Abstract
Empirical studies show that many Americans are unable to pay an unexpected $500 debt.3 Twenty-five percent of American families have less than $400 in savings.4 More broadly, in 2017, forty percent of adults report that they or their families had trouble meeting at least one basic need for food, health care, housing or utilities.5 Though $500 may appear small in a legal setting-given the myriad court costs, legal fees, and expenses associated with any case-social science research shows that the loss of this amount would create real economic hardship for many individuals and families. Primary blame for the failure to enact revised Article 2 rests with state legislatures, influenced by special interests concerned with matters unrelated to deposit return calculations.12 The shortcomings of the ALI and ULC rest with a structural inability to deal with important, but technical, fixes outside of the grand amendment. When the UCC operates as a civil code, the conventional apparatus of a Permanent Editorial Board comment, ideally suited to certain types of technical corrections, will not suffice as a second-best solution if the intended audience does not read it. 13 Accordingly, the case is made for a populist takeover of the amendment process, state by state, to correct the social injustice of deposit return calculations where established institutions of reform have failed.14 Based on the research presented here, the most important state for an amendment is New York, since that jurisdiction is both influential and the one in which case law has advocated for the "penalty" interpretation. Gongora v. Eye Gallery of Scarsdale is a recent example.15 In that case, Gongora brought a small claims action to recover a $750 deposit that she provided to Eye Gallery of Scarsdale toward the purchase of a pair of eyeglasses for a total purchase price of $1,380.16 At trial, defendant proved actual damages of $250 from Gongora's breach, representing the cost of lenses which Eye Gallery could not resell.17 For reasons not explained, the small claims court dismissed the action, apparently allowing defendant Eye Gallery of Scarsdale to retain the entire $750 deposit.18 The appellate court reversed, directing entry of judgment of $224 for Gongora as restitution.19 This allowed defendant Eye Gallery to retain $526 of the deposit, rather than the full $750 amount allowed by the trial court.