Georgene Vairo: Perspective on VA Supreme Court Hearing

After listening to the audio of the argument I can tell you that  Bill Hurd did a wonderful job for us, and that Woody Fowler was ineffective for the SBC board position.  I say this not because of the side I am on in this battle, but because nothing Fowler said was persuasive. 

 

Here is what was so good about Hurd’s argument:  He told the court very clearly what we wanted: a preliminary injunction in the form of the appointment of a fiduciary who would run the college.  The fiduciary would report to the court, not the president or the SBC board.  And, he explained clearly why the law allowed the Court to remand to Judge Updike to require him to do this.

 

One justice asked whether he wanted the president and board removed.  Hurd said that would "be nice but not necessary.”  This was careful lawyering:  We just need to stop the train-wreck and all that we need at this point is to get someone in there who answers to Judge Updike.  We can get more later depending on what happens.  Clearly, Hurd did not want to overreach and ask the Supreme Court to do more.  And, Hurd was very good at explaining why SBC is a trust.  There was a will that led to a trust.  That trust incorporated as the Sweet Briar Institute, but it remained a trust.  As a trust, it is governed by Virginia Trust law which is particular about how a trust is supposed to do certain things.  Here, how to close SBC if the Board thinks the school needs to close.  Our position is that SBC, as a trustee, needed to get judicial permission to close and to dispose of its assets.  It was supposed to convince the court that it was no longer able to carry out the mission Indiana Fletcher Williams mandated in her will.  And, it is our position that the financial situation would not have supported closure.

 

Fowler, on the other hand, tried to raise all sorts of procedural issues designed to say to the Supreme Court that it essentially lacked jurisdiction to resolve the issues we raised on appeal.  He got called on this in all sorts of ways.  His procedural irregularity approach seemed to fall on very deaf ears.  As did his argument that SBC is simply a corporation, and not a trustee.  

 

While it is always dangerous to predict what a court will do based on the questions asked, and the inclinations those questions may seem to suggest, it is at least clear to me that the Court really gets the essential issues.  They understand that there was a way for SBC to proceed that they are adamant about NOT using. (In fact, Elizabeth Wyatt said in a meeting on April 9 with the Faculty Executive Committee that they didn’t want to go to the courts because “they would lose control of the process.”) Instead of going to a court to seek permission to close because they felt their mission could no longer be carried out, SBC went about closing the college in secret.  They announced the closure, and then proceeded to start burning down the house.  Then, if they succeeded in that — no classes after the Honors program is completed this summer — they would go to the AG and ask him to help them get the courts to bless whatever they wanted to do with the remnants of the college’s assets (remaining endowment; proceeds from the sale of the land, art, etc); i.e., create a scholarship fund for women college students.  SBC says that under the business judgment rule, as a corporation and not a trust, they had unfettered discretion to make the decision to close.  Then, to the extent that there are assets remaining, they would dispose of such assets via the courts and the attorney general.

 

Thus, from our perspective, one of the best moments of the argument was when Fowler said that there were only two options: "orderly wind-down or crash and burn."  In response, one of the Supreme Court justices said there was a third option: go to the courts to use "cy pres” to keep the college open. Rather than doing what SBC did, as a trustee, SBC should have gone to the court and said “we are having a problem doing what we are supposed to be doing.  Help us.”  Here, that could have been, for example, asking the court to “unlock” some of the restricted funds to pay down, for example, the $9 Million bond that SBC is threatening will come due soon.  The Court seems very sympathetic to the idea that if no preliminary relief is granted now, SBC will continue to burn down the house.  And, by the time the issue of whether SBC is a trust or not ever comes back to the Court for a final resolution, and which means that SBC should have gone the cy pres route rather than the route it took, it will be too late.

 

The Saving Sweet Briar legal team is expecting a very quick decision.  Maybe tomorrow.  Maybe Monday.  I will rest well tonight believing that we will be back to Judge Updike next week for further relief.