Attorneys for the U.S. Chamber of Commerce yesterday filed suit in U.S. District court in Oklahoma in an attempt to overturn an opinion by that state's attorney general that bars foreign corporations from owning Oklahoma real estate.
In that opinion, issued Sept. 12, 1979, Attorney General Jan Eric Cartwright interpreted Oklahoma's constitution and statutes as prohibiting real property ownership by foreign firms, including firms legally entitled to do business in Oklahoma, and said that title to such holdings automatically reverts to the state, according to the lawsuit.
The dispute over the Oklahoma opinion comes at a time when many states are actively seeking foreign investment but also during a time of some increase in protectionist sentiment.
"If the Oklahoma attorney general prevails and the sentiment continues to be against alien corporations, other states could begin to go the way of Oklahoma," said Stanley T. Kaleczyc, Jr. director of the National Chamber Litigation Center, which is providing attorneys for the case. The suit was filed on behalf of the Oklahoma State Chamber of Commerce and Oklahomans for Economic Progress, another business group.
Kaleczyc said his initial research indicated that only a handful of other states, perhaps three to five, have laws similar to the Oklahoma language, which might be used to bar foreign ownership of land. Maryland and Virginia are not among them.
Apparently the first company affected by the Oklahoma ruling is a Canadian investment firm, Hillcrest Investments, Ltd. Hillcrest and its subsidiaries own approximately $150 million worth of real estate, including office and apartment buildings and shopping centers, according to the Chamber.
Hillcrest received a letter dated Nov. 14 from the state's attorney general advising the corporation that it had 30 days to divest itself of its real estate holdings before the proceedings begin to convey the real estate to the state of Oklahoma.
"It's our understanding that Hillcrest has not divested itself of any of its property and is considering filing a suit of its own," said Kaleczyc. Hillcrest could not be reached for comment. Chamber of Commerce president Richard L. Lesher said he understood that Hillcrest initially invested in the state in 1977 in response to state efforts to attract foreign investors.
The Chamber's suit charges that the Oklahoma attorney general's ruling violates the U.S. constitution and infringes on presidential and congressional powers to regulate trade. The suit also alleges that the ruling unlawfully restricts interstate commerce and denies companies due process and equal protection under the law.