations, evidence of possible Micrus and Monsanto followed the 6 VOLUME XVII, NO. 3, FALL 2005

fusal to condone or carry out practices to bonos mores.”35 Some tribunals have International Accounting Standards that are prohibited by the FCPA, the found national laws to also hold such Subcommittee, and a vice chair of the practical eff ect is to shift the burden contracts to be illegal. Anti-Money Laundering and Profes- to an employer to demonstrate that Until the recent adoption of the sional Ethics Committee. Deming is also the termination was for cause. anti-bribery conventions, no specifi c a former Chair of the International Law Especially in the wake of the reference to international law could Section of the State Bar of Michigan, corporate scandals in recent years, be made. That has now changed. former co-chair of the ABA’s National this public policy exception to at-will Th ere can be little question that an Institutes on the Foreign Corrupt Prac- employment associated with possible agreement to pay a bribe is contrary to tices Act, founder of the ABA’s Task Force FCPA violations can be expected customary international law and not on International Standards for Corrupt to be followed by more and more just a breach of moral standards. Ar- Practices, and former member of the courts. Indeed, in dicta, the Seventh bitrators can accordingly be expected Board of Editorial Advisors to the For- Circuit has stated in applying the to be more and more confronted with eign Corrupt Practices Act Reporter. public-policy exception in Brandon arguments of this nature by parties Deming received his B.A., M.B.A., v. Anesthesia & Pain Management As- challenging the enforcement of a con- and J.D. from the University of Michigan. sociates, Ltd., 277 F.3d 936, 942 (7th tract where allegations of improper He is licensed to practice in Michigan Cir. 2002), that states are “required payments exist. and in the District of Columbia. He is to treat federal law on a parity with a member of the bar of the U.S. Supreme state law, and thus [are] not entitled Conclusion Court as well as a number of federal to relegate violations of federal law or Focusing on the FCPA as being district and appellate courts. He has policy to second-class citizenship.” solely related to making improper also been licensed as a Certifi ed Public Enforcement of Contracts payments to foreign offi cials can be Accountant in Michigan. Within the context of contractual a dangerous proposition. Sarbanes- Endnotes disputes, the FCPA can in certain Oxley has dramatically increased the seriousness of the implications for any 1 15 U.S.C. §§ 78m; 78dd-1; 78dd-2; 78dd- situations serve as a basis for not 3, 78ff . enforcing a contract. In litigation in individual or entity that takes a nar- 2 Conceptually, an issuer is a publicly-held U.S. courts and in other common row or cavalier approach to abiding company. However, from a technical law jurisdictions, the “unclean hands” by the terms of the FCPA. Especially standpoint, an issuer is any entity that is doctrine can bar a claim for equitable for issuers, the pervasive nature of the required under the Securities Exchange accounting and record-keeping provi- Act to register under Section 12 or to relief. In some jurisdictions the doc- fi le reports under Section 15(d). Id. trine has also been applied to bar a sions cannot be overstated. Great care at §§ 78l, 78o(d). Issuers may be cause of action. Th is includes situa- must be exercised to ensure that all foreign companies, including a foreign tions where a payment may have been of an issuer’s obligations under the company with American Depository made in violation of the anti-bribery FCPA are strictly observed.
Receipts (“ADRs”), that are registered pursuant to Section 12 or required to provisions of the FCPA.34 Stuart H. Deming of Deming, fi le reports pursuant to Section 15(d). In the context of international ar- Th e accounting and record-keeping PLLC has written and spoken exten- bitration, arbitral tribunals and courts provisions apply to issuers and not solely sively in the United States and abroad in enforcing or annulling arbitral to publicly-held companies. on a range of legal issues related to in in- 3 Th e anti-bribery provisions relate to the awards are increasingly confronted ternational business. He is the author of prohibitions on improper payments to with situations where the enforce- the American Bar Association treatise, foreign offi cials. Id. at §§ dd-1; dd-2; ment of a contract or the enforcement dd-3. Th e Foreign Corrupt Practices Act of an award relating to a contract 4 While the anti-bribery provisions do not and the New International Norms. may be barred due to improper in- technically apply to foreign subsidiaries, Deming is also an adjunct profes- a parent can be held vicariously liable ducements in conjunction with the sor at the John Marshall Law School for the conduct of a subsidiary if it has contract. Over the years, arbitrators Center for International Business and suffi cient knowledge and control. As have asserted the existence of “an in- a practical matter, there are relatively Trade Law in Chicago. He is the vice ternational public order which makes few situations where parent companies chair of ABA Securities and Capital bribery contracts invalid and contrary have little knowledge or control over the Markets Committee, the chair of the activities of their subsidiaries. Moreover, 7
ichigan International Lawyer

what is often termed “willful blindness” of GE was able to generate false profi ts, statement of SEC policy, particularly in cannot be used as a defense to a violation apparently without GE’s knowledge, terms of future enforcement policy. of the anti-bribery provisions. arguably raised concerns about GE’s 26 Id. 5 15 U.S.C. § 78m(b)(2); 17 C.F.R. § internal controls, effi ciency, and integrity, 27 Id. In explaining its position, the SEC 240.13b2-1. However, in terms all of which would have been relevant to cited to Basic Inc. v. Levinson, 485 U.S. of representations or omissions to a reasonable investor). 224, 240 (1988) (“materiality depends auditors, materiality is a factor. Id. at § 23 See, e.g., G. Porter, What Did You Know on the signifi cance the reasonable 240.13b2-2. and When Did You Know It?: Public investor would place on the withheld 6 “Sarbanes-Oxley” is derived from the Company Disclosure and the Mythical or misrepresented information”). names of the respective chairmen of the Duties To Correct and Update, 68 28 In a situation similar to Titan, GE pertinent oversight committees of the F L. R. 2199 (2000); M. encountered evidence of possible Senate, Paul S. Sarbanes, and the U.S. Gulati, When Corporate Managers Fear FCPA violations in the course of its House of Representatives, Michael G. a Good Th ing is Coming to an End: Th e acquisition of InVision Technologies, Oxley. Case of Interim Nondisclosure, 46 UCLA Inc. SEC Litigation Release No. 7 15 U.S.C. § 7262. L. R. 675 (1999). 19078 (Feb. 14, 2005) (http://www. 8 Id. at § 78ff (a). 24 “Th e periodic disclosure requirements sec.gov/litigation/litreleases/lr19078. 9 Th e maximum fi ne for a criminal violation include: (1) the annual fi ling of Form htm), reprinted in B L, I. by an entity is $2 million, and the 10-K, which requires an extensive (FCPA), § 699.9202. Disclosures to maximum period of imprisonment for discussion of the corporation’s business the Department of Justice and SEC an individual is 5 years. 15 U.S.C. §§ for the preceding fi ve years; (2) disclosure followed along with a resolution. 78dd-2(g); 78dd-3(e); 78ff (c). of audited fi nancial statements for While the SEC’s ability to seek civil 10 18 U.S.C. § 1513(e). the immediately preceding three fi scal fi nes may be limited by the expiration 11 Id. at § 1513(d). years, and management’s analysis of of applicable statutes of limitations, 12 Id. the changes in its fi nancial condition its ability to seek equitable relief is not 13 Id. at §§ 1519 and 1520. and the results of its operations for limited by a statute of limitations. 14 15 U.S.C. § 78j-1(m)(4). the periods covered by its fi nancial 29 SEC Litigation Release No. 19107 (March 15 18 U.S.C. § 1412A. statements (known as the “MD&A”); 1, 2005) (http://www.sec.gov/litigation/ 16 15 U.S.C. § 78j-1. and (3) quarterly fi lings of Form 10- litreleases/lr19107.htm), reprinted 17 Id. at § 7245. Q, which require quarterly and year- in B L, I. (FCPA), § 18 17 C.F.R. § 205.2(i). to-date fi nancial statements and an 699.9203. 19 Id., § 205.3(d)(2). MD&A covering the quarter and year- 30 B L, I. (FCPA), § 20 See, e.g., Roeder v. Alpha Industries, to-date period. Episodic disclosure 101.00801. Inc., 814 F.2d 22, 26 (1st Cir. 1987) requirements include: (1) fi ling of a 31 Id. (“Illegal payments that are so small proxy statement preceding any meeting 32 Th e international conventions include as to be relatively insignifi cant to the of the corporation’s stockholders, which the Convention on Combating bribery requires detailed information about the corporation’s bottom line can still have of Foreign Offi cials in International items to be voted on at the stockholder’s vast economic implications”); In re Business Transactions, often referred meeting; (2) registration statements Rospatch Sec. Litigation, 760 F. Supp. to as the “Organization for Economic that are required to be fi led prior to 1239, 1252 (W.D.Mich. 1991) (“Th e Co-operation and Development the sale of the corporation’s securities, spirit of the federal securities laws (‘OECD’) Anti-Bribery Convention,” which requires an extensive disclosure requires that those who are in positions the Inter-American Convention regarding the contemplated off ering; to know of serious wrongdoing ought Against Corruption, the Council of to disclose any such wrongdoing to the and (3) the fi ling of Form 8-K, which is required to be fi led within 10 days Europe Criminal Law Convention on public”). Corruption, and the United Nations 21 For example, in Roeder, at 26, the First following certain material events such as a change of control of the corporation, Convention against Corruption. Circuit cited to a situation where small 33 E.g., D’Agostino v. Johnson & Johnson, illegal payments could be material to an signifi cant acquisitions or dispositions of assets, and changes in a corporation’s Inc., 133 N.J. 516, 628 A.2d 305 (N.J. entity that “relies heavily on government 1993); Th ompson v. St. Regis Paper because such activity can result in auditors.” Porter at 2202 n. 13. 25Th e investigative report is located at http:// Co., 102 Wash.2d 219, 685 P.2d 1081 the corporation being barred from (Wash. 1984). obtaining future government contracts www.sec.gov/litigation/investreport/34- 51283.htm, reprinted in B L, 34 E.g., Adler v. Federal Republic of Nigeria, or subcontracts.” See also SEC v. Jos. 219 F.3d 869, 876-78 (9th Cir. 2000); Schlitz Brewing Co., 452 F. Supp. I. (FCPA), § 699.9204. A “Section 21(a) report” is prepared pursuant SEDCO International, S.A. v. Cory, 683 824, 830 (E.D. Wis. 1978) (it may be th to Section 21(a) of the Securities F.2d 1201, 1210-11 (8 Cir. 1982). material that brewery risked losing its 35 Martin, International Arbitration and license to sell beer by engaging in illegal Exchange Act. 15 U.S.C. § 78u(a). It does not represent a factual fi nding or Corruption: An Evolving Standard, practices). I E  M 22 E.g., In re Kidder Peabody Securities adjudication. However, it is a signifi cant report in that it is rarely issued and, A, M L S Litigation, 10 F.Supp.2d 398, 410-411 (Spring 2002). (S.D.1998) (that a prominent subsidiary most important, it signifi es a major 8 VOLUME XVII, NO. 3, FALL 2005

Th e Intensifying Confl ict between State and Federal Government Procurement Policy Paul J. Carrier, Th omas M. Cooley Law School

Since that time in light of reservations held in a single direction, which under- 1979 and by other nations.5 Today, however, scores the importance of government the Tokyo the AGP organizes the participants’ procurement on a national and an Round off erings into fi ve basic categories, international level. In turn, there is of world which are set out in fi ve diff erent an- added pressure on a federal level to trade ne- nexes to each participant’s Appendix negotiate even further liberalization gotiations, I: 1) Central Government Entities; of procurement opportunities on a the United 2) Sub-Central Government Entities; reciprocal basis. States has 3) Other Entities; 4) Services; and 5) In 2004, federal aspirations re- Paul J. Carrier participated Construction Services.6 ceived a setback in what appears to in a limited Th e heightened importance of be a backlash to the outsourcing international regime on the opening government procurement is best un- of telephone call centers to nations of specifi ed government procurement derstood not only by the inclusion such as India.12 At least thirty-seven opportunities to other participating of more items to which the AGP states have taken steps to prohibit nations, on a reciprocal basis, that applies,7 but also to the number of or to discourage outsourcing where have also signed the Agreement on new participants, and as importantly, it involves the expenditure of state Government Procurement (“AGP”).1 to the number of new bi- and multi- funds.13 In Michigan, Executive With certain threshold limits and lateral trade agreements that now Directives 2004-2 and 2004-3 now certain other exceptions, the intent include government procurements direct Michigan state procurers to of the AGP is to require the partici- as a topic of trade liberalization. To- favor Michigan-based businesses to pants to treat bidders from the other day, the AGP now has thirty-seven the extent permitted by federal law.14 signatory nations on an equal basis as signatory nations and the European In light of the fact that the States’ par- their domestic bidders for procuring Communities, twenty observers, and ticipation in the sub-central procure- entities and for items listed in their nine nations (currently observers) ment regime of the AGP is voluntary, respective annexes. In effect, the that have applied for accession.8 Th e the extent to which a State may opt AGP calls for national (i.e., “equal”) United States has included procure- out of federally-agreed obligations treatment2 and for non-discrimina- ment in several of its bi-lateral and under the AGP would appear to tion3, with the attainment of gradual regional trading arrangements,9 and be total.15 However, while a recent liberalization driven by negotiations, is currently negotiating procurement U.S. Supreme Court decision that primarily on a bi-lateral basis but coverage as part of several new agree- recognized federal supremacy over with plurilateral eff ects, over inclu- ments.10 Moreover, other nations state procurement law was narrowly sion of an ever-increasing number of as well are including government tailored to avoid direct confl ict with procuring entities and procurement procurement in their bi-lateral and States’ rights in this area, the omens opportunities to each participant’s regional trading arrangements at point toward a confl ict wherein the respective annexes. Originally, the the sub-AGP level. If the reasoning States’ rights over the question with AGP only covered the procurements behind carving out the ability of whom they choose to aff ord procure- of a “central” or federal government WTO/GATT members to enter into ments opportunities will be subju- and did not include sub-central gov- regional trading arrangements proves gated to federal policy.16 ernments’ procurements, special state true,11 at some point the regional Th e purpose of this article is to enterprises, etc.4 Th e U.S. (federal) gains and regional experience will set out the current state of aff airs with position favored a more inclusive be folded into the larger WTO/GPA regard to U.S. state’s authority over agreement, which was not feasible at framework. All of this is pointing their respective government procure-

