2016 Drafting Season is Over

The 2016 drafting committee season is now over. On December 2nd and 3rd, I attended the meetings of our Uniform Commercial Code Committee and of the Permanent Editorial Board for the Uniform Commercial Code in Philadelphia.

philly-sunset
Sunset over Philadelphia

These Committees continue to shepherd the signature work of the Conference, the Uniform Commercial Code. Under the leadership of Commissioner Carl Bjerre of Oregon, work continues on the identification and republication of an “Official Text” of the Code. The Committees also reviewed the present status of the articles of the Code to assess whether the time for modernization or revision has arrived. Have you ever considered whether we need to continue UCC Articles 10 and 11, the transitional articles? Well, your Committees have. (And so far the answer is still, “yes.”)

We also reviewed the status of the Federal Reserve Bank of New York’s effort to draft a federal statute for a national mortgage registry and of our complementary efforts to modernize UCC Articles 1, 3 and 9 to provide for electronic residential mortgage notes and for a state law based residential mortgage note registry.

On Saturday December 3rd, the last meeting of the season, the Joint Editorial Board for Uniform Trust and Estate Acts occurred in Chicago. Since the Conference does not yet own a Star Trek-style transporter machine, I did not attempt to make that meeting. (A transporter machine for the ULC heads my Christmas wish list!).

Speaking of meetings and travel, your leadership team, Executive Committee Chair Anita Ramasastry, Vice-President Melissa Hortman, Treasurer Tom Buiteweg, Secretary Dan Robbins, Division Chairs H. Lane Kneedler, Cam Ward, Bill Barrett, Nora Winkelman, Pam Bertani, and John McGarvey, together with Liza Karsai and members of the ULC staff, covered 10 different drafting or editorial board meetings, in Washington, Chicago, Philadelphia, Minneapolis, and Louisville during the second half of this year. They helped to coordinate the work of our many committees. Thanks to all of them and to the Committee chairs, reporters and members for advancing our work.

Your leadership team is now preparing the last details (primarily budgetary) before the Scope and Program and Executive Committees meet in January in Point Clear, Alabama at the ULC’s midyear meeting. Then it is on to our spring drafting committee meetings and the 2017 Annual Meeting in San Diego, July 14 through 20, 2017. Although it is snowing as I write, I can almost feel the warm Southern California sun!

Rich

Richard T. Cassidy, President, Uniform Law Commission

2016 Drafting Season is Over

Model Veterans’ Court Act Drafting Committee Update

The Model Veterans’ Court Act Drafting Committee met for a third time on October 14th and 15th, 2016, in Washington, DC.  The drafting committee focused on addressing concerns that were raised this past summer at the ULC Annual Meeting in Stowe, Vermont.  Two of the biggest issues that the drafting committee is currently working through are who is eligible to be admitted into a veterans’ treatment court and prosecutorial discretion of individuals admitted into a veterans’ treatment court.  The drafting committee made further progress in drafting language that will properly balance how these issues are treated.  The act itself will not create a veterans’ treatment court, but rather enables local jurisdictions to create a veterans’ treatment court docket.  The drafting committee will seek the permission of the Uniform Law Commission Executive Committee to have the name of the model act revised to be named the “Model Veterans’ Treatment Court Act” to further reflect the act’s focus on the treatment court model, similar to drug treatment courts. The drafting committee continues to work with stakeholders in the domestic violence community to refine the drafted language in order to appropriately address crimes of domestic violence.

The meeting was attended by Justice for Vets and the National Center for State Courts whom have been instrumental in helping the drafting committee craft the model act.  The drafting committee expects to meet again this coming spring before the model act undergoes a final reading at the Annual Meeting this summer in San Diego, California.  In the interim, the drafting committee plans to hold one or more conference calls in order to fine-tune the act language.  Drafting committee members are working cohesively in making important policy decisions in the draft act and the draft is rounding into good shape as it wraps up its final year of drafting.

Harry L. Tindall, Chair, Model Veterans’ Court Act

Model Veterans’ Court Act Drafting Committee Update

Report from the Annual Meeting of the Uniform Law Conference of Canada

Becky and I are just home from Fredericton, New Brunswick. Together with International Legal Developments Committee Chair Bob Stein, we represented the Uniform Law Commission at the Annual Meeting of the Uniform Law Conference of Canada.

