Repo! The Genetic Opera, UCC 9-609 and Purchase Money Security Interests
Darren Bousman’s Repo! The Genetic Opera was meant to be an successfully unsuccessful movie. It paints the picture of a dark, zany, future where an “epidemic of organ failures” begins to kill off humans who cannot afford transplants. Out of reaction, a company, Gene Co., begins to make organ replacement accessible through financing. Unfortunately when the debtor-in-possession/organ-replacement-recipient defaults, the creditor Gene Co., automatically pursues the individual without notice to recapture the organ/collateral. Oh, and did I mention this is a wicked rock opera too?
It struck me as interesting when thinking about the property interests an individual may have in their own anatomy, and that which might be acquirable in the anatomy of another. This raises problems with gift-law, expectancy rights, informed consent, and whether an individual actually has the right to sell his or her own organs. Certainly auto-reproduced bodily products can be sold, and currently there is no doubt that post death an individual may make a donative gift of his or her organs.
The National Organ Transplant Act of 1984 strictly prohibits a “…person to knowingly acquire, receive, or otherwise transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.” So absent a state law to the contrary, I suppose that means I am able to sell my organs to a willing purchaser within my state? This is good news for people whom only need the use of one arm who are a little tight in the pocketbook. But, it might present commerce clause/dormant commerce clause problems down the line.
But, ok- let’s assume for arguments sake that it was legal to make an inter vivos sale of your organs. Next, we have to deal with the issues of sale/lease and financing. The Uniform Commercial Code, adopted by nearly every state, sets the laws for things like: Sales of goods, Negotiable Instruments, Lease of Goods, Securities, Secured Financing, and more. More specifically, the code sets out the rights and obligations to a sale/lease transaction, and the rights in a creditor/debtor relationship.
Again, we are going to assume that Organs can be sold/leased as fungible goods, thus UCC Articles 2 and 2a would apply respectively. If you are unable to come up with cash on demand, the rights of finance transactions secured by collateral are governed by UCC Article 9.
That’s where Repo! comes in. What are the rights and responsibilities of a creditor when the debtor defaults? First, one would have to look and see if the transaction was secured or unsecured, that is, whether the debtor has the right to look to collateral for repayment in the event of the debtor’s default. Assuming that we are financing, and certain other factors are present we might be able to say that a Purchase Money Security Interest is created. That is, when a creditor lends money to an individual (or corporation) for the purchase/acquisition of a specific good, and further takes back a security interest in that good (the ability to recapture/replevin/reposes the good upon default). Usually when dealing with secured financing, a creditor must attach the collateral and perfect the collateral in order for them to take rights in the collateral, and have priority against any interested third-parties. For purposes of this discussion, and when dealing with PMSI’s, we will assume the collateral was properly attached, and that there is no further action needed for perfection (Note that PMSI’s fall under Automatic Perfection).
The PMSI now allows the creditor to look to the collateral in the event of debtor default. But note, that the creditor must follow certain procedures consistent with due process (ie. notice, etc.) before he may repossess the collateral. In Repo! there is no due process, so we don’t have to worry about this.
Please note that PMSI’s are common in every day commerce. The next time you shop at Target and Target specifically lends you money (excluding line of credit) for the purchase of that new camera for instance, and you sign a valid security agreement, it is safe to assume that upon default Target is going to be knocking at your door (again, assuming that they have complied with due process). Yes, this also means that there is a hidden lien on the good that you purchased. And yes, depending on the amount of the debt, Target will come knocking at your door to avoid the reputation of being a non-reposessing creditor.
Upon repossession, a creditor may use self-help if: It provides so in the agreement, and does not breach the peace. Otherwise he must have the Sheriff repossess and pursue judicial remedies
That is where Repo! comes in again. There are no notice requirements, and there are no sheriffs. If you default, you die. Simple. This is consistent with early Roman creditor law, which allowed creditors to satisfy an outstanding debt by cutting the debtor into pieces and dividing the flesh in pro rations among the creditors.
Repo! is fun and sexy, but it is also fantasy, and that is ok because this movie does not present itself as fact. Movies now-a-days all tell the same love story, or drama, just with different actors. It is finally refreshing to see a film which presents a uniquity.
Have you been harmed or wronged by a business? Do you feel mislead? Deceived, perhaps? Call Friedman Legal today for a free consolation at 888-411-1677