[00:00:00] Speaker 04:
238065 Weston Brock versus Kappa Kappa Gamma.

[00:00:07] Speaker 04:
You can approach the podium when you're ready.

[00:00:12] Speaker 02:
Good morning, Your Honors, and may it please the Court, May mailmen on behalf of appellants, and I hope to save three minutes for rebuttal.

[00:00:22] Speaker 02:
The issue in this appeal is actually quite narrow.

[00:00:25] Speaker 02:
This case is at a motion to dismiss.

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The question before the district court and this court is not the interpretation of woman.

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The question is whether plaintiffs plausibly allege a breach of fiduciary duty.

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And we do.

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The district court reached the opposite conclusion only by ignoring our well-pled facts and by importing inapplicable legal principles.

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The decision must be reversed.

[00:00:49] Speaker 02:
I want to start by addressing the relevant allegations in our complaint.

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The plaintiffs allege that the directors of Kappa Kappa Gamma unilaterally changed the nature of the organization by adding a category of members.

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Most importantly, the complaint alleges that the directors did this in bad faith.

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The complaint alleges that the directors dodged an honest conversation with the members by burying language in areas unlikely to be policed as a change to membership.

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And when the women in the Wyoming chapter

[00:01:22] Speaker 02:
faced harm from the change being implemented, they again avoided a good faith conversation and applied pressure to ensure unquestioned acceptance.

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Let me interrupt.

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I have a preliminary question that goes to whether we have jurisdiction to hear this case at all.

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Obviously, we have to have a final decision from the district court before we can exercise subject matter jurisdiction.

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Here, the district court dismissed but gave

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very specific instructions on how you could fix your complaint and refile.

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If we were to look at the intent of the district court in determining whether or not the district court thought it was a final decision, it seems to me it's not final.

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How do you respond to that?

[00:02:10] Speaker 02:
Well, a dismissal is considered final when it goes to the merits of the plaintiff's complaint rather than a procedural issue that the plaintiffs could be expected to fix.

[00:02:18] Speaker 02:
And so the footnote that the district court, I don't think, indicates that his decision had anything to do not with the merits, that this was a procedural issue.

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It was if you are allowed to refile, because they've already filed their First Amendment complaint, but if you are allowed to,

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I hope that you do a better job of writing it, basically, not that there's anything that the plaintiffs can fix.

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So what the plaintiffs allege is that there's a promise that's been broken.

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The district court said there is no such promise, and even if there was, I wouldn't be able to do anything regardless.

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That goes to the merits of the complaint.

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There would be no way to write the complaint around that merits decision.

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Also, I think another practical consideration is, are there pieces of this case that are living in the district court that might spring to life at any moment?

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Is this going to lead to piecemeal appeals?

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And no, there's nothing remaining at the district court.

[00:03:04] Speaker 01:
Wait a minute.

[00:03:05] Speaker 01:
You did not appeal the contract or tort claim.

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Correct.

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So those are remaining in the district court having been dismissed without prejudice.

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So think of this hypothetical.

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You lose here on the derivative claim and the direct claim.

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You go back to the district court and say, well, I still have my contract and my tort claims because they were dismissed without prejudice.

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So I'm going to amend, as was suggested by the district court in its footnote.

[00:03:42] Speaker 01:
That's piecemeal litigation.

[00:03:44] Speaker 02:
Well, there's no, I guess the district court didn't say that this could be amended.

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And the contract, all of these claims are wrapped up in the- Wait, wait, wait, wait.

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It said without prejudice.

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And it talks about what you can do if you choose to amend.

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But there's no way to fix the merits.

[00:04:03] Speaker 04:
So the contract claim- And it didn't just dismiss without prejudice.

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It denied a motion asking that it be dismissed.

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with prejudice, which is an exclamation point.

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But I think that's separate from what the Moyah case said, is that where there's a request to leave to amend and that that's granted, that that is something that's not appealable.

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But here, the only reason the district court said that he wasn't going to grant this with prejudice is because

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the defendants didn't argue that amendment would be futile.

