29. What Happened At The First Mills College Court Hearing?

"Good Morning, the Worm your honor
The Crown will plainly show
The prisoner who now stands before you
Was caught red-handed showing feelings
Showing feelings of an almost human nature..
This will not do..
"Call the Schoolmaster..."

Pink Floyd, The Wall

Thanks to Dani Aidan Stone for writing this summary of the first meeting of the Plaintiffs and the Defendants in Alameda County Superior Court on August 16th, 2021. We have edited the transcript slightly to ensure we are posting accurate information.

Judge: Stephen Pulido
For Plaintiffs: Lisa McCurdy, Greenberg Traurig
For Defendants: Stephanie Yonekura, Hogan Lovells

The hearing that was scheduled for 2:30pm Thursday, September 9 has been postponed to 2pm PST Monday, September 13th. Live stream here.

August 16th Mills Hearing

These things start slowly. The hearing began by going through who was there and what had been filed. The parties engaged a court reporter (the Alameda Court doesn’t provide them for this type of case); everyone was on Blue Jeans (video conferencing software like Zoom) who needed to be; people were listening on livestream, and a “Miss Argensen” was observing in the Blue Jeans room.

The judge confirmed that Blue Jeans observation was okay. He stated that he had reviewed the case, and rapidly went through the various declarations and exhibits. He points out a notice of ex parte application from Thomas Connally (a partner with Hogan Lovells, the firm that represents Mills), and states, “Those types of motion cannot be done ex parte, it has to be a noticed motion. I see that it's been put on for today, which is not really a motion calendar.”

The lawyer for the alumna trustees, Lisa McCurdy, objects to putting it today’s calendar; last they’d heard was that it had been filed ex parte and had been denied by the court, this is the first they're hearing that it got re-filed and went through.
The judge notes that he’s particularly sensitive to this needing to be a noticed motion bc this used to be a huge problem in the court, people filing these without notice. He says that they can turn it into a noticed motion and put it on the calendar, but he can't technically hear it today, “so let's move on to the merits.”
The judge starts out by stating, “I have read everything. I want to be clear that I am not deciding whether or not this merger can take place. I’m not deciding the end result of this case, I am not on the Board of Trustees, that's not my job, and I’m well aware of what it's like to be on that type of board.

“Whether or not these documents should be produced, and I’ll say, again, i've read everyone's... and it gets a little heightened sometimes. There's a lot of emotion on both sides. And I appreciate that, but that's not how I'm deciding this case. "There's no vote. We're not taking votes here in the court. I appreciate different trustees telling me how they feel, but again, we're not taking votes on this."

He goes on to comment that it “makes it sound like Mills College is gonna go down the tubes if this TRO [Temporary Restraining Order on voting on the deal] is extended any further,” and that first, he has to decide about plaintiffs’ right to the documents, "and second, what's the harm of a little bit more of a delay. Everyone's different. i have certain members of the board of trustees telling me what they need and don't need...."

He puts a question to McCurdy: now that he's got the declaration from the CPA [which gives a list of documents they’re requesting, as does their original filing], is this a new list, an additional list, or intertwined with what's been requested?
She says it does overlap some, “but it is an additional request of what he in his professional capacity would want and expect to see in evaluating what's going on here. He reviewed the publicly available documents after the ex parte was filed, which is why there's some differences here.”

Note: Mills is being represented here by two lawyers from Hogan Lovells, Stephanie Yonekura and Harmony Gbe, pronounced Bee.

[Connally is not licensed to practice by the California Bar Association, and the judged denied their application to let him represent the College, so the Defendants were represented by Stephanie Yonekura, a white collar crime specialist and former Acting US Attorney for Los Angeles - Ed.]

The judge turns to Yonekura and says, “Say what you need to say, don't go over everything that's in the paperwork but... I'm a little surprised about why these documents can't be available.” He references the fact that Mills did give her in-person access on the condition that she go in alone, without her phone, but seems to think that that is impractical.

Yonekura states that "plaintiff has been given the access... under CA corp code 6334. There has been a distinction made btw nonprofit corporations and regular corporations...." She argues that because Viji hasn’t come in to view the documents she had access to, it makes the situation even worse: they’re in a financial emergency, even just the little delay that’s at issue so far HAS caused harm to students. Students are entering in less than 10 days and are having to make the decision about whether to come to the school not knowing whether they will be able to continue, or even whether the college will be operational for the rest of the school year.

