In early February, Texas A&M School of Law Professor Bill Henning and Professor John McGarvey of the University of Kentucky College of Law filed an amicus brief with the U.S. Supreme Court urging the Court to grant certiorari, or a request for judicial review, in In re I80 Equipment, LLC., 938 F.3d 866 (7th Cir. 2019).
Professors Henning and McGarvey are members of the Uniform Law Commission (ULC), serve as vice-chair and chair, respectively, of the ULC’s Committee on the Uniform Commercial Code (UCC), are both members of the American Law Institute (ALI) and both serve on the Permanent Editorial Board for the Uniform Commercial Code (PEB).
The ULC and ALI promulgated the UCC, and the PEB was established to oversee its ongoing development. Professors Henning and McGarvey, and many other members of these organizations, have been concerned about what has been described as a tsunami of badly reasoned decisions applying the UCC, and they decided to try to do something about it.
In the case at issue, the Seventh Circuit held that the requirement that a publicly searchable Article 9 financing statement contain information about the collateral could be satisfied by a cross-reference to a private security agreement. Because third-party searchers do not have access to this agreement, the decision has the capacity to undermine a critical component of the country’s most important commercial law. There is no support for it in the decisional law and it is at odds with the First Circuit’s decision in In re Financial Oversight and Management Board for Puerto Rico, 914 F.3d 694 (1st Cir. 2019), cert. denied 140 S.Ct. 47 (Oct. 7, 2019).
Because of the importance of the issue and the split in the circuits, Professors Henning and McGarvey hope the Supreme Court will grant certiorari and bring clarity to this important topic.