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So he didn't even consider it.

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He didn't say that you could refile.

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He just said, there isn't futility being alleged here, so I'm just not even going to consider it.

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It was not a basis for the decision.

[00:04:54] Speaker 01:
But don't you agree that if you lose on the derivative claim and you lose on the direct claim, that you can go back to district court and amend?

[00:05:06] Speaker 02:
I think the problem is... Can you do that?

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Not around the merits determination.

[00:05:14] Speaker 01:
Can you amend the tort and or the contract claim?

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I don't think there'd be a good faith basis to do so.

[00:05:25] Speaker 01:
Can you do that?

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Are you authorized to do that by the order of the district court judge?

[00:05:31] Speaker 01:
We could ask.

[00:05:32] Speaker 02:
We could certainly ask to refile, but it would

[00:05:36] Speaker 02:
The problem here, and this goes to the practical consideration of is it on the merits, is that all of these contract claims, every single one of the claims, boils down to whether there's been a certain promise made in the bylaws and whether that promise was broken.

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And so if we lose here, then in a sense, there'd be no way to get around that determination.

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I couldn't figure out a way.

[00:06:01] Speaker 01:
What if you sought to amend the claim on the contract regarding housing?

[00:06:09] Speaker 02:
Again, that contract goes to the bylaws and whether there was a promise in the bylaws.

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So I guess we could try.

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We could ask.

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But there would be a difficult merits determination to overcome.

[00:06:26] Speaker 00:
Council, can I read your briefings to

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conclude that you are abandoning the contract and tort claim for all time and also really have no intent to, in fact, maybe disclaim any rights you have to amend, counts one and four as well.

[00:06:41] Speaker 02:
Right, so it's not raised in our opening brief and so we've forfeited that claim.

[00:06:46] Speaker 00:
What about counts one and four, though?

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You have been granted leave to amend those as well.

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I understand you'd argue to say there's nothing we can do to amend those claims to potentially make them viable, consistent with the district court orders.

[00:06:59] Speaker 00:
Are you just claiming any rights you may have to amend them?

[00:07:01] Speaker 02:
Well, we haven't been given a right to amend that.

[00:07:04] Speaker 02:
The claim has been dismissed.

[00:07:08] Speaker 00:
You know without prejudice and footnote 67 of the district court order is pretty clear that if you want to amend here are Sort of the guidelines that the district court is offering to you a lifeline, right?

[00:07:18] Speaker 02:
And so we could write it better.

[00:07:19] Speaker 02:
I agree.

[00:07:20] Speaker 02:
We could follow that that Footnote and write it better.

[00:07:24] Speaker 02:
The problem is we couldn't write it to get around the determination on the merits so we could write it cleaner and prettier and nicer just not to fix the problem that exists here and so that's what I really

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want to address is, what is that merits determination that we really can't get around?

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And here, the district court, instead of assessing the elements of a breach of fiduciary duty claim, said that he was unable to review that claim because of noninterference principles.

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But the problem is, there is no noninterference principle that forbids courts from looking into bad faith

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breaches of fiduciary duty.

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So that really is the question is, are we in bad faith land or are we in good faith disagreements about the bylaws?

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And so it's only by transforming the complaint into this is a good faith disagreement that you have that deference principle.

[00:08:20] Speaker 02:
But the complaint doesn't allege that.

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The complaint alleges that there was a change.

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So this is paragraph 7, paragraph 57, paragraph 58 that say there was a change to the bylaws.

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that this was an alteration of the membership requirement, that they added a category of members, and that they did this in bad faith.

[00:08:36] Speaker 02:
So that when the women in Wyoming said that they had some harm arising from this change, instead of having a conversation about that, they said, we are going to make the vote not anonymous, even though it needs to be, that women are going to be threatened with dismissal.

[00:08:52] Speaker 04:
In looking at your arguments below,

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I don't see any argument about anonymity.

[00:09:01] Speaker 04:
When you're talking about the voting requirements, that's not there.

[00:09:09] Speaker 02:
Sorry, so places in the complaint or?

