Opposing mandatory arbitration – transcript and notes of plaintiffs’ oral arguments

On August 26, 2014 Charles Harder, for Anne Josephson and Children 1 and 2 and Michael Josephson, in pro per, presented their arguments opposing the efforts of Ms. English and the board to force the Josephsons’ case into secret arbitration proceedings. What follows is a link to the transcript of the oral arguments, including defendants’ response and Michael Josephson’s Outline of the oral Argument  — including all the things he meant to say but did not get to.

Transcript of Oral Argument 082614

Michael Josephson – Outline of Oral Argument August 26, 2104

  1. Mr. Harder has ably argued the law and presented, we hope a compelling legal case for denial of defendants’ motion. I want to present a different perspective equally relevant and well within the court’s jurisdiction to consider – the ethical and public policy ramifications of interpreting the law the way Ds want you to.
  2. I appear here in pro per well aware of proverb that a man who represents himself has a fool for a lawyer. Fortunately, my wife and two children are represented by a real lawyer, Mr. Harder, limiting, I hope the damage I may do. Still, I can only imagine how thrilled you must be, Your Honor, to have such a fool before you.
    1. There was a time when being called or thought of as a fool would have really bothered me, but since my family filed this suit against Archer I’ve had to get used to being called much worse. Fool, seems almost kind.
    2. At this stage of my life, this acrimonious litigation with a school we loved and supported for almost 10 years – doesn’t even come close to making my bucket list.
    3. I am here because I and my family believe, heart and soul, that the conduct of Ms. English, and the board members who participated in it and supported her every action, should not be permitted in an educational setting. We believe they were very, very wrong and we only ask for our day in court to prove it.
  3. At the Core. This case has come this far because a woman we entrusted to create an safe environment chose to use her power and authority to settle an old personal debt and make an example of my family to deter any further challenges to her claim of absolute, unchallengeable authority
    1. This is a remarkable statement about a woman in such an exalted position and it’s bound to raise skepticism. Nevertheless, it’s true and we want a chance to prove it, to have our day in court to vindicate our children, our responses to the way they were treated and to stand up for dozens of families who have experienced similar bullying and dozens more who will if she and her hand-selected board are not held accountable.
  4. Scope of the Arb Clause. Based on defendants claims as to the scope of the arb clause, if Ms. English punched my daughters in the face in front of me and threatened to do so again to punish me or to shut me up that my family’s only remedy would be a secret arbitration proceeding that would cost us thousands of dollars and, even if we prevailed, Ms. English would be free to do the same thing to other families who would be allowed to know of our experience or the arbitrator’s ruling.
    1. And there would be no precedent making it clear that this kind of conduct is wrong.
    2. This is not a farfetched example. This what she did except she punched by daughters in their hearts not their faces and when she banned my whole family – including two Archer grads who had nothing to do with this she added: “and the horse you rode in on.”

 

  1. Not a surprise. Sadly, the court’s tentative ruling is a disappointment, but it doesn’t come as a complete surprise. It’s not a surprise because I read the cases and could see the momentum in favor of “everything goes to arbitration.” And most lawyers said it would be an uphill fight.
    1. I persist, however, in this last ditch effort to ask this court to reverse its tentative ruling and, if I fail, I will persist in trying to get an appellate court to hear our arguments because I truly believe that forced arbitration is wrong in this case. I don’t just mean legally wrong I mean morally wrong and I hope that’s still an important factor.
  2. Today’s hearing concerns the defendants’ motion asking you to declare that our claims cannot be litigated in this court, that if we are to pursue them at all, we must do so in an arbitration proceeding that cannot provide the remedies we seek.
  3. “No law should be applied if it is inconsistent with the reason for it.” In the dark ages, when I was a law professor, a common expression was that “no law should be applied if it is inconsistent with the reason for it.”  I hope that doctrine is still valid.
    1. Arbitration and other alternative dispute resolution systems were created for a reason. Arbitration was an alternative to court, never its equivalent.
    2. It’s a very different process that often makes resolution of disputes quicker, cheaper and at least as fair but only if the parties really, really want it (as opposed to the strained interpretation of “agreeing” to it).
    3. But a least where there is room for interpretation of a particular clause, as there is here, arbitration should not be compelled when it is more expensive and cannot come close to providing a grieved party the remedies that are needed and appropriate, remedies that only a court can provide.
    4. In our case, an objective look at the real world facts leads to only one conclusion: if forced into the secret, expensive, limited process of arbitration we will not have a full and fair opportunity to prove our many grievances or achieve our objectives
  4. Our objectives. While we hope to be awarded compensation for our costs and injuries, we have stated publicly and to the defendants that our primary goal is to hold the defendants publicly accountable to deter further misconduct, to reform practices at the Archer school and other private institutions and to establish law that will protect all parents from the kind of tyranny exhibited in this case.

