Congressional Quarterly
Federal Document Clearing House Congressional Testimony
March 9, 2006 Thursday
CAPITOL HILL HEARING TESTIMONY
HOUSE JUDICIARY
SUBCOMMITTEE: COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY
NOTARIZATION AND INTERSTATE COMMERCE
BILL-NO:
H.R. 1458
TESTIMONY-BY: DEAN M. GOOGASIAN, PRACTICING ATTORNEY
AFFILIATION: THE GOOGASIAN FIRM
BODY:
Statement of Dean M. Googasian Practicing Attorney, The Googasian
Firm
Committee on House Judiciary Subcommittee on Courts, the Internet and
Intellectual Properties
March 9, 2006
I am pleased to appear and provide the following testimony before the
subcommittee on Courts, the Internet, and Intellectual property in
support ofH.R.1458 which would provide enhanced recognition of
affidavits and other notarized documents. I appreciate the
opportunity to testify today in support of legislation which would
require recognition of notarized documents from state to state
because, from my perspective and experience as a practicing attorney,
this is an important issue that needs attention. My law practice is
located in Bloomfield Hills, Michigan, which is a suburb of Detroit.
I have had the pleasure during my career to practice in several
different legal areas, from clerking on the Michigan Supreme Court,
to serving as Special Assistant to the Assistant Attorney General for
the Criminal Division of the United States Department of Justice, to
practicing commercial and other litigation. My current practice at
The Googasian Finn is entirely in litigation, and I represent
corporations and individuals in civil lawsuits. I am not a notary
public, but Ideal with and rely on notarized documents in my
practice. In fact, notarized documents, and the recognition of
notarized documents in courts in my state, are an integral part of my
practice. Legislation requiring recognition of affidavits from other
states is needed badly, and I am pleased the panel is considering
this legislation.
THE NEED FOR LEGISLATION ENHANCING INTERSTATE RECOGNITION OF
NOTARIZED DOCUMENTS
Many documents require notarization, including the affidavits that I
and countless other lawyers rely on for a myriad of reasons in our
daily practice. Black’s Law Dictionary defines an affidavit as “[a]
voluntary declaration of facts written down and sworn to by the
declarant before an officer authorized to 1 administer oaths, such as
a notary public.” Black’s Law Dictionary, 8’h Ed, 2004. An affidavit
becomes notarized when the notary public before whom the affidavit is
sworn confirms on the face of the affidavit that the person signing
the affidavit is actually the person identified byname in the
affidavit. Affidavits and other notarized documents are used for
numerous purposes in everyday business transactions, personal and
real estate transactions, and in court proceedings as well. In court
cases, affidavits are used at every stage of litigation as a means of
putting sworn testimony before a court without the necessity of
calling witnesses physically to appear and testify. Affidavits are
required to support certain types of claims and defenses, as well as
to support and oppose motions for summary judgment seeking to dismiss
cases. Id. Affidavits are an efficient and expedient way to provide
the factual testimony needed in many court proceedings and serve to
reduce the cost of litigation and use of court time. The legislation
under consideration by the committee would modernize and streamline
the use of affidavits in state and federal courts.
Streamlining the use of affidavits and other notarized documents from
state to state is important because we live in an age of national and
global competition where speed is increasingly essential to success
in business and litigation. The difference between accomplishing a
goal or failing, closing a deal or letting it slip away, winning a
customer or client or losing it to the competition, or prevailing in
litigation is often determined by speed and efficiency. The advanced
technology we enjoy and use in our professions, including our
wireless phones, the internet, our pda’s and other mobile handheld
devices and laptop computers, is in large measure a result of this
relentless demand for speed and efficiency.
We live in an electronic age and many of the transactions that we
engage in on a daily basis are completed electronically. Today, the
business, organization or government office without a website seems
the exception, rather than the rule. Consumers every year make an
ever increasing portion of their annual purchases with their credit
cards over the internet. The U. S. Census Bureau has reported that
e-commerce for the fourth quarter of2005 was $22.9 billion, an
increase of23 % from the same period the year before.
Total e-commerce sales for 2005 were estimated to be more than $86
billion, an increase of more than 24% from the year before. Id.
