Copyright (c) 1996 The Columbia Law Review
Columbia Law Review

April, 1996

96 Colum. L. Rev. 759

BOOK REVIEW: TAKING A NEW LOOK AT SECURED TRANSACTIONS SECURED CREDIT: A Systems Approach. By Lynn M. LoPucki and Elizabeth Warren. New York: Little, Brown & Co. Pp. 805. $ 48.00

Reviewed by Kathryn R. Heidt *

* Professor of Law, University of Pittsburgh School of Law.

There used to be two ways of teaching secured transactions: the traditional method and the theoretical perspective method. Secured Credit: A Systems Approach presents a third method that is superior to the others. It is not a casebook in the traditional sense because it does not simply provide a series of cases and problems designed to teach the law of secured transactions and Article 9 of the Uniform Commercial Code (U.C.C.), which governs these transactions. 1 Yet, neither is it a course book that attempts to provide a grand theory of Article 9 and secured lending. Despite the daunting title, the book does not need a "DON'T PANIC" label on its front cover. 2 It is user-friendly for both student and teacher. The book's strength is that it presents the law of secured transactions in the broader context of secured credit and lending markets as well as the context of legal and social systems in general. Secured Credit is something new - even revolutionary - in legal education.

Perhaps the greatest advantage to the systems approach is that it offers an innovative and dynamic new perspective on teaching and on thinking about law. LoPucki and Warren demonstrate that the law of secured credit is best understood not as a body of rules or principles codified in the U.C.C., but as part of a system consisting of a variety of players and social forces. This approach encourages the teacher to reconsider what "law" is and how it should be taught.

Professors traditionally have taught secured credit courses by relying heavily on statutory law and the case method. This approach requires the students to master the applicable statutory law and then observe as courts apply the statute to complicated fact situations. The goal is for students to master the relevant rules and then be able to apply them to new facts. What emerges, however, is that students gain a vision of the law as a rigid body of legal principles codified in statutes applied in the real world through cases. Professors sometimes add an element of real-world experiences to keep the course interesting, or test their students' mastery of the law using complex hypotheticals. The basic emphasis of this approach, however, is on learning the legal rules. [*760]

LoPucki and Warren view "law" as far more than this rote application of rules to fact situations. Their goal is not only to teach students the rules of Article 9, but to show that Article 9 may be viewed as part of a far larger system consisting of many factors. Some of these factors are statutes like the U.C.C., but equally as important, secured credit law is the people who draft and update the U.C.C.; it is the courts and state and local offices charged with applying it; it is the role of third party players such as financial intermediaries and clerical personnel; and it is a series of intangible social forces such as changes in the interest rate, politics, and social norms governing morality and the ethics of lending. By considering such a wide array of factors, the authors seek to open the study of law beyond the narrow confines of cases and statutes and to show that one's vision of the law is, in part, determined by the system in which one places it. This insight also encourages the user to view the study of law as a more flexible and open inquiry. The boundaries of legal study can be adjusted and may be broadened or narrowed according to the system being studied.

For example, the authors pose the question: what good is a security interest in a debtor's assets or a legal right to recover on those assets if evasive behavior of the debtor, market conditions or inadequacy of enforcing the rights in court make recovery on the security impractical? If the black letter law of the U.C.C. grants a right of recovery, but real-world factors interfere with enforcement of that right, then we need to adjust our vision of whether a "right" is what the U.C.C. says it is or what the lending or social system actually permits.

Examining the larger system of law helps students absorb the material effectively, widens one's perspective on law, and displaces many of the notions of legal education passed down through traditional teaching methods.

Using an innovative "systems approach," Professors LoPucki and Warren have seized an opportunity to influence the way a whole generation of lawyers, judges and law professors think about secured credit. In this regard, the book presents a very effective, step-by-step method for learning secured credit, while simultaneously leading the reader to the almost inescapable conclusion that the present system of secured transactions is not well-integrated and is out of date. This new flavor of course book is particularly timely since Article 9 is currently in the revision process. A study group was appointed by the American Law Institute (ALI), and has completed its report - the first step in the revision of Article 9. 3 [*761] A drafting committee has been established. 4 Yet the Article 9 revision process will take many years before a new Article 9 is in place in most states 5 and will not render Secured Credit obsolete for some time.

A legal course book should educate law students effectively about a particular area of law and provide insights into that area's strengths, weaknesses and purposes. In a statutory course, another main purpose should be teaching students to read statutes. 6 LoPucki and Warren's book does all of this, and does it well. It is pedagogically sound and is a pleasure to use.

The book, however, is not without its faults. At a general level, the authors fail to live up to their promise of applying a true systems approach to secured credit. This criticism is directed at the book on an academic level, however, and does not detract from the effectiveness of using the book to teach secured credit. 7 A second criticism is that the authors intersperse bankruptcy material throughout the book, which does not work pedagogically. 8

Part I of this Book Review presents a general background to the theory of "systems analysis" used by LoPucki and Warren. It then describes in greater detail the effective and valuable insights this approach brings to secured credit. Part II discusses the secondary goals of LoPucki and Warren: incorporating concepts of real estate secured lending and bankruptcy into the book. This is followed by a discussion of whether the use of such materials enhances a secured lending course. Part III provides a review of the content and structure of the book, with observations about the cases, problems, text, and other materials used in the book. Part IV considers what impact the book might have on the current Article 9 revision process and on the future of Article 9. Part V looks ahead to the potential impact that the systems approach will have on shaping the future of legal education and practice. Finally, Part VI concludes with a brief endorsement of the book and a recommendation that it be used in secured credit courses. [*762]

I. The LoPucki and Warren SystemsApproach

A. The Systems Approach: Generally and as Applied to Law

1. A General Definition of the Systems Approach. - I begin with a non-scientific, flexible description of the systems approach so that the reader can compare the LoPucki and Warren approach to the systems approach used in science, sociology, and other fields. It is an interdisciplinary approach which can be applied to many subjects. 9

Stated simply, the systems approach hypothesizes that in order to understand something, that something needs to be examined in the larger context in which it exists. For example, a human cell cannot be fully understood except as a part of the larger context in which it exists - as part of an organ or the body itself. If we are to comprehend the workings of a heart muscle cell, that cell cannot be explored in isolation, but must also be seen from the perspective of its role in the functioning of the heart and the body.

2. The Origins of the Systems Approach: The Physical and Social Sciences. - The systems approach and general systems theory are well-established theories in the physical and social sciences. In both disciplines, systems analysis and general systems theory have developed into extremely complex theories. In the physical sciences, the approach developed from the ground up. Scientists were worried about specialization, isolation, and being cut off from scientific colleagues who might have important information to share with them relating to their own fields. 10 The systems approach, and ultimately, "general systems theory" 11 and "systems philos- [*763] ophy" 12 were reactions to this specialization. Under the new approach, specialization gave way to generalization. The new order used terms such as "wholeness" and "holistic" to describe its undertaking. 13 Another common thread that runs throughout the systems approach is empiricism. 14 Both of these components are apparent in Secured Credit, 15 as well as the authors' other work. 16

In the mid-1970s, the systems approach became popular in other fields, such as sociology 17 and psychology. Although the approach fell somewhat out of favor for a variety of reasons, 18 it has experienced a re- [*764] cent revival. 19 Definitions of the theory have appeared, ranging from the simple to the complex. 20 The systems approach cannot be overlooked in reviewing a book with the phrase "A Systems Approach" in its very title. On the other hand, digging too deep into the scientific general systems theory would, in my view, be inappropriate for this Book Review; I have tried to strike a balance by providing basic information about the approach.

One of the inherent problems of applying a systems analysis to any subject is that one must define the parameters of the system being examined. One needs to place a boundary on the limits of the inquiry. A system can have an infinite number of subsystems or itself be part of some larger system. Further, there are links and bonds between seemingly unrelated systems. Thus, a criticism of the systems approach is that it is difficult, if not impossible, to place appropriate boundaries on the system to be studied. In sociology, for example, the systems approach is often criticized on the grounds that the criteria for the inclusion and exclusion of subject matter in a system are not sufficiently precise to provide a useful theory or approach. In the earlier example using the human cell, one reasonably can ask whether the heart, the cardiovascular system, or the entire body is the appropriate system in which to place the cell. The imposed boundaries of any system may seem arbitrary. Indeed, one may make the same criticism about using a systems analysis in law.

3. The Systems Approach as Applied to Law. - There are many advantages to using a systems approach in legal education. Most of the material that we learn as lawyers, law teachers, and law students can be aptly conveyed through a systems approach.

To illustrate a simple application of the systems approach, consider ordinary parking rules. These rules are so well ingrained in us that we barely question them. When we find a ticket on the windshield - beyond our initial irritation - immediately we understand that we have violated a [*765] rule that keeps traffic flowing, allows access to fire hydrants, and serves other important functions. We need not think long and hard to apply a systems approach to a parking ticket. But placing other legal rules, such as those of Article 9 of the U.C.C., in context is not so obvious. The context in which Article 9 exists requires more facts, more complexity, and more thought because commercial lending rules are not a normal part of our socialization. Placing rules in context allows the students and the teacher to question when the rules make sense, when they work, when they should be changed, and what other options exist. Placing rules in context allows students and teachers to consider whether the rule is serving the system and society appropriately.