9
ichigan International Lawyer

ments with an eye on the intensifying goods, services, and construction ser- restrictions on outsourcing. Most, confl ict occasioned by eff orts toward vices, respectively, is SDR 355,000.21 if not all, of these actions remain further liberalization by the United Michigan’s commitment is for pro- in committee, or await some other States Trade Representative and the curements made by the Department approval of the other state legisla- States’ respective policies and prac- of Management and Budget, with tive body. It would seem that state tices. Th e intent of the article is not exception for construction-grade anti-outsourcing activity began in to take a side or to debate with any steel, motor vehicles, and coal.22 Sev- 2003 in the period leading up to the degree of detail the pros and cons eral bills have been introduced in the 2004 U.S. Presidential election, but of worldwide free trade that include Michigan House of Representatives has been stalled in the aftermath. central and sub-central procurement that would address concerns over loss Michigan’s response is contained in opportunities. Rather, the goal is to of jobs and opportunities due to out- two Executive Directives. Th e likely point out the approaching confl ict sourcing of procurements,23 but none reason is that the executive directive, and to attempt to defi ne some of have been enacted into law. Rather, unlike a state law or an executive or- the issues that States should consider Michigan’s commitments have come der, does not carry the force of law, early enough to ensure meaning- in the form of executive letters from allowing it to be amended or dropped ful participation in the process of the Governor to the United States without a time-consuming and pos- including sub-central procurements Trade Representative (“USTR”). In sibly contentious legislative battle. In in federally negotiated free trade fact, the current federal approach to eff ect, the embodiment of Michigan’s agreements. state procurement liberalization is anti-outsourcing rules in an executive for the USTR to request increasing directive maintains the current state Current State of Play commitment of governors rather than of détente between state and federal Currently, participation of the of state legislatures.24 Moreover, the policies. Th e same appears to be true States in federally-negotiated gov- drive for increasing state participation of other states, although the manifes- ernment procurement agreements is in the developing international pro- tations of anti-outsourcing attempts voluntary.17 In addition, negotiations curement regime includes, again on a and the method for putting them on between the European Union and voluntary basis, the North American hold diff er. the United States led to inclusion, Free Trade Agreement (“NAFTA”), Th e stalling of state anti-outsourc- again on a voluntary basis, of pro- the U.S.-Israel Trade Act, and is ing attempts may be attributable to at curements conducted by several large urged with regard to several other bi- least several factors, such as conclu- cities, including the City of Detroit and multi-lateral trade agreements, sion of the 2004 Presidential election for out-of-city suppliers.18 Worthy including the Central American (were this movement to have been a of note is the fact that the commit- – Dominican Republic Free Trade political platform of sorts intended ments for the City of Detroit and Agreement (“CAFTA”), AUSFTA, to aff ect the election), or even tacit for several other sub-state procuring and the U.S.-Singapore Free Trade agreement between state and federal entities only apply to the European Agreement.25 players in furtherance of the current Communities, further underscoring In what appears to be a backlash state of détente. Another possibility is the voluntary nature of sub-federal to outsourcing of state procurements use by the federal government of its commitments.19 that may have started in Tennessee,26 “power of the purse” to discourage In all, thirty-seven states have it would appear that at approximately states from taking strong and irrevo- agreed to treat the suppliers from oth- thirty-seven to thirty-nine states have cable steps under the cloud of losing er AGP member nations as equivalent adopted or have attempted to adopt discretionary federal funding dollars. to domestic bids for procurements mechanisms to prevent outsourc- Michigan’s use of the executive direc- by entities set out in Annex 2 of ing.27 Th e forms of protection that tive may be the ideal mechanism by Appendix 1 of the AGP for goods, are advocated by these actions include which to maintain the state’s position services, and construction services.20 preferences for state-based procur- while stopping short of seriously of- Th e threshold amount at or above ers, requirements that all call centers fending federal sensibilities. What which the equal treatment and non- identify their location, information is clear, however, is that the states’ discrimination obligations arise for requirements on a bidder’s organiza- anti-outsourcing movement and covered procurements in the cases of tion and places of doing business, and federal policy on liberalization of 10 VOLUME XVII, NO. 3, FALL 2005

procurement policy will someday parable bids from non-restricted bid- law must be subjugated to federal collide if both sides continue on their ders were received.38 Th e exceptions law where the Congress has spoken respective courses. Th is eventuality is provided a degree of fl exibility, in the and/or where the executive function best exemplifi ed by challenges, fi led areas or sectors so provided or under in implementing the congressional by the European Communities and somewhat extreme circumstances. mandate is threatened in the case that by Japan, for the alleged breach by Nevertheless, and as the Supreme a state law is based on a political motive the U.S. of its commitments under Court clearly noted, Burma Act did that has been addressed by the federal the AGP after Massachusetts passed not contain either a general waiver government. a law prohibiting the granting of provision or a termination provi- Th erefore, the question whether procurement contracts to a category sion.39 It is for this reason that the federal law pre-empts state law based of businesses that engaged in com- Burma Act was infl exible with regard on the paramount concern over the merce with Burma with the purpose to possible federal policies (i.e., if they health and welfare of its citizens, of forcing changes to Burma’s record did not fi t into Massachusetts’ defi ned which is unquestionably linked to on human rights.28 A brief analysis of categories) and provided the basis for state spending, remains an open the Supreme Court’s ruling in the case a pre-emption challenge. one. Whether it will be answered by challenging Massachusetts’ “Burma Th e federal district court found, federal legislation or by federal court Act” is in order. and the Court of Appeals for the decision when the confl ict is unavoid- First Circuit agreed, that the Burma able is another question. The Burma Act and Crosby v. Na- Act 1) unconstitutionally interfered 29 tional Foreign Trade Council with the foreign aff airs power of the Conclusion In 2000, the U.S. Supreme Court executive branch; 2) unconstitution- Th e climax in the confl ict be- was asked to decide whether a state ally interfered with the dormant For- tween state and federal authority law that prohibited the award of state eign Commerce Clause of the federal over procurement, in light of the procurement contracts to businesses Congress; and 3) that the Burma Act developing international regime, has that had signifi cant commercial deal- was pre-empted by a federal Act of not yet been reached. In light of the ings with Burma. Th e goal of Massa- the same ilk that was enacted three developments in international trade, chusetts’ Burma Law30 was to pressure months after Massachusetts’ enact- particularly with respect to further Burma to improve its practices in the ment.40 Th e Supreme Court majority eff orts of the USTR to include gov- area of human rights by attempting commenced its analysis with a focus ernment procurement opportunities to restrict commerce. The Burma on the third issue, i.e. pre-emption in bi- and multi-lateral trade agree- Act created a ‘restricted purchase list’ of the Burma Act by the federal ments, the conclusion must be drawn to which parties doing business in government’s own enactment. In rul- that the impending confl ict between Burma were added.31 Th e term “do- ing that the federal law pre-empted state and federal policy is approaching ing business” was defi ned especially its apex, and that the outstanding is- 32 the Massachusetts Act, the majority broadly, although certain activities sues from the Crosby majority opinion relied on the line of reasoning in in important and non-political sectors will be answered. were exempted, such as those relating Youngstown Sheet & Tube Co. v. Saw- 41 The benefits of international 33 yer , whereby the executive’s foreign to news reporting in Burma, inter- trade, which rely on open markets, aff airs power, when bolstered by full national telecommunications goods are unassailable. Th e importance of 34 35 congressional support on the level or services, and medical supplies. government procurement as a part of of foreign commerce, establishes a In addition to these exemptions, the international trade, in light of the fact Burma Act also provided for three particularly virulent form of federal that it represents a signifi cant portion important exceptions to its applica- pre-emption. In eff ect, the majority of nation’s respective economies,42 is tion in cases where: 1) there would was able to combine the fi rst two is- also clear, which in turn highlights be no bids or insuffi cient competition sues addressed by the lower courts and what may be the new frontier of without a bid from a party ‘doing wrap them into a ruling based only on international trade liberalization as business in Burma’ as defi ned by the the third, i.e., federal pre-emption. In tariff s and other barriers to trade are 36 Burma Act ; 2) the procurement was the fi nal analysis, the majority hold- resolved. Accordingly, from a state 37 for medical supplies ; and 3) no com- ing in Crosby makes clear that state perspective, thought should be given 11
ichigan International Lawyer

to the approach to be taken, including a federal law that does not directly and simple-majority voting require- possible legislative or even constitu- impact on the issue nevertheless will ments. In the least, states could try to tional changes, that maximize states’ be found to take precedence over state condition their participations in any rights in light of what may prove to be authority and lead to pre-emption. In federal scheme on assurances of the inevitable pre-emption. For example, such case, the best mechanism from a equal sharing of benefi ts and burdens states could perhaps condition their state’s point of view is craft something by all states. Of course, states could participation in federally-requested that will force a further stand-off or wait for the right (or wrong?) test case (or, some day, federally-mandated) require the federal system to clearly to reach the U.S. Supreme Court in government procurement schemes on accept responsibility for any damage this area, after which such ruling may the level of access that bidders from to the citizens of the individual states, be applied as a matter of course to the respective state have abroad, or i.e., require that the burden of any net reject subsequent (and perhaps more even based on some comparison of losses be shared equally by all states eff ectively tailored) arguments on the respective state benefi ts from such under the supervision and protec- basis of decided precedent.
openness such that an equal protec- tion of the federal system. A word of tion challenge may be possible. In the caution is in order. Whatever step is Paul J. Carrier is an Assistant Pro- fi nal analysis, states may wish to fi nd a taken, if at all, it should be narrowly fessor of Law at Th e Th omas M. Cooley way to clearly bootstrap the economic tailored so as not to trigger the federal Law School. Before joining academia, and social welfare of their citizens that need to pre-empt. Rather, any change Carrier served as a law clerk to former derives from employment levels and should only sanctify each state’s rights Michigan Supreme Court Chief Justice related economic factors eff ectuated and duties relating to protecting the Dorothy Comstock Riley; worked as by state procurement policies to the health and welfare of its citizens. a research attorney for the Michigan federal responsibility. In such a way, Th e current steps by the federal Court of Appeals; and practiced in- at least the states may retain some system to bring about collective state ternational corporate law with Lovells degree of authority, moral or legal, participation may be found in a and Squire, Sanders & Dempsey, LLP. to engage in state-federal horse-trad- memorandum of the Intergovern- Among other honors, Carrier served as ing over items such as federal monies mental Policy Advisory Committee a Fulbright Senior Teaching Scholar in for highway projects, etc., or in the submitted to the United States Trade public international law. Carrier holds least point to the exact source of Representative.44 Th e recommenda- a B.A. from the University of Michigan, responsibility when state economies tions include establishment of a Fed- J.D. from the Michigan State Uni- experience diffi culties. eral-State International Trade/Invest- versity Detroit College of Law, and It is possible that the confl ict is ment Policy Commission, collection L.L.M. from Georgetown University ultimately resolved by federal stat- and reporting of data, etc. While this Law Center. ute, in which case states may wish to is an excellent idea and may lead to pass legislation and/or constitutional signifi cant universal gains based on a Endnotes amendment making clear a federal more open government procurement 1 Agreement on Government Procurement, legislator’s duties to the state which system, it may not be optimal for General Agreement on Tariff s and Trade, 26th Supp. BISD 33 (1980) are not in confl ict with federal rules. states to go along without bolstering (entered into force Jan. 1, 1981). In In this way, legislators at the federal their positions. addition to market liberalizations in level will have their votes watched What is clear is that the current world trade pursuant to the General carefully for possible constitutional state of détente is unlikely to continue. Agreement on Tariff s and Trade infringements. In eff ect, this would Accordingly, states wishing to retain (“GATT”), the Tokyo Round of world trade negotiations resulted in throw the concept of the “conscien- sovereignty over procurements, even the creation of four side agreements, tious legislator” as has been applied if only to capitulate to federal requests of limited participation, including to state legislators and governors after some return consideration, the Agreement on Government back onto the federal system43 and should be actively participating in Procurement. Th ese four agreements basically require that responsibility the debate. It may also be in a state’s were commonly referred to as the four Tokyo Round Codes, hence be taken if the current, voluntary best interest to bolster its rights by the common form of “Government system is changed due to federal carefully crafting legislation that Procurement Code” prior to the activity. Another possibility is that would not permit quick decisions Uruguay Round, wherein this “Code” 12 VOLUME XVII, NO. 3, FALL 2005

was adopted as part of the Final includes additions to four new Annexes in Annex 15-A, however, Governor Act Embodying the Results of the (including Annex 2 on sub-central Granholm, in a letter to United States Uruguay Round of Multilateral Trade procurements) as well as increased Trade Representative Robert Zoellick Negotiations, [[opened for signature inclusion of central procurements set dated June 30, 2004, agreed to inclusion Apr. 15, 1994, in GATT Secretariat, forth in the participants’ respective of state procurements at the same level Th e Results of the Uruguay Round of Annex 1 of Appendix I. as Michigan’s commitment for purposes Multilateral Trade Negotiations at 438, 8 Th e list of members, observers, nations of the AGP (copy of letter available at GATT Sales No. 1994 - 4 (1994). Th is seeking accession, and international http://www.citizen.org/documents/ was revised[[ revised text, expected to organizations that have observer status MIgovtoZoellickAUSFTA.pdf). To enter into force on January 1, 1996, such as the International Monetary determine whether a bi-lateral or is contained in document GPR/ Fund is available at the offi cial WTO regional trade agreement, or agreement- Spec/77 (Dec. 15, 1993).(hereafter website, link http://www.wto.org/ in-process, contains provisions on sub- the “AGP”).]] Th e original signatories english/tratop_e/gproc_e/memobs_ central procurements, one may access from the Tokyo Round Code were the e.htm (last accessed May 23, 2005). copies of agreements or drafts at the United States, Canada, Japan, Sweden, 9 See infra offi cial cite of the United States Trade Finland, Norway, Austria, Switzerland, 10 Th e Central America – Dominican Representative, “Trade Agreements” Hong Kong, and the countries of the Republic Free Trade Agreement tab, “Bilateral” and/or “Regional” tabs, European Communities (these were at (“CAFTA”) was signed on August 5, and simply click on the agreement or that time Belgium, Luxembourg, the 2004, but has not yet been ratifi ed by draft then search for chapters and Netherlands, France, Italy, Republic of Congress. For the USTR’s reasons for annexes on government procurement Ireland, Germany, Denmark, and the ratifi cation of CAFTA, see http://www. (home page available at http://www. United Kingdom). ustr.gov/assets/Trade_Agreements/ ustr.gov/). 2 AGP Art. III. Bilateral/CAFTA/Briefing_Book/ 11 See General Agreement on Tariff s and 3 Id. U.S. examples of “other” entities of asset_upload_fi le680_7178.pdf. A Trade, Apr. 15, 1994, Marrakech Annex 3 include the Tennessee Valley version of CAFTA, including its Agreement Establishing the World Authority and the Port Authority of Chapter 9 and Annexes on government Trade Organization, Annex 1A, Legal New York and New Jersey. procurement, is available at the Instruments - Results of the Uruguay 4 See Alan Kashdan, Government USTR website http://www.ustr.gov/ Round, Art. XXIV (permitting Procurement, in T W T Trade_Agreements/Bilateral/CAFTA/ regional trading arrangements as O: T M CAFTA-DR_Final_Texts/Section_ exceptions to the most-favored-nation T F    Index.html. Worthy of note is that obligation from Art. I). Th e spirit C  U.S. I the list of sub-central procurements is of this exception is set out in Art. legislation 555, 557 (T. Stewart, ed. not co-extensive with that of the AGP. XXIV:4: “Th e contracting parties 1996). For example, the State of Michigan recognize the desirability of increasing 5 Id. has not undertaken any obligations to freedom of trade by the development, 6 AGP, see supra n. 1, Appendix I. See date (as evident from review of Annex through voluntary agreements, also id. n. 1 and accompanying text; 9.1.2(b)(i)). Th e Australia-U.S. Free of closer integration between the Amelia Porges, Expansion of the World Trade Agreement (“AUSFTA”) was economies of the countries parties to Trade Organization (WTO) Agreement signed on [ ], and its Chapter 15 and such agreements. Th ey also recognize on Government Procurement (1994) accompanying Annex 15-A set out that the purpose of a customs union Consequent to the Enlargement of the central and sub-central procurements. or of a free-trade area should be to European Communities on May 1, A copy of the agreement is available facilitate trade between the constituent 2004; U.S. Implementing Actions [ ], at the USTR website http://www. territories and not to raise barriers to [ ] (Project of the American Society ustr.gov/assets/Trade_Agreements/ the trade of other contracting parties of International Law Interest Group Bilateral/Australia_FTA/Final_Text/ with such territories.” on International Economic Law, asset_upload_file148_5168.pdf, 12 See infra n. 13. June 18, 2004). Chapter 15 at 13 Outsourcing is a major concern of states http://www.ustr.gov/assets/Trade_ and of workers’ groups. For example, Th e four new annexes to Appendix I Agreements/Bilateral/Australia_FTA/ there is a website entitled “Rescue were added after the Uruguay Round Final_Text/asset_upload_file218_ American Jobs” that lists bills and of multilateral trade negotiations. See 5160.pdf, and Annex 15-A at other legislative steps that states are Government Procurement, supra n. 4 http://www.ustr.gov/assets/Trade_ considering or have taken with regard at 571, Agreements/Bilateral/Australia_FTA/ to protection against outsourcing and 7 Liberalization before the Uruguay Final_Text/asset_upload_file780_ calls for users to report any new, state Round was carried out at the central 5161.pdf. Th e State of Michigan is not activity on the outsourcing issue. See government level by adding to a listed as having off ered at least some of http://www.rescueamericanjobs.org/ nation’s respective Annex 1. After its procurements for purposes of equal legislation/states-bills.php; see also the Uruguay Round, liberalization treatment and non-discrimination http://www.ncsl.org/standcomm/

