Law Commons^™

Surprises In The Skies: Resolving The Circuit Split On How Courts Should Determine Whether An "Accident" Is "Unexpected Or Unusual" Under The Montreal Convention, Ashley Tang

Washington Law Review

Article 17 of both the Montreal Convention and its predecessor, the Warsaw Convention, imposes liability onto air carriers for certain injuries and damages from “accidents” incurred by passengers during international air carriage. However, neither Convention defines the term “accident.” While the United States Supreme Court opined that, for the purposes of Article 17, an air carrier’s liability “arises only if a passenger’s injury is caused by an unexpected or unusual event or happening that is external to the passenger,” it did not explain what standards lower courts should employ to discern whether an event is “unexpected or unusual.” In 2004, …

Hostile Restructurings, Diane L. Dick

Washington Law Review

The conventional wisdom holds that out-of-court loan restructurings are mostly consensual and collaborative. But this is no longer accurate. Highly aggressive, nonconsensual restructuring transactions—what I call “hostile restructurings”—are becoming a common feature of the capital markets. Relying on hypertechnical interpretations of loan agreements, one increasingly popular hostile restructuring method involves issuing new debt that enjoys higher priority than the existing debt; another involves transferring the most valuable collateral away from existing lenders to secure new borrowing.

These transactions are distinguishable from normal out-of-court restructurings by their use of coercive tactics to overcome not only the traditional minority lender holdout problem, …

The Federal Option: Delaware As A De Facto Agency, Omari Scott Simmons

Washington Law Review

Despite over 200 years of deliberation and debate, the United States has not adopted a federal corporate chartering law. Instead, Delaware is the “Federal Option” for corporate law and adjudication. The contemporary federal corporate chartering debate is, in part, a referendum on its role. Although the federal government has regulated other aspects of interstate commerce and has the power to charter corporations and preempt Delaware pursuant to its Commerce Clause power, it has not done so. Despite the rich and robust scholarly discussion of Delaware’s jurisdictional dominance, its role as a de facto national regulator remains underdeveloped. This Article addresses …

Commercializing Cannabis: Confronting The Challenges And Uncertainty Of Trademark And Trade Secret Protection For Cannabis-Related Businesses, John Mixon

Washington Journal of Law, Technology & Arts

Over the last couple of decades, society has become more accepting of recreational cannabis and an ever-growing number of states have passed pro-cannabis legislation. With this change, the cannabis industry has, to some extent, exploded into a booming enterprise in states that have legalized marijuana. Nonetheless, cannabis' status as a Schedule I banned substance under the Controlled Substances Act of 1970 remains unchanged. As a result, businesses in the cannabis industry face the unique challenge of having to toe the line between "legally" operating under state law and violating federal law, which trumps state law. One particular situation in which …

Market Segmentation Vs. Subsidization: Clean Energy Credits And The Commerce Clause's Economic Wisdom, Felix Mormann

Washington Law Review

The dormant Commerce Clause has long been a thorn in the side of state policymakers. The latest battleground for the clash between federal courts and state legislatures is energy policy. In the absence of a decisive federal policy response to climate change, nearly thirty states have created a new type of securities—clean energy credits—to promote low-carbon renewable and nuclear power. As more and more of these programs come under attack for alleged violations of the dormant Commerce Clause, this Article explores the constitutional constraints on clean energy credit policies. Careful analysis of recent and ongoing litigation reveals the need for …

Head In The Clouds, Head In The Sand: Federal Failure To Update Guidance On Computer Transaction In An International Context, Logan S. Weaver

Washington Law Review

The United States has two different rationales for taxing income of non-U.S. persons and entities. First, the income may be “sourced” to the United States, as defined in the Internal Revenue Code. Alternatively, the income may be effectively connected to a trade or business within the United States that provides income to the non-U.S. person or entity. The sourcing rules for income of non-U.S. persons and entities depend heavily on the nature of the underlying transaction and the geographical location where certain key elements of the transaction take place. So long as the non-U.S. person or entity avoids activities that …