B. LoPucki and Warren's Use of the Systems Approach

Using a systems approach to study the law of secured transactions requires that one look at the larger context in which secured credit exists. One must look at lending practices in general - how banks and debtors act and react to a variety of factors both in and outside the law, including societal pressures and political processes affecting secured transactions. 21 While the main subject of LoPucki and Warren's book is Article 9 of the U.C.C., the authors broaden their analysis to consider a wide array of relevant transactions and social concerns. Students tend to prefer this approach. 22

LoPucki and Warren refer to the systems approach in the title of the book, but they have little to say about a systems approach in the text itself. Although a greater understanding of the systems approach would be useful for the teacher, the student need not be burdened with the details of systems theory, i.e., with the details of an approach that began as a scientific method, became popular in the social or behavioral sciences, and is just now appearing in the law. Explanations of the systems approach appear only briefly in the Introduction, which unfortunately was omitted by the publisher from the final printed version, 23 and the Teacher's Manual. In the Introduction, the authors explain that the book examines the "secured credit system" and that law is only "one of many elements" that make up the system of secured credit (Teacher's Manual, p. 4). Specifically, the authors write:

As may already be apparent, the systems approach we employ in this book looks at more than just law. Law is one of many elements that together constitute the secured credit system. To teach the law without teaching the system in which it is embedded would deprive the law of much of its meaning and [*766] make it more difficult to understand. But to teach the whole system requires discussion of institutions, people, and things that are not "law." Among them are sheriffs, bankruptcy trustees, filing systems, security agreements, financing statements, search companies, Vehicle Identification Numbers, closing practices, collateral repurchase agreements, and a variety of other commercial and legal practices. Together with law from a variety of sources, these things constitute the system we know as secured credit and the subject of this course. (Teacher's Manual, p. 4.)

In the Teacher's Manual, the authors recognize that the book has "no exposition of systems analysis" (Teacher's Manual, p. 4). They explain that they "realized that systems analysis is sufficiently intuitive that it needs no special introduction" (Teacher's Manual, p. 4). But in the scientific and sociological worlds, the systems approach was not intuitive; it was a way of thinking that developed over many years. The authors suggest that students desiring a better understanding should consult the definition given to the word "system" in Webster's Dictionary: "a regularly interacting or interdependent group of items forming a unified whole" (Teacher's Manual, p. 4). 24 While this is a good definition of the word, it is not the definition used in other fields. In my view, it would have been better for LoPucki and Warren either to say that they were placing the law of Article 9 in the larger context of secured credit without using terms that have significance in the physical and social sciences, or to give the teacher more insight into the systems approach.

Overall, the authors recognize that secured credit, or any other commercial law course, is impossible to teach without some understanding of the underlying transactions. 25 The authors note that they, and perhaps many others, have been using a systems approach all along (Teacher's Manual, p. 3).

Recall that one of the problems with the systems approach is the difficulty of finding an appropriate basis for setting the boundaries of the system to be studied. The list of systems and subsystems that one could consider in this course, or any law course, seems endless. The boundary could be as narrow as the system of secured lending of personal property or as broad as the international politics of lending - clearly too broad a boundary. LoPucki and Warren have placed appropriate boundaries on the scope of the inquiry into the system of secured lending. They limit their inquiry into the secured lending systems to the obligations and people that play a role in secured credit and on whom secured credit has an effect. They look at the major factors that influence the secured credit system and the effects that the system has on its key players. They explain: "The system is not composed merely of law, but of people, papers, computers, money, debts, hundreds of kinds of collateral, customs, pro- [*767] cedures, and law" (Teacher's Manual, p. 4). They place Article 9 in the context of real people, real lawyers, common lending strategies, customs, practices, procedures, policies, and real obligations. They compare an unsecured creditor's remedies with those of a secured creditor. They look at the reality of being a creditor or a debtor in the system. They raise both legal and practical issues about how a creditor or debtor would react to certain situations. They look beyond Article 9 to bankruptcy law 26 and lending secured by real estate. They use other real-life examples to paint a picture of the secured lending system. For instance, they reproduce the advertisement of a large bank to potential business debtors. As one works through the book, one is given an overall picture of the secured credit system; to a lesser extent, the system of lending in general; and finally, a few brief glimpses into the larger legal and societal systems. 27 Even more importantly, one realizes how relevant these discussions are for a book about the law of secured lending. LoPucki and Warren push the definition of law itself by insisting that the smallest details be considered part of legal analysis. Article 9 of the U.C.C. plays an important role in the law of secured credit, but its dimensions are too narrow to fully explain secured lending. In my view, this intertwining of secured lending law with the wider experience of secured lending is within appropriate boundaries.

For those instructors who wish to expand or contract the boundaries of the systems in which secured credit is considered, the book offers ample opportunity to do so. 28 In my view, LoPucki and Warren have struck the right balance to permit the teacher to make choices about the specific subject that she will cover as well as the larger issue of how far into the system of secured credit, the larger system of lending, and ultimately, the legal and societal systems she wants to venture with her students.

C. Examples of a Systems Approach as Applied to Article 9 in "Secured Credit"

In this section, I will consider two very different examples used by LoPucki and Warren to show the breadth and depth a systems approach provides to secured transactions. Each example illustrates the authors' efforts to redefine the boundaries of secured lending law by considering materials traditionally considered extra-legal because they are outside the limits of Article 9. One example illustrates a complex statutory system: motor vehicle certificate of title laws. Yet this example deals with a very complex subject that the students must understand. The example shows how the systems approach relieves the teacher of a great deal of frustra- [*768] tion in attempting to cover motor vehicle laws. The second example - the use of self-help generally in our legal system - explores complex legal and societal issues while using simple facts. The first example is simple intellectually because it merely teaches students the larger system in which motor vehicle financing exists. The second addresses more complex issues in our legal and social system. It takes the class into the highest order of the system - societal norms in general and their relationship to law.

1. The Motor Vehicle System. - Before using LoPucki and Warren's book, I often had to explain in detail how a transaction seemingly unrelated to Article 9 worked. Every year when it came time to study the continued perfection of a security interest in a motor vehicle moved by the debtor from one state to another, I had to describe the motor vehicle laws and certificate of title laws of a typical state and explain how they functioned. The applicable section of Article 9, the conflict of laws rules of section 9-103(2), simply cannot be understood or mastered without understanding the rules by which the individual states issue certificates of title for and register automobiles. The law is far from uniform. I am certain that much was lost, misunderstood, or simply forgotten through my oral transmission of the generalized motor vehicle rules in my former classes. Attempting to provide the details I thought necessary to master the Article 9 concepts involved, I would briefly explain certificates of title, obtaining new certificates of title in a new state, and registration. These statutes or systems were not explained in other texts. They were not explained because they are not part of Article 9 and other books tend to limit their scope to Article 9. Further, the subject is not very popular and there is little case law. This oral explanation took time and often went astray as students wanted more information about motor vehicle registration than was necessary for the discussion.

LoPucki and Warren put the problem into perspective (pp. 51417). First, they explain the basics in clearly written text. Importantly, they explain the difference between a certificate of title and "registration" (pp. 51415). They bring concreteness to these concepts by reproducing a certificate of title (p. 508) and a vehicle registration (p. 515). They then discuss the Article 9 rules regarding an interstate move using an easy-to-follow hypothetical. Marjorie Murphy, a California resident, owns a Toyota titled in California. The car is subject to a lien, duly noted on the certificate of title, which is kept in the bank's vault. Marjorie moves to Georgia. The authors describe what Marjorie must do in order to have her car retitled in Georgia. The process, if all goes according to the statutory plan, will result in a Georgia certificate of title being issued on which the bank's lien will be noted. 29 I assign LoPucki and Warren's explanation with specific attention to the sections "How It Is Supposed to Work" [*769] (pp. 51516) and "Some Things That Can Go Wrong" (pp. 51617). These sections are not only better presented than the explanations I used to give to the class, they are also stylistically clear and concise. As a result, the students understand the system better, and can refer back to the text rather than having to depend on their memories or notes of my general description.

No other book that I have ever used has had this sort of information about the system in which section 9-103(2) operates. LoPucki and Warren have filled a gap. They explain the system of the motor vehicle laws and then place the problem of the interstate move, which is dealt with by Article 9, in that system. From this method, one can comprehend the Article 9 rules. This is a perfect example of a systems approach at an applied level.