[00:09:13] Speaker 04:
I'm talking about when you raised it in the district court and when you raised it with kappa kappa gamma.

[00:09:23] Speaker 02:
OK.

[00:09:24] Speaker 02:
I guess a couple of pieces.

[00:09:27] Speaker 02:
So one, to the futility slash demand argument, I think there's two things here.

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So one, you could see the request, the various requests to the CAPA directors as a demand or whether that's futile.

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So we would say both.

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One, that there was an actual demand made and in that demand letter, and that's at 259 and 60,

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of volume one of the appendix that we specifically do raise that there were illegal voting procedures here.

[00:09:59] Speaker 04:
But you never say, and they actually, the attorneys for the fraternity write back and say, could you please point us to the particular provisions or bylaws or procedures that you say that we have violated, and you don't respond at all.

[00:10:21] Speaker 04:
And I think that that maybe- It's hard to show futility if they were trying to engage and you didn't respond.

[00:10:28] Speaker 02:
Well, I guess we don't see a good faith engagement here because the illegal voting procedures have been raised with them multiple times and our allegations in our complaint is that they are behind it and so that shows

[00:10:42] Speaker 02:
and antagonistic nature that shows that their minds are closed to argument because if they're the ones behind it, if they are saying that we're going to now use a Google poll rather than Omega recruit, if they are saying that some of the members need to go through sort of retraining,

[00:11:00] Speaker 02:
to be better CAPA members, and that if they're behind this, then of course they're antagonistic.

[00:11:05] Speaker 02:
And I think that that's what the district court said, of course.

[00:11:08] Speaker 04:
But you didn't ever raise, either when the district court or with CAPA, CAPA, gamma, your allegations about alleged election violations.

[00:11:21] Speaker 04:
It's not in your letter.

[00:11:22] Speaker 04:
It's not in the argument to the district court.

[00:11:25] Speaker 04:
It springs fully formed anew on appeal.

[00:11:30] Speaker 02:
Well, I guess I disagree with that in the sense that there was a specific, in the letter to the CAPA directors, it says that voting is supposed to be anonymous and that voting here was not anonymous.

[00:11:48] Speaker 04:
In your complaint?

[00:11:49] Speaker 02:
And in the complaint, absolutely.

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The lack of secret nature was at paragraph 12, paragraph 106, and paragraph 134.

[00:11:57] Speaker 04:
But it's too late in your complaint if you didn't make an effort to raise that complaint to show that you have a right to bring a derivative complaint because it would have been futile or they were not interested in responding.

[00:12:17] Speaker 04:
You have to actually bring it to their attention.

[00:12:20] Speaker 04:
The district court never even addressed the election violation theory because it didn't even know it was for it.

[00:12:27] Speaker 02:
Well, even assuming that that is the case, there still is a derivative claim remaining there about the violation of the bylaws in bad faith.

[00:12:38] Speaker 02:
So even assuming that, we still have a claim.

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But the district court did specifically mention the letter as the reason how we know that these directors were antagonistic.

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And that letter leads with a complaint about the illegal voting procedures.

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And that the request in the letter was for a valid vote in accordance with the bylaws.

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And I hope to reserve.

[00:13:06] Speaker 02:
Yep, go ahead.

[00:13:10] Speaker 01:
You allege claims against only one defendant, two defendants,

[00:13:23] Speaker 01:
Right.

[00:13:24] Speaker 01:
Okay.

[00:13:25] Speaker 01:
So you asked for injunctive relief, correct?

[00:13:30] Speaker 01:
Correct.

[00:13:32] Speaker 01:
And Rooney cannot give you injunctive relief.

[00:13:38] Speaker 01:
She's one individual of, I think, a council of eight that takes a vote of six to do something.

[00:13:47] Speaker 01:
So she has no authority.

[00:13:50] Speaker 01:
So if you get an injunction against her, isn't it meaningless?

[00:13:57] Speaker 02:
A declaratory relief, I think, would be meaningful in that circumstance.