13
ichigan International Lawyer

scecon/04legisecon.htm (National money in certain cases). See also, e.g., sdr.HTM. Calculations are according Conference of State Legislatures Jason F. Hellwig, Th e Retreat of the to a formula found at http://www.imf. website, 2004 Legislation Regulating State? Th e Massachusetts Burma Law org/external/np/fin/rates/rms_sdrv. or Prohibiting Non-U.S. Citizens and Local Empowerment in the Context cfm, and daily values are available from State Contracts as of June 29, of Globalization(s), 18 W. I’ . from International Monetary Fund’s 2004). Currently, the websites are . , 500 and n. 132. See also, e.g. main web page. See http://www.imf. tracking and reporting on bills and Letter of Gov. Jennifer Granholm org/external/map.htm. Using the other state government activity in at to U.S. Trade Representative Robert exchange rate for June 1, 2005, of least 37 states, including Michigan. Zoellick of June 30, 2004, available 0.6804010000, the SDR value in It would appear that state granting of at http://www.citizen.org/documents/ USD is approximately $241,542.36. bids to foreign call centers, particularly MIgovtoZoellickAUSFTA.pdf 22 AGP, supra n. 1, App. I, Annex 2. Other in India, are the fi rst source of the (agreeing to the same commitments states with the same exceptions include domestic preference in procurement in the Australia-U.S. Free Trade New York, Illinois and Pennsylvania. backlash. See, e.g., Darren Dunlap, State Agreement as in the AGP, but specifi cally 23 See HR No. 4940 of July 2, 203, as law against outsourcing might be fi rst excluding such commitments in any modifi ed by HR No. 5081 of Sept. in U.S., D T, May 18, 2004, other agreement). 25, 2003, HR No. 5128 of October available at http://www.thedailytimes. 18 Agreement in the form of an exchange 2, 2003, and HR No. 6084 of July com/sited/story/html/164029; Bruce of letters between the European 21, 2004. All of these bills manifest Stokes, Use Outsourcing to Spur Change Community and the United States of an intention to provide preference to in India: Anti-outsourcing initiatives America on government procurement, Michigan-based fi rms. should be designed as negotiating tools to O.J. L 134 (20 June 1995); U.S. 24 See USTR Sends New Procurement force India to liberalize, T N Procurement Report, supra n. 18, para. Request to Governors – Dismissing J, February 28, 2004, available 277. State Legislators’ Concerns, available at at http://yaleglobal.yale.edu/display. 19 Id. Th e other cites are Boston, Chicago, http://www.citizen.org/print_article. article?id=3431; Indrajit Basu, India Dallas, Indianapolis, Nashville, and cfm?ID=13068. A copy of the letter sees bright side to US outsourcing threat, San Antonio. Further, to states have sent to Maine Governor John Baldacci T A T, Jan. 27 2004, agreed to AGP-styled commitments in of January 27, 2005 is available at available at favor of suppliers from the European http://www.citizen.org/documents/ http://www.atimes.com/atimes/South_ Communities but not all of the AGP USTR_to_ME_Panama.pdf. Asia/FA27Df06.html. Of course, members: North Dakota and West 25 A list of bi- and multi-lateral trade the problem is bigger than potential Virginia. agreements with government competition from any one nation. 20 Th e states are Arizona, Arkansas, California, procurement commitments, Other nations with low costs of labor Colorado, Connecticut, Delaware, whether in force or pending, may or raw materials, such as Russia, Florida, Hawaii, Idaho, Illinois, be obtained at http://www.ustr.gov/ are poised to underbid U.S.-based Iowa, Kansas, Kentucky, Louisiana, Trade_Agreements/Section_Index. bidders on government procurement Maine, Maryland, Massachusetts, html by clicking the Tabs “Bilateral” opportunities. Michigan, Minnesota, Mississippi, and “Regional” and by then selecting 14 Exec. Directive. No. 2004-2, available Missouri, Montana, Nebraska, New an agreement and searching for at http://www.michigan.gov/ Hampshire, New York, Oklahoma, government procurement provisions. gov/0,1607,7-168-21973-88888-- Oregon, Pennsylvania, Rhode Island, 26 See Darrel Dunlap, State law against ,00.html, and Exec. Dir. No. 2004-3, South Dakota, Tennessee, Texas, Utah, outsourcing might be fi rst in U.S., Th e available at http://www.michigan.gov/ Vermont, Washington, Wisconsin, and Daily Times, May 18, 2004, available gov/0,1607,7-168-21975_22515_ Wyoming. Id. Th e level of coverage for at http://www.thedailytimes.com/ 28804-88890--,00.html. equal treatment varies. sited/story/html/164029. 15 Th e voluntary nature for inclusion of 21 See U.S. Procurement Report, supra 27 A web site named “Rescue American Jobs” sub-central procurements should apply n. 18, Table III.20. Th ere are also attempts to track state outsourcing to other U.S. federal trade agreements. diff erent threshold amounts for and “insourcing” legislation, see See Cf. infra n. 25. certain of the other procuring entities http://www.rescueamericanjobs. 16 See infra that have signed onto the AGP, such org/legislation/states-bills.php (last 17 See World Trade Organization, Trade as SDR 400,000 for procurements by accessed June 6, 2005) as does Policy Review: United States, Report the New York and New Jersey Port the National Conference of State by the Secretariat, Doc. WT/TPR/S/56 Authority, and SDR 182,000 for Legislatures website, 2004 Legislation (1 June 1999), para. 277 (hereafter the Tennessee Valley Authority. Th e Regulating or Prohibiting Non-U.S. U.S. Procurement Report) (noting that “SDR” or “special drawing rights” is a Citizens from State Contracts as of the states “apply” AGP rules to sub- convention for reporting the real value June 29, 2004, see http://www.ncsl. federal procurements while further of national currencies based on a basket org/standcomm/scecon/04legisecon. noting that states must comply with of international currencies. See http:// htm (last amended June 29, 2004). such rules where funded by federal www.imf.org/external/np/exr/facts/ Th e latter lists thirty-seven, rather

14 VOLUME XVII, NO. 3, FALL 2005

than thirty-nine, states’ actions in this 1999). Th e ruling to which reference is Act, 1997, § 570, 110 Stat. 3009-166 regard. Th e purpose of this article is made for the suspension would appear to 3009-167 (enacted by the Omnibus not to delve into signifi cant detail in to be the federal district court Crosby Consolidated Appropriations Act, this area such as by engaging in an v. National Foreign Trade Council, 26 1997, § 101(c), 110 Stat. 3009-121 to exhaustive, state-by-state analysis of Fl.Supp.2d 287 (D.Mass. 1998), aff ’d. 3009-172). See Crosby, supra n. 28, at legal provisions. Rather, the purpose 181 F.3d 38 (C.A. 1, 1999). 368. at this juncture is to demonstrate the 29 530 U.S. 363, 120 S.Ct. 228, 147 41 343 U.S. 579, 72 S.Ct. 863, 96 extent of concern that outsourcing has L.Ed.2d 352 (2000). L.Ed.1153 (1952). caused. Th ere is signifi cant, but not 30 1996 Mass. Acts 239, ch. 130, codifi ed 42 Estimates of U.S. government entire, overlap between the list of states at Mass Gen. Laws §§ 7:22G-7.2M procurement as a percentage of GDP that have voluntarily signed onto the (1997) (hereafter the “Burma Act”). in the 1990’s, for example, hover above Burma has changed its name to AGP, see supra n. 20 and those that have 30%. See Trade Policy Review: United Myanmar, but for purposes of this taken steps to prevent outsourcing. States, supra n. 17, para. 274. article, the common terminology of 28 43 See Matthew Schaefer, Conscientious See United States – Measures Aff ecting “Burma Act” is used. Government Procurement, Request 31 Id. § 7:22J(a)-(d). Legislators an the Cultures of for Consultations by the European 32 Id. § 7:22G(a)-(d). Compliance and Liberalization Relating Communities, WT/DS88/1, GPA/ 33 Id. § 7:22H(e). to International Trade Agreements, D2/1 (26 June 1997), available via 34 Id. Proceedings of the 95th Annual Meeting link from web page http://www. 35 Id. § 7:22I (exemption for purchase of 52 (American Society of International wto.org/wto/english/tratop_ special medical supplies or those for Law, April 4-7, 2001), citing P. Brest, e/gproc_e/disput_e.htm; which there is no medical substitute). Th e Conscientious Legislator’s Guide to United States – Measure Aff ecting 36 Id. § 7:22H(b)(1)-(2). Constitutional Interpretation, 27 S. Government Procurement, Request to 37 Id. § 7:22I (exception from the restriction L. R. 585 (1975) (for the idea of Join Consultations, Communication for suppliers whose operations in conscientious legislators at the federal from Japan, WT/DS88/2, (2 July Burma involve the provision of medical level), and Louis Henkin, International 1997) (joining in the EC’s challenge), supplies only). Law: Politics, Values, and Functions, available via link from web page http:// 38 Id. § 7:22H(d). In the case that other 216 R D C 21 (1989) www.wto.org/wto/english/tratop_e/ bids from non-restricted bidders were (on the “culture of compliance” that gproc_e/disput_e.htm. A panel was received, this exception would apply state legislators should follow based on requested and established to consider where such other bids were higher by their oaths of fealty to uphold the U.S. the merits, however, the panel was later more than 10 percent of a bid from Constitution). requested to suspend its consideration a restricted bidder. See id. § 7:22G. 44 Intergovernmental Policy Advisory of the matter in light of “a U.S. court Th is exception looks suspiciously like Committee Memorandum, ruling barring implementation of the a domestic price preference that has Recommendations for Improving long been a part of the international measure at issue ….” See United States Federal-State Trade Policy government procurement regime. – Measure Aff ecting Government Coordination (August 5, 2004), 39 Crosby, supra n. 28, 120 S.Ct. at 2291. Procurement, Communication from 40 Foreign Operations, Export Financing, available at http://www.ncsl.org/print/ the Chairman of the Panel, WT/ and Related Programs Appropriations standcomm/scecon/IGPAC8504.pdf. DS88/5 and WT/DS95/5 (12 February

The American Society of International Law and the International Law Students Association are proud to announce that: The Philip C . Jessup International Moot Court Regional Competition will be held in Detroit, MI in February 2006

Law students from schools throughout the Midwest will be competing for the opportunity to represent the United States in the International Competition.

To request information about serving as a judge or sponsor, please email Pam Morgan at [email protected].

For general information about the Jessup Moot Court Competition or to review the 2006 problem, please visit http://www.ilsa.org/jessup/.