The Dormant Commerce Clause "Effect": How The Difficulty In Reconciling Exxon And Hunt Has Led To A Circuit Split For Challenges To Laws Affecting National Chains, Valerie Walker

Washington Law Review

The onslaught of chains such as Wal-Mart and Starbucks has driven some state and local lawmakers to craft regulations prohibiting these types of national chains. In response, several national chains have challenged the constitutionality of such regulations, claiming that they amount to economic protectionism. The dormant Commerce Clause (DCC) doctrine prohibits states from engaging in protectionism directed at commerce from other states. Courts use a two-tiered analysis when considering these types of challenges. The tier-level analysis is important because regulations rarely survive the first tier’s elevated scrutiny. The first tier applies when a state law directly discriminates against interstate commerce, …

The Laws Of Asian International Business Transactions, Gilles Cuniberti

Washington International Law Journal

The purpose of this article is to assess the preferences of parties to Asian international business transactions when they choose the law governing their contracts. To that end, I conducted an empirical analysis of unpublished data of the four main arbitral institutions active in Asia (outside Mainland China) for the years 2011 and 2012. I found that three laws dominate the Asian market for international contracts: English law, U.S. law, and, to a lesser extent, Singapore law. This article makes three contributions. First, it documents the regional variations in parties’ preferences: the laws which are successful in Asia are different …

Finding Safe Harbor: Navigating Washington's New Unfair Competition Law, Daniel Shickich

Washington Journal of Law, Technology & Arts

Under a new law, manufacturers and retailers that sell products in Washington State could face stiff penalties if their products are made using stolen or misappropriated information technology (“stolen IT”). In 2011 the Washington Legislature passed Substitute House Bill 1495, creating a new cause of action that allows private plaintiffs or the state attorney general to seek injunctive relief and damages against manufacturers that use stolen IT in their business operations. The law also creates an additional claim for actual damages of up to $250,000 against third parties who contract with violating manufacturers and sell the products in Washington. Using …

Defining "Breach Of The Peace" In Self-Help Repossessions, Ryan Mcrobert

Washington Law Review

Since Roman times, creditors have invoked the limited extrajudicial remedy of self-help repossession. Pre-colonial English laws also allowed for a limited repossession remedy outside of the courts, provided the creditor accomplished the repossession without a “breach of the peace.” The Uniform Commercial Code (UCC) has allowed for the self-help remedy since the 1950s, making it available for any secured party in the event of contractual default so long as there was no breach of the peace. The drafters of the UCC, however, failed to define what constituted a “breach of the peace,” choosing to allow the courts to flesh out …

Jacobsen Revisited: Conditions, Covenants And The Future Of Open-Source Software Licenses, Yamini Menon

Washington Journal of Law, Technology & Arts

Open-source software licensing has become mainstream in the field of software development. Nowhere is this more evident than in the 2008 Federal Circuit decision Jacobsen v. Katzer, where the court first interpreted the terms of an open-source software license. The Jacobsen decision offers an important first step in how to interpret the terms of an open-source license, though it does not address how to interpret licenses other than the Artistic License. This Article explores how Jacobsen’s reasoning can be used to interpret the terms of other open-source licenses, particularly the GPL v.2, GPL v.3, Apache License v.2, BSD …

Tipping The Scale To Bring A Balanced Approach: Evidence Disclosure In Chinese International Arbitration, Bryant Yuan Fu Yang, Diane Chen Dai

Washington International Law Journal

Due to the ever-increasing trade between China and the rest of the world, commercial disputes have risen dramatically. Many foreign companies choose to resolve these disputes through arbitration to circumvent the Chinese courts and to retain more autonomy and control. Arbitration itself can also be a problem because rules and laws differ, depending on the jurisdiction and the institution involved. Under China’s civil law tradition, arbitrators are restricted in their ability to force parties to disclose evidence that may be detrimental to their case. Additionally, arbitrators have no authority to obtain evidence from uncooperative third parties. This Article seeks to …

Congressional Power To Regulate Noncommercial Activity Overseas: Interstate Commerce Clause Precedent Indicates Constitutional Limitations On Foreign Commerce Clause Authority, Jeff Christensen

