Saturday, September 16, 2006

Gay Species Finds a Way to Make the UCC Interesting:

This is a great post. Stephen, as a professional, had to work with the Uniform Commercial Code (from reading his post, he had to work with Article 9, the heart of the Secured Transactions class that we so dreaded in law school).

The UCC is a code written by experts in the field of commercial law and adopted by all of the 50 states. Louisiana, our only state which because of its French heritage doesn't have a common law tradition, was the last to adopt the code (which they did only in part). And indeed, the UCC was based a great deal on the common law. It sought to take what was most efficient about the common law, codify it, and then modify parts of the common law to make things even more "commerce friendly" if you will. As a Business Law professor, one general theme I see running in the UCC v. the Common Law is the UCC wants the deal to happen even more so than the common law. That is, there are many factual circumstances which will flunk the common law -- that is: no contract -- where under the UCC, a contract exists nonetheless.

One area where I might disagree with what Stephen wrote where he said: "The Code is long on generalities, and only when needed does it get specific." I'm not sure if I would have written the sentence this way. Earlier in the blog he seems to contradict this sentiment, which more accurately describes the UCC:

When matters became more complex, business and lawyers came together in 1952 to write the Uniform Commercial Code, a brilliant piece of mutual understanding in all phases of commercial and business transactions. Instead of each business writing every nuance into every contract, the U.C.C. became "understood" as already incorporated into the contract and business proposal. Any breach of the contract or U.C.C. was one in the same. All business people had to do was study the Code. Sections either applied or not, but there was no point in rehearsing what was or was not included, it was all presumed to be included. Everyone was on the same page, and everyone understood the rules of the game.

I understand the UCC to be a pretty detailed code. Though, it does -- like the common law -- understand that the heart of contract law is "freedom of contract," that is the freedom of each party to formulate the terms of the contract. So both the UCC and the common law are "general" in the sense that they tend to keep their hands off what terms may properly go into a contract and both generously grant the parties the freedom to write those terms themselves.

Often though, parties don't write or anticipate every term when they make a contract. A contract could derive from a simple exchange of letters, each a few sentences long. And in that case, the UCC seems to be a pretty detailed code in explicating "if you didn't otherwise agree and such and such happens, the following will result."

This is important because it sheds light on what's real judicial activism, and what is meaningless demagoguery. If you are dealing with a thick code which clearly answers the question in specific language and the judge ignores such specific language, then we would have real judicial activism. Our statutory codes, like the UCC, or especially the tax or immigration codes, are replete with such specific language. Even the Constitution itself has some specific language where a judge would have no discretion whatsoever in the ruling -- the classic example being the Constitution's mandate that the President be at least 35 years of age.

Stephen gives an example of a real case of judicial activism because the code clearly seems to say X and the judge ruled Y.

The U.C.C. and every conditional sales contract gives the lender the right to repossess the goods to which the contract corresponds under the terms of default. Non-payment is a notorious marker of default. My staff decided to repossess a vehicle for which no payment had been made for 120 days. At the time, the laws allowed the delinquent to cure the loan once, and regain his vehicle. The same situation recurred 12 months later, and again his vehicle was repossessed. When the borrower became outraged at having forfeited his car, he came to my staff with a sawed-off shotgun. The idiot was apparently unaware of the security cameras and the guards in tow after his shiny weapon. Since it was the lender's option to cure the loan again, and since the borrower had changed jobs and residences more often than not, coupled with the gun incident, I supported my manager's decision to disallow the cure. The deadbeat took us to court, and a municipal S.F. judge ruled in the deadbeat's favor. Indeed, she rescinded the rest of the debt (with 3 years to go). That is not in the U.C.C. But I think she qualifies as an "activist judge." Attorneys and staff were dumbfounded beyond consolation.

Now, compared to such codes, the Constitution is an astonishingly brief document, replete with broad general terms. And indeed, some of the most fundamental rights like the First Eight Amendments, and the Privileges or Immunities Clause, are some of the briefest and most general.

I don't see how any sensible person understanding the complexities of life, the limitless factual circumstances that could arise under words such as "the freedom of speech" could not conclude that judges in interpreting the Constitution will have to exercise a quasi-common law like power where rules of law are made on the spot giving more specific meaning to general principles. Hence an "evolving" body of constitutional law. Hopefully, one that evolves consistent with the underlying principles specified in the text of the Constitution. With the First Amendment's Free Speech Clause -- the underlying principle is "government may not censor." The Privileges or Immunities Clause, in addition to incorporating the First Eight Amendments to the Bill of Rights, also grants a substantive general right to liberty, not unlike the Declaration of Independence's claim that men inherently possess an unalienable right to liberty, etc. etc.