15
ichigan International Lawyer

Changes in India’s Patent Law and its Repercussions on the Global Drug Industry Ashish S. Joshi, Lorandos, Gravel-Henkel, Stipanovic PLLC

India is among the world’s top fi ve of some vendible product, or (2) other process. drug producers in terms of volume, improves, or restores to its former Th us, patent- though its $7 billion market does not condition a vendible product, or ing a product rank as high in value.1 Prices are low (3) has the eff ect of preserving from assumes a because of the profusion of generic deterioration some vendible products slightly dif- drug makers and the competition to which it is applied.5 ferent com- among them – made possible through Before 1970, India’s patent laws, plexion from the old Patents Act of 1970. like many others, were derived from the patenting Th e procedure for obtaining a its colonial days resulting into some of a process. Ashish S. Joshi patent in India, and matters con- of the world’s highest drug prices. The Act nected therewith are detailed in the However, by 1970, India, along of 1970 stated Patents Act 1970 and Patent Rules with other developing countries had that with regard to medicine or drug framed thereunder.2 Th e Patents Act adopted “process patenting regime”.6 and certain classes of chemicals no 1970 is modeled substantially on the Th e Act of 1970 by granting “process patent is granted for the substance U.K. Patents Act of 1949.3 Th e basic patents” on drugs in combination itself even if new, but a process of concepts of this law in India and with extensive use of fertilizers and manufacturing the substance is U.K. being the same, the decisions pesticides not only led to low drug patentable.7 Th erefore, with respect of English Courts along with leading prices but also extended life expec- to food, medicine or drugs, patents English authorities on the subject tancy and ended regular famines. In were granted only for the process of are often cited by lawyers and Judges order to appreciate the gravity of the manufacture of the substance but not alike in the interpretation of some of amendment and its repercussions on for the substance itself. Such restric- the provisions of the Indian Act. Not the international drug industry it is tions on the grant of product patents surprisingly, even decisions of Com- imperative to understand the diff er- do not exist in virtually any other monwealth Countries have persuasive ence between “product patents” and country. All Western countries grant value in Indian courts. “process patents”. Process patenting “product patents” on new inventions implies the patenting of the method of – i.e. the patent is granted for the The Old Law manufacturing a product. Under the substance itself. However, since 1970, Th e Act of 1970 defi nes an inven- Indian Patents Act of 1970, process India has granted “process patents,” tion as follows: patenting was provided for. Aside which allow another inventor to pat- Invention means any new and from the fact that India has surplus ent the same product as long as it was useful fl ow of relatively cheap labor, it also created by a “novel process”. In phar- (i) art, process, method or man- has a long tradition of manufacturing maceutical industry, it could mean ner of manufacture, drugs of various types. Th is resulted that a tiny tweak in the synthesis of (ii) machine, apparatus or other into several new techniques of making a molecule yields a new patent. Sev- article, drugs cheaply. After the product has eral companies can produce the same (iii) substance produced by manu- been manufactured with the patented drug, creating competition that drives facture, process, it would then be known as down prices and puts multinational and includes any new and useful patented product in patented in a corporations that spend millions of improvement of any of them, and an country adhering to process patent- dollars in research and development alleged invention.4 ing, such as India. Any other manu- at a serious disadvantage. Indian courts have held that a facturer cannot produce a product by Th e old patent system allowed method or process is a “manufacture” the patented process, although the Indian pharmaceutical companies if it (1) results in the production manufacturer can produce it by an- to copy drugs patented abroad by

16 VOLUME XVII, NO. 3, FALL 2005 merely changing their manufacturing used to be the guy who could copy patent law have sparked worries that process. Th is served two purposes: faster. Now that has completely Indian companies will face tough one, it kept cost of drugs inexpensive changed so that companies that don’t global competition, and that the cost in India; two, it also allowed a local innovate will die, especially in the of medicines would jump in poor pharmaceutical company to thrive pharmaceutical industry”.9 Th e new countries now supplied by Indian which otherwise would have faced patent system recognizes registered generic drugs. Since 2000, the gather- multi-million dollars lawsuit for pat- original drugs as products no matter ing momentum of the global popular ent infringement. By copying drugs how they are produced, thus making outrage against a tighter patent re- other companies spent millions of it illegal to copy drugs still under gime has become a powerful coun- dollars to develop, Indian pharma- patent. Also, it appears that the 2005 tervailing force due to emergence of ceuticals companies could sell them amendments have done away with the the AIDS crisis.12 Many international at as little as one-tenth their original practice of “evergreening” of pharma- aid organizations use inexpensive prices. ceutical patents, where patent owners Indian generic drugs to save money allegedly try to extend patent life as they save lives. For example, India The 2005 Amendments through grant of new patents by mi- is a big supplier of low-price generic to the Old Law nor “innovations” or improvements versions of drugs for treating AIDS. It is widely believed that the 2005 on formulations, dosage forms or In Africa, exports by Indian compa- amendments8 were made mainly minor chemical variations of an ear- nies, especially Cipla and Ranbaxy due to international pressure, as the lier patented product. However, the Laboratories, helped drive the annual World Trade Organization (“WTO”) new law10 also makes it clear that any price of antiretroviral treatment down demanded that India observe inter- invention that enhances the known from $15,000 per patient a decade national drug patents. In 1995, the effi cacy of the substance or results in ago to about $200 now. Th ough the WTO’s Trade-related Intellectual a new product or employs at least one new patent law is not as restrictive as Property Rights (TRIPS) agreement new reactant is patentable and that many feared and won’t dry up supply was reached in Marrakesh, Morocco, only the mere discovery of a new form of today’s generic AIDS drugs, inter- where India, along with many other or of any new property or new use national organizations worry that the countries, agreed to grant 20-year pat- of a known substance or process is need to pay royalties or get licenses ents on pharmaceutical products from excluded. It may not be too diffi cult may constrict supplies of new drugs. January 1, 2005. Th e new WTO re- to prove that the improved dosage All generic drugs could have been re- gime eff ectively outlawed the generic form is more effi cacious or that one moved from the market. However, all production of new medicines. new reactant is involved in the known the generic drugs already approved in In March 2005, India’s Parlia- process to make the product.11 India can still be sold, though sellers ment approved patent regulations These amendments to India’s must pay licensing fees.13 to stop local drug makers from copying new drugs developed by other, primarily Western com- panies. Th e new law, amending India’s 1970 Patent Act, aff ects everything from electronics to software to medicines, and has been expected for years as a condition for India to join the World Trade Organization. Pre- viously, companies could copy drugs discovered or invented by other companies by tweaking the processes used to make them. As an executive of a leading Indian company puts it: “Th e winner 17
ichigan International Lawyer

Nonetheless, many of India’s in- has invested $100 million in research were excessive but has not said how novative companies14 have welcomed and development in the last couple of that would be determined.20 In fact, the stronger patent protections saying years. India’s generic drug companies, the new law bars the government that these changes have made India which until now made money copy- from over-riding any patent for at more competitive on global scale and ing best-selling foreign drugs, has now least three years – a provision not re- will trigger further investment and increased spending on research with quired under the TRIPS Agreement. innovation in India.15 It is expected an eye to launch low-cost drugs for Further, the new law states that the that with the stronger patent protec- the global market. As Dr. Swati Pira- Controller of Patents has a series of tion, more mal, director wide-ranging discretionary powers multi-na- for strategic to determine all kind of criteria like tional corpo- “In March 2005, India’s Parlia- alliances and “reasonable aff ordability,” “reasonable rations will ment approved patent regulations communi- pricing,” and “reasonable royalty.”21 tap India’s to stop local drug makers from cations of As Subbaraman Ramkrishna, senior relatively Nicholas Pi- director for corporate aff airs at Pfi zer inexpensive copying new drugs developed ramal says: India Ltd. noted, the word “reason- engineers, by other, primarily Western com- “If an Indi- able” appears 42 times in the bill, scientists panies.” an company giving the impression that royalty and com- makes a drug rates would be imposed subjectively.22 puter pro- whose devel- Lastly, with the removal of Section 5 grammers opment costs of the law, it is not clear if chemical for product design, drug develop- are under $50 million, compared processes continue to be defi ned to ment and clinical testing. In fact, with a billion-dollar-plus develop- include biochemical, biotechnical multinational corporations such as ment costs in the West, we will be and microbiological processes.23 General Motors Corp., Microsoft able to change the paradigm of drug Corp. and Nokia Corp. already have discovery.”18 Conclusion research facilities in India. Financial Th e amendments made to the and country analysts expect the re- Ambiguities in the new law patent law by India have been os- search-outsourcing industry to grow Th e 2005 amendments to the pat- tensibly to comply with its WTO to more than $10 billion globally in ent law have many ambiguities that obligations on intellectual property, the next fi ve years.16 need to be addressed. To illustrate a the amended law represents a com- As India opens its markets and its few: under the new law, a maker of promise between opposing interests. companies venture abroad, companies generics can apply to copy a patented Th is compromise has resulted in a are seeking to ensure that they profi t drug, but only after it has been mar- complicated and confused law with from their own innovations. Th e list keted for three years. Th e generic’s potential negative consequences that of top applicants in 2004 shows the maker however must pay a “reason- could have been avoided. Th e new law importance of patents in global com- able” royalty. Th e new law does not at times seems to exceed the require- petition. Among the top applicants defi ne what can be considered to be ments of the Agreement on TRIPS, are Sony Corp, Procter & Gamble “reasonable”. Th is can result into un- or has provisions unique to India, Co. and DaimlerChrysler AG – all warranted complications and needless and at other times, appears to be in with more than 300 applications each litigation.19 Further, the amendments confl ict with the TRIPS Agreement. last year. From the Indian side, the have sparked fears that with the new It is also believed that India, ironi- top applicants include Dr. Reddy’s law, prices on patented breakthrough cally, has swung from one extreme to Laboratories Ltd. and Ranbaxy Labo- drugs would most likely rise to nearly another, moving from 1970 law that ratories Ltd. – both have more than the level in the United States, while was clearly anti-patent to a law that is doubled their research-and-develop- prices on more commonly used pro-patent applicant but not necessar- ment spending to about 10% of rev- drugs would most likely rise only ily pro-innovation.24 At a time when enue.17 Nicholas Piramal, a generics moderately. Th e Indian government there is increasing skepticism around company based in Mumbai, India, has said it would step in if price rises the world over the patent-system as it

18 VOLUME XVII, NO. 3, FALL 2005 has evolved so far, particularly in the 8 Th e 2005 amendments have made 19 Couple of years ago, U.K.- based U.S.25, it remains to be seen whether many changes to the Act of 1970. GlaxoSmithKline demanded 40 the hybrid Indian patent-system However, this article focuses on the percent of the sales proceeds of an change made to adopt “product AIDS drug it licensed to a South stands the true test of time. patenting” system and its eff ect on African company. However, under “Th e works of founders of states, the international drug industry. pressure from South African regulators law givers, tyrant destroyers and 9 Shrikumar Suryanarayan, President and activists, it later licensed it to three heroes cover but narrow spaces, and for Research & Development at rival companies for only 5 percent. endure but for a little time, while Biocon Ltd., Bangalore, India. See 20 See Th e New York Times, March 24, Wall Street Journal, dated April 2005, Section C , Page 6 , Column 5 the work of the inventor though of 11th, 2005 at A20. 21 Id. less pomp is felt everywhere and lasts 10 Section 3(d) 22 Id. forever”.26
11 A Confusing Patent Law for India, 23 See Footnote 7 Economic and Political Weekly, 24 A Confusing Patent Law for India, Ashish S. Joshi is an attorney with April 16, 2005 Economic and Political Weekly, April Lorandos, Gravel-Henkel, Stipanovic 12 V. Sridhar, A Tempered Patents 16, 2005 Regime, Frontline, Volume 22 - 25 See Jaff e, Adam and Josh Lerner, PLLC. Mr. Joshi graduated with ad- Issue 08, Mar. 12 - 25, 2005 Innovation and its Discontents, vanced degrees in law from University 13 Th ere are also provisions allowing Princeton University Press, 2004 of Michigan Law School at Ann Arbor companies that make generics to 26 Francis Bacon, quoted in Mainly on and Gujarat University, India. Mr. copy drugs in the future. However, Patents at page 1, edited by Felix Joshi focuses on international business, there are relatively tough criteria for Liebesny, Butterworths. such copying, and activists predict intellectual property & commercial that prices for newly invented litigation in the U.S. and South-East drugs will be much higher, because Asia. Mr. Joshi has been admitted to the drug-makers will have the same State Bars of Michigan, New York, and 20-year patent monopolies as they Gujarat, India. have in the Western countries. See www.doctorswithoutborders.org. 14 As Indian economy opens up to foreign competition, its leading Endnotes companies are increasing their 1 See Th e New York Times, March 24, 2005, spending on research and Section C , Page 6 , Column 5 development to stay competitive. 2 P. Narayanan, Intellectual Property Law Indian companies applied for (2nd edition) at page 14, Eastern Law nearly 800 patents at the World House. Intellectual Property Organization 3 Th is Act has been replaced by Patents Act last year – more than twice the 1977 resulting into substantial changes number of patents it applied for in the U.K. Patent Law. four years ago. See Wall Street 4 Section 2(1)(j) of Th e Patent Act, 1970. Journal dated April 11th, 2005, Th is defi nition has been retained by page A20 the amended law. 15 Th e “mailbox” system designed by 5 P. Narayanan, supra at page 14. Indian Government two years 6 Asthana, B. N., Patents in the WTO ago in which drug makers could Regime, Chartered Secretary, December deposit patents they hoped to 2002, page 1657 fi le when the law was amended 7 Section 5 of Th e Patent Act, 1970 states, had 1,500 proposals from Indian inter alia, “In the cases of inventions companies and 7,000 from foreign – (a) claiming substances intended for ones, suggesting the new law use, or capable of being used, as food would benefi t foreign companies or as medicine or drug, or (b) relating more. to substances prepared or produced 16 See Wall Street Journal, dated April by chemical processes …. no patent 11th, 2005 at A20. shall be granted in respect of claims 17 Id. for the substances themselves, but 18 See Th e New York Times, March claims for the methods or processes of 24, 2005, Section C , Page 6 , manufacture shall be patentable. Column 5

19
ichigan International Lawyer Enforcement of Investors’ Rights Under Investment Treaties Grant Hanessian and Peter Swiecicki, Baker & McKenzie LLC

With investment in foreign coun- tional treatment”), and to investors exceeded its powers, there was cor- tries having reached record levels, from other countries (“most favored ruption, or a serious departure from there is now more than ever a need nation treatment”), free transfer of a fundamental rule of procedure. An- for protection of those investments, funds and returns, and non-discrimi- nulment attempts are few in number, particularly in developing countries, natory and fair and equitable treat- and rarely succeed. in which the fi nancial and economic ment of the investment. ICSID also has an Additional risks have been severe. Investors, both Th e term “investment” is broadly Facility which allows ICSID to ad- companies and individuals, should defi ned. In practice the term is inter- minister certain proceedings between be aware that protection is available preted widely by ICSID to include States and nationals of other States through a world-wide legal structure almost anything other than a contract that fall outside the scope of the IC- of over 2,400 Bilateral Investment for the sale of goods, and even that is SID Convention. Th ese include: Treaties (“BITs”), primarily between covered if the host state itself is party investment disputes where one developing countries, together with to a contract with the investor. of the parties is not an ICSID the International Center for the Most BITs are bilateral (two Contracting State or a national Settlement of Investment Disputes country) treaties and provide for of such a State; (“ICSID”), an agency of the World arbitration of disputes with the host disputes which do not arise di- Bank in Washington, D.C. state arising from BITs to be referred rectly out of an investment but to ICSID arbitration. But there are where at least one of the parties Use of World Bank Leverage also multilateral investment treaties, is an ICSID Contracting State or Investors may invoke against a such as the Energy Charter Treaty a national of a Contracting State host state with whom they have a dis- and the North American Free Trade and the underlying transaction pute the substantive rights provided Agreement, which call for ICSID has features which distinguish it by the BITs through an arbitration arbitration as their dispute resolution from an “ordinary commercial procedure provided by ICSID, with procedure. Th e ICSID secretariat is transaction”; or fi nal decisions not reviewable by the legally obliged to register a request for fact-finding, a pre-dispute courts. Th e World Bank has leverage, arbitration against the host state un- mechanism for providing an both political and economic, over less the request is manifestly outside impartial assessment of the countries that do not comply with its jurisdiction. facts aimed at preventing diff er- ICSID awards. Th e essence of the ences of view arising on specifi c structure is that in return for obtain- ICSID Arbitration factual issues in the course of a ing foreign investment, host states ICSID arbitration is different long-term relationship. must provide stable and favorable from the usual international com- conditions for that investment. mercial arbitration, not just because On-line Sources Regarding it involves claims against host state BITs and ICSID Structure of BITs governments, but because the process Th ere are several on-line sources While no two BITs are identical, is self-contained in the sense that IC- that provide information on BITs and the substantive risks and concomitant SID awards are not subject to any ju- ICSID. To fi nd: protection covered by the BITs are dicial process outside of ICSID. Th ere a specifi c BIT between two coun- crucial for investors in foreign coun- is a very limited right, entirely within tries or all available BITs signed tries. BITs require compensation for ICSID, to seek annulment of an by one country, see http://www. expropriation of assets, treatment no award on basic procedural grounds, unctadxi.org/templates/DocSearch_ less favorable than that accorded to such as the arbitral tribunal was not __779.aspx the host state’s own investors (“na- properly constituted, or manifestly the list of the 150 States that