[00:14:02] Speaker 02:
And I think there's still monetary relief that we're seeking for the organization, which has lost.

[00:14:07] Speaker 02:
Against Rooney.

[00:14:08] Speaker 02:
Against Rooney.

[00:14:10] Speaker 01:
Even though she has no power to act alone.

[00:14:15] Speaker 02:
No, but through declaratory relief that the board cannot unilaterally amend the bylaws.

[00:14:22] Speaker 02:
I think that the declaratory relief would apply by its nature.

[00:14:29] Speaker 01:
Are you saying then that you may be able to survive on your direct claim, but not your derivative claim, because that's on behalf of the entity?

[00:14:39] Speaker 02:
I think a declaratory judgment

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that Rooney may not take certain actions or that this is what the bylaws require, unless everyone else wants to go then and violate it separately and then get claimed against.

[00:14:59] Speaker 01:
But what good is any relief, injunctive or declaratory, if the only non-nominal defendant is a single individual that is on a board of

[00:15:14] Speaker 01:
that requires six votes to do anything.

[00:15:17] Speaker 01:
What meaning does any relief have?

[00:15:20] Speaker 02:
So an injunctive relief against one person would still lead to the result that the plaintiffs are seeking here, because we would hope that the rest of the court... We're going to talk about hopes and aspirations here.

[00:15:38] Speaker 01:
That means, according to your view,

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The other seven members of the council would have no meaning.

[00:15:48] Speaker 01:
I mean, okay, so you can clam up Rooney, but what about the other seven?

[00:15:54] Speaker 02:
They're still not free to violate the bylaws and violate this order.

[00:15:58] Speaker 01:
That goes to the merits.

[00:16:01] Speaker 01:
I'm talking about whether or not you can bring this suit against one nominal defendant, excuse me, one non-nominal defendant.

[00:16:10] Speaker 02:
At the very least, the monetary relief would still be there.

[00:16:13] Speaker 02:
And that's not just the direct claim.

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That's the derivative claim.

[00:16:16] Speaker 02:
The harm here is to the organization.

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The organization is the one that has lost donations, that has lost its reputation, and that has lost members.

[00:16:27] Speaker 02:
Members have dropped.

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In fact, the House in Wyoming was not at capacity and is at risk of closing because of that.

[00:16:33] Speaker 02:
So still, ultimately, at the end of the day, the monetary relief would be sufficient.

[00:16:39] Speaker 04:
And you're out of time.

[00:16:58] Speaker 03:
May it please the court?

[00:17:00] Speaker 03:
My name is Natalie McLaughlin, and it is my privilege to represent Kappa Kappa Gamma Fraternity, the president of its fraternity council, Mary Pat Rooney, and the Kappa Kappa Gamma Building Co.

[00:17:11] Speaker 03:
in this matter.

[00:17:12] Speaker 03:
The district court correctly dismissed this lawsuit, recognizing the right of an Ohio voluntary organization to not have a federal court interfere in its governance.

[00:17:23] Speaker 03:
There are three points appellees seek to highlight for the court today.

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One, CAPA's governing documents explicitly grant Fraternity Council the duty to interpret CAPA's bylaws.

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Two, because CAPA is a voluntary organization, CAPA is entitled to judicial deference under Ohio law to interpret its own bylaws.

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And three, there is a presumption under Ohio law that CAPA's Fraternity Council acted in good faith in accordance with their fiduciary obligations.

[00:17:55] Speaker 03:
in interpreting CAPA's bylaws.

[00:17:57] Speaker 04:
Before you jump into the merits, do we have jurisdiction to even hear this case?

[00:18:01] Speaker 04:
Is there a final judgment from the district court when some of the claims were dismissed without prejudice?

[00:18:07] Speaker 03:
So we had raised this early with the district court's disposition and the requirement of jurisdiction, and we certainly think this is a valid question for the court to consider.

[00:18:16] Speaker 03:
This is something that the court will have to consider before getting to the merits.

[00:18:21] Speaker 03:
And I'm asking you to weigh in on that consideration.