Yonekura says that three staff members have resigned now because of the uncertainty, and that the other 22 Trustees “are sitting on their hands and not being able to act and govern and continue on considering the NEU parthernship. They’re all being held hostage by the one trustee, your honor.”
She says that with respect to the preliminary injunction rights, the plaintiff needs to be able to show likelihood of success vs suffering irreparable harm. That Viji has access to these files, and that “the other trustees don’t believe they need access” to them to be able to vote.

The judge asks her to clarify: “You say she already has access. are you talking-- she has the records, or this is she gets to go down there alone and view them without anyone present?”

“Yes, your honor, that is what I’m referring to. She can go down alone. Can I address just the help she's requesting? ... Not only it's not within the statute for a nonprofit vs a for profit... it's the help as in attorneys that are being paid for by the AAMC — the outside interest group — and with help from a consultant who in his declaration said he's going to assess the financial status and whether there's actually a financial crisis being suffered by the College, and that's not what the inspection rights are supposed to do!... [they’re] supposed to let her get informed to make her one vote with respect to the NEU partnership.”

She adds, with respect to that, “In case it got lost, the College offered her access and to get copies after she had access,” and that because there are new categories of records that weren’t requested initially — the ones that were requested after the alum trustees talked to a CPA about the information they did have access to, and about what else they would need to make an informed decision — it "makes it seem like the lawsuit is just a cause for delay.” She says the lawsuit was filed on June 10th before the Northeastern partnership was on the table, "and in fact she didn't even request the documents that are on the table until June 17th.

“The College worked hard to get those documents gathered, and those documents gathered are documents that the Board of Trustees wouldn't normally consider. She has reams of [info] about the college in terms of board minutes and board meetings and posted on the intranet page.... the College, with very scarce resources, used those resources to get those gathered and she hasn't reviewed ANY of those records! The harm is really resulting from the delay! She has access, and she's chosen to sit on that access."

Opposing counsel: "I'll start by saying that I'm astonished by what I'm hearing...."
McCurdy states that she’s lost count of how many times she heard that Viji has been given access…. “they say she's been given access but in front of you, you have all these pleadings and supplemental pleadings saying she shouldn't be given access. Why wouldn't any trustee be allowed to review these docs and records that are germane to her job as a trustee? And for you to now hear that it's improper for her to request them for review is candidly shocking.”

Re the harm resulting from the delay, McCurdy says, “After multiple submissions by defendants... nowhere in their many, many papers have they submitted any actual evidence that there's any harm to the College.”

McCurdy goes on to note that there’s no evidence of harm to the Northeastern University deal in delaying it. “Why has this [providing files to review with a forensic accountant and counsel] not happened long ago? And so, we’re asking that you enforce that relief that was requested in the TRO papers, and that the brakes be pushed on this.”

The judge asks what form they requested the documents be provided in. McCurdy says they requested electronic docs, but if not, for Viji to be able to go off campus with counsel and whoever else to review them. That it’s not feasible to see thousands and thousands of records within a day’s time, and make sense of them.
The judge asks whether they want the court to allow and inspect what they originally requested, the information and documents requested in writing on June 17th, and also the documents requested by the CPA.

McCurdy: “Yes, and if your honor were to limit it to the documentation in the papers, that would be fine. My suspicion is that if we look at them with an accountant we’ll be back asking for the rest, most expeditious way is to review all of the records at one time.”

Judge: “But you don’t dispute that the purpose is so that she can make an informed decision, not whether Mills is stable or not.”

McCurdy: “They’re connected issues, but yes, she needs to find out this stuff so she can make an informed decision with professional assistance. And frankly, all of the trustees, whether they have said so or not, should want to review the documents that Dr. Nakka-Cammauf has requested.”

Judge: “Let’s talk about that for a minute.“ If he gives access, how would the other trustees look at them if they wanted to?

McCurdy says, “They could request them from counsel from defendants, or from Dr. Nakka-Cammauf. Or from the Board of Trustee’s secretary, presumably. It would be up to them to do that, obviously.” She notes that Nakka-Cammauf signed a confidentiality agreement, at least until there’s a decision, but that the other Trustees would fall within that cone of confidentiality.