2. Taking the Law Into One's Own Hands. - The second example takes us further into systems theory territory. It asks us to consider a particular problem in light of a variety of systems that together form "law" in the broadest sense. Importantly, it forces students to examine some of the feelings they have about the legal system and its effectiveness. Problem 1.2, the second problem in the book, reproduces an excerpt from The New York Times column "At the Bar" about a Maine lobster catcher, Mr. Look (pp. 2021). Mr. Look is owed $ 30,000 from a wholesaler to whom he delivered lobsters, but who now refuses to pay. Look has a plan. He phones the debtor and poses as a friend of novelist and scriptwriter Stephen King. He orders $ 28,000 worth of lobsters for a big local bash - having no intention of paying for them. Look promises the debtor that the debtor will meet Mr. King and dangles the hope of future catering for the famous writer. The debtor delivers the lobsters to the appointed meeting place and leaves in a limousine to meet Mr. King, who is purportedly detained. By the time the debtor figures out that he has been had, Look has the lobsters and sells them promptly. The ledger is almost even, yet Look obviously deceived the debtor. This true life story engages the students. Some support Look - he was owed money by the debtor. Some support the debtor - there are legal processes which should have been followed. An animated discussion follows. The authors raise probing questions and the teacher can add more: for example, if the debtor complains, what is his remedy? More to the point, what is the likely response of the authorities? Will they feel sympathetic toward the debtor, the original deadbeat in this story? The excerpt from The New York Times and the questions that it asks cut to a fundamental core of the American psyche - should one take the law into one's own hands? 30 If [*770] so, under what circumstances? Implicitly, the problem asks the students and the teacher to ponder their views of those who take matters into their own hands, and compels us to examine these questions in several systems and subsystems. It forces us to consider where the actions and reactions of these various actors are likely to fall in the system of law. It raises the question not only in the narrow system of debt collection, tort law, and criminal fraud or deceit. It also compels us to consider the larger systems that constitute law. The latter include the reactions of officials - the sheriff or police officer to whom the debtor complains - the district attorney, the debtor's own lawyer, 31 and ultimately the judge and jury who will decide the case if tried. The saga of Mr. Look continues in the Teacher's Manual and allows the teacher to provide some closure to the story. Mr. Look is indicted for theft. But he has many supporters. According to The New York Times, no one expects him to end up in jail, although he is paying thousands of dollars in legal fees (Teacher's Manual, p. 14). The ledger is now no longer close to even.

In this problem, one can see that LoPucki and Warren are not only realists 32 in the traditional legal jurisprudential sense, but that they have followed the trend of later realists (or post-realists) who proposed the idea that the legal system is made up of much more than a group of formal laws. 33 LoPucki and Warren have tapped into that bit of the American experience that is in fact part of the larger legal system. While this experience might not be considered law as described by a traditional law professor, the larger social norms of behavior and the rules by which officials make decisions constitute a whole panoply of rules that are not law in the formal sense, but are in fact part of the system of law that encompasses all of the rules, actors, actions and reactions on which our legal system is based and in which it exists. [*771]

II. Additional Effects of Using a Systems Approach to Secured Credit

The task of applying a systems approach to secured transactions raises difficult questions concerning which elements of the system should be included in the analysis. LoPucki and Warren make two interesting decisions. First, to broaden their discussion, they sprinkle principles, rights, and remedies regarding credit secured by real estate throughout the text. Second, they intermingle bankruptcy issues affecting secured creditors throughout the text (Teacher's Manual, p. 2). Both ideas are novel and enticing, but both have their problems as they are used in SecuredCredit. Overall, I like the infusion of the real estate concepts and use much of that material. However, I have completely reordered the bankruptcy materials for my class.

The real estate materials are appealing to have available in a course book so that one can draw comparisons between real estate secured credit and personal property secured credit. Students usually have some familiarity with the basics of mortgages. They or someone they know probably own a home. They know that they get a lower interest rate for a home mortgage than on a credit card. They know that mortgages are recorded. They know that if the mortgage is not paid, something called foreclosure is likely to happen. They may have heard the terms "sheriff's sale" or "judicial sale" or possibly even the right to "redeem." I applaud LoPucki and Warren for providing a good, solid overview of real estate backed lending and then using it to show the comparisons with Article 9 transactions. I assign a fair amount of this material in the beginning of the course.

Two problems inevitably arise. The first is that, unlike Article 9, the real estate systems of each state are far from uniform. One can only learn and use the broad generalizations about the state real estate lending system for so long. This leads to a second problem. Because of this diversity, the comparison of the real estate systems to the Article 9 system becomes less useful as the semester moves on. Early comparisons about the right to possession after default (pp. 4260), foreclosure (pp. 3339, 6884, 9198), and the right to redeem (pp. 7083) work well. Similarly, the comparisons between real property and personal property recording and filing systems work well. Later comparisons, such as the debtor's right to cure (pp. 26768), or the priority between several mortgagees and lien holders (pp. 52735, 649) and several other contests (pp. 65056) are simply too far removed from Article 9 to cover. 34 In my view, these sections are not worth the time the student or teacher must invest to understand fully the real estate system. I am sure the material works well for the authors. It may also work in a more comprehensive course, or for those who have a very good understanding of the rules of real [*772] estate financing. It is not as useful in an introductory Article 9 course. Ultimately, I must eliminate or reorder this material. Nonetheless, to be fair, I should comment that I have rarely known an instructor to teach a book from cover to cover as designed by the authors - including the authors.

The bankruptcy materials are juxtaposed against the areas of secured lending that they affect. A student should consider the possibility of bankruptcy after learning any Article 9 rule. If the student learns that foreclosure of real property or repossession of personal property under Article 9 is a powerful remedy, 35 the student must then consider the possibility that bankruptcy will limit or defeat the secured creditor's power. This is a logical and innovative approach. After exploring the creditor-debtor relationship in general in Assignments One through Five (pp. 3113), LoPucki and Warren discuss the creditor's remedies in bankruptcy in Assignments Six and Seven (pp. 11559). After discussing proceeds from the sale or disposition of collateral in Assignment Ten (pp. 20518), they trace collateral and proceeds in bankruptcy in Assignment Eleven (pp. 21931). They discuss default and the secured creditor's rights in Assignment Thirteen (pp. 25579) and then cover default and related issues under bankruptcy law in Assignment Fourteen (pp. 28094). After explaining the basics of priority in Assignment Twenty-six (pp. 52741), they outline the concept of priority under bankruptcy law in Assignment Twenty-seven (pp. 54261). This theme continues as secured creditors, lien creditors, and other interested parties compete for the debtor's assets.

Nonetheless, I have found that this approach does not work from a pedagogical standpoint. It may work for the authors, 36 who have had much experience in teaching their Article 9 courses with bankruptcy remedies and limits interwoven in the materials. But I find that it is more effective to have students learn the basics of Article 9 and the context in which Article 9 is used by lenders, debtors, and lawyers before the subject of bankruptcy is broached. While I do mention the bankruptcy automatic stay when appropriate, I generally have found it best to leave the bankruptcy problems for another day. The statutory provisions of Article 9 are challenging. To require students to read sections of the Bankruptcy Code at the same time that they are learning the fundamentals of Article 9 is asking too much. The authors might argue that the system of secured [*773] credit includes the Bankruptcy Code and the law of how a secured transaction is treated in bankruptcy. However, the two statutory systems of law are different. They serve different purposes. Article 9 seeks to provide a way in which creditors and debtors can easily conclude a secured transaction - that is, a loan secured by collateral. 37 The Bankruptcy Code, on the other hand, seeks to sort out and prioritize a variety of interests. While these interests are the subject of much debate, 38 to make the transition from Article 9 to bankruptcy, one needs to provide the student with an overview of the ostensible goals of bankruptcy law. I believe that it is impossible to do this in the middle of a secured transactions course. Although I agree that, in theory, a lawyer ultimately must understand the possibility that the rights of a debtor or creditor in an Article 9 secured transaction will be altered in bankruptcy, I believe shifting focus back and forth in a law school course from Article 9 to the Bankruptcy Code is difficult; it asks a great deal of the teacher to orchestrate this discussion.

To handle the complications that bankruptcy issues create, I treat bankruptcy as one unit of the class. At the end of the course, I cover the automatic stay, 39 the avoiding powers, 40 the ability of the secured creditor [*774] to perfect in certain cases, 41 and preferences. 42 My approach is to cover Article 9, in context, and then consider the effect of bankruptcy on a secured transaction. Once the students have completed the bankruptcy segment, they can reconsider some of the points learned earlier. For example, they can consider the problem of the unperfected secured creditor in bankruptcy or the problem of filing a financing statement within ninety days of bankruptcy (a potential preference). I have not found this reordering of the text to be a problem. Students readily recognize automatic stay problems, avoidance power problems and preferences once they have been through the bankruptcy unit in my course.

There needs to be a balance both in the book and in the class. An experienced Article 9 teacher knows what works for him or her. The teacher can add to the course as he or she taught it previously by using the systems approach rather than attempting a forced march through the book. After ten years of teaching, one has a sense of what will and will not work in a class. Fortunately, the LoPucki and Warren text is sufficiently flexible to allow teachers the luxury of reordering the course to their own design. 43

III. Comments on the Ordering of Subjects, Cases, Problems, Text and Other Materials

A textbook cannot be judged solely on the novelty of its approach. A primary purpose of the book is to teach students about the structure and operation of Article 9. This Part will discuss the degree to which the book succeeds at this task.

In the first year of my teaching career, I did what many beginning law teachers do. I chose a book and marched through it. 44 About a third of that book was devoted to the subject of secured transactions. The secured transactions portion of the book contained a large number of cases, many of which I assigned. The next year I switched to Douglas Baird and Thomas Jackson's book. 45 Over time I omitted substantial portions of the Baird and Jackson book, including the ostensible ownership sections 46 and many cases. Ultimately, I was left with a handful of cases and several dozen problems from Baird and Jackson supplemented heav- [*775] ily by my own handout problems. In fact, before switching to LoPucki and Warren, I suggested to students that they share the book or use one of the copies on reserve because so little of the book was used in the course.