[00:18:24] Speaker 03:
Yeah, so appellants have we

[00:18:28] Speaker 03:
We question the court's jurisdiction, and that's why we raised it in a motion and raised it again in our brief.

[00:18:34] Speaker 03:
Appellants have represented to the court that they believe no amendment could cure any of their claims.

[00:18:41] Speaker 03:
And we certainly do believe they have a better understanding of what they are seeking to advance with regard to their derivative and their direct claims.

[00:18:51] Speaker 03:
So the court does have the opportunity to consider

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whether it can take their representations to consider those claims.

[00:19:00] Speaker 03:
We do believe that there has been an abandonment, though, of their breach of contract and their torsion interference claims and not advancing those claims before the court.

[00:19:09] Speaker 03:
But this court will need to consider.

[00:19:11] Speaker 04:
How can they advance those claims before the court when they were dismissed without prejudice?

[00:19:16] Speaker 03:
We believe those courts have been abandoned by them and not advancing them any further.

[00:19:22] Speaker 04:
So you think they should have appealed the decision to dismiss them without prejudice, even though they would have had an opportunity to amend?

[00:19:31] Speaker 03:
Well, they have represented to the court that all of their claims are completely contingent on the determination by the district court that the CABA has the ability to determine

[00:19:47] Speaker 03:
its own bylaws and interpret the bylaws, interpret the term women.

[00:19:52] Speaker 03:
And though we have represented, we have put forth for this court early on in our motion and have raised it again in our briefing, that because of the court's determination that that decision was without prejudice, that there is a jurisdictional question that this court will have to determine.

[00:20:08] Speaker 03:
And whether we had raised it or not, this court would have to make that decision even suespante if we had not raised it.

[00:20:14] Speaker 03:
And so that is a decision for this court to make.

[00:20:18] Speaker 03:
And we think that that is a fair question for this court.

[00:20:21] Speaker 03:
Now, they have asked this court to take their representation, that that is a question that they have said is a question that they cannot do anything to fix that claim.

[00:20:35] Speaker 03:
And we question that representation.

[00:20:38] Speaker 01:
So I understand your answer.

[00:20:43] Speaker 01:
Is it your position we do not have jurisdiction?

[00:20:45] Speaker 03:
We do not believe they have jurisdiction.

[00:20:48] Speaker 03:
But they have asked this court to take their representation at face value and find jurisdiction.

[00:20:53] Speaker 03:
Yes.

[00:20:55] Speaker 03:
So the term women is undefined in CAPA's bylaws.

[00:20:59] Speaker 03:
And that term women is not a term that has a singular definition.

[00:21:04] Speaker 03:
But everyone in this.

[00:21:06] Speaker 04:
Well, I mean, I think the argument comes down to,

[00:21:10] Speaker 04:
Your, the fraternity has the right to interpret its own bylaws and its policies, but the argument is this isn't an interpretation, this is an amendment and that woman has been expanded to include people who when the fraternity was formed would not have been considered women.

[00:21:38] Speaker 04:
Can you respond to that argument?

[00:21:40] Speaker 04:
Certainly, certainly.

[00:21:41] Speaker 03:
So the membership qualifications in the bylaws remain the same.

[00:21:47] Speaker 03:
There has been no amendment to the bylaws, which is that a member must be a woman.

[00:21:54] Speaker 03:
Now that qualification, however, is undefined in the bylaws.

[00:21:59] Speaker 03:
And Fraternity Council is explicitly given the duty, not even just the right, the duty in these standing rules,

[00:22:07] Speaker 03:
to interpret terms in the bylaws and that is what occurred here.

[00:22:11] Speaker 03:
Now the issue here is whether Fraternity Council has the right to interpret the term women and it is not whether they have, you know, announced that term in the best form but whether they have exercised the right to interpret that term and that is what occurred here.

[00:22:28] Speaker 03:
And so the term women is undefined in the bylaws, and that term women is not subject to a singular definition.

[00:22:36] Speaker 03:
And everyone in this large and diverse organization of over 210,000 individuals does not interpret that term women in the same way.

