The fraud trial against JAMS Inc. and retired appellate justice Sheila Sonenshine for allegedly padding her online resume is through its first week, and it already appears the judge is having some regrets about the case.
Venture capitalist Kevin Kinsella and his attorney Bryan Vess told a San Diego jury that Sonenshine and JAMS fabricated the claim that she founded a private equity fund after leaving the bench. They also say Sonenshine claimed to have run an investment bank called EquiCo but that the company was actually just a broker and that Sonenshine concealed from her resume that it settled a fraud class action for $41.5 million. They allege JAMS and Sonenshine took these steps to attract businessmen like Kinsella to use their services.
JAMS and Sonenshine say she did, in fact, found a private equity fund and that the lawsuit was filed years after she’d exited the investment bank. In any event, Kinsella was looking for a family law expert to handle his marital dissolution, and there’s no credible evidence that he relied on the business achievements listed on her resume, they say. His real beef is that Sonenshine ordered him to pay more spousal support, and he’s now on a campaign of harassment against them, they contend.
Here are five takeaways from the first week of trial, which is scheduled to run through mid-May.
Superior Court Judge John Meyer sounded at times as if he has some buyer’s remorse about putting the case before a jury. Meyer has given Vess plenty of latitude to explore Sonenshine’s businesses and her communications with JAMS, but he’s clamped down quickly on any questions going to her character. He’s also observed, including in front of the jury, that litigants who lose in court often blame the judge – which happens to be one of the cornerstones of JAMS’ defense. Vess has also accused Meyer of backing away from rulings made in his earlier summary judgment order.
Vess wants to portray Soneshine as someone who went into business with shady operators and perpetrated a “scam.” But Meyer points out she has no record of discipline as an attorney or a judge. As an “umpire calling balls and strikes,” Meyer said the fact that Sonenshine once did business years ago with a convicted felon would be more prejudicial than probative. “If I’m wrong, bring it on,” he told Vess.
“We’re not that way,” Vess professed. “We’re not going to be Earl Weaver, kicking dirt on the poor umpire.”
JAMS’ values, and business model, are getting a lot of scrutiny. JAMS presents itself as a for-profit company that’s also dedicated to public service. Most of the company’s 320 neutrals contribute 1 percent of their earnings to the JAMS Foundation, which focuses on resolving disputes between police and communities, in schools and in jails, CEO Christopher Poole testified. If growing revenues and profits were the sole consideration, Poole told the jury, he’d have been fired by now.
Vess, on the other hand, called JAMS “a shadow legal system” that’s “driven by profit and greed.” He elicited testimony from Poole that JAMS has no system for tracking customer feedback about its neutrals. Whatever else may be true, the trial has given a sense of JAMS’ size. Poole’s testimony indirectly put JAMS’ annual revenues in the ballpark of $120 million, which would have ranked it No. 176 on last year’s Am Law 200.
JAMS outsources the vetting of its retired judges to the State Bar of California. JAMS and Sonenshine have emphasized throughout trial the thorough vetting she received from the State Bar’s Judicial Nominees Evaluation Commission when she was appointed to the superior court and later the appellate bench. Defense attorney Joseph McMonigle of Long & Levit described it as a “very rigorous, FBI-like investigation” that made a formal background check by JAMS unnecessary. Sonenshine described the process for the appellate bench as a background check “on steroids.”
That was, however, 35 years ago—or as Vess put it, “way back in the ’80s”—long before Sonenshine began her nine-year career in the investment business. Brian Parmelee, the JAMS executive who recruited Sonenshine in 2008, acknowledged he did not contact any of the customers who sued the investment bank Sonenshine co-founded. Instead he relied on lawyers and judges who knew her as a jurist. “Did you ever Google Justice Sonenshine?” Vess asked Parmelee. “Back in 2008 Google wasn’t as big a part of our life as it is now,” Parmalee replied.
JAMS hasn’t had a chance to go on offense yet. Kinsella is expected to wrap up his case this week. For its defense, JAMS has promised to call Richard Renkin, one of seven lawyers who’ve represented Kinsella during his tumultuous dissolution proceedings, and Sharon Blanchet, who represents Tamara Kinsella.
Renkin will testify that he never looked at Sonenshine’s resume when he recommended her to Kinsella and that he has apologized to Sonenshine for dragging her into Kinsella’s scorched-earth litigation, according to McMonigle. Blanchet will testify that Kinsella filed a complaint about her with the state bar.
McMonigle also said during opening statements that expert witness Paul Meyer, who represents judges before the Commission on Judicial Performance, will testify that Sonenshine has acted ethically. During openings, Vess derided Meyer as a criminal defense lawyer who boasts on his website of defending child pornography charges, drawing a furious objection from McMonigle.
Long & Levit partner Jessica MacGregor has been an unsung hero for the defense. McMonigle delivered opening statements and has argued motions, but McGregor has been busy handling evidence. She has asserted several dozen objections, most of them sustained. She also examined Sonenshine, gracefully handling a squeeze play between Meyer, who was leaning on her to speed up the examination, and her client, who wanted to testify at some length about her professional achievements.
MacGregor got off one of the best lines of the trial, when Meyer took over explaining to the jury how an appellate court reviews trial court proceedings—even potentially the JAMS trial itself. “That assumes someone’s unhappy” with the outcome, Meyer quipped. “That would never happen, your honor,” MacGregor deadpanned.