No longer satisfied with dial-up internet access, which struck
manyusers with awe and wonder when it first appeared, more and more
Americans and others from around the world are now insisting on, and
paying for, broadband high speed internet access. The Federal
Communications Commission reported in December 2004 that the number
of high speed internet lines was increasing at a rate of ‘3 8% per
year.
Speed and efficiency are the hallmark of effective business in 2006.
In his book, Business @The
Speed of Thought, author Bill Gates wrote:
If the 1980s were about quality and the 1990s were about
reengineering, then the 2000s will be about velocity. About how
quickly the nature of business will change. About how quickly
business itselfwill be transacted. About how information access will
alter the lifestyle of consumers and their expectations of business.
Quality improvements and business process improvements will occur far
faster.
The ease and speed of technology in general and the internet in
particular in this electronic age permeate every aspect of the
government as well as the private sector. Twenty years ago if a
constituent wanted to find a particular government document she would
write her representative and request it and a copy might be sent by
mail or she might be able to obtain it by traveling to her local
library. Today, that same constituent can obtain the document
instantly and inexpensively, as I did in preparation for my testimony
today, by simply accessing it through a high-speed internet
connection.
In addition to its efforts to provide information electronically, our
federal government has also put e-commerce to work in its own
transactions. Effective October 10, 2000, federal legislation
instructs that “[t]he head of each executive agency shall establish,
maintain, and use, to the maximum extent that is practicable and
cost-effective, procedures and processes that employ electronic
commerce in the conduct and administration of its procurement
system.” 41 U.S.C. 426.
Just as legislation exists that requires the heads of executive
agencies to use e-commerce, many other laws on the federal and state
level have been changed to keep up with velocity of electronic
transactions. Congress has taken steps to ensure that advances in the
speed of business aren’t hindered by outdated laws. The Electronic
Signatures in Global and National Commerce Act, located at 15 U.S.C.
7001, for example, sets forth certain principles to “promote the
acceptance and … use of electronic signatures.” 15 U.S.C. 7031. The
first principle is to “remove paper-based obstacles to electronic
transactions,” to “[p]ermit parties to a transaction to have the
opportunity to prove in court or other proceedings that their
authentication approaches and their transactions are valid.” In
short, the act instructs that the secretary of commerce shall promote
the ability to engage in electronic transactions and to have those
transactions recognized and enforced in a court of law. Id.
The act also provides that a “a signature, contractor other record
relating to [any transaction in or affecting interstate or foreign
commerce] may not be denied legal effect, validity, or enforceability
solely because it is in electronic form.” 15 U.S.C. 7001. My home
state of Michigan, along with approximately 40 other states, has
adopted the Uniform Electronic Transactions Act. This important
legislation provides, among other things, that an electronic
signature is as good as a written signature, and that a record or
signature shall not be denied legal effect simply because it is in
electronic form.
Consistent with Mr. Gates’ writings, state and federal courts have
heeded the need for modernization and the efficiency offered by the
digital age. Electronic filing is now in place in federal courts
across the country. In the Eastern District of Michigan, where my
practice is located, the federal court now accepts electronic
filings, only, with limited exception. Michigan’s state courts are
rolling out electronic filing as well.
But with all the recognition and encouragement of commerce and the
willingness of business, consumer, courts, and government alike to
recognize and accept the validity of electronic transactions, and
despite all of these technological advances and the changes in
federal and state laws that have become necessary in order not to
hamper business in the 215 Century, there is at least one area where
we are still stuck in the 19″ century. It is in the area of
recognition of out of state notaries where some states are, sadly,
140 or 150 years behind the times.
Michigan is a prime example of why legislation that enhances the
recognition of affidavits from other states is essential. In
Michigan, a law written in 1879 governs the recognition of affidavits
from other states. This post-civil war law has been held to provide
that an affidavit notarized outside the state of Michigan cannot be
considered by a judge or admitted into evidence unless it has been ”
certified by the clerk ofany court of record in the county where such
affidavit shall be taken, under seal of said court.”
Mich. Comp. Laws 600.2102. The “certification” required consists of
an examination of an affidavit or other notarized document by a
government official and confirmation by that official that the notary
is a licensed, qualified notary and that the signature on the
document is, in fact, that of a notary. In order to obtain
certification, an affidavit must be taken or sent to the certifying
official who must review it and make the certification, and the
certified document returned. Depending on the identity of the
government official, the backlog of documents awaiting certification,
and the location of the government official, certifying an affidavit
can take days or weeks to complete, making it very inefficient by
today’s technologically advanced standards.