[00:22:44] Speaker 03:
And Kappa's Fraternity Council are the volunteers of this organization.

[00:22:49] Speaker 03:
who were elected to serve as the board and given that duty in the standing rules to interpret the terms.

[00:22:56] Speaker 03:
And what appellants have asked the court to do is to elevate their interpretation above that of fraternity council.

[00:23:04] Speaker 03:
But what this court should do is defer to fraternity council's interpretation, because that is what is required both by CAPA's governing documents and Ohio law.

[00:23:13] Speaker 04:
What if the interpretation of women was that it included

[00:23:19] Speaker 04:
cisgender men.

[00:23:21] Speaker 04:
Would your same argument fly, that it's simply an interpretation and they have absolute right to interpret it any way they want?

[00:23:28] Speaker 03:
So the principle under Ohio law, and Ohio law on this is that judicial deference accorded to voluntary organizations in their interpretation and administration is a threshold issue that the court must consider.

[00:23:45] Speaker 03:
And what Ohio law holds in turning to this for a case

[00:23:49] Speaker 03:
is that courts must defer and without direction or interference by the courts, the right to adopt bylaws and interpret them and administer them is as sacred as the right to make them.

[00:24:01] Speaker 03:
And the only time that a court can step in is if they have to show that the interpretation is both unreasonable and arbitrary.

[00:24:11] Speaker 03:
So that particular interpretation is not before the court today.

[00:24:15] Speaker 03:
And that is something that I do not have the research on or interpretations on cisgender men.

[00:24:21] Speaker 03:
But what we would have to look at is, is that interpretation

[00:24:25] Speaker 03:
unreasonable and arbitrary.

[00:24:27] Speaker 03:
And here, what we have done for this court is put forward many resources and many other sources, such as the National Panhellenic Conference, federal courts, other women's organizations, women's colleges, the Endocrine Society guidelines, and dictionaries to show this court

[00:24:45] Speaker 03:
not to say that this is the correct interpretation, but to enable this court to look at that and say this interpretation is a reasonable and non-arbitrary interpretation.

[00:24:56] Speaker 03:
And judicial deference only requires the court to look at that and determine, is this a reasonable and non-arbitrary interpretation?

[00:25:04] Speaker 03:
And if so, then judicial deference is required per Ohio law.

[00:25:08] Speaker 00:
Counsel, how do you respond to the appellant's argument?

[00:25:12] Speaker 00:
Again, you keep using the word interpretation, and their argument is there's no interpretation here.

[00:25:15] Speaker 00:
It's legislation.

[00:25:17] Speaker 00:
Even the bylaws itself, when it says woman, period.

[00:25:19] Speaker 00:
When you're adding language and those who identify as women, that you're creating a new category altogether.

[00:25:25] Speaker 03:
Sure.

[00:25:26] Speaker 03:
So the issue here is whether council has the right to interpret women, not, again, whether they have announced that interpretation in the best form.

[00:25:37] Speaker 03:
So nine years ago, council had shared that the interpretation that membership was inclusive of individuals identifying as women.

[00:25:45] Speaker 03:
And we have certainly improved in nine years in how we might define and talk about gender identity.

[00:25:51] Speaker 03:
But we cannot expect a volunteer board to communicate their interpretations

[00:25:55] Speaker 03:
as precisely as a legislator drafts a statute, nor are they held to a statutory interpretation analysis.

[00:26:02] Speaker 03:
And what CAPA's governing documents do is they give counsel the right to interpret, and an inartful announcement of an interpretation by a volunteer board does not warrant court interference under Ohio law.

[00:26:17] Speaker 03:
only an unreasonable and arbitrary interpretation does.

[00:26:20] Speaker 00:
But they're alleging bad faith here.

[00:26:22] Speaker 00:
And the idea, as I understand it, is it's one thing for the board to interpret the bylaws in a way that determines eligibility criteria regarding things like GPA, or let's say you want to admit someone who has good moral character, compared with what is really the foundational issue for why this organization has existed for 150 years, that this is categorically different.