Judge: “Anything further from the defendant?”

Yonekura: “Yes, we would just like to focus on the balance of harms. Again, plaintiff has been given access, not in the form she wants necessarily… and had access to the reams of materials that have shown why this College has been in financial crisis for more than five years. She was sitting at the table while the College has had to make very difficult decisions like laying off employees and selling off invaluable assets and losing programs, she’s been sitting at the table for the past five years and she hasn’t asked a question that has gone unanswered…. So she makes this last-minute request for records that aren’t normally considered for by the Board, and then shows her hand by making another request on Friday. The claims counsel says that they’re related, but they’re not. The only right is to review records to make an informed decision. So I want to balance the College’s harm, and we’ve gone through a lot of that before, and I will note that the NEU partnership involves letting them settle the college’s debt….”

Yonekura notes that trustee Eric Roberts says the college may run out of cash as early as Nov or Dec of this year. She argues that Nakka-Cammauf [The President of the AAMC] is “doing the bidding of the AAMC. We haven’t even talked about them and the fact that they’re behind the scenes, making very public statements, doing nothing but stirring up friction….” She cites something that says Viji has the right to these files “unless it’s to cause trouble. She just want to use the statute to halt the process. The delay is the harm, your honor. Every day that the Board of Trustees is prevented from acting, the College and its community is being harmed, and plaintiff’s harm is zero.”

Yonekura then focuses on the right to make an informed decision. She states that the trustees do have the right to make an informed vote, and that Nakka-Cammauf does not need more information in order to do that. Because if she doesn’t feel she has enough information to make a decision, “she can vote no. And if she votes no, she holds no personal liability and her voice is heard, as it should be".

Yonekura then states that the delay is the beginning of “the death spiral for Mills College,” and that the plaintiff “needs to review the documents she has access to and get ready to make her informed decision.”

The judge reiterates: “Just to be clear, the TRO didn’t stop negotiations. It stopped signing the contract. But it was not the court’s intent that Mills can’t continue to talk with NEU.”

[That will be important in the upcoming hearing. The College’s paperwork states that the reason they didn’t provide requested details of the Northeastern University deal, or of how it would affect Mills’ projected budget/cash flow, is that they haven’t finished negotiating with Northeastern. And they state that it’s partly Nakka-Cammauf’s fault that they haven’t finished negotiations, because they stopped negotiating with Northeastern for two weeks in early August, in case the judge was going to ask them to stop negotiating. But they were not required to stop negotiations, either by the judge or by the initial TRO.]

Judge: “When is the next opportunity for the vote to occur?”

Yonekura: “They would give the Board 4 days notice and take a vote Friday.”

Judge: “So if I were to allow the inspection of certain documents… I don’t know if I’m going to give a wholesale combination fo the two requests… if I were to order that the plaintiff could inspect these docs with an attorney and/or accountant present….” He wants to know: would the College give them electronically, allow her on campus with representatives, or what?

Yonekura: “If the portion of preventing the vote to go forward is lifted, and the court orders the defendants to provide the documents,” they’ll provide them as the court orders. “Oh but your honor, with respect to that, that would be the docs we already gathered” on June 17th; they haven’t gathered the ones requested on Friday yet.

The judge asks why he would I lift the TROs to the vote and allow the inspection of documents if Nakka-Cammauf doesn’t really have time to review them by Friday. Mills counsel claims again that she’s had three weeks to review the documents.

Judge: “She can vote no, but I think every trustee is still entitled to have an informed vote. Now, we may disagree about the meaning of an informed vote.
“Today is 4 days after the vote was to occur. Are you telling me if it’s delayed 2-3 weeks, Mills is doomed, when we’ve been obviously talking about this for years?”

Yonekura says she won’t say it’s doomed, but that it will suffer irreparable harm each day, because students and staff will be lured elsewhere, and Mills might have to make “difficult decisions as it relates to its operating expenses.” They want Nakka-Cammauf to “get informed as best she can in those four days.”

McCurdy: “First of all, counsel’s testimony, and it is testimony, is not evidence. There’s a lot that’s been said for which evidence has not been submitted.
“Second, if students have any uncertainty, it’s because the college itself announces in march that it would be closing. The uncertainty is not of plaintiff’s creation, it’s of defendants’ creation.”