20 VOLUME XVII, NO. 3, FALL 2005

have signed the ICSID Conven- fulfi ll the investment agreement. Grant Hanessian is a Partner in the tion and the 134 States that have Negotiations were unavailing. New York offi ce of Baker & McKenzie deposited their instruments of Th e U.S. company commenced LLC, where he is a member of the ar- ratifi cation to the Convention, an arbitration proceeding under bitration and litigation practice group. see http://www.worldbank.org/ic- the U.S.-Poland BIT, which states His experience includes cases before the sid/constate/c-states-en.htm that the UNCITRAL arbitration Iran-U.S. Claims Tribunal, and the a precedent for an ICSID arbi- rules govern and that ICSID UN Compensation Commission for tration clause, see http://www. serves as the appointing authority claims arising against Iraq out of the worldbank.org/icsid/model-clauses- for arbitrators. Commencement fi rst Gulf War. He may be reached at en/main-eng.htm of the arbitration broke the dead- [email protected]. the ICSID arbitration rules and lock in negotiations, which even- Peter Swiecicki is Of Counsel in the other basic documents, see http:// tually resulted in a settlement; Chicago offi ce of Baker & McKenzie www.worldbank.org/icsid/basic- an English company claimed LLC. He works on cross-border transac- doc/basicdoc/htm. expropriation of its assets by the tions, and is a member of the Steering State of Guyana of its investment. Committee for the fi rm’s Central Eu- Examples of Dispute Resolution An ICSID arbitration was com- ropean Transactions Team. He is also a Under BITs menced (Case No. ARB/02/1); Council member of the International As discussed above, the types a French water company, un- Law Section. He may be reached at of disputes that may be resolved by able to resolve a dispute with an [email protected]. relying on BITs cover a wide variety Indonesian government entity, of claims. Here are some examples, commenced an ICSID arbitra- based upon our experiences: tion. a U.S. telecommunications com- The variety of these examples pany invested in a mobile tele- show that it is important for counsel phone company as a joint venture for aggrieved investors to examine with another telecommunications the applicability of BITs when an company wholly owned by the investment dispute arises, even if the Republic of Poland. The U.S. commercial contract did not contain company claimed that the Polish an arbitration clause.
company and Polish state failed to

Calling all authors

The
ichigan International Lawyer is issuing an invitation for article submissions for its Winter issue. Deadline for submissions is December 1, 2005. Submissions should be mailed to Professor Julia Ya Qin, Michigan International Lawyer, Wayne State University Law School, 471 W. Palmer, Detroit, MI 48202 or emailed to [email protected].

21
ichigan International Lawyer

Law Student Essay Medical Malpractice Liability Under Chinese and American Law Samuel Saks, Wayne State University Law School

I. Introduction rural population, were left out of the Th ey are to be fi ned (and/or criminally Chinese-foreign equity and con- medical insurance system.5 However, prosecuted), suspended for six months tractual joint venture medical institu- the PRC does provide some basic ser- to a year, and, if the circumstances tions (“foreign medical institutions”) vices; for example, pregnant women, are serious, may have their practice are subject to general PRC medical even in outlying and poverty-stricken certifi cates revoked.14 malpractice (“malpractice”) law pur- areas, are legally entitled to medical suant to Order No. 11 of the People’s support and assistance.6 In contrast, General Corporate Liability Republic of China’s (“PRC”) Ministry the US has the Medicare and Medicaid In the US, under the corporate of Health and the Ministry of Foreign programs, providing qualifi ed citizens responsibility doctrine, a hospital can Trade and Economic Cooperation. On with some basic support,7 which are be held directly accountable, under September 1, 2002, new PRC regula- expected to distribute approximately certain circumstances, for the actions tions on medical malpractice became $518 billion to almost 48 million of those who staff it.15 In such cases, eff ective.1 Because malpractice liability Americans in 2005.8 the hospital’s liability is distinct from is one of the most important consid- the physician’s liability. In fact, in some erations in determining the fi nancial II. Potential Liability of Domestic and cases it may even attach in the absence viability of any medical institution, it Foreign Medical Institutions of a fi nding of physician negligence.16 is important that foreign companies Direct Liability Th is was the case in Schoening v. Grays 17 understand how these new regulations Th e PRC regulations provide for Harbor Community Hospital, where will aff ect their potential liability. In direct legal consequences for medical a woman brought suit against both the hospital and the physicians who the US, medical malpractice liability is institutions when a malpractice is treated her after she had a baby. She a topic of fi erce debate. Supporters of committed on-site. Once the exis- eventually settled with the physicians, medical malpractice reform — which tence of a malpractice is confi rmed, but not the hospital.18 Th e court held is often discussed under the umbrella the medical institution will receive that the hospital owed an independent term “tort reform” — point to the a warning by the administrative duty of care to Schoening.19 rising costs of health care. Opponents 9 department in charge of health. If Article 24 of the PRC interim argue that medical malpractice liability the malpractice is serious (involving measures, read in conjunction with the serves to advance two important goals: death or signifi cant permanent harm), PRC malpractice law, seems to provide compensating victims and deterring however, the medical institution will for corporate liability in cases of medi- substandard health care.2 Th e fact is be ordered to suspend its operations cal malpractice. Th is article specifi cally 10 that as a result of malpractice lawsuits, to conduct “internal rectifi cation.” subjects foreign medical institutions to nearly every hospital in the US em- Additionally, the institution’s license PRC medical malpractice law, not the ploys professionals to deal with quality may be revoked.11 law of foreigners’ home state. Th us, assurance and risk management. Th e PRC regulations also list some foreign medical institutions are subject The PRC faces different health per se violations of PRC malpractice to PRC administrative regulations care challenges. Currently, the popu- law. Th e violations include: failing to of medical practice, laws regarding lation of China is estimated at more inform a patient of his or her condi- physicians and nurses, and, of course, than 1.3 billion.3 In 2001, the PRC’s tions, failing to properly handle medi- general corporate law.20 Foreign medi- total health expenditures consisted of cal records, and failing to report inci- cal institutions are thereby given clear 5.5 percent of its GDP,4 while the US dents of potential malpractice.12 Th ese notice that they will be subject to PRC spent 13.9 percent of its GDP. A PRC violations are administrative in nature. governmental scrutiny in all aspects of Ministry of Health survey showed Additionally, there are consequences their business. that nearly 50 percent of its urban for staff and supervisors who are “in- Potential direct and corporate li- residents, and nearly 80 percent of its volved” in a medical malpractice.13 ability is why hospitals in the US and 22 VOLUME XVII, NO. 3, FALL 2005

foreign medical institutions in the fering” are often out of proportion to rules on the control over medical PRC have to understand medical mal- the physical injuries suff ered by the hygiene, and standards as well as practice law. A negligent physician patient. Th is has sparked malpractice general rules for diagnosis, treatment, may face suspension, civil suits, and award limits, such as those enacted and nursing.”33 in extreme cases, even criminal pros- under Michigan Law.25 The PRC From a westerner’s perspective, ecution. He may ruin his career. But regulations clearly disfavor consider- these provisions seem to make it dif- because of the doctrine of corporate ation of pain and suff ering apart from fi cult for a plaintiff s’ attorney to ob- liability and special regulations opera- a physical injury — even if results tain sympathetic experts. Why? Th e tive in the PRC, he may also cause his directly from physician negligence.26 experts all serve under medical asso- employer to go out of business. ciations which have obvious interests III. Procedures in their primary constituents: physi- II. Medical Malpractice Liability Experts cians and the medical institutions Whereas malpractice is vaguely Th e PRC regulations provide for that employ them. Senior physicians and variously defined under US “technical appraisal of medical mal- are similarly unlikely to testify against law, the PRC medical malpractice practices,” organized by medical asso- fellow physicians. Though experts regulations provide comparatively ciations.27 Local medical associations are exhorted to act independently, more specifi c guidance. Under PRC at the municipal and county levels are they do so only within the context of law medical malpractice is defi ned responsible for organizing “initial” established medical regulations. Even as “accidents of damages to patients technical medical appraisals.28 Prov- under “special circumstances” a pa- negligently committed by medical inces, autonomous regions, and mu- tient may have a chance to choose an institutions and their medical staff nicipalities directly under the Central expert, but only from an expert pool in the course of medical activities People’s Government are responsible of another medical association. Th us, due to violation of laws.”21 The for organizing “further” technical ap- while the PRC regulations give equal PRC malpractice regulations give praisal.29 Where necessary, the “China access to expert evaluation, they take priority to laws and administrative Medical Association may organize the away much of the potential benefi t: regulations, which are much easier technical appraisal for disputes about the PRC’s established medical fi eld to objectively determine. In the PRC, is tasked with policing itself. Experts medical malpractices that are diffi cult legal violations of medical law are per willing to challenge established medi- and complicated, and have serious se malpractice. In the US, however, cal doctrine are unlikely to qualify as consequences nationwide.”30 legal violations are merely relevant experts because they are unlikely to A technical appraisal of a medical evidence in determining a breach have served in a senior position or be malpractice is a determination made of care: a claimant must still prove characterized having “excellent ethical 22 by a selected group of experts — an causation and injury. practices”. Even if they are allowed Latent in this definition is a expert testimony group — chosen into the expert pool, they will not get far more important diff erence. Th e from an “expert pool.” Experts must to choose their battles. Instead, absent PRC regulations classify malpractices have “outstanding professional ac- special circumstances, they will be based on the extent of the patient’s complishments and practice ethics” randomly assigned to cases. physical injuries.23 Th is classifi cation and have worked in a senior position If a majority of the experts in a scheme does not take the patients for at least three years for medical testimony group agree, they issue a pain and suff ering into account. Nor institutions, or as a medical science “technical appraisal paper” relating to 31 does it consider the negligence of teacher. Generally, the medical as- the dispute. Among other things, the the treating physician or staff . Th us, sociation responsible for the technical paper must contain a summary of the a negligently performed procedure appraisal chooses qualifi ed experts facts and claims of the parties, how 32 that causes enormous but temporary randomly from the pool. Th e ex- the act has violated laws or general pain to a patient may not count as perts in the testimony group act as medical principles, causation, extent a malpractice at all. At most, it will independent judges and provide a of responsibility, and, most startling- fi t into the fourth category of “other medical basis for their fi ndings. Th ey ly, medical advice for the patient who consequences of personal injuries.”24 must consider the “laws, administra- suff ered the malpractice.34 Providing In the US, awards for “pain and suf- tive regulations, and departmental medical advice to the injured patient 23
ichigan International Lawyer

forces the expert testimony group to terminate its handling of the case.42 malpractice falls within category II become not merely the arbitrators of Th e party thereby loses its opportu- or above (death or moderate disabil- malpractice but practitioners as well. nity for upfront technical appraisal ity),49 or if three or more patients are At the same time, the requirement35 by experts. And while the appraisal injured, the medical institution has means acknowledged experts will get process may be biased against the only 12 hours to fi le the report.50 In to weigh in on the case, whereas in rights of individual patients, it may the case of an unexplained death of the US, experts are nearly always on still uncover valuable information a patient, a necropsy must be con- one side or another. relating to the technical aspects of ducted with 48 hours.51 Because these In the US, many states have en- the case — information that would injuries are so serious, the medical acted statutes defi ning the necessary be very expensive to acquire using in- institution is required to act quickly. qualifi cations for experts in medical dependent experts. In egregious cases, Notice that the regulations place malpractice suits. In Michigan for where the expert testimony group the burden and expectation of report- example, an expert must be board may indeed fi nd fault with the physi- ing, at least initially, on the medical certifi ed in the same specialty as the cians and/or medical institution, the institutions themselves. When the defendant-physician.36 An evaluation patient will be deprived of extremely administrative department receives a of the expert’s educational and profes- convincing evidence of negligence as report of serious medical negligence, sional training, area of specialization, well as a chance at compensation. it must order the medical institu- length of time engaged in active clini- tion to take the necessary preventive cal practice or instruction, and the rel- Administrative Processing of measures and judge whether the Malpractice Claims evancy of the testimony is required 37. reported conduct is in fact malprac- Th e PRC malpractice regulations During the year preceding the action, tice, including, if necessary, initiating institute an elaborate administrative the expert must either have been in the technical appraisal process dis- procedure for handling medical mal- active clinical practice or a teacher in cussed, supra.52 In case of a dispute, practice. Jurisdiction over medical an accredited health profession school an interested party can fi le a written malpractice is conferred to admin- or accredited residency or clinical application to the administrative istrative departments in charge of research program.38 In other words, a department. health.43 Medical institutions have plaintiff ’s expert must be, essentially, a After an examination and veri- an affi rmative duty to formulate con- colleague of the defendant-physician. fication, the regulations allow for tingent schemes for preventing and Th e constitutionality of legislature settlement via mediation, so long handling medical malpractices.44 As enacting what amount to substantive as the parties make a written report part of such a scheme, once medical laws of evidence was recently upheld, and give a copy to the local admin- negligence is discovered (or claimed) under Michigan law, in McDougall v. istrative department within seven the medical staff has a duty to imme- Schanz.39 4041 days.53 These local administrative diately report it to their supervisors.45 Th e PRC regulations underscore departments must also make reports The supervisors must report it to the differences between the ap- to their regional supervisors.54 Th e the staff in charge of quality control proaches of the two countries. Th e various reporting requirements of the and oversight, who in turn must im- US legal system stresses justice as it Regulations demonstrate the PRC mediately investigate and verify the is elicited from an adversarial con- bureaucracy in progress: myriads of conduct in question and report the frontation of the parties; the PRC reports traveling up and down the “relevant situations” to those chiefl y stresses administrative resolution and various levels of administrative agen- in charge of the medical institutions.46 mediation: order even at the expense cies and local governments. Th e aff ected patients must be notifi ed of an individual’s opportunity recov- Th e law in US states is often dif- as well.47 “In the event of medical ery. Th is also helps explain why the ferent. In the context of a medical malpractices” the medical institution regulations strongly favor the “tech- malpractice claim (as opposed to gen- itself must fi le a report with the local nical appraisal” approach. Where a eral state and federal medical laws), it administrative departments in charge party attempts to bypass this level of is the claimant who gives notice to the of health.48 Th e time allowed for the administrative review (strongly geared defendant medical institution and/or fi ling of the report depends on the toward mediation), the administrative physician. Michigan law, for example, seriousness of the malpractice. If the department in charge of health must requires a claimant to give advance 24 VOLUME XVII, NO. 3, FALL 2005