a. Public accountability is a deterrent – the defendants’ obsession with trying to keep our grievances a secret demonstrates how important it is to them that that no one knows what we claim and whether our claims were proven.

1) The school claims confidentially to insulate themselves from scrutiny and criticism.

2) if we learned anything from the Sandusky case is that the public needs transparency not secrecy, especially from institutions dealing with children.

b. This is a legitimate and time-honored use of our judicial system, but if the defendants’ efforts to force us into arbitration succeed, we cannot do this NOR WILL ANYONE ELSE. The law will remain static or continue to support secrecy and unaccountability

  1. How can we possibly accomplish our goals in arbitrattiion?
    1. We have 8 causes of action, each requiring us to prove different elements.—these are not made up flimsy causes of action, but separate claims we think we could prove.
    2. We have 30 defendants – not made up defendants, but people we think we could, if given the opportunity, prove breached their duties in a way that caused my family serious injury.

c.   Law and Public Policy. If we were allowed the benefits of the public judicial process we could clarify the law in a way that would affect public policy and the practices of private schools.

1) Educator malpractice. We could establish a standard for educator malpractice based on the fiduciary duty of educators and the application of a professional standard of care in administering discipline and punishing children for perceived insubordination of their parents.  This could prevent school administrators with the disposition of one of the great movie villains of all time: Nurse Ratched (“One Flew Over the Cuckoo’s Nest”) from bullying and browbeating parents and staff.

b. Alienation of Child. We could create a legal precedent that would forbid and educator from deliberately and vindictively seeking to drive a wedge between a student and her parents.

c. Threatening Litigation. We could clarify the law so it was clear that an administrator cannot terminate an enrollment contract or dismiss a student because a parent indicated the possibility of exercising the constitutional right to bring a legal action.

d. Change Board Governance. If we could succeed in doing their we could change board governance of private schools dramatically and bring it into line with the current law in the corporate world imposing a rigorous duty on boards to provide meaningful  oversight and guidelines and internal controls to prevent wrongdoing.

10. Limitations that would prevent us from proving our claims

a. Discovery. In court we would not have to ask permission to file requests for admissions, propound interrogatories and take whatever time we needed to get complete depositions. Based on current strategy defendants are certain to seek to limit our discovery in any way.

b. Protection of witnesses. Some of our witnesses will be current parents and employees who fear retaliation if they testify honestly, a court can devise and impose a protective order, without permission of both sides, an arbitrator cannot.

c. Cost of Arbitrator. In arbitration we would be forced to pay the arbitrator $4,000 a day (our share of the typical $8,000 fee) to hear our motions or those propounded by the defendants (who have proved their willingness to inflict costs on us with their completely frivolous attempt to get a gag order).

d. Attorney fees. In court we would not be subject to the defendants’ overt threats that if they prevail we could be ordered to pay their attorney’s fees which we were told already amount to $200,000.

11. “You can’t handle the truth.” When I review the seeming evolution of the law regarding mandatory arbitration clauses, I can’t help but think of the great line from the movie, A Few Good Men: “You can’t handle the truth.”

a. Let me quickly say I don’t mean you personally, Your Honor, I mean the LAW.

b. I respectfully contend the law in this area has strayed from the truth and defies common sense and that you have the jurisdiction and justification to begin the process of returning to truth.

c. This is important to our family, not because the truth will set us free, but because it will keep us in court.

12. Legal Fictions. Until I buried myself in researching the law of arbitration I did not know and never would have imagined all the things the “law” pretends not to know and the number of clearly false statements it says is true.