[00:26:44] Speaker 00:
Which I also understand them to say,

[00:26:46] Speaker 00:
That's why the court getting involved in this one unique issue would not lead to the, quote, wave of suits about whether or not this person was admitted because their GPA was on the cusp or, you know, some other eligibility criteria.

[00:26:59] Speaker 00:
So isn't this fundamentally different?

[00:27:01] Speaker 03:
Well, that is speculation on that part, but we do not view this issue as any different.

[00:27:07] Speaker 03:
Council exercises the authority.

[00:27:11] Speaker 03:
There is no distinguishing factor in the standing rules that council has the ability to interpret certain terms and not other terms.

[00:27:18] Speaker 03:
Women is unquestionably not defined.

[00:27:21] Speaker 03:
Women is also a term that unquestionably has multiple definitions, and that they seek to distinguish this term versus other terms that counsel also exercises the right to interpret.

[00:27:32] Speaker 03:
Certainly there are other terms, and you have called out some of them, that counsel also exercises their authority to interpret, so that they seek to question the interpretation

[00:27:42] Speaker 03:
of this term, which is one that they take issue with.

[00:27:45] Speaker 03:
Well, again, council has interpreted other things such as, you know, how do they interpret regard for others and appreciation for the worth of all individuals?

[00:27:53] Speaker 03:
Well, council has also set forth in their position statements that they interpret that to mean they require candidates to be responsible citizens and contributing members of their communities.

[00:28:04] Speaker 03:
That this interpretation is something that they take issue with

[00:28:08] Speaker 03:
does not give that this is something they disagree with, does not divest Fraternity Council of both their right under the standing rules and the right under Ohio law to interpret that.

[00:28:21] Speaker 00:
But we're also at the pleading stage and they're alleging bad faith.

[00:28:25] Speaker 00:
Wouldn't that eviscerate any deference that the board would be entitled?

[00:28:29] Speaker 03:
No, so it is important to distinguish that under Ohio law, because this is a voluntary organization, there are two separate tests that this court needs to be aware of.

[00:28:39] Speaker 03:
The first is the judicial deference test.

[00:28:42] Speaker 03:
And that is something that is only accorded to voluntary organizations.

[00:28:46] Speaker 03:
It is not something that is accorded to for-profit corporations under Ohio law.

[00:28:51] Speaker 03:
And judicial deference is the test that we set forth under DeBora and the other cases.

[00:28:56] Speaker 03:
Under that, judicial deference is accorded to the interpretation of governing documents.

[00:29:01] Speaker 03:
And that is a threshold issue for this court to decide.

[00:29:04] Speaker 03:
The breach of fiduciary duty test is a second test, and that's for breach of fiduciary duty claims that could apply both for voluntary organizations and for profit corporations.

[00:29:15] Speaker 03:
moving beyond, beyond judicial deference.

[00:29:18] Speaker 03:
That is a separate test.

[00:29:20] Speaker 03:
And so if the court were to determine, even if you were to find that their interpretation was unreasonable, you would still consider whether breach of the judiciary duty claim is met.

[00:29:30] Speaker 03:
And under that, they have to allege facts to establish

[00:29:35] Speaker 03:
a plausible claim for breach of fiduciary duty.

[00:29:38] Speaker 03:
Now what must be alleged, again, is that there are facts to show plausibly that there has been bad faith on the part of Ms.

[00:29:47] Speaker 03:
Rooney.

[00:29:47] Speaker 03:
And that is more than just conclusory allegations, actual facts.

[00:29:52] Speaker 03:
And here that has not been contended.

[00:29:54] Speaker 04:
What they allege, as I understand it, is that

[00:29:58] Speaker 04:
Ms.

[00:29:59] Speaker 04:
Rooney had an outcome that she wanted and manipulated the voting process so that she could get that outcome.

[00:30:09] Speaker 04:
I'm not saying that's what happened, I'm saying that's what's alleged.

[00:30:12] Speaker 04:
Isn't that enough of an allegation to support at this stage?

[00:30:18] Speaker 04:
That's it.