written notice to a physician and/or ing medical expenses, lost wages, to access. Th e PRC system stresses hospital he intends to sue at least six and “consolation money for mental administrative review (as evinced by months in advance.55 Similar to the injury.”59 Th e last category may be the Supreme People’s Court rulings) requirements in the PRC, the written intended as a rough equivalent to the and oversight while the US depends notice must state the factual basis for notion in US law of “pain and suf- on grievances fi led and pursued in the claim, the applicable standard fering.” However, unlike in US law, court. Medical malpractice claims in of care, the manner in which that the “consolation” money is directly the PRC are seldom successful.65 standard was breached, any mitigat- related to the average living cost in At the same time, the malpractice ing measures that should have been the place where the malpractice oc- regulations of the PRC and US states taken, how the breach proximately curred.60 It is also limited in that if like Michigan share many similari- caused the injury, and the names of the patient has died, only six years ties. Both legal systems treat medical all defendants.56 of such costs may be calculated; if malpractice claims very seriously and the patient has become disabled, the acknowledge the need to depend on IV. Compensation compensation period cannot be more medical experts rather than lawyers As we have seen, the PRC mal- than three years.61 and judges. Recognizing the practical practice regulations allow parties to Many US states have enacted consequences of medical malpractice settle or mediate their dispute. In fact statutory limits on awards of “non- liability, both legal systems have they seem to encourage such a prac- economic losses” to malpractice limited awards in order to protect tice, given the proliferation of reports claimants. “Non-economic losses” physicians and the medical industry and technical appraisals that might include compensation for pain, as a whole.
otherwise result. The regulations suffering, inconvenience, physical list the relevant factors that should impairment, and physical disfi gure- Endnotes determine the amount of any award: ment.62 In Michigan, for example, the class of the malpractice, the ex- 1 Locke v. Pachtman, 521 N.W.2d 786, the maximum allowed award for non- 789 (Mich. 1994) (citing Mich. tent of responsibility of the medical economic losses is set at $280,000 Comp. Laws Ann. § 600.2912a (West negligence for the malpractice, and or — for cases involving more than 2004)). the relationship between the adverse one defendant or a defendant who consequences of the malpractice and suff ers total permanent functional 1 Regulations on Handling Medical 57 Malpractices, Decree No. 351 of the the diseases of the patient. If a medi- 63 loss of more than one limb — at State Council of the People’s Republic 64 cal institution has not committed a $500,000. Such limits substantially of China, Isinolaw Reference ID: 315 malpractice, it is not to bear liability reduce the appeal of bringing all but 2002956 (April 4, 2002). Hereinafter for compensation.58 Th is provision the strongest malpractice suits be- referred to as “the regulations.” seems to preclude a medical institu- cause high expert fees would cut into 2 Id. tion from paying a patient simply to 3 As of April, 2005. More specifi c estimates the recovery. available at http://www.cpirc.org.cn/ “keep them quiet.” Rather, a medical en/eindex.htm (last visited April 12, institution which believes a patient’s VI. Conclusion 2005). case is weak will try to steer the case Th e PRC system of medical mal- 4 More information available at http://www. to mediation, hoping that the expert practice diff ers substantially from that china.org.cn/english/Life/124576. testimony group will determine that of the United States. Aside from all htm (last visited April 12, 2005). 5 Id. no malpractice occurred. Th en the the technical diff erences examined 6 See art. 2, Law of the People’s Republic of medical institution can say to the above, the PRC regulations exhibit China on Maternal and Infant Health patient “we are truly sorry for your some of the fundamental diff erences Care, Order of the President of the injuries, but the regulations prevent between Chinese and American cul- People’s Republic of China No.33, us from compensating you because ture. The PRC puts less stress on Isinolaw Reference ID: 264 131686 (October 27, 1994). there has not been a fi nding of mal- personal independence and privacy, 7 See generally, Samuel Saks, Representative practice.” especially in connection with medi- Payment and the Social Security Act of Th e regulations also specify the cal records. Th e medical institution is 2004, 51 W L. R. __ (2005). types of injuries that a compensation allowed full control over the records For a discussion of the US regulations award should encompass, includ- while the patient is merely entitled on emergency medical treatment see 25
ichigan International Lawyer

Samuel Saks, Call 911: Psychiatry and 51 Regulations, art. 18. 60 Id. the New Emergency Medical Treatment 52 Id. at art. 36. 61 Regulations, art. 50(11). and Active LaborAct (EMTALA) 53 Id. at art. 43. Th e same rule applies for 62 See, e.g., M. C. L. A. § Regulations, 32 J. P  L. 483 a mediation or court judgment. Id. at 600.1483(3) (West 2004). (2004). art. 44. 63 Due to injury to the brain or spinal 8 Statistics available at http://www.ssa.gov/ 54 Id. at art. 45. cord. See M. C. L. A. § pressoffi ce/basicfact.htm (last visited 55 M. C. L. A. § 600.1483(1)(a) (West 2004). April 12, 2005). 600.2912b(1) (West 2004). In some 64 M. C. L. A. § 600.1483(1) 9 Regulations, art. 55. cases, notice can be given only three (West 2004). Th ese amounts are tied 10 Id. months in advance. See M. C. to the consumer price index and are 11 Id. L. A. § 600.2912b(3) (West adjusted accordingly. M. C. 12 See Regulations, art. 56. 2004). L. A. § 600.1483(4) (West 13 Regulations, art. 55. 56 M. C. L. A. § 2004). 14 Id. 600.2912b(4) (West 2004). 65 See, e.g., Ching-Ching Ni, Maladies of 15 See 12 A.L.R. 4th 57 (1982) for a helpful 57 Id. at art. 49. China’s Medical System, Seattle Times overview of the development of the 58 Id. (Feb. 3, 2002). law. 59 Id. at arts. 50(1)-(11). 16 Id. 17 698 P.2d 593 (Wash. App. 1985). 18 Id. at 595. 19 Id. at 596. 20 PRC interim measures, arts. 21-28. 21 PRC interim measures, art. 2. Treasurer's Report 22 See, e.g., Locke, 521 N.W.2d 786 (Mich. 1994). State Bar of Michigan International Law Section 08/15/05 23 Id. at art. 4. 24 Id. Current Activity Activity to Date 25 See discussion in section IV, infra. 26 See discussion in section IV, infra. July July 27 Regulations, arts. 20 - 34. Income: 28 Id. at art. 21. International Law Section Dues 12,780.00 29 Id. International Stud/Affi l Dues 90.00 30 Id. 31 Id. at art. 23. Total Income 12,870.00 32 Regulations, art. 24. 33 Id. at art. 27. Expenses: 34 Id. at art. 31. ListServ 25.00 250.00 35 Id. at art. 31(8). Meetings 1,598.18 2,592.78 36 M. C. L. A. § 600.2169(1)(a) (West 2004). Annual Meeting Expenses 918.81 37 M. C. L. A. § 600.2169(2) Newsletter 2,589.54 (West 2004). 38 M. C. L. A. § Printing 99.72 600.2169(1)(b) (West 2004). Postage 5.11 39 597 N.W.2d 148, 155 (Mich. 1999). 40 M. C. L. A. § 600.2169(4) Miscellaneous 783.00 1,521.21 (West 2004). Total Expenses 2,406.18 7,977.17 41 M. C. L. A. § 600.2169(2) (West 2004). Net Income (2,406.18) 4,892.83 42 Regulations, art. 40. Beginning Fund Balance: 43 Id. at art. 35. 44 Id. at art. 12. Fund Bal-International Law Sec 26,674.28 45 Regulations, art. 13. 46 Id. Total Beginning Fund Balance 26,674.28 47 Id. Ending Fund Balance (2,406.18) 31,567.11 48 Id. at art. 14. 49 See discussion in II.A, supra. 50 Regulations, art. 14.

26 VOLUME XVII, NO. 3, FALL 2005

Minutes of Regular Section Meetings Lois Elizabeth Bingham

April 19, 2005 carried, the Minutes were approved, the State Bar; (2) a review of mul- On Tuesday, April 19, 2005, the as corrected, by all members of the tidisciplinary practice; (3) review of Council of the International Law Section in attendance. lessons learned in successful practices; Section of the State Bar of Michigan Next, Scott Fenstermaker, Trea- and (4) the possibility of using live held its Regular Meeting at the Uni- surer of the Section, presented the video conferencing equipment at versity of Detroit-Mercy Law School Treasurer’s Report for the six (6) section meetings. Th e Chair noted pursuant to notice duly circulated to months ending March 31, 2005. Th e that he and Bruce Birgbauer, Chair all Section members. year-to-date income was $12,715.00 - Elect for the Section, would attend Th e meeting was called to order and expenses were $3,453.82, for a the next meeting for the Advisory at 4:15 p.m. by the Chair, Randolph net income of $9,261.18. When add- Council scheduled on June 10, 2005 M. Wright. ed to the beginning fund balance of at Mackinac Island. Section members and guests in at- $26,674.28, the Section has an end- In response to the Chair’s report, tendance introduced themselves and ing fund balance of $35,935.46 as of Professor Mogk mentioned that the their professional affi liations. March 31, 2005. Upon motion duly potential existence of an International Th e Chair invited Mark Gordon, made, seconded and unanimously Law Section within the Metropolitan Dean of U of D-Mercy to make a carried, the Treasurer’s report was Detroit Bar Association. He sug- few statements to the Council. Dean approved as presented. Th e Section gested that we contact the local bar Gordon welcomed all in attendance engaged in some general discussion associations to determine if they have to the law school and remarked on as to how best to spend the ending organized international law sections the various programs the law school fund balance and the Chair indicated and that the Section consider collabo- off ered in the area of international that the Council would welcome any rations with such local international law, such as the Joint Degree Program proposals for programs. law sections. The Chair indicated with the University of Windsor and Next, Randolph M. Wright, that he would send a letter to the the NAFTA course taught by faculty Chair of the Section, gave his report. local bar associations to ascertain in Mexico and the United States for He indicated that he had attended whether such bar associations have both Mexican and American law stu- the Section Leaders Advisory Council international law sections. It was also dents. Dean Gordon solicited com- meeting. He remarked that the focus suggested that the Section consider ments from the Council on ways the of the meeting was to address ways a networking lunch session similar law school could better approach the sections of the State Bar can retain to that sponsored by the State Bar’s study of international law and further members and increase membership Computer Law Section. indicated that the law school was in participation at section events. He re- Th e Chair then asked for a report need of adjunct professors. marked that the attendees exchanged from John Mogk on the Michigan Lois Elizabeth Bingham, Secretary ideas, best practices and success International Lawyer. Mr. Mogk in- of the Section, presented the Minutes stories regarding section develop- dicated that the Spring issue would of the Regular Meeting of the Council ment such as the use of seminars, be available in May. He further noted of the International Law Section held symposiums, journals, newsletters, that Professor Julia Qin will be re- on January 18, 2005. She noted that and list servs, as well as collaborative sponsible for the journal the upcom- the minutes should be corrected to initiatives with national counterpart ing academic year, and that Christi indicate that the Section has an end- organizations. He remarked that the Patrick will become the lead student ing fund balance of $37,375.27 as of following items were noted as action editor. He remarked that there would December 31, 2004, instead of De- items for the Advisory Council: (1) also be three new student editors. Th e cember 31, 2005. Upon motion duly identifi cation of trends that infl uence deadline for the Fall 2005 edition of made, seconded, and unanimously member involvement in sections of the journal is August 1, 2005 and it

27
ichigan International Lawyer

will contain the article submitted by and legal challenges for automotive circulated to all Section members. the Section’s 2004 winner of the Law suppliers in China and India. Call to Order. Th e Chair, Ran- Student Scholarship. Th e Chair asked In connection with the Annual dolph M. Wright, called the meeting Professor Mogk if the Section had any Meeting, the Chair reminded every- to order at 4:15 p.m. information on the number of mem- one that the Section presents the Out- Introductions. Section members bers who have elected to review the standing Section Award to a member and guests in attendance introduced journal on-line instead of receiving a of the Section. Th e Chair welcomes themselves and their professional af- hard copy. It was suggested that the all recommendations. fi liations. Chair follow-up with Carla Machnik Mr. Wright then asked Mr. Birg- Approval of Minutes. Th e Min- as she is the primary contact for the bauer to address the International Bar utes of the Regular Meeting of the Section’s web site. Association. Mr. Birgbauer indicated Council of the International Law Reporting on behalf of Howard that the current dues owed by the Section held on April 19, 2005 were Hill, the Chair provided a status on Section to the IBA equals 100 G.B.P. presented for review and approval. the 2005 Law Student Scholarship He remarked that there is no charge Two necessary corrections were Program. He remarked that the Sec- to the Section to have Section mem- noted—the annual meeting will be tion had received three (3) student bers at their expense register for IBA the Sheraton Detroit Novi Hotel submissions that had been forwarded meetings, and that the IBA will as- and Professor Qin’s name needs to be to the respective judges for review. sist its members with suggestions for corrected. Upon motion duly made, Th e Chair reminded the Council speakers. Upon motion duly made, seconded, and unanimously carried, that the next meeting scheduled for seconded and unanimously carried, the Minutes were approved, as cor- June 14, 2005 is the Section’s annual the Section approved the payment of rected, by all members of the Section strategic planning session. He indi- membership fees to the IBA. in attendance. cated that he had not yet secured a Th e Chair then solicited input on Treasurer’s Report. Next, Scott location, but that he would inform whether the Section should increase Fenstermaker, Treasurer of the Sec- the Council and members of the the section membership fees. After tion, presented the Treasurer’s Report Section when the meeting notice was general discussion, the Section took for the six (6) months ending March circulated. no action to increase the fees. Th e 31, 2005. Th e year-to-date income Next, Mr. Wright requested Chair also noted that a sufficient was $12,750.00 and expenses were that Fred Smith comment on the number of articles were secured $4,297.57, for a net income of proposed Metro Airport tour. Mr. for submission to the State Bar of $8,452.43. When added to the be- Smith solicited input from those Michigan Journal – International ginning fund balance of $26,674.28, present on potential areas of interest Law Section to be published in De- the Section has an ending fund bal- such as the broker process, cargo, and cember 2005. ance of $35,126.71 as of March 31, supply chain approval. He indicated Th ere being no further business, 2005. Upon motion duly made, that the number of attendees could the Chair adjourned the meeting seconded and unanimously carried, not exceed 40 persons. Mr. Smith at 5:24 p.m., and invited everyone the Treasurer’s report was approved indicated that he would inquire about to remain and participate in the as presented. the scheduling of an event that would educational program on the Foreign Chairman’s Report. Next, Ran- not coincide with the Section’s June Corrupt Practices Act to be presented dolph M. Wright, Chair of the Sec- 14th meeting. by Stuart Deming, Esq., of Deming tion, gave his report. He indicated Mr. Wright then asked Mr. Birg- PLLC. that he and Bruce Birgbauer, the bauer to discuss the upcoming An- Chair-Elect of the Section, attended nual Meeting of the Section. Mr. June 14, 2005 the 2005 Bar Leadership Forum on Birgbauer indicated that the Annual June 10, 2005 at Mackinac Island. A On Tuesday, June 14, 2005, the Meeting would be held on October major policy issue discussed was the Council of the International Law Sec- 6, 2005 at the Sheraton Hilton. Th e proposed application of the Michigan tion of the State Bar of Michigan held topic for the program to be presented Single Business Tax to legal services. its Regular Meeting at the Detroit in conjunction with our Section’s An- Th e Bar Association will lobby to op- Athletic Club pursuant to notice duly nual Meeting will address the business pose such imposition. Mr. Wright also 28 VOLUME XVII, NO. 3, FALL 2005