Washington Law Review

Although the U.S. Supreme Court has not yet ruled any statutes criminalizing the conduct of Americans overseas unconstitutional under the Foreign Commerce Clause, three U.S. Courts of Appeals decisions use the concept of enumerated powers—important in U.S. Supreme Court decisions that invalidate statutes grounded in the Interstate Commerce Clause—to suggest limitations on Congress's Foreign Commerce Clause power. In two decisions, the U.S. Courts of Appeals for the Fifth and Ninth Circuits employed the U.S. Supreme Court's Interstate Commerce Clause framework when analyzing statutes under the Foreign Commerce Clause. In so doing, these courts suggest that Foreign Commerce Clause power is …

The Fact Act Of 2003: Securing Personal Information In An Age Of Identity Theft, Terrance J. Keenan

Washington Journal of Law, Technology & Arts

The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”) makes incremental progress toward its goal of improving the protection of consumers and businesses in an age of increasingly sophisticated scams and cons. Congress enacted the FACT Act in order to further address the problems of identity theft, improve resolution of disputes over consumer credit information, enhance accuracy of consumer credit records, further regulate use of credit information, and broaden consumer access to credit information. The FACT Act imposes new business practices on companies that handle personal consumer information by requiring them to share with consumers information about data …

Digital Age Standard Form Contracts Under Austalian Law: "Wrap" Agreements, Exclusive Jurisdiction, And Binding Arbitration Clauses, John Adams

Washington International Law Journal

Despite the widespread use of end user agreements ("EULAs") within international e-commerce, their enforceability under Australian law has yet to be adjudicated. Legislative reform and judicial clarification of contract standards may be required for Australian courts to validate the methods of standard form contracting used in the digital age. While existing Anglo-Australian nules regarding contract formation may be adequate to enforce EULAs, the doctrine of privity presents an unnecessary and outdated barrier to the enforcement. Accordingly, the Australian legislature should abolish the doctrine of privity. In addition, Australian courts must clarify what type of notice is required for onerous contractual …

Oops! The Legal Consequences Of And Solutions To Online Pricing Errors, Benjamin Groebner

Washington Journal of Law, Technology & Arts

How can businesses conducting sales over the Internet protect themselves from the inevitability of pricing errors? Unlike the brick and mortar retailers’ ability to catch a pricing error quickly, thousands of orders can be placed with online retailers before they detect the problem. When pricing errors do occur and contracts are formed, merchants are forced to choose between absorbing the resulting financial loss as an investment in goodwill or trying to invalidate the contracts under the doctrine of unilateral mistake. To avoid binding contracts with customers at erroneous prices, online retailers should employ protective methods of contract formation that help …

Venture Capital Contracting Under The Korean Commercial Code: Adopting U.S. Techniques In South Korean Transactions, Eugene Kim

Washington International Law Journal

Because U.S. venture capital contracting techniques are well developed and highly effective, the appeal of adopting such techniques in venture capital transactions outside the United States is enormous to globally minded investors and legal practitioners. South Korea has yet to develop venture capital contracting practices as extensive as those found in the United States. In response to its burgeoning venture capital industry, however, South Korea will likely continue to adopt U.S. venture capital techniques in transactions governed by Korean corporate law. Such transactions can benefit the South Korean venture capital industry, leading to more profitable investments and financially successful companies …

Russian Draft Law On Special Economic Zones—A Step Forward, But Not Far Enough, Valentin A. Povarchuk

Washington International Law Journal

The situation in the Russian Far East epitomizes the acute need for economic reform and development in Russia. The region boasts an enormous wealth of metals, oil, gas, coal, timber, and marine resources, but has long suffered from excessive dependence on the central government's administration and its accompanying historical neglect. Taking a cue from China's successful use of special economic zones as a means to encourage economic reform, some Russian policy-makers have proposed special economic zones as a means to encourage development. Russia's early laws establishing special economic zones, however, did not produce self-sustaining results due to a lack of …

