When winning isn't everything

Forgive me if I come across as a bad winner this week. When it comes to Uniform Computer Information Transactions Act (UCITA), I just haven’t had any practice.

Free IT resource Open Source Business Conference (OSBC) May 22-23, 2007 Sponsored by OSBC Free IT resource Virtualization Insights from Top Experts - Learn how virtualization gets real! Sponsored by Dell

In case you missed the news, on Feb. 10 at the American Bar Association’s house of delegates meeting in Seattle , the National Conference of Commissioners on Uniform State Laws (NCCUSL) withdrew its motion asking the ABA approve UCITA. What many of the news stories missed was that this withdrawal is permanent, meaning NCCUSL has virtually conceded UCITA will never be a uniform law enacted by all the states.

“It is apparent that there is a strongly held view among a number of sections and other delegates that this body should not take a position on the merits of UCITA,” NCCUSL President King Burnett told the ABA delegates in withdrawing the motion. “We have no intention of bringing this act back [to the ABA ] in the future.”

Because the ABA 's house of delegates as a whole could neither debate nor vote after the motion was withdrawn, NCCUSL subsequently tried to portray the withdrawal as less than a total defeat. In point of fact, though, the ABA conducted quite a number of debates and votes on UCITA. Five ABA sections — policy-making groups within the ABA that focus on a particular area of the law — examined UCITA in the weeks leading to the Seattle meeting and took a position. All recommended that their members vote to table UCITA indefinitely.

Perhaps the most important of these recommendations, in terms of UCITA's future, was that taken by the ABA business law section. "Generally, uniform acts illustrate an emerging consensus around certain areas of the law," the business law section council wrote when urging ABA delegates to vote to postpone indefinitely consideration of UCITA. "Clearly, there is no consensus here. … It is the strong preference and sentiment of the section leadership to refrain from an endorsement of this proposal and, instead, to support a motion to postpone. Please also be advised that if the motion to postpone is defeated, the business law section delegates have been instructed by the section's council to vote 'no' on the proposed resolution."

Many of the other sections that took a stance on UCITA followed the same formula, asking the delegates to vote to postpone if they could, and to vote to reject if they had to. In addition to the sections, several smaller standing committees also voiced their concerns. Perhaps the most telling of these — at least in terms of showing that ABA members clearly understood what they were dealing with — was a letter from the ABA 's standing committee on law and national security explaining why the committee could not support the motion to approve UCITA. “We are unable to support this resolution because the ‘automatic restraint’ provision could allow for the installation of ‘backdoors’ and present a significant security concern, potentially affecting key aspects of our nation's critical infrastructure,” the security committee’s letter read in part.

Clearly, the ABA folks had done their homework, for which we can all be grateful. By the time I got to Seattle , the writing was on the wall for UCITA. NCCUSL withdrew not because the ABA couldn’t come to a consensus — after all, the lack of consensus has never stopped NCCUSL from pushing UCITA before — but because everyone knew UCITA was going to lose and lose big if put to a vote. In promising not to bring UCITA back to the ABA , NCCUSL’s Burnett essentially conceded the point.

What does UCITA’s failure with the ABA mean? In theory, at the very least it ought to mean that UCITA will lose the “Uniform” in its name, because the ABA is supposed to approve uniform acts. In fact, the ABA should have been asked to approve it four years ago, before NCCUSL started trying to get it enacted in the states. Now that day of reckoning has finally come, and the possibility of the ABA approving it in the future has been ruled out, the notion that UCITA could be adopted uniformly by all the states is a clear impossibility.

If not impossible, it would also certainly now seem highly improbable that UCITA will be adopted in any more states. The ABA ’s prestige among lawmakers is such that it will be very difficult for proponents to explain away its refusal to endorse the law. Of course, as it is, no state has enacted UCITA since Virginia and Maryland rushed to judgment four years ago, so it was already a hard sell.

Is it possible that NCCUSL will finally recognize the time has come to drop UCITA? I can tell you there are many NCCUSL commissioners who hope so, because they are tired of having their conference embarrassed by this thing. Won’t NCCUSL’s leadership finally have to recognize that all these entities that know at least as much about the law as they do — not to mention all the technology professional societies that know a lot more about software and e-commerce than they do — are right, and that NCCUSL got it wrong?

Don’t bet on it. Burnett spoke in a very conciliatory manner to the ABA delegates, but his words carry an undertone that suggests NCCUSL will push on alone. Indeed, subsequent public comments by NCCUSL officials indicate that they plan to have UCITA introduced shortly in Arizona , Colorado , Delaware , the Virgin Islands, Wisconsin , and Washington . It has recently been introduced in Oklahoma . ( Delaware residents in particular might want to ask their elected representatives in Dover if the state should jeopardize its role as forum of choice for business litigation with legislation trashed by the ABA business law section.)

That’s the reason I sound like a bad winner. Although we won an important battle, this stupid war looks as if it will go on.