reviewed other issues discussed at the to be done early in the morning on a c. Review of Committee Struc- Forum, and briefl y reviewed Repre- weekday. Messrs. Wright and Smith ture. Mr. Wright initiated a discus- sentative Assembly vacancies and the will work on setting up a tour of the sion of the advantages and disad- multi-disciplinary practice issue. secure and non-secure areas of the vantages of our current committee Michigan International Lawyer. airport this summer. structure. Messrs. Wright and Birg- Julia Qin will be chiefl y responsible c. Annual Meeting. Bruce Birg- bauer will contact committee chairs for assisting, on behalf of the Wayne bauer reported as follows: Th e Annual to defi ne roles and responsibilities of State Law School faculty, the student Meeting will be held on October 6, the committees. editors of the Journal. Professor Qin 2005, from 2:00 p.m. to 5:00 p.m., at d. Increase Law Student Partici- introduced Christi Patrick, who will the Sheraton Detroit Novi Hotel. Th e pation in Section Activities. Ideas were be the student editor. topic for the program to be presented proposed to increase law student par- Committee/Programs Report. in conjunction with the Annual Meet- ticipation in Section activities includ- a. Law School Scholarship Program ing will address the business and legal ing brown bag lunch discussions at / Summer Intern Program. Howard challenges for automotive suppliers in area schools by practicing attorneys, Hill reported on the law-student- China and India. Mr. Birgbauer has and mentorship programs. essay scholarship competition. Th e arranged the speakers. e. Creation of Section Participation $1,000 scholarship will be awarded d. Web Site. Fred Frank reported Form. There was general discussion to Terrance Finneran. Th e two pro- on the Section’s web site, including over the need to create a form whereby fessors who judged the contest will the number of hits. Th e usage rate is section members could indicate their critique the essay in order to assist considered satisfactory and contin- interest to serve on designated com- in the preparation for its publication ued improvements to the web site mittees and/or areas of expertise within in the Michigan International Law will be made. the international law practice. Th e ILS Journal. Planning Session. home page on the website, along with Mr. Hill then presented a pro- a. Dates and Locations of Future the use of the Section list serve, was posal for the Section to fund a public- Meetings. Tentative dates and loca- considered as potential methods to international-law summer internship tions were discussed. disseminate the form. grant. The cost was estimated at b. Additional Presentations at Th ere being no further business, between $5,000 and $7,000. Fol- the 2005 Bar Leadership Forum. Mr. the Chair adjourned the meeting at lowing discussion, it was decided Wright summarized some of the 6:30 p.m.
that the Scholarship Committee will presentations made at the Forum, in- review the proposal and will report cluding the challenge of working with Respectfully submitted for approval its conclusions at the next Council the diff erent perspectives and values by the Section meeting. of diff erent generations of lawyers, Lois Elizabeth Bingham, b. Metro Airport Tour. Fred Smith and the need to use videoconference, Secretary, International Law Section, reported that airport management is phone conference, webinar or other State Bar of Michigan reluctant to allow a group larger than alternate meeting tools to increase 10 in the airport secure area at any meeting participation. one time. Any airport tour will have

ichigan International Lawyer is Looking for New Section Editors!

If you are interested in publishing a short report on events or activities related to international law that are taking place in your area, please contact Christi Patrick, [email protected]. Current openings: • Northern Michigan Editor • Western Michigan Editor • Upper Peninsula Editor

29
ichigan International Lawyer

Section Tours Detroit Airport Nathaniel Schmidt, Wayne State University Law School

Most travelers arriving at the in- ment of Homeland Security in 2002. Following the tour, members of the ternational terminal at Detroit Metro- Th anks to specialized cross training, International Law Section enjoyed two politan Airport have just one thought all CBP inspectors today are qualifi ed presentations given by Metro Detroit in mind; “Get me out of here as fast to inspect and process both passengers Airport officials. Michael Conway, as possible.” On September 15, 2005, and their baggage. One major benefi t Director of Public Aff airs and Environ- members of the International Law Sec- for arriving passengers is that they now ment, briefl y introduced the history of tion (ILS) of the State Bar of Michigan deal with “one face” when arriving in the Metro Detroit Airport and its plans couldn’t stay long enough. the United States. for future improvement and expansion. Frederick Smith, Assistant Chief Questions asked by both immigra- He announced that Metro Detroit is Counsel of Customs and Border Pro- tion practitioners and international busi- an important economic engine in the tection (CBP) of the Detroit offi ce ness practitioners focused on what advice region, employing thousands of work- and ILS member, and Randolph M. foreign clients and colleagues should ers each year. In addition, Tart stated Wright, Chair of the ILS, organized a receive to ensure no complications arise that the newly built McNamara termi- tour of the international arrival section at the airport. Th e answer was simple: nal currently overshadows Chicago’s at the McNamara Terminal. Th e tour “Tell them to be honest.” CBP offi cials O’Hare Airport in landing capacity. was led by Robert Tartt, Assistant Port reiterated that their purpose is to ensure Th ereafter, Barbara Hogan, Deputy Director and Randy Dyer, Supervisor foreign visitors to the U.S. have a valid Director of Public Aff airs and Environ- Inspector. reason for coming, whether it is for busi- ment, presented Metro Detroit’s plans CBP offi cers process approximately ness, pleasure or study. for NFL SuperBowl XL 2006. Hogan 8,500 passengers each day with as many The tour was an excellent way stated that the SuperBowl is now the as 2,000 passengers inside the terminal for both CBP staff and the attending biggest sporting event on Earth with at one time. Th e layout of the terminal attorneys to meet and to get to know nearly 800 million viewers in 180 and the structure of CBP operations each other. Putting a familiar face on countries. She noted that because the are designed to process all arriving pas- what is usually a distant relationship airport will be the fi rst and last impres- sengers as effi ciently as possible. Th is serves to maintain and deepen the pro- sion of Detroit for the many of the is especially important given that 95% fessional relationships between CBP SuperBowl visitors, it is important that of passengers arriving from abroad and Michigan practitioners. the airport be fully prepared.
to Detroit take connecting fl ights to other destinations across the country. Tartt and Dyer walked tour attendees through the various sections includ- ing where passengers are inspected for immigration purposes as well as where passengers pick up luggage and present for customs inspections. Tartt and Dyer also explained how the Customs Department, Immigra- tion and Naturalization Services (INS), and the Department of Agriculture previously operated as separate entities at U.S. airports. Th e three departments’ operations were merged together under CBP with the creation of the Depart-

30 VOLUME XVII, NO. 3, FALL 2005 Event Calendar 2004 -2005: Meetings, Seminars, & Conferences of Interest

S = Section M = Michigan N =National I =International =Teleconference

I Sunday, September 25, 2005 Tuesday, October 25, 2005 M MFriday, November 11, 2005 Conference of the International Bar Web Conference: Basic Immigration Detroit Bankruptcy Conference: Association Court Procedure For Newer Practice Under the New Prague, Check Republic Practitioners Bankruptcy Law http://www.ibanet.org/conferences/Conferences_ http://www.aila.org/content/default.aspx?docid=12489 Novi, Michigan home.cfm http://www.michbar.org/news/calendar.cfm I Wednesday, October 26, 2005 N Wednesday, September 28, 2005 Section Fall Meeting N Monday, November 14, 2005 Th e World Trade Organization at 10 Brussels, Belgium National Institute on Economic and the Road to Hong Kong http://www.abanet.org/intlaw/meet/home/html Sanctions Washington, DC Washington, DC I Wednesday, October 26, 2005 http://www.abanet.org/intlaw/meet/home/html Fragmentation: Diversifi cation and http://www.abanet.org/intlaw/meet/home/html I Th ursday, September 29, 2005 Expansion of International Law Tuesday, November 15, 2005 Customary International Law; Ottawa, Canada Ethics And Th e Litigator Challenges, Practices Debates http://www.asil.org/events/calendar.cfm http://www.aila.org/content/default. aspx?docid=12469 Montreal, Canada Th ursday, October 27, 2005 http://www.abanet.org/cle/compcal.html I AIJA International Finance Forum I Tuesday, November 15, 2005 Customs Valuation: Managing the I Th ursday, September 29, 2005 2005 Forum on Air and Space Law Toronto, Canada Transaction Value Montreal, Canada http://www.abanet.org/intlaw/meet/home/html Brussels, Belgium http://www.abanet.org/cle/compcal.html http://events.wcoomd.org/cal2005.htm I Monday, October 31, 2005 Th ursday, November 17, 2005 N Th ursday, September 29, 2005 Energy in Latin America – New Going International: Fundamentals Trends Ethical Confl icts in Your of International Business Buenos Aires, Argentina Immigration Practice (Newer Transactions http://www.ibanet.org/conferences/Conferences_home.cfm Practitioner) Chicago, IL http://www.aila.org/content/default. Tuesday, November 01, 2005 aspx?docid=12469 https://www.ali-aba.org/aliaba/crslst2.asp#D Web Conference: Best Practices Th ursday, November 24, 2005 S Th ursday, October 06, 2005 For Gathering Documentation For I International Law Section Annual PERM Asia Pacifi c Mergers & Meeting, Business and Legal http://www.aila.org/content/default.aspx?docid=12469 Acquisitions Conference Challenges in China and India for Hong Kong, China N Friday, November 04, 2005 http://www.ibanet.org/conferences/Conferences_ Automotive Suppliers Th e CISG and the Business Lawyer: home.cfm http://www.michbar.org/international/events.cfm Th e UNCITRAL Digest as a I Th ursday, November 24, 2005 N Th ursday, October 06, 2005 Contract Drafting Tool Aviation Conference – Perspectives AILA Fundamentals of Immigration Pittsburgh, PA of the Latin American Market http://www.asil.org/events/calendar.cfm law Conference Sao Paulo, Brazil Scottsdale, AZ Tuesday, November 08, 2005 http://www.ibanet.org/conferences/Conferences_ http://www.aila.org/content/default. home.cfm aspx?docid=12489 Ethical Issues For Th e Business Practitioner N Th ursday, December 01, 2005 Tuesday, October 18, 2005 http://www.aila.org/content/default.aspx?docid=12469 1st Annual NYU/IBA - Is Time Standing Still? Retrogression S Tuesday, November 08, 2005 International Tax Institute and AC21 Conference http://www.aila.org/content/default. Council Meeting aspx?docid=12489 TBD New York, NY http://www.michbar.org/international/calendar.cfm http://www.ibanet.org/conferences/Conferences_ I Friday, October 21, 2005 home.cfm I Th ursday, November 10, 2005 9th Annual Competition Tuesday, December 06, 2005 Conference Global Immigration Conference I London, England Energy & Natural Resources Law: Fiesole, Italy Focus on the Middle East http://www.ibanet.org/conferences/Conferences_ http://www.ibanet.org/conferences/Conferences_home.cfm home.cfm Dubai, UAE http://www.ibanet.org/conferences/Conferences_ home.cfm 31
ichigan International Lawyer