Over the years organizations like the National Conference of
Commissioners on Uniform State Laws (“NCCUSL”) and the National
Notary Association have recognized the need for modernizing and
unifying state laws governing the recognition of affidavits and other
notarized documents from other states.
These groups have urged states to unify their laws to provide for the
recognition of documents notarized outside the state without special
certification or authentication of the type required by Michigan’s
1879 statute. One of those efforts was the Uniform Recognition of
Acknowledgments Act (“URAA”), which was proposed during the 1960’s.
In its prefatory note to the URAA, the NCCUSL explained the need for
uniform legislation on recognition of notarial acts performed outside
a particular state:
Need for Uniformity. The major need for uniformity is the need of
notaries and persons outside the enacting state who have been asked
to notarize a document for use in the enacting state… [a] major use
outside the enacting state is by personnel of the Armed
Forces of the United States who are asked by persons connected with
the Armed Forces installation to perform a notarial act for use
elsewhere.
A uniform act on the subject of recognition of acknowledgments is
becoming increasingly more imperative as more and more citizens of
the United States are employed by the federal government and American
industry away from their state of origin or property management.
[Uniform legislation] would substantially help … citizens and
residents conduct affairs having significance in [one] state at
places wherever they happen to be at the time the notarial act is
performed.
The need for uniformity today is significantly greater than it was 40
years ago when the URAA was proposed because today, more o four
citizens choose to locate or do business away from their home states
and business is increasingly conducted outside state lines.
In 1969, Michigan adopted the URAA which provided that an affidavit
notarized outside Michigan is valid and is to be recognized without
further proof of the notary’s authority if it was properly notarized
in the state in which it was signed. MCL 565.262-263. Until recently,
it was widely believed that the URAA had done away with any
requirement that affidavits from other states required any
authentication before they could be admitted into a Michigan court.
In June of last year, however, the Michigan Court of Appeals ruled,
despite the URAA, that Michigan’s 1879 law controlled and that
Michigan courts would not recognize affidavits from other states that
have not been authenticated by the clerk of the court of the county
in which the affidavit was notarized.’
Copies of the opinions from Michigan Court of Appeals are attached as
Exhibits 1 and 2. Numerous groups submitted legal briefs urging that
these decisions were erroneous. The witness briefed this issue on
behalf ofthe State Bar of Michigan as well as the National Notary
Association, urging the Court to rule that the affidavits were valid
under the URAA.
Michigan’s refusal to recognize affidavits from other states without
certification creates both inefficiency and injustice. Certification
is inefficient because it adds delay and expense to everyday
transactions. Instead of being able to submit an affidavit directly,
the affidavit must be sent to the certifying official. This entails
first detaining the identity of the certifying official which can be
a difficult task in and ofitself Next, delay is caused while the
document is sent to the official and certification is completed.
Certification can be costly, particularly where delay is unacceptable
and there is a need to expedite the certification process. And
certification serves little, if any purpose.
But outdated state laws that refuse to accept affidavits and other
notarized documents from other states may cause injustice as well.
The literal language of Michigan’s statute, for example, requires not
just certification, but certification by a particular government
official -the clerk of the court of the county in which the affidavit
was notarized-from whom certification may not be available. This law
was enacted in the late 19th century when, apparently, the clerks
oflocal courts actually provided certification. In many states today,
the clerk of the county court no longer authenticates affidavits.
Today, authentication is in some states performed by the Secretary of
State and in others is performed at the local level, but not by the
clerk of a court. As a result, Michigan may refuse to recognize valid
affidavits from many sister states.’
‘In 1981, the United States joined the Hague Convention and agreed,
among other things, to recognize affidavits from other Hague
Convention countries. Those countries joining the Hague Convention
agreed to do away with the old system of requiring “legalization” of
documents, and instead, to accept documents that had been
authenticated by a certain public official and bear the “apostille.”