What I was looking for was a book that provided the correct balance of text, cases, problems, and other materials to suit my method of teaching secured transactions. The LoPucki and Warren book fits the bill. While I still have to tailor the book to my course, it has an appropriate balance of materials 47 and does not pretend to answer every dilemma using a single theoretical construct.

A. Introduction and Ordering of Subjects

1. Covering the Rights of and Against Unsecured Creditors. - The book begins, as every secured transactions book should, with a look at the rights and remedies of an unsecured creditor. The first assignment allows the teacher to fill in the amount of detail he or she desires regarding these subjects. I believe it is important to cover obtaining lien creditor status in the beginning of the course. The first assignment does this, but I have a major problem with it. The Vitale 48 case - the first case in the book - is tortuous reading (pp. 614). Vitale is a case that shows how difficult it can be for an unsecured creditor to collect a debt. 49 In seven and a half pages, it takes the reader through the series of procedural hoops through which the unsecured creditor must jump to collect from an uncooperative debtor when the sheriff is unwilling to continue his attempt to levy on the debtor's property. The case ends with a discussion of the claim of amercement. 50 The authors' intentions here are sound. They want to illustrate a point: it can be extremely difficult, if not impossible, for an unsecured creditor to collect from a "recalcitrant debtor" (p. 6). This is important for students to grasp. After only one year of law school (or even two), most students have not considered the reality of collecting on a judgment. Students need to learn that the prospect of recovering damages under tort law, contract law, property law, or other laws, about which they have already learned so much, can be bleak.

In my view, however, the Vitale case is not the way to introduce basic concepts of unsecured credit collection devices. Seven and a half pages of effort is not worth the result, which can be more easily explained sum- [*776] marily. Instead, I use the overview problem described below 51 to explore the basic hurdles of an unsecured creditor's recovery. It also lets students explore the ways in which creditors might be thwarted. It is neater, more complete, and less burdensome than reading Vitale.

In fairness to Professors LoPucki and Warren, I note that they warn the teacher that Vitale is "far too difficult technically for the first day, if it is used to teach amercement and the like" (Teacher's Manual, p. 12). They encourage the teacher to assign students the case for "the story it tells" (Teacher's Manual, p. 12). They make an appealing argument that facts are far more credible if set out in a judicial opinion than if the teacher tells the story. Nonetheless, I do not assign the case. Many students in secured transactions are in their second year. They have been trained to read cases with great care, 52 and are unlikely to leave this training in close reading at the doorstep of Vitale. They are likely to feel frustrated by this first case - a bad beginning to a course on secured credit. 53

2. The Dilemma of What to Cover First: The Rights of the Secured Creditor and the Debtor or the Secured Creditor Versus Other Creditors. - Teachers of secured transactions should have a sense of the various tensions in a secured transaction. Teaching secured transactions requires an explanation and articulation of these conflicts. The basic secured transaction is a two-party contract that significantly affects the rights of third parties. The focus of Article 9 is on the effect of the two-party deal on the third parties. Therein lies the dilemma - whether to cover the two-party contract first, including all of its attendant rights and remedies, or whether to focus on its effects on third parties.

In the typical secured transaction, the debtor gives away a property right to the creditor. The right is: you, creditor, have the right to take certain property if I do not pay you as agreed. 54 The creditor is not satisfied with only a property right, however; the creditor will also want to have the first right to the property, i.e., the right to take the property before all other creditors. This is a "priority" right. Most of the provisions of Article 9 set forth the requirements the creditor must meet to gain this priority right. The first right, the property right, is a contract between the two parties to the agreement. The second right, the priority right, is a right that can be asserted against third parties who are not party to the contract. The dilemma for a secured credit course is which principle to address first. Addressing the two-party contract issue first runs the risk of getting bogged down in the rights and remedies of the debtor and creditor, losing time needed to cover the priority rules. On the other [*777] hand, if one skips the basic contract rights and moves into the perfection and priority rules, the students miss the underlying transaction, the two-party contract.

Over the years I have tried teaching secured transactions both ways - with the two-party contract first, 55 and with priority rules and secured creditors against other creditors first. I have concluded that the basic debtor/secured creditor contract and remedies should be covered before the priority issues. First, students have a basic background in contracts. They understand the two-party deal. To this basic model, the teacher can add the formal requisites of section 9-203(1). 56 Second, covering section 9-203(1) provides students with the requirements of "attachment," a status which must be achieved in order to obtain perfection and priority.

For these reasons, LoPucki and Warren make the right choice in addressing the two-party contract issue first. For one who fears spending too much time on the two-party relationship, there are two possible responses. One is to reorder the Assignments in the book, which I do not recommend, for the reasons stated above. 57 The other alternative is to begin the secured transactions course with an overview problem. I use a problem that covers a basic debtor/unsecured credit transaction, and then moves to priority questions between secured creditors, and between a secured creditor and a lien creditor. 58 This overview provides the students with the rudiments of what it takes to create a secured transaction and of the basic priority rules. The students in one or two days get a broad overview of Article 9. With this overview in mind, the class can go back through the details of the two-party contract, the right of the debtor and the creditor in any disputes they have, the rules of attachment and perfection, and finally the priority rules that are the ultimate benefit given to a secured creditor under Article 9. I use this approach in my bankruptcy course as well. I have never seen such an overview problem in any text, and have known only one law professor to use the method. The overview problem gives the students a road map - it is a very general map, but it helps students know where the course is going. [*778]

B. Examples of a Secured Transaction

To help students learn the law of Article 9, the course book appropriately includes several examples of a secured transaction. The first is a "pseudo-history" of secured credit (pp. 2730). LoPucki and Warren weave a tale showing the reader the origins of secured transactions. Debord owns Blackacre, which is worth $ 500.00. Debord needs to borrow money. The time is the "Dark Ages," a time obviously predating Article 9. Creech is willing to lend money to Debord. They strike the following deal: Debord sells Blackacre to Creech for $ 100.00. Creech agrees to resell Blackacre to Debord in one year for $ 110.00, the $ 100 principal and $ 10 interest. The first time through the transaction everything runs smoothly; Debord pays Creech $ 110.00 on the appointed date and Creech reconveys the property. From this simple story, we can see how secured lending was born. LoPucki and Warren also use this example to show what happens when Debord offers to pay the $ 110.00 but is at first two weeks late, and eventually two months late. Ultimately, a court of equity must decide if and under what circumstances Creech may keep the property, worth $ 500.00, and under what circumstances Debord should be entitled to "redeem" the property. Both the right to redeem and "foreclosure," which cuts off the right to redeem, are born. Hence, LoPucki and Warren point out that even in a system that has no rules for secured lending, parties could easily use existing rules regulating sales to construct a secured lending arrangement (pp. 2730). 59

Later in the book the authors offer a simple secured transaction that involves the buying and selling of a restaurant (pp. 16164). After the subjects of attachment and the relationship between the debtor and creditor are covered, the authors provide a chapter that covers a more typical secured transaction: a floor planning arrangement involving loans secured by boats that are inventory of the debtor (pp. 295314). This is a transaction that is not simple, but is also not of the most complex variety.

The authors' progression from the basic pseudo-history to the restaurant purchase example to the floor planning arrangement example provides three accounts of how a secured transaction might work. Examples two and three are particularly apt. The restaurant example provides the context in which the secured transaction takes place. It provides all of the information necessary to see the system of secured credit with all its component parts. The floor planning transaction provides an even more detailed and complete picture of the pieces of a secured credit arrangement. [*779]

C. Problems

The problems are the highlight of the book. The course book can be used so that the students read the assignment and then do the problems, which then can be the focus of the classes. The problems ask the student to assume the role of lawyer for a particular party, or of a judicial clerk. Often, the students are asked how a lender (or borrower) should proceed with its loan documentation given a particular judicial opinion in the assignment. 60

From the very first assignment the problem sets are well devised. The problem sets allow students to learn and analyze the rules, manipulate the rules to some degree, and apply different strategies to reach the desired result. Most importantly, the problem sets put the subject of the assignment in the context of the system as a whole. All of the tools are given in the assignment to allow the student, while solving a problem, to put that problem and its attendant ambiguities, along with the possible strategies, in the larger context of secured credit and lending in general.

D. Cases

LoPucki and Warren are merciful in their use of cases. Over many years of teaching secured transactions, my course has evolved into one that uses few cases. Early on I concluded that the best method of teaching courses such as secured transactions, sales, commercial paper and bankruptcy is the problem method. Cases are simply too long (even at three to five pages) to use for the purpose of applying a statute to a problem. The relevant code section (be it the U.C.C. or the Bankruptcy Code), along with a hypothetical or problem is far more effective. In this age of statutes, students are still taught primarily through cases in the first year. A change is in order, and LoPucki and Warren recognize it. They note that "cases are an extraordinarily inefficient way" to provide the information that will allow students to solve problems (Teacher's Manual, p. 6). With a few exceptions, the book's cases are well chosen. Usually LoPucki and Warren present a short preview of the case and summarize the important aspects of it in the text following the case. They often tell us what they think about the case. Their approach is not to force the students to discover all of the nuances of a particular case - as is often done in the first year of law school. Rather, they give students and teachers only the tools needed to master the law of secured transactions in the context of the real-world setting of secured credit. By relying less on cases and more on problems and statutes, the book encourages students to explore both sides of the argument and to develop good judgment in applying statutes to realistic situations. [*780]

E. Explanatory Text

Unlike most other commercial transactions books, this book contains a significant amount of explanatory text. I do not think any review can do justice to the value of this material - it is superb. The text, which is geared to the level of the particular assignment, is consistently easy to understand and thorough. For example, LoPucki and Warren explain the statute itself when necessary. 61 They explain the transactions in which the secured loan takes place, the transaction itself, and the relative bargaining power of the parties. The authors also explain the context in which a particular problem might arise. They explain or describe a transaction using a hypothetical that sets the stage for applying a particular section.