Tuesday, December 06, 2005 I Monday, March 06, 2006 N Th ursday, May 04, 2006 Web Conference: J-1 Trainees International Wealth Transfer Immigration Law: Basics and More vs. H-3 Trainees -- Options & Practice Washington, DC Strategies For Employers London, England https://www.ali-aba.org/aliaba/crslst2.asp#D http://www.aila.org/content/default. http://www.ibanet.org/conferences/Conferences_home.cfm Friday, May 12, 2006 aspx?docid=12455 N I Monday, March 13, 2006 Immigration Law: Basics and More Tuesday, December 20, 2005 Creating Business Th rough World Washington, DC Advanced Topics And Trends In Patent Enforcement https://www.ali-aba.org/aliaba/crslst2.asp#D Consular Processing London, England http://www.aila.org/content/default. http://www.ibanet.org/conferences/Conferences_home.cfm I Monday, May 22, 2006 aspx?docid=12455 17th Annual Communications and Friday, March 24, 2006 I Competition Law Conference N Friday, January 20, 2006 6th Latin American Regional Istanbul, Turkey 2006 Midyear CLE Conference Conference San Juan, Puerto Rico http://www.ibanet.org/conferences/Conferences_ Caracas, Venezuela home.cfm http://www.aila.org/content/default. http://www.ibanet.org/conferences/Conferences_home.cfm aspx?docid=17134 I Wednesday, May 31, 2006 Wednesday, March 29, 2006 Sunday, January 29, 2006 N 23rd International Financial Law I American Society of International African Regional Conference Conference Law Annual Meeting Lagos, Nigeria Edinburgh, Scotland http://www.ibanet.org/conferences/Conferences_ Washington, DC http://www.ibanet.org/conferences/Conferences_ home.cfm http://www.asil.org/events/annualmeeting.html home.cfm Wednesday, March 29, 2006 Th ursday, June 01, 2006 N Wednesday, February 01, 2006 N N ABA/ Section Midyear Meeting 100th ASIL Annual Meeting: A Just 5th International Mergers and New Orleans, LA World Under Law Acquisitions Conference http://www.abanet.org/intlaw/meet/home/html Washington, DC New York, NY http://www.asil.org/events/calendar.cfm http://www.ibanet.org/conferences/Conferences_ N Saturday, February 04, 2006 home.cfm AILA Business Immigration Ski I Th ursday, March 30, 2006 Conference 5th Annual Corporate Counsel I Th ursday, June 08, 2006 Vail, CO Conference 3rd World Women Lawyers http://www.aila.org/content/default. Budapest, Hungary Conference aspx?docid=15521 http://www.ibanet.org/conferences/Conferences_home.cfm London, England http://www.ibanet.org/conferences/Conferences_ I Tuesday, February 07, 2006 I Sunday, April 02, 2006 home.cfm Harmonized System Training Section on Energy, Environment, Workshop on Chemical Products Natural Resources and N Th ursday, August 03, 2006 Brussels, Belgium Infrastructure Law ABA/ Section Annual Meeting http://events.wcoomd.org/cal2005_cal2006.htm Rome, Italy Honolulu, HI http://www.ibanet.org/conferences/Conferences_home.cfm http://www.abanet.org/intlaw/meet/home/html Monday, February 20, 2006 I Sunday, September 17, 2006 International Arbitration and N Wednesday, April 05, 2006 N China: Recent Developments and Section Spring Meeting IBA 2006 Conference Current Issues New York, NY Chicago, IL http://www.abanet.org/intlaw/meet/home/html http://www.ibanet.org/conferences/Conferences_ Shanghai, China home.cfm http://www.ibanet.org/conferences/Conferences_ Friday, April 28, 2006 home.cfm I S TBD 2nd Annual Antitrust Spring S Sunday, February 26, 2006 Security Procedures Related to I Conference Air Travel 7th Annual Private Investment Sydney, Australia Funds Conference http://www.ibanet.org/conferences/Conferences_home.cfm TBD http://www.michbar.org/international/events.cfm London, England http://www.ibanet.org/conferences/Conferences_ home.cfm

I Monday, March 06, 2006 A Mid Year Conference – Maritime Law Dubai, UAE http://www.ibanet.org/conferences/Conferences_ home.cfm

32 VOLUME XVII, NO. 3, FALL 2005

S B  M International Law Section Leadership Roster 2004-2005

CHAIR: Andrew Segovia Term Expiring 9/2007 Randolph M. Wright General Motors Corporation Sheryln L. Adle Berry Moorman PC 300 Renaissance Center Compuware Corporation 255 E. Brown St #320 MC 482-C25-C22 One Campus Martius Birmingham, MI 48009-6210 Detroit, MI 48265 Detroit, MI 48226 Telephone: (248) 645-9680 Telephone: (313) 665-4745 Telephone: (313) 227-2834 Fax: (248) 645-1233 Fax: (313) 665-4695 [email protected] [email protected] [email protected] William H. Dance CHAIR-ELECT: James S. Serocki Fragomen, Del Rey, Bernsen and Loewy Bruce D. Birgbauer KPMG LLP 2301 West Big Beaver Road Miller, Canfi eld, Paddock & Stone 150 West Jeff erson, Suite 1200 Ste. 225 150 W. Jeff erson #2500 Detroit, MI 48243-1507 Troy, MI 48084 Detroit, MI 48226-4415 Telephone: (313) 983-0301 Telephone: (248) 649-5404 Telephone: (313) 496-7577 Fax: (313) 983-0008 Fax: (248) 649-5121 Fax: (313) 496-8451 [email protected] [email protected] birgbauer@millercanfi eld.com Carla S. Machnick Nicholas J. Stasevich Miller, Canfi eld, Paddock & Stone SECRETARY: Butzel Long PC 150 West Jeff erson Ste. 2500 Lois E. Bingham 150 West Jeff erson Detroit, MI 48226 RL Polk & Co. Detroit, MI 48226 Telephone: (519) 977-1555 26955 Northwestern Highway Telephone: (313) 225-7035 Fax: (519) 977-1566 Southfi eld, MI 48034 Fax: (313) 225-7080 machnick@millercanfi eld.com Telephone: (248) 728-7791 [email protected] Fax: (248) 728-7502 COMMITTEE CHAIRS: [email protected] Term Expiring 2006 Business Law Frederick J. Frank Peter Swiecicki TREASURER: Honigman Miller Schwartz and Cohn Baker & McKenzie Scott T. Fenstermaker LLP 3 W. Lane 3607 Elder Road S. 2290 First National Bldg Dearborn, MI 48124 West Bloomfi eld, MI 48324 Detroit, MI 48226 Telephone: (313) 510-6450 Telephone: (248) 360-2182 Telephone: (313) 465-7384 [email protected] Fax: (248) 360-2182 Fax: (313) 465-7385 [email protected] fj [email protected] Scott T. Fenstermaker 3607 Elder Road S. COUNCIL: John E. Mogk West Bloomfi eld, MI 48324 Term Expiring 2005 1000 Yorkshire Road Telephone: (248) 360-2182 Narinder J. S. Kathuria Grosse Pointe Park, MI 48230 Fax: (248) 360-2182 3331 Bloomfi eld Shore Drive Telephone: (313) 885-4589 [email protected] West Bloomfi eld, MI 48323 Fax: (313) 885-5569 Telephone: (248) 855-8159 [email protected] Frederick J. Frank Fax: (248) 855-8426 Honigman Miller Schwartz [email protected] Frederick B. Smith and Cohn LLP Offi ce of Assistant Chief Counsel 2290 First National Bldg Marc C. McGuire US Customs Service Detroit, MI 48226 Delphi Automotive Systems 477 Michigan Ave #281 Telephone: (313) 465-7384 PO Box 5052 Detroit, MI 48226 Fax: (313) 465-7385 MC 480-414-420 Telephone: (313) 442-0378 fj [email protected] Troy, MI 48007 Fax: (313) 226-5559 Nicholas J. Stasevich Telephone: (248) 813-2517 [email protected] Butzel Long, P.C. Fax: (248) 813-2491 Peter Swiecicki 150 W. Jeff erson Ave., Ste 900 [email protected] Baker & McKenzie Detroit, MI 48226 3 W. Lane Telephone: (313) 225-7035 Dearborn, MI 48124 Fax: (313) 225-7080 Telephone: (313) 510-6450 [email protected] [email protected]

33
ichigan International Lawyer

S B  M International Law Section Leadership Roster 2004-2005

Customs Mary A. Bedikian Brian J. Sullivan Andrew P. Doornaert Professor of Law Deloitte & Touche, LLP Miller, Canfi eld, Paddock Director of Alternative Dispute 600 Renaissance Center #900 & Stone, P.L.C. Resolution Program Detroit, MI 48243 150 West Jeff erson Ave. Michigan State University, Telephone: (313) 396-5848 Ste 2500 College of Law Fax: (313) 566-5025 Detroit, MI 48226-4415 368 Law College Building [email protected] Telephone: (313) 496-8431 East Lansing, MI 48824-1300 Fax: (313) 496-8452 Telephone: (800) 844-9352 Website Committee doornaert@millercanfi eld.com Fax: (517) 432-0098 Frederick J. Frank [email protected] Honigman Miller Schwartz Frederick B. Smith and Cohn LLP Offi ce of Assistant Chief Counsel International Family Law 2290 First National Bldg US Customs Service Jan Rewers McMillan Detroit, MI 48226 477 Michigan Ave #281 400 Galleria Offi centre Suite 117 Telephone: (313) 465-7384 Detroit, MI 48226 Southfi eld, MI 48034 Fax: (313) 465-7385 Telephone: (313) 442-0378 Telephone: (248) 352-8480 fj [email protected] Fax: (313) 226-5559 Fax: (248) 352-8680 [email protected] [email protected] Carla S. Machnick Miller, Canfi eld, Paddock & Stone Immigration Law International Tax 150 West Jeff erson Ste. 2500 Linda Armstrong Michael Domanski Detroit, MI 48226 Butzel Long P.C. Honigman Miller Schwartz and Telephone: (519) 977-1555 150 West Jeff erson, Suite 900 Cohn, LLP Fax: (519) 977-1566 Detroit, MI 48226 660 Woodward Avenue machnick@millercanfi eld.com Telephone: (313) 983-7476 2290 First National Building Fax: (313) 225-7080 Detroit, MI 48226-3506 LIAISONS: [email protected] Telephone: (313) 465-7352 Academic Liaison: Fax: (313) 465-7353 Virginia B. Gordan Ingrid K. Brey [email protected] Assistant Dean of International Law Offi ces of Ingred K. Brey, P.C. Programs 15124 Kercheval James S. Serocki Th e University of Michigan Grosse Pointe Park, MI 48230 KMPG LLP – Law School Telephone: (313) 822-8888 150 West Jeff erson, Suite 1200 941 Legal Research Building Fax: (313) 822-8822 Detroit, MI 48243-1507 Ann Arbor, MI 48109-1215 [email protected] Telephone: (313) 983-0301 Telephone: (734) 764-5269 Fax: (313) 983-0008 Fax: (734) 763-9182 Andrea Olivos-Kah [email protected] [email protected] Miller, Canfi eld, Paddock & Stone 150 W. Jeff erson, Suite 2500 Don Wilson Commissioner Liaison: Detroit, MI 48226 Deloitte & Touche, LLP Thomas W. Cranmer Telephone: (313) 963-6420 600 Renaissance Center #900 Miro Weiner & Cranmer, PC Fax: (313) 496-8452 Detroit, MI 48243 38500 Woodward Ave., Suite 100 Telephone: (313) 396-5848 P. O. Box 908 International Dispute Resolution Fax: (313) 566-5025 Bloomfi eld Hills, MI 48304 Randolph M. Wright [email protected] Telephone: (248) 258-1202 Berry Moorman PC Fax: (248) 646-5052 255 E. Brown St #320 [email protected] Birmingham, MI 48009-6210 Telephone: (248) 645-9680 Fax: (248) 645-1233 [email protected]

34 VOLUME XVII, NO. 3, FALL 2005

S B  M International Law Section Leadership Roster 2004-2005

Michigan International Lawyer: Godfrey J. Dillard Susan Waun de Restrepo Professor John E. Mogk Attorney at Law General Motors Corp. Wayne State University PO Box 311421 PO Box 300 Law School Detroit, MI 48231 MC 482-C14-B16 1000 Yorkshire Road Telephone: (313) 964-2838 Detroit, MI 48265-3000 Grosse Pointe Park, MI 48230 Fax: (313) 259-9179 Telephone: (313) 665-3967 Telephone: (313) 577-3955 [email protected] Fax: (313) 665-4121 Fax: (313) 885-5569 [email protected] [email protected] Stephen W. Guittard 131 E 66th St. #2A Logan G. Robinson Professor Julia Y. Qin New York, NY 10021-6129 Vice President and General Counsel Wayne State University Telephone: (212) 628-6963 Delphi Automotive Systems Law School MC 483-400-603 471 W. Palmer Howard B. Hill 5725 Delphi Drive Detroit, MI 48202 PO Box 36632 Troy, MI 48098-2815 Telephone: (313) 577-3940 Grosse Pointe Farms, MI 48236 Telephone: (248) 813-2537 Fax: (313) 577-2620 Telephone: (313) 882-8184 Fax: (248) 813-2491 [email protected] Email: [email protected] [email protected] Timothy F. Stock Christi Patrick Professor John H. Jackson 2200 Wilson Blvd #102-255 250 East Harbortown Drive #711 Georgetown University Law Center Arlington, VA 22201-3324 Detroit, MI 48207-5011 600 New Jersey Avenue, N.W. Telephone: (703) 524-2960 Telephone: (313) 567-4937 Washington, D.C. 20001 Fax: (707) 897-2537 [email protected] Telephone: (202) 662-9837 [email protected] Fax: (202) 662-9408 Betina Schlossberg [email protected] Bruce C. Thelen Wayne State University Law School Dickinson Wright PLLC 471 W. Palmer Robert D. Kullgren One Detroit Center Detroit, MI 48202 Varnum, Riddering, Schmidt & 500 Woodward Ave #4000 [email protected] Howlett LLP Detroit, MI 48226-3425 Bridegewater Place Telephone: (313) 223-3500 Nathaniel M. Schmitz PO Box 352 Fax: (313) 223-3598 1728 McIntyre Dr. Grand Rapids, MI 49501-0352 [email protected] Ann Arbor,MI 48105 Telephone: (616) 336-6000 [email protected] Fax: (616) 336-7000 Anthony P. Thrubis [email protected] General Motors – Legal Staff Susie Tehlirian 300 Renaissance Center 6823 Edinborough Clara DeMatteis Mager MC 482-C24-D24 West Bloomfi eld, MI 48322 Butzel Long PC Detroit, MI 48265-3000 [email protected] 150 W. Jeff erson Telephone: (313) 665-4768 Detroit, MI 48226 Fax: (313) 665-4896 Telephone: (313) 225-7077 [email protected] EX-OFFICIO: Fax: (313) 225-7080 Jan Rewers McMillan [email protected] Thomas R. Williams Law offi ces of Jan Rewers McMillan Kerr, Russell and Weber, PLC 400 Galleria Offi centre #117 J. David Reck One Detroit Center Southfi eld, MI 48034 Miller, Canfi eld, Paddock & Stone 500 Woodward Ave #2500 Telephone: (248) 352-8480 121 S. Barnard, #7 Detroit, MI 48226-3406 Fax: (248) 352-8680 Howell, MI 48843 Telephone: (313) 961-0200 [email protected] Telephone: (517) 546-7600 Fax: (313) 961-0388 Fax: (517) 546-6974 [email protected] Stuart H. Deming reck@millercanfi eld.com 259 East Michigan Avenue, Suite 406 Donald E. Wilson Kalamazoo, MI 49007-6114 Deloitte & Touche Telephone: 616) 382-8080 600 Renaissance Center #900 Fax: (616) 382-8083 Detroit, MI 48243-1704 Telephone: (313) 396-3260 Fax: (313) 396-3595 [email protected]

35

ichigan International Lawyer is now available online at www.michbar.org/international

We recognize that not all our members have the ability to Yes! I would like to continue to re- access the Journal online. If you cannot access the Journal online, we’d like to hear from you. Please take the time to ceive the Michigan International Lawyer fi ll out the form to ensure that you will continue to receive by mail. Please mail to the address a hardcopy of the Journal. below:

Please send to: Name: Joan Kreutzman State Bar of Michigan Address: 306 Townsend Lansing, MI 48933 City:

State:

Zip:

ichigan International Lawyer NONPROFIT State Bar of Michigan U.S. POSTAGE Michael Franck Building PAID LANSING, MI 306 Townsend Street PERMIT NO. 191 Lansing, MI 48933-2083