ULCC 2016 Meeting 1
Sunset over the St. John’s River

Our Canadian colleagues are a hospitable bunch, and they made us feel right at home. They do work that is very similar to ours, but they do it in a different way. As befits the smaller population of their country, they are a considerably smaller group than we are. For the bulk of their meeting, they are divided into two groups, a Civil Section and a Criminal Section. This makes particular sense for them, as in Canada, Criminal Law is essentially federal in nature. Most of the work of the Criminal section is considering adopting resolutions recommending changes in criminal law to the Canadian federal government.

Both sections seem to work extensively from white papers prepared by very small working groups.

Even on the Civil Side, things look very different. Like us they are drafting uniform and model acts. The Civil Section considers and adopts resolutions on policy principles that professional drafters convert into statutory language for consideration by the provincial and territorial parliaments.

And, of course, all this work is taking place in two languages. One truly feels an international flavor when the headphones come out for simultaneous translation.

In both Sections, debate seemed sedate by our standards, even when disagreements were sharp. Perhaps we could learn something from that.

Although the methods of work are quite different, I was struck by the fact that both organizations grapple with many of the same legal issues and underlying human problems. Let me give you a few examples.  On Monday, the Civil Section discussed the Uniform Access to Digital Assets by Fiduciaries Ac. The next day, the Civil Section spent considerable time on Domestic Arbitration. Then I went to the Criminal Section, which was discussing treatment courts, (which they call wellness courts) targeted at first nations’ peoples. They went on to discuss the extent to which persons convicted of violating their criminal laws against the distribution of intimate images should be required to register as sex offenders.

All these topics no doubt sound familiar to you, as we have done, or are doing, work on the same problems.

Back in the Civil Section, the members finished work ironing out the coordination of French and English texts on a project that we completed jointly, the Uniform Recognition of Substitute Decision Making Documents Act.

I addressed a joint session of both sections, and reported in some detail on the current status of our work.

Both organizations obviously value the relationship. The nature of our next cooperative effort is not yet clear, but I feel confident that a new chapter of our long history of collaboration and cooperation is just around the corner.

Rich

Richard T. Cassidy, President, Uniform Law Commission

ULCC 2016 Meeting 2
ULCC members at their annual East vs. West Softball Challenge
ULCC 2016 Meeting 3
Former ULCC President Luc Labonte presents the softball trophy to the captain of the victorious West team.
Report from the Annual Meeting of the Uniform Law Conference of Canada

Another way to stay involved

Are you interested in following the work of a Committee even though you can’t commit to Committee service?  Commissioners may be added to the roster for any committee to receive notice of any conference calls and meetings and to receive drafts and memos that are under the committee’s consideration.  While you won’t have a vote (and unfortunately, we won’t be able to reimburse you if you travel to any meetings), your input may be really helpful.  This also is a great way for Commissioners who don’t have the time to volunteer for full committee service to participate in areas in which they have particular expertise.  A list of current committees can be found on the ULC website at www.uniformlaws.org.  Please contact the Chicago office if you’d like to be added to the roster of any current committee.

Rich

Richard T. Cassidy, ULC President

Another way to stay involved

Update from the Family Law Arbitration Drafting Committee

The Family Law Arbitration Act Drafting Committee had a productive meeting in Chicago in March 2016 and a follow-up conference call in early April.  The Act, which will be up for a final reading at the 2016 Annual Meeting, has undergone significant changes in the past year.  As currently drafted, the Act  tracks the Revised Uniform Arbitration Act (RUAA) in many respects but diverges from the RUAA in key areas that distinguish family law arbitration from commercial arbitration.  These include standards for arbitration of child custody and child support, protections for victims of family violence, provisions for temporary awards, and provisions relating to post-decree modifications.