I surveyed my students anonymously after the first time I used the completed published text. One of the consistent responses I received from students was their appreciation for this straightforward, no-nonsense text. 62

F. Other Materials

Other materials used by the authors include examples of important state statutes, examples of a financing statement, a certificate of title and occasional cartoons. All of this material is well-placed and useful. For instance, the authors provide examples of a state exemption statute (pp. 1718), a federal statute limiting what property may be used as collateral [*781] (pp. 24243), and a state statute making unlawful the disposing of collateral (p. 211). The inclusion of the financing statement is invaluable. I refer to it long before we reach this section of the course because the students need to see that the "financing statement" is a small piece of paper containing only a few facts, such as the debtor's name and address, the creditor's name and address, and a list of the collateral potentially "covered." When dealing with attachment and the requirement of a written security agreement, it is important for students to understand why a financing statement is not sufficient to qualify as a security agreement. The financing statement simply provides notice that a security agreement may exist.

LoPucki and Warren include a unique chapter discussing the legal limits on what can be collateral (pp. 23250). While many bankruptcy casebooks discuss the concept of "property of the estate," or what can be included within the bankrupt debtor's estate, it is unusual for a secured credit casebook to consider what sorts of property can be given as security under Article 9. Specifically, the authors consider FCC licenses and certain pension benefits. No other book that I have used or considered for use raises this important concept of what property can be offered as collateral. The book points out that property of a "highly personal" nature, such as personal clothing, is not appropriate collateral - except in a purchase money security interest. This assignment allows the class to explore the concept of what is property, how our concepts of property have changed over the years, the limitations imposed by non-U.C.C. law, such as regulations promulgated by the Federal Trade Commission and other consumer protection laws, and the explicit exclusion of some transactions from Article 9 altogether, as provided in section 9-104.

In the section on lender liability, the authors have reproduced a full-page newspaper advertisement placed by a bank advertising for commercial borrowers. The ad portrays a bank that wants to form a partnership or long-term relationship with the borrower. It depicts a spider and suggests that too many debtors find themselves in "tangled webs of quick-fix financial quick fixes" (p. 274). The bank suggests that it would prefer to have a relationship with the debtor that is "just a wee bit shy of forever" (p. 274). The authors explain, ironically, that this ad ran a few years after the bank was held liable in the amount of $ 105 million for "knocking off one of its customers, presumably by putting it out of business via failing to continue its lending arrangement" (p. 274, note accompanying Fig. 2).

Humor is also used throughout the book both in the text and even in cartoon form. It is usually appreciated by the students. 63 [*782]

IV. Article 9 Today and Tomorrow

One effect of using a systems approach to secured lending is that it compels us to consider how well the statutory law serves the rest of the system. After considering all angles on secured lending, LoPucki and Warren's book gradually unfolds the grim reality that Article 9 no longer works as a part of the secured credit system - and perhaps never did. Although solutions to particular problems are suggested by the authors, the larger question of how one would construct a workable secured credit system is left to the user of the text. With the teacher as guide, the students are asked to ponder the future of Article 9 and its possible contours. With the future of Article 9 and its contents in a state of flux, the teacher and students may consider the best solution to a variety of problems. For example, a theme that ran throughout my course was the use of technology in secured transactions. 64

The lack of a coherent, uniform Article 9 stems in large part from the commercial and technological changes that have occurred since the 1950s and 1960s. A Study Group and Drafting Committee have been established. The Study Group has completed its review of Article 9 and issued a report suggesting revisions. 65 Drafting the actual Code provisions is likely to take several years, although some are more optimistic. This will be followed by many years of state adoption until a uniform Article 9 is again in effect in all states. The whole process is likely to last into the next century. Unfortunately, this new book is unlikely to have a significant impact on the Article 9 revision process since the members of the study group and those who will ultimately draft the legislation graduated law school long before this book was written. One often learns approaches to subjects in law school which shape one's outlook in the long term. If the drafters learned secured transaction today using a systems approach, they might see the world differently. The overwhelming majority of people involved in the process are practicing lawyers who studied secured transactions some time ago. Their expertise comes not only from their law school days, but from their practical experiences. While specific suggestions for reform made by LoPucki and Warren are likely to find their way to some of those involved in the process, the angst concerning the system of secured transactions will not be relayed in any meaningful way. The drafters are focused on the law of Article 9, on making that law current and on expanding the reach of Article 9. 66 They are not [*783] concerned with sorting out the larger legal and societal issues that the secured credit system presents. 67

Thus, at first glance it might seem unfortunate that LoPucki and Warren's book is new and that the members of the Article 9 study group and drafting committee did not have, or will not have, the benefit of having learned secured transactions through a systems approach. However, the majority of committee members are commercial lawyers. 68 These lawyers already have much of the background and expertise that LoPucki and Warren attempt to convey. They have been practicing in the real world and almost certainly are using a systems approach - even if they do not recognize it. Thus, while the drafters might not cover some of the broader theoretical points, they are likely to have a good sense of what Article 9 accomplishes and how it can be made better in light of the system of secured lending.

Dean Robert Scott explains the study group process. At study group meetings, held only a few times each year, working papers are distributed. The topics of the working papers are discussed at length and hopefully a consensus is reached about how the issue should be resolved in any revision of Article 9. The reporters or the chair of the study group might seek recommendations from "advisory groups of "experts.' " 69 In Dean Scott's view, "the principal currency in the Study Group, therefore, is technical expertise." 70 The expertise of the skilled practitioner, according to Scott, is valued more highly than are academic insights. 71 The constituency of the study group suggests that those who write and propose uniform laws already recognize the value of systems analysis. Knowledge about how the system actually works is valued more highly than knowledge of legal rules taught by academics.

The systems approach also may help bridge the gap between the priorities of the unsecured and the secured creditor and solve the debate between rights of the secured and unsecured creditor taking place in the academic literature. 72 One line of thinking supports placing non-consen- [*784] sual creditors above some or all secured creditors in priority. 73 Perhaps by applying a systems approach we can tackle both the theoretical and the normative aspects of this debate. The systems approach requires us to look at the broader impact of secured transactions on society to determine which interests secured creditor priority promotes and defeats. For example, secured creditor priority over non-consensual tort creditors arguably interferes with the appropriate internalization of costs. 74 From this broader standpoint we can then choose appropriate legal rules for the future.

Ultimately, however, the world is changing too fast; the LoPucki and Warren book makes it abundantly clear that Article 9 is out of date. The question is not only how do we bring it up to date, but how we keep it up to date in a swiftly changing world. Even since the revision project began there have been advances in technology. Encryption programs such as "Pretty Good Privacy" 75 would allow a debtor to electronically sign and electronically file a financing statement. What form the next round of revisions will take is anyone's guess. 76 What is clear is that the current [*785] revision process takes too long. Perhaps the only answer is one suggested by some for other reasons - a federal system of commercial law. 77 Such a system would allow for swift (or at least swifter) reaction to changes in technology.

V. The Future of the Systems Approach

A. Learning via the Systems Approach

If the systems approach takes hold, new casebooks will be needed on all topics of commercial law and bankruptcy law. In fact, a systems approach is appropriate for most of business law and perhaps for many other subjects. I can recall from my own law school days being somewhat mystified by several concepts in my corporations course. Without having a clear understanding of some of the basic facts of corporate reality and structure, I found several of the concepts of corporate law difficult to grasp. That difficulty would have been alleviated if I had a better understanding of the corporate form, the people who make up a corporation, corporate practices, the way in which corporations do business and a number of related fields - both legal and nonlegal. Most of us probably can recall some subject area or point in a law school course that we did not fully comprehend until we understood the larger context in which it existed. In fact, I would venture to say that this phenomenon continues to exist in our every day experience as we continue to learn - whether about law or another topic. Every now and then what we thought we understood intellectually suddenly makes sense; it becomes clear as we have a flash of insight or a breakthrough. This breakthrough is usually a byproduct of grasping some larger system, theory, or other context in which the specific point exists. There is a bright future for the systems approach to a variety of subjects taught in law school. We need only start thinking on a larger scale.