[00:30:19] Speaker 03:
Reviewing the complaint, that is not what is actually alleged.

[00:30:24] Speaker 03:
And so certainly that is what their briefing now attempts to allege.

[00:30:29] Speaker 03:
But again, the complaint, we have to look at what are the actual factual allegations as opposed to the conclusory allegations.

[00:30:40] Speaker 03:
And looking at the factual allegations here, the factual allegations and taking again, there's very little alleged against Miss Rooney, but taking the allegations against Fraternity Council to be what is alleged against her.

[00:30:55] Speaker 03:
The actual allegations against Fraternity Council about when does Fraternity Council come into play.

[00:31:02] Speaker 03:
Those are the allegations in paragraph 63.

[00:31:05] Speaker 03:
93, 94, 141.

[00:31:08] Speaker 03:
There are no allegations that fraternity council became aware of anything going on until actually after post-election, not in the membership selection.

[00:31:20] Speaker 03:
The complaints about fraternity council is that after Ms.

[00:31:23] Speaker 03:
Langford had been selected by the chapter, complaints were made

[00:31:28] Speaker 03:
that the Fraternity Council was made aware of this.

[00:31:31] Speaker 03:
And what they failed to do was stop.

[00:31:34] Speaker 03:
They did not stop the induction.

[00:31:36] Speaker 03:
I see my time is about to run short.

[00:31:38] Speaker 03:
May I finish this answer before?

[00:31:40] Speaker 04:
Yes, and we gave your opposition two extra minutes, so I'm fine with that.

[00:31:47] Speaker 04:
But let me point you to paragraph 163.

[00:31:50] Speaker 04:
By not only allowing, but also by endorsing and actively working to secure the membership of Langford, the directors of this sorority have violated their duties of loyalty, care, and obedience compliance.

[00:32:03] Speaker 03:
And certainly, and that is absolutely what we contend is certainly a conclusory allegation.

[00:32:08] Speaker 03:
If you review the actual factual allegations here,

[00:32:13] Speaker 03:
And again, looking at allegations 63, 93, 94, and 141 of the complaint, which allege the actual specific facts of when did Fraternity Council even become aware of what was going on in the chapter of Wyoming.

[00:32:32] Speaker 03:
What is specifically alleged regarding Ms.

[00:32:34] Speaker 03:
Langford is that complaints were made after she was elected, that this individual had been selected by the chapter, and they were made aware.

[00:32:44] Speaker 03:
And what they failed to do was stop the induction of Ms.

[00:32:48] Speaker 03:
Langford, but what they have also done is they have put forth the standing rules and the bylaws, and that allows the court to review what the actual process is for induction of members by fraternity council, and that is basically an automatic process.

[00:33:07] Speaker 03:
The induction process is something that is required.

[00:33:11] Speaker 03:
The language that is for fraternity council is shall.

[00:33:15] Speaker 03:
And so they shall induct anybody who meets those requirements.

[00:33:19] Speaker 03:
It is not a discretionary process.

[00:33:20] Speaker 03:
And you are now over.

[00:33:23] Speaker 01:
I'm sorry.

[00:33:24] Speaker 01:
You invoke the concept of the fiduciary shield law of Wyoming as interpreted by this court in Tin Mile Industrial Park, correct?

[00:33:37] Speaker 03:
Correct.

[00:33:38] Speaker 01:
And if that's correct, that Ms.

[00:33:41] Speaker 01:
Rooney is shielded as a fiduciary under Wyoming law, there's nothing left but nominal defendants, correct?

[00:33:54] Speaker 03:
That is correct.

[00:33:56] Speaker 01:
And is that a basis alone to affirm the dismissal without prejudice?

[00:34:08] Speaker 03:
That could be, yes.

[00:34:11] Speaker 01:
Thank you.

[00:34:13] Speaker 04:
Thank you.

[00:34:16] Speaker 04:
Thank you.

[00:34:16] Speaker 04:
We will take this matter under advisement.

[00:34:20] Speaker 04:
We appreciate your argument today and the briefing.