The Naked Emperor: A Corporate LawyerLooks at RUPA's Fiduciary Provisions

Confronting an ongoing debate from the outside is somewhat like arriving in a foreign land. One knows something about the human species but perhaps has never experienced the local culture or encountered its norms. What is considered trivial and what is considered important? What do we observe of the locals? What do we consider unusual that they do not observe or consider unusual of themselves? And what does this foreign culture reveal to us about our own? The matter is complicated somewhat, perhaps, when the foreign land one is visiting previously has been colonized by our own or, like the United States and Canada, has been colonized by a common predecessor. Much is familiar. Many, if not all of the inhabitants, speak our language. We drive on the same side of the road. We eat the same foods. But much will be different, sometimes obviously and sometimes more subtly. And the proximity, indeed the intermingling, of two cultures makes aspects of each all the more striking. This analogy occurs to me as particularly apt as I encounter, really for the first time, the debate over the Revised Uniform Partnership Act (RUPA) and partnership fiduciary law in the context of this excellent symposium. I come, of course, from the land of corporate law which, like partnership law, has a colonial antecedent in fiduciary obligation. And much like the caricatured American tourist, I will undoubtedly be conspicuous in my bad manners and cultural arrogance. But, like that caricature (and really quite like myself as well), I will be direct. For what I find in this foreign land is that its Emperor, the centerpiece of the debate over RUPA, is stark naked. This debate is, I shall argue, a debate about nothing, because it has entirely ignored, except superficially, what is important. Having undoubtedly already ruffled some feathers, I shall be more specific. There are two points at which the debate fails to engage its substance. Each point is strikingly characterized by the way in which metaphors, labels, and just plain rhetoric substitute for any meaningful analysis.1 The first point is the broadly structural normative argument that has been characterized as the debate between contractarianism and the fiduciary approach. In evaluating this issue, I feel much like a visitor from a former colonial power, encountering a familiar form that has completely lost its meaning. The second point is in the fight over RUPA's fiduciary provisions. Here I feel like a visitor from a sister colony, encountering a common norm that has grown differently when rooted in different soil. My purpose in evaluating this debate is not to advocate a particular point of view, although that will undoubtedly be a byproduct (and it is no secret where my sympathies lie). Rather, it is to evaluate the extent to which the argument has failed to go beyond the level of rhetoric and metaphor to grapple with the real issues and to suggest some different ways of thinking about fiduciary issues in the context of this very important discussion. My conclusion is that the debate largely has missed the point. With a camera slung around my neck and a loud Hawaiian print shirt on my back, let me then go exploring. I The Complete Irrelevance of the Contractarian/Fiduciary Debate The debate over RUPA consistently has been characterized as one over contractarianism versus some "other" model, usually described as the fiduciary or mandatory model.2 Drawing on the history of the predecessor Uniform Partnership Act (UPA), which sought to provide a default contract for those persons who found themselves, whether intentionally or not, in partnerships without formalized agreements, a significant question concerning the drafting of RUPA appears to be the extent to which the goal was to provide anything more than that - a simple default contract. Largely forgotten, however, is the origin of the partnership form of business in common law and before that in observed human behavior. …