B. One Answer to the Future of Legal Education

Our students graduate each year and enter a competitive world and market for their services. In recent years, American legal education has come under attack. The McCrate Report, 78 issued by the Task Force on Law Schools and the Profession in 1992, found that the greatest fault with legal education is its lack of practical courses and experiences through clinics or simulated courses. Anthony Kronman, Dean of the Yale Law School, is disturbed by the replacement of traditional legal education, which uses the case method, with grand theories, such as law and eco- [*786] nomics or critical legal studies. 79 Grand theories, he argues, have done more harm than good in legal education, and that harm spills over into the cynicism we see today in the legal profession. The harm is committed because the theory, especially law and economics, gives students the false security that the answer to any legal problem can be gleaned by applying a single theory. With respect to law and economics, judgment or practical wisdom (which Kronman deems essential to the lawyer in the best tradition) is replaced with calculation. 80 Both law and economics and critical legal studies "have fostered a style of thought that deprecates the value of practical wisdom." 81

Ultimately, Dean Kronman believes in the case method, which he uses broadly to include not only reading cases, but also problem solving, planning, and client interaction. What Kronman's broad view of the case problem method does, therefore, is force students to think through all sides of the issue. Whatever preconceived notion students had about a subject before coming to law school, they now begin to understand other points of view. The process is called "losing one's soul." 82 This process of exploring all sides of the argument as well as playing the impartial judge is one step on the path of gaining practical wisdom, prudence, and good judgment, which are the core of being a great lawyer.

LoPucki and Warren's systems approach answers some of these concerns. 83 First, the student is given a practical framework. It requires the student to consider the transaction in a real setting. Every student cannot enroll in a clinic, simulation course, 84 or other practice oriented course. [*787] But the LoPucki and Warren system gives students a practical outlook in a core law school course.

Further, the fact that the students must consider all sides of an issue, through a case or a problem, gives students the tools through which they can develop the practical wisdom that Dean Kronman advocates and considers to be at the core of great lawyering. In fact, the systems approach does more than the old fashioned, traditional case method that Dean Kronman advocates. It asks student to do more than just consider sides of an argument. 85 The systems approach requires students to place these arguments in the larger context of the transaction, the legal system, lending as a whole, and, occasionally, in the context of society as a whole. The systems approach educates better lawyers.

The systems approach is attractive. Those of us who have used the method to some extent in our teaching advocate it. But as noted earlier, we need the approach to take hold in course books. We need the method to permeate legal education through such books. When the method takes hold, there will be a subtle revolution in the way law is taught. As students leave law school, better prepared and with a better understanding of how the systems that they have studied work, they will be better lawyers. Perhaps this will be part of a larger movement that will reshape the legal profession and improve its credibility. 86

VI. Conclusion - Reasons to Try This Book

There are many reasons to try this book. It places Article 9 in a larger context. It forces students to think beyond the letter of the law. For those who want to try the new approach to secured credit that compares real estate secured credit with Article 9, this is the book.

My minor criticisms can all be alleviated by a little pruning. Those with experience teaching Article 9 will know what to cut and what to keep from their own experience.

The systems approach brings a welcome new perspective to this subject. Students see secured transactions in action. They see secured transactions as they exist in the larger system of credit, lending, rights between the creditor and debtor, and rights between the creditor and others - other creditors, buyers, the Internal Revenue Service, the bankruptcy trustee, sellers and lien creditors. Students ultimately see the system in which Article 9 operates.

FOOTNOTES:
n1. See U.C.C. 9-102 (1990).

n2. See Douglas Adams, The Hitchhiker's Guide to the Galaxy 3 (1980).

n3. See infra text accompanying notes 6569; see also Robert E. Scott, The Politics of Article 9, 80 Va. L. Rev. 1783, 180308, 184748 (1994) (providing overview and critique of revision process). Regular updates can be found in the Consumer Finance Law Quarterly Report. See, e.g., Alvin C. Harrell, 1994 Meetings Refine Proposed Article 9 Revisions, 48 Consumer Fin. L.Q. Rep. 326 (1994); Fred H. Miller, The Revision of UCC Article 9, 47 Consumer Fin. L.Q. Rep. 257 (1993).

n4. See Miller, supra note 3, at 258.

n5. See infra text accompanying notes 6569.

n6. I sometimes joke that my course in Article 9 is a "remedial reading" course. I explain that I do not mean that the students need remedial reading, but that every time I teach a statutory course such as Article 9, I must constantly read and reread the statute itself. I believe this point is important. Students in the beginning of their second year are accustomed to reading cases. They read dozens of pages in a single opinion in order to gain a few significant points. Statutes, on the other hand, are quite different. A few words or lines have significant meaning. Focusing on every word, every conjunction, and every omission is a challenge. I tell students that I approach every statute as though I have never read it before, and that I parse it into its components.

n7. See infra text accompanying notes 2324.

n8. See infra text accompanying notes 3542.

n9. See Ludwig von Bertalanffy, Foreword to Ervin Laszlo, Introduction to Systems Philosophy: Toward a New Paradigm of Contemporary Thought at xvii (1972) [hereinafter Laszlo, Systems Philosophy] ("In many fields of endeavor, the necessity of a "systems approach' or "systems thinking' is emphasized.").

n10. See Ervin Laszlo, The Systems View of the World: The Natural Philosophy of the New Developments in the Sciences 315 (1972) [hereinafter Laszlo, Systems View]; Ludwig von Bertalanffy, General System Theory 14, 4951 (1968) [hereinafter von Bertalanffy, General System Theory]; cf. Gerald M. Weinberg, An Introduction to General Systems Thinking 3637 (1975) (discussing difficulty of being a "generalist" in light of the "explosive growth of knowledge" in the modern age).

n11. "General Systems Theory" is a type of meta-theory of systems that can be used to evaluate any system. It provides an overall theory about the systems approach and analysis.

The roots of general systems theory date back to the 1920s. The theory developed in the 1940s and 1950s, and became mainstream in the 1960s. See von Bertalanffy, General System Theory, supra note 10, at 12. Von Bertalanffy introduced a new "paradigm" in scientific thinking in the Kuhnian sense. See Thomas S. Kuhn, The Structure of Scientific Revolutions 1022 (2d ed. 1970). By the time of the second edition of his book, von Bertalanffy recognized that the systems approach could be applied to fields other than the physical sciences and technology; it could be applied to psychology and the social sciences, for example. See id. at 19; von Bertalanffy, General System Theory, supra note 10, at 32. Perhaps the best historical example of the emergence of a new paradigm is the discovery in astronomy that the stars and planets do not revolve around the earth. As movements of planets and other celestial bodies were observed over the centuries, the model of planetary movement had to be continually revised. Eventually, the model became extremely complex and chaotic - it could no longer be depended upon to explain the next aberration that might be found. Ultimately, of course, Copernicus introduced a new paradigm. See Kuhn, supra, at 6772. The state of scientific research then returned to a "normal" state in which scientists work with and do their research using the new model. See id. at 7791.

n12. See Laszlo, Systems Philosophy, supra note 9, at xviixxi, 113; Laszlo, Systems View, supra note 10, at 315.

n13. See, e.g., Laszlo, Systems View, supra note 10, at 6 (using "business enterprises" as an example of something we think of as a company (i.e., a whole) "rather than as individual wokers and administrators"); Anatol Rapoport, Foreword to Modern Systems Research for the Behavioral Scientist at xxi (Walter Buckley ed., 1968) [hereinafter Modern Systems] (asserting that the new systems approach is a "holistic" approach, incorporating a general approach without abandoning "scientific rigor"); von Bertalanffy, General System Theory, supra note 10, at 13, 37, 45, 55, 6675, 94; von Bertalanffy, Foreword to Laszlo, Systems Philosophy, supra note 9, at xviii ("general systems theory ... is the scientific exploration of "wholes' and "wholeness' ...."); Weinberg, supra note 10, at 2023.

n14. See Kenneth D. Bailey, Sociology and the New Systems Theory 34, 5962 (1994); Laszlo, Systems Philosophy, supra note 9, at 16; Laszlo, Systems View, supra note 10, at vi; von Bertalanffy, General System Theory, supra note 10, at 9495.

n15. The authors write, "we are more interested in the empirical reality of secured credit than myths perpetuated by arm chair theorists. To our minds, secured credit is what secured credit does" (Teacher's Manual, p. 1). The Teacher's Manual also discusses wholeness (Teacher's Manual, p. 3).

n16. Both LoPucki and Warren have engaged in extensive empirical research. See Lynn M. LoPucki & William C. Whitford, Bargaining Over Equity's Share in the Bankruptcy Reorganization of Large, Publicly Held Companies, 139 U. Pa. L. Rev. 125 (1990); Lynn M. LoPucki & William C. Whitford, Venue Choice and Forum Shopping in the Bankruptcy Reorganization of Large, Publicly Held Companies, 1991 Wis. L. Rev. 11; Teresa A. Sullivan et al., As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America 113 (1989).

n17. There are a number of articles written in the sociology field that reflect a systems analysis perspective. In fact, an entire organization based on systems analysis has been created by sociologists - the Society for General Systems Research. See The Social Science Encyclopedia 330 (Adam Kauper & Jessica Kauper eds., 1985). For a collection of works on behavioral sciences written over several decades which show the systems analysis perspective, see Modern Systems, supra note 13, at VII-X.

n18. Today, many sociologists have moved away from scientific trends associated with the physical sciences. Indeed, some lean toward the opposite extreme: ideals of story telling for their craft.

