Our view: A supreme victory for Sweet Briar supporters
Editorial, Roanoke Times – 6/10/2015
Indiana Fletcher Williams lives.
Or, at least, her will from 1900 does — a will that left her estate in Amherst County to a nonprofit corporation to operate a women’s college as a “perpetual memorial” to her late daughter.
That college is Sweet Briar College and at precisely 10:45 a.m. Tuesday, the Virginia Supreme Court dramatically tilted the scales in favor of Williams’ wishes being carried out — and the school staying open.
Technically, the court — in its unsigned but unanimous order — did not do many of the things the alumnae had sought in their fight to reverse the board’s decision to close. The court didn’t issue a temporary injunction against closing. The court didn’t remove the board and install a special fiduciary to run the college. It’s clear the justices were looking for the narrowest ruling they could make. Virginia Beach lawyer Steve Emmert, who publishes a website devoted to court decisions, speculates it’s because the Supreme Court expects the full case to be back before it, and possibly quite soon.
But on the essential question — really, the only one that mattered, legally — the justices came down squarely on the side of the alumnae and against the board.
Is Williams’ will still in force? Bedford County Circuit Court Judge James Updike had ruled in April that it was not— that Sweet Briar College could not simultaneously be both a nonprofit corporation and a trust for the will, that Williams’ will “ceased to exist” the moment her estate was transferred to the corporation. That ruling undercut much of the case the alumnae hoped to make because it meant that only ordinary business law applied, and it’s a settled proposition that courts can’t interfere with the “business judgment” of a corporation. (Even if, as is the case here, that “judgment” seems hasty and unimaginative and, well, wrong.)
In 14 spare but potent words, the Supreme Court overturned Updike’s finding: “This legal conclusion was erroneous. The law of trusts can apply to a corporation.” The Supreme Court didn’t actually say Sweet Briar is a trust, but it sent the matter back to Updike for another hearing, and ordered that hearing to come quickly. Whenever it does, it would seem inescapable that the judge will have to find that Williams’ will still governs Sweet Briar.
So now what?
For one thing, this ruling shifts the burden from the alumnae (and the students, and the faculty, who have separate lawsuits of their own) to the board: The board will presumably now have to explain to Updike just why the trustees can’t carry out Williams’ clear instructions to operate the school as a “perpetual memorial.” The board will say it’s because the college is running out of money, but there’s plenty of evidence to the contrary — that the school has been woefully mismanaged and with new (and energetic) leadership could yet be turned around.
With the exception of this particular ruling on the legal nature of the board, Updike has been consistently sympathetic with those trying to save the school — issuing not one but two temporary injunctions trying to slow down the closure to create the legal space for a negotiated settlement. With the Supreme Court essentially telling Updike he needs to find that the will still applies, his courtroom would seem to be one where the board is now very much on the defensive
And yet . . . the clock is ticking, and every day that goes by, the board is winning. There’s no incoming class. The remaining students are transferring. Faculty and staff may be looking for other jobs. While the Supreme Court’s ruling is a huge legal victory for those trying to save the school, they haven’t saved it yet.
Perhaps the real question is this: Does the Supreme Court ruling put enough pressure on the board that it now has motivation to agree to a negotiated settlement — which, realistically, means reversing its decision to close? Updike has made it clear he’d like to see an agreement that keeps the school open. The Supreme Court, interestingly, noted that “the parties are engaged in widely publicized, closed-door negotiations.” Reading between the lines, one gets the feeling the Supreme Court would be very happy if those negotiations produced a settlement so it wouldn’t have to face another courtroom overflowing with Sweet Briar supporters, as it did last week.
So what about those negotiations? Will the court’s decision increase the political pressure on Attorney General Mark Herring to try to strong-arm an agreement?
After all, this could have been his victory. It wasn’t. His office seemed curiously passive at the outset of the Sweet Briar controversy. He could have filed suit to enforce the will, in his role as “the people’s attorney.” He did not. A previous attorney general defended the will back in the ’60s when the Sweet Briar board went to court to change one proviso; Herring strangely opted out, and seemed content to be a neutral party.
When Amherst County’s county attorney, Ellen Bowyer, filed suit to enforce the will, Herring sent his lawyers to court to argue that she didn’t have legal standing. Updike ruled otherwise. Once Bowyer’s standing was confirmed, she brought in as her co-counsel the high-powered Richmond lawyers representing the Saving Sweet Briar alumnae group — and it was one of those lawyers, William Hurd, who so effectively argued the case before the high court last week.
In effect, Herring ceded his role to a private law firm, which has now won a spectacular victory. Will he have any regrets? Herring could yet cover himself in glory, though, if the mediation he set in motion results in a deal to keep Sweet Briar open.
Many Sweet Briar supporters have been suspicious that the board agreed to mediation simply as a way to run out the clock. Even though the lawyers involved in the mediation were sworn to secrecy, the board’s vice chair, Elizabeth Wyatt, penned a commentary last week in the Wall Street Journal insisting the school’s problems were “terminal.” Not exactly the definition of negotiating in good faith.
But now, with the Supreme Court’s ruling, the board risks a situation where Judge Updike might lose his patience with the dueling accountants — and appoint his own fiduciary to examine the school’s disputed finances.
In fact, if the question now becomes whether Indiana Williams’ will can still be carried out, that’s exactly what he ought to do.