The Oklahoma Bar Journal January 2023

electronic record has the right to derive the benefit of the digital asset, including requiring that any payments be made directly to the person with control of the control lable electronic record. Section 12-107 provides the choice of law rules for Article 12 and generally states that the law of a controllable electronic record’s juris diction governs matters covered by Article 12. If a controllable electronic record expressly states its jurisdic tion, then that jurisdiction is the controllable electronic record’s juris diction. If the controllable electronic record does not state its jurisdiction, then its jurisdiction is the jurisdiction whose laws govern the system in which the controllable electronic record is recorded. If neither the controllable electronic record nor the system states a jurisdiction, the controllable electronic record’s juris diction is deemed to be Washington, D.C. However, if Washington, D.C., has not enacted Article 12, then the official text of Article 12 promulgated by the Uniform Law Commission will apply. The rationale for choosing Washington, D.C., as the jurisdiction of last resort, is that the district is likely to enact Article 12 in a timely fashion, and it does not favor the laws of one state over another. This concept is similar to 12A Okla. Stat. Section 1-9-307(c), (f)(3) and (h), which also provides for Washington, D.C., to be the default location of a debtor under certain circumstances. The 2022 amendments to the uniform text, including the new Article 12, bring much-needed clarity to the transactional rules in the uniform text, especially with respect to digital assets, and in some cases should be of persua sive authority even if a state does not enact the amendments.

Author’s Note: The author would like to recognize the members of the Legislative Review Subcommittee as co-authors of the article. The subcommittee members are Kaitlyn Chaney, Dudley Gilbert, Andrew Harrell, Whitney Humphrey, Eric L. Johnson, Bob Luttrell, Jonathan Rogers, Jeff Vogt, Ashley Warshell and Moira Watson. ABOUT THE AUTHOR Alvin C. Harrell is a professor emeritus at the OCU School of Law and president of the Home Savings & Loan Association of Oklahoma City. He is the co-author of a dozen books, including The Law of Modern Payment Systems and Notes . ENDNOTES 1. See, e.g., Fairchild v. Swearingen , 377 P.3d 1262, 1264 (2013). 2. See Fairchild , id . at 1266. 3. This raises some issues relating to Subsection ( j) of the uniform text in order to preserve the superiority of this section. To the extent there are contrary provisions of law (and a more thorough review of Oklahoma statutory law may be necessary to locate such contradictions), these issues may need to be considered to ensure there is no express contradiction. For example, many states provide exceptions to the subordination of these account debtor rules to compensate for injuries or sickness under federal law or the right to receive benefits under federal special needs trusts or the right to receive lottery prize winnings. One other state has adopted the following language: “( j) This section prevails over any inconsistent provision of an existing or future statute, rule or regulation of this state unless the provision is contained in a statute of this state, refers expressly to this section and states that the provision prevails over this section.” 4. The underlined language is not included in the 2022 uniform text amendments to the UCC but would provide a substantial benefit to practitioners and align the treatment of as-extracted collateral filings and timber-to-be cut filings with the treatment of fixture filings, which exist as substantially similar categories of collateral. This amendment mirrors the adoption of similar provisions by oil-and-gas-producing states, such as Texas and West Virginia.

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THE OKLAHOMA BAR JOURNAL