I suspect that LoPucki and Warren would scoff at the idea of using "story telling" to teach Article 9, although such methods have become popular for legal analysis and discussion. See the program brochure for the Association of American Law Schools 1995 Annual Meeting 6263 (Jan. 48, 1995) (on file with the Columbia Law Review); the program brochure for the Association of American Law Schools 1996 Annual Meeting 63 (Jan. 37, 1996) (on file with the Columbia Law Review). Even so, LoPucki and Warren tell many stories throughout their book in the form of cases, problems and text to teach secured credit. Perhaps, just as LoPucki and Warren argue that a systems approach has been used for many years by scholars without recognizing it (Teacher's Manual, p. 3), so too has story telling.

n19. See Bailey, supra note 14, at 13 (and works cited therein).

n20. Various definitions of a system have been advanced. Some are rather general while others list specific criteria. See von Bertalanffy, General System Theory, supra note 10, at 3236; A.D. Hall & R.E. Fagen, Definition of System in Modern Systems, supra note 13, at 81, 81. Hall and Fagen give a rather simple definition of "system," noting that "[a] system is a set of objects together with relationships between the objects and between their attributes." But they then go on to expound on "objects," "attributes" and "relationships." Id. at 8182. Other books describe types of systems instead of defining the term, or attempt to describe a system by its traits. See, e.g., Bailey, supra note 14, at 4752; George J. Klir, An Approach to General Systems Theory 5061 (1969). For a broad, subjective view of systems, see Weinberg, supra note 10, at 5155.

n21. See infra text accompanying notes 2933.

n22. See, e.g., infra note 62 and accompanying text.

n23. The Introduction is available from the publisher to hand out to the students. However, I doubt that omission is considered a significant loss by students, who rarely read introductions. Copies are also on file with the Columbia Law Review, the author of this review and the authors of the book.

n24. Merriam-Webster's Collegiate Dictionary 1197 (10th ed. 1993).

n25. For a few examples, see infra text accompanying note 29.

n26. The authors have infused bankruptcy treatment of secured credit throughout the book as they think appropriate. In my view, however, this material does not work from a pedagogical standpoint. See infra text accompanying notes 3642.

n27. See, e.g., infra text accompanying notes 3032 for a discussion of when and whether one should take the law into one's own hands.

n28. See infra text accompanying notes 2933.

n29. This example uses the Uniform Motor Vehicle Certificate of Title and Anti-theft Act ("UMV Act"), 11 U.L.A. 421 (1974), adopted in barely a dozen states. Since other states have similar rules, the LoPucki and Warren description is appropriate. I still explain to my students in very general terms how the motor vehicle systems work and do not require that the students learn the UMV Act.

n30. Several years ago, shortly after the end of the cultural revolution in China, I had the privilege of meeting and becoming friends with a couple who were both law professors from the People's Republic of China. Over many dinners and late night conversations, sometimes with other attorneys or law professors, we explored the differences in our legal systems. One conversation startled me. My friends had watched the movie High Noon. The message they took away from the movie was: the United States has a well-developed legal system and yet in High Noon people took the law into their own hands. "How can this be?" they asked. At the time, I thought it an anomaly - an old movie based on the mythology of the Old West and its lawlessness. My American colleagues and I tried to explain the context of the movie and that it did not represent the reality of American law today.

On further reflection, however, I believe there still is an attitude of taking the law into one's own hands, and such an act often finds support with juries - one need only recall Bernard Goetz. These reflections on the norms of taking the law into one's hands are very much a part of the system of law. The systems approach brings these concepts to life.

n31. I often ask whether any of the students would want to represent the debtor in a suit against Look.

n32. LoPucki and Warren "confess to being dyed-in-the-wool Legal Realists" (Teacher's Manual, p. 1).

n33. See, e.g., Karl N. Llewellyn, The Bramble Bush: On Our Law and Its Study (1960); Harold D. Lasswell & Myres S. McDougal, Legal Education and Public Policy: Professional Training in the Public Interest, 52 Yale L.J. 203 (1943) (regarding post-realist theories).

n34. For example, the priority between a construction lien and a mortgage is too far outside the scope of the topic (pp. 65559).

n35. In keeping with their style, LoPucki and Warren's materials on repossession are infused with the problems and pitfalls of actually gaining possession of the collateral (pp. 4267). The materials allow the students and teacher to be creative and make the remedy as meaningful as the drafters of Article 9 intended.

n36. Another user of the book, Professor William Woodward of Temple University, has told me that he has used the book in the order presented and that it worked well for him. He believes that by walking in the author's steps, one can more fully understand the system into which secured credit fits. See Interview with William Woodard, Professor of Law, Temple University, at the 1996 Annual Meeting of the Association of American Law Schools (Jan. 6, 1996).

n37. Article 9 has been the subject of several academic debates. One debate focused on whether Article 9 is "efficient." The debate began with Thomas H. Jackson & Anthony T. Kronman, Secured Financing and Priorities Among Creditors, 88 Yale L.J. 1143 (1979); and continued with Richard L. Barnes, The Efficiency Justification for Secured Transactions: Foxes with Soxes and Other Fanciful Stuff, 42 Kan. L. Rev. 13, 5768 (1993); F.H. Buckley, The Bankruptcy Priority Puzzle, 72 Va. L. Rev. 1393 (1986); Homer Kripke, Law and Economics: Measuring the Economic Efficiency of Commercial Law in a Vacuum of Fact, 133 U. Pa. L. Rev. 929 (1985); Saul Levmore, Monitors and Freeriders in Commercial and Corporate Settings, 92 Yale L.J. 49 (1982); Randal C. Picker, Security Interests, Misbehavior, and Common Pools, 59 U. Chi. L. Rev. 645 (1992); Alan Schwartz, The Continuing Puzzle of Secured Debt, 37 Vand. L. Rev. 1051 (1984); Robert E. Scott, A Relational Theory of Secured Financing, 86 Colum. L. Rev. 901 (1986); Paul M. Shupack, Solving the Puzzle of Secured Transactions, 41 Rutgers L. Rev. 1067, 1118 (1989); James J. White, Efficiency Justifications for Personal Property Security, 37 Vand. L. Rev. 473 (1984).

n38. For the early debate concerning bankruptcy policy, see Douglas G. Baird, Loss Distribution, Forum Shopping, and Bankruptcy: A Reply to Warren, 54 U. Chi. L. Rev. 815 (1987); Elizabeth Warren, Bankruptcy Policy, 54 U. Chi. L. Rev. 775 (1987). For just a few of the more recent commentaries, see generally Symposium, The Washington University Interdisciplinary Conference on Bankruptcy and Insolvency Theory, 72 Wash. U. L.Q. 797 (1994). Other articles include Michael Bradley & Michael Rosenzweig, The Untenable Case for Chapter 11, 101 Yale L.J. 1043 (1992) (covering a wide variety of issues and theories regarding bankruptcy and bankruptcy policy); see Lynn M. LoPucki, Strange Visions in a Strange World: A Reply to Professors Bradley and Rosenzweig, 91 Mich. L. Rev. 79 (1992); Elizabeth Warren, The Untenable Case for Repeal of Chapter 11, 102 Yale L.J. 437 (1992); James W. Bowers, The Fantastic Wisconsylvania Zero-Bureaucratic-Cost School of Bankruptcy Theory: A Comment, 91 Mich. L. Rev. 1773 (1993); Karen Gross, Failure and Forgiveness: An Assessment of Contemporary Bankruptcy Law (forthcoming Yale Univ. Press 1996).

n39. See 11 U.S.C. 362 (1993 & Supp. 1995).

n40. See 11 U.S.C. 544(a) (1993).

n41. See 11 U.S.C. 546(b) (1993 & Supp. 1995).

n42. See 11 U.S.C. 547(b), (e), and certain exceptions in subsection (c) (1993 & Supp. 1995).

n43. I would encourage new Article 9 teachers to consult with others who have used the book - just as I would encourage them to consult with others regarding any book for a new course.

n44. The book was E. Allen Farnsworth & John Honnold, Cases and Materials on Commercial Law (4th ed. 1985).

n45. See Douglas Baird & Thomas Jackson, Secured Interests in Personal Property (2d ed. 1987). Although I regard their bankruptcy book very highly and use it in my bankruptcy classes, their secured transactions book simply was not meant for student use. It serves better as a good reference guide for teachers.

n46. See id. at 10103, 401.

n47. See, e.g., the text's inclusion of a bank's advertisement for commercial borrowers (p. 274).

n48. Vitale v. Hotel California, Inc., 446 A.2d 880 (N.J. Super. Ct. Law Div. 1982).

n49. This case is described here rather than under the heading of cases because it is used by the authors not to make a substantive point but to show how completely futile, indeed absurd, attempting to collect an unsecured judgment can be.

n50. Amercement, according to the judge in Vitale, is a proceeding by which the sheriff may be held liable for failing to properly execute against a judgment debtor. See Vitale, 446 A.2d at 889. According to Black's Law Dictionary, amercement is "[a] money penalty in the nature of a fine imposed upon an officer for some misconduct or neglect of duty." Black's Law Dictionary 81 (6th ed. 1990).

n51. See infra text accompanying note 58.

n52. It is unfortunate that in today's legal world, where so much of the law is statutory, so much attention is given to reading cases in the first year.

n53. Another teacher agrees with LoPucki and Warren that this case works. See interview with William Woodward, supra note 36. To me it is a black hole.

n54. Some of these rights may be waived, others may be further defined by the parties and some are fixed. See, e.g., U.C.C. 9-501, 3B U.L.A. 10 (1992).