There are those who would argue that under current Michigan law even
authentication from the highest levels of another states government-
an apostille-may not be admissible in Michigan. This creates the
potential and illogical situation that an affidavit from Florida that
must be recognized by the governments of such far-flung countries as
Armenia, Botswana, Figi, Serbia and Montenegro, Malta, and Tonga may
be refused recognition in the state of Michigan. See
wwvv.state.gov/m/a/autli/c1267.htm and
A review of the U.S. Notary Reference Manual, published by the
National Notary Association, reveals that in seven of the thirteen
states whose representatives appear on this subcommittee, including
California, Florida, Wisconsin, Massachusetts, Utah, Tennessee and
New York, certification by the clerk of the local court is not
available. As a result, Michigan may refuse to recognize valid
affidavits from these states .
The refusal of a state to recognize documents notarized out of state
creates real world problems for lawyers, businesses, and individuals
as well as the very real threat of injustice. A few examples maybe
helpful to illuminate just what problems may be caused:
Example #1: A troubling situation confronts creditors. Each year,
retail creditors including large department stores, home centers,
auto companies, and credit card companies are required to file
thousands of lawsuits to collect millions owed to them. These
businesses have extended credit to Michigan’s consumers and need to
enforce their accounts. The individual accounts are relatively small,
but the total amount owed by these individual debtors to out ofstate
creditors collectively is large. Lawyers for these creditors use
Michigan’s streamlined statutory scheme for collections by creditors
which requires the submission of an affidavit verifying the debt
owed. Mich. Comp. Laws 600.2145. This affidavit must be filed within
10 days of its signing in order to create a statutory presumption
that permits the entry of a default judgment. Id. Many creditors,
including auto companies located in Michigan, have their credit
operations in other states, and the employees who possess the
knowledge necessary to sign the affidavit verifying the debt are
located outside Michigan. Creditors now face the difficult,
expensive, and inefficient task of obtaining authentication for each
and every affidavit submitted to collect on a debt. The delay caused
by obtaining authentication- which usually involves receiving the
affidavit by mail, forwarding the affidavit by mail to the
appropriate authenticating official, waiting for the official to
receive and process the affidavit, then waiting for the affidavit to
return by mail before it can be filed -may result in the affidavits
being filed more than 10 days after their signing. This, in turn, may
make Michigan’s streamlined debt collection process unavailable to
creditors and subject them to costly and inefficient litigation.
Example #2: A corporation located in California issued in a Michigan
state court based upon a belief that the corporation is the parent
corporation of a local business with a similar name. The California
corporation has no connection with the local business being sued and
seeks to file a motion for some judgment, supported by an affidavit
from its CEO that there is no relation between the two corporations.
Certification is not available from the court clerk in California,
and the CEO maybe forced to fly to Michigan (or another state where
certification can be obtained from the court clerk) in order to
execute an affidavit admissible in a Michigan court.
Example #3: A world renowned forensic expert is located within the
state of New York, and a local county prosecutor in Michigan wants to
retain that expert to provide an opinion on the validity of an audio
recording. By statute in New York, authentication is no longer
performed by the clerk of the local court, but instead by the
Secretary of State, and the expert may therefore be unable to submit
in a Michigan court an affidavit notarized in New York. The
prosecutor may face the choice of either incurring the expense of
having the expert travel to Michigan to execute an affidavit or
simply foregoing the use of the expert.
Example #4: A mother relocates to Florida with her children following
a divorce. She and her ex-husband become involved in a custody
dispute and the ex-husband files a motion in the Michigan court that
granted the divorce seeking a change in custody. By Florida statute,
authentication can only be performed by the Florida Secretary of
State and the clerk of the court is no longer permitted to certify
affidavits. Fla. Stat. Ann. 117.103. The mother needs to provide
evidence to the Court in order to preserve her parental rights, but
the Michigan court may not recognize the affidavit she wishes to
submit because she cannot obtain court-clerk authentication of her
Florida affidavit.
Other examples of the problems caused by the refusal of states to
recognize notarizations from other states are as innumerable as the
situations where those documents are required.
CONCLUSION
Legislation like H.R. 1458 and the alternative that has been offered
would greatly increase the efficiency of our courts and aid
businesses and individuals alike. As a practicing lawyer, I encourage
the subcommittee to further this legislation and strongly support its
passage. I would again like to thank the committee for its attention
today.