In response to concerns expressed by various commissioners and outside groups, the Committee strengthened the role of the courts in cases involving children and in disputes in which domestic violence is present.  In particular, in order to confirm an arbitration award determining child custody or child support, the act now requires that a court find that the award complies with applicable law and furthers the best interests of the child.  A verbatim record must be created for any part of an arbitration hearing addressing child-related issues, and the arbitrator is required to provide a statement of reasons for the award.  In addition, a bracketed provision is now in the act authorizing discretionary de novo review of awards determining child-related disputes.  Further, if domestic violence is evident between the parties in a dispute that is subject to arbitration, a court must decide whether arbitration may proceed.  Finally, a mechanism for excluding child-related issues from arbitration altogether is available under the act.

The Drafting Committee has also addressed the question of preemption under the Federal Arbitration Act by adopting the language of the FAA and the RUAA regarding the validity of arbitration agreements.  In particular, the Act no longer prohibits pre-dispute agreements except for agreements concerning child-related issues.  As under the FAA and the RUAA, ordinary contract defenses (lack of voluntariness, fraud, duress, etc) remain available to challenge the validity of an arbitration agreement at the time of enforcement.

Other changes include unique provisions for arbitrator qualifications and arbitrator powers.  In the family law world, parties often prefer that a seasoned family law practitioner or retired family court judge serve as arbitrator.  For certain issues, however, parties might seek out a business valuation specialist as arbitrator.  The act provides flexibility in this regard and gives parties the right to waive certain general requirements by agreement.  Also, the act recognizes arbitrator powers particularly relevant to the family law realm, such as the power to appoint a representative for a child.

After three years of drafting, the Committee remains enthusiastic about the project.  We believe the act will provide needed guidance across the United States for this growing form of dispute resolution.

Barbara A. Atwood, Chair, Drafting Committee on Family Law Arbitration Act

 

Update from the Family Law Arbitration Drafting Committee

Update from the JEB on Uniform Unincorporated Organization Acts

The Joint Editorial Board on Uniform Unincorporated Organization Acts (“the JEB”) met Friday, February 19th in Washington, D.C. The JEB monitors judicial and legislative developments affecting unincorporated organizations governed by uniform acts, e.g., LLCs and partnerships; considers issues referred to it by either the ULC or ABA Business Law Section; and makes recommendations as appropriate for consideration and possible action by the ULC. At its meeting the JEB took up a number of issues. Three are most notable.

UCC §§ 9-406 and 9-408 and “Pick-Your-Partner.”   The right of partners or LLC members to “pick their partners” has been enshrined in the uniform acts from the beginning. It is a core, identifying principle of these organizations, but UCC Article 9 Sections 9-406 and 9-408 appear to override both the principles and the statutory and contractual restrictions that protect the principles. After more than a decade of study, analysis, and discussion, last December the JEB Chair and Research Director reached a tentative agreement with PEB representatives that amendments to UCC 9-406 and 9-408 need to be made. At its February meeting, the JEB discussed this development, examined the language of various state statutes, and, after further discussion with PEB representatives, will recommend the text for necessary amendments to the ULC Executive Committee.

Law Firm Bankruptcies and the “Unfinished Business Doctrine.” In recent years, numerous cases of law firm bankruptcies have involved claims by bankruptcy trustees that “unfinished business” of the firm—specifically, non-contingency, hourly rate clients’ cases—are the property of the bankrupt firm under partnership law, and not of a lawyer or other firm to whom a client transferred the case. The ABA has taken the position through amicus curiae briefs that the bankruptcy trustees are wrong and that hourly rate, non-contingency cases cannot ethically be regarded as “the property” of the firm.

In the fall of 2015, the ABA Business Law Section’s Bankruptcy Court Structure and Insolvency Process Committee (“BSCIP”) adopted a Resolution intended for Section Council and House of Delegates’ consideration, calling on states to amend their partnerships acts to preclude the analysis made and result sought by bankruptcy trustees. Specific reference to uniform acts was deleted when objection was raised that neither the JEB nor the LLCPUE Committee had had the opportunity to consider the proposed Resolution, but the Resolution’s call is otherwise alive and well—including a call to make statutory changes as necessary.

The JEB discussed the Resolution and its background and the JEB consensus was three-fold, that: (1) the BSCIP Resolution calling for unspecified statutory amendments is most likely to be understood as a call for changes to the partnership statute and LLC statutes; (2) as such the Resolution is overbroad, would make inappropriate changes to the statutes, and is unnecessary; but (3) in the law firm bankruptcy cases, the ABA is correct based on the ethics analysis. The JEB will report back to the LLCPUE Committee and also enter into discussions with the sponsors of the Resolution.

Proposal Authorizing JEB to Draft and Recommend to the ULC Executive Committee Proposed Amendments in Certain Situations. The JEB is responsible for monitoring legislative and judicial developments concerning uniform acts concerning business entities. On occasion, developments occur that make amending a uniform act appropriate but do not warrant appointing a new drafting committee.

The ULC Executive Committee is authorized under Section 4.3(b)(3) of the ULC Constitution to approve amendments to uniform acts, subject to the right of each commissioner to object and call for full Conference deliberation and action. During the last year, the JEB has developed a proposed mechanism for the efficient use of Section 4.3(b)(3) in connection with uniform business entity acts. With LLCPUE concurrence, the JEB has proposed to the Executive Committee a mechanism: (i) authorizing the JEB to draft language in certain cases, for reasons stated, that would amend uniform business entity acts, and submit the proposal to the Executive Committee for expedited approval under Section 4.3(b)(3); and (ii) providing that the Executive Committee may approve or reject the proposal or take other appropriate action (e.g., referring the matter back to the JEB.) The JEB approved the final wording at its February meeting. The proposal is being referred to LLCPUE leadership for essentially pro forma final approval, after which the JEB will submit the proposal to the Executive Committee.

 David S. Walker, Chair, JEB for Uniform Unincorporated Organization Acts

Update from the JEB on Uniform Unincorporated Organization Acts

Update from the Employee and Student Online Privacy Protection Act

The Drafting Committee on Employee and Student Online Privacy Protection (formerly known as the Drafting Committee on Social Media Privacy) met in Dallas on February 26-27, 2016 and made great progress. This was our fourth face-to-face meeting in less than a year working on this challenging topic. Although we contemplate some telephone follow up, this was also our last face-to-face before formal consideration by Style Committee and then final consideration at the Annual Meeting in Stowe, Vermont, in July 2016.

At the meeting, the Committee addressed a wonderful revised draft prepared by Reporter Dennis Hirsch. A great deal of effort has been put into the current draft, and not surprisingly, the project is attracting more and more attention and input, including significant input from various technology, social media, and other groups. Based on input from a variety of different sources and after a good deal of discussion, the Committee made a number of important decisions. Among them were the following:

  • The final draft will not expressly protect “metadata” for a variety of reasons, including definitional, but it will address the topic in its provisions on protected information. There was a consensus that protected information would include any information accessible to an account holder. A significant amount of time was spent discussing whether the act needed to capture this concept in a definition of “content” or “protected content” or whether it can be handled in the substantive provisions. The Reporter will consider the best method of implementation.
  • A discussion of the civil action provisions (Section 6 of the current draft) yielded various changes. In an action by an Attorney General, the draft will now provide that the relief may include a civil penalty of up to $[1,000] per violation with a cap of $[100,000] per occurrence. In a civil action brought by an employee or student, the draft will now provide that the relief may include actual damages, without a statutory minimum damage provision. In deference to other local law provisions, the draft will now not contain a statutory directive for an award of attorneys’ fees for a frivolous action.
  • It was agreed that an employer or educational institution would not be limited in its use of information about an employee or student acquired incidentally from a third party except that it will be barred from using the information to require, request, or coerce the employee or student to give it access to a protected account unless the information falls within specified exceptions (e.g., it implicates health or safety).

The Committee determined that the act should apply to public and private educational institutions and leaned towards limiting it to post-secondary institutions. However, strong arguments were made to extend the act to secondary and perhaps pre-secondary schools and it was agreed that a final decision would be made in a follow-up conference call.

The Committee continues to make a number of other changes intended to simplify and clarify the draft. We look forward to presenting an outstanding draft for final approval this summer in Stowe.

Samuel A. Thumma, Chair, Drafting Committee on Employee and Student Online Privacy Protection Act

Update from the Employee and Student Online Privacy Protection Act