n55. The Baird and Jackson book used this approach, see Baird & Jackson, supra note 45.

n56. These formal requirements alter to some extent what students learned in contracts. For example, consideration is replaced by "value," a term defined in U.C.C. 1-201(44), 1 U.L.A. 70 (1989 & Supp. 1995), that is broader than common law consideration.

n57. I do recommend this option elsewhere regarding bankruptcy. See supra text accompanying notes 3842. The two-party remedy assignments could be covered later if the teacher wants to move on to perfection and priority.

n58. The problem is available from the author of this Book Review.

n59. The LoPucki and Warren history is fairly accurate. For a more detailed explanation of the development of mortgage theories in the United States, see Grant S. Nelson & Dale A. Whitman, Real Estate Finance Law 4.1.3 (3d ed. 1993).

n60. LoPucki and Warren's problem 18.4 examines this by requiring students to imagine judicial interpretation of a code provision and to advise a hypothetical client accordingly (p. 379).

n61. I am an advocate for using the statute itself as the primary focus of any issue. Some sections, however, are so obscure or poorly drafted that I have encouraged the students to read LoPucki and Warren's recapitulation of what the statute provides. Section 9-312(3), which grants to a purchase money lender in inventory a priority over a preexisting secured party, is an example of where LoPucki and Warren provide good text. I encourage the students to read LoPucki and Warren's version before they attempt to read 9-312(3) itself (p. 636).

n62. Typical responses were: "Text seems fairly concise;" "I liked it because it was right to the point;" "Clear and helpful to people with no business background;" "Much easier to understand issues [as compared to other law texts];" "This book was very clearly written;" "Authors are good at explaining complex theories with easy to digest examples." However, a few students thought that the book was "too simplistic" and doubted that secured transactions are really that easy. Comments surveys taken in Secured Transactions, Wayne State University Law School, Summer 1995, and Secured Transactions, University of Pittsburgh, School of Law, Fall 1995, on file with the author [hereinafter Surveys]. Finally, I noticed a difference in approach from my students at Wayne State and at University of Pittsburgh Law School. The students at Wayne appreciated that the text contains fewer cases. Students at Pittsburgh had mixed reactions: some missed the cases, while others appreciated the sparse use of cases. Next year I will have to make more of an effort to show that secured credit is better taught using problems. At Pittsburgh, there was also a wider range of opinion on the book, ranging from one to ten on a ten-point scale, with ten being the highest. Comments also ranged widely. At one end: "I liked how the book used text to explain the black letter law and provided applicable code sections and was then followed by explanatory cases. I also liked how the provisions at the end of each assignment directed the student to the applicable code section." At the other end a student commented that the book was "pure drivel." See id.

n63. For the most part, students appreciate the humor. From the survey at Wayne State, typical student responses were: "I appreciate the humor and candor," and "Sense of humor appreciated." See id.

n64. See infra text accompanying notes 7576 (discussing impact of encryption programs and computer filing on secured transactions).

n65. The final report of the study group was sent to the American Law Institute and the National Conference of Commissioners of Uniform State Laws (NCCUSL). The NCCUSL has appointed a drafting committee to transform the study group report into legislation, which will then be proposed to the state legislatures. See Scott, supra note 3, at 180309

n66. Interestingly, the study group has at the same time considered expanding the scope of Article 9, as well as raising a number of novel questions. See American Law Institute, Uniform Commercial Code Reports 2329 (April 5, 1995).

n67. See infra note 72 and accompanying text.

n68. The study group has sixteen members, three of whom are law professors and thirteen of whom are practicing lawyers. See Scott, supra note 3, at 1807.

n69. Id. at 1808; see Permanent Editorial Board Study Group Uniform Commercial Code Article 9: Report 26 (1992).

n70. Scott, supra note 3, at 1807.

n71. See id.

n72. The subject was debated in the program "The Unsecured Creditor and Article 9: Bambi Meets Godzilla Again and is Better Off Ex Ante" presented at the 1996 Annual Meeting of the Association of American Law Schools. See program brochure for the Association of American Law Schools 1996 Meeting (Jan. 37, 1996) (on file with the Columbia Law Review). See Kathryn R. Heidt, Cleaning Up Your Act: Efficiency Considerations in the Battle for the Debtor's Assets in Toxic Waste Bankruptcies, 40 Rutgers L. Rev. 819 (1988) [hereinafter Heidt, Cleaning Up] (arguing that environmental obligations should be given priority over secured claims from an economic analysis); Kathryn R. Heidt, Corrective Justice from Aristotle to Second Order Liability: Who Should Pay When the Culpable Cannot?, 47 Wash. & Lee L. Rev. 347 (1990) [hereinafter Heidt, Corrective Justice] (arguing that environmental obligations should be given priority over secured creditors based on the corrective justice idea of fairness as well as economic analysis); Lynn M. LoPucki, The Unsecured Creditor's Bargain, 80 Va. L. Rev. 1887 (1994) (arguing that all nonconsensual creditors should have priority); Christopher M.E. Painter, Note, Tort Creditor Priority in the Secured Credit System: Asbestos Times, the Worst of Times, 36 Stan. L. Rev. 1045 (1984) (arguing against unfairness and inefficiency of current prioritization scheme on nonconsenting tort claimants). But see Susan Block-Lieb, The Unsecured Creditor's Bargain: A Reply, 80 Va. L. Rev. 1989, 1989 (1994) (questioning whether LoPucki's reforms are likely to be more harmful than helpful); Steve Knippinberg, The Unsecured Creditor's Bargain: An Essay in Reply, Reprisal, or Support, 80 Va. L. Rev. 1967, 1973 (1994) (contending that the unsecured creditors bargain implicitly calls for more than a reordering of priorities).

n73. See Heidt, Corrective Justice, supra note 72, at 348; LoPucki, supra note 72, at 1891; Painter, supra note 72, at 1046.

n74. See Heidt, Cleaning Up, supra note 72, at 83941; LoPucki, supra note 72, at 193141.

n75. "Pretty Good Privacy" or "PGP" is an encryption program written by Phillip R. Zimmermann at M.I.T. See Phillip R. Zimmermann, Foreword to William Stalings, Protect Your Privacy: A Guide for PGP Users ixxi (1995); program and included documentation, Phillip Zimmermann, Pretty Good Privacy, which can be downloaded by accessing the following internet address for the location of the program: HTTP://web.mit.edu/network/pgp.html (the location of the program changes every half hour, this address gives its current location along with warnings against exportation). It is the worldwide de facto standard for electronic signatures. PGP makes electronic signing both easy and irrefutable. It uses a public key/private key encryption system. The irrefutable aspect of the signature makes these signatures superior to handwritten signatures. Other systems exist but are not so widely used.

n76. For example, the study group apparently considered electronic filing and proposed eliminating the need for the debtor's signature, perhaps as a means of avoiding the necessity for hard paper. Encryption programs allow for the integrity of the system via a debtor's signature, rather than simply eliminating it for convenience. The point is that technology changes so fast that those who revise the system must be absolutely up-to-date on the latest technology available. Most lawyers and law professors are computer literate, but only a few are on the cutting edge.

n77. See David M. Phillips, Secured Credit and Bankruptcy: A Call for the Federalization of Personal Property Security Law, 50 Law & Contemp. Probs., Spring 1987, at 53.

n78. See Legal Education and Professional Development - An Educational Continuum (1992) (Report of the Task Force on Law Schools and the Profession: Narrowing the Gap).

n79. See Anthony T. Kronman, The Lost Lawyer: Failing Ideals of the Legal Profession 166 (1994).

n80. See id. at 167.

n81. Id. at 168.

n82. Id. Kronman argues that practical wisdom, good judgment, and prudence are the characteristics of a great lawyer, the "lawyer statesman," which Dean Kronman describes in detail in his book. He adds that the time of such lawyers is past. See id. at 1214. His book examines three potential reasons for the change in our legal culture: large law firms, the judiciary, and legal education. His book is worth reading, especially for those of us who teach law.

n83. For more background regarding Dean Kronman's view and its derivation from legal realism, see id. at 16870. Dean Kronman divides the realists into "prudentialist" realists and "scientific" realists. Although LoPucki and Warren find the roots of their approach in a scientific theory, I cannot conclude that LoPucki and Warren fall into the disfavored category of the modern approach based on scientific realism. Rather, LoPucki and Warren apply the ideals of legal education promoted by Dean Kronman. For Dean Kronman's discussion of scientific realism, see id. at 195209. As the text explains, the case method is exactly what LoPucki and Warren do. They use not only cases but also problems, planning and client interaction. In fact, one can be misled by labels because LoPucki and Warren probably fit within Kronman's nonscientific, i.e., prudentialist view of legal realism, which focuses on judgment, experience and practical wisdom. See id. at 20925.

n84. Further, the most established simulation courses are trial advocacy. The majority of lawyers today do not regularly go to trial. Transactions and their attendant documents and considerations, especially when it comes to the commercial/business lawyer, constitute the lawyer's daily routine.

n85. Dean Kronman advocates the case method because it forces the student to understand and argue both sides of an issue, which in turn, leads to better judgment and practical wisdom. Kronman, supra note 79, at 11321.

n86. Needless to say, other efforts are needed to change the public's view of lawyers.

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