Third, she’s not just voting yes or no, she’s entitled to have information “so that she can have meaningful dialogue with her colleagues about making this decision.”
McCurdy adds that Northeastern publicly stated after the TRO that they were looking forward to continuing to have discussions with Mills College.

Judge: “The June 17th docs are to be produced electronically, on or before… Wed August 18 by close of business. The court is also issuing a preliminary injunction restraining them from making further decisions and taking further definitive action, including entering any new contracts or financial commitments, whether with NEU or otherwise, related to the future of the college, including requesting that the board take action upon such matters. That injunction will expire on August 27th, 2021, close of business - 5 pm.”

[The injunction has now been extended to 5pm September 13th, 2021 -Ed.]

Yonekura requests that they specify she can share the records with attorneys and consultants but not with the AAMC and others; he agrees.

Yonekura requests that they consider the posting of a mandatory bond in this situation…$25M.

He says get that order directly to him in dept 517, email it, asap, and they’ll print it out. Make sure to give it to the other side first to make sure it meets with their approval as conforming to his orders.

Mills requests that wrt the injunction, may the college provide notice to be able to make that decision on August 27th, not to post notice on the 27th which would cause another 4-day delay. AAMC counsel objects bc same day inspection rights end is the same day as a vote. Judge notes that her inspection rights don’t end that day. Counsel says that only gives her ten days to assess the records, make a determination, get ready for a vote.

He asks mills to clarify; Mills clarifies that they are requesting, in order for the college to be able to in fact make a decision on August 27th, it would be able to give notice to the trustees 4 days earlier, per their bylaws, that a vote would happen on the 27th. “Otherwise, it’s in essence a delay till the end of the month.”
The Judge points out the docs are all together, so they could give her the docs tomorrow instead. Clarifies that Viji could be reviewing the docs that entire time, so he doesn’t see the harm in that. AAMC says that that’s not a lot of time, they’ve said that there are thousands and thousands of records, the vote puts a stop to not only when she has to have read them, but had any discussions with her fellow trustees, etc etc, again, because there’s no evidence of any imminent harm submitted, asking for an additional week of time would be reasonable and they had initially requested 60 days; 2 or 3 weeks would be very beneficial.

Mills clarifies that just for the record, it is not thousands, it is hundreds. Counsel says they were told thousands; Mills clarifies that it’s thousands of PAGES but hundreds of DOCUMENTS.

Judge extends injunction to September 3, but college can give notice of the vote 4 days before that.

Mills clarifies that they’re free to continue negotiations and anything that would lead up to a vote in the time before that. He agrees.

“All right, let’s talk about the bond.” He asks if they agree that it’s mandatory to order a bond, and AAMC counsel says no, and that to the extent that the court wants a bond, one of a thousand dollars or so is customary in case law; that would be their suggestion if it’s something other than zero.

Mills gives the CA civil proc code 529, says the bond is indeed mandatory, per manjini vs Durand international, abba rubber company vs sea quest, court must estimate the harmful effect the injunction is likely to have and set the bond at that sum. The evidence of the statements set out in the declarations is the evidence of the harm

Judge: “I don’t think the evidence is clear to the court. I certainly understand that the defendants have stated in declarations that they believe that the College and the community are being harmed…. I don’t think I have enough evidence to set an amount… I don’t think I’ve gotten enough evidence of what the actual numbers are as far as potential harm to the College. We’re talking about, today’s the 16th of August and September 3rd, the vote can take place, so it’s a question of from today’s date of August 16 through Sept 3, is….”

Mills interrupts to offer to submit additional evidence of harm: “Those types of figures at this point given the business dealings that we have now are confidential and we’d like to submit that under seal”

Judge: “You know, I just want to make a decision and make it on the best evidence I have right now so that everybody can move on. I’m gonna set the bond at $2500.”

the end

A huge thanks to Dani for transcribing and narrating this. The Judge seems fair and reasonable, and - most crucially - able to see through the gaslighting of the Defendants. They ignored his order, so back in Court again - Monday should be interesting.

Read all the Court documents at the AAMC web site

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29. What Happened At The First Mills College Court Hearing?

August 16th Mills Hearing

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