The Constitution could not possibly explicate all of the factual circumstances where these rights would apply (and I don't think we would want it to because, given the difficulty in amending it, the Constitution would fast become obsolete). Hence the courts, as they make constitutional law, further explicate how those general principles apply in specific factual circumstances as they arise. And the result is a body of constitutional law as thick as those detailed codes.


The Gay Species said...

As a business person vis-a-vis an attorney, I regarded the U.C.C. as pro-business (which you underscore), but perhaps the "details" I consider generalities (given financial documentation) is probably more specific than a general legal attitude would allow. The U.C.C., as you observe, doesn't proscribe contrary contracts, it merely facilitates the "usual and ordinary course of business." The irony, recited in my case of the repossesed vehicle, is that the conditional sales contract was quite specific, and the court was no less equally negating.

But you cite an degamgoguing approach by the "rightist" judges on the court. I still have no idea of how Thomas comes to the conclusions he does, but I think I have an idea of how Scalia does. As we all know, he subscribes to "orginal intent," the doctrine that the meaning of the Constitution's words must be understood as the framers understood them. Aside from Scalia's telepathy in discerning those intents, and aside from the "intentional fallacy," his adoption of original intent is no less activist than any of his fellow justices. He simply believes that hoisting "orginal intent" obviates any due diligence, other than his reading of the writings and etymologies of the framers' linguistic style. Thomas, apparently, follows in some version of that shadow.

Contrary to deconstructionist, postmodernist, and other literary theories, language is usually stable enough to convey a basic meaning. When the Fourth Amendment proscribes unreasonable warrantless searches, even those of us with an ordinary use of English words and sentences in the 20th C. think we understand what that means. When the Constitution requires "equal protection," I think we know that "separate, but equal" is not equivalent. No one denies that the language evolves, and words used centuries ago may not mean the same today. Cranmer's use of "prevenient" in a collect of the Book of Commom Prayer, means, "to go before." Today, it means to prevent. Fortunately, the OED helps us over those obstacles.

But "unreasonable search and seizure" and "double jeopardy" have not changed that much in two centuries to allow Scalia's dissent in Hamdan. And how many McNichols' trials of terrorism must we endure (federal, state) before double jeopardy isn't a feature? As much as I lament the O. J. nullification, I lament even more the additional "opportunities" to try him in different courts on different counts that amount to the same thing. The entire RICO statutes are an assault on every notion of "innocent until proved guilty," which Scalia has found does not mean the same thing in different courts in different contexts to his "original intent." Sometimes, the words say what they mean, and mean what they say, and appealing to "original intent" is just another form of judicial activism however surreptitious. Scalia apparently thinks the Fourth Amendment means different things when he applies his "original intent." Like the municipal court judge who determined that "contract" is a bank contract to enslave a minority, from which the former slaves must be freed, she too had an "interpretation" that does not fit our ordinary use. It's all judicial activism. Just as GWB thinks "executive privilege" trumps separation of powers, he too has an activist interpretation.

The Founders, Scalia, and every other justice is skirmishing, making up the rules as they go along. But we need to realize that "in order to form a more perfect union" the silly equivalence of separate but equal does not mean equal protection, that unwarranted wiretaps is an unreasonable search and seizure, that no one person is above the law, not even court justices, and especially not presidents. The 200 years after founding counts for something, call it experience, that is a prism to determine whether the founders, we, or anyone has the right grasp of the concepts. All judicial decisions are activist, hopefully, in my view, they are liberal activism, in favor of the Enlightenment principles which the Founders did not fully articulate (e.g., equal protection, due process). The 18th C. experiment was noble, but deficient. As long as we know we still have a "better" union to form, then we might find better solutions. As long as we appeal to our worst instincts, we get "separate but equal" instead of "equal protection." In took the Supreme Court 75 years to discern it was terribly, terribly wrong. And the damage done in those and earlier years cannot be redeemed.

Hopefully, we are all liberal activists, pleading for individual liberty and rights, defending them against every assault, and yearning to form a more perfect union. "Original intent," like all activist theories, is just another petard to delay our full actuality. And the suffering, the injustice, and the immorality cannot be resolved by appeals to tradition, history, and original intent. For back then, slavery was the tradition, it was the history, and it was the intent. And it was sickening then as it is now.

Jonathan said...


However, out of the two, I think Thomas is more likely to embrace the words "original intent." Scalia would argue that he is a strict "textualist," that i,s he is most concerned with what the text says only and is wary of the arguments which would say "but the Framers intended this" when such contradicts what the text of the Constitution (or a statute) says.

He likes to supplement the text with "traditions." Which is odd because the text of the Constitution says noting about supplementing vague parts of it with "tradition."