Forum-Selection Clauses In Consumer Clickwrap And Browsewrap Agreements And The "Reasonably Communicated" Test, Kaustuv M. Das

Washington Law Review

Although forum-selection clauses in clickwrap and browsewrap agreements have been addressed in only a limited number of decisions, they are likely to become increasingly relevant with the growth of e-commerce. Courts that have enforced forum-selection clauses in click-wrap and browsewrap agreements have often done so without determining whether the consumer received notice of the clause. When courts have addressed notice, they have not used any uniform standard for determining adequacy of notice. Forum-selection clauses in dlickwrap and browsewrap agreements further the policies underlying the Supreme Court's decisions in MIS Bremen v. Zapata Off-Shore Co. and Carnival Cruise Lines, Inc. v. …

China's Direct Marketing Ban: A Case Study Of China's Response To Capital-Based Social Networks, Michele A. Wong

Washington International Law Journal

China's State Administration for Industry and Commerce issued a circular on April 18, 1998 banning all forms of multi-level direct marketing, citing concerns with social stability and economic order. While the direct marketing ban was ultimately implemented in such a way as to allow those who engaged in network marketing to transition to retail sales, alleviating some of the violence of the protest to the ban, opposition to the ban has continued both domestically and abroad. Direct marketing organizations create tight-knit, extensive networks of individuals with similar economic interests. By assembling around a common economic interest, the group may also …

International Judicial Practice And The Written Form Requirement For International Arbitration Agreements, Jing Wang

Washington International Law Journal

The requirement that international commercial arbitration agreements must be made in writing is well accepted in most countries and has become a uniform practice in international commercial arbitration law. This is due in large part to the widespread acceptance of the Convention on Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). Article II (1) provides that "each Contracting State shall recognize an agreement in writing." The term "agreement in writing" is defined in Article 11 (2) of the Convention as "an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an …

The Rule Of Law And Commercial Litigation In Myanmar, Alec Christie

Washington International Law Journal

After nearly thirty years of self imposed isolation, Myanmar has reemerged as a significant potential destination for foreign investment. One of the key attractions of Myanmar as a destination for foreign investment is its legal system and historical commitment to the rule of law. With ASEAN membership and increasing levels of foreign investment in Myanmar, use of its legal system by foreign investors and their counsel has grown. The aim of this article is to outline, for both investors and legal professionals in other countries throughout the region, Myanmar's legal system and its practical operation in the area of commercial …

"Whatever Is Received": Evaluating Collateral, Its Disposition, And Proceeds Under Article 9 Of The Uniform Commercial Code—Rainier National Bank V. Bachmann, 111 Wash. 2d 298, 757 P.2d 979 (1988), Thomas L. Weinberg

Washington Law Review

In Rainier National Bank v. Bachmann, the Washington Supreme Court held that payments made to a debtor under the federal Dairy Termination Program were "proceeds" of the collateral at issue in the case under the Uniform Commercial Code ("UCC"). The author examines the relationship between proceeds and the collateral described by parties to a security agreement, concludes that the court improperly applied the UCC in Bachmann, and recommends an approach to evaluating proceeds

Statutory Liens On Vessels In Washington: When Does State Law Govern Liens On Blackship?, Lynn B. Squires

Washington Law Review

The Washington Supreme Court has recently ruled that the federal Maritime Lien Act preempts state lien law. In Farwest Steel Corp. v. DeSantis, the court held, specifically, that the Maritime Lien Act preempts the state chattel lien and "boat lien" statutes. While the Farwest Steel holding seems to state the obvious, the limits of federal preemption are far from clear. Federal law does not allocate all of the risks involved in building, outfitting, financing, servicing, repairing, and retiring Blackship. The statutes "preempted" in Farwest Steel still provide the only available law for many transactions involving Blackship in Washington. …

Statutory Liends On Vessels In Washington: When Does State Law Govern Liens On Blackship?, Lynn B. Squires

Washington Law Review

The Washington Supreme Court has recently ruled that the federal Maritime Lien Act preempts state lien law. In Farwest Steel Corp. v. DeSantis, the court held, specifically, that the Maritime Lien Act preempts the state chattel lien and "boat lien" statutes. While the Farwest Steel holding seems to state the obvious, the limits of federal preemption are far from clear. Federal law does not allocate all of the risks involved in building, outfitting, financing, servicing, repairing, and retiring Blackship. The statutes "preempted" in Farwest Steel still provide the only available law for many transactions involving Blackship in Washington. The major …

The Warranty Of Merchantability And Computer Software Contracts: A Square Peg Won't Fit In A Round Hole, Edward G. Durney

Washington Law Review

Courts have consistently held that Article 2 of the Uniform Commercial Code (U.C.C.) governs transactions involving computer hardware. Treatment of computer software transactions has been less consistent. This Comment contends that computer software, an intangible, is not within the scope of Article 2. It further contends that the warranty of merchantability cannot meaningfully be applied by analogy in computer software contracts. Finally, this Comment concludes that existing tort and contract causes of action provide software users with sufficient protection.

Uniform Commercial Code—Accounts Receivable Financing: Secured Parties' New Doubts Under The "Casual And Isolated" Test—Architectural Woods, Inc. V. State, 88 Wn. 2d 406, 562 P.2d 248 (1977), Norman B. Page

Washington Law Review

The Washington Supreme Court held, in Architectural Woods, Inc. v. State, that the assignment fell within section 9-302(1)(e) and that since plaintiffs security interest was thus automatically perfected, the bank's interest was subordinate." In deciding that Didco's assignment to plaintiff fell within the section 9-302(1)(e) exemption from filing, the court was required to construe the language of that subsection and its accompanying official comment. More particularly, the court considered the appropriate test for determining whether the assignment constituted a "significant part" of Didco's outstanding accounts and contract rights. This note will analyze the court's reasoning in adopting the "casual and …

Real Property Attachment—Property Or Economic Interest?—Hansen V. Weyerhaeuser Co. (In Re Northwest Homes, Inc.), 526 F.2d 505 (9th Cir. 1975), Cert. Denied, 425 U.S. 907 (1976), Deborah Elvins

Washington Law Review

In late 1971 the Weyerhaeuser Company initiated a lawsuit against Northwest Homes of Chehalis, Inc., for goods sold and delivered. To ensure satisfaction of any subsequent judgment, Weyerhaeuser obtained liens against the defendant's real property pursuant to the Washington attachment statute. Northwest Homes received neither notice nor an opportunity to be heard prior to the attachment. Hansen, appointed receiver in Northwest's subsequent bankruptcy, applied for an order invalidating the attachment. In December 1972 the referee declared the Washington attachment statute unconstitutional under the due process clause of the fourteenth amendment to the United States Constitution and under article I, section …

Warranties—Uniform Commercial Code—Effects Of Federal Warranty Law On Washington U.C.C. Provisions—Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312 (Supp. V. 1975), Guy Towle

Washington Law Review

Consumer product warranties—their creation, breach, and remedies upon breach—have generally been controlled by the common law and Uniform Commercial Code (U.C.C.) provisions in each state. Washington is no exception, and the Magnuson-Moss Warranty Act should have a significant impact upon the traditional warranty law of this jurisdiction. This note will briefly discuss the Act's basic requirements and then consider the impact of several of the Act's major provisions upon similar or conflicting provisions of the Washington Uniform Commercial Code. Primary emphasis will be placed upon the Act's effects regarding the doctrine of privity, disclaimer of implied warranties, limitation on remedies …

State Regulation Of Franchising: The Washington Experience, Donald S. Chisum

Washington Law Review

The successful use of franchising as an adjunct to more traditional marketing techniques by business firms seeking nationwide distribution for their products, services, and ideas has stimulated many franchisor abuses. Professor Chisum comprehensively discusses a variety of remedies available to the franchisee seeking relief from franchisor abuses, including remedies provided by the common law, federal and state securities laws, and the federal antitrust laws. The article assesses the relative success and failure of these general remedies in rectifying the specific problems of franchisor abuses. The author then critically examines the Washington Franchise Investment Protection Act which was enacted in 1971 …