Posted: 7 Jun 1999
The American Law Institute ("ALI") and the National Conference of Commissioners on Uniform State Laws ("NCCUSL") are in the process of revising the Uniform Commercial Code ("UCC"), and recently promulgated the final draft of Article 9. Their efforts have been hobbled by the allegation that banks and other special interest groups have captured the revision process and that the revised statutes do not protect consumers or people who are not parties to the particular transaction. This article suggests that, where Article 9 is concerned, the difficulty lies not in capture of the uniform law process per se, but in the interaction between the dynamics of federalism and the desire for uniformity. Uniform law drafters seek uniform and universal adoption. They must therefore anticipate the possibility that capture of state legislatures and competition among states (in the form of a so-called "race to the bottom") may lead states to reject an efficient rule. Therefore, even where the uniform law process itself is not captured, the dynamics of federalism may force the uniform law drafters to approximate the results of capture or of a "race to the bottom" in order to ensure widespread adoption of the uniform law. Based on this insight, the article proposes a decision rule which predicts when the uniform law process will fail because of anticipated capture or an anticipated "race to the bottom" and applies this rule to current efforts to revise Article 9 and show that the rule is descriptive, predictive, and prescriptive. It describes what has already happened in connection with the Revision of Article 9 and other articles of the UCC; and it can be used to define and circumscribe the appropriate domain for uniform laws.
Suggested Citation: Suggested Citation
Janger, Edward J., Predicting When the Uniform Law Process will Fail: Article 9, Capture and the Race to the Bottom. Iowa Law Review, Vol. 83, p. 569, March 1998 [Published December 1998]. Available at SSRN: https://ssrn.com/abstract=158269