New Jersey Governor Phil Murphy’s administration has significantly narrowed the scope of a state law intended to prevent government dealings with Russian-affiliated businesses following a legal setback in federal court.
The move effectively aligns New Jersey with federal sanctions, diluting the initial effort to penalize Russia for its 2022 invasion of Ukraine.
Governor Murphy signed a bill into law after the invasion, aiming to blacklist state-affiliated companies with ties to Russia and Belarus. The legislation was broad, potentially affecting companies with a parent company owning a Russian subsidiary.
Although Russia’s setback at the UK Supreme Court may not have a significant impact on Putin’s war in Ukraine, it represents another move towards neutralizing his threats to the international order, according to Hess. (Credits: Alexander Nemenov/AFP)
In December, U.S. District Court Judge Robert Kirsch granted a permanent injunction, preventing the state from enforcing the anti-Russia law against Kyocera, an American subsidiary of a Japanese electronics company.
Judge Kirsch ruled that New Jersey acted unconstitutionally by attempting to set its own foreign policy through the law. While he didn’t strike down the law entirely, he suggested it could be constitutional if applied to companies facing federal sanctions.
In response, the state Treasury, responsible for enforcing the law, announced this week that it would interpret the law in line with Kirsch’s decision. New Jersey’s sanctions list will now mirror the U.S. Treasury’s list for Russia or Belarus.
This revised interpretation is narrower than the original law’s intent. The state will enforce the law against companies subject to federal sanctions, a move seen as merely mandating adherence to existing federal law.
Daniel Tannebaum, a former U.S. Treasury official, noted that states were always expected to follow federal law regarding business dealings with sanctioned entities.
The Murphy administration chose not to appeal the ruling in favor of Kyocera, likely anticipating a challenging legal battle. Similar laws in other states, like a 1990s Massachusetts law targeting businesses dealing with Myanmar, have faced legal setbacks.
The decision means that companies like JPMorgan Chase, Xerox, and a major turf field supplier, initially targeted for possible state-level sanctions, would no longer be at risk.
The Treasury declined to comment on the status of those companies, while Governor Murphy’s office refrained from providing additional comments.
The rapid legislative process, moving from introduction to law within ten days, underscores the urgency surrounding the issue amid geopolitical tensions.
Kyocera, represented in court by former state Attorney General Chris Porrino and former state Supreme Court Justice Barry Albin, offered no comment on the matter.