  1. Barrier. I would never have imagined that vendors of services (including private schools) would be allowed to impose such a one-sided process that constitutes a barrier so high that it deters victims from seeking redress. A fact we will prove if we are allowed discovery is that at Archer, virtually no one has used the arbitration process. If we are wrong let the defendants say so. They won’t because they can’t.

 b. The arbitration process only favors Archer. According to the law, an arbitration provision is unconscionable if it unfairly favors the party who wrote the form contract. The test is balance – are both sides given essentially equal burdens and benefits.

1) But why does the “law” pretend not to know that including the arb clause in the take it or leave it contract is itself unconscionable because it forces parents to give up rights they shouldn’t have to.

2) There is no advantage whatsoever for mandatory arbitration to the parents, parties most likely to want to arbitrate a grievance.

3) If properly advised and free to do so, no parent would agree to this one-sided provision which limits their rights with no off-setting benefit.

c. Challenging the arbitration provision prior to signing the contract would be futile and foolish. The law pretends not to understand the practical but certain reality that a parent has no leverage, no bargaining power and that even questioning the arb clause (or any other clause in the form contract) would only identify the parent as a troublemaker and jeopardize their children’s status at the school.

1) Because we’ve been denied discovery by defendant’s motion to stay the proceedings, we can’t yet prove what is obvious (though the defendants smugly imply otherwise) no one ever tries to negotiate or question anything in their form contract, including the arbitration clause and if they did, especially at Archer, the school would invite them to go elsewhere. (not an option since other schools have similar provisions)

2) Reality check. Does the court really have any “real world doubt” that the school never has, and their lawyers would not ever let them, negotiate the arb clause? Yet, the case most relied on by defendants suggests that a parent’s failure to offer evidence that they tried to negotiate the provision precludes a conclusion of substantive unconscionability.

d. Secrecy/lack of transparency. How could any parent know that the school would assert and the courts have upheld the claim that the arbitration clause, which on its face seems to be about the contract, would prevent a parent from seeking judicial relief if there child were molested? Even with my legal background, I never imagined that the Archer would claim and the courts would uphold that even intentional torts and criminal acts like those committed by Jerry Sandusky are arbitrable.

1) I know defendant’s lawyer will argue that my subjective interpretations of phrases like “arising out of the contract” are irrelevant in a legal world that calls lies and false statements of facts, “fictions”, but if given a chance, I will testify under oath that as a former law professor I did not understand this phrase to be so broadly construed. In fact, when a lawyer first told me that such interpretations have been upheld by the courts I did not believe him.

2) remember the basic “meeting of the minds” test? Not as interpreted by some courts but as intended to require a real, honest to God agreement, not the fictionalized “gotcha” interpretation based on the simplistic reasoning:  you read it,  you signed it, you’re bound by it.

e. The final audacity. Why would courts allow parties to abandon any semblance of common sense and fairness by suggesting that a provision that says that only the arbitrator can decide f whether a claim is arbitrable?  Can one imagine a greater conflict of interests and denial of due process?

13. Why people sign form contracts. We sign form contracts all the time when we click the “I agree” box for every piece of software we’ve downloaded – we assume that two things protect us from the possibility that we sold our children – 1) a belief that the marketplace would prevent a company from being really unreasonable and 2) if a provision was too oppressive or overreaching it would not be enforceable under the doctrine of unconscionability

a. Problem is that neither of these safeguard apply to increasingly restrictive arbitration clauses including the one written by the defendants’ super lawyers:

1) The marketplace provides no check on overreaching clauses because everyone in the industry wants these clauses – why wouldn’t they and every private school has them. Try to find a quality private school without an arbitration clause that effectively insulates the school from accountability or liability

2) The assumption that really unfair provisions won’t be enforceable, at least in this area, has been obliterated by a succession of appellate court cases that favor arbitration so much that the courts turn a blind eye to the inherent unfairness of requiring parents to forego the processes of our judicial system.

14. This case is of great public significance.

a. Over 1/3 of all schools in the U.S. are private schools and 10% of all students attend these schools.

b. If this court continues the “blind eye” approach to arb clauses used by private schools, the critical judicial safeguards against abuse will be lost as every parent is forced to bargain them away for a chance to get their kids in the school they have chosen.

c. The cruel and vindictive abuses of power that damaged my family in this case were very serious but if schools are not held publicly accountable, the worst is yet to come.

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