UCITA, the undead

I HAD HOPED by this point I could write UCITA's final obituary. But the Uniform Computer Information Transactions Act is unfortunately showing no signs of resting in peace.

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UCITA is still walking around in spite of having had more than one stake driven through its heart in recent months. The realization after Sept. 11 that a law promoting security holes was not in the national interest should have been a mortal wound all by itself. When that was followed by a stinging rejection of UCITA as totally unfixable by a strong majority of the state attorneys general, it was hard to see how any state could consider enacting it.

And, indeed, over the winter legislative season, it received no serious attention in any state legislature, while several states actively debated anti-UCITA bills. Three states (Iowa, West Virginia, and North Carolina) have now enacted such legislation. Maryland and Virginia remain the only states to have adopted versions of UCITA itself.

But what I and many other observers assumed would be the final nail in the coffin was delivered at the end of January. The working group appointed by the American Bar Association to study and recommend a position for the ABA to take on UCITA produced a report that, while couched in as polite language as possible, was nonetheless a scathing indictment, essentially calling for UCITA to be completely redrafted.

The ABA working group's report noted 10 specific areas of "critical concerns" it felt had to be addressed. In addition, it had a long list of recommended changes for specific sections of the current draft. Only one member of the nine-person panel dissented and filed a minority report in support of UCITA.

The group's findings were based on the assumption that the amendments approved in December by the UCITA stand-by drafting committee will be adopted this summer at the annual meeting of the National Conference of Commissioners on Uniform State Laws (NCCUSL), the organization responsible for drafting UCITA and promulgating it to the state legislatures. Without those amendments, the working group said it would have even more problems with UCITA.

The ABA panel's top 10 concerns about UCITA dovetail with many of my own: electronic self-help; the scope issues that would allow manufacturers to sell goods with any embedded software under UCITA's rules; the ability of UCITA to undercut state laws concerning consumer protection and unfair/deceptive practices; license-based prohibitions on criticism of software; the lack of economic justification in the Web era for licensors to hide their licenses terms before payment; and the way the draft committee's latest free software amendment actually hurts open-source developers while potentially helping commercial software publishers.

At the very top of the ABA's working group's list of concerns was the issue of UCITA's "clarity and ease-of-use." UCITA opponents have always complained that the draft is obtuse (with proponents usually countering that just means the opponents are too stupid to live and should go away and let the proponents interpret UCITA for the world.) The working group members were struck by how they, a prestigious group of experienced attorneys, couldn't make sense of it either. After many hours of intensive "tutorials," presentations, and debates, they still found themselves getting lost in the draft's maze of convoluted definitions, intricate cross references, and ambiguous phrasing.

"Time and again when the Working Group attempted to consider the substantive merits of a UCITA concept or provision, the Group had first to parse through the language word by word and clause by clause, only to realize, in the end, that the individual members of the group could not agree on what the particular section said or meant," the ABA working group's report read. "Accordingly, the Working Group is concerned that UCITA, as presently drafted, would not achieve the principal objective that a uniform law is expected to achieve, namely, the establishment of a high level of clarity and certainty in a particular area of law."

After reading the ABA report, I'll confess that I really thought UCITA was finished, at least in this form. Surely the ABA's refusal to endorse UCITA would force NCCUSL to withdraw it. After all, the ABA isn't the first prestigious organization to find that it can't stomach UCITA. (The American Law Institute [ALI] "stepped away" from the drafting project in 1999, preventing NCCUSL from making what was then UCC Article 2B part of the Uniform Commercial Code.) With the ABA joining the state attorneys general in lambasting it, how could NCCUSL continue to pretend that UCITA is serving its mission of promoting uniformity in state laws?

I should have known better. NCCUSL has made no move to withdraw UCITA, and officially the only changes it is contemplating are the amendments that the drafting committee published in December. But statements made by NCCUSL officials in some public forums hint at their actual plan. It would seem the standby UCITA drafting committee is preparing a limited set of additional amendments to respond, or at least appear to respond, to the ABA report. No public meetings of the drafting committee are scheduled before the NCCUSL annual meeting in August, however, so these amendments will be concocted by UCITA's drafters and presented only weeks before the commissioners vote on them. No doubt NCCUSL will declare yet again that its "open process" has fixed UCITA to everyone's satisfaction.

Does this sound familiar? In 1999, just when ALI's dislike of UCC 2B had doomed it, NCCUSL rushed out the original draft of UCITA just a few months before it was adopted at the annual meeting. That's how this process works. It's when you think the beast is dead